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EXHIBIT 10.1
CREDIT AGREEMENT
This Agreement, dated as of September 29, 1995, is among U.S. Home
Corporation, a Delaware corporation, the Lenders listed on the signature
pages of this Agreement, and The First National Bank of Chicago, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
the Borrower or any of its Subsidiaries (excluding the Non-Borrowing
Subsidiaries) (i) acquires any going concern or all or substantially all of
the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series
of transactions) at least a majority (in number of votes) of the securities
of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power)
of the outstanding partnership or other ownership interests of a
partnership, joint venture, limited liability company or other similar
business organization.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Lenders to the Borrower of the same
Type and, in the case of a Eurodollar Advance, for the same Interest
Period.
"Affected Lender" is defined in Section 2.21.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the
controlling Person beneficially owns (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended) 20% or more of any class
of voting securities (or other ownership interests) of the controlled
Person or possesses, directly or indirectly, the power to direct or cause
the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
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"Agent" means The First National Bank of Chicago in its capacity
as agent for the Lenders pursuant to Article XIII, and not in its
individual capacity as a Lender, and any successor Agent appointed pursuant
to Article XIII.
"Aggregate Available Credit" means the aggregate of the Available
Credits of all of the Lenders.
"Aggregate Commitment" means the aggregate of the Commitments of
all the Lenders, as reduced from time to time pursuant to the terms hereof.
As of the date of this Agreement, the Aggregate Commitment is $130,000,000.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" is defined in Section 12.9.
"Alternate Base Rate" means, for any day, a rate of interest per
annum equal to the higher of (i) the Corporate Base Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day plus (b)
1/2 of 1% per annum.
"Applicable Commitment Rate" means, as at any date of
determination, the rate per annum indicated in Section 2.11 as then
applicable in the determination of the commitment fee under Section 2.5.
"Applicable Eurodollar Margin" means, as at any date of
determination, the margin indicated in Section 2.11 as then applicable in
the determination of Eurodollar Rates and the Applicable Letter of Credit
Rate.
"Applicable Floating Rate Margin" means, as at any date of
determination, the margin indicated in Section 2.11 as then applicable in
the determination of the Floating Rate, provided, however, that, with
respect to the first $25,000,000 of Floating Rate Advances outstanding at
any time, the Applicable Floating Rate Margin shall be zero (0).
"Applicable Letter of Credit Rate" means, as at any date of
determination, a rate per annum equal to (i) the Applicable Eurodollar
Margin as at such date, less (ii) 0.25 percent.
"Applicable Margin(s)" means the Applicable Eurodollar Margin
and/or the Applicable Floating Rate Margin, as the case may be.
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"Article" means an article of this Agreement unless another
document is specifically referenced.
"Authorized Officer" means any of the Chairman, President, Senior
Vice President or any Vice President of the Borrower, acting singly.
"Available Credit" means, at any date with respect to any Lender,
the amount (if any) by which such Lender's Commitment exceeds the sum of
(i) the outstanding principal balance of such Lender's Loans as of such
date, plus (ii) such Lender's ratable share (determined in accordance with
Section 4.6) of the Facility Letter of Credit Obligations as of such date.
"Borrower" means U.S. Home Corporation, a Delaware corporation,
and its successors and assigns.
"Borrowing Base" means, with respect to an Inventory Valuation
Date for which it is to be determined, an amount equal to the sum of the
following assets of the Borrower and the Guarantors (but only to the extent
that such assets are not subject to any Liens (other than Permitted
Encumbrances), whether or not such Liens are permitted hereunder): (i) the
Receivables, multiplied by ninety percent (90%), (ii) the book value of
Housing Units Under Contract, multiplied by eighty percent (80%), (iii) the
book value of Inventory Housing Units, multiplied by seventy percent (70%),
but not exceeding thirty percent (30%) of Total Senior Loan Commitments,
and (iv) the book value of Finished Lots, multiplied by fifty percent
(50%), but not exceeding twenty-five percent (25%) of Total Senior Loan
Commitments.
"Borrowing Base Certificate" means a written certificate in a form
acceptable to the Required Lenders setting forth the amount of the
Borrowing Base with respect to the calendar month most recently completed,
certified as true and correct by an Authorized Officer of the Borrower.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or
rate selection of Eurodollar Advances, a day (other than a Saturday or
Sunday) on which banks generally are open in Chicago and New York for the
conduct of substantially all of their commercial lending activities and on
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which dealings in United States dollars are carried on in the London
interbank market and (ii) for all other purposes, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago for the
conduct of substantially all of their commercial lending activities.
"Capitalized Lease" of a Person means any lease of Property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of
the obligations of such Person under Capitalized Leases which would be
shown as a liability on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.
"Change in Control" means the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 50% or more of the outstanding shares
of voting stock of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender
to make Loans, and to participate in the Facility Letters of Credit in
accordance with Section 4.6(a), not exceeding the amount set forth opposite
its signature below or as set forth in any Notice of Assignment relating to
any assignment that has become effective pursuant to Section 15.3.2, as
such amount may be modified from time to time pursuant to the terms hereof.
"Consolidated Funded Indebtedness" means, at any date, the
outstanding amount of all Indebtedness of the Borrower and the Guarantors,
excluding accrued expenses incurred in the ordinary course of business and
guarantees of performance or completion and performance bonds (but not
excluding guarantees of payment), all determined on a consolidated basis
for the Borrower and the Guarantors in conformity with Agreement Accounting
Principles.
"Consolidated Interest Expense" means for any period, without
duplication, the aggregate amount of interest which, in conformity with
Agreement Accounting Principles, would be set opposite the caption
"interest expense" or any like caption on an income statement for the
Borrower and the Guarantors (including, without limitation, imputed
interest included on Capitalized Lease Obligations, all commissions,
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discounts and other fees and charges owed with respect to Letters of Credit
and bankers' acceptance financing, the net costs associated with Rate Hedging
Obligations, amortization of other financing fees and expenses, the interest
portion of any deferred payment obligation, amortization of discount or
premiums, if any, and all other noncash interest expense other than
interest and other charges amortized to cost of sales) and includes,
with respect to the Borrower and the Guarantors, without duplication, all
interest included as a component of cost of sales for such period.
"Consolidated Interest Incurred" means for any period, without
duplication, the aggregate amount of interest which, in conformity with
Agreement Accounting Principles, would be set opposite the caption
"interest expense" or any like caption on an income statement for the
Borrower and the Guarantors (including, without limitation, imputed
interest included on Capitalized Lease Obligations, all commissions,
discounts and other fees and charges owed with respect to Letters of Credit
and bankers' acceptance financing, the net costs associated with Rate
Hedging Obligations, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of
discount or premium, if any, and all other noncash interest expense other
than interest and other charges amortized to cost of sales) and includes,
with respect to the Borrower and the Guarantors, without duplication, all
capitalized interest for such period, all interest attributable to
discontinued operations for such period to the extent not set forth on the
income statement under the caption "interest expense" or any like caption,
and all interest actually paid by the Borrower or a Guarantor under any
Contingent Obligation during such period.
"Consolidated Net Income" means, for any period, the net income
(or loss) of the Borrower and the Guarantors on a consolidated basis for
such period taken as a single accounting period, determined in conformity
with Agreement Accounting Principles; provided that there shall be excluded
from Consolidated Net Income (i) the income (or loss) of any Person that is
not the Borrower or a Guarantor, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or a
Guarantor by such Person during such period, and (ii) the income (or loss)
of any Person accrued prior to the date it becomes a Subsidiary of the
Borrower or is merged into or consolidated with the Borrower or any of its
Subsidiaries or that Person's assets are acquired by the Borrower or any of
its Subsidiaries.
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"Consolidated Senior Debt Borrowings" means, at any date, with
respect to the Borrower and the Guarantors, on a consolidated basis, the
outstanding balance of all obligations described in clauses (i), (iv) or
(viii) of the definition of "Indebtedness" (including the Obligations)
calculated in accordance with Agreement Accounting Principles but excluding
(i) Indebtedness secured by a Lien on Property, (ii) Indebtedness of the
Borrower to a Guarantor, a Guarantor to the Borrower or a Guarantor to
another Guarantor, and (iii) the Convertible Subordinated Notes and any
other Subordinated Indebtedness.
"Consolidated Tangible Net Worth" means, at any date, the
consolidated stockholders' equity of the Borrower determined in conformity
with Agreement Accounting Principles, less its consolidated Intangible
Assets, all determined as of such date. For purposes of this definition
"Intangible Assets" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) of (i) all write-ups
(other than write-ups resulting from foreign currency translations and
write-ups of assets of a going concern business made within twelve months
after the acquisition of such business) subsequent to March 31, 1995 in the
book value of any asset owned by the Borrower, (ii) all investments in
Non-Borrowing Subsidiaries and (iii) all unamortized debt discount,
goodwill, patents, trademarks, service marks, trade names, copyrights,
organization or developmental expenses and other intangible items.
"Contingent Obligation" of a Person means, without duplication,
any agreement, undertaking or arrangement by which such Person assumes,
guarantees (other than a Guaranty), endorses (other than endorsements in
the ordinary course of business or negotiable instruments for deposit or
collection), contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the
obligation or liability of any other Person, or agrees to maintain the net
worth or working capital or other financial condition of any other Person,
or otherwise assures any creditor of such other Person against loss,
including, without limitation, any comfort letter, operating agreement,
take-or-pay contract, or application or other contingent obligation with
respect to a Letter of Credit, but excluding guarantees of performance or
completion and performance bonds, or setoff rights of a lender. "Contingent
Obligation" does not include the obligation to make capital contributions
to a joint venture.
"Contribution Agreement" is defined in Section 5.1(xi).
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower or any of its
Subsidiaries, are treated as a single employer under Section 414 of the
Code.
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"Conversion/Continuation Notice" is defined in Section 2.9.
"Convertible Subordinated Notes" means the 4.875% Convertible
Subordinated Debentures due 2005 of the Borrower issued in the original
principal amount of $80,000,000.
"Corporate Base Rate" means a rate per annum equal to the
corporate base rate of interest announced by First Chicago from time to
time, changing when and as said corporate base rate changes.
"Coverage Test" is defined in Section 9.2(b).
"Default" means an event described in Article X after the
expiration of any applicable cure or notice period.
"EBITDA" means, for any period, without duplication, (i) the sum
of the amounts for such period of (a) Consolidated Net Income, (b)
Consolidated Interest Expense, (c) charges against income for all federal,
state and local taxes, (d) depreciation expense, (e) amortization expense,
(f) other non-cash charges and expenses, and (g) any losses arising outside
of the ordinary course of business which have been included in the
determination of Consolidated Net Income, less (ii) any gains arising
outside of the ordinary course of business which have been included in the
determination of Consolidated Net Income, all as determined on a
consolidated basis for the Borrower and the Guarantors in conformity with
Agreement Accounting Principles.
"ERISA" means the Employee Retirement Income Security Act of l974,
as amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which bears interest at a
Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance
for the relevant Interest Period, the rate determined by the Agent to be
the rate at which deposits in U.S. dollars are offered by First Chicago to
first-class banks in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of such Interest
Period, in the approximate amount of First Chicago's relevant Eurodollar
Loan and having a maturity approximately equal to such Eurodollar Interest
Period.
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"Eurodollar Loan" means a Loan which bears interest at a
Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to such Interest Period, divided by (b) one
minus the Reserve Requirement (expressed as a decimal) applicable to such
Interest Period, plus (ii) the Applicable Eurodollar Margin. The Eurodollar
Rate shall be rounded to the next higher multiple of 1/16 of 1% if the rate
is not such a multiple.
"Excluded Taxes" is defined in Section 3.1.
"Extension Request" is defined in Section 2.20.
"Facility Letter of Credit" means a Letter of Credit issued by the
Issuing Bank for the account of the Borrower or a Guarantor in accordance
with Article IV.
"Facility Letter of Credit Fee" means a fee, payable with respect
to each Facility Letter of Credit issued by the Issuing Bank, in an amount
per annum equal to the product of (i) the Applicable Letter of Credit Rate
(determined as of the date on which the monthly installment of such fee is
due) and (ii) the greater of (A) $50,000 or (B) the face amount of such
Facility Letter of Credit.
"Facility Letter of Credit Obligations" means, at any date, the
sum of (i) the aggregate undrawn face amount of all outstanding Facility
Letters of Credit, and (ii) the aggregate amount paid by an Issuing Bank on
any Facility Letters of Credit to the extent (if any) not reimbursed by the
Borrower or by the Lenders under Section 4.4.
"Facility Termination Date" means September 29, 1998, as the same
may be extended as provided in Section 2.20.
"Federal Funds Effective Rate" means, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published for such day
(or, if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations at approximately 10 a.m. (Chicago time) on such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent in its sole discretion.
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"Financial Undertaking" of a Person means (i) any repurchase
obligation or liability of such Person or any of its Subsidiaries with
respect to accounts or notes receivable sold by such Person or any of its
Subsidiaries, (ii) any sale and leaseback transactions which do not create
a liability on the consolidated balance sheet of such Person and its
Subsidiaries, (iii) any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute
a liability on the consolidated balance sheets of such Person and its
Subsidiaries, or (iv) any Rate Hedging Obligations.
"Finished Lots" means parcels of land owned by the Borrower or any
Guarantor which are duly recorded and platted for use as Housing Units and
zoned for such use, with respect to which all requisite governmental
consents and approvals have been obtained and on which (i) all development
activity, other than the application of the seal or finishing coat on
improved roadways and other minor repairs required to dedicate such
roadways, has been completed and (ii) water and sewer connections have been
brought to the lot shown on the plat covering such parcel and are available
for hook-up to a Housing Unit; provided, however, that the term "Finished
Lots" shall not include any real property upon which the construction of a
Housing Unit has commenced.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Fixed Rate Debt" means any obligation described in clauses (i),
(iv) or (viii) of the definition of "Indebtedness" (i) that bears interest
at a rate that is fixed until maturity of such Indebtedness and that does
not fluctuate or vary, whether on the basis of rates established from time
to time by the obligee, indices, market conditions or otherwise or (ii)
having an average weighted maturity equal to or exceeding the then
remaining term of this Agreement and with respect to which the Borrower has
arranged Rate Hedging Obligations that protect the Borrower from
fluctuations of interest rates, which Rate Hedging Obligations are
acceptable to the Required Lenders in all respects, including without
limitation the Person or Persons that are parties thereto, the fixed
interest rates thereunder and the other terms and conditions thereof.
"Floating Rate" means, for any day, a rate per annum equal to (i)
the Alternate Base Rate for such day, plus (ii) the Applicable Floating
Rate Margin, in each case changing when and as the Alternate Base Rate
changes.
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"Floating Rate Advance" means an Advance which bears interest at
the Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the
Floating Rate.
"GAAP" means generally accepted accounting principles in effect
from time to time, consistently applied.
"GECC" means General Electric Capital Corporation.
"Guarantors" means the Subsidiaries of the Borrower listed on
Schedule "1-A" hereto and any Subsidiary of Borrower that shall hereafter
execute a Guaranty in accordance with Section 7.11 hereof, and any
successors and assigns or any of the foregoing.
"Guaranty" means a Guaranty, in substantially the form of Exhibit
"A", duly executed by one or more of the Guarantors, as the same may be
amended or modified and in effect from time to time.
"Housing Unit" means a single-family dwelling, whether detached or
attached (including condominiums but excluding mobile homes), including the
parcel of land on which such dwelling is located, that is (or, upon
completion of construction thereof, will be) available for sale; the term
"Housing Unit" includes an Inventory Housing Unit.
"Housing Unit Closing" means a closing of the sale of a Housing
Unit by the Borrower or a Guarantor to a bona fide purchaser for value that
is not an Affiliate.
"Housing Unit Under Contract" means a Housing Unit owned by the
Borrower or a Guarantor as to which the Borrower or such Guarantor has a
bona fide contract of sale, in a form customarily employed by the Borrower
or such Guarantor, entered into not more than 15 months prior to the date
of determination with a Person who is not an Affiliate, under which
contract no defaults then exist and not less than $1,000.00 toward the
purchase price has been paid; provided, however, that in the case of any
Housing Unit the purchase of which is to be financed in whole or in part by
a loan insured by the Federal Housing Administration or guaranteed by the
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Veterans Administration, the required minimum downpayment shall be the
amount (if any) required under the rules of the relevant agency.
"Indebtedness" of a Person means, without duplication, such
Person's (i) obligations for borrowed money, (ii) obligations representing
the deferred purchase price of Property or services (other than (A)
accounts payable arising in the ordinary course of such Person's business
and (B) rights or duties under option agreements to acquire real property),
(iii) obligations, whether or not assumed, secured by Liens (other than
Permitted Encumbrances) or payable out of the proceeds or production from
Property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, debentures, or other similar
instruments, (v) Capitalized Lease Obligations, (vi) net liabilities under
Rate Hedging Obligations, (vii) Contingent Obligations and (viii)
reimbursement obligations for which such Person is obligated with respect
to a Letter of Credit.
Indebtedness includes, in the case of the Borrower, the Obligations.
"Indenture" means that certain Indenture, dated as of June 21,
1993, between the Borrower and IBJ Xxxxxxxx Bank & Trust Company pursuant
to which the Senior Notes were issued.
"Interest Period" means, with respect to a Eurodollar Advance, a
period of one, two, three or six months commencing on a Business Day
selected by the Borrower pursuant to this Agreement. Such Interest Period
shall end on (but exclude) the day which corresponds numerically to such
date one, two, three or six months thereafter, provided, however, that if
there is no such numerically corresponding day in such next, second, third
or sixth succeeding month, such Interest Period shall end on the last
Business Day of such next, second or third or sixth succeeding month. If an
Interest Period would otherwise end on a day which is not a Business Day,
such Interest Period shall end on the next succeeding Business Day,
provided, however, that if said next succeeding Business Day falls in a new
calendar month, such Interest Period shall end on the immediately preceding
Business Day.
"Inventory Housing Unit" means any Housing Unit owned by the
Borrower or any Guarantor that is not a Housing Unit Under Contract.
"Inventory Valuation Date" means the last day of the most recent
calendar month with respect to which the Borrower is required to have
delivered a Borrowing Base Certificate pursuant to Section 7.1(vii) hereof.
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"Investment" of a Person means any loan, advance, extension of
credit (other than accounts receivable arising in the ordinary course of
business), deposit account or contribution of capital by such Person to any
other Person or any investment in, or purchase or other acquisition of, the
stock, partnership, joint venture or limited liability company interests,
notes, debentures or other securities of any other Person made by such
Person.
"Issuance Date" means the date on which a Facility Letter of
Credit is issued, amended or extended.
"Issuing Bank" means any Lender that may from time to time be
designated as Issuing Bank in accordance with the provisions of Section
4.10, provided, however, that a Lender may be designated as Issuing Bank
only if, at the time of such designation, it has a rating of not less than
"A" as publicly announced by Standard & Poor's Corporation. As of the date
of this Agreement, First Chicago is the Issuing Bank.
