Exhibit 10.1
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CREDIT AGREEMENT
Dated as of December 12, 2002
among
MERITAGE CORPORATION,
as the Borrower,
GUARANTY BANK
as Administrative Agent and Swing Line Lender,
FLEET NATIONAL BANK,
as Syndication Agent,
BANK ONE, NA,
as Documentation Agent,
and
The Other Lenders Party Hereto
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GUARANTY BANK,
as
Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms...................................................1
1.02 Other Interpretive Provisions..................................28
1.03 Accounting Terms...............................................29
1.04 Rounding.......................................................29
1.05 References to Agreements and Laws..............................30
1.06 Times of Day...................................................30
1.07 Letter of Credit Amounts.......................................30
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Revolving Loans................................................30
2.02 Borrowings, Conversions and Continuations of Revolving Loans...31
2.03 Letters of Credit..............................................32
2.04 Swing Line Loans...............................................39
2.05 Prepayments....................................................42
2.06 Termination or Reduction of Commitments........................43
2.07 Repayment of Loans.............................................43
2.08 Interest.......................................................43
2.09 Fees...........................................................44
2.10 Computation of Interest and Fees...............................44
2.11 Evidence of Debt...............................................45
2.12 Payments Generally.............................................45
2.13 Sharing of Payments............................................47
2.14 Extension of Scheduled Maturity Date...........................48
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes..........................................................49
3.02 Illegality.....................................................50
3.03 Inability to Determine Rates...................................51
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves
on Eurodollar Rate Loans.....................................51
3.05 Funding Losses.................................................52
3.06 Matters Applicable to all Requests for Compensation............52
3.07 Survival.......................................................53
ARTICLE IV. CONDITIONS PRECEDENT TO Credit Extensions
4.01 Conditions of Initial Credit Extension.........................53
4.02 Conditions to all Credit Extensions............................55
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01 Existence, Qualification and Power; Compliance with Laws.......55
5.02 Authorization; No Contravention................................56
5.03 Governmental Authorization; Other Consents.....................56
5.04 Binding Effect.................................................56
5.05 Financial Statements; No Material Adverse Effect...............56
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5.06 Litigation.....................................................57
5.07 No Default.....................................................57
5.08 Ownership of Property; Liens...................................57
5.09 Environmental Compliance.......................................57
5.10 Insurance......................................................57
5.11 Taxes..........................................................57
5.12 ERISA Compliance...............................................58
5.13 Capitalization; Subsidiaries; Joint Ventures...................58
5.14 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act..........................................59
5.15 Disclosure.....................................................59
5.16 Compliance with Laws...........................................59
5.17 Intellectual Property; Licenses, Etc...........................60
5.18 Solvency.......................................................60
5.19 Businesses.....................................................60
5.20 Common Enterprise..............................................60
ARTICLE VI. AFFIRMATIVE COVENANTS
6.01 Financial Statements...........................................61
6.02 Certificates; Other Information................................61
6.03 Notices........................................................63
6.04 Payment of Obligations.........................................63
6.05 Preservation of Existence, Etc.................................63
6.06 Maintenance of Properties......................................64
6.07 Maintenance of Insurance.......................................64
6.08 Compliance with Laws...........................................64
6.09 Books and Records..............................................64
6.10 Inspection Rights..............................................64
6.11 Use of Proceeds................................................64
6.12 Additional Guarantors..........................................65
ARTICLE VII. NEGATIVE COVENANTS
7.01 Liens..........................................................65
7.02 Investments....................................................66
7.03 Indebtedness...................................................67
7.04 Fundamental Changes............................................67
7.05 Dispositions...................................................68
7.06 Restricted Payments............................................69
7.07 Change in Nature of Business...................................69
7.08 Transactions with Affiliates...................................69
7.09 Burdensome Agreements..........................................70
7.10 Use of Proceeds................................................70
7.11 Financial Covenants............................................70
7.12 Fiscal Year and Accounting Methods.............................71
7.13 Amendment and Waivers of Senior Notes..........................71
7.14 Sale and Leaseback.............................................72
7.15 Off-Balance Sheet Liabilities..................................72
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ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default..............................................72
8.02 Remedies Upon Event of Default.................................74
8.03 Application of Funds...........................................74
ARTICLE IX. ADMINISTRATIVE AGENT
9.01 Appointment and Authorization of Administrative Agent..........76
9.02 Delegation of Duties...........................................76
9.03 Liability of Administrative Agent..............................76
9.04 Reliance by Administrative Agent...............................77
9.05 Notice of Default..............................................77
9.06 Credit Decision; Disclosure of Information by
Administrative Agent.........................................78
9.07 Indemnification of Administrative Agent........................78
9.08 Administrative Agent in its Individual Capacity................79
9.09 Successor Administrative Agent.................................79
9.10 Administrative Agent May File Proofs of Claim..................80
9.11 Guaranty Matters...............................................81
9.12 Other Agents; Arrangers and Managers...........................81
9.13 Related Obligations............................................81
ARTICLE X. MISCELLANEOUS
10.01 Amendments, Etc................................................82
10.02 Notices and Other Communications; Facsimile Copies.............83
10.03 No Waiver; Cumulative Remedies.................................84
10.04 Attorney Costs, Expenses and Taxes.............................84
10.05 Indemnification by the Borrower................................85
10.06 Payments Set Aside.............................................86
10.07 Successors and Assigns.........................................87
10.08 Confidentiality................................................89
10.09 Set-Off........................................................90
10.10 Interest Rate Limitation.......................................91
10.11 Counterparts...................................................91
10.12 Integration....................................................91
10.13 Survival of Representations and Warranties.....................91
10.14 Severability...................................................91
10.15 Tax Forms......................................................92
10.16 Replacement of Lenders.........................................93
10.17 Governing Law..................................................94
10.18 Waiver of Right to Trial by Jury...............................94
10.19 ENTIRE AGREEMENT...............................................94
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SCHEDULES
1.01(b) Existing Credit Facilities
2.01 Commitments and Pro Rata Shares
2.03(m) Existing L/Cs
5.05 Supplement to Interim Financial Statements
5.05(e) Off-Balance Sheet Liabilities
5.06 Existing Litigation
5.13 Subsidiaries and Other Equity Investments
7.01 Existing Liens
7.02 Existing Investments
7.03 Existing Indebtedness
7.08 Transactions With Affiliates
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
FORM OF
A Revolving Loan Notice
B Swing Line Loan Notice
C Revolving Note
D Compliance Certificate
E Assignment and Assumption
F Guaranty
G Opinion Matters
H Borrowing Base Certificate
I Swing Line Note
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("AGREEMENT") is entered into as of December 12,
2002, among MERITAGE CORPORATION, a Maryland corporation (the "BORROWER"), each
lender from time to time party hereto (collectively, the "LENDERS" and
individually, a "LENDER"), GUARANTY BANK, as Administrative Agent and Swing Line
Lender, FLEET NATIONAL BANK, as Syndication Agent, and BANK ONE, NA, as
Documentation Agent.
The Borrower has requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.
In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms shall
have the meanings set forth below:
"ACQUIRED BUSINESS" has the meaning specified in SECTION 1.03(c).
"ACQUISITION" means the acquisition by any Person of (a) a majority of the
Equity Interests of another Person, (b) all or substantially all of the assets
of another Person or (c) all or substantially all of a line of business of
another Person, in each case (i) whether or not involving a merger or
consolidation with such other Person and (ii) whether in one transaction or a
series of related transactions.
"ACQUISITION CONSIDERATION" means the consideration given by the Borrower
or any of its Subsidiaries for an Acquisition, including but not limited to the
sum of (without duplication) (a) the fair market value of any cash, property
(including Equity Interests) or services given, plus (b) the amount of any
Indebtedness assumed, incurred or guaranteed (to the extent not otherwise
included) in connection with such Acquisition by the Borrower or any of its
Subsidiaries.
"ADMINISTRATIVE AGENT" means Guaranty Bank in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"ADMINISTRATIVE AGENT'S OFFICE" means the Administrative Agent's address
and, as appropriate, account as set forth on SCHEDULE 10.02, or such other
address or account as the Administrative Agent may from time to time notify the
Borrower and the Lenders.
"ADMINISTRATIVE REPLY FORM" means an Administrative Reply Form in a form
supplied by the Administrative Agent.
"AFFILIATE" means with respect to any Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by
or is under common Control with the Person specified. "Control" means the
possession, directly or indirectly, of the power to direct or cause the
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xxxxxxxxx of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. "CONTROLLING" and
"CONTROLLED" have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the Voting Stock of such Person.
"AGENT-RELATED PERSONS" means the Administrative Agent, together with its
Affiliates (including, in the case of Guaranty Bank in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"AGGREGATE COMMITMENTS" means the Commitments of all the Lenders.
"AGREEMENT" means this Credit Agreement.
"APPLICABLE LAW" means (a) in respect of any Person, all provisions of Laws
applicable to such Person, and all orders and decrees of all courts and
determinations of arbitrators applicable to such Person and (b) in respect of
contracts made or performed in the State of Texas, "APPLICABLE LAW" shall also
mean the laws of the United States of America, including, without limitation the
foregoing, 12 USC Sections 85 and 86, as amended to the date hereof and as the
same may be amended at any time and from time to time hereafter, and any other
statute of the United States of America now or at any time hereafter prescribing
the maximum rates of interest on loans and extensions of credit, and the laws of
the State of Texas.
"APPLICABLE RATE" means the following percentages per annum:
PRICING COMMITMENT EURODOLLAR RATE; ALL BASE
LEVEL LEVERAGE RATIO FEE LETTERS OF CREDIT RATE
----- -------------- --- ----------------- ----
1 Greater than 2.00 to 1 0.500% 2.250% 0.500%
2 Greater than 1.50 to 1 but less
than or equal to 2.00 to 1 0.375% 2.000% 0.250%
3 Greater than 1.25 to 1 but less
than or equal to 1.50 to 1 0.300% 1.750% 0.000%
4 Less than or equal to 1.25 to 1 0.275% 1.500% 0.000%
Any increase or decrease in the Applicable Rate resulting from a change in the
Leverage Ratio shall become effective as of the first Business Day immediately
following the date a Compliance Certificate is delivered pursuant to SECTION
6.02(B); PROVIDED, HOWEVER, that (x) if a Compliance Certificate is not
delivered when due in accordance with such Section, or (y) there shall occur an
Event of Default, then Pricing Level 1 shall apply as of the first Business Day
after the date on which such Compliance Certificate was required to have been
delivered or such Event of Default shall have occurred, as applicable.
Thereafter, as to clause (x) above only, any decrease in the Applicable Rate
resulting from a change in the Leverage Ratio shall become effective as of the
first Business Day immediately following the date a Compliance Certificate is
delivered. In addition to the Leverage Ratio required above, in connection with
a decrease in the Applicable Rate to Pricing Level 4, such decrease shall occur
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only if the Borrower shall have and maintain a Debt Rating of at least BB- by
S&P and Ba3 by Xxxxx'x. Thereafter, if Pricing Level 4 is in effect and a
publicly announced downgrade in either Debt Rating shall occur, the Applicable
Rate shall be increased to Pricing Level 3 effective during the period
commencing on the date of the public announcement thereof and ending on the date
immediately preceding the effective date of the next such change.
Notwithstanding the foregoing, the Applicable Rate in effect from and after the
Closing Date to but not including the first Business Day immediately following
the date the first Compliance Certificate is delivered pursuant to SECTION
6.02(b) shall be Pricing Level 2.
"ARRANGER" means Guaranty Bank, in its capacity as sole lead arranger and
sole book manager.
"ASSIGNMENT AND ASSUMPTION" means an Assignment and Assumption
substantially in the form of EXHIBIT E.
"ATTORNEY COSTS" means and includes all fees, expenses and disbursements of
any law firm or other external counsel and, without duplication, the allocated
cost of internal legal services and all expenses and disbursements of internal
counsel.
"ATTRIBUTABLE INDEBTEDNESS" means on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"AUDITED FINANCIAL STATEMENTS" means the audited consolidated balance sheet
of the Borrower and its Subsidiaries for the fiscal year ended December 31,
2001, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.
"AVAILABILITY PERIOD" means the period from and including the Closing Date
to the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to SECTION 2.06, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to SECTION 8.02.
"BASE RATE" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Guaranty Bank
as its "prime rate." The "prime rate" is a rate set by Guaranty Bank based upon
various factors including Guaranty Bank's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate.
Any change in such rate announced by Guaranty Bank shall take effect at the
opening of business on the day specified in the public announcement of such
change.
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"BASE RATE LOAN" means a Loan that bears interest based on the Base Rate.
"BORROWER" has the meaning specified in the introductory paragraph hereto.
"BORROWING" means a Revolving Borrowing or a Swing Line Borrowing, as the
context may require.
"BORROWING BASE" means with respect to an Inventory Valuation Date for
which it is to be determined, an amount equal to the sum (without duplication)
of the following assets of each Loan Party (but only to the extent that such
assets set forth in subparagraph (a) below are not subject to any Liens and such
assets set forth in subparagraphs (b) through (h) below are not subject to any
Liens other than Permitted Liens):
(a) 100% of Cash and Receivables (which shall not include cash used to
collateralize L/C Obligations);
(b) 90% of the Net Book Value of Presold Units;
(c) 80% of the Net Book Value of Eligible Model Units;
(d) 80% of the Net Book Value of Unsold Units Under Construction;
(e) 80% of the Net Book Value of Completed Unsold Units Less Than 18
Months Since Completion;
(f) 70% of the Net Book Value of Finished Lots;
(g) 60% of the Net Book Value Land/Lots Under Development; and
(h) 50% of the Net Book Value of Unimproved Entitled Land;
PROVIDED, HOWEVER, that (i) at no time shall more than 50% of the Borrowing
Base be comprised of the items set forth in subparagraphs (f), (g) and (h)
above, (ii) at no time shall more than 25% of the Borrowing Base be comprised of
the items set forth in subparagraphs (g) and (h) above and (iii) at no time
shall the aggregate amount of condominiums exceed 15% of the aggregate number of
Units comprising the items set forth in subparagraphs (b), (c), (d) and (e) in
the aggregate.
"BORROWING BASE ASSETS" means Cash, Receivables, Presold Units, Eligible
Model Units, Unsold Units Under Construction, Completed Unsold Units Less Than
18 Months Since Completion, Finished Lots, Land/Lots Under Development and
Unimproved Entitled Land of the Borrower and the Guarantors included in the
calculation of the Borrowing Base.
"BORROWING BASE CERTIFICATE" means the Certificate in the form of EXHIBIT H
hereto, or in such other form acceptable to the Administrative Agent, executed
by a Responsible Officer of the Borrower.
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"BORROWING BASE DEBT" means as of any date of determination, all
Consolidated Indebtedness as of such date of determination, including without
limitation the Obligations and the Senior Notes, but excluding (a) any portion
of any Subordinated Debt of any Loan Party which is due and payable more than
one year from such date of determination and (b) Indebtedness secured by Liens
on assets that are not part of any of the Borrowing Base Assets, but only to the
extent that the Indebtedness (i) secured by any Lien on such asset does not
exceed the Net Book Value of such asset as determined by GAAP and (ii) does not
exceed in aggregate amount the amount set forth in SECTION 7.03(f).
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent's Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.
"CAPITAL LEASE" means as of any date, any lease of property, real or
personal, the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on the balance sheet of the lessee.
"CASH" means unrestricted cash.
"CASH AND CASH EQUIVALENTS" means (a) Cash; (b) marketable obligations
issued or unconditionally guaranteed by the U.S. Government or issued by any of
its agencies and backed by the full faith and credit of the U.S., in each case
maturing within one year from the date of acquisition (and investments in mutual
funds investing primarily in those obligations); (c) short-term investment grade
domestic and eurodollar certificates of deposit or time deposits that are fully
insured by the Federal Deposit Insurance Corporation or are issued by commercial
banks having combined capital, surplus, and undivided profits of not less than
$500,000,000 (as shown on its most recently published statement of condition);
(d) commercial paper and similar obligations rated "P-1" by Xxxxx'x or "A-1" by
S&P; (e) readily marketable tax-free municipal bonds of a domestic issuer rated
"AAA" by Xxxxx'x, or "AAA" by S&P, and maturing within one year from the date of
issuance (and investments in mutual funds investing primarily in those bonds);
and (f) demand deposit accounts maintained in the ordinary course of business.
"CASH COLLATERALIZE" has the meaning specified in SECTION 2.03(g).