"Lenders" means the lending institutions listed on the signature
pages of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Agent, any office, branch, subsidiary or Affiliate of such Lender or the
Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued by a financial institution upon the application
of such Person or upon which such Person is an account party or for which
such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or other
security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title
retention agreement).
"Loan" means, with respect to a Lender, such Lender's portion of
any Advance.
"Loan Documents" means this Agreement, the Notes and any
Reimbursement Agreements.
"Material Adverse Effect" means a material adverse effect on (i)
the business, Property, condition (financial or otherwise), or results of
operations of the Borrower and the Guarantors, taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan
Documents, or (iii) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent, the Lenders or any
Issuing Bank thereunder.
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"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which the
Borrower or any member of the Controlled Group is a party to which more
than one employer is obligated to make contributions.
"Non-Borrowing Subsidiaries" means the Subsidiaries of the
Borrower listed on Schedule "1-B" hereto and any Person that (i) hereafter
becomes a Subsidiary of the Borrower and has as its primary business one or
more of the types of businesses currently conducted by the Subsidiaries
listed on Schedule "1-B" or (ii) is or hereafter becomes a Subsidiary of a
Non-Borrowing Subsidiary.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person (i) for which the sole legal recourse for
collection of principal and interest on such Indebtedness is against the
specific property identified in the instruments evidencing or securing such
Indebtedness and such property was acquired with the proceeds of such
Indebtedness or such Indebtedness was incurred within 90 days after the
acquisition of such property and for which no other assets of such Person
may be realized upon in collection of principal or interest on such
Indebtedness or (ii) that refinances Indebtedness described in clause (i)
and for which the recourse is limited to the same extent described in
clause (i).
"Note" means a promissory note, in substantially the form of
Exhibit "B" hereto, duly executed by the Borrower and payable to the order
of a Lender in the amount of its Commitment, including any amendment,
modification, renewal or replacement of such promissory note.
"Notice of Assignment" is defined in Section 15.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, the Facility Letter of Credit Obligations, all
accrued and unpaid fees and all expenses, reimbursements, indemnities and
other obligations of the Borrower to the Lenders or to any Lender, the
Agent, any Issuing Bank or any indemnified party hereunder arising under
the Loan Documents.
"Participants" is defined in Section 15.2.1.
35
"Payment Date" means the first day of each calendar month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Encumbrances" means any of the following:
(i) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings and for which adequate reserves shall
have been set aside on its books in accordance with GAAP.
(ii) Liens imposed by law, such as carriers', warehousemen's,
mechanics' and materialmen's Liens and other similar Liens arising in the
ordinary course of business which secure payment of obligations not more
than 90 days past due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on its books in accordance with GAAP.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation in
accordance with GAAP.
(iv) Utility easements, rights of way, zoning restrictions and such
other encumbrances or charges against real property, or other minor
irregularities of title, as are of a nature generally existing with respect
to properties of a similar character and which do not in any material way
interfere with the use thereof or the sale thereof in the business of the
Borrower or the Guarantors.
(v) Easements, dedications, assessment district or similar Liens in
connection with municipal financing and other similar encumbrances or
charges, in each case reasonably necessary or appropriate for the
development of real property of the Borrower or a Guarantor, and which are
granted in the ordinary course of the business of such Borrower or
Guarantor, and which in the aggregate do not materially burden or impair
the fair market value or use of such real property (or the project to which
it is related) for the purposes for which it is or may reasonably be
expected to be held.
36
"Person" means any natural person, corporation, firm, joint
venture, partnership, limited liability company, association, enterprise,
trust or other entity or organization, or any government or political
subdivision or any agency, department or instrumentality thereof.
"PIR" means, at the date hereof, 1.75, as such amount may
hereafter be adjusted from time to time as provided in Section 9.2.
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code as to which the Borrower or any member of the Controlled
Group may have any liability.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
"Purchasers" is defined in Section 15.3.1.
"Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefor),
under (i) any and all agreements, devices or arrangements designed to
protect at least one of the parties thereto from the fluctuations of
interest rates, exchange rates or forward rates applicable to such party's
assets, liabilities or exchange transactions, including, but not limited
to, dollar-denominated or cross-currency interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options, puts
and warrants, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any of the foregoing.
"Receivables" means the net proceeds payable to, but not yet
received by, the Borrower or any Guarantor following a Housing Unit
Closing.
"Refinancing Indebtedness" means Indebtedness that refunds,
refinances or extends any Indebtedness described in Schedule "8.2" hereto
(or that refunds, refinances or extends any refund, refinancing or
extension of such Indebtedness), but only to the extent that (i) the
37
Refinancing Indebtedness is subordinated to or pari passu with the
Obligations to the same extent as the Indebtedness being refunded,
refinanced or extended, if at all, (ii) the Refinancing Indebtedness
is scheduled to mature no earlier than the then current maturity date of
such Indebtedness, (iii) such Refinancing Indebtedness is in an aggregate
amount that is equal to or less than the sum of the aggregate amount then
outstanding under the Indebtedness being refunded, refinanced or
extended, (iv) the Person or Persons (or Persons who are Subsidiaries
of such Persons or of which such Persons are Subsidiaries) liable
for the payment of such Refinancing Indebtedness are the same Persons
that were liable for the Indebtedness being refunded, refinanced or
extended when such Indebtedness was initially incurred and (v) such
Refinancing Indebtedness is incurred within 120 days after the
Indebtedness being refunded, refinanced or extended is so refunded,
refinanced or extended.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the
Federal Reserve System.
"Rejecting Lender" is defined in Section 2.20(b).
"Reimbursement Agreement" means, with respect to a Facility Letter
of Credit, such form of application therefor and form of reimbursement
agreement therefor (whether in a single or several documents, taken
together) as an Issuing Bank may employ in the ordinary course of business
for its own account, with such modifications thereto as may be agreed upon
by such Issuing Bank and the Borrower and as are not materially adverse (in
the reasonable judgment of such Issuing Bank and the Agent) to the
interests of the Lenders; provided, however, in the event of any conflict
between the terms of any Reimbursement Agreement and this Agreement, the
terms of this Agreement shall control.
"Replacement Lender" is defined in Section 2.21.
38
"Reportable Event" means a reportable event as defined in Section
4043 of ERISA and the regulations issued under such Section, with respect
to a Plan, excluding, however, such events as to which the PBGC by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided, however,
that a failure to meet the minimum funding standard of Section 412 of the
Code and of Section 302 of ERISA shall be a Reportable Event regardless of
the issuance of any such waiver of the notice requirement in accordance
with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has
been terminated, Lenders in the aggregate holding at least 66-2/3% of the
aggregate unpaid principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to an Interest Period,
the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under
Regulation D on Eurocurrency liabilities (as defined therein).
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Senior Debt" means the Senior Notes or, if the Senior Notes are
refinanced, the Refinancing Indebtedness with respect thereto.
"Senior Debt Rating" means the publicly announced ratings by
Xxxxx'x Investors Service, Inc. or Standard & Poor's Corporation (whichever
is lower) on the Borrower's Senior Debt, provided, however, if more than
one rating gradation exists between the two ratings, the Senior Debt Rating
shall be the rating that is one gradation below the higher of the two
ratings. The Senior Debt Rating shall change if and when such rating(s)
change.
"Senior Notes" means the 9-3/4% Senior Notes due 2003 of the
Borrower issued in the original principal amount of $200,000,000 pursuant
to the Indenture.
"Significant Guarantor" means any Guarantor with assets or
liabilities or annual revenues in excess of $1,000,000.
39
"Single Employer Plan" means a Plan maintained by the Borrower or
any member of the Controlled Group for employees of the Borrower or any
member of the Controlled Group.
"Subordinated Indebtedness" of a Person means any Indebtedness of
such Person the payment of which is subordinated to payment of the
Obligations to the reasonable satisfaction of the Required Lenders,
including, as to the Borrower, the Convertible Subordinated Notes.
"Subordination Agreement" is defined in Section 5.1(xii).
"Subsidiary" of a Person means (i) any corporation more than 50%
of the outstanding securities having ordinary voting power for the election
of the board of directors of which shall at the time be beneficially owned
(within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934,
as amended) directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii)
any partnership, association, joint venture, limited liability company or
similar business organization more than 50% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and the Guarantors, taken as a whole, Property which (i)
represents more than 10% of Consolidated Tangible Net Worth, as would be
shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the fiscal quarter in which such
determination is made, or (ii) is responsible for more than 10% of
Consolidated Net Income, as reflected in the financial statements referred
to in clause (i) above.
"Total Senior Loan Commitments" means, at any date, on a
consolidated basis for the Borrower and the Guarantors, (i) the sum of (a)
all outstanding obligations described in clauses (i), (iv) and (viii) of
the definition of "Indebtedness" to Persons that are not Affiliates of the
Borrower or of any of its Subsidiaries, plus (b) all bona fide, binding but
unfunded commitments (including the Commitments) of banks or other
financial institutions with respect to the borrowing by the Borrower or any
Guarantor of obligations of the type referred to in clause (a) above,
except to the extent that such commitments are subject to conditions that
have not been satisfied (other than customary conditions that the Borrower
and the Guarantors can reasonably be expected to satisfy in the ordinary
course of business), less (ii) the sum of the outstanding amounts of the
Convertible Subordinated Notes and all other Subordinated Indebtedness,
all as determined in accordance with Agreement Accounting Principles.
40
"Transferee" is defined in Section 15.4.
"Type" means, with respect to any Advance, its nature as a
Floating Rate Advance or Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the
present value of all vested nonforfeitable benefits under all Single
Employer Plans exceeds the fair market value of the assets of such Plans
allocable to such benefits, all determined as of the then most recent
valuation date for such Plans, using the actuarial methods and assumptions
utilized in the actuarial report for each such Plan as of such date.
"Unmatured Default" means an event which but for the lapse of time
or the giving of notice, or both, would constitute a Default.
"Unused Commitment" means, at any date with respect to any Lender,
the amount (if any) by which such Lender's Commitment exceeds the sum of
(i) the outstanding principal balance of such Lender's Loans as of such
date and (ii) such Lender's ratable share (determined in accordance with
Section 4.6) of the outstanding amount of the Facility Letters of Credit.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all
of the outstanding voting securities (or the election of the board of
directors) of which shall at the time be beneficially owned (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended)
directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, association, joint
venture, limited liability company or similar business organization 100% of
the ownership interests having ordinary voting power of which shall at the
time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
41
ARTICLE II
THE CREDITS
2.1. Commitment. From and including the date of this Agreement
and prior to the Facility Termination Date, each Lender severally agrees,
on the terms and conditions set forth in this Agreement, to make Loans to
the Borrower from time to time in amounts not to exceed in the aggregate at
any one time outstanding the amount of its Commitment; provided, however,
that a Lender shall not be required to make any Loan or Loans in excess of
the amount of such Lender's then Available Credit. Subject to the terms of
this Agreement, the Borrower may borrow, repay and reborrow at any time
prior to the Facility Termination Date. The Commitments to lend hereunder
shall expire on the Facility Termination Date.
2.2. Required Payments. Any outstanding Advances and all other
unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date.
2.3. Ratable Loans. Each Advance hereunder shall consist of
Loans made from the several Lenders ratably in proportion to the ratio
that their respective Commitments bear to the Aggregate Commitment.
2.4. Types of Advances. The Advances may be Floating Rate
Advances or Eurodollar Advances, or a combination thereof, selected by the
Borrower in accordance with Sections 2.8 and 2.9.
2.5. Commitment Fee; Reductions in Aggregate Commitment. The
Borrower agrees to pay to the Agent for the account of each Lender a
commitment fee, at a rate per annum equal to the Applicable Commitment
Rate, on the daily average of such Lender's Unused Commitment from the date
hereof to and including the Facility Termination Date, payable in arrears
on the first day of each January, April, July and October hereafter and on
the Facility Termination Date. The Borrower may permanently reduce the
Aggregate Commitment in whole, or in part ratably among the Lenders in
integral multiples of $5,000,000 at any time or from time to time, upon at
least three (3) Business Days' written notice to the Agent, which notice
shall specify the amount of any such reduction, provided, however, that the
amount of the Aggregate Commitment may not be reduced below the sum of (i)
the aggregate principal amount of the outstanding Advances and (ii) the
Facility Letter of Credit Obligations. All accrued commitment fees shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Loans hereunder.
42
2.6. Minimum Amount of Each Advance. Each Advance shall be in the
minimum amount of $2,000,000 (and in multiples of $1,000,000 if in excess
thereof).
2.7. Optional Principal Payments. The Borrower may at any time or
from time to time pay, without penalty or premium, all outstanding Floating
Rate Advances, or, in a minimum aggregate amount of $2,000,000 or any
integral multiple of $1,000,000 in excess thereof, any portion of the
outstanding Floating Rate Advances upon one Business Day's prior notice to
the Agent. The Borrower may, upon three Business Days' prior notice to the
Agent, (a) pay, without penalty or premium, any Eurodollar Advance in full
on the last day of the Interest Period for such Eurodollar Advance, and (b)
prepay any Eurodollar Advance in full prior to the last day of the Interest
Period for such Eurodollar Advance, provided that the Borrower shall also
pay at the time of such prepayment all amounts payable with respect thereto
pursuant to Section 3.4 hereof.
2.8. Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the case of
each Eurodollar Advance, the Interest Period applicable to each Advance
from time to time. The Borrower shall give the Agent irrevocable notice (a
"Borrowing Notice") not later than 10:00 a.m. (Chicago time) on the
Borrowing Date of each Floating Rate Advance and three Business Days before
the Borrowing Date of each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Agent at its address specified pursuant to Article XVI. The
Agent will make the funds so received from the Lenders available to the
Borrower at the Agent's aforesaid address.
43
2.9. Conversion and Continuation of Outstanding Advances
Floating Rate Advances shall continue as Floating Rate Advances unless
and until such Floating Rate Advances are converted into Eurodollar Advances.
Each Eurodollar Advance shall continue as a Eurodollar Advance until the end
of the then applicable Interest Period therefor, at which time such Eurodollar
Advance shall be automatically converted into a Floating Rate Advance
unless the Borrower shall have given the Agent a Conversion/Continuation
Notice requesting that, at the end of such Interest Period, such Eurodollar
Advance either continue as a Eurodollar Advance for the same or another
Interest Period or be repaid. Subject to the terms of Section 2.6, the
Borrower may elect from time to time to convert all or any part of an
Advance of any Type into any other Type or Types of Advances; provided that
any conversion of any Eurodollar Advance may be made on, and only on, the
last day of the Interest Period applicable thereto. The Borrower shall give
the Agent irrevocable notice (a "Conversion/Continuation Notice") of each
conversion of an Advance or continuation of a Eurodollar Advance not later
than 10:00 a.m. (Chicago time) at least one Business Day, in the case of a
conversion into a Floating Rate Advance, or three Business Days, in the
case of a conversion into or continuation of a Eurodollar Advance, prior to
the date of the requested conversion or continuation, specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to
be converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance is
to be converted or continued and, in the case of a conversion into or
continuation of a Eurodollar Advance, the duration of the Interest Period
applicable thereto.
2.10. Changes in Interest Rate, etc. Each Floating Rate Advance
shall bear interest on the outstanding principal amount thereof, for each
day from and including the date such Advance is made or is converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.9 to
but excluding the date it becomes due or is converted into a Eurodollar
Advance pursuant to Section 2.9 hereof, at a rate per annum equal to the
Floating Rate for such day. Changes in the rate of interest on that portion
of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate or in the
Applicable Floating Rate Margin. Each Eurodollar Advance shall bear
interest from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
interest rate determined as applicable to such Eurodollar Advance. No
Interest Period may end after the Facility Termination Date.
44
2.11. Determination of Applicable Margins and Applicable
Commitment Rate. (a) The Applicable Margins and the Applicable Commitment
Rate shall be determined by reference to the Senior Debt Rating in accordance
with the following table:
Applicable Applicable
Senior Debt Eurodollar Floating Rate Applicable
Rating Margin (%) Margin (%) Commitment Rate (%)
BB-/Baa3 or 1.00 0 0.250
higher
BB+/Ba1 1.25 0 0.300
BB/Ba2 1.50 0 0.350
BB-/Ba3 1.75 0.25 0.375
B+/B1 2.00 0.50 0.400
Lower or no 2.25 0.75 0.500
Senior Debt
Rating
(b) The Applicable Floating Rate Margin and the
Applicable Commitment Rate shall be adjusted, as applicable from time to
time, effective on the first Business Day after any change in the Senior
Debt Rating. The applicable Eurodollar Rate Margin in respect of any
Eurodollar Advance shall be adjusted, as applicable from time to time,
effective on the first day of the Interest Period for any Eurodollar
Advance after any change in the Senior Debt Rating.
2.12. Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.8, 2.9 or 2.10, during the continuance
of a Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 11.2 requiring unanimous consent
of the Lenders to changes in interest rates), declare that no Advance may
be made as, converted into or continued as a Eurodollar Advance.
Notwithstanding anything to the contrary contained in Section 2.8, 2.9 or
2.10, during the continuance of an Unmatured Default the Required Lenders
may, at their option, by notice to the Borrower (which notice may be
revoked at the option of the Required Lenders notwithstanding any provision
of Section 11.2 requiring unanimous consent of the Lenders to changes in
interest rates), declare that no Advance may be made as or converted into a
Eurodollar Advance. During the continuance of a Default, the Required
Lenders may, at their option, by notice to the Borrower (which notice maybe
45
revoked at the option of the Required Lenders notwithstanding any
provision of Section 11.2 requiring unanimous consent of the Lenders
to changes in interest rates), declare that (i) each Eurodollar
Advance shall bear interest for the remainder of the applicable Interest
Period at the rate otherwise applicable to such Interest Period plus 2%
per annum and (ii) each Floating Rate Advance shall bear interest at a
rate per annum equal to the Floating Rate otherwise applicable to the
Floating Rate Advance plus 2% per annum.
2.13. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XVI, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time at the place of
receipt) on the date when due, and shall be applied ratably by the Agent
among the Lenders. Each payment delivered to the Agent for the account of
any Lender shall be delivered promptly by the Agent to such Lender in the
same type of funds that the Agent received at its address specified
pursuant to Article XVI or at any Lending Installation specified in a
notice received by the Agent from such Lender. If the Agent receives, for
the account of a Lender, a payment from the Borrower and fails to remit
such payment to the Lender on the Business Day such payment is received (if
received by noon by the Agent) or on the next Business Day (if received
after noon by the Agent), the Agent shall pay to such Lender interest on
such payment at a rate per annum equal to the Federal Funds Effective Rate
for each day for which such payment is so delayed. The Agent is hereby
authorized to charge the account of the Borrower maintained with First
Chicago for each payment of principal, interest and fees as it becomes due
hereunder.
2.14. Notes; Telephonic Notices. Each Lender is hereby authorized
to record the principal amount of each of its Loans and each repayment on
the schedule attached to its Note, provided, however, that the failure to
so record shall not affect the Borrower's obligations under such Note. The
Borrower hereby authorizes the Lenders and the Agent to extend, convert or
continue Advances, effect selections of Types of Advances and to transfer
funds based on telephonic notices made by any person or persons the Agent
or any Lender in good faith believes to be acting on behalf of the
Borrower. The Borrower agrees to deliver promptly to the Agent a written
confirmation, if such confirmation is requested by the Agent or any Lender,
of each telephonic notice signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by the
Agent and the Lenders, the records of the Agent and the Lenders shall
govern absent manifest error.
46
2.15. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, and on any date on
which the Advance is prepaid, whether due to acceleration or otherwise.
Interest and commitment fees shall be calculated for actual days elapsed on
the basis of a 360-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if
payment is received prior to noon (local time at the place of receipt). If
any payment of principal of or interest on an Advance shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in
computing interest in connection with such payment.
2.16. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will
notify each Lender of the contents of each Aggregate Commitment reduction
notice, Borrowing Notice, Conversion/Continuation Notice, and repayment
notice received by it hereunder. The Agent will notify each Lender of the
interest rate applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt notice
of each change in the Alternate Base Rate.
2.17. Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to
any such Lending Installation and the Notes shall be deemed held by each
Lender for the benefit of such Lending Installation. Each Lender may, by
written or telex notice to the Agent and the Borrower, designate a Lending
Installation through which Loans will be made by it and for whose account
Loan payments are to be made.
2.18. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which
it is scheduled to make payment to the Agent of (i) in the case of a
Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a
payment of principal, interest or fees to the Agent for the account of the
Lenders, that it does not intend to make such payment, the Agent may assume
that such payment has been made. The Agent may, but shall not be obligated
to, make the amount of such payment available to the intended recipient in
reliance upon such assumption. If the Borrower or such Lender, as the case
may be, has not in fact made such payment to the Agent, the recipient of
such payment shall, on demand by the Agent, repay to the Agent the amount
so made available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per
annum equal to (a) in the case of payment by a Lender, the Federal Funds
Effective Rate for such day or (b) in the case of payment by the
Borrower, the interest rate applicable to the relevant Advance.
47
2.19. Withholding Tax Exemption. At least five Business Days prior
to the first date on which interest or fees are payable hereunder for the
account of any Lender, each Lender (if any) that is not incorporated under
the laws of the United States of America, or a state thereof, agrees that
it will deliver to each of the Borrower and the Agent two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Lender is entitled to receive payments
under this Agreement and the Notes without deduction or withholding of any
United States federal taxes and an Internal Revenue Service Form W-8 or W-9
entitling such Lender to receive a complete exemption from United States
tax backup withholding. Each Lender which so delivers a Form 1001 or 4224
further undertakes to deliver to each of the Borrower and the Agent two
additional copies of such form (or a successor form) on or before the date
that such form expires (currently, three successive calendar years for Form
1001 and one calendar year for Form 4224) or becomes obsolete or after the
occurrence of any event requiring a change in the most recent forms so
delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the Borrower or the Agent, in
each case certifying that such Lender is entitled to receive payments under
this Agreement and the Notes without deduction or withholding of any United
States federal taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender advises the
Borrower and the Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal tax. If a Lender does
not provide duly executed forms to the Borrower and the Agent within the
time periods set forth in the preceding paragraph, the Borrower or the
Agent shall withhold taxes from payments to such Lender at the applicable
statutory rates and the Borrower shall not be required to pay any
additional amounts as a result of such withholding. Upon the reasonable
request of the Borrower or the Agent, each Lender that has not provided
the forms or other documents, as provided above, on the basis of being
a "United States person," shall submit to Borrower and the Agent a
certificate or other evidence to the effect that it is such a
"United States person."
48
2.20. Extension of Facility Termination Date. (a) The Borrower may
request a one-year extension of the Facility Termination Date by submitting
a request for an extension to the Agent (an "Extension Request") no more
than 27 months nor less than 25 months prior to the then scheduled Facility
Termination Date. Promptly upon (but not later than five Business Days
after) receipt of the Extension Request, the Agent shall notify each Lender
of the contents thereof and shall request each Lender to approve the
Extension Request. Each Lender approving the Extension Request shall
deliver its written approval no later than 30 days later than the date of
the Extension Request. If the approval of each of the Lenders is received
by the Agent within 30 days of the date of the Extension Request (or as
otherwise provided in Section 2.20(b)), the Agent shall promptly so notify
the Borrower, each Lender and the Issuing Bank, and the Facility
Termination Date shall be extended by one year, and in such event the
Borrower may thereafter request further extension(s) of the then scheduled
Facility Termination Date in accordance with this Section 2.20. If any of
the Lenders does not deliver to the Agent such Lender's written approval to
any Extension Request within the 30 days of the date of such Extension
Request, the Facility Termination Date shall not be extended, except as
otherwise provided in Section 2.20(b).
(b) If (i) any Lenders whose pro rata shares of the
Aggregate Commitment do not exceed (in the aggregate) 20% of the Aggregate
Commitment ("Rejecting Lenders") shall not approve an Extension Request,
(ii) all rights and obligations of such Rejecting Lenders under this
Agreement and under the other Loan Documents (including, without
limitation, their Commitment and all Loans owing to them) shall have been
assigned, within 90 days following such Extension Request, in accordance
with Section 2.21, to one or more Replacement Lenders who shall have
approved in writing such Extension Request at the time of such assignment,
and (iii) no other Lender shall have given written notice to the Agent of
such Lender's withdrawal of its approval of the Extension Request, the
Agent shall promptly so notify the Borrower, each Lender and the Issuing
Bank and the Facility Termination Date shall be extended by one year, and
in such event the Borrower may thereafter request further extension(s) as
provided in Section 2.20(a).
49
(c) Within ten days of the Agent's notice to the Borrower
that all of the Lenders have approved an Extension Request (whether
pursuant to Section 2.20(a) or 2.20(b)), the Borrower shall pay to the
Agent for the account of each Lender an extension fee equal to the product
of (i) such Lender's Commitment and (ii) the fee set forth with respect to
such Lender (or such Lender's predecessor-in-interest if such Lender is not
a Lender on the date hereof) set forth in Schedule 2.20 hereto.
2.21. Replacement of Certain Lenders. In the event a Lender (the
"Affected Lender") shall have requested compensation from the Borrower
under Sections 3.1 or 3.2 to cover additional costs incurred by such Lender
that are not being incurred generally by the other Lenders or shall have
delivered a notice pursuant to Section 3.3 that such Affected Lender is
unable to extend Eurodollar Loans for reasons not generally applicable to
the other Lenders or such Affected Lender is a Rejecting Lender pursuant to
Section 2.20, then, in any such case, the Borrower or the Agent may make
written demands on such Affected Lender (with a copy to the Agent in the
case of a demand by the Borrower and a copy to the Borrower in the case of
a demand by the Agent) for the Affected Lender to assign, and such Affected
Lender shall use its best efforts to assign, pursuant to one or more duly
executed assignment agreements in substantially the form provided for in
Section 15.3.1, within five Business Days after the date of such demand, to
one or more financial institutions that comply with the provisions of
Section 15.3, and if selected by the Borrower, that are reasonably
acceptable to the Agent, that the Borrower or the Agent, as the case may
be, shall have engaged for such purpose (the "Replacement Lender"), all of
such Affected Lender's rights and obligations under this Agreement and the
other Loan Documents (including, without limitation, its Commitment and all
Loans owing to it) in accordance with Section 15.3. The Agent agrees, upon
the occurrence of such events with respect to an Affected Lender and upon
written request of the Borrower, to use its reasonable efforts to obtain
the commitments from one or more financial institutions to act as a
Replacement Lender. The Agent is authorized, but shall not be obligated to,
execute one or more of such assignment agreements as attorney-in-fact for
any Affected Lender failing to execute and deliver the same within five
Business Days after the date of such demand. Further, with respect to such
assignment, the Affected Lender shall have concurrently received, in cash,
all amounts due and owing to the Affected Lender hereunder or under any
other Loan Document, including without limitation the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment, amounts payable under
Sections 3.1 and 3.2 with respect to such Affected Lender and all fees
payable to such Affected Lender hereunder; provided that, upon such
Affected Lender's replacement, such Affected Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Article III and Section 12.7, as well as to any fees accrued hereunder
and not yet paid, and shall continue to be obligated under Section 13.8
with respect to obligations and liabilities accruing prior to the
replacement of such Affected Lender.
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ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any interpretation thereof,
or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to
any tax, duty, charge or withholding on or from payments due from the
Borrower (excluding any taxes imposed on, or based on, or determined by
reference to the net income of any Lender or applicable Lending
Installation, including, without limitation, franchise taxes, alternative
minimum taxes and any branch profits tax (collectively, "Excluded Taxes")),
any taxes imposed on, or based on, or determined by reference to or changes
the basis of taxation of payments to any Lender in respect of its Loans or
other amounts due it hereunder (except for Excluded Taxes),
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or
any applicable Lending Installation (other than reserves and assessments
taken into account in determining the interest rate applicable to
Eurodollar Rates), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making,
funding or maintaining loans or reduces any amount receivable by any Lender
or any applicable Lending Installation in connection with loans, or
requires any Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of loans held or interest
received by it, by an amount deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making,
funding and maintaining its Loans and its Commitment; provided, however,
that the Borrower shall not be required to increase any such amounts
payable to any Lender (i) if such Lender fails to comply with the
requirements of Section 2.19 hereof or (2) to the extent that such Lender
determines, in its sole reasonable discretion, that it can, after notice
from the Borrower, through reasonable efforts, eliminate or reduce the
amount of tax liabilities payable (without additional costs or expenses
unless the Borrower agrees to bear such costs or expenses) or other
disadvantages or risks (economic or otherwise) to such Lender or the Agent.
If any Lender receives a refund in respect of any tax for which such Lender
has received payment from the Borrower hereunder, such Lender shall
promptly notify the Borrower of such refund and such Lender shall repay the
amount of such refund to the Borrower, provided that the Borrower, upon the
request of such Lender, agrees to return such refund (plus any penalties,
interest or other charges) to such Lender in the event such Lender is
required to repay such refund. The determination as to whether any Lender
has received a refund shall be made by such Lender and such determination
shall be conclusive absent manifest error.
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3.2. Changes in Capital Adequacy Regulations. If a Lender or
Issuing Bank determines the amount of capital required or expected to be
maintained by such Lender, any Lending Installation of such Lender or
Issuing Bank or any corporation controlling such Lender or Issuing Bank is
increased as a result of a Change, then, within 15 days of demand by such
Lender or Issuing Bank, the Borrower shall pay such Lender or Issuing Bank
the amount necessary to compensate for any shortfall in the rate of return
on the portion of such increased capital which such Lender or Issuing Bank
determines is attributable to this Agreement, its Loans or its obligation
to make Loans hereunder, or its issuance or maintenance of or participation
in, or commitment to issue, to maintain or to participate in, the Facility
Letters of Credit hereunder (after taking into account such Lender's or
Issuing Bank's policies as to capital adequacy). "Change" means (i) any
change after the date of this Agreement in the Risk-Based Capital
Guidelines or (ii) any adoption of or change in any
other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of
law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender, Issuing Bank, Lending
Installation or any corporation controlling any Lender or Issuing Bank.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines
in effect in the United States on the date of this Agreement, including
transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International Convergence of
Capital Measurements and Capital Standards," including transition rules,
and any amendments to such regulations adopted prior to the date of this
Agreement.
3.3. Availability of Types of Advances. If any Lender determines
and notifies the Agent that maintenance of any of such Lender's Eurodollar
Loans at a suitable Lending Installation would violate any applicable law,
rule, regulation or directive, whether or not having the force of law, the
Agent shall suspend the availability of the affected Type of Advance and
require any Eurodollar Advances of the affected Type to be repaid; or if
the Required Lenders determine and notify the Agent that (i) deposits of a
type or maturity appropriate to match fund Eurodollar Advances are not
available, the Agent shall suspend the availability of the affected Type of
Advance with respect to any Eurodollar Advances made after the date of any
such determination, or (ii) an interest rate applicable to a Type of
Advance does not accurately reflect the cost of making a Eurodollar Advance
of such Type, then, if for any reason whatsoever the provisions of Section
3.1 are inapplicable, the Agent shall suspend the availability of the
affected Type of Advance with respect to any Eurodollar Advance made after
the date of any such determination.
3.4. Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable
Interest Period, whether because of acceleration, prepayment or otherwise,
or a Eurodollar Advance is not made on the date specified by the Borrower
for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost in liquidating
or employing deposits acquired to fund or maintain the Eurodollar Advance.
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3.5. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Advances to reduce any
liability of the Borrower to such Lender under Sections 3.1 and 3.2 or to
avoid the unavailability of a Type of Advance under Section 3.3, so long as
such designation is not disadvantageous to such Lender. Each Lender or
Issuing Bank shall deliver a written statement of such Lender or Issuing
Bank as to the amount due, if any, under Sections 3.1, 3.2 or 3.4. Such
written statement shall set forth in reasonable detail the calculations
upon which such Lender or Issuing Bank determined such amount and shall be
final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in connection
with a Eurodollar Advance shall be calculated as though each Lender funded
its Eurodollar Advance through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining
the Eurodollar Advance applicable to such Loan, whether in fact that is the
case or not. Unless otherwise provided herein, the amount specified in the
written statement shall be payable on demand after receipt by the Borrower
of the written statement. The obligations of the Borrower under Sections
3.1, 3.2 and 3.4 shall survive payment of the Obligations and termination
of this Agreement.
ARTICLE IV
THE LETTER OF CREDIT FACILITY
4.1. Facility Letters of Credit. The Issuing Bank agrees, on the
terms and conditions set forth in this Agreement, to issue from time to
time for the account of the Borrower, through such offices or branches as
it and the Borrower may jointly agree, one or more Facility Letters of
Credit in accordance with this Article IV, during the period commencing on
the date hereof and ending on the Business Day prior to the Facility
Termination Date.
4.2. Limitations. No Issuing Bank shall issue, amend or extend,
at any time, any Facility Letter of Credit:
(i) if the aggregate maximum amount then available for
drawing under Letters of Credit issued by such Issuing Bank, after giving
effect to the Facility Letter of Credit or amendment or extension thereof
requested hereunder, shall exceed any limit imposed by law or regulation
upon such Issuing Bank;
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(ii) if, after giving effect to the Facility Letter of Credit
or amendment or extension thereof requested hereunder, the aggregate
principal amount of the Facility Letter of Credit Obligations would exceed
$20,000,000;
(iii) that, in the case of the issuance of a Facility Letter of
Credit, is in, or in the case of an amendment of a Facility Letter of
Credit, increases the face amount thereof by, an amount in excess of the
then Aggregate Available Credit;
(iv) if, after giving effect to the Facility Letter of Credit
or amendment or extension thereof requested hereunder, Consolidated Senior
Debt Borrowings would exceed the Borrowing Base as of the most recent
Inventory Valuation Date;
(v) if such Issuing Bank receives written notice from the
Agent at or before noon (Chicago time) on the proposed Issuance Date of
such Facility Letter of Credit that one or more of the conditions precedent
contained in Sections 5.1 or 5.2, as applicable, would not on such Issuance
Date be satisfied, unless such conditions are thereafter satisfied and
written notice of such satisfaction is given to such Issuing Bank by the
Agent;
(vi) that has an expiration date (taking into account any
automatic renewal provisions thereof) later than the Business Day next
preceding the scheduled Facility Termination Date; or
(vii) that is in a currency other than U.S. Dollars.
4.3. Conditions. In addition to being subject to the satisfaction
of the conditions contained in Sections 5.1 and 5.2, as applicable, the
issuance of any Facility Letter of Credit is subject to the satisfaction in
full of the following conditions:
(i) the Borrower shall have delivered to the Issuing Bank
at such times and in such manner as the Issuing Bank may reasonably
prescribe a Reimbursement Agreement and such other documents and materials
as may be reasonably required pursuant to the terms thereof, and the
proposed Facility Letter of Credit shall be reasonably satisfactory to such
Issuing Bank in form and content; and
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(ii) as of the Issuance Date no order, judgment or decree of
any court, arbitrator or governmental authority shall enjoin or restrain
such Issuing Bank from issuing the Facility Letter of Credit and no law,
rule or regulation applicable to such Issuing Bank and no directive from
and governmental authority with jurisdiction over the Issuing Bank shall
prohibit such Issuing Bank from issuing Letters of Credit generally or from
issuing that Facility Letter or Credit.
4.4. Procedure for Issuance of Facility Letters of Credit. (a) The
Borrower shall give the Issuing Bank and the Agent not less than 15 days'
prior written notice of any requested issuance of a Facility Letter of
Credit under this Agreement. Such notice shall specify (i) the stated
amount of the Facility Letter of Credit requested, (ii) the requested
Issuance Date, which shall be a Business Day, (iii) the date on which such
requested Facility Letter of Credit is to expire, which date shall be in
compliance with the requirements of Section 4.2(vi), (iv) the purpose for
which such Facility Letter of Credit is to be issued, and (v) the Person
for whose benefit the requested Facility Letter of Credit is to be issued.
At the time such request is made, the Borrower shall also provide the Agent
with a copy of the form of the Facility Letter of Credit it is requesting
be issued.
(b) Upon receipt of a request for issuance of a Facility Letter of
Credit in accordance with Section 4.4(a), the Agent shall promptly deliver
a copy of such request to the Lender then designated as Issuing Bank
pursuant to Section 4.10. Within 10 days after receipt of such request,
such Issuing Bank shall approve or disapprove, in its reasonable
discretion, the issuance of such requested Facility Letter of Credit, but
the issuance of such approved Facility Letter of Credit shall continue to
be subject to the provisions of this Article IV. The Issuing Bank shall use
reasonable efforts to notify the Borrower of any changes in the Issuing
Bank's policies or procedures that could reasonably be expected to affect
adversely the Issuing Bank's approval of requested Facility Letters of
Credit.
(c) Not less than three nor more than five Business Days prior to
the issuance of a Facility Letter of Credit approved by the Issuing Bank as
provided in Section 4.4(b), the Borrower shall confirm in writing to the
Agent and to the Issuing Bank the intended Issuance Date and amount of such
Facility Letter of Credit. The Agent shall determine, as of the close of
business on the day it receives such written confirmation from the
Borrower, whether the issuance of such Facility Letter of Credit would be
55
permitted under the provisions of Sections 4.2(iii) and (iv) and,
prior to the close of business on the second Business Day after the
Agent received such written confirmation from the Borrower under
Section 4.4(a), the Agent shall notify the Issuing Bank and the Borrower
(in writing or by telephonic notice confirmed promptly thereafter in
writing) whether issuance of the requested Facility Letter of Credit
would be permitted under the provisions of Sections 4.2(iii) and (iv).
If the Agent notifies the Issuing Bank and the Borrower that such issuance
would be so permitted, then, subject to the terms and conditions of this
Article IV and provided that the applicable conditions set forth in
Sections 5.1 and 5.2 have been satisfied, the Issuing Bank shall, on the
requested Issuance Date, issue the requested Facility Letter of Credit
in accordance with the Issuing Bank's usual and customary business practices.
The Issuing Bank shall give the Agent written notice, or telephonic notice
confirmed promptly thereafter in writing, of the issuance of a Facility
Letter of Credit.