"CHANGE OF CONTROL" means with respect to any Person, an event or series of
events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding the
Permitted Holders, any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee,
agent or other fiduciary or administrator of any such plan) becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be
deemed to have "beneficial ownership" of all securities that such person or
group has the right to acquire (such right, an "OPTION RIGHT"), whether
such right is exercisable immediately or only after the passage of time),
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directly or indirectly, of 25% or more of the equity securities of such
Person entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully-diluted basis (and taking into
account all such securities that such person or group has the right to
acquire pursuant to any option right); or
(b) during any period of 24 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of
such Person cease to be composed of individuals (i) who were members of
that board or equivalent governing body on the first day of such period,
(ii) whose election or nomination to that board or equivalent governing
body was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a majority
of that board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was approved by
individuals referred to in clauses (i) and (ii) above constituting at the
time of such election or nomination at least a majority of that board or
equivalent governing body.
"CLOSING DATE" means the first date all the conditions precedent in SECTION
4.01 are satisfied or waived in accordance with SECTION 4.01 (or, in the case of
SECTION 4.01(b), waived by the Person entitled to receive the applicable
payment).
"CODE" means the Internal Revenue Code of 1986.
"COMMITMENT" means as to each Lender, its obligation to (a) make Revolving
Loans to the Borrower pursuant to SECTION 2.01, (b) purchase participations in
L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender's name on SCHEDULE 2.01, in any Assignment and
Assumption pursuant to which such Lender becomes a party hereto, or in any
amendment hereto, as applicable, as such amount may be adjusted from time to
time in accordance with this Agreement.
"COMPLETED UNSOLD UNITS LESS THAN 18 MONTHS SINCE COMPLETION" means as of
any date, all Units (excluding Model Units), for which construction has been
"completed" less than 18 months before such date, but for which there is in
existence no Contract For Sale. Construction will be considered "completed" when
the temporary certificate of occupancy or the certificate of occupancy has been
issued, whichever occurs first.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form of
EXHIBIT D, with such changes, or in such other form, as agreed to by the
Administrative Agent, executed by a Responsible Officer of the Borrower.
"CONSENTING LENDERS" has the meaning specified in SECTION 2.14(b).
"CONSOLIDATED EBITDA" means for any period, the Consolidated Net Income of
the Loan Parties PLUS, to the extent deducted from revenues in determining
Consolidated Net Income, (a) Consolidated Interest Expense, (b) expense for
income taxes paid or accrued, (c) depreciation, (d) amortization, (e) all other
non-cash items reducing Consolidated Net Income (excluding any non-cash charge
that results in an accrual of a reserve for cash charges in the future) and (f)
the amount of dividends accrued or payable by the Loan Parties in respect of
Disqualified Equity Interests or any Preferred Stock of any Restricted
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Subsidiary (excluding any amount payable to any Loan Party), which amount shall
be "grossed up" to include any applicable taxes on income that would be used to
pay such dividends, PROVIDED, HOWEVER, that interest, dividends or other
payments or accruals of a consolidated Subsidiary that is not wholly owned shall
be included only to the extent of the interest of such Person in such
Subsidiary.
"CONSOLIDATED INDEBTEDNESS" means as of any date of determination, for the
Loan Parties on a consolidated basis, Indebtedness of the Loan Parties as of
such date, but excluding Indebtedness of one Loan Party to another Loan Party.
"CONSOLIDATED INTEREST EXPENSE" means for any period, for the Loan Parties
on a consolidated basis, the interest expense and interest and other charges
amortized to cost of home sales and cost of land sales for the Loan Parties for
such period.
"CONSOLIDATED INTEREST INCURRED" means for any period, the aggregate amount
(without duplication and determined in each case in accordance with GAAP) of (a)
interest (excluding interest on Indebtedness of a Loan Party to another Loan
Party) incurred, whether such interest was expensed or capitalized, paid,
accrued, or scheduled to be paid or accrued by any of the Loan Parties during
such period, including (i) original issue discount and non-cash interest
payments or accruals, (ii) the interest portion of all deferred payment
obligations, and (iii) all commissions, discounts and other fees and charges
owed with respect to bankers' acceptances and letter of credit financings and
Swap Contracts, in each case to the extent attributable to such period PLUS (b)
the amount of dividends accrued or payable by the Loan Parties in respect of
Disqualified Equity Interests or any Preferred Stock of any Restricted
Subsidiary (excluding any amount payable to any Loan Party), which amount shall
be "grossed up" to include applicable taxes on income that would be used to pay
such in dividends, PROVIDED, HOWEVER, that interest, dividends or other payments
or accruals of a consolidated Subsidiary that is not wholly owned shall be
included only to the extent of the interest of such Person in such Subsidiary.
For purposes of this definition, (x) interest on Capital Leases shall be deemed
to accrue at an interest rate reasonably determined by the Borrower to be the
rate of interest implicit in such Capital Leases in accordance with GAAP and (y)
without duplication, interest expense attributable to any Indebtedness of
another Person represented by any Guarantee of a Loan Party shall be deemed to
be the interest expense attributable to the Indebtedness guaranteed.
"CONSOLIDATED NET INCOME" means with respect to any Person for any period,
the net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; PROVIDED, that (a)
net income (or loss) of any other Person which is not a Subsidiary of the Person
or is accounted for by such specified Person by the equity method of accounting
shall be included only to the extent of the amount of dividends or distributions
paid to the specified Person or a Subsidiary of such Person, (b) all gains and
losses which are either extraordinary (as determined in accordance with GAAP) or
are either unusual or nonrecurring (including any gain from the sale or other
disposition of assets outside the ordinary course of business or from the
issuance or sale of any Equity Interests), shall be excluded, and (c) the net
income, if positive, of any of such Person's consolidated Subsidiaries to the
extent that the declaration or payment of dividends or similar distributions is
not at the time permitted by operation of the terms of its charter or bylaws or
any other agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such consolidated Subsidiary shall be
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excluded, PROVIDED, HOWEVER, in the case of exclusions from Consolidated Net
Income set forth in CLAUSES (b) and (c) above, such amounts shall be excluded
only to the extent included in computing such net income (or loss) in accordance
with GAAP and without duplication.
"CONSOLIDATED TANGIBLE NET WORTH" means as of any date of determination,
for Loan Parties on a consolidated basis, Shareholders' Equity of the Loan
Parties on that date MINUS the Intangible Assets of the Loan Parties on that
date.
"CONTRACT FOR SALE" means a bona fide written sale and purchase agreement
between a Loan Party and a third Person purchaser who (a) is not an Affiliate of
any Loan Party, and (b) has made an xxxxxxx money deposit or down payment of at
least $1,000; PROVIDED, HOWEVER, that such agreement shall not contain any
contingency clause other than the contingency that the purchaser shall have
obtained mortgage financing.
"CONTRACTUAL OBLIGATION" means as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CONTROL" has the meaning specified in the definition of "AFFILIATE."
"CREDIT EXTENSION" means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.
"DEBT RATINGS" means, as of any date, the lowest rating that has been
recently announced by either S&P or Xxxxx'x, as the case may be, for any
non-credit-enhanced, senior unsecured long-term debt of the Borrower.
"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"DEFAULT" means any event or condition that constitutes an Event of Default
or that, with the giving of any notice, the passage of time, or both, would be
an Event of Default.
"DEFAULT RATE" means an interest rate equal to (a) the Base Rate PLUS (b)
the Applicable Rate, if any, applicable to Base Rate Loans PLUS (c) 2% per
annum; PROVIDED, HOWEVER, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.
"DEFAULTING LENDER" means any Lender that (a) has failed to fund any
portion of the Revolving Loans, participations in L/C Obligations or
participations in Swing Line Loans required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the
8
date when due, unless the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.
"DISPOSITION" or "DISPOSE" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
"DISQUALIFIED EQUITY INTERESTS" means (a) except as set forth in clause (b)
below, with respect to any Person, Equity Interests of such Person that, by its
terms or by the terms of any security into which it is convertible, exercisable
or exchangeable, is, or upon the happening of an event or the passage of time
would be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such Person or any of its Subsidiaries, in whole or in part,
on or prior to the Scheduled Maturity Date, and (b) with respect to any
Subsidiary of such Person (including with respect to any Subsidiary of the
Borrower), any Equity Interests other than any common stock with no preference,
privileges, or redemption or repayment provisions.
"DOCUMENTATION AGENT" means Bank One, NA, in its capacity as documentation
agent under any of the Loan Documents.
"DOLLAR" and "$" mean lawful money of the United States.
"ELIGIBLE ASSIGNEE" has the meaning specified in SECTION 10.07(g).
"ELIGIBLE MODEL UNITS" means Model Units that have not been completed for
more than 36 months after the last production Unit in the Project (for which
such Model Unit is used as a Model) has been closed.
"ENTITLED LAND" means Land that has all requisite vested residential zoning
for the construction of Units.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
9
"EQUITY INTERESTS" means as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
in any Person that is a corporation, each class of partnership interest in any
Person that is a partnership, and each class of membership interest in any
Person that is a limited liability company, and any warrants or options to
purchase or otherwise acquire any such equity interests.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA AFFILIATE" means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"EURODOLLAR RATE" means for any Interest Period with respect to any
Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a) does not appear
on such page or service or such page or service shall not be available, the
rate per annum equal to the rate determined by the Administrative Agent to
be the offered rate on such other page or other service that displays an
average British Bankers Association Interest Settlement Rate for deposits
in Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, or
10
(c) if the rates referenced in the preceding clauses (a) and (b) are
not available, the rate per annum determined by the Administrative Agent as
the rate of interest at which deposits in Dollars for delivery on the first
day of such Interest Period in same day funds in the approximate amount of
the Eurodollar Rate Loan being made, continued or converted by Guaranty
Bank and with a term equivalent to such Interest Period would be offered by
Guaranty Bank to major banks in the London interbank eurodollar market at
their request at approximately 4:00 p.m. (London time) two Business Days
prior to the first day of such Interest Period.
"EURODOLLAR RATE LOAN" means a Revolving Loan that bears interest at a rate
based on the Eurodollar Rate.
"EVENT OF DEFAULT" has the meaning specified in SECTION 8.01.
"EXISTING CREDIT FACILITIES" means these certain credit facilities of the
Borrower and its Subsidiaries set forth on SCHEDULE 1.01(b) which are to be paid
in full on the Closing Date without further loan or funding commitments
thereunder.
"EXISTING L/C'S" has the meaning specified in SECTION 2.03(m).
"FEDERAL FUNDS RATE" means for any day, the 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 by the Federal Reserve Bank on the Business Day next
succeeding such day; PROVIDED that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Guaranty Bank on
such day on such transactions as determined by the Administrative Agent.
"FEE LETTER" means the letter agreement, dated September 18, 2002, among
the Borrower, the Administrative Agent and the Arranger, and any other fee
letter entered into from time to time among the Administrative Agent, the
Borrower and the Arranger, or any of them.
"FINISHED LOTS" means parcels of Entitled Land which are duly recorded and
platted for the construction of Units with vested zoning for such use, with
respect to which substantially all utilities and major infrastructure has been
completed and stubbed to site, and all requisite governmental consents and
approvals required for a building permit to be issued have been, or could be,
obtained and construction commenced without the satisfaction of any further
conditions; PROVIDED, HOWEVER, that the term "FINISHED LOTS" shall not include
any real property upon which the construction of a Unit has commenced.
"FOREIGN LENDER" has the meaning specified in SECTION 10.15(a)(i).
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
11
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"GUARANTEE" means as to any Person, any (a) obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term "GUARANTEE" as a verb has a corresponding meaning.
"GUARANTIED PARTIES" has the meaning given to such term in the Guaranty.
"GUARANTORS" means each Restricted Subsidiary of the Borrower existing on
the Closing Date and each Restricted Subsidiary that becomes an additional
Guarantor pursuant to SECTION 6.12.
"GUARANTY" means each Guaranty made by the Guarantors in favor of the
Administrative Agent on behalf of the Guarantied Parties, substantially in the
form of EXHIBIT F.
"GUARANTY BANK" means Guaranty Bank and its successors.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
12
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HIGHEST LAWFUL RATE" means at the particular time in question the maximum
rate of interest which, under Applicable Law, any Lender is then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, any Lender is permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower. For purposes of determining the Highest Lawful Rate under Applicable
Law, the indicated rate ceiling shall be the lesser of (a)(i) the "WEEKLY
CEILING", as that expression is defined in Section 303.003 of the Texas Finance
Code, as amended, or (ii) if available in accordance with the terms thereof and
at the Administrative Agent's option after notice to the Borrower and otherwise
in accordance with the terms of Section 303.103 of the Texas Finance Code, as
amended, the "ANNUALIZED CEILING" and (b)(i) if the amount outstanding under
this Agreement is less than $250,000, twenty-four percent (24%), or (ii) if the
amount under this Agreement is equal to or greater than $250,000, twenty-eight
percent (28%) per annum.
"HONOR DATE" has the meaning specified in SECTION 2.03(c)(i).
"ICC" has the meaning specified in SECTION 2.03(h).
"INDEBTEDNESS" means as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers' acceptances,
bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (except the following items shall not be included
as Indebtedness: (i) trade accounts payable that are not more than 30 days
past the date the invoice was approved and entered into the computer system
by such Person and also including any trade payables that are in dispute
and (ii) accrued expenses incurred by such Person in the ordinary course of
business);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse;
(f) obligations under Capital Leases;
13
(g) Synthetic Lease Obligations and Off-Balance Sheet Liabilities;
(h) obligations in respect to Redeemable Stock of such Person;
(i) any Receivables Facility Attributed Indebtedness;
(j) any "withdrawal liability" of such Person as such term is defined
under Part I of Subtitle E of Title IV of ERISA; and
(k) all Guarantees by such Person in respect of any of the foregoing
of another Person.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer to the extent that such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, unless such Indebtedness is expressly made
non-recourse to such Person. The amount of any net obligation under any Swap
Contract on any date shall be deemed to be the Swap Termination Value thereof as
of such date. The amount of any Capital Lease or Synthetic Lease Obligation as
of any date shall be deemed to be the amount of Attributable Indebtedness in
respect thereof as of such date.
Notwithstanding the foregoing, (1) earn-outs or similar profit sharing
arrangements provided for in Acquisition agreements which are determined on the
basis of future operating earnings or similar performance criteria (which are
not determinable at the time of acquisition) of the acquired assets or entities,
(2) deferred income taxes and surety bonds arising in the ordinary course of
business, (3) any liabilities arising under rolling options and similar
contracts for the acquisition of real property incurred in the ordinary course
of business, and (4) any liabilities arising under model home leases shall not
be considered Indebtedness to the extent such items are not required to be
capitalized in accordance with GAAP.
"INDEMNIFIED LIABILITIES" has the meaning set forth in SECTION 10.05.
"INDEMNITEES" has the meaning set forth in SECTION 10.05.
"INTANGIBLE ASSETS" means assets that are considered to be intangible
assets under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks, patents, franchises, licenses, unamortized
deferred charges and unamortized debt discount.
"INTEREST COVERAGE RATIO" means as of any date of determination, the ratio
of (a) Consolidated EBITDA for the period of four fiscal quarters ended on such
date to (b) Consolidated Interest Incurred for such four fiscal quarters.
"INTEREST PAYMENT DATE" means (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; PROVIDED, HOWEVER, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the first Business Day of each January, April,
July and October shall also be Interest Payment Dates; and (b) as to any Base
Rate Loan (including a Swing Line Loan), the first Business Day of each January,
April, July and October and the Maturity Date.
14
"INTEREST PERIOD" means as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Revolving Loan Notice;
PROVIDED that:
(i) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
"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 6.02(c).
"INVESTMENT" means as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"IP RIGHTS" has the meaning set forth in SECTION 5.17.
"IRS" means the United States Internal Revenue Service.
"LAND" means land owned by any Loan Party, which land is held for future
development or sale.
"LAND/LOTS UNDER DEVELOPMENT" means Entitled Land on which grading or
construction of on-site infrastructure improvements has begun, and, for which
all necessary zoning approvals have been obtained and are in full force and
effect, and which does not qualify as a Presold Unit, an Unsold Unit Under
Construction or a Finished Lot.
"LAWS" means collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
15
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C ADVANCE" means with respect to each Lender, such Lender's funding of
its participation in any L/C Borrowing in accordance with its Pro Rata Share.
"L/C BORROWING" means an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Borrowing.
"L/C CREDIT EXTENSION" means with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C ISSUER" means Guaranty Bank in its capacity as issuer of Letters of
Credit hereunder, or such other Lender or Lenders as the Borrower, the
Administrative Agent and such other Lender or Lenders may agree upon that may
also issue Letters of Credit hereunder.
"L/C OBLIGATIONS" means as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit PLUS the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.