(d) An Issuing Bank shall not extend or amend any Facility Letter
of Credit unless the requirements of this Section 4.4 are met as though a
new Facility Letter of Credit were being requested and issued.
(e) Any Lender may, but shall not be obligated to, issue to the
Borrower or any Subsidiary Letters of Credit (that are not Facility Letters
of Credit) for its own account, and at its own risk. None of the provisions
of this Article IV shall apply to any Letter of Credit that is not a
Facility Letter of Credit.
4.5. Duties of Issuing Bank. Any action taken or omitted to be
taken by an Issuing Bank under or in connection with any Facility Letter of
Credit, if taken or omitted in the absence of willful misconduct or gross
negligence, shall not put such Issuing Bank under any resulting liability
to any Lender or, assuming that such Issuing Bank has complied with the
procedures specified in Section 4.4, relieve any Lender of its obligations
hereunder to such Issuing Bank. In determining whether to pay under any
Facility Letter of Credit, the Issuing Bank shall have no obligation
relative to the Lenders other than to confirm that any documents required
to be delivered under such Facility Letter of Credit appear to have been
delivered in compliance and that they appear to comply on their face with
the requirements of such Facility Letter of Credit.
4.6. Participation. (a) Immediately upon issuance by an Issuing
Bank of any Facility Letter of Credit in accordance with Section 4.4,
each Lender shall be deemed to have irrevocably and unconditionally
purchased and received from such Issuing Bank, without recourse or warranty,
an undivided interest and participation (ratably in proportion to the
ratio that such Lender's Commitment bears to the Aggregate Commitment) in
such Facility Letter of Credit (including, without limitation, all
obligations of the Borrower with respect thereto other than amounts owing
to such Issuing Bank under Section 3.2).
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(b) In the event that an Issuing Bank makes any payment under any
Facility Letter of Credit and the Borrower shall not have repaid such
amount to such Issuing Bank on or before the date of such payment by such
Issuing Bank, such Issuing Bank shall promptly so notify the Agent, which
shall promptly so notify each Lender. Upon receipt of such notice, each
Lender shall promptly and unconditionally pay to the Agent for the account
of such Issuing Bank the amount of such Lender's share (ratably in
proportion to the ratio that such Lender's Commitment bears to the
Aggregate Commitment) of such payment in same day funds, and the Agent
shall promptly pay such amount, and any other amounts received by the Agent
for such Issuing Bank's account pursuant to this Section 4.6(b), to such
Issuing Bank. If the Agent so notifies such Lender prior to 10:00 A.M.
(Chicago time) on any Business Day, such Lender shall make available to the
Agent for the account of such Issuing Bank such Lender's share of the
amount of such payment on such Business Day in same day funds. If and to
the extent such Lender shall not have so made its share of the amount of
such payment available to the Agent for the account of such Issuing Bank,
such Lender agrees to pay to the Agent for the account of such Issuing Bank
forthwith on demand such amount, together with interest thereon, for each
day from the date such payment was first due until the date such amount is
paid to the Agent for the account of such Issuing Bank, at the Federal
Funds Effective Rate. The failure of any Lender to make available to the
Agent for the account of such Issuing Bank such Lender's share of any such
payment shall not relieve any other Lender of its obligation hereunder to
make available to the Agent for the account of such Issuing Bank its share
of any payment on the date such payment is to be made.
(c) The payments made by the Lenders to an Issuing Bank in
reimbursement of amounts paid by it under a Facility Letter of Credit shall
constitute, and the Borrower hereby expressly acknowledges and agrees that
such payments shall constitute, Advances hereunder and such payments shall
for all purposes be treated as Advances (notwithstanding that the amounts
thereof may not comply with the provisions of Section 2.6). Such Advances
shall be Floating Rate Advances, subject to the Borrower's rights under
Article II hereof.
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(d) Upon the request of the Agent or any Lender, an Issuing Bank
shall furnish to the requesting Agent or Lender copies of any Facility
Letter of Credit or Reimbursement Agreement to which such Issuing Bank is
party and such other documentation as may reasonably be requested by the
Agent or the Lender.
(e) The obligations of the Lenders to make payments to the Agent
for the account of an Issuing Bank with respect to a Facility Letter of
Credit shall be irrevocable, not subject to any qualification or exception
whatsoever and shall be made in accordance with, but not subject to, the
terms and conditions of this Agreement under all circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower may have at any time against a beneficiary named
in a Facility Letter of Credit or any transferee of any Facility Letter of
Credit (or any Person for whom any such transferee may be acting), such
Issuing Bank, the Agent, any Lender, or any other Person, whether in
connection with this Agreement, any Facility Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including
any underlying transactions between the Borrower or any Subsidiary and the
beneficiary named in any Facility Letter of Credit);
(iii) any draft, certificate or any other document presented
under the Facility Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect of any statement therein being
untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(v) any failure by the Agent or the Issuing Bank to make any
reports required pursuant to Section 4.8; or
(vi) the occurrence of any Default or Unmatured Default.
4.7. Compensation for Facility Letters of Credit. (a) The
Borrower agrees to pay to the Agent, in the case of each outstanding
Facility Letter of Credit, the Facility Letter of Credit Fee therefor,
payable in monthly installments in advance on the Issuance Date (which
installment shall be a pro rata portion of the annual Facility Letter
of Credit Fee for the period commencing on the Issuance Date and ending on
the day preceding the Payment Date next following the Issuance Date) and
on each Payment Date after the Issuance Date (which installment shall be
a pro rata portion of the annual Facility Letter of Credit Fee for the
month in which such Payment Date occurs). Facility Letter of Credit
Fees shall be calculated, on a pro rata basis for the period to which such
payment applies, for actual days that will elapse during such period,
on the basis of a 360-day year. The Agent shall promptly remit such
Facility Letter of Credit Fees, when paid, to the Lenders (ratably in the
proportion that each Lender's Commitment bears to the Aggregate Commitment).
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(b) An Issuing Bank shall have the right to receive solely for its
own account such amounts as the Borrower may agree, in writing, to pay to
such Issuing Bank with respect to issuance fees and for such Issuing Bank's
out-of-pocket costs of issuing and servicing Facility Letters of Credit.
4.8. Issuing Bank Reporting Requirements. Each Issuing Bank shall,
no later than the tenth day following the last day of each month, provide
to the Agent a schedule of the Facility Letters of Credit issued by it, in
form and substance reasonably satisfactory to the Agent, showing the
Issuance Date, account party, original face amount, amount (if any) paid
thereunder, expiration date and the reference number of each Facility
Letter of Credit outstanding at any time during such month and the
aggregate amount (if any) payable by the Borrower to such Issuing Bank
during the month pursuant to Section 3.2. Copies of such reports shall be
provided promptly to each Lender by the Agent.
4.9. Indemnification; Nature of Issuing Bank's Duties. (a) In
addition to amounts payable as elsewhere provided in this Article IV, the
Borrower hereby agrees to protect, indemnify, pay and save the Agent and
each Lender and Issuing Bank harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) arising from the claims of third
parties against the Agent, Issuing Bank or Lender as a consequence, direct
or indirect, of (i) the issuance of any Facility Letter of Credit other
than, in the case of an Issuing Bank, as a result of its willful misconduct
or gross negligence, or (ii) the failure of an Issuing Bank issuing a
Facility Letter of Credit to honor a drawing under such Facility Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto government or governmental
authority.
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(b) As among the Borrower, the Lenders, the Agent and the Issuing
Bank, the Borrower assumes all risks of the acts and omissions of, or
misuse of Facility Letters of Credit by, the respective beneficiaries of
such Facility Letters of Credit. In furtherance and not in limitation of
the foregoing, neither the Issuing Bank nor the Agent nor any Lender shall
be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of the Facility Letters of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Facility Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) for failure of the
beneficiary of a Facility Letter of Credit to comply fully with conditions
required in order to draw upon such Facility Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (v) for errors in interpretation of technical terms;
(vi) for any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any Facility Letter of Credit or
of the proceeds thereof; (vii) for the misapplication by the beneficiary of
a Facility Letter of Credit of the proceeds of any drawing under such
Facility Letter of Credit; and (viii) for any consequences arising from
causes beyond the control of the Agent, the Issuing Bank and the Lenders
including, without limitation, any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority. None of the above shall affect, impair, or prevent
the vesting of any of the Issuing Bank's rights or powers under this
subsection 4.9.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
an Issuing Bank under or in connection with the Facility Letters of Credit
or any related certificates, if taken or omitted in good faith, shall not
put such Issuing Bank, the Agent or any Lender under any resulting
liability to the Borrower or relieve the Borrower of any of its obligations
hereunder to any such Person.
(d) Notwithstanding anything to the contrary contained in this
Section 4.9, the Borrower shall have no obligation to indemnify an Issuing
Bank under this Section 4.9 in respect of any liability incurred by such
Issuing Bank arising primarily out of the willful misconduct or gross
negligence of such Issuing Bank, as determined by a court of competent
jurisdiction, or out of the wrongful dishonor by such Issuing Bank of a
proper demand for payment made under the Facility Letters of Credit issued
by such Issuing Bank, unless such dishonor was made at the request of the
Borrower.
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4.10. Resignation of Issuing Bank. The Issuing Bank shall continue
to be the Issuing Bank unless and until (i) it shall have given the
Borrower and the Agent notice that it has elected to resign as Issuing Bank
and (ii) a replacement Issuing Bank shall have been designated and approved
in writing by the Agent and the Borrower. The resigning Issuing Bank shall
continue to have the rights and obligations of an Issuing Bank hereunder
solely with respect to Facility Letters of Credit theretofore issued by it
notwithstanding the designation of a replacement Issuing Bank hereunder),
but upon such designation of a replacement Issuing Bank, the resigning
Issuing Bank shall not thereafter issue any Facility Letters of Credit
(unless such Lender shall again thereafter be designated as Issuing Bank in
accordance with the provisions of this Section 4.10).
4.11. Obligations of Issuing Bank and Other Lenders. Except to the
extent that a Lender shall have agreed to be designated as an Issuing Bank,
no Lender shall have any obligation to accept or approve any request for,
or to issue, amend or extend, any Letter of Credit, and the obligations of
the Issuing Bank to issue, amend or extend any Facility Letter of Credit
are expressly limited by and subject to the provisions of this Article IV.
ARTICLE V
CONDITIONS PRECEDENT
5.1. Initial Advance. The Lenders shall not be required to make
the initial Advance hereunder, and the Issuing Bank shall not be required
to issue the initial Facility Letter of Credit hereunder, unless the
Borrower has paid to the Agent the fees set forth in the letter agreement
dated July 31, 1995 between the Agent and the Borrower, and from which
payment the Agent shall have paid to the Lenders the fees provided to be
paid to them in accordance with the Agent's "offer letter" dated August 23,
1995, and the Borrower has furnished to the Agent with sufficient copies
for the Lenders:
(i) Copies of the certificate of incorporation of the Borrower and
each Guarantor, together with all amendments, and a certificate of good
standing, all certified by the appropriate governmental officer in the
jurisdiction of incorporation.
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(ii) Copies, certified by the Secretary or Assistant Secretary of the
Borrower and each Guarantor, of each such corporation's by-laws and of its
Board of Directors' resolutions (and resolutions of other bodies, if any
are deemed necessary by counsel for any Lender) authorizing the execution
of the Loan Documents.
(iii) Incumbency certificates, executed by the Secretary or Assistant
Secretary of the Borrower and each Guarantor, which shall identify by name
and title and bear the signature of the officers of the such corporation
authorized to sign the Loan Documents and the Guaranty (as applicable) and
(if applicable) to make borrowings hereunder and to request, apply for and
execute Facility Letter of Credit Reimbursement Agreements with respect to
Facility Letters of Credit hereunder, upon which certificates the Agent,
the Lenders and the Issuing Bank shall be entitled to rely until informed
of any change in writing by the Borrower.
(iv) A certificate, signed by an Authorized Officer, certifying that on
the initial Borrowing Date or initial Issuance Date no Default or Unmatured
Default has occurred and is continuing.
(v) A written opinion of Xxxx, Scholer, Fierman, Xxxx & Handler,
counsel to the Borrower and Guarantors, addressed to the Agent and Lenders
in substantially the form of Exhibit "C" hereto.
(vi) A written opinion of Xxxxxx Xxxx, Director-Legal of the Borrower,
addressed to the Agent and the Lenders in substantially the form of Exhibit
"D' hereto.
(vii) A written opinion of Lord, Bissell & Brook, Illinois counsel to
the Borrower and Guarantors, addressed to the Agent and the Lenders in
substantially the form of Exhibit "E" hereto.
(viii) Notes payable to the order of each of the Lenders.
(ix) Written money transfer instructions, in substantially the form of
Exhibit "F" hereto, addressed to the Agent and signed by an Authorized
Officer, together with such other related money transfer authorizations as
the Agent may have reasonably requested.
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(x) The Guaranty duly executed by the Guarantors.
(xi) A Contribution Agreement duly executed by the Guarantors in the
form of Exhibit "G" hereto (the "Contribution Agreement").
(xii) A Subordination Agreement duly executed by the Non-Borrowing
Subsidiaries in the form of Exhibit "H" hereto (the "Subordination
Agreement").
(xiii) Evidence satisfactory to the Agent (A) of payment in full (which
payment may be made from the proceeds of the initial Advance hereunder) of
all obligations of the Borrower to, and termination of the Borrower's
financing arrangements with, GECC, and (B) that all Liens securing such
obligations and financing arrangements shall be discharged promptly, but in
no event later than 90 days, following the payment of such obligations.
(xiv) Such other documents as any Lender or Issuing Bank or their
respective counsel may have reasonably requested.
5.2. Each Advance. The Lenders shall not be required to make any
Advance (other than the conversion of an Advance of one Type to an Advance
of another Type that does not increase the aggregate amount of outstanding
Advances), unless on the applicable Borrowing Date, and an Issuing Bank
shall not be required to issue, amend or extend a Facility Letter of Credit
unless on the applicable Issuance Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article VI are true
and correct in all material respects as of such Borrowing Date or Issuance
Date except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation or
warranty shall be true and correct in all material respects on and as of
such earlier date and except to the extent that any such representation or
warranty relates to changes otherwise permitted by this Agreement.
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(iii) After the making of such Advance or issuance of such Facility Letter
of Credit, Consolidated Senior Debt Borrowings shall not exceed the
Borrowing Base (determined as of the most recent Inventory Valuation Date).
(iv) The Borrower shall have delivered to the Agent, not more than three
(3) Business Days prior to the applicable Borrowing Date or Issuance Date,
a duly completed certificate in substantially the form of Exhibit "I"
hereto.
(v) All legal matters incident to (A) the making of such Advance shall
be reasonably satisfactory to the Lenders and their counsel and (B) the
issuance of such Facility Letter of Credit shall be reasonably satisfactory
to the Agent, such Issuing Bank and their respective counsel.
Each Borrowing Notice with respect to each such Advance and each
request for a Facility Letter of Credit shall constitute a representation
and warranty by the Borrower that the conditions contained in Sections
5.2(i) and (ii) have been satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
6.1. Existence and Standing. The Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite authority to conduct
its business in each jurisdiction in which its business is conducted
(except to the extent that a failure to maintain such existence, good
standing or authority would not reasonably be expected to have and does not
have a Material Adverse Effect). Each of the Significant Guarantors is a
corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all requisite
authority to conduct its business in each jurisdiction in which its
business is conducted (except to the extent that a failure to maintain such
existence, good standing or authority would not reasonably be expected to
have and does not have a Material Adverse Effect).
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6.2. Authorization and Validity. The Borrower has the corporate
power and authority to execute and deliver the Loan Documents and to
perform its obligations hereunder and thereunder. The execution and
delivery by the Borrower of the Loan Documents and the performance of its
obligations thereunder have been duly authorized and the Loan Documents
constitute legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms, subject to bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and general principles of equity. Each of the Guarantors has the
corporate power and authority to execute and deliver the Guaranty and to
perform its obligations thereunder. The execution and delivery by the
Guarantors of the Guaranty and the performance of their obligations
thereunder have been duly authorized, and the Guaranty constitutes the
legal, valid and binding obligations of the Guarantors enforceable against
the Guarantors in accordance with its terms, subject to bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and general principles of equity.
6.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents or by the Significant
Guarantors of the Guaranty, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof or thereof will
violate in any material respect any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower or any of the
Significant Guarantors or the Borrower's or any Significant Guarantor's
certificate of incorporation or by-laws or the provisions of any indenture,
instrument or agreement to which the Borrower or any Significant Guarantor
is a party or is subject, or by which it, or its Property, is bound, or
conflict with or constitute a default thereunder, or result in the creation
or imposition of any Lien in, of or on the Property of the Borrower or any
Significant Guarantor pursuant to the terms of any such indenture,
instrument or agreement except that, until the payment of the Borrower's
Indebtedness to GECC as provided in Section 5.2(xiii) hereof, the execution
and delivery of this Agreement may violate Borrower's credit agreement with
GECC. Except as set forth on Schedule "6.3" hereto, no order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is
required in connection with the execution, delivery and performance of, or
the legality, validity, binding effect or enforceability of, any of the
Loan Documents or the Guaranty.
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6.4. Financial Statements. The June 30, 1995 unaudited condensed
consolidated financial statements of the Borrower and its Subsidiaries
delivered to the Lenders were prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and note disclosures normally included in annual financial statements
prepared in accordance with GAAP have been condensed or omitted pursuant to
those rules and regulations. Such statements fairly present, in all
material respects, the consolidated financial condition and operations of
the Borrower and its Subsidiaries at such date and the consolidated results
of their operations for the period then ended, subject to normal recurring
adjustments.
6.5. Material Adverse Change. Since the date of the financial
statements (whether quarterly or annual) of the Borrower that have most
recently been delivered by the Borrower to the Agent, there has been no
change in the business, Property, condition (financial or otherwise) or
results of operations of the Borrower and the Significant Guarantors (taken
as a whole) that has had or would reasonably be expected to have a Material
Adverse Effect.
6.6. Taxes. The Borrower and the Significant Guarantors have
filed all United States federal income tax returns and all other material
tax returns which are required to be filed and have paid all taxes due
pursuant to said returns or pursuant to any assessment received by the
Borrower or any such Significant Guarantor, except such taxes, if any, as
are being contested in good faith and as to which adequate reserves have
been provided. No tax Liens have been filed and no claims are being
asserted with respect to any such taxes. The charges, accruals and reserves
on the books of the Borrower and the Significant Guarantors in respect of
any taxes or other governmental charges are adequate in accordance with
GAAP.
6.7. Litigation and Contingent Obligations. Except as set forth
on Schedule "6.7" hereto, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of any
Authorized Officer, threatened against or affecting the Borrower or any
Significant Guarantor that has had or would reasonably be expected to have
a Material Adverse Effect. Other than any liability incident to such
litigation, arbitration or proceedings, the Borrower and the Significant
Guarantors have no material contingent obligations not provided for or
disclosed in the financial statements (whether quarterly or annual) of the
Borrower that have been most recently delivered by the Borrower to the
Agent that has had or would reasonably be expected to have a Material
Adverse Effect.
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6.8. Subsidiaries. Schedule "6.8" hereto contains an accurate
list of all of the Subsidiaries of the Borrower, setting forth their
respective jurisdictions of incorporation or formation and the percentage
of their respective capital stock or partnership interests owned by the
Borrower or its Subsidiaries. All of the issued and outstanding shares of
capital stock of such Subsidiaries that are corporations have been duly
authorized and validly issued and are fully paid and non-assessable.
6.9. ERISA. The Unfunded Liabilities of all Single Employer Plans
do not in the aggregate exceed $5,000,000. Neither the Borrower nor any
other member of the Controlled Group has incurred, or is reasonably
expected to incur, any withdrawal liability to Multiemployer Plans in
excess of $5,000,000 in the aggregate. Each Plan complies in all material
respects with all applicable requirements of law and regulations, no
Reportable Event has occurred with respect to any Plan, neither the
Borrower nor any other member of the Controlled Group has withdrawn from
any Multiemployer Plan or initiated steps to do so, and no steps have been
taken to terminate any Plan.
6.10. Accuracy of Information. All factual information heretofore
or contemporaneously furnished by or on behalf of the Borrower or any
Guarantor to the Agent or any Lender for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all other
such factual information hereafter furnished by or on behalf of the
Borrower or any Guarantor to the Agent or any Lender will be, true and
accurate (taken as a whole), in all material respects, on the date as of
which such information is dated or certified and not incomplete by omitting
to state any material fact necessary to make such information (taken as a
whole) not misleading at such time.
6.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.
6.12. Material Agreements. Neither the Borrower nor any
Significant Guarantor is in default, which default has had or would
reasonably be expected to have a Material Adverse Effect, in the
performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in (i) any agreement to which it is a party, or
(ii) any agreement or instrument evidencing or governing Indebtedness.
6.13. Labor Disputes and Acts of God. Neither the business nor the
Property of the Borrower or of any Significant Guarantor is affected by any
fire, explosion, accident, strike, lockout, or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or of the public
enemy, or other casualty (whether or not covered by insurance), which has
had or would reasonably be expected to have a Material Adverse Effect.
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6.14. Ownership and Liens. The Borrower and each of the
Significant Guarantors have title to, or valid leasehold interests in, all
of their respective properties and assets, real and personal, including the
properties and assets and leasehold interests reflected in the financial
statements referred to in Section 6.4 (except to the extent that (i) such
properties or assets have been disposed of in the ordinary course of
business or (ii) the failure to have such title has not had and would not
reasonably be expected to have a Material Adverse Effect) and none of the
properties and assets owned by the Borrower or any Significant Guarantor
and none of their leasehold interests is subject to any Lien, except as may
be permitted pursuant to Section 8.8.
6.15. Operation of Business. The Borrower and each of the
Significant Guarantors possess all licenses, permits, franchises, patents,
copyrights, trademarks, and trade names, or rights thereto, to conduct
their respective businesses substantially as now conducted, and as
presently proposed to be conducted, with such exceptions as have not had
and would not reasonably be expected to have a Material Adverse Effect.
6.16. Laws; Environment. Except as set forth on Schedule "6.16"
hereto, the Borrower and each of the Significant Guarantors have duly
complied, and their businesses, operations and Property are in compliance,
in all material respects, with the provisions of all federal, state, and
local statutes, laws, codes, and ordinances and all rules and regulations
promulgated thereunder (including without limitation those relating to the
environment, health and safety). Except as set forth on Schedule "6.16"
hereto, the Borrower and each of the Significant Guarantors have been
issued all required federal, state, and local permits, licenses,
certificates, and approvals relating to (1) air emissions; (2) discharges
to surface water or groundwater; (3) solid or liquid waste disposal; (4)
the use, generation, storage, transportation, or disposal of toxic or
hazardous substances or hazardous wastes (intended hereby and hereafter to
include any and all such materials listed in any federal, state, or local
law, code, or ordinance and all rules and regulations promulgated
thereunder as hazardous); or (5) other environmental, health or safety
matters. Except in accordance with a valid governmental permit, license,
certificate or approval or as set forth on Schedule "6.16" hereto, to the
best knowledge of the Borrower, there has been no material emission,
spill, release, or discharge into or upon (1) the air; (2) soils, or any
improvements located thereon; (3) surface water or groundwater; or (4)
the sewer, septic system or waste treatment, storage or disposal
system servicing any Property of the Borrower or any
Significant Guarantor, of any toxic or hazardous substances or hazardous
68
wastes at or from such Property. There has been no written complaint,
order, directive, claim, citation, or notice by any governmental authority
or any person or entity with respect to violations of law or damage by
reason of the Borrower's or any Significant Guarantor's (1) air emissions;
(2) spills, releases, or discharges to soils or improvements located
thereon, surface water, groundwater or the sewer, septic system or waste
treatment, storage or disposal systems servicing any Property; (3) solid or
liquid waste disposal; (4) use, generation, storage, transportation, or
disposal of toxic or hazardous substances or hazardous waste; or (5) other
environmental, health or safety matters affecting the Borrower or any
Significant Guarantor or its business, operation or Property. Except as set
forth on Schedule "6.16" hereto, neither the Borrower nor any Significant
Guarantor has any material Indebtedness, obligation, or liability, absolute
or contingent, matured or not matured, with respect to the storage,
treatment, cleanup, or disposal of any solid wastes, hazardous wastes, or
other toxic or hazardous substances (including without limitation any such
indebtedness, obligation, or liability with respect to any current
regulation, law or statute regarding such storage, treatment, cleanup, or
disposal). A matter will not constitute a breach of this Section 6.16
unless it is reasonably likely to result in costs or liabilities to the
Borrower or a Significant Guarantor in excess of $2,500,000 in the
aggregate.
6.17. Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
6.18. Public Utility Holding Company Act. Neither the Borrower nor
any Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
6.19. Subordinated Indebtedness. The Obligations constitute
senior indebtedness which is entitled to the benefits of the subordination
provisions of the Convertible Subordinated Notes and all other outstanding
Subordinated Indebtedness.
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ARTICLE VII
AFFIRMATIVE COVENANTS
During the term of this Agreement, unless the Required Lenders
shall otherwise consent in writing:
7.1. Financial Reporting. The Borrower will maintain, for
itself and each Subsidiary, a system of accounting established and
administered in accordance with GAAP, and furnish to the Lenders:
(i) Within 90 days after the close of each fiscal year, an
unqualified audit report certified by nationally recognized independent
certified public accountants, reasonably acceptable to the Lenders,
prepared in accordance with GAAP on a consolidated basis for the Borrower
and its Subsidiaries, including balance sheets as of the end of such
period, related profit and loss and reconciliation of surplus statements,
and a statement of cash flows, accompanied by (a) any management letter
prepared by said accountants, and (b) a certificate of said accountants
that, in the course of their examination necessary for their certification
of the foregoing, they have obtained no knowledge of any Default or
Unmatured Default, or if, in the opinion of such accountants, any Default
or Unmatured Default shall exist, stating the nature and status thereof.
(ii) Within 90 days after the close of each fiscal year, unaudited
balance sheets as of the end of such fiscal year for each of the operating
divisions of the Borrower and a related profit and loss statement for each
Subsidiary, all certified by an Authorized Officer.
(iii) Within 45 days after the close of the first three quarterly
periods of each fiscal year, for the Borrower and its Subsidiaries, on a
consolidated condensed basis, unaudited balance sheets as at the close of
each such period and a related profit and loss statement for the period
from the beginning of such fiscal year to the end of such quarter, all
certified by an Authorized Officer.
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(iv) As soon as available, but in any event not later than 10 days
prior to the beginning of each fiscal year, a copy of the business plan
(including a consolidated balance sheet, income statement and cash flow
statement) of the Borrower and its Subsidiaries for such fiscal year.
(v) Within 45 days of the end of each of the first three quarterly
periods of each fiscal year, a quarterly variance analysis comparing actual
quarterly results versus projected quarterly results for the fiscal quarter
most recently ended (including consolidated income statements of the
Borrower and its Subsidiaries, an analysis of revenues, Housing Unit
Closings and operating profits on a consolidated basis, unaudited income
statements and balance sheets (by operating division) for such quarter, and
such other items as are reasonably requested by any of the Lenders),
together with a written explanation of material variances.
(vi) Within 90 days after the end of each fiscal year, a variance
analysis comparing actual annual results versus the business plan for the
fiscal year most recently ended (including consolidated income statements
of the Borrower and its Subsidiaries, an analysis of revenues, Housing Unit
Closings and operating profits on a consolidated basis, unaudited income
statements and balance sheets (by operating division) for such fiscal year,
and such other items as are reasonably requested by any of the Lenders),
together with a written explanation of material variances.
(vii) Within 10 Business Days after the end of each calendar month, a
Borrowing Base Certificate of an Authorized Officer, with respect to the
Inventory Valuation Date occurring on the last day of such calendar month.
(viii) Within 45 days after the end of each quarterly period of each
fiscal year, a certificate of an Authorized Officer certifying the Housing
Units as at such date, which lists (by operating division) the Housing
Units, designated in the same categories as are identified in the
Borrower's report dated June 30, 1995; such summary shall include a
delineation of sold or unsold items in each category.
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(ix) Within 45 days after the end of each quarterly period of each
fiscal year, a certificate of an Authorized Officer certifying as of such
date (by operating division) the book values of raw land held for
development or sale, land under development, Finished Lots, Finished Lots
on the books in excess of nine months, Housing Units, Housing Units Under
Contract and Inventory Housing Units.
(x) Within 45 days after the end of each of the first three
quarterly periods, and within ninety (90) days after the end, of each
fiscal year, a certificate of an Authorized Officer of the Borrower in the
form of Exhibit "J" hereto.
(xi) Within 270 days after the close of each fiscal year, a statement
of the Unfunded Liabilities of each Single Employer Plan, certified as
correct by an actuary enrolled under ERISA (which requirement may be
satisfied by the delivery of the most recent actuarial valuation of each
such Single Employer Plan).
(xii) As soon as possible and in any event within ten days after the
Borrower knows that any Reportable Event has occurred with respect to any
Plan, a statement, signed by an Authorized Officer, describing said
Reportable Event and the action which the Borrower proposes to take with
respect thereto.
(xiii) As soon as possible, and in any event within thirty (30) days
after the Borrower knows or has reason to know that any circumstances exist
that constitute grounds entitling the PBGC to institute proceedings to
terminate a Plan subject to ERISA with respect to the Borrower or any
member of the Controlled Group and promptly but in any event within two (2)
Business Days of receipt by the Borrower or any member of the Controlled
Group of notice that the PBGC intends to terminate a Plan or appoint a
trustee to administer the same, and promptly but in any event within five
(5) Business Days of the receipt of notice concerning the imposition of
withdrawal liability in excess of $500,000 with respect to the Borrower or
any member of the Controlled Group, a certificate of an Authorized Officer
setting forth all relevant details of such event and the action which the
Borrower proposes to take with respect thereto.
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(xiv) Promptly after the furnishing thereof, copies of any statement,
report, document, notice, certificate, and correspondence furnished to any
other party pursuant to the terms of any indenture (including the
Indenture), loan, credit, or similar agreement with respect to any
Indebtedness in excess of $1,000,000 or to any rating agency and not
otherwise required to be furnished to the Lenders pursuant to any other
provision of this Section 7.1.
(xv) Promptly after the sending or filing thereof, copies of all proxy
statements, financial statements, and reports which the Borrower or any
Significant Guarantor sends to its stockholders, and copies of all regular,
periodic, and special reports, and all registration statements which the
Borrower or any Significant Guarantor files with the Securities and
Exchange Commission or any governmental authority which may be substituted
therefor, or with any national securities exchange.
(xvi) Promptly after the commencement thereof, notice of all actions,
suits, and proceedings before any court or governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign,
affecting the Borrower or any Significant Guarantor (a) which, if
determined adversely to the Borrower or such Significant Guarantor, could
reasonably be expected to have a Material Adverse Effect or (b) in which
liability in excess of $2,500,000 (in the aggregate with respect to any
action, suit or proceeding) is asserted against the Borrower or any
Significant Guarantor.
(xvii) As soon as possible and in any event within ten days after receipt
by the Borrower or any Significant Guarantor, a copy of (a) any written
notice or claim to the effect that the Borrower or any Significant
Guarantor is or may be liable to any Person as a result of the release of
any toxic or hazardous waste or substance into the environment, and (b) any
notice alleging any violation of any federal, state or local environmental,
health or safety law or regulation by the Borrower or any Guarantor which,
in the case of either (a) or (b), could reasonably be expected to have a
Material Adverse Effect or could result in liability to the Borrower or any
Significant Guarantor in excess of $2,500,000 (in the aggregate with
respect to any notice or claim).
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(xviii) Such other information (including non-financial information) as
the Agent may from time to time reasonably request.
7.2. Use of Proceeds. Subject to the limitations contained in
this Agreement, the Borrower will use the proceeds of the Advances for
general corporate purposes (including payment of reimbursement obligations
with respect to Facility Letters of Credit), and to repay outstanding
Advances. The Borrower will not, nor will it permit any Subsidiary to, use
any of the proceeds of the Advances to purchase or carry any "margin stock"
(as defined in Regulation U) or, except as otherwise permitted by this
Agreement, to purchase any securities in any transaction that is subject to
Sections 13 and 14 of the Securities Exchange Act of 1934, as amended. The
Borrower will not permit any Non-Borrowing Subsidiaries to receive, whether
by loan or other Investment, or otherwise to use any proceeds of, any
Advance if the effect thereof would be to increase the Investments of the
Borrower or any Guarantor in any Non-Borrowing Subsidiaries to an amount
(in the aggregate) in excess of such Investments as of August 31, 1995;
provided that the Borrower and the Guarantors may (i) make advances or
loans to or other Investments in Non-Borrowing Subsidiaries in an amount
not to exceed the aggregate amount of all advances, loans or other
Investments made by the Non-Borrowing Subsidiaries to the Borrower after
August 31, 1995 which have not been repaid to such Non-Borrowing
Subsidiaries and (ii) make Investments in the Non-Borrowing Subsidiaries
permitted under Section 8.6.
7.3. Notice of Default. The Borrower will, and will cause each
Significant Guarantor to, give prompt notice in writing to the Lenders of
the occurrence of (i) any Default or Unmatured Default and (ii) any other
development, financial or otherwise, that has had or would be reasonably
expected to have a Material Adverse Effect.
7.4. Conduct of Business. Except as otherwise permitted under
this Agreement, the Borrower will, and will cause each Significant
Guarantor to, carry on and conduct business in the same general manner and
in substantially the same fields of enterprise as presently conducted and
to do all things necessary to remain duly incorporated, validly existing
and in good standing as a domestic corporation in their respective
jurisdictions of incorporation (or, in the case of any Guarantors that are
partnerships, duly formed and validly existing in their respective
jurisdictions of formation) and maintain all requisite authority to conduct
business in each jurisdiction in which business is conducted; provided,
however, that nothing contained herein shall prohibit the dissolution
of any Guarantor as long as the Borrower or another Guarantor succeeds to
the assets, liabilities and business of the dissolved Guarantor.
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7.5. Taxes. The Borrower will, and will cause each Significant
Guarantor to, pay when due all taxes, assessments and governmental charges
and levies upon them or their income, profits or Property, except those
that are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside in accordance with
GAAP.
7.6. Insurance. The Borrower will, and will cause each
Significant Guarantor to, maintain with financially sound and reputable
insurance companies insurance on all their Property in such amounts and
covering such risks as is consistent with sound business practice, and the
Borrower will furnish to any Lender upon request full information as to the
insurance carried.
7.7. Compliance with Laws. The Borrower will, and will cause each
Significant Guarantor to, comply with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be
subject, except to the extent that the failure to do so would not
reasonably be expected to have and does not have a Material Adverse Effect.
7.8. Maintenance of Properties. The Borrower will, and will cause
each Significant Guarantor to, do all things necessary to maintain,
preserve, protect and keep its Property in good repair, working order and
condition, except to the extent that the failure to do so would not
reasonably be expected to have and does not have a Material Adverse Effect.
7.9. Inspection. The Borrower will, and will cause each Guarantor
to, permit the Lenders, by their respective representatives and agents, to
inspect any of the Property, corporate (or partnership) books and financial
records of the Borrower and the Guarantors to examine and make copies of
the books of accounts and other financial records of the Borrower and the
Guarantors, and to discuss the affairs, finances and accounts of the
Borrower and the Guarantors with, and to be advised as to the same by,
their respective officers at such reasonable times and intervals as the
Lenders may designate.
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7.10. Environment. The Borrower will, and will cause the
Significant Guarantors to, (i) comply, in all material respects, with the
provisions of all federal, state, and local environmental, health, and
safety laws, codes and ordinances, and all rules and regulations issued
thereunder; (ii) promptly contain and remove any hazardous discharge from
or affecting the Property of the Borrower or such Significant Guarantor,
to the extent required by and in compliance with all applicable laws; (iii)
promptly pay any fine or penalty assessed in connection therewith or contest
the same in good faith; and (iv) permit the Agent to inspect such Property,
to conduct tests thereon, and to inspect all books, correspondence,
and records pertaining thereto at reasonable hours and places; and (v)
at the request of the Required Lenders, and at the Borrower's expense,
provide a report of a qualified environmental engineer, satisfactory
in scope, form, and content to the Required Lenders, and such other
and further assurances reasonably satisfactory to the Required Lenders
that any new condition or occurrence hereafter identified in any
revision of Schedule "6.16" delivered by the Borrower pursuant to
Section 7.12 has been corrected; provided that a failure to comply with
the foregoing provisions of this Section 7.10 shall not constitute a
Default or an Unmatured Default unless such noncompliance has resulted
in or is reasonably likely to result in costs or liabilities to the
Borrower or a Significant Guarantor in excess of $2,500,000.
7.11. New Subsidiary. In the event that Borrower shall hereafter
create a new Subsidiary or a Person shall hereafter become a Subsidiary of
the Borrower, the Borrower shall (i) cause such Subsidiary to execute and
deliver to the Agent (a) in the case of a Subsidiary that is not a
Non-Borrowing Subsidiary, a Guaranty and an amendment to the Contribution
Agreement pursuant to which such Guarantor shall become a party thereunder
and (b) in the case of a Non-Borrowing Subsidiary, a Subordination
Agreement, and (ii) deliver or cause to be delivered, by and with respect
to such Subsidiary, certificates, opinions and other documents
substantially similar to those required to be delivered under the
provisions of Sections 5.1(i), (ii), (iii), (vi) and (vii) and such other
documents as any Lender or Issuing Bank or their respective counsel may
reasonably request; all of the foregoing shall be in form and substance
satisfactory to the Required Lenders.
7.12. Change in Schedules. Promptly following the occurrence of
any event or circumstance as a result of which any of Schedules 6.7, 6.8 or
6.16 ceases to be accurate in all material respects, the Borrower shall
furnish to the Agent the applicable revised Schedule and shall certify that
such revised Schedule is true, correct and complete in all material
respects, and such revised Schedule shall be substituted for the applicable
Schedule hereunder.