"LENDER" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the L/C Issuer and the Swing Line Lender.
"LENDING OFFICE" means as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Reply Form, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"LETTER OF CREDIT" means any letter of credit issued hereunder. A Letter of
Credit may be a commercial letter of credit or a standby letter of credit.
"LETTER OF CREDIT APPLICATION" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
"LETTER OF CREDIT EXPIRATION DATE" means the day that is seven days prior
to the Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).
"LETTER OF CREDIT SUBLIMIT" means an amount equal to $40,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
"LEVERAGE RATIO" means as of any date of determination, the ratio of (a)
Consolidated Indebtedness on such date (which, for the purpose of calculating
the Leverage Ratio only, shall include accrued expenses of the Loan Parties
incurred in the ordinary course of business) to (b) Consolidated Tangible Net
Worth on such date.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
16
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
"LOAN" means an extension of credit by a Lender to the Borrower under
ARTICLE II in the form of a Revolving Loan or a Swing Line Loan.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Fee Letter, each
Guaranty, each Request for Credit Extension, each Compliance Certificate, and
any other agreement executed, delivered or performable by any Loan Party in
connection herewith or as security for the Obligations (excluding, however, any
Swap Contract with a Lender or an Affiliate of a Lender).
"LOAN PARTIES" means collectively, the Borrower and each Guarantor.
"MATERIAL ADVERSE EFFECT" means any of the following events: (a) a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent), condition (financial or otherwise) or prospects of the Borrower
or the Loan Parties taken as a whole; (b) a material impairment of the ability
of any Loan Party to perform its obligations under any Loan Document to which it
is a party; (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Loan Party of any Loan Document to which it
is a party; or (d) the occurrence of any event or circumstance the effects of
which will result in, or could reasonably be expected to result in, a Default.
"MATURITY DATE" means the earlier of (a) the Scheduled Maturity Date or (b)
such earlier date that (i) the Obligations become due and payable pursuant to
this Agreement (whether by acceleration, prepayment in full, scheduled reduction
or otherwise) or (ii) there shall exist an Event of Default under SECTION
8.1(f).
"MODEL UNITS" means all Units which are initially used as models or sales
offices to market a particular Project and that are not intended to be sold
until all or substantially all other Units in such particular Project are sold.
"MOODY'S" means Xxxxx'x Investors Service, Inc., or any successor rating
agency.
"MULTIEMPLOYER PLAN" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.
"NET AVAILABLE PROCEEDS" means, with respect to any Disposition, the
proceeds thereof in the form of Cash and Cash Equivalents, net of:
(i) brokerage commissions and other fees and expenses (including fees and
expenses of legal counsel, accountants and investment banks) of such Disposition
paid to parties other than the Borrower or Affiliates of the Borrower;
(ii) provisions of taxes payable as a result of such Disposition (after
taking into account any available tax credits or deductions and any tax sharing
arrangements);
17
(iii) amounts required to be paid by any Person (other than the Borrower or
any Restricted Subsidiary) owning a beneficial interest in the assets subject to
the Disposition or having a Lien thereon;
(iv) payments of unassumed liabilities (not constituting Indebtedness)
relating to the assets sold at the time of, or within 30 days after the date of,
such Disposition; and
(v) appropriate amounts to be provided by the Borrower or any Restricted
Subsidiary, as the case may be, as a reserve required in accordance with GAAP
against any liabilities associated with such Disposition and retained by the
Borrower or any Restricted Subsidiary, as the case may be, after such
Disposition, including pensions and other post-employment benefit liabilities
under any indemnification obligations associated with such Disposition, all as
reflected in an certificate of a Responsible Officer delivered to the
Administrative Agent; provided, however, that any amounts remaining after
adjustments, revaluations or liquidations of such reserves shall constitute Net
Available Proceeds.
"NET BOOK VALUE" means, with respect to an asset owned by a Loan Party, the
gross investment of such Loan Party in the asset, less all reserves (including
loss reserves and reserves for depreciation) attributable to that asset, all
determined in accordance with GAAP.
"NON-CONSENTING LENDER" has the meaning specified in SECTION 2.14(a).
"NON-RECOURSE INDEBTEDNESS" with respect to any Person means Indebtedness
of such Person (i) for which the sole legal recourse for collection of principal
and interest on such Indebtedness is against the specific property identified in
the instruments evidencing or securing such Indebtedness and such property was
acquired with the proceeds of such Indebtedness or such Indebtedness was
incurred within ninety (90) days after the acquisition of such property and for
which no other assets of such Person may be realized upon in collection of
principal or interest on such Indebtedness, or (ii) that refinances Indebtedness
described in clause (i) and for which the recourse is limited to the same extent
described in clause (i).
"NOTES" means the Revolving Loan Notes and the Swing Line Note.
"OBLIGATIONS" means all debts, liabilities and obligations of any Loan
Party arising under any Loan Document or any Swap Contract entered into with any
Lender or any Affiliate of any Lender, whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising, and shall also include all fees, expenses and
other amounts owing to any Lender pursuant to cash management, depository
accounts (including chargebacks) or similar agreements. Without limiting the
generality of the foregoing, "OBLIGATIONS" includes all amounts which would be
owed by any Loan Party or any other Person (other than Administrative Agent or
Lenders) to Administrative Agent, Lenders or any Affiliate of a Lender under any
Loan Document, but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
any Loan Party or any other Person (including all such amounts which would
become due or would be secured but for the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding of any
other Loan Party or any other Person under any Debtor Relief Law).
18
"OFF-BALANCE SHEET LIABILITIES" means with respect to any Person as of any
date of determination thereof, without duplication and to the extent not
included as a liability on the consolidated balance sheet of such Person and its
Subsidiaries in accordance with GAAP: (a) with respect to any asset
securitization transaction (including any accounts receivable purchase facility)
(i) the unrecovered investment of purchasers or transferees of assets so
transferred, and (ii) any other payment, recourse, repurchase, hold harmless,
indemnity or similar obligation of such Person or any of its Subsidiaries in
respect of assets transferred or payments made in respect thereof, other than
limited recourse provisions that are customary for transactions of such type and
that neither (x) have the effect of limiting the loss or credit risk of such
purchasers or transferees with respect to payment or performance by the obligors
of the assets so transferred nor (y) impair the characterization of the
transaction as a true sale under applicable Laws (including Debtor Relief Laws);
(b) the monetary obligations under any financing lease or so-called "synthetic,"
tax retention or off-balance sheet lease transaction which, upon the application
of any Debtor Relief Law to such Person or any of its Subsidiaries, would be
characterized as indebtedness; (c) any other monetary obligation arising with
respect to any other transaction which (i) upon the application of any Debtor
Relief Law to such Person or any of its Subsidiaries, would be characterized as
indebtedness or (ii) is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the consolidated balance
sheet of such Person and its Subsidiaries (for purposes of this clause (c), any
transaction structured to provide tax deductibility as interest expense of any
dividend, coupon or other periodic payment will be deemed to be the functional
equivalent of a borrowing); PROVIDED, HOWEVER, that (A) liabilities arising
under rolling options and similar contracts for the acquisition of real property
incurred in the ordinary course of business and (B) liabilities arising under
model home leases in the ordinary course of business shall not be deemed to be
"Off-Balance Sheet Liabilities".
"ORGANIZATION DOCUMENTS" means (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"OUTSTANDING AMOUNT" means (i) with respect to Revolving Loans and Swing
Line Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Revolving Loans
and Swing Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date.
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"PARTICIPANT" has the meaning specified in SECTION 10.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PENSION PLAN" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"PERMITTED HOLDERS" means Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxx, their
respective wives and children, any corporation, limited liability company or
partnership in which either of them has voting control and is the direct and
beneficial owner of a majority of the Equity Interests and any trust for the
benefit of either of them or their wives or children.
"PERMITTED LIENS" means as to any Loan Party, any of the following:
(a) Liens for taxes, assessments or governmental charges or levies on
such Loan Party's property if the same (i) shall not at the time be
delinquent or thereafter can be paid without penalty, or (ii) are being
contested in good faith and by appropriate proceedings and for which
adequate reserves shall have been established on such Loan Party's books in
accordance with GAAP;
(b) Liens imposed by Law, such as carriers', warehousemen's,
mechanics' and materialmen's Liens and other similar Liens arising in the
ordinary course of business with respect to amounts that either (i) are not
yet delinquent, or (ii) are delinquent but are being contested in a timely
manner in good faith by appropriate proceedings and for which adequate
reserves shall have been established on such Loan Party's books in
accordance with GAAP;
(c) utility easements, rights of way, zoning restrictions, covenants,
conditions, restrictions, reservations, and such other burdens,
encumbrances or charges against Real Estate, or other minor irregularities
of title, as are of a nature generally existing with respect to properties
of a similar character and which do not in any material way interfere with
the use thereof or the sale thereof in the ordinary course of business of
such Loan Party or materially detract from the value of the Real Estate
subject thereto;
(d) 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 Estate of such Loan Party, and which are granted in the
ordinary course of the business of such Loan Party, 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;
(e) any option or right of first refusal to purchase real property or
marketing deed of trust granted to the master developer or the seller of
real property that arises as a result of the non-use or non-development of
20
such real property by such Loan Party or relates to the coordinated
marketing and promotion by the master developer;
(f) any agreement or contract to participate in income or revenue or
pay lot premiums, in each case derived from the sale of Units or Finished
Lots and granted in the ordinary course of business to the seller of the
real property upon which the Unit or Finished Lot is constructed or
improved, as the case may be;
(g) leases or subleases (or any Liens related thereto) granted to
others that do not materially interfere with the ordinary course of
business of a Loan Party;
(h) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(i) attachment or judgment Liens not giving rise to a Default and
which are being contested in good faith by appropriate proceedings; and
(j) any option, contract or other agreement to sell an asset, provided
such sale is not otherwise prohibited under this Agreement.
"PERMITTED UNRESTRICTED SUBSIDIARY INDEBTEDNESS" means Indebtedness of an
Unrestricted Subsidiary (a) as to which neither the Borrower nor any Restricted
Subsidiary (i) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (ii) is directly or
indirectly liable as a guarantor or otherwise, or (iii) constitutes the lender;
(b) no default with respect to which (including any rights that the holders
thereof may have to take enforcement action against an Unrestricted Subsidiary)
would permit upon notice, lapse of time or both any holder of any other
Indebtedness (other than the Notes) of the Borrower or any Restricted Subsidiary
to declare a default on the other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its stated maturity; and (c) as to which the
lenders have been notified in writing that they will not have any recourse to
the Equity Interests or assets of the Borrower or any Restricted Subsidiary.
"PERSON" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"PLAN" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"PREFERRED STOCK" means, with respect to any Person, any and all preferred
or preference stock or other Equity Interests (however designated) of such
Person whether now outstanding or issued after the Closing Date.
"PRESOLD UNITS" means a Unit owned by any Loan Party that is subject to a
Contract For Sale for sale in the ordinary course of such Loan Party's business
of such Unit and the related lot.
"PRO RATA SHARE" means with respect to each Lender at any time, a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Commitment of such Lender at such time
21
and the denominator of which is the amount of the Aggregate Commitments at such
time; PROVIDED that if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to SECTION 8.02, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to the terms hereof. The initial Pro Rata Share of each Lender is set forth
opposite the name of such Lender on SCHEDULE 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"PROJECT" means a parcel of Real Estate owned by a Loan Party which is to
be developed or sold as a part of a common scheme.
"PUBLIC INDEBTEDNESS" means unsecured Indebtedness evidenced by notes,
debentures, or other similar instruments issued after the Closing Date pursuant
to either (a) a registered public offering or (b) a private placement of such
instruments in accordance with an exemption from registration under the
Securities Act of 1933 and/or the Securities Exchange Act of 1934 or similar
law.
"REAL ESTATE" means land, rights in land and interests therein (including,
without limitation, leasehold interests), and equipment, structures,
improvements, furnishings, fixtures and buildings (including a mobile home of
the type usually installed on a developed site) located on or used in connection
with land, rights in land or interests therein (including leasehold interests),
but shall not include mortgages or interests therein.
"RECEIVABLES" means the net proceeds payable to, but not received by, any
Loan Party following a Unit Closing.
"RECEIVABLES FACILITY ATTRIBUTED INDEBTEDNESS" means the amount of
obligations outstanding under a receivables purchase facility on any date of
determination that would be characterized as principal if such were structured
as a secured lending transaction rather than a purchase.
"REDEEMABLE STOCK" means any Equity Interests of the Borrower or any of its
Restricted Subsidiaries which prior to January 12, 2006 is (a) mandatorily
redeemable, (b) redeemable at the option of the holder thereof or (c)
convertible into Indebtedness of the Borrower or any of its Restricted
Subsidiaries.
"REFINANCING INDEBTEDNESS" has the meaning set forth in the definition of
Restricted Payments.
"REGISTER" has the meaning set forth in SECTION 10.07(c).
"RELEASE DATE" means the date upon which all Obligations are paid in full
and the Commitments are terminated.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
22
"REQUEST FOR CREDIT EXTENSION" means (a) with respect to a Borrowing,
conversion or continuation of Revolving Loans, a Revolving Loan Notice, (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice.
"REQUIRED LENDERS" means as of any date of determination, Lenders having at
least 66 2/3% of the Aggregate Commitments or, if the commitment of each Lender
to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to SECTION 8.02, Lenders holding in the aggregate
at least 66 2/3% of the Total Outstandings (with the aggregate amount of each
Lender's risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed "held" by such Lender for purposes of this
definition); PROVIDED that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.
"RESPONSIBLE OFFICER" means the chief executive officer, president, chief
financial officer, treasurer or assistant treasurer of a Loan Party or the
controller of the Borrower. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.
"RESTRICTED PAYMENT" means (a) any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interest of
the Borrower or any Restricted Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interest or of any option, warrant or other right
to acquire any such Equity Interest and (b) any payment or prepayment of
principal, interest, premium or penalty on the Senior Notes or any other Public
Indebtedness or Subordinated Debt of any Loan Party or any defeasance,
redemption, purchase, repurchase or other acquisition or retirement for value,
in whole or in part, of the Senior Notes or any other Public Indebtedness or
Subordinated Debt (including, without limitation, the setting aside or the
deposit of funds therefor); PROVIDED, HOWEVER, a refinancing of the Senior Notes
or any other Public Indebtedness or Subordinated Debt, to the extent consisting
of the repayment of the Senior Notes or any other Public Indebtedness or such
Subordinated Debt and the simultaneous incurring of new Indebtedness in respect
of the Senior Notes or such other Public Indebtedness or Subordinated Debt
("REFINANCING INDEBTEDNESS"), respectively, shall not constitute a Restricted
Payment so long as (i) the Refinancing Indebtedness is subordinated to or PARI
PASSU with the Obligations (or Guarantor's obligations under its Guaranty, as
applicable) to the same extent as the Indebtedness being refunded, refinanced or
extended, and (ii) the Refinancing Indebtedness is scheduled to mature no
earlier than the current maturity date of such Indebtedness.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Borrower which is not
an Unrestricted Subsidiary.
23
"REVOLVING BORROWING" means a borrowing consisting of simultaneous
Revolving Loans of the same Type and, in the case of Eurodollar Rate Loans,
having the same Interest Period made by each of the Lenders pursuant to SECTION
2.01.
"REVOLVING LOAN" has the meaning specified in SECTION 2.01.
"REVOLVING LOAN NOTICE" means a notice of (a) a Revolving Borrowing, (b) a
conversion of Revolving Loans from one Type to the other, or (c) a continuation
of Eurodollar Rate Loans, pursuant to SECTION 2.02(A), which, if in writing,
shall be substantially in the form of EXHIBIT A.
"REVOLVING NOTE" means a promissory note made by the Borrower in favor of a
Lender evidencing Revolving Loans made by such Lender, substantially in the form
of EXHIBIT C.
"SALE AND LEASEBACK TRANSACTION" means any transaction providing for the
leasing to any Loan Party of any property or to any Person in exchange for funds
which have been or are to be advanced by such Person on the security of, or for
the transfer of, such property.
"SCHEDULED MATURITY DATE" means December 12, 2005, as the same may be
extended pursuant to SECTION 2.14.
"S&P" means Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx,
Inc., or any successor rating agency.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"SENIOR AND SUBORDINATED INDEBTEDNESS" means the Senior Notes and any
Subordinated Debt.
"SENIOR NOTE INDENTURE" means that certain Indenture, dated as of May 30,
2001, among the Borrower, the guarantors named therein, and Xxxxx Fargo Bank,
National Association, as Trustee, entered into with respect to the Senior Notes.
"SENIOR NOTES" means the 9-3/4% Senior Notes of the Borrower due 2011 in
the original principal amount of $165,000,000, with any such amendments or
modifications as permitted by SECTION 7.13, and any Refinancing Indebtedness in
respect of the Senior Notes.
SHAREHOLDERS' EQUITY" means as of any date of determination, consolidated
shareholders' equity of the Loan Parties as of that date determined in
accordance with GAAP.
"SOLVENT" means, with respect to any Person, as of any date of
determination, that the fair value of the assets of such Person (at fair
valuation) is, on the date of determination, greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person
as of such date, that the present fair saleable value of the assets of such
Person will, as of such date, be greater than the amount that will be required
to pay the probable liability of such Person on its debts as such debts become
absolute and matured, and that, as of such date, such Person will be able to pay
all liabilities of such Person as such liabilities mature and such Person does
not have unreasonably small capital with which to carry on its business. In
computing the amount of contingent or unliquidated liabilities at any time, such
24
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability discounted to present value
at rates believed to be reasonable by such Person.
"SUBORDINATED DEBT" means any Indebtedness of the Borrower or any
Restricted Subsidiary which is expressly subordinated to the Obligations at all
times (including in respect of any amendment or modification thereto) pursuant
to terms satisfactory to the Required Lenders.
"SUBSIDIARY" of a Person means with respect to any Person (a) any
corporation, limited liability company, association or other business entity
(other than a partnership), of which more than fifty percent (50%) of the total
voting power of the Equity Interests entitled (without regard to the occurrence
of any contingency) to vote in the election of the Board of Directors or other
governing body thereof are at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (b) any partnership (i) the sole general
partner or the managing general partner of which is such Person or a Subsidiary
of such Person or (ii) the only general partners of which are such Person or one
or more Subsidiaries of such Person (or any combination hereof). Unless
otherwise specified, all references herein to a "SUBSIDIARY" or to
"SUBSIDIARIES" shall refer to a Subsidiary or Subsidiaries of the Borrower.
"SWAP CONTRACT" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "MASTER AGREEMENT"), including
any such obligations or liabilities under any Master Agreement.
"SWAP TERMINATION VALUE" means in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
25
"SWING LINE" means the revolving credit facility made available by the
Swing Line Lender pursuant to SECTION 2.04.
"SWING LINE BORROWING" means a borrowing of a Swing Line Loan pursuant to
SECTION 2.04.
"SWING LINE LENDER" means Guaranty Bank in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.
"SWING LINE LOAN" has the meaning specified in SECTION 2.04(a).
"SWING LINE LOAN NOTICE" means a notice of a Swing Line Borrowing pursuant
to SECTION 2.04(B), which, if in writing, shall be substantially in the form of
EXHIBIT B. "SWING LINE NOTE" means a promissory note made by the Borrower in
favor of the Swing Line Lender evidencing Swing Line Loans made by such Lender,
substantially in the favor of EXHIBIT I.
"SWING LINE SUBLIMIT" means an amount equal to the lesser of (a)
$25,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Commitments.
"SYNDICATION AGENT" means Fleet National Bank, in its capacity as
syndication agent under any of the Loan Documents.
"SYNTHETIC LEASE OBLIGATION" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment); PROVIDED, HOWEVER, that model
home leases entered into in the ordinary course of business of such Person and
consistent with practices of such Person prior to the Closing Date shall not be
considered Synthetic Lease Obligations.
"TOTAL OUTSTANDINGS" means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.
"TYPE" means with respect to a Revolving Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.
"UNENTITLED LAND" means any Land which is not zoned to permit single family
residences as a use by right (or a comparable classification under local Law).
"UNFUNDED PENSION LIABILITY" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
26
"UNIMPROVED ENTITLED LAND" means Entitled Land that is not Land/Lots Under
Development, Finished Lots or any real property upon which the construction of
Units has commenced (as described in the definition of "UNSOLD UNITS UNDER
CONSTRUCTION").
"UNIT" means a single-family dwelling (where construction has commenced as
described in the definition of "UNSOLD UNITS UNDER CONSTRUCTION"), whether
detached or attached (including condominiums, but excluding mobile homes),
including the parcel of Land in which such dwelling is located.
"UNIT CLOSING" means a closing of the sale of a Unit by a Loan Party to a
bona fide purchaser for value that is not an Affiliate of a Loan Party.
"UNITED STATES" and "U.S." mean the United States of America.
"UNREIMBURSED AMOUNT" has the meaning set forth in SECTION 2.03(c)(i).
"UNRESTRICTED SUBSIDIARY" means (1) any Subsidiary of the Borrower
designated by the board of directors of the Borrower from time to time as a
"Unrestricted Subsidiary" pursuant to a resolution of the board of directors and
(2) any Subsidiary of an Unrestricted Subsidiary, but only to the extent such
Subsidiary:
(i) has no Indebtedness other than Permitted Unrestricted Subsidiary
Indebtedness;
(ii) is not party to any agreement, contract, arrangement or understanding
with the Borrower or any Restricted Subsidiary of the Borrower unless the terms
of any such agreement, contract, arrangement or understanding are no less
favorable to the Borrower or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the Borrower;
(iii) is a Person with respect to which neither the Borrower nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe
for additional Equity Interests or (b) maintain or preserve such Person's
financial condition or to cause such person to achieve any specified levels of
operating results;
(iv) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Borrower or any of its Restricted
Subsidiaries, unless such guarantee or credit support is released upon such
designation; and
(v) is designated an "Unrestricted Subsidiary" under the Senior Note
Indenture or any Refinancing Indebtedness relating thereto.
Any designation of a Restricted Subsidiary of the Borrower as an Unrestricted
Subsidiary shall be evidenced to the Administrative Agent by filing with the
Administrative Agent a certified copy of the resolution of the board of
directors giving effect to such designation and an certificate of a Responsible
Officer certifying that such designation complied with the preceding conditions.
If at any time an Unrestricted Subsidiary shall fail to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be
deemed an Unrestricted Subsidiary for purposes of this Agreement and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
27
Subsidiary of the Borrower as of such date. Notwithstanding anything to the
contrary contained herein, each Guarantor shall at all times be a Restricted
Subsidiary for all purposes hereunder, and Borrower shall not designate a
Guarantor as an Unrestricted Subsidiary. As of the Closing Date, the Borrower
shall be deemed to have designated Texas Home Mortgage Corporation and
MTH-Mortgage, LLC as Unrestricted Subsidiaries.
"UNSOLD UNITS" means any Unit which is not a Presold Unit or a Model Unit.
"UNSOLD UNITS UNDER CONSTRUCTION" means all Units for which building
permits have been issued and construction has commenced but not completed, and
for which there is no Contract For Sale. Construction will be considered to have
"commenced" when the slab or foundation for the Unit has been completed.
"VOTING STOCK" of any Person means Equity Interests of any class or classes
having ordinary voting power for the election of at least a majority of the
members of the board of directors, managing general partners or the equivalent
governing body of such Person, irrespective of whether, at the time, Equity
Interests of any other class or classes or such entity shall have or might have
voting power by reason of the happening of any contingency.
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b) (i) The words "HEREIN," "HERETO," "HEREOF" and "HEREUNDER" and words
of similar import when used in any Loan Document shall refer to such Loan
Document as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.
(iii) The term "INCLUDING" is by way of example and not limitation.
(iv) The term "DOCUMENTS" includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.
(c) In the computation of periods of time from a specified date to a later
specified date, the word "FROM" means "FROM AND INCLUDING;" the words "TO" and
"UNTIL" each mean "TO BUT EXCLUDING;" and the word "THROUGH" means "TO AND
INCLUDING."
(d) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
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1.03 ACCOUNTING TERMS.
(a) All accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, EXCEPT
as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); PROVIDED THAT, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
(c) In the event that the Borrower shall acquire, pursuant to an
Acquisition permitted under this Agreement, (i) a majority of the Equity
Interests of another Person, (ii) all or substantially all of the assets of
another Person or (iii) all or substantially all of a line of business of
another Person (the "ACQUIRED BUSINESS") and, provided that (A) the Borrower
shall have furnished to the Administrative Agent, and the Administrative Agent
shall have approved (1) consolidated balance sheets and related consolidated
statements of earnings, stockholders' equity and cash flows of the Acquired
Business for the most recently concluded fiscal year of the Acquired Business,
prepared in accordance with GAAP consistently applied and audited and reported
upon by a firm of independent certified public accountants of recognized
standing acceptable to the Administrative Agent (such audit to be unqualified)
and (2) for any quarters of the next succeeding fiscal year that are concluded
as of the date of such Acquisition, a consolidated balance sheet of the Acquired
Business as of the end of the most recent quarter, and the related consolidated
statement of earnings and cash flows of the Acquired Business for the period
from the beginning of the current fiscal year to the end of that quarter, all
prepared in accordance with GAAP consistently applied, unaudited but certified
to be true and accurate, subject to normal year-end audit adjustments, by the
chief financial officer of the Acquired Business and (B) the Acquired Business
shall either become or be merged into, or its assets shall be acquired by, a
Guarantor hereunder, then, from and after such Acquisition, the Borrower shall
include in the determination of Consolidated EBITDA, Consolidated Interest
Expense, Consolidated Interest Incurred and Consolidated Net Income, for any
applicable period for which such amounts are to be determined pursuant to this
Agreement, such Acquired Business as if such Acquired Business had been a Loan
Party during such period.
1.04 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
29
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly provided
herein, (a) references to Organization Documents, agreements (including the Loan
Documents) and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions and rulings consolidating, amending, replacing,
supplementing or interpreting such Law.
1.06 TIMES OF DAY. Unless otherwise specified, all references herein to
times of day shall be references to Central Time (daylight or standard, as
applicable).
1.07 LETTER OF CREDIT AMOUNTS. Unless otherwise specified, all references
herein to the amount of a Letter of Credit at any time shall be deemed to mean
the maximum face amount of such Letter of Credit after giving effect to all
increases thereof contemplated by such Letter of Credit or the Letter of Credit
Application therefor, whether or not such maximum face amount is in effect at
such time.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 REVOLVING LOANS.
(a) Subject to the terms and conditions set forth herein, each Lender
severally agrees to make loans (each such loan, a "REVOLVING LOAN") to the
Borrower from time to time, on any Business Day during the Availability Period,
in an aggregate amount not to exceed at any time outstanding the amount of such
Lender's Commitment; PROVIDED, HOWEVER, that after giving effect to any
Revolving Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, (ii) the aggregate Outstanding Amount of the Revolving Loans of any
Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C
Obligations, PLUS such Lender's Pro Rata Share of the Outstanding Amount of all
Swing Line Loans shall not exceed such Lender's Commitment and (iii) except as
provided in Section 2.01(b) below, the aggregate principal amount of all
Borrowing Base Debt shall not exceed the Borrowing Base determined as of the
most recent Inventory Valuation Date. Within the limits of each Lender's
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow under this SECTION 2.01, prepay under SECTION 2.05, and reborrow
under this SECTION 2.01. Revolving Loans may be Base Rate Loans or Eurodollar
Rate Loans, as further provided herein.
(b) Notwithstanding the provisions of SECTION 2.01(A) above, the Borrower
may elect to deliver to Administrative Agent a Borrowing Base Certificate in
anticipation of an Investment as a result of an Acquisition that includes all
assets that would have been included in the Borrowing Base had the Acquisition
been consummated as of the last Inventory Valuation Date, provided, however,
that such Borrowing Base Certificate shall (i) be delivered by the Borrower to
30
the Administrative Agent at least three days prior to the anticipated closing of
such Acquisition and (ii) expressly state that it is delivered in anticipation
of, and shall only be effective hereunder for purposes of the Revolving
Borrowings made on or after, the consummation of such Acquisition. Upon or after
the consummation of such Acquisition, such Borrowing Base Certificate shall be
effective for determining the maximum amount available for any Revolving Loan in
accordance with SECTION 2.01(a) above.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF REVOLVING LOANS.
(a) Each Revolving Borrowing, each conversion of Revolving Loans from one
Type to the other, and each continuation of Eurodollar Rate Loans shall be made
upon the Borrower's irrevocable notice to the Administrative Agent, which may be
given by telephone. Each such notice must be received by the Administrative
Agent not later than 11:00 a.m. (i) three Business Days prior to the requested
date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans
or of any conversion of Eurodollar Rate Loans to Base Rate Revolving Loans, and
(ii) on the requested date of any Borrowing of Base Rate Revolving Loans. Each
telephonic notice by the Borrower pursuant to this SECTION 2.02(b) must be
confirmed promptly by delivery to the Administrative Agent of a written
Revolving Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Each Borrowing of, conversion to or continuation of
Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof. Except as provided in SECTIONS 2.03(c)
and 2.04(c), each Borrowing of or conversion to Base Rate Revolving Loans shall
be in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof. Each Revolving Loan Notice (whether telephonic or written) shall
specify (i) whether the Borrower is requesting a Revolving Borrowing, a
conversion of Revolving Loans from one Type to the other, or a continuation of
Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Revolving Loans to be borrowed, converted or continued, (iv)
the Type of Revolving Loans to be borrowed or to which existing Revolving Loans
are to be converted, and (v) if applicable, the duration of the Interest Period
with respect thereto. If the Borrower fails to specify a Type of Revolving Loan
in a Revolving Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Revolving Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans. If the Borrower requests a Borrowing of, conversion to, or continuation
of Eurodollar Rate Loans in any such Revolving Loan Notice, but fails to specify
an Interest Period, it will be deemed to have specified an Interest Period of
one month.
(b) Following receipt of a Revolving Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Revolving Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in the preceding subsection. In the case of a Revolving Borrowing,
each Lender shall make the amount of its Revolving Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 1:00 p.m. on the Business Day specified in the
applicable Revolving Loan Notice. Upon satisfaction of the applicable conditions
set forth in SECTION 4.02 (and, if such Borrowing is the initial Credit
31
Extension, SECTION 4.01), the Administrative Agent shall make all funds so
received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Guaranty Bank with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; PROVIDED,
HOWEVER, that if, on the date the Revolving Loan Notice with respect to such
Borrowing is given by the Borrower, there are Swing Line Loans or L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied, FIRST, to the
payment in full of any such L/C Borrowings, SECOND, to the payment in full of
any such Swing Line Loans, and THIRD, to the Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Borrower and the Lenders of any change in
Guaranty Bank's prime rate used in determining the Base Rate promptly following
the public announcement of such change.
(e) After giving effect to all Revolving Borrowings, all conversions of
Revolving Loans from one Type to the other, and all continuations of Revolving
Loans as the same Type, there shall not be more than ten Interest Periods in
effect with respect to Revolving Loans.
2.03 LETTERS OF CREDIT.
(a) THE LETTER OF CREDIT COMMITMENT.
(i) Subject to the terms and conditions set forth herein, (A) the L/C
Issuer agrees, in reliance upon the agreements of the other Lenders set
forth in this SECTION 2.03, (1) from time to time on any Business Day
during the period from the Closing Date until the Letter of Credit
Expiration Date, to issue Letters of Credit for the account of the Borrower
or certain Restricted Subsidiaries, and to amend or renew Letters of Credit
previously issued by it, in accordance with subsection (b) below, and (2)
to honor drafts under the Letters of Credit; and (B) the Lenders severally
agree to participate in Letters of Credit issued for the account of the
Borrower; PROVIDED that no L/C Issuer shall be obligated to make any L/C
Credit Extension with respect to any Letter of Credit, and no Lender shall
be obligated to participate in any Letter of Credit if as of the date of
such L/C Credit Extension, (I) the Total Outstandings would exceed the
Aggregate Commitments, (II) the aggregate Outstanding Amount of the
Revolving Loans of any Lender, PLUS such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations, PLUS such Lender's Pro Rata
Share of the Outstanding Amount of all Swing Line Loans would exceed such
Lender's Commitment, (III) the Outstanding Amount of the L/C Obligations
would exceed the Letter of Credit Sublimit or (IV) the aggregate principal
32
amount of all Borrowing Base Debt would exceed the Borrowing Base
determined as of the most recent Inventory Valuation Date. Within the
foregoing limits, and subject to the terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully revolving,
and accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed.
(ii) No L/C Issuer shall be under any obligation to issue any Letter
of Credit if:
(A) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the L/C
Issuer from issuing such Letter of Credit, or any Law applicable to
the L/C Issuer or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over
the L/C Issuer shall prohibit, or request that the L/C Issuer refrain
from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the
L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good xxxxx
xxxxx material to it;
(B) the expiry date of such requested Letter of Credit would
occur more than twenty-four months after the date of issuance or last
renewal, unless the Required Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would violate one or
more policies of the L/C Issuer;
(E) such Letter of Credit is denominated in a currency other than
Dollars; or
(F) the face amount of such Letter of Credit exceeds $20,000,000.