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ARTICLE VIII
NEGATIVE COVENANTS
During the term of the Agreement, unless the Required
Lenders shall otherwise consent in writing:
8.1. Dividends. The Borrower will not, nor will it permit any
Significant Guarantor to, declare or pay any dividends on its capital stock
(other than dividends payable in its own capital stock), except that any
Significant Guarantor may declare and pay dividends to the Borrower or to
a Wholly-Owned Subsidiary.
8.2. Indebtedness. The Borrower will not, nor will it permit any
Significant Guarantor to, create, incur or suffer to exist any Indebtedness,
except:
(i) The Loans.
(ii) Indebtedness existing on August 31, 1995 and described in Schedule
"8.2" hereto and Refinancing Indebtedness.
(iii) Rate Hedging Obligations related to the Loans or otherwise
required pursuant to Section 9.5 hereof.
(iv) Indebtedness of the Borrower to a Subsidiary or of a Subsidiary to
the Borrower or to another Subsidiary, provided the same is permitted under
Section 7.2.
(v) Trade accounts payable and accruals arising or occurring
in the ordinary course of business.
(vi) Indebtedness with respect to Letters of Credit (including Facility
Letters of Credit) in an aggregate amount outstanding at any time not to
exceed $25,000,000.
(vii) Indebtedness secured by purchase-money Liens permitted under
Section 8.8(ii).
(viii) Subordinated Indebtedness.
(ix) Non-Recourse Indebtedness in an aggregate amount outstanding at
any time not to exceed $50,000,000.
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(x) Performance bonds, completion bonds, and guarantees of performance.
(xi) Indebtedness of a Person existing as of the time of the
Acquisition of such Person by the Borrower or any Guarantor, provided that,
after giving effect to such Acquisition, the Borrower is in compliance with
the terms of this Agreement (including without limitation Section 7.11 and
Article IX).
(xii) Indebtedness not otherwise permitted by this Section 8.2 in an
aggregate amount outstanding at any time not to exceed $25,000,000.
8.3. Merger. The Borrower will not, nor will it permit any
Guarantor to, merge or consolidate with or into any other Person, except
(i) that a Guarantor may merge with any other Guarantor or with the
Borrower and (ii) for transactions permitted under Section 8.4 or Section
8.6(vii).
8.4. Sale of Assets. The Borrower will not, nor will it permit any
Significant Guarantor to, lease, sell or otherwise dispose of its Property,
to any other Person except (i) for sales or leases in the ordinary course
of business, (ii) for leases, sales or other dispositions of its Property
that, together with all other Property of the Borrower and the Significant
Guarantors previously leased, sold or disposed of (other than in the
ordinary course of business) as permitted by this Section during the
twelve-month period ending with the month in which any such lease, sale or
other disposition occurs, do not constitute a Substantial Portion of the
Property of the Borrower and the Significant Guarantors and (iii) as
permitted in Section 8.5.
8.5. Sale and Leaseback. The Borrower will not, nor will it permit
any Significant Guarantor to, sell or transfer any of its Property in order
to concurrently or subsequently lease as lessee such or similar Property,
except for model homes that do not at any time exceed $10,000,000 in book
value, in the aggregate for the Borrower and the Significant Guarantors.
8.6. Investments and Acquisitions. The Borrower will not, nor will
it permit any Significant Guarantor to, make or suffer to exist any
Investments (including without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or joint
venture, or to make any Acquisition of any Person, except:
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(i) Obligations of, or fully guaranteed by, the United States of
America or any agency thereof, which obligations have maturities of one
year or less.
(ii) Commercial paper rated A-l or better by Standard and Poor's
Corporation or P-l or better by Xxxxx'x Investors Service, Inc.
(iii) Demand deposit accounts maintained in the ordinary course of business.
(iv) Certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and surplus
in excess of $100,000,000.
(v) Existing Investments in Subsidiaries and other Investments in
existence on August 31, 1995 and described in Schedule "8.6" hereto.
(vi) Investments in joint ventures, partnerships, limited liability
companies or other similar business organizations in which any Person other
than the Borrower or a Significant Guarantor has an interest, provided that
the outstanding amount of such Investments of the Borrower and the
Significant Guarantors do not at any time exceed $25,000,000 in the
aggregate.
(vii) The Acquisition of a business or entity engaged primarily in the
business of home building, provided that (a) the Investment (exclusive of
the issuance of capital stock of the Borrower or its Subsidiaries in
connection therewith) in any single Acquisition after the date hereof does
not exceed $10,000,000 and in all such Acquisitions after the date hereof
does not exceed $25,000,000 in the aggregate, (b) immediately upon the
consummation of any such Acquisition the Borrower is in compliance with the
terms, covenants and conditions of this Agreement (including without
limitation Section 7.11 and Article IX) and (c) the Borrower shall deliver
to the Agent a certificate, signed by an Authorized Officer, certifying
that, on the date of, and taking into account, the consummation of such
Acquisition, no Default or Unmatured Default has occurred and is
continuing.
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(viii) Investment of the Borrower in a Guarantor or of a Guarantor in
the Borrower or another Guarantor.
(ix) Investments in Non-Borrowing Subsidiaries to the extent permitted
under the provisions of Section 7.2.
(x) Stock, obligations or securities received in satisfaction
of debts owing to the Borrower or any Guarantor.
(xi) Pledges or deposits in cash by the Borrower or a Guarantor to
support surety bonds, performance bonds or guarantees of completion in the
ordinary course of business.
(xii) The creation of new Subsidiaries engaged primarily in the home
building business (or the purpose of which is principally to preserve the
use of a name in which such business is conducted) or Non-Borrowing
Subsidiaries.
(xiii) Investments pursuant to the Borrower's or a Significant
Guarantor's employment compensation plans or agreements.
(xiv) Investments, in addition to those enumerated in this Section 8.6,
in an aggregate amount outstanding at any time not to exceed $5,000,000.
8.7. Contingent Obligations. The Borrower will not, nor will it
permit any Significant Guarantor to, make or suffer to exist any Contingent
Obligation (including, without limitation, any Contingent Obligation with
respect to the obligations of a Subsidiary), except (i) the Guaranty, and
(ii) to the extent permitted by Section 8.2.
8.8. Liens. The Borrower will not, nor will it permit any
Significant Guarantor to, create, incur, or suffer to exist any Lien in, of
or on the Property of the Borrower or any of the Significant Guarantors,
except:
(i) Permitted Encumbrances.
(ii) Purchase-money Liens on any Property hereafter acquired or the
assumption of any Lien on Property existing at the time of such acquisition
(and not created in contemplation of such acquisition), or a Lien incurred
in connection with any conditional sale or other title retention or a
Capitalized Lease; provided that;
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(a) Any Property subject to any of the foregoing is
acquired by the Borrower or any Significant Guarantor in the ordinary
course of its respective business and the Lien on any such Property
attaches to such asset concurrently or within 90 days after the acquisition
thereof;
(b) The obligation secured by any Lien so created,
assumed, or existing shall not exceed ninety percent (90%) of the lesser of
the cost or the fair market value as of the time of acquisition of the
Property covered thereby by the Borrower or the Significant Guarantor
acquiring the same; and
(c) Each Lien shall attach only to the Property so acquired.
(iii) Liens existing on the date hereof and described in Schedule "8.2"
hereto and Liens securing Refinancing Indebtedness with respect thereto.
(iv) Liens incurred in the ordinary course of business not otherwise
permitted by this covenant, provided that the aggregate amount of
Indebtedness secured by such Liens outstanding at any time shall not exceed
$25,000,000.
(v) Judgments and similar Liens arising in connection with court
proceedings; provided the execution or enforcement thereof is stayed and
the claim is being contested in good faith.
(vi) Liens securing Non-Recourse Indebtedness.
(vii) Liens existing with respect to Indebtedness of a Person acquired
in an Acquisition permitted by this Agreement.
8.9. Redemption. The Borrower will not purchase or redeem any of
its capital stock heretofore or hereafter issued, except that the Borrower
may purchase or redeem its capital stock (i) to the extent that the
consideration for such redemption or purchase is limited to capital stock
of the Borrower or (ii) if the consideration for such purchase or
redemption is other than capital stock of the Borrower and does not exceed,
in the aggregate for all such purchases and redemptions from and after the
date hereof, $5,000,000.
8.10. Affiliates. The Borrower will not, nor will it permit any
Significant Guarantor to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make
any payment or transfer to, any Affiliate except (i) in the ordinary course
of business and pursuant to the reasonable requirements of the Borrower's
or such Guarantor's business and upon fair and reasonable terms no less
favorable to the Borrower or such Significant Guarantor than the Borrower
or such Significant Guarantor would obtain in a comparable arms-length
transaction, (ii) Investments permitted under Section 8.6 and (iii)
pursuant to employment compensation plans and agreements.
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8.11. Subordinated Indebtedness. The Borrower will not, nor will
it permit any Significant Guarantor to, make any amendment or modification
to the subordination provisions of any indenture, note or other agreement
evidencing or governing any Subordinated Indebtedness, or directly or
indirectly voluntarily prepay, defease or in substance defease, purchase,
redeem, retire or otherwise acquire, any Subordinated Indebtedness;
provided, however, that the foregoing shall not prohibit (i) the conversion
of the Convertible Subordinated Notes in accordance with the Indenture
dated as of November 3, 1993 or an amendment permitting such conversion at
a lower conversion price than is therein provided or (ii) the repayment or
prepayment of Subordinated Indebtedness solely from the net proceeds of
other Subordinated Indebtedness or from capital stock.
8.12. Amendments. The Borrower will not (i) amend or modify the
Indenture or the Senior Notes, except for amendments or modifications that
do not (a) impose upon the Borrower obligations not contained therein as of
the date of this Agreement, (b) accelerate any of the tax obligations of
the Borrower or (c) otherwise adversely affect the Borrower or (ii) permit
any Guarantor to amend or modify the Contribution Agreement, except as
provided in Section 7.11.
8.13. Financial Undertakings. The Borrower will not, nor will
it permit any Significant Guarantor to, enter into or remain liable upon
any Financial Undertaking, except as permitted under Section 8.2 or Section
8.5.
ARTICLE IX
FINANCIAL COVENANTS
During the term of this Agreement, unless the Required
Lenders shall otherwise consent in writing:
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9.1. Minimum Consolidated Tangible Net Worth. The Borrower will
maintain at all times a Consolidated Tangible Net Worth of not less than
(i) $250,000,000 plus (ii) fifty percent (50%) of the Consolidated Net
Income earned after March 31, 1995 (excluding any quarter in which there is
a loss) plus (iii) one hundred percent (100%) of the net proceeds of
capital stock issued by the Borrower after March 31, 1995.
9.2. Permitted Indebtedness Ratio. (a) The Borrower
will not at any time permit Consolidated Funded Indebtedness to exceed the
product of (i) the then applicable PIR and (ii) Consolidated Tangible Net
Worth.
(b) If at any time the Borrower shall fail to maintain a
ratio, determined as of the last day of each fiscal quarter for the
four-quarter period ending on such day, of (i) EBITDA to (ii) Consolidated
Interest Incurred, of at least 1.75 to 1.0 (the "Coverage Test"), then the
PIR, effective as of the first day of the fiscal quarter immediately
following the four-quarter period with respect to which the Borrower shall
have so failed the Coverage Test, shall be decreased to the extent herein
provided. Upon the first failure to satisfy the Coverage Test, or any other
failure to satisfy the Coverage Test that occurs on a date on which the PIR
is 1.75, the PIR shall be decreased by 0.25 to 1.50. Upon any failure to
satisfy the Coverage Test that occurs on a date on which the PIR is less
than 1.75, the PIR shall be decreased by 0.10.
(c) If at any time at which the PIR is less than 1.75,
the Borrower shall satisfy the Coverage Test (which for purposes of this
Section 9.2(c) shall be deemed satisfied only if, on the same day on which
the Borrower maintains the ratio set forth in Section 9.2(b), the Borrower
is also in compliance with the covenant set forth in Section 9.2(a)), then
the PIR, effective as of the first day of the fiscal quarter immediately
following the four-quarter period with respect to which the Borrower shall
have so satisfied the Coverage Test, shall be increased to the extent
herein provided. Upon satisfaction of the Coverage Test on a date on which
the PIR is 1.50, the PIR shall be increased to 1.75. Upon satisfaction of
the Coverage Test on a date on which the PIR is less than 1.50, the PIR
shall be increased by 0.10. In no event shall the PIR exceed 1.75.
(d) Any increase or decrease of the PIR provided for in
this Section 9.2 shall be effective as of the first day of a fiscal quarter
as provided in Section 9.2(b) or (c) (as applicable), and the PIR (as
adjusted) shall remain in effect for the entire fiscal quarter and
thereafter unless and until adjusted as of the first day of any subsequent
fiscal quarter as provided in this Section 9.2(b) or (c) (as applicable).
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(e) A failure to satisfy the Coverage Test shall not
constitute a Default or an Unmatured Default but a failure at any time to
comply with the covenant set forth in Section 9.2(a) shall constitute a
Default under Section 10.3.
9.3. Land Owned. The Borrower will not at any time permit (a) the
sum of (i) the book value of all raw land owned by the Borrower or any
Guarantor for development or sale, plus (ii) the book value of all land
under development owned by the Borrower or any Guarantor, plus (iii) the
book value of all lots that have been Finished Lots for more than nine
months, to exceed (b) the sum of (i) Consolidated Tangible Net Worth plus
(ii) forty percent (40%) of the outstanding principal amount of the
Convertible Subordinated Notes or Refinancing Indebtedness with respect
thereto.
9.4. Housing Inventory. The Borrower will not at any time permit
the number of InventoryHousing Units to exceed twenty-five percent (25%) of
the number of Housing Unit Closings during the preceding twelve (12) months.
9.5. Rate Protection. The Borrower will not at any time permit
less than fifty percent (50%) of the obligations of the Borrower and the
Guarantors described in clauses (i), (iv) and (viii) of the definition of
"Indebtedness," on a consolidated basis, to be Fixed Rate Debt.
ARTICLE X
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
10.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any Significant Guarantor to the Lenders, the
Issuing Bank or the Agent under or in connection with this Agreement, any
Loan Document, or any certificate or information delivered in connection
with this Agreement or any other Loan Document shall not be true and
correct in any material respect on the date as of which made.
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10.2. Nonpayment of principal of any Note when due, or nonpayment
of interest upon any Note or of any commitment fee or other obligations
under any of the Loan Documents within five days after the same becomes
due.
10.3. The breach by the Borrower (other than a breach which
constitutes a Default under Section 10.1 or 10.2) of any of the terms or
provisions of this Agreement which is not remedied within 30 days after the
occurrence of such breach.
10.4. Failure of the Borrower or any Significant Guarantor to pay
when due (after any applicable grace or notice period) any Indebtedness
(other than Non-Recourse Indebtedness) equal to or exceeding $5,000,000 (in
the aggregate); or the default by the Borrower or any Significant Guarantor
in the performance of any term, provision or condition contained in any
agreement under which any Indebtedness (other than Non-Recourse
Indebtedness) equal to or exceeding $5,000,000 (in the aggregate) was
created or is governed, or any other event shall occur or condition exist,
the effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any Indebtedness (other than Non-Recourse Indebtedness) of the
Borrower or any Significant Guarantor equal to or exceeding $5,000,000 (in
the aggregate) shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or the Borrower or any Significant Guarantor shall not
pay, or shall admit in writing its inability to pay, its debts generally as
they become due.
10.5. The Borrower or any Significant Guarantor shall (i) have an
order for relief entered with respect to it under the Federal bankruptcy
laws as now or hereafter in effect, (ii) make an assignment for the benefit
of creditors, (iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any Substantial Portion of its Property, (iv)
institute any proceeding seeking an order for relief under the Federal
bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file, within the applicable time period for
the filing thereof, an answer or other pleading denying the material
allegations of any such proceeding filed against it, (v) take any corporate
action to authorize or effect any of the foregoing actions set forth in
this Section 10.5 or (vi) fail to contest in good faith any appointment or
proceeding described in Section 10.6.
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10.6. A receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any Significant Guarantor
or any Substantial Portion of its Property without the application,
approval or consent of the Borrower or such Significant Guarantor, or a
proceeding described in Section 10.5(iv) shall be instituted against the
Borrower or any Significant Guarantor and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a
period of 60 consecutive days.
10.7. The Borrower or any Significant Guarantor shall fail within
30 days to pay, bond or otherwise discharge any judgment or order for the
payment of money in excess of $10,000,000 which has not been stayed on
appeal or is not otherwise being appropriately contested in good faith.
10.8. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $5,000,000 or any Reportable Event shall occur in
connection with any Plan, which Reportable Event has had or would
reasonably be expected to have a Material Adverse Effect.
10.9. The Borrower or any member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that it has
incurred withdrawal liability to such Multiemployer Plan in an amount
which, when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Borrower or any other member of the Controlled
Group as withdrawal liability (determined as of the date of such
notification), exceeds $5,000,000 or requires payments exceeding $2,000,000
per annum; provided, however, that such event shall not constitute a
Default as long as the Borrower or the Controlled Group member, as
applicable, is contesting in good faith the imposition of withdrawal
liability.
10.10. The Borrower or any other member of the Controlled Group
shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization, if as a result of such
reorganization the aggregate annual contributions of the Borrower and the
other members of the Controlled Group (taken as a whole) to all
Multiemployer Plans which are then in reorganization have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding
the plan year in which the reorganization occurs by an amount exceeding
$5,000,000.
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10.11. Any Change in Control shall occur.
10.12. Any Guaranty shall fail to remain in full force or effect
with respect to any one or more of the Significant Guarantors (except by
reason of a merger of a Significant Guarantor with the Borrower or another
Guarantor or the dissolution of a Guarantor permitted hereunder or as a
result of a sale permitted under Section 8.4) or any action shall be taken
by any one or more of the Significant Guarantors to discontinue or to
assert the invalidity or unenforceability of any Guaranty, or any
Significant Guarantor shall fail to comply with any of the terms or
provisions of any Guaranty, or any Significant Guarantor denies that it has
any further liability under any Guaranty or gives notice to such effect
(except by reason of a merger of a Significant Guarantor with the Borrower
or another Guarantor or the dissolution of a Guarantor permitted hereunder
or as a result of a sale permitted under Section 8.4).
ARTICLE XI
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
11.1. Acceleration. If any Default described in Section 10.5 or
10.6 occurs with respect to the Borrower, the obligations of the Lenders to
make Loans and of the Issuing Bank to issue Facility Letters of Credit
hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the
part of the Agent, the Issuing Bank or any Lender. If any other Default
occurs, the Required Lenders may terminate or suspend the obligations of
the Lenders to make Loans and of the Issuing Bank to issue Facility Letters
of Credit hereunder, or declare the Obligations to be due and payable, or
both, whereupon the Obligations shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which
the Borrower hereby expressly waives. If, within five days after
acceleration of the maturity of the Obligations or termination of the
obligations of the Lenders to make Loans hereunder as a result of any
Default (other than any Default as described in Section 10.5 or 10.6 with
respect to the Borrower) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the Required
Lenders (in their sole discretion) shall so direct, the Agent shall, by
notice to the Borrower, rescind and annul such acceleration and/or
termination.
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11.2. Amendments. Subject to the provisions of this Article XI,
the Required Lenders (or the Agent with the consent in writing of the
Required Lenders) and the Borrower may enter into agreements supplemental
hereto for the purpose of adding or modifying any provisions to the Loan
Documents or changing in any manner the rights of the Lenders or the
Borrower hereunder or waiving any Default hereunder; provided, however,
that no such supplemental agreement shall, without the consent of each
Lender and Issuing Bank affected thereby:
(i) Extend the maturity of any Loan or Note or forgive all or any
portion of the principal amount thereof, or reduce the rate of, or extend
the time of payment of, interest or fees thereon;
(ii) Reduce the percentage specified in the definition of Required
Lenders;
(iii) Increase the amount of the Commitment of any Lender hereunder,
or permit the Borrower to assign its rights under this Agreement; or
(iv) Amend this Section 11.2.
No amendment of any provision of this Agreement relating to the Agent shall
be effective without the written consent of the Agent. The Agent may waive
payment or reduce the amount of the fees referred to in Section 13.12 or
the fee required under Section 15.3.2 without obtaining the consent of any
other party to this Agreement.
11.3. Preservation of Rights. No delay or omission of any Lender
or Issuing Bank or the Agent to exercise any right under the Loan Documents
shall impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan or the issuance, amendment
or extension of a Facility Letter of Credit notwithstanding the existence
of a Default or the inability of the Borrower to satisfy the conditions
precedent to such Loan or Facility Letter of Credit shall not constitute
any waiver or acquiescence. Any single or partial exercise of any such
right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by the Lenders (and, if applicable, the
Agent) required pursuant to Section 11.2, and then only to the extent in
such writing specifically set forth. All remedies contained in the Loan
Documents or by law afforded shall be cumulative and all shall be available
to the Agent, the Issuing Bank and the Lenders until the Obligations have
been paid in full.
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ARTICLE XII
GENERAL PROVISIONS
12.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive delivery
of the Notes and the making of the Loans and the issuance, amendment or
extension of any Facility Letter of Credit herein contemplated.
12.2. Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Lender or Issuing Bank shall
be obligated to extend credit to the Borrower in violation of any limitation
or prohibition provided by any applicable statute or regulation.
12.3. Taxes. Any recording, intangible, filing or stamp fees or
taxes or other similar assessments or charges made by any governmental or
revenue authority in respect of the Loan Documents shall be paid by the
Borrower, together with interest and penalties, if any.
12.4. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of
any of the provisions of the Loan Documents.
12.5. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent and the Lenders
and supersede all prior agreements and understandings among the Borrower
and the Agent, the Lenders relating to the subject matter thereof.
12.6. Nature of Obligations; Benefits of this Agreement. (a) The
respective obligations of the Lenders hereunder are several and not joint
and no Lender shall be the partner or agent of any other (except to the
extent to which the Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any
other Lender from any of its obligations hereunder.
(b) This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
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12.7. Expenses; Indemnification. The Borrower shall reimburse the
Agent for any reasonable costs, internal charges and out-of-pocket expenses
(including reasonable attorneys' fees and time charges of attorneys for the
Agent, which attorneys may be employees of the Agent) paid or incurred by
the Agent in connection with the preparation, negotiation, execution,
delivery, review, amendment, modification, and administration of the Loan
Documents. The Borrower also agrees to reimburse the Agent, the Lenders and
each Issuing Bank for any reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and time
charges of attorneys for the Agent, the Lenders and such Issuing Bank,
which attorneys may be employees of the Agent, the Lenders or such Issuing
Bank) paid or incurred by the Agent, any Lender or such Issuing Bank in
connection with the collection and enforcement of the Loan Documents. The
Borrower further agrees to indemnify the Agent and each Lender or Issuing
Bank, its directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or
not the Agent or any Lender or Issuing Bank is a party thereto) which any
of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Loan
hereunder (except to the extent arising due to the gross negligence or
willful misconduct of the indemnified Person). The obligations of the
Borrower under this Section shall survive the termination of this
Agreement.
12.8. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
12.9. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP applied on a
basis consistent with the audited financial statements of the Borrower as
of December 31, 1994 ("Agreement Accounting Principles"). If any change in
GAAP from the principles used in preparing such statements would have a
material effect upon the results of any calculation required by or
compliance with any provision of this Agreement, then such calculation
shall be made or calculated and compliance with such provision shall be
determined using accounting principles used in preparing the audited
financial statements of the Borrower as of December 31, 1994.
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12.10. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction
or the operation, enforceability, or validity of that provision in any
other jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.
12.11. Nonliability of Lenders and Issuing Bank. The relationship
between the Borrower and the Lenders and the Agent shall be solely that of
borrower and lender. Neither the Agent nor any Lender or Issuing Bank shall
have any fiduciary responsibilities to the Borrower. Neither the Agent nor
any Lender or Issuing Bank undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any phase of
the Borrower's business or operations.
12.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
12.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR
ANY LENDER OR ISSUING BANK TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE AGENT OR ANY LENDER OR ISSUING BANK OR ANY AFFILIATE OF THE
AGENT OR ANY LENDER OR ISSUING BANK INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
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12.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, AND EACH
LENDER AND ISSUING BANK HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING
IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
12.15. Confidentiality. Each Lender and the Agent agree to use
commercially reasonable efforts to keep confidential any financial reports
and other information from time to time supplied to them by the Borrower
hereunder to the extent that such information is not and does not become
publicly available through or with the consent or acquiescence of the
Borrower, except for disclosure (i) to the Agent and the other Lenders or
to a Transferee, (ii) to legal counsel, accountants, and other professional
advisors to a Lender, the Agent or a Transferee, (iii) to regulatory
officials, (iv) to any Person as required by law, regulation, or legal
process, (v) to any Person in connection with any legal proceeding to which
that Lender is a party, and (vi) permitted by Section 15.4. Any Lender or
Agent disclosing such information shall use commercially reasonable efforts
to advise the Person to whom such information is disclosed of the foregoing
confidentiality agreement and to direct such Person to comply therewith.
ARTICLE XIII
THE AGENT
13.1. Appointment. The First National Bank of Chicago is hereby
appointed Agent hereunder and under each other Loan Document, and each of
the Lenders irrevocably authorizes the Agent to act as the agent of such
Lender. The Agent agrees to act as such upon the express conditions
contained in this Article XIII. The Agent shall not have a fiduciary
relationship in respect of the Borrower, any Lender or the Issuing Bank by
reason of this Agreement.
13.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the
terms of each thereof, together with such powers as are reasonably
incidental thereto. The Agent shall have no implied duties to the Lenders,
or any obligation to the Lenders to take any action thereunder except any
action specifically provided by the Loan Documents to be taken by the
Agent.
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13.3. General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower or
any Lender for action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith
except for its or their own gross negligence or willful misconduct.
13.4. No Responsibility for Loans, Recitals, etc. Neither the
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i)
any statement, warranty or representation made in connection with any Loan
Document or any borrowing or any request for the issuance, amendment or
extension of any Facility Letter of Credit hereunder; (ii) the performance
or observance of any of the covenants or agreements of any obligor under
any Loan Document or Reimbursement Agreement, including, without
limitation, any agreement by an obligor to furnish information directly to
each Lender; (iii) the satisfaction of any condition specified in Article
IV or V, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness or genuineness of any Loan Document or
Reimbursement Agreement or any other instrument or writing furnished in
connection with any of the foregoing. The Agent shall have no duty to
disclose to the Lenders information that is not required to be furnished by
the Borrower to the Agent at such time, but is voluntarily furnished by the
Borrower to the Agent (either in its capacity as Agent or in its individual
capacity).
13.5. Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions
signed by the Required Lenders (except as otherwise provided in Section
11.2), and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders
of Notes. The Agent shall be fully justified in failing or refusing to take
any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against
any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.
13.6. Employment of Agents and Counsel. The Agent may execute any
of its duties as Agent hereunder and under any other Loan Document by or
through employees, agents, and attorneys-in-fact and shall not be
answerable to the Lenders, except as to money or securities received by it
or its authorized agents, for the default or misconduct of any such agents
or attorneys-in-fact selected by it with reasonable care. The Agent shall
be entitled to advice of counsel concerning all matters pertaining to the
agency hereby created and its duties hereunder and under any other Loan
Document.
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13.7. Reliance on Documents; Counsel. The Agent shall be entitled
to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons,
and, in respect to legal matters, upon the opinion of counsel selected by
the Agent, which counsel may be employees of the Agent.
13.8. Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their
respective Commitments (i) for any amounts not reimbursed by the Borrower
for which the Agent is entitled to reimbursement by the Borrower under the
Loan Documents, (ii) for any other expenses incurred by the Agent on behalf
of the Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever
which may be imposed on, incurred by or asserted against the Agent in any
way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby,
or the enforcement of any of the terms thereof or of any such other
documents, provided that no Lender shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of
the Agent. The obligations of the Lenders under this Section 13.8 shall
survive payment of the Obligations and termination of this Agreement.
13.9. Rights as a Lender or Issuing Bank. In the event the Agent
is a Lender, the Agent shall have the same rights and powers hereunder and
under any other Loan Document as any Lender and may exercise the same as
though it were not the Agent, and the term "Lender" or "Lenders" shall, at
any time when the Agent is a Lender, unless the context otherwise
indicates, include the Agent in its individual capacity. In the event the
Agent is an Issuing Bank, the Agent shall have the rights and powers of the
Issuing Bank hereunder and may exercise the same as though it were not the
Agent, and the term "Issuing Bank" shall, at any time when the Agent is the
Issuing Bank, unless the context otherwise indicates, include and mean the
Agent in its capacity as the Issuing Bank. The Agent may accept deposits
from, lend money to, and generally engage in any kind of trust, debt,
equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted
hereby from engaging with any other Person. The Agent, in its individual
capacity, is not obligated to remain a Lender.
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13.l0. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other
Loan Documents. Each Lender also acknowledges that it will, independently
and without reliance upon the 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 the other Loan Documents.
13.11. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to
be effective upon the appointment of a successor Agent or, if no successor
Agent has been appointed, 45 days after the retiring Agent gives notice of
its intention to resign. The Agent may be removed at any time with or
without cause by written notice received by the Agent from the Required
Lenders, such removal to be effective on the date specified by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall
have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders within thirty days after the resigning Agent's giving
notice of its intention to resign, then the resigning Agent may appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If the Agent has
resigned or been removed and no successor Agent has been appointed, the
Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable
Lender and for all other purposes shall deal directly with the Lenders. No
successor Agent shall be deemed to be appointed hereunder until such
successor Agent has accepted the appointment. Any such successor Agent
shall be a commercial bank having capital and retained earnings of at least
$50,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
or removed Agent. Upon the effectiveness of the resignation or removal of
the Agent, the resigning or removed Agent shall be discharged from its
duties and obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation or removal of an Agent, the provisions of
this Article XIII shall continue in effect for the benefit of such Agent in
respect of any actions taken or omitted to be taken by it while it was
acting as the Agent hereunder and under the other Loan Documents.
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13.12. Agent's Fee. The Borrower agrees to pay to the Agent, for
its own account, the fees agreed to by the Borrower and the Agent pursuant
to that certain letter agreement dated July 31, 1995, or as otherwise agreed
from time to time.
ARTICLE XIV
SETOFF; RATABLE PAYMENTS
14.1. Setoff. In addition to, and without limitation of, any
rights of the Lenders or Issuing Bank under applicable law, if the Borrower
becomes insolvent, however evidenced, or any Default occurs, any and all
deposits (including all account balances, whether provisional or final and
whether or not collected or available) and any other Indebtedness at any
time held or owing by any Lender or Issuing Bank to or for the credit or
account of the Borrower may be offset and applied toward the payment of the
Obligations owing to such Lender or Issuing Bank, whether or not the
Obligations, or any part hereof, shall then be due.
14.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than payments
received pursuant to Sections 3.1, 3.2 or 3.4) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon
demand, to purchase a portion of the Loans held by the other Lenders so
that after such purchase each Lender will hold its ratable proportion of
Loans. If any Lender, whether in connection with setoff or amounts which
might be subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be subject to
setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral
ratably in proportion to their Loans. In case any such payment is disturbed
by legal process, or otherwise, appropriate further adjustments shall be
made.
ARTICLE XV
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
15.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower,
the Lenders and the Issuing Bank and their respective successors and
assigns, except that (i) the Borrower shall not have the right to assign
its rights or obligations under the Loan Documents, and (ii) any assignment
by any Lender must be made in compliance with Section 15.3. Notwithstanding
clause (ii) of this Section, any Lender may at any time, without the
consent of the Borrower or the Agent, assign all or any portion of its
rights under this Agreement and its Notes to a Federal Reserve Bank;
provided, however, that no such assignment shall release the transferor
Lender from its obligations hereunder. The Agent may treat the payee of any
Note as the owner thereof for all purposes hereof unless and until such
payee complies with Section 15.3 in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the
96
transfer is filed with the Agent. Any assignee or transferee of a Note
agrees by acceptance thereof to be bound by all the terms and provisions of
the Loan Documents. Any request, authority or consent of any Person, who at
the time of making such request or giving such authority or consent is the
holder of any Note, shall be conclusive and binding on any subsequent
holder, transferee or assignee of such Note or of any Note or Notes issued
in exchange therefor.
15.2. Participations.
15.2.1. Permitted Participants; Effect. Any Lender may,
in the ordinary course of its business and in accordance with applicable
law, at any time sell to one or more banks or other Persons that are not,
and that are not Affiliates of a Person, in the home building business
("Participants") participating interests in any Loan owing to such Lender,
any Note held by such Lender, any Commitment of such Lender or any other
interest of such Lender under the Loan Documents in an amount of not less
than $5,000,000. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower, the Agent and the Issuing
Bank shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan
Documents.
15.2.2. Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees (other than Agent's fees) or reduces the
interest rate or fees (other than Agent's fees) payable with respect to any
such Loan or Commitment, or postpones any date fixed for any
regularly-scheduled payment of principal of, or interest or fees (other
than Agent's fees) on, any such Loan or Commitment.
15.2.3. Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in Section
14.1 in respect of its participating interest in amounts owing under the
Loan Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents,
provided that each Lender shall retain the right of setoff provided in
Section 15.1 with respect to the amount of participating
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interests sold to each Participant. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff
provided in Section 14.1, agrees to share with each Lender, any amount
received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 14.2 as if each Participant were a
Lender.
15.3. Assignments.
15.3.1. Permitted Assignments. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at
any time assign to one or more banks or other Persons that are not, and
that are not Affiliates of a Person, in the home building business
("Purchasers") all or any part of its rights and obligations under the Loan
Documents in the amount of not less than $5,000,000, provided that,
immediately following such assignment, the assigning Lender either (i)
shall retain a Commitment of not less than $10,000,000 or (ii) shall have
assigned all of its Commitment and have no remaining interest in the
Obligations. Such assignment shall be substantially in the form of Exhibit
"J" hereto or in such other form as may be agreed to by the parties
thereto. The consent of the Borrower and the Agent shall be required prior
to an assignment becoming effective with respect to a Purchaser which is
not a Lender or an Affiliate thereof; provided, however, that if a Default
has occurred and is continuing, the consent of the Borrower shall not be
required. Such consent shall not be unreasonably withheld.
15.3.2. Effect; Effective Date. Upon (i) delivery to the
Agent of a notice of assignment, substantially in the form attached as
Exhibit "I" to Exhibit "J" hereto (a "Notice of Assignment"), together with
any consents required by Section 15.3.1, and (ii) payment by the Lender of
a $4,000 fee to the Agent for processing such assignment, such assignment
shall become effective on the effective date specified in such Notice of
Assignment. The Notice of Assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Loans under the applicable assignment
agreement are "plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will not be
"plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by the Lenders and shall
have all the rights and obligations of a Lender under the Loan Documents,
to the same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the percentage of
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the Aggregate Commitment and Loans assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this Section
15.3.2, the transferor Lender, the Agent and the Borrower shall make
appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes, are
issued to such Purchaser, in each case in principal amounts reflecting
their Commitment, as adjusted pursuant to such assignment.
15.4. Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in
such Lender's possession concerning the creditworthiness of the Borrower
and its Subsidiaries; provided that each Transferee and prospective
Transferee agrees to be bound by Section 12.15 of this Agreement.
15.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section
2.19.
ARTICLE XVI
NOTICES
16.1. Giving Notice. Except as otherwise permitted by Section 2.14
with respect to borrowing notices, all notices and other communications
provided to any party hereto under this Agreement or any other Loan
Document shall be in writing or by telex or by facsimile and addressed or
delivered to such party at its address set forth below its signature hereto
or at such other address as may be designated by such party in a notice to
the other parties. Any notice, if mailed and properly addressed with
postage prepaid, shall be deemed given when received; any notice, if
transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of telexes).
16.2. Change of Address. The Borrower, the Agent, any Lender
and the Issuing Bank may each change the address for service of notice upon
it by a notice in writing to the other parties hereto.
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ARTICLE XVII
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one agreement, and any of the
parties hereto may execute this Agreement by signing any such counterpart.
This Agreement shall be effective when it has been executed by the
Borrower, the Agent, and the Lenders and each party has notified the Agent
by telex or telephone, that it has taken such action.
IN WITNESS WHEREOF, the Borrower, the Lenders, and the Agent have
executed this Agreement as of the date first above written.
BORROWER:
U.S. HOME CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxx,
Vice President - Finance
and Chief Financial Officer
0000 Xxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
LENDERS:
Commitments
$30,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
By: /s/ Xxxxx X. Xxxxx
--------------------------
Name: Xxxxx X. Xxxxx,
Assistant Vice President
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
100
$30,000,000 GUARANTY FEDERAL BANK, F.S.B.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx,
Vice President
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
$30,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxxx,
Senior Vice President
Lincoln Plaza
000 X. Xxxxx - Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
$25,000,000 BANK ONE, ARIZONA, NA
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxx,
Assistant Vice President
000 X. Xxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
$15,000,000 COMERICA BANK, a Michigan
corporation
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxx,
Vice President
000 Xxxxxxxx Xxxxxx, X/X 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
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Exhibit "A"
GUARANTY
This GUARANTY ("Guaranty") is made as of the ___ day of
September, 1995, by _________________________, a __________ corporation
(the "Guarantor"), in favor of the "Lenders" under that certain Credit
Agreement, of even date herewith, by and among U.S. Home Corporation (the
"Borrower"), the financial institutions from time to time parties thereto
(collectively, and including the Issuing Bank (as defined in the Credit
Agreement) the "Lenders") and The First National Bank of Chicago, in its
capacity as Agent. Such Credit Agreement, as it may be amended, modified or
supplemented from time to time, is hereinafter referred to as the "Credit
Agreement". Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to them in the Credit Agreement.