(iii) The L/C Issuer shall be under no obligation to amend any Letter
of Credit if (A) the L/C Issuer would have no obligation at such time to
issue such Letter of Credit in its amended form under the terms hereof, or
(B) the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit.
(b) PROCEDURES FOR ISSUANCE AND AMENDMENT OF LETTERS OF CREDIT.
(i) Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the Borrower delivered to the L/C Issuer for
Letters of Credit to be issued by it (with a copy to the Administrative
33
Agent) in the form of a Letter of Credit Application, appropriately
completed and signed by a Responsible Officer of the Borrower. Such Letter
of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 11:00 a.m. at least two Business Days
(or such later date and time as the L/C Issuer may agree in a particular
instance in its sole discretion) prior to the proposed issuance date or
date of amendment, as the case may be. In the case of a request for an
initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the
name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the
full text of any certificate to be presented by such beneficiary in case of
any drawing thereunder; and (G) such other matters as the L/C Issuer may
require. In the case of a request for an amendment of any outstanding
Letter of Credit, such Letter of Credit Application shall specify in form
and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be
amended; (B) the proposed date of amendment thereof (which shall be a
Business Day); (C) the nature of the proposed amendment; and (D) such other
matters as the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from the Borrower and, if not, the L/C Issuer will
provide the Administrative Agent with a copy thereof. Upon receipt by the
L/C Issuer of confirmation from the Administrative Agent that the requested
issuance or amendment is permitted in accordance with the terms hereof,
then, subject to the terms and conditions hereof, the L/C Issuer shall, on
the requested date, issue a Letter of Credit for the account of the
Borrower or enter into the applicable amendment, as the case may be, in
each case in accordance with the L/C Issuer's usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer issuing such Letter of Credit a
risk participation in such Letter of Credit in an amount equal to the
product of such Lender's Pro Rata Share TIMES the amount of such Letter of
Credit.
(iii) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the L/C Issuer will also deliver to the
Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.
(c) DRAWINGS AND REIMBURSEMENTS; FUNDING OF PARTICIPATIONS.
(i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer for such
Letter of Credit shall notify the Borrower and the Administrative Agent
thereof. Not later than 11:00 a.m. on the date of any payment by the L/C
Issuer under a Letter of Credit (each such date, an "HONOR DATE"), the
Borrower shall reimburse the L/C Issuer through the Administrative Agent in
an amount equal to the amount of such drawing. If the Borrower fails to so
reimburse the L/C Issuer by such time, the Administrative Agent shall
34
promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (the "UNREIMBURSED AMOUNT"), and the amount of such
Lender's Pro Rata Share thereof. In such event, the Borrower shall be
deemed to have requested a Revolving Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in SECTION 2.02 for
the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Commitments and the conditions set
forth in SECTION 4.02 (other than the delivery of a Revolving Loan Notice).
Any notice given by the L/C Issuer or the Administrative Agent pursuant to
this SECTION 2.03(C)(I) may be given by telephone if immediately confirmed
in writing; PROVIDED that the lack of such an immediate confirmation shall
not affect the conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as L/C Issuer) shall
upon any notice pursuant to SECTION 2.03(c)(i) make funds available to the
Administrative Agent for the account of the L/C Issuer at the
Administrative Agent's Office in an amount equal to its Pro Rata Share of
the Unreimbursed Amount not later than 1:00 p.m. on the Business Day
specified in such notice by the Administrative Agent, whereupon, subject to
the provisions of SECTION 2.03(c)(iii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Revolving Loan to the
Borrower in such amount. The Administrative Agent shall remit the funds so
received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Revolving Borrowing of Base Rate Loans because the
conditions set forth in SECTION 4.02 cannot be satisfied or for any other
reason, the Borrower shall be deemed to have incurred from the L/C Issuer
an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate. In
such event, each Lender's payment to the Administrative Agent for the
account of the L/C Issuer pursuant to SECTION 2.03(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this SECTION 2.03.
(iv) Until each Lender funds its Revolving Loan or L/C Advance
pursuant to this SECTION 2.03(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender's Pro
Rata Share of such amount shall be solely for the account of the L/C
Issuer.
(v) Each Lender's obligation to make Revolving Loans or L/C Advances
to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this SECTION 2.03(c), shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing. No such making of an L/C Advance shall relieve or otherwise
impair the obligation of the Borrower to reimburse the L/C Issuer for the
35
amount of any payment made by the L/C Issuer under any Letter of Credit,
together with interest as provided herein.
(vi) If any Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such
Lender pursuant to the foregoing provisions of this SECTION 2.03(c) by the
time specified in SECTION 2.03(c)(ii), the L/C Issuer shall be entitled to
recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately
available to the L/C Issuer at a rate per annum equal to the Federal Funds
Rate from time to time in effect. A certificate of the L/C Issuer submitted
to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest
error.
(d) REPAYMENT OF PARTICIPATIONS.
(i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C Advance
in respect of such payment in accordance with SECTION 2.03(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment
in respect of the related Unreimbursed Amount or interest thereon (whether
directly from the Borrower or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Pro Rata Share thereof
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's L/C Advance was outstanding) in
the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to SECTION 2.03(c)(i) is required to be
returned under any of the circumstances described in SECTION 10.06
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Lender shall pay to the Administrative Agent for the
account of the L/C Issuer its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to
the date such amount is returned by such Lender, at a rate per annum equal
to the Federal Funds Rate from time to time in effect.
(e) OBLIGATIONS ABSOLUTE. The obligation of the Borrower to reimburse the
L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim, set-off, defense or
other right that the Borrower may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), any L/C Issuer or any
36
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by any L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit; or any payment made by any L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) ROLE OF L/C ISSUER. Each Lender and the Borrower agree that, in paying
any drawing under a Letter of Credit, no L/C Issuer shall have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application. The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; PROVIDED, HOWEVER,
that this assumption is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of any L/C Issuer, any
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of any L/C Issuer, shall be liable or responsible for any of the
matters described in clauses (i) through (v) of SECTION 2.03(e); PROVIDED,
HOWEVER, that anything in such clauses to the contrary notwithstanding, the
Borrower may have a claim against a L/C Issuer, and such L/C Issuer may be
37
liable to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Borrower which
the Borrower proves were caused by the L/C Issuer's willful misconduct or gross
negligence or the L/C Issuer's willful failure to pay under any Letter of Credit
issued by it after the presentation to it by the beneficiary of a sight draft
and certificate(s) strictly complying with the terms and conditions of such
Letter of Credit. In furtherance and not in limitation of the foregoing, any L/C
Issuer may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and no L/C Issuer shall be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit issued by it 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.
(g) CASH COLLATERAL. Upon the request of the Administrative Agent, (i) if
any L/C Issuer has honored any full or partial drawing request under any Letter
of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of
the Letter of Credit Expiration Date, any Letter of Credit may for any reason
remain outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount determined as of the
date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case
may be). For purposes hereof, "CASH Collateralize" means to pledge and deposit
with or deliver to the Administrative Agent, for the benefit of each L/C Issuer
and the Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuers (which documents are hereby consented
to by the Lenders). Derivatives of such term have corresponding meanings. The
Borrower hereby grants to the Administrative Agent, for the benefit of the L/C
Issuers and the Lenders, a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing. Cash collateral
shall be maintained in blocked, non-interest bearing deposit accounts at
Guaranty Bank.
(h) APPLICABILITY OF ISP98 AND UCP. Unless otherwise expressly agreed by
the L/C Issuer and the Borrower when a Letter of Credit is, (i) the rules of the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the "ICC")
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial Letter of Credit.
(i) LETTER OF CREDIT FEES. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Pro Rata Share a
Letter of Credit fee for each Letter of Credit equal to the Applicable Rate for
Letters of Credit TIMES the daily maximum amount available to be drawn under
such Letter of Credit (whether or not such maximum amount is then in effect
under such Letter of Credit). Such letter of credit fees shall be computed on a
quarterly basis in arrears. Such letter of credit fees shall be due and payable
on the first Business Day of each January, April, July and October, commencing
with the first such date to occur after the issuance of such Letter of Credit,
38
on the Letter of Credit Expiration Date and thereafter on demand. If there is
any change in the Applicable Rate during any quarter, the daily maximum amount
of each Letter of Credit shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect.
(j) FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO L/C
ISSUER. The Borrower shall pay directly to the L/C Issuer for its own account a
fronting fee with respect to each Letter of Credit issued by the L/C Issuer at a
per annum rate equal to 0.125% TIMES the daily maximum amount available to be
drawn under such Letter of Credit (whether or not such maximum amount is then in
effect under such Letter of Credit). Such letter of credit fees shall be
computed on a quarterly basis in arrears. Such letter of credit fees shall be
due and payable on the first Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, or the Letter of Credit Expiration Date and
thereafter on demand. In addition, the Borrower shall pay directly to the L/C
Issuer for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of the L/C Issuer
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.
(k) CONFLICT WITH LETTER OF CREDIT APPLICATION. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
(l) OBLIGATIONS OF L/C ISSUER. Except to the extent that a Lender shall
have agreed to be designated as a L/C Issuer, no Lender shall have any
obligation to accept or approve any request for, or to issue, amend or extend,
any Letter of Credit.
(m) EXISTING LETTERS OF CREDIT. The Administrative Agent and Xxxxx Fargo,
each as a letter of credit issuer pursuant to the Existing Credit Facilities,
issued prior to the date hereof and there are currently outstanding pursuant to
the Existing Credit Facilities those certain letters of credit identified on
SCHEDULE 2.03(m) hereto (the "EXISTING L/CS"). The Existing L/Cs shall remain
outstanding after the date of this Agreement and, from and after the date of
this Agreement, shall constitute Letters of Credit for all purposes under this
Agreement and shall be subject to all terms and conditions hereof. On the
Closing Date the participation of the Lenders pursuant to the Existing Credit
Facilities in the Existing L/Cs shall terminate and the Administrative Agent and
Xxxxx Fargo, as the case may be, as issuer shall be deemed to have
unconditionally and irrevocably sold to each Lender and each Lender shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably purchased from the such issuer a participation in each Existing L/C
as a Letter of Credit pursuant to SECTION 2.03(c).
2.04 SWING LINE LOANS.
(a) THE SWING LINE. Subject to the terms and conditions set forth herein,
the Swing Line Lender agrees to make loans (each such loan, a "SWING LINE LOAN")
to the Borrower from time to time on any Business Day during the Availability
Period in an aggregate amount not to exceed at any time outstanding the amount
of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans,
when aggregated with the Pro Rata Share of the Outstanding Amount of Revolving
Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed
39
the amount of such Lender's Commitment; PROVIDED, HOWEVER, that after giving
effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed the
Aggregate Commitments, (ii) the aggregate Outstanding Amount of the Revolving
Loans of any Lender (other than the Swing Line Lender), PLUS such Lender's Pro
Rata Share of the Outstanding Amount of all L/C Obligations, PLUS such Lender's
Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not
exceed such Lender's Commitment, and (iii) the aggregate principal amount of all
Borrowing Base Debt shall not exceed the Borrowing Base determined as of the
most recent Inventory Valuation Date, and PROVIDED, FURTHER, that the Borrower
shall not use the proceeds of any Swing Line Loan to refinance any outstanding
Swing Line Loan. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrower may borrow under this SECTION 2.04, prepay under
SECTION 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall
be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender's Pro Rata Share TIMES the
amount of such Swing Line Loan.
(b) BORROWING PROCEDURES. Each Swing Line Borrowing shall be made upon the
Borrower's irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $100,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing Line Lender has received notice (by telephone
or in writing) from the Administrative Agent (including at the request of any
Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A)
directing the Swing Line Lender not to make such Swing Line Loan as a result of
the limitations set forth in the proviso to the first sentence of SECTION
2.04(A), or (B) that one or more of the applicable conditions specified in
ARTICLE IV is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to the Borrower at its office by crediting the account of the
Borrower on the books of the Swing Line Lender in immediately available funds.
(c) REFINANCING OF SWING LINE LOANS.
(i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Borrower (which hereby irrevocably
authorizes the Swing Line Lender to so request on its behalf), that each
Lender make a Base Rate Revolving Loan in an amount equal to such Lender's
Pro Rata Share of the amount of Swing Line Loans then outstanding. Such
request shall be made in writing (which written request shall be deemed to
40
be a Revolving Loan Notice for purposes hereof) and in accordance with the
requirements of SECTION 2.02, without regard to the minimum and multiples
specified therein for the principal amount of Base Rate Loans, but subject
to the unutilized portion of the Aggregate Commitments. The Swing Line
Lender shall furnish the Borrower with a copy of the applicable Revolving
Loan Notice promptly after delivering such notice to the Administrative
Agent. Each Lender shall make an amount equal to its Pro Rata Share of the
amount specified in such Revolving Loan Notice available to the
Administrative Agent in immediately available funds for the account of the
Swing Line Lender at the Administrative Agent's Office not later than 1:00
p.m. on the day specified in such Revolving Loan Notice, whereupon, subject
to SECTION 2.04(c)(ii), each Lender that so makes funds available shall be
deemed to have made a Base Rate Revolving Loan to the Borrower in such
amount. The Administrative Agent shall remit the funds so received to the
Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be refinanced by
such a Revolving Borrowing in accordance with SECTION 2.04(c)(i), the
request for Base Rate Revolving Loans submitted by the Swing Line Lender as
set forth herein shall be deemed to be a request by the Swing Line Lender
that each of the Lenders fund its risk participation in the relevant Swing
Line Loan and each Lender's payment to the Administrative Agent for the
account of the Swing Line Lender pursuant to SECTION 2.04(c)(i) shall be
deemed payment in respect of such participation.
(iii) If any Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to be
paid by such Lender pursuant to the foregoing provisions of this SECTION
2.04(c) by the time specified in SECTION 2.04(c)(i), the Swing Line Lender
shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such
payment is immediately available to the Swing Line Lender at a rate per
annum equal to the Federal Funds Rate from time to time in effect. A
certificate of the Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause
(iii) shall be conclusive absent manifest error.
(iv) Each Lender's obligation to make Revolving Loans or to purchase
and fund risk participations in Swing Line Loans pursuant to this SECTION
2.04(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Swing Line
Lender, the Borrower or any other Person for any reason whatsoever, (B) the
occurrence or continuance of a Default, or (C) any other occurrence, event
or condition, whether or not similar to any of the foregoing. No such
funding of risk participations shall relieve or otherwise impair the
obligation of the Borrower to repay Swing Line Loans, together with
interest as provided herein.
(d) REPAYMENT OF PARTICIPATIONS.
(i) At any time after any Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
41
distribute to such Lender its Pro Rata Share of such payment (appropriately
adjusted, in the case of interest payments, to reflect the period of time
during which such Lender's risk participation was funded) in the same funds
as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by
the Swing Line Lender under any of the circumstances described in SECTION
10.06 (including pursuant to any settlement entered into by the Swing Line
Lender in its discretion), each Lender shall pay to the Swing Line Lender
its Pro Rata Share thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned, at a rate per annum equal to the Federal Funds Rate. The
Administrative Agent will make such demand upon the request of the Swing
Line Lender.
(e) INTEREST FOR ACCOUNT OF SWING LINE LENDER. The Swing Line Lender shall
be responsible for invoicing the Borrower for interest on the Swing Line Loans.
Until each Lender funds its Base Rate Revolving Loan or risk participation
pursuant to this SECTION 2.04 to refinance such Lender's Pro Rata Share of any
Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for
the account of the Swing Line Lender.
(f) PAYMENTS DIRECTLY TO SWING LINE LENDER. The Borrower shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.
2.05 PREPAYMENTS.
(a) The Borrower may, upon notice to the Administrative Agent, at any time
or from time to time voluntarily prepay Revolving Loans in whole or in part
without premium or penalty; PROVIDED that (i) such notice must be received by
the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior
to any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Revolving Loans; (ii) any prepayment of Eurodollar Rate
Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Revolving
Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Revolving Loans to be prepaid. The Administrative
Agent will promptly notify each Lender of its receipt of each such notice, and
of the amount of such Lender's Pro Rata Share of such prepayment. If such notice
is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied
by all accrued interest thereon, together with any additional amounts required
pursuant to SECTION 3.05. Each such prepayment shall be applied to the Revolving
Loans of the Lenders in accordance with their respective Pro Rata Shares.