1. Guaranty. (i) For value received and in consideration
of any loan, advance or financial accommodation of any kind whatsoever
heretofore, now or hereafter made, given or granted to the Borrower by the
Lenders, the Guarantor unconditionally guarantees for the benefit of each
of the Lenders the full and prompt payment when due, whether at maturity or
earlier, by reason of acceleration or otherwise, and at all times
thereafter, of all of the Obligations (including, without limitation,
interest accruing following the filing of a bankruptcy petition by or
against the Borrower, at the applicable rate specified in the Credit
Agreement, whether or not such interest is allowed as a claim in
bankruptcy).
(ii) At any time after the occurrence of a Default, the
Guarantor shall pay to the Agent, for the benefit of the Lenders, on demand
and in immediately available funds, the full amount of the Obligations. The
Guarantor further agrees to pay to the Agent and reimburse the Agent for,
on demand and in immediately available funds, (a) all fees, costs and
expenses (including, without limitation, all court costs and attorneys' and
paralegals' fees, costs and expenses) paid or incurred by the Agent or any
of the Lenders in: (1) endeavoring to collect all or any part of the
Obligations from, or in prosecuting any action against, the Guarantor
relating to this Guaranty; (2) taking any action with respect to any
security or collateral securing the Guarantor's obligations hereunder; and
(3) preserving, protecting or defending the enforceability of, or
enforcing, this Guaranty or their respective rights hereunder (all such
costs and expenses are hereinafter referred to as the "Expenses"). The
Guarantor hereby agrees that this Guaranty is an absolute guaranty of
payment and is not a guaranty of collection.
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2. Obligations Unconditional. Subject to Section 10, the
Guarantor hereby agrees that its obligations under this Guaranty shall be
unconditional, irrespective of: (i) the validity, enforceability,
avoidance, novation or subordination of any of the Obligations or any of
the Loan Documents; (ii) the absence of any attempt by, or on behalf of,
any Lender or the Agent to collect, or to take any other action to enforce,
all or any part of the Obligations whether from or against the Borrower,
any other guarantor of the Obligations or any other Person; (iii) the
election of any remedy by, or on behalf of, any Lender or the Agent with
respect to all or any part of the Obligations; (iv) the waiver, consent,
extension, forbearance or granting of any indulgence by, or on behalf of,
any Lender or the Agent with respect to any provision of any of the Loan
Documents; (v) the election by, or on behalf of, any one or more of the
Lenders, in any proceeding instituted under Chapter 11 of Title 11 of the
United States Code (11 U.S.C. 101 et seq.) (the "Bankruptcy Code"), of the
application of Section 1111(b)(2) of the Bankruptcy Code; (vi) any
borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under Section 364 of the Bankruptcy Code; (vii) the
disallowance, under Section 502 of the Bankruptcy Code, of all or any
portion of the claims of any of the Lenders or the Agent for repayment of
all or any part of the Obligations or any Expenses; or (viii) any other
circumstance which might otherwise constitute a legal or equitable
discharge or defense of the Borrower or the Guarantor.
3. Enforcement; Application of Payments. Upon the
occurrence of a Default, the Agent may proceed directly and at once,
without notice, against the Guarantor to obtain performance of and to
collect and recover the full amount, or any portion, of the Obligations,
without first proceeding against the Borrower or any other Person, or
against any security or collateral for the Obligations. Subject only to the
terms and provisions of the Credit Agreement, the Agent shall have the
exclusive right to determine the application of payments and credits, if
any, from the Guarantor, the Borrower or from any other Person on account
of the Obligations or any other liability of the Guarantor to any Lender.
4. Waivers. (a) The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event
of receivership or bankruptcy of the Borrower, protest or notice with
respect to the Obligations, all setoffs and counterclaims and all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor and notices of acceptance of this
Guaranty, the benefits of all statutes of limitation, and all other demands
whatsoever (and shall not require that the same be made on the Borrower as
a condition precedent to the Guarantor's obligations hereunder), and
covenants that this Guaranty will not be discharged, except by complete
payment (in cash) and performance of the Obligations and any other
obligations contained herein. The Guarantor further
103
waives all notices of the existence, creation or incurring of new or
additional indebtedness, arising either from additional loans extended to
the Borrower or otherwise, and also waives all notices that the principal
amount, or any portion thereof, and/or any interest on any instrument or
document evidencing all or any part of the Obligations is due, notices of
any and all proceedings to collect from the maker, any endorser or any
other guarantor of all or any part of the Obligations, or from any other
Person, and, to the extent permitted by law, notices of exchange, sale,
surrender or other handling of any security or collateral given to the
Agent to secure payment of all or any part of the Obligations.
(b) The Guarantor understands that it shall be liable for
the full amount of its liability under this Guaranty, notwithstanding the
occurrence of any event impairing the right of the Guarantor, the Agent or
any of the Lenders to proceed against the Borrower, any other guarantor or
the Borrower's or such guarantor's property. The Guarantor agrees that all
of its obligations under this Guaranty (including its obligation to pay in
full all indebtedness evidenced by or arising under the Credit Agreement)
shall remain in full force and effect without defense, offset or
counterclaim of any kind, notwithstanding that the Guarantor's rights
against the Borrower may be impaired, destroyed or otherwise affected by
reason of any action or inaction on the part of the Agent or any Lender.
(c) The Lenders, either themselves or acting through the
Agent, are hereby authorized, without notice or demand and without
affecting the liability of the Guarantor hereunder, from time to time, (i)
to renew, extend, accelerate or otherwise change the time for payment of,
or other terms relating to, all or any part of the Obligations, or to
otherwise modify, amend or change the terms of any of the Loan Documents;
(ii) to accept partial payments on all or any part of the Obligations;
(iii) to take and hold security or collateral for the payment of all or any
part of the Obligations, this Guaranty, or any other guaranties of all or
any part of the Obligations or other liabilities of the Borrower, (iv) to
exchange, enforce, waive and release any such security or collateral; (v)
to apply such security or collateral and direct the order or manner of sale
thereof as in their discretion they may determine; and (vi) to settle,
release, exchange, enforce, waive, compromise or collect or otherwise
liquidate all or any part of the Obligations, this Guaranty, any other
guaranty of all or any part of the Obligations, and any security or
collateral for the Obligations or for any such guaranty. Any of the
foregoing may be done in any manner, without affecting or impairing the
obligations of the Guarantor hereunder.
5. Setoff. At any time after all or any part of
the Obligations have become due and payable (by acceleration or
otherwise) following the occurrence of a Default, each Lender and
the Agent may, without notice to the Guarantor and regardless of the
acceptance of any security or collateral for
104
the payment hereof, appropriate and apply toward the payment of all or any
part of the Obligations (i) any indebtedness due or to become due from such
Lender or the Agent to the Guarantor, and (ii) any moneys, credits or other
property belonging to the Guarantor, at any time held by or coming into the
possession of such Lender or the Agent or any of their respective
affiliates.
6. Financial Information. The Guarantor hereby assumes
responsibility for keeping itself informed of the financial condition of
the Borrower and any and all endorsers and/or other guarantors of all or
any part of the Obligations, and of all other circumstances bearing upon
the risk of nonpayment of the Obligations, or any part thereof, that
diligent inquiry would reveal, and the Guarantor hereby agrees that none of
the Lenders nor the Agent shall have any duty to advise the Guarantor of
information known to any of them regarding such condition or any such
circumstances. In the event any Lender, in its sole discretion, undertakes
at any time or from time to time to provide any such information to the
Guarantor, such Lender shall be under no obligation (i) to undertake any
investigation not a part of its regular business routine, (ii) to disclose
any information which such Lender, pursuant to accepted or reasonable
commercial finance or banking practices, wishes to maintain confidential or
(iii) to make any other or future disclosures of such information or any
other information to the Guarantor.
7. No Marshalling; Reinstatement. The Guarantor consents
and agrees that none of the Lenders nor the Agent nor any Person acting for
or on behalf of the Lenders or the Agent shall be under any obligation to
xxxxxxxx any assets in favor of the Guarantor or against or in payment of
any or all of the Obligations. The Guarantor further agrees that, to the
extent that the Borrower, the Guarantor or any other guarantor of all or
any part of the Obligations makes a payment or payments to any Lender or
the Agent, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to the Borrower, the Guarantor, such other guarantor
or any other Person, or their respective estates, trustees, receivers or
any other party, including, without limitation, the Guarantor, under any
bankruptcy law, state or federal law, common law or equitable cause, then,
to the extent of such payment or repayment, the part of the Obligations
which has been paid, reduced or satisfied by such amount shall be
reinstated and continued in full force and effect as of the time
immediately preceding such initial payment, reduction or satisfaction.
8. Subrogation. Until the Obligations have been paid in
full, the Guarantor (i) shall have no right of subrogation with respect to
such Obligations and (ii) waives any right to enforce any remedy which the
Lenders or the Agent (or any of them) now have or may hereafter have
against the Borrower, any endorser or any guarantor of all or any part of
the Obligations or any other Person, and the Guarantor waives any benefit
of, and any right to participate in, any security or collateral given to
the Lenders and the Agent (or any of them) to secure the payment or
performance of all or any part of the Obligations or any other liability of
the Borrower to the Lenders.
105
9. Enforcement; Amendments; Waivers. No delay on the part
of any of the Lenders or the Agent in the exercise of any right or remedy
arising under this Guaranty, the Credit Agreement, any of the other Loan
Documents or otherwise with respect to all or any part of the Obligations
or any other guaranty of or security for all or any part of the Obligations
shall operate as a waiver thereof, and no single or partial exercise by any
such Person of any such right or remedy shall preclude any further exercise
thereof. No modification or waiver of any of the provisions of this
Guaranty shall be binding upon the Lenders or the Agent, except as
expressly set forth in a writing duly signed and delivered by the party
making such modification or waiver. Failure by any of the Lenders or the
Agent at any time or times hereafter to require strict performance by the
Borrower, the Guarantor, any other guarantor of all or any part of the
Obligations or any other Person of any of the provisions, warranties, terms
and conditions contained in any of the Loan Documents now or at any time or
times hereafter executed by such Persons and delivered to the Agent or any
Lender shall not waive, affect or diminish any right of the Agent or such
Lender at any time or times hereafter to demand strict performance thereof
and such right shall not be deemed to have been waived by any act or
knowledge of the Agent or any Lender, or their respective agents, officers
or employees, unless such waiver is contained in an instrument in writing,
directed and delivered to the Borrower or the Guarantor, as applicable,
specifying such waiver, and is signed by the party or parties necessary to
give such waiver under the Credit Agreement. No waiver of any Default by
the Agent or any Lender shall operate as a waiver of any other Default or
the same Default on a future occasion, and no action by the Agent or any
Lender permitted hereunder shall in any way affect or impair the Agent's or
any Lender's rights and remedies or the obligations of the Guarantor under
this Guaranty. Any determination by a court of competent jurisdiction of
the amount of any principal and/or interest owing by the Borrower to any of
the Lenders shall be conclusive and binding on the Guarantor irrespective
of whether the Guarantor was a party to the suit or action in which such
determination was made.
10. Effectiveness; Termination. This Guaranty shall
become effective upon its execution by the Guarantor and shall continue in
full force and effect and may not be terminated or otherwise revoked until
the Obligations shall have been fully paid (in cash) and discharged and the
Credit Agreement and all financing arrangements between the Borrower and
the Lenders shall have been terminated. If, notwithstanding the foregoing,
the Guarantor shall have any right under applicable law to terminate or
revoke this Guaranty, the Guarantor agrees that such termination or
revocation shall not be effective until a written notice of such revocation
or termination, specifically referring hereto, signed by the Guarantor, is
actually received by the Agent. Such notice shall not affect the right and
power of any of the Lenders or the Agent to enforce rights arising prior to
receipt thereof by the Agent. If any Lender grants loans or takes other
action after the Guarantor terminates or revokes this Guaranty but before
the Agent receives such written notice, the rights of such Lender with
respect thereto shall be the same as if such termination or revocation had
not occurred.
106
11. Successors and Assigns. This Guaranty shall be
binding upon the Guarantor and upon its successors and assigns and shall
inure to the benefit of the Lender and the Agent and their respective
successors and assigns; all references herein to the Borrower and to the
Guarantor shall be deemed to include their respective successors and
assigns. The successors and assigns of the Guarantor and the Borrower shall
include, without limitation, their respective receivers, trustees or
debtors-in-possession. All references to the singular shall be deemed to
include the plural where the context so requires.
12. Officer Authority. The Guarantor authorizes its
Chairman, President, and each of its Vice Presidents, respectively, from
time to time, severally and not jointly, on behalf and in the name of the
Guarantor from time to time in the discretion of such officer, to take or
omit to take any and all action and to execute and deliver any and all
documents and instruments which such officer may determine to be necessary
or desirable in relation to, and perform any obligations arising in
connection with, this Guaranty and any of the transactions contemplated
hereby, and, without limiting the generality of the foregoing, hereby gives
to each such officer severally the power and right on behalf of the
Guarantor, without notice to or assent by the Guarantor, to do the
following: (i) to execute and deliver any amendment, waiver, consent,
supplement, other modification or reaffirmation of this Guaranty or any
document relating hereto, and to perform any obligation arising in
connection herewith or therewith; (ii) to sell, transfer, assign, encumber
or otherwise deal in or with any security for this Guaranty or any part
thereof; (iii) to grant liens, security interests or other encumbrances on
or in respect of any property or assets of the Guarantor, whether now owned
or hereafter acquired, in favor of the Lenders and the Agent; (iv) to send
notices, directions, orders and other communications to any Person relating
to this Guaranty, or any security for all or any part of the Obligations;
(v) to take or omit to take any other action contemplated by or referred to
in this Guaranty or any document covering any security for all or any part
of the Obligations; and (vi) to take or omit to take any action with
respect to this Guaranty, any security for all or any part of the
Obligations or any document covering any such security, all as such officer
may determine in his or her sole discretion. The undersigned hereby
certifies that he/she has all necessary authority to grant and execute this
Guaranty on behalf of the Guarantor.
107
13. Governing Law. This Guaranty has been delivered by
the parties hereto in Chicago, Illinois. Any dispute between the Guarantor
and the Lenders or the Agent arising out of or related to the relationship
established between them in connection with this Guaranty, and whether
arising in contract, tort, equity, or otherwise, shall be resolved in
accordance with the internal laws, and not the conflicts of law provisions,
of the State of Illinois.
14. Consent to Jurisdiction; Counterclaims; Forum Non
Conveniens. (a) Exclusive Jurisdiction. Except as provided in subsection
(b) of this Section 14, the Agent, on behalf of itself and the Lenders, and
the Guarantor agree that all disputes between them arising out of or related
to the relationship established between them in connection with this Guaranty,
whether arising in contract, tort, equity, or otherwise, shall be resolved
only by state or federal courts located in Chicago, Illinois, but the parties
acknowledge that any appeals from those courts may have to be heard by a court
located outside of Chicago, Illinois.
(b) Other Jurisdictions. The Lenders and Agent shall have
the right to proceed against the Guarantor or its real or personal property
in a court in any location to enable the Agent or the Lenders to obtain
personal jurisdiction over the Guarantor or to enforce a judgment or other
court order entered in favor of the Agent or the Lenders.
(c) Venue; Forum Non Conveniens. Each of the Guarantor
and the Agent, on behalf of itself and the Lenders, waives any objection
that it may have (including, without limitation, any objection to the
laying of venue or based on forum non conveniens) to the location of the
court in which any proceeding is commenced in accordance with this Section
14.
15. Waiver of Jury Trial. Each of the Guarantor and the
Agent waives any right to trial by jury in any dispute, whether sounding in
contract, tort, or otherwise, between the Guarantor and the Lenders or the
Agent arising out of or related to the transactions contemplated by this
Guaranty or any other instrument, document or agreement executed or
delivered in connection herewith. Either the Guarantor or the Agent may
file an original counterpart or a copy of this Guaranty with any court as
written evidence of the consent of the parties hereto to the waiver of
their right to trial by jury.
108
16. Waiver of Bond. The Guarantor waives the posting of
any bond otherwise required of the Agent in connection with any judicial
process or proceeding to enforce any judgment or other court order entered
in favor of the Agent, or to enforce by specific performance, temporary
restraining order, or preliminary or permanent injunction, this Guaranty or
any other agreement or document between the Agent and the Guarantor.
17. Advice of Counsel. The Guarantor represents and
warrants that it has consulted with its legal counsel regarding all waivers
under this Guaranty, including without limitation those under Section 4 and
Sections 14 through 17 hereof, that it believes that it fully understands
all rights that it is waiving and the effect of such waivers, that it
assumes the risk of any misunderstanding that it may have regarding any of
the foregoing, and that it intends that such waivers shall be a material
inducement to the Agent and the Lenders to extend the indebtedness
guaranteed hereby.
18. Notices. All notices and other communications
provided to any party hereto shall be in writing or by facsimile and
addressed to such party at its address set forth below or at such other
address as may be designated by such party in a notice to the other party.
Any notice, if mailed and properly addressed with postage prepaid, shall be
deemed given when received; any notice, if transmitted by facsimile, shall
be deemed given when transmitted. The addresses for notices are as follows:
if to the Guarantor, at:
========================
========================
if to the Agent, at
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: 312/732-1117
19. Severability. Wherever possible, each provision of
this Guaranty shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Guaranty.
20. Merger. This Guaranty represents the final agreement
of the Guarantor with respect to the matters contained herein and may not be
contradicted by evidence of prior or contemporaneous agreements, or
subsequent oral agreements, between the Guarantor and the Agent or any Lender.
109
21. Execution in Counterparts. This Guaranty may be
executed in any number of counterparts and by different parties hereto 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.
IN WITNESS WHEREOF, this Guaranty has been duly executed
by the Guarantor as of the day and year first set forth above.
-------------------------
By: __________________________
Name: ____________________
Title:
Acknowledged and agreed to as of the ___ day of September, 1995.
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:--------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
110
EXHIBIT "B"
NOTE
$ ----------------- ----------------- , l9
The undersigned (the "Borrower") promises to pay to the order of
(the "Lender") the lesser of the principal sum of Dollars or the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower
pursuant to the Credit Agreement (as the same may be amended or modified,
the "Agreement") hereinafter referred to, in immediately available funds at
the main office of The First National Bank of Chicago in Chicago, Illinois,
as Agent, together with interest on the unpaid principal amount hereof at
the rates and on the dates set forth in the Agreement. The Borrower shall
pay the principal of and accrued and unpaid interest on the Loans in full
on the Facility Termination Date.
The Lender shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance with its
usual practice, the date and amount of each Loan and the date and amount of
each principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled
to the benefits of, the Credit Agreement, dated as of September __, 1995
among the Borrower, The First National Bank of Chicago, individually and as
Agent, and the lenders named therein, including the Lender, to which
Agreement, as it may be amended from time to time, reference is hereby made
for a statement of the terms and conditions governing this Note, including
the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the
Agreement.
U.S. HOME CORPORATION
By:______________________
Print Name:________________
Title:_____________________
111
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF U.S. HOME CORPORATION
DATED ____________, 199_
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
------ ---------- ----------- --------- -------