(b) The Borrower may, upon notice to the Swing Line Lender (with a copy to
the Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; PROVIDED that
(i) such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such
42
prepayment shall be in a minimum principal amount of $100,000. Each such notice
shall specify the date and amount of such prepayment. If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
(c) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; PROVIDED, HOWEVER, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this SECTION 2.05(c) unless
after the prepayment in full of the Revolving Loans and Swing Line Loans the
Total Outstandings exceed the Aggregate Commitments then in effect.
2.06 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower may, upon notice
to the Administrative Agent, terminate the Aggregate Commitments, or from time
to time permanently reduce the Aggregate Commitments; PROVIDED that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate
or reduce the Aggregate Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments, and (iv) if, after giving effect to any reduction of the
Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit
exceeds the amount of the Aggregate Commitments, such Sublimit shall be
automatically reduced by the amount of such excess. The Administrative Agent
will promptly notify the Lenders of any such notice of termination or reduction
of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall
be applied to the Commitment of each Lender according to its Pro Rata Share. All
commitment fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.
2.07 REPAYMENT OF LOANS.
(a) The Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Revolving Loans outstanding on such date and all
other outstanding and unpaid Obligations.
(b) The Borrower shall repay each Swing Line Loan on the earlier to occur
of (i) the date five Business Days after such Loan is made and (ii) the Maturity
Date.
2.08 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the lesser of (A) the
Eurodollar Rate for such Interest Period PLUS the Applicable Rate or (B) the
Highest Lawful Rate; (ii) each Base Rate Revolving Loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the lesser of (A) the Base Rate PLUS the Applicable Rate
or (B) the Highest Lawful Rate; and (iii) each Swing Line Loan shall bear
interest on the outstanding principal amount thereof from the applicable
43
borrowing date at a rate per annum equal to the lesser of (A) the Base Rate PLUS
the Applicable Rate or (B) the Highest Lawful Rate.
(b) If any amount payable by the Borrower under any Loan Document is not
paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Furthermore,
upon the request of the Required Lenders, while any Event of Default exists, the
Borrower shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
Accrued and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.09 FEES. In addition to certain fees described in subsections (i) and (j)
of SECTION 2.03:
(a) COMMITMENT FEE. The Borrower shall pay to the Administrative Agent for
the account of each Lender in accordance with its Pro Rata Share, a commitment
fee equal to the Applicable Rate TIMES the actual daily amount by which the
Aggregate Commitments exceed the sum of (i) the Outstanding Amount of Revolving
Loans and (ii) the Outstanding Amount of L/C Obligations. The commitment fee
shall accrue at all times during the Availability Period, including at any time
during which one or more of the conditions in ARTICLE IV is not met, and shall
be due and payable quarterly in arrears on the last Business Day of each March,
June, September and December, commencing with the first such date to occur after
the Closing Date, and on the Maturity Date. The commitment fee shall be
calculated quarterly in arrears, and if there is any change in the Applicable
Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.
(b) OTHER FEES.
(i) The Borrower shall pay to the Arranger and the Administrative
Agent for their own respective accounts fees in the amounts and at the
times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
2.10 COMPUTATION OF INTEREST AND FEES. All computations of interest for
Base Rate Loans when the Base Rate is determined by Guaranty Bank's "prime rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
44
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
365-day year). Interest shall accrue on each Loan for the day on which the Loan
is made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, PROVIDED that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.12(a), bear
interest for one day.
2.11 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lenders to the Borrower
and the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender's
Loans in addition to such accounts or records. Each Lender may attach schedules
to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection (a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit and Swing Line Loans. In the event
of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.
2.12 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent's Office in
Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein. The Administrative Agent will promptly distribute to each
Lender its Pro Rata Share (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by the Administrative Agent after 1:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.
45
(b) Subject to the provisions of the definition of "INTEREST PERIOD", if
any payment to be made by the Borrower shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case
may be.
(c) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately
available funds, together with interest thereon in respect of each day from
and including the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is repaid to the
Administrative Agent in immediately available funds at the Federal Funds
Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period
from the date such amount was made available by the Administrative Agent to
the Borrower to the date such amount is recovered by the Administrative
Agent (the "COMPENSATION PERIOD") at a rate per annum equal to the Federal
Funds Rate from time to time in effect. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's
Revolving Loan included in the applicable Borrowing. If such Lender does
not pay such amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent may make a demand therefor upon the
Borrower, and the Borrower shall pay such amount to the Administrative
Agent, together with interest thereon for the Compensation Period at a rate
per annum equal to the rate of interest applicable to the applicable
Borrowing. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent funds for any
Loan to be made by such Lender as provided in the foregoing provisions of this
ARTICLE II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in ARTICLE IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
46
received from such Lender) to such Lender, with interest at the Federal Funds
Rate for each day that such funds are not returned to such Lender.
(e) The obligations of the Lenders hereunder to make Revolving Loans and to
fund participations in Letters of Credit and Swing Line Loans are several and
not joint. The failure of any Lender to make any Revolving Loan or to fund any
such participation on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its
Revolving Loan or purchase its participation.
(f) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.13 SHARING OF PAYMENTS. If, other than as expressly provided elsewhere
herein, any Lender shall obtain on account of the Revolving Loans made by it, or
the participations in L/C Obligations or in Swing Line Loans held by it, any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Revolving Loans made by them and/or such subparticipations
in the participations in L/C Obligations or Swing Line Loans held by them, as
the case may be, as shall be necessary to cause such purchasing Lender to share
the excess payment in respect of such Revolving Loans or such participations, as
the case may be, pro rata with each of them; PROVIDED, HOWEVER, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Lender under any of the circumstances described in SECTION 10.06 (including
pursuant to any settlement entered into by the purchasing Lender in its
discretion), such purchase shall to that extent be rescinded and each other
Lender shall repay to the purchasing Lender the purchase price paid therefor,
together with an amount equal to such paying Lender's ratable share (according
to the proportion of (i) the amount of such paying Lender's required repayment
to (ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect of
the total amount so recovered, without further interest thereon. The Borrower
agrees that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to SECTION 10.09) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments. Each Lender that purchases a
participation pursuant to this Section shall from and after such purchase have
the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.
47
2.14 EXTENSION OF SCHEDULED MATURITY DATE.
(a) The Borrower may request extensions of the then Scheduled Maturity Date
by making such request in writing at least ninety (90) days prior to each
anniversary of this Agreement. Within 30 days of delivery of such notice, each
Lender shall notify the Administrative Agent whether or not it consents to such
extension (which consent may be given or withheld in such Lender's sole and
absolute discretion). Any Lender not responding within the above time period
shall be deemed not to have consented to such extension. The Administrative
Agent shall promptly notify the Borrower and the Lenders of the Lenders'
responses. If any Lender declines, or is deemed to have declined, to consent to
such extension (such Lender being a "NON-CONSENTING Lender"), the Borrower may
cause any such Non-Consenting Lender to be replaced as a Lender pursuant to
SECTION 10.16.
(b) The Scheduled Maturity Date shall be extended only if Lenders holding
at least 66-2/3% of the Aggregate Commitments (calculated prior to giving effect
to any replacements of Non-Consenting Lenders permitted herein) and all Lenders
(after giving effect to any replacements of Non-Consenting Lenders permitted
herein) (the "CONSENTING LENDERS") have consented thereto. If so extended, the
Maturity Date, as to the Consenting Lenders, shall be extended to the same date
in the following year, effective as of the Maturity Date then in effect (such
existing Scheduled Maturity Date being the "EXTENSION EFFECTIVE DATE");
PROVIDED, HOWEVER, the Scheduled Maturity Date shall not be so extended as to
any Non-Consenting Lender. To the extent that the Maturity Date is not extended
to any Lender pursuant to this SECTION 2.14 and such Non-Consenting Lender is
not replaced in accordance with SECTION 10.16 on or prior to the Extension
Effective Date, the Commitment and Obligations of such Non-Consenting Lender
shall automatically terminate and become due and payable, in whole on such
unextended Scheduled Maturity Date, without further notice or other action to or
by the Borrower, such Non-Consenting Lender or any other Person, and the failure
of the Borrower to pay the same shall constitute an Event of Default under
SECTION 8.1(a)(i) (which Event of Default may not be waived without the consent
of each Lender, including the Non-Consenting Lender, as provided in SECTION
10.01(c)). The Administrative Agent and the Borrower shall promptly confirm to
the Lenders such extension and the Extension Effective Date. As a condition
precedent to such extension, the Borrower shall deliver to the Administrative
Agent a certificate of each Loan Party dated as of the Extension Effective Date
(in sufficient copies for each Lender) signed by a Responsible Officer of such
Loan Party (i) certifying and attaching the resolutions adopted by such Loan
Party approving or consenting to such extension and (ii) in the case of the
Borrower, certifying that, before and after giving effect to such extension, (A)
the representations and warranties contained in ARTICLE V and the other Loan
Documents are true and correct on and as of the Extension Effective Date, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this SECTION 2.14, the representations and
warranties contained in subsections (a) and (b) of SECTION 5.05 shall be deemed
to refer to the most recent statements furnished pursuant to subsections (a) and
(b), respectively, of SECTION 6.01, and (B) no Default exists. The Borrower
shall prepay any Revolving Loans outstanding on the Extension Effective Date
(and pay any additional amounts required pursuant to SECTION 3.05) to the extent
necessary to keep outstanding Revolving Loans ratable with any revised and new
Pro Rata Shares of all the Lenders effective as of the Extension Effective Date.
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(c) This Section shall supersede any provisions in SECTION 10.01 to the
contrary.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Except as provided below in this SECTION 3.01, any and all payments by
the Borrower to or for the account of the Administrative Agent or any Lender
under any Loan Document shall be made free and clear of and without deduction
for any and all present or future taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and all liabilities with
respect thereto, EXCLUDING, in the case of the Administrative Agent and each
Lender or its applicable lending office, or any branch or affiliate thereof,
taxes imposed on or measured by its net income (including net income taxes
imposed by means of a backup withholding tax) franchise taxes, branch taxes,
taxes on doing business or taxes measured by or imposed under the overall
capital or net worth of any Lender or its applicable lending office, or any
branch or affiliate thereof, in each case imposed (i) by the jurisdiction (or
any political subdivision thereof) under the Laws of which the Administrative
Agent, or such Lender, applicable lending office or branch or affiliate is
organized or is located, or in which the principal executive office of the
Administrative Agent or any Lender is located, or any nation within which such
jurisdiction located (or any political subdivision thereof); or (ii) by reason
of any present or former connection between the jurisdiction imposing such tax
and the Administrative Agent or such Lender, applicable lending office, branch
or affiliate other than a connection arising from the Administrative Agent or
such Lender having executed, delivered or performed its obligation under, or
received payment under or enforced this Agreement (all such non-excluded taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and liabilities being hereinafter referred to as "TAXES"). If the
Borrower shall be required by any Laws to deduct any Taxes from or in respect of
any sum payable under any Loan Document to the Administrative Agent or any
Lender, (i) the sum payable shall be increased as necessary to yield to the
Administrative Agent and such Lender an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions, (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within 30 days after the date of such payment, the Borrower shall
furnish to the Administrative Agent (which shall forward the same to such
Lender) the original or a certified copy of a receipt evidencing payment
thereof; PROVIDED, however, that Borrower shall be entitled to deduct and
withhold any Taxes and shall not be required to increase any such amounts
payable to any Lender with respect to Taxes (i) that are directly attributable
to such Lender's failure to comply with the requirements of SECTION 10.15 of
this Agreement and (ii) that are U.S. withholding taxes required on amounts
payable to such Lender at the time such Lender becomes a party to this
Agreement.
(b) In addition, the Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "OTHER TAXES").
49
(c) If the Borrower shall be required to pay any Taxes or Other Taxes from
or in respect of any sum payable under any Loan Document to the Administrative
Agent or any Lender, the Borrower shall also pay to the Administrative Agent or
to such Lender, as the case may be, but without duplication in respect of any
other such amounts payable hereunder, at the time interest is paid, such
additional amount that the Administrative Agent or such Lender specifies is
necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) that the Administrative
Agent or such Lender would have received if such Taxes or Other Taxes had not
been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under SECTION 3.01(c) and (iii) any liability (including additions to
tax, penalties, interest and expenses) arising therefrom or with respect
thereto, in each case whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. Payment
under this subsection (d) shall be made within 30 days after the date the Lender
or the Administrative Agent makes a demand therefor.
(e) Any Lender claiming any additional amounts payable pursuant to this
SECTION 3.01 shall use its reasonable best efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
lending office, if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts which may thereafter accrue
and would not, in the reasonable judgment of such Lender, be disadvantageous to
such Lender.
(f) Each Lender (and the Administrative Agent with respect to payments to
the Administrative Agent for its own account) agrees that (i) it will take all
reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding taxes (whether available by
treaty, existing administrative waiver, by virtue of the location or any
Lender's lending office) and (ii) otherwise cooperate with the Borrower to
minimize amounts payable by it under this SECTION 3.01; PROVIDED, HOWEVER, the
Lenders and the Administrative Agent shall not be obligated by reason of this
SECTION 3.01(f) to contest the payment of any Taxes or Other Taxes or to
disclose any information regarding its tax affairs or tax computations or
reorder its tax or other affairs or tax or other planning. Subject to the
foregoing, to the extent the Borrower pays sums pursuant to this SECTION 3.01
and any Lender or the Administrative Agent receives a refund of any or all of
such sums, such refund shall be applied to reduce any amounts then due and owing
under this Agreement or, to the extent that no amounts are due and owing under
this Agreement at the time such refunds are received, the party receiving such
refund shall promptly pay over all such refunded sums to the Borrower, provided
that no Default is in existence at such time.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
50
Eurodollar Rate Loans or to convert Base Rate Revolving Loans to Eurodollar Rate
Loans shall be suspended until such Lender notifies the Administrative Agent and
the Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted. Each Lender agrees to designate
a different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If the Required Lenders determine that
for any reason adequate and reasonable means do not exist for determining the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, the Administrative
Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, the Borrower may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Revolving Borrowing of Base Rate Loans in the
amount specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON
EURODOLLAR RATE LOANS.
(a) If any Lender determines that as a result of the introduction of or any
change in or in the interpretation of any Law, or such Lender's compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans or (as the case may
be) issuing or participating in Letters of Credit, or a reduction in the amount
received or receivable by such Lender in connection with any of the foregoing
(excluding for purposes of this subsection (a) any such increased costs or
reduction in amount resulting from (i) Taxes or Other Taxes (as to which SECTION
3.01 shall govern), (ii) changes in the basis of taxation of overall net income
or overall gross income by the United States or any foreign jurisdiction or any
political subdivision of either thereof under the Laws of which such Lender is
organized or has its Lending Office, and (iii) reserve requirements contemplated
by SECTION 3.04(c), then from time to time upon demand of such Lender (with a
copy of such demand to the Administrative Agent), the Borrower shall pay to such
Lender such additional amounts as will compensate such Lender for such increased
cost or reduction.
(b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
compliance by such Lender (or its Lending Office) therewith, has the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of such Lender's obligations hereunder
51
(taking into consideration its policies with respect to capital adequacy and
such Lender's desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such reduction.
(c) The Borrower shall pay to each Lender, as long as such Lender shall be
required to maintain reserves with respect to liabilities or assets consisting
of or including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional interest on the unpaid principal amount of each
Eurodollar Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which shall be due and payable on each date
on which interest is payable on such Loan, PROVIDED the Borrower shall have
received at least 15 days' prior notice (with a copy to the Administrative
Agent) of such additional interest from such Lender. If a Lender fails to give
notice 15 days prior to the relevant Interest Payment Date, such additional
interest shall be due and payable 15 days from receipt of such notice.
3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than the last
day of the Interest Period therefor as a result of a request by the Borrower
pursuant to SECTION 10.16;
including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Borrower shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this SECTION 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of the Administrative Agent or any Lender claiming
compensation under this ARTICLE III and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods.
52
(b) Upon any Lender's making a claim for compensation under SECTION 3.01 or
3.04, the Borrower may replace such Lender in accordance with SECTION 10.16.
3.07 SURVIVAL. All of the Borrower's obligations under this ARTICLE III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of each Lender
to make its initial Credit Extension hereunder is subject to satisfaction of the
following conditions precedent in form and substance satisfactory to the
Administrative Agent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance satisfactory to the Administrative Agent and its legal
counsel:
(i) executed counterparts of this Agreement and the Guaranty,
sufficient in number for distribution to the Administrative Agent, each
Lender and the Borrower;
(ii) Revolving Loan Notes executed by the Borrower in favor of each
Lender requesting a Revolving Loan Note, each in a principal amount equal
to such Lender's Commitment;
(iii) a Swing Line Note executed by the Borrower in favor of the Swing
Line Lender, in a principal amount equal to the Swing Line Sublimit;
(iv) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to
act as a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party;
(v) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or
formed, and that each Loan Party is validly existing, in good standing and
qualified to engage in business in each jurisdiction where its ownership,
lease or operation of properties or the conduct of its business requires
such qualification, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect;
(vi) a favorable opinion of Xxxxx & Xxxxxx, L.L.P., counsel to the
Loan Parties (and local counsel for each Loan Party that is organized under
the Laws of other than Arizona, California and Nevada), addressed to the
Administrative Agent and each Lender, as to the matters set forth in
EXHIBIT G and such other matters concerning the Loan Parties and the Loan
Documents as the Required Lenders may reasonably request;
53
(vii) copies of central filing UCC searches of the Borrower and its
Subsidiaries, each such search showing no Liens except Liens permitted
pursuant to SECTION 7.01;
(viii) a certificate of a Responsible Officer of each Loan Party
either (A) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by such
Loan Party and the validity against such Loan Party of the Loan Documents
to which it is a party, and such consents, licenses and approvals shall be
in full force and effect, or (B) stating that no such consents, licenses or
approvals are so required;
(ix) a certificate signed by a Responsible Officer of the Borrower
certifying (A) that the conditions specified in SECTIONS 4.02(a) and (b)
have been satisfied, and (B) that there has been no event or circumstance
since the date of the Audited Financial Statements that has had or could be
reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect; and (C) a calculation of the Leverage Ratio as of
the last day of the fiscal quarter of the Borrower most recently ended
prior to the Closing Date;
(x) evidence that all insurance required to be maintained pursuant to
the Loan Documents has been obtained and is in effect;
(xi) evidence that the Existing Credit Facilities have been or
concurrently with the Closing Date is being terminated and all Liens
securing obligations under the Existing Credit Agreement have been or
concurrently with the Closing Date are being released;
(xii) an executed Borrowing Base Certificate as of October 31, 2002;
(xiii) evidence satisfactory to the Agent that as of the Closing Date,
assuming the Total Outstandings equal to the Aggregate Commitment, that the
Total Outstanding would be permitted under Section 4.06 of the Senior Note
Indenture;
(xiv) evidence that MTH-Mortgage has been designated an "Unrestricted
Subsidiary" under the Senior Note Indenture; and
(xv) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender
or the Required Lenders reasonably may require.
(b) Any fees required to be paid on or before the Closing Date shall have
been paid, and all Fee Letters shall be in full force and effect.
(c) Unless waived by the Administrative Agent, the Borrower shall have paid
all Attorney Costs of the Administrative Agent to the extent invoiced prior to
or on the Closing Date, plus such additional amounts of Attorney Costs as shall
constitute its reasonable estimate of Attorney Costs incurred or to be incurred
by it through the closing proceedings (provided that such estimate shall not
thereafter preclude a final settling of accounts between the Borrower and the
Administrative Agent).
54
(d) The Closing Date shall have occurred on or before December 31, 2002.
4.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each Lender to
honor any Request for Credit Extension (other than a Revolving Loan Notice
requesting only a conversion of Revolving Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Borrower and each other Loan
Party contained in ARTICLE V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct on and as of the date of such Credit
Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, and except that for purposes of this SECTION
4.02, the representations and warranties contained in subsections (a) and (b) of
SECTION 5.05 shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of SECTION 6.01.
(b) No Default shall exist, or would result from such proposed Credit
Extension.
(c) The Administrative Agent and, if applicable, the L/C Issuer or the
Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
Each Request for Credit Extension (other than a Revolving Loan Notice
requesting only a conversion of Revolving Loans to the other Type or a
continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed
to be a representation and warranty that (a) the conditions specified in
SECTIONS 4.02(A) and (B) have been satisfied on and as of the date of the
applicable Credit Extension and (b) the proposed Credit Extension is permitted
to be made pursuant to Section 4.06 of the Senior Note Indenture.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the
Lenders that:
5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Each Loan
Party (a) is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority and all requisite governmental licenses, authorizations, consents
and approvals to (i) own its assets and carry on its business and (ii) execute,
deliver and perform its obligations under the Loan Documents to which it is a
party, (c) is duly qualified and is licensed and in good standing under the Laws
of each jurisdiction where its ownership, lease or operation of properties or
the conduct of its business requires such qualification or license, and (d) is
in compliance with all Laws; except in each case referred to in clause (b)(i),
(c) or (d), to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect.
55
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, (i) any
Contractual Obligation to which such Person is a party or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law.
5.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.
5.04 BINDING EFFECT. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto. This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms.
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited consolidated financial statements of the Borrower and its
Subsidiaries dated September 30, 2002, and the related consolidated statements
of income or operations, shareholders' equity and cash flows for the fiscal
quarter ended on that date (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and (ii) fairly present the financial condition of the
Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby, subject, in the case of clauses (i)
and (ii), to the absence of footnotes and to normal year-end audit adjustments.
(c) SCHEDULE 5.05 sets forth all material indebtedness and other
liabilities, direct or contingent, of the Borrower and its consolidated
Restricted Subsidiaries incurred since the date of the financial statements
referred to in SECTION 5.05(b) which the Borrower reasonably believes would be
required to be reported on its financial statements as filed with the SEC,
including material commitments and Indebtedness (but excluding accrued
liabilities for taxes).
56
(d) Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.
(e) The Borrower and its Restricted Subsidiaries have no Off-Balance Sheet
Liabilities, except as set forth on SCHEDULE 5.05(e).
5.06 LITIGATION. Except as set forth on SCHEDULE 5.06, there are no
actions, suits, proceedings, claims or disputes pending or, to the knowledge of
the Borrower after due and diligent investigation, threatened or contemplated,
at law, in equity, in arbitration or before any Governmental Authority, by or
against the Borrower or any of its Restricted Subsidiaries or against any of
their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate, if determined adversely,
could reasonably be expected to have a Material Adverse Effect; PROVIDED,
HOWEVER, that actions, suits, proceedings, claims or disputes for damages in an
aggregate amount not greater than $10,000,000 shall not be deemed for purposes
of this SECTION 5.06 to result in a Material Adverse Effect.
5.07 NO DEFAULT. Neither the Borrower nor any Restricted Subsidiary is in
default under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
5.08 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and each Restricted
Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of the Borrower and its Restricted Subsidiaries is
subject to no Liens, other than Liens permitted by SECTION 7.01.
5.09 ENVIRONMENTAL COMPLIANCE. The Borrower and its Restricted Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Borrower has reasonably concluded
that such Environmental Laws and claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.10 INSURANCE. The properties of the Borrower and its Restricted
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Borrower, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where the
Borrower or the applicable Restricted Subsidiary operates.
5.11 TAXES. The Borrower and its Restricted Subsidiaries have filed all
Federal, state and other material tax returns and reports required to be filed,
and have paid all Federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
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income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with GAAP. There is no
proposed tax assessment against the Borrower or any Restricted Subsidiary that
would, if made, have a Material Adverse Effect, and there are no items that
would give rise to a substantial understatement penalty for the Borrower or any
Restricted Subsidiary. There are no tax agreements among any of the Borrower and
its Restricted Subsidiaries. With respect to Federal tax returns through 1998,
the period for assessment under Applicable Law has expired.
5.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.
5.13 CAPITALIZATION; SUBSIDIARIES; JOINT VENTURES. SCHEDULE 5.13 contains a
complete and accurate list of (a) all Subsidiaries of the Borrower, including,
with respect to each Subsidiary, (i) its state of incorporation or organization,
(ii) all jurisdictions (if any) in which it is qualified as a foreign
corporation, (iii) the number of shares of its Equity Interests outstanding, and
(iv) the number and percentage of those shares owned by the Borrower and/or by
any other Subsidiary, and (b) each entity investment in any corporation or other
entity which is not a Subsidiary. All Equity Interests of each Restricted
Subsidiary of the Borrower are validly issued, fully paid and nonassessable and
all capital contributions and other consideration required to be paid in
connection with the issuance of any Equity Interests have been made or paid, as
the case may be. All of the outstanding Equity Interests of each Restricted
Subsidiary owned by the Borrower or another Restricted Subsidiary as specified
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on SCHEDULE 5.13 are owned free and clear of all Liens, security interests,
equity or other beneficial interests, charges and encumbrances of any kind
whatsoever, except for Permitted Liens. Neither the Borrower nor any other Loan
Party owns of record or beneficially any shares of the Equity Interests or other
equity interests of any Person that is not a Guarantor, except (a) Persons in
which such Loan Party is permitted to invest pursuant to SECTION 7.03(g), (b)
Unrestricted Subsidiaries in existence on the Closing Date and (c) Investments
disclosed in SCHEDULE 5.13(b). None of the Borrower or any Restricted Subsidiary
has issued any Redeemable Stock.
5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT.
(a) The Borrower is not engaged and will not engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the FRB), or extending
credit for the purpose of purchasing or carrying margin stock. Following the
application of the proceeds of each Borrowing or drawing under each Letter of
Credit, not more than 25% of the value of the assets (either of the Borrower
only or of the Borrower and its Restricted Subsidiaries on a consolidated basis)
subject to the provisions of SECTION 7.01 or subject to any restriction
contained in any agreement or instrument between the Borrower and any Lender or
any Affiliate of any Lender relating to Indebtedness and within the scope of
SECTION 8.01(e) will be margin stock.
(b) None of the Borrower, any Person Controlling the Borrower, or any
Restricted Subsidiary (i) 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, or (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940.
5.15 DISCLOSURE. The Borrower has disclosed to the Administrative Agent and
the Lenders all agreements, instruments and corporate or other restrictions to
which it or any of its Restricted Subsidiaries is subject, and all other matters
known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. No report, financial statement,
certificate or other information furnished (whether in writing or orally) by or
on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
5.16 COMPLIANCE WITH LAWS. Each of the Borrower and each Restricted
Subsidiary is in compliance in all material respects with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
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5.17 INTELLECTUAL PROPERTY; LICENSES, ETC. The Borrower and its Restricted
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, "IP RIGHTS") that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. To the best knowledge of the
Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower or any Restricted Subsidiary infringes upon any rights
held by any other Person. No claim or litigation regarding any of the foregoing
is pending or, to the best knowledge of the Borrower, threatened, which, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
5.18 SOLVENCY. The Borrower is, and the Borrower and its Restricted
Subsidiaries are on a consolidated basis, solvent.
5.19 BUSINESSES. The Borrower is presently engaged, or may in the future
engage, directly or through wholly owned Subsidiaries in the business of home
building; land acquisition, development and sale for home building; home sales;
and mortgage loan origination, title insurance and other related ancillary
business to such home sales, including commercial development for light retail
and mixed use ancillary to the Borrower's master plan communities; PROVIDED that
real estate activity outside of home building activity and not ancillary to
existing business of the Borrower (including industrial, retail and office
development other than as set forth above with respect to the Borrower's master
plan communities, but excluding development of corporate headquarters for the
Borrower) shall not be a permitted business activity.
5.20 COMMON ENTERPRISE. The Borrower and its Restricted Subsidiaries are
engaged in the businesses set forth in SECTION 5.19 as of the Closing Date, as
well as in certain other businesses. These operations require financing on a
basis such that the credit supplied can be made available from time to time to
the Borrower and various of its Restricted Subsidiaries, as required for the
continued successful operation of the Borrower and its Restricted Subsidiaries
as a whole. The Borrower has requested the Lender to make credit available
hereunder primarily for the purposes set forth in SECTION 6.11 and generally for
the purposes of financing the operations of the Borrower and its Restricted
Subsidiaries. The Borrower and each of its Restricted Subsidiaries expects to
derive benefit (and the Board of Directors of the Borrower and each of its
Restricted Subsidiaries has determined that such Restricted Subsidiary may
reasonably be expected to derive benefit), directly or indirectly, from a
portion of the credit extended by the Lenders hereunder, both in its separate
capacity and as a member of the group of companies, since the successful
operation and condition of the Borrower and each of its Restricted Subsidiaries
is dependent on the continued successful performance of the functions of the
group as a whole. The Borrower acknowledges that, but for the agreement by each
of the Guarantors to execute and deliver the Guaranty, the Administrative Agent
and the Lenders would not have made available the credit facilities established
hereby on the terms set forth herein.
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ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall, and shall (except in the
case of the covenants set forth in SECTIONS 6.01, 6.02, 6.03 and 6.11) cause
each Restricted Subsidiary to:
6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower, a consolidated and consolidating balance sheet
of the Borrower and its Subsidiaries, a consolidated and consolidating balance
sheet of the Borrower and its Restricted Subsidiaries as at the end of such
fiscal year, and the related consolidated and consolidating statements of income
or operations, shareholders' equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report with respect to the consolidated balance sheet of the
Borrower and its Subsidiaries and related consolidated statements of income or
operations, shareholders' equity and cash flows and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and shall not be
subject to any "going concern" or like qualification or exception or any
qualification or exception as to the scope of such audit; and
(b) as soon as available, but in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower, a
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries, a consolidated and consolidating balance sheet of the Borrower and
its Restricted Subsidiaries as at the end of such fiscal quarter, and the
related consolidated and consolidating statements of income or operations,
shareholders' equity and cash flows for such fiscal quarter and for the portion
of the Borrower's fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail and certified by a Responsible Officer of the Borrower
as fairly presenting the financial condition, results of operations,
shareholders' equity and cash flows of the Borrower and its Restricted
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes.
As to any information contained in materials furnished pursuant to SECTION
6.02(e), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative Agent
and each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:
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(a) concurrently with the delivery of the financial statements referred to
in SECTION 6.01(a), a certificate of its independent certified public
accountants certifying such financial statements and stating that in making the
examination necessary therefor no knowledge was obtained of any Default under
the financial covenants set forth in SECTION 7.11 or, if any such Default shall
exist, stating the nature and status of such event;
(b) concurrently with the delivery of the financial statements referred to
in SECTIONS 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrower;
(c) as soon as available, and in any event within 25 days after the last
day of each calendar month or more frequently, as requested by the
Administrative Agent, a Borrowing Base Certificate showing the computation of
the Borrowing Base in reasonable detail as of the close of business on the last
day of such month, signed by a Responsible Officer of the Borrower;
(d) promptly after any request by the Administrative Agent, copies of any
detailed audit reports, management letters or recommendations submitted to the
board of directors (or the audit committee of the board of directors) of the
Borrower by independent accountants in connection with the accounts or books of
the Borrower or any Restricted Subsidiary, or any audit of any of them;
(e) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Borrower, and copies of all annual, regular, periodic and
special reports and registration statements which the Borrower may file or be
required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto, including without limitation, form 10-Q
within 45 days of each fiscal quarter end and form 10-K within 90 days of each
fiscal year end;
(f) at least 15 days prior to the end of each fiscal year of the Borrower,
an annual budget of the Borrower and its Restricted Subsidiaries containing,
among other things, pro forma financial statements for the next fiscal year; and
(g) promptly, such additional information regarding the business, financial
or corporate affairs of the Borrower or any Restricted Subsidiary, or compliance
with the terms of the Loan Documents, as the Administrative Agent may from time
to time reasonably request.
Documents required to be delivered pursuant to SECTION 6.01(a) or (b) or
SECTION 6.02(e) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on SCHEDULE 10.02; or (ii)
on which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); PROVIDED that: (i)
the Borrower shall deliver paper copies of such documents to the Administrative
Agent or any Lender that requests the Borrower to deliver such paper copies
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until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (ii) the Borrower shall notify (which
may be by facsimile or electronic mail) the Administrative Agent and each Lender
of the posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (I.E., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificates required by
SECTION 6.02(c) to the Administrative Agent and each of the Lenders. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
6.03 NOTICES. Promptly notify the Administrative Agent:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect;
(c) of the occurrence of any ERISA Event;
(d) of any announcement by Xxxxx'x or S&P of any change or possible change
or withdrawal in a Debt Rating; and
(e) of any material change in accounting policies or financial reporting
practices by the Borrower or any Restricted Subsidiary.
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to SECTION 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall become due
and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Restricted Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property; and (c) all Indebtedness, as and when due and payable, but subject to
any subordination provisions contained in any instrument or agreement evidencing
such Indebtedness, in each case where the failure to do so could reasonably be
expected to have a Material Adverse Effect.
6.05 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
SECTION 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
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or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.
6.06 MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect all of
its material properties and equipment necessary in the operation of its business
in good working order and condition, ordinary wear and tear excepted; and (b)
make all necessary repairs thereto and renewals and replacements thereof except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons.
6.08 COMPLIANCE WITH LAWS. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, write, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
6.09 BOOKS AND RECORDS. Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Restricted Subsidiary, as the case
may be.
6.10 INSPECTION RIGHTS. Permit representatives and independent contractors
of the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; PROVIDED,
however, (a) other than inspections conducted during the existence and
continuance of an Event of Default, no more than two such inspections may be
conducted during any fiscal year, one of which may be by the Administrative
Agent, and the Borrower shall only be liable for the expenses of the
Administrative Agent in connection with any such inspection and (b) that when an
Event of Default exists and is continuing the Administrative Agent or any Lender
(or any of their respective representatives or independent contractors) may do
any of the foregoing at the expense of the Borrower at any time during normal
business hours with twenty-four hours advance notice and without limit as to
number.
6.11 USE OF PROCEEDS. Use the proceeds of the Credit Extensions (a) to
repay all amounts owed under the Existing Credit Facilities and (b) for general
corporate purposes, including Acquisitions, not in contravention of any Law or
of any Loan Document.
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6.12 ADDITIONAL GUARANTORS.
(a) Subject to SECTION 6.12(b), notify the Administrative Agent at the time
that any Person becomes a Restricted Subsidiary, and within 30 days, cause such
Person to (i) become a Guarantor by executing and delivering to the
Administrative Agent a counterpart of the Guaranty or such other document as the
Administrative Agent shall deem appropriate for such purpose, and (ii) deliver
to the Administrative Agent documents of the types referred to in clauses (iii)
and (iv) of SECTION 4.01(a) and a favorable opinion of counsel to such Person
located in the jurisdiction of organization of such Person in form, content and
scope reasonably satisfactory to the Administrative Agent.
(b) Notwithstanding any other provision in this Agreement, a Subsidiary
shall not be required to become a Guarantor in the manner contemplated by
SECTION 6.12(a) if prior to the expiration of such 30 day period, such
Subsidiary is designated an Unrestricted Subsidiary in accordance with the
provisions of this Agreement.
ARTICLE VII.
NEGATIVE COVENANTS
From the Closing Date, so long as any Lender shall have any Commitment
hereunder, any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower
shall not, nor shall it permit any Restricted Subsidiary to, directly or
indirectly:
7.01 LIENS. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:
(a) Permitted Liens;
(b) Liens pursuant to any Loan Document;
(c) Liens existing on the date hereof and listed on SCHEDULE 7.01 and any
renewals or extensions thereof, PROVIDED that the property covered thereby is
not increased and any renewal or extension of the obligations secured or
benefited thereby is permitted by SECTION 7.03(a);
(d) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
(e) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to judgments or litigation), performance bonds and other obligations of
a like nature incurred in the ordinary course of business; and
(f) Liens securing Indebtedness permitted under SECTION 7.03(f) PROVIDED
that such Liens do not extend to any Borrowing Base Assets.
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7.02 INVESTMENTS. Make any Investments, except:
(a) Investments other than those permitted by subsections (b) through (i)
below existing on the Closing Date and listed on SCHEDULE 7.02;
(b) Investments in Cash and Cash Equivalents;
(c) Investments of the Borrower in any wholly-owned Guarantor and
Investments of any Restricted Subsidiary in the Borrower or in another
wholly-owned Guarantor;
(d) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;
(e) Guarantees permitted by SECTION 7.03;
(f) Investments as a result of Acquisitions, if each of the following
conditions has been satisfied: (i) immediately before and after giving effect to
such Acquisition, no Default shall have occurred and be continuing, (ii) such
Acquisition shall not be opposed by the board of directors of the Person or
assets being acquired, (iii) the Administrative Agent shall have received
written notice thereof at least 15 Business Days prior to the date of such
Acquisition, (iv) for Acquisitions in which the Acquisition Consideration is in
excess of $50,000,000, the Administrative Agent shall have received at least
seven Business Days prior to the date of such Acquisition a Compliance
Certificate (A) setting forth the covenant calculations both on or prior to and
after giving effect to the proposed Acquisition, and (B) certifying that no
Default shall have occurred and be continuing after giving effect to such
Acquisition, (v) for Acquisitions in which the Acquisitions Consideration is
equal to or less than $50,000,000, the Administrative Agent shall have received
no later than the date of such Acquisition a certificate, executed by a
Responsible Officer of the Borrower, certifying that, after giving effect to the
proposed Acquisition, no Default shall have occurred and be continuing, (vi) the
assets, property or business acquired shall be in the business described in
SECTION 5.19, and (vii) if such Acquisition results in a Restricted Subsidiary,
the requirements of SECTION 6.12 are satisfied;
(g) lease, utility and other similar deposits in the ordinary course of
business;
(h) Investments made by the Borrower or a Guarantor for consideration given
by the Borrower or any Guarantor consisting only of Equity Interests other than
Disqualified Equity Interests; and
(i) Investments other than those permitted by subsections (a) through (h)
above (but including any Investments in Unrestricted Subsidiaries in existence
on the Closing Date and Investments disclosed on SCHEDULE 5.13(b) that are not
in Guarantors) in Persons that are in the business described in SECTION 5.19 not
to exceed in aggregate amount outstanding at any time 15% of Consolidated
Tangible Net Worth.
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7.03 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness, other than that permitted by subsections (b) through (g)
below, outstanding on the Closing Date and listed on SCHEDULE 7.03 and any
refinancings, refundings, renewals or extensions thereof; PROVIDED that the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing plus an amount equal to any
existing commitments unutilized thereunder;
(b) Indebtedness under the Loan Documents;
(c) Guarantees of the Borrower or any Guarantor in respect of Indebtedness
otherwise permitted hereunder of the Borrower or any other Guarantor;
(d) obligations (contingent or otherwise) of the Borrower or any Restricted
Subsidiary existing or arising under any Swap Contract, PROVIDED that (i) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person, and not for purposes of speculation or taking a "market view;" and (ii)
such Swap Contract does not contain any provision exonerating the non-defaulting
party from its obligation to make payments on outstanding transactions to the
defaulting party;
(e) unsecured Indebtedness including Public Indebtedness (but excluding any
type of working capital or similar line of credit); PROVIDED, that there exists
no Default both before and after giving effect to such Indebtedness;
(f) (i) secured Indebtedness, PROVIDED that such Liens are permitted
pursuant to SECTION 7.01 and are on assets other than Borrowing Base Assets,
(ii) the aggregate amount of Indebtedness in respect of any of the foregoing
outstanding at any time (which shall include any Indebtedness listed on SCHEDULE
7.03 which is secured) shall not exceed 10% of Consolidated Tangible Net Worth
and (iii) there exists no Default both before and after giving effect to such
Indebtedness; and
(g) Indebtedness of the Borrower to any Guarantor and Indebtedness of any
Guarantor owed to the Borrower or another Guarantor.
7.04 FUNDAMENTAL CHANGES. Merge, dissolve, liquidate, consolidate with or
into another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:
(a) any Restricted Subsidiary may merge with (i) the Borrower, PROVIDED
that the Borrower shall be the continuing or surviving Person, (ii) any one or
more other Restricted Subsidiaries, PROVIDED that when any Guarantor is merging
with another Restricted Subsidiary, the Guarantor shall be the continuing or
surviving Person or (iii) any Person, provided that such Person formed by or
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surviving such consolidation or merger becomes a Guarantor pursuant to SECTION
6.12 and is a Restricted Subsidiary;
(b) any Restricted Subsidiary may Dispose of all or substantially all of
its assets (upon voluntary liquidation or otherwise) to the Borrower or to
another Restricted Subsidiary; PROVIDED that if the transferor in such a
transaction is a Guarantor, then the transferee must either be the Borrower or a
Guarantor; and
(c) the Borrower or any Restricted Subsidiary may make any Investment
permitted by SECTION 7.02(f).
7.05 DISPOSITIONS. Make any Disposition or enter into any agreement to make
any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b) Dispositions of assets in the ordinary course of business, including,
without limitation, sales (directly or indirectly), dedications and other
donations to Governmental Authorities, leases and sales and leasebacks of Units
and Land;
(c) Dispositions of assets in which the Net Available Proceeds therefrom
are used within one year to (i) repay any Indebtedness under the Loan Documents,
(ii) repay any Indebtedness which was secured by the assets sold in such
Disposition, and/or (iii) invest all or any part of the Net Available Proceeds
thereof in the purchase of assets (other than securities, unless such securities
represent Equity Interests in an entity engaged solely in the business described
in SECTION 5.19, such entity becomes a Restricted Subsidiary and the Borrower or
a Restricted Subsidiary acquires voting and management control of such entity)
to be used by the Borrower or any Restricted Subsidiary in the business
described in SECTION 5.19, PROVIDED HOWEVER, if after one year from such
Disposition and on the date of the proposed payment referred to immediately
hereafter, there is no Indebtedness outstanding under this Agreement, the
Borrower may repay any amounts required under Section 4.09 of the Senior Note
Indenture or similar provisions contained in any Refinancing Indebtedness
relating thereto or in any Public Indebtedness;
(d) Dispositions of property by any Restricted Subsidiary to the Borrower
or to a wholly-owned Restricted Subsidiary; PROVIDED that if the transferor of
such property is a Guarantor, the transferee thereof must either be the Borrower
or a Guarantor;
(e) Dispositions permitted by SECTIONS 7.02, 7.04 and 7.06;
(f) transfers of Cash and Cash Equivalents;
(g) the creation or realization of any Lien permitted by SECTION 7.01; and
(h) dispositions of mortgage liens and related assets and mortgage backed
securities in the ordinary course of business;
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PROVIDED, HOWEVER, that any Disposition pursuant to clauses (a), (b), (c), (f)
and (h) shall be for fair market value.
7.06 RESTRICTED PAYMENTS. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that:
(a) each Restricted Subsidiary may declare and make dividends and any other
Restricted Payments to the Borrower and to any Guarantor;
(b) the Borrower and each Restricted Subsidiary may declare and make
dividend payments or other distributions payable solely in the common stock or
other common equity interests of such Person;
(c) the Borrower may make regularly scheduled payments of principal and
interest on the Senior Notes or other Public Indebtedness or any Subordinated
Debt of any Loan Party;
(d) the Borrower may (i) declare or pay cash dividends, (ii) repurchase
shares of its capital stock, (iii) redeem its capital stock held by officers,
directors or employees of former officers, directors or employees (or their
transferees, estates or beneficiaries under their estates), upon their death,
disability, retirement, severance or termination of employment or service; and
(iv) repurchase or acquire any outstanding Public Indebtedness Securities,
PROVIDED, however, in no event shall (y) the aggregate amount of such cash
dividends, repurchases, redemptions and acquisitions referred to in clauses (i)
through (iv) immediately above during any period of four consecutive fiscal
quarters exceed 50% of Consolidated Net Income (if greater than zero) earned
during the most recently completed four fiscal quarters and (z) notwithstanding
anything in clause (y) immediately preceding, the aggregate proposed amount of
Public Indebtedness securities repurchased or acquired during any period of four
consecutive fiscal quarters exceed $10,000,000; (e) the Borrower may repurchase
its capital stock upon the exercise of stock options if the capital stock
represents a portion of the exercise price;
PROVIDED THAT immediately before and immediately after any Restricted Payment
otherwise permitted above, no Default exists or would result therefrom.
7.07 CHANGE IN NATURE OF BUSINESS. Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and its Subsidiaries on the date hereof or any business substantially related or
incidental thereto.
7.08 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of any kind
with any Affiliate (other than with the Borrower or a Guarantor) of the
Borrower, whether or not in the ordinary course of business, other than on fair
and reasonable terms substantially as favorable to the Borrower or such
Restricted Subsidiary as would be obtainable by the Borrower or such Restricted
Subsidiary at the time in a comparable arm's length transaction with a Person
other than an Affiliate; PROVIDED, HOWEVER, that SECTION 7.08 shall not be
deemed to prohibit:
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(a) reasonable director, officer, employee and consultant compensation
(including bonuses) and other benefits (including retirement, health, stock and
other benefit plans) and indemnification arrangement;
(b) any agreement as in effect on the Closing Date and set forth on
SCHEDULE 7.08 or any extension, amendment or modification thereto (so long as
any such extension, amendment or modification satisfies the requirements set
forth in the first paragraph of this SECTION 7.08);
(c) Restricted Payments of the type described in clause (a) of the
definition of "RESTRICTED PAYMENT" and which are made in accordance with SECTION
7.06; and
(d) sale of Borrower's capital stock or Subordinated Debt for cash to an
Affiliate.
7.09 BURDENSOME AGREEMENTS. Enter into any Contractual Obligation that (a)
limits the ability (i) of any Restricted Subsidiary to make Restricted Payments
to the Borrower or any Guarantor or to otherwise transfer property to the
Borrower or any Guarantor, (ii) of any Restricted Subsidiary to Guarantee the
Indebtedness of the Borrower or (iii) of the Borrower or any Restricted
Subsidiary to create, incur, assume or suffer to exist Liens on property of such
Person; PROVIDED, HOWEVER, that this clause (iii) shall not prohibit (1) any
negative pledge incurred or provided in favor of any holder of Indebtedness
permitted under SECTION 7.03(f) solely to the extent any such negative pledge
relates to the property financed by or the subject of such Indebtedness or (2)
any negative pledge incurred or provided in favor of any holder of any Public
Indebtedness permitted under SECTION 7.03(e); or (b) requires the grant of a
Lien to secure an obligation of such Person if a Lien is granted to secure
another obligation of such Person, PROVIDED that this clause (b) shall not
prohibit the requirement of granting a pari passu Lien in favor of any holder of
any Public Indebtedness permitted under SECTION 7.03(e) if the Obligations
hereunder are required to be secured; PROVIDED, FURTHER, HOWEVER, (x) the
foregoing shall not apply to restrictions imposed by Law, this Agreement or any
other Loan Documents or the Senior Notes, (y) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to a sale
of a Subsidiary or all or substantially all of its assets pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is
sold and such sale is permitted hereunder, and (z) clause (iii) shall not apply
to customary provisions in leases restricting the assignment thereof.
7.10 USE OF PROCEEDS. Use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose in
violation of Regulation U of FRB.
7.11 FINANCIAL COVENANTS.
(a) MINIMUM NET WORTH. Permit Consolidated Tangible Net Worth at any time
to be less than the sum of $180,000,000 plus (b) an amount equal to 50% of
Consolidated Net Income earned in each full fiscal quarter ending after the
Closing Date (with no deduction for a net loss in any such fiscal quarter), plus
(c) an amount equal to 75% of the aggregate increases in Consolidated Tangible
Net Worth of the Borrower and its Restricted Subsidiaries after the Closing Date
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by reason of the issuance and sale of Equity Interests or other equity interests
of the Borrower or any Restricted Subsidiary (other than issuances to the
Borrower or a wholly-owned Restricted Subsidiary), including upon any conversion
of debt securities of the Borrower into such Equity Interests or other equity
interests, plus (d) an amount equal to the Net Worth of any Person that becomes
a Restricted Subsidiary or is merged into or consolidated with the Borrower or
any Restricted Subsidiary or substantially all of the assets of which are
acquired by the Borrower or any Restricted Subsidiary, in each case after the
Closing Date.
(b) LEVERAGE RATIO. Permit the Leverage Ratio at any time during any period
of four fiscal quarters of the Borrower to be greater than 2.25 to 1.
(c) INTEREST COVERAGE RATIO. Permit the Interest Coverage Ratio at any time
during any period of four fiscal quarters of the Borrower to be less than 2.00
to 1.
(d) BORROWING BASE. Permit the Borrowing Base Debt to exceed the Borrowing
Base at any time.
(e) TOTAL LAND RESTRICTIONS. Permit the sum of (a) the Net Book Value of
Unentitled Land, plus (b) the Net Book Value of Unimproved Entitled Land, plus
(c) the Net Book Value of Land/Lots Under Development, plus (d) the Net Book
Value of Finished Lots to exceed 125% of Consolidated Tangible Net Worth at any
time.
(f) RAW LAND RESTRICTIONS. Permit the sum of (a) the Net Book Value of
Unentitled Land plus (b) the Net Book Value of Unimproved Entitled Land to
exceed 20% of Consolidated Tangible Net Worth.
(g) UNSOLD UNITS. Permit the number of Unsold Units existing as of the end
of any fiscal quarter to exceed 25% of the number of Unit Closings within the
four fiscal quarters ending on the last day of such fiscal quarter.
(h) MODEL UNITS. Permit the number of Model Units existing as of the end of
any fiscal quarter to exceed 10% of the number of Unit Closings within the four
fiscal quarters ending on the last day of such fiscal quarter.
7.12 FISCAL YEAR AND ACCOUNTING METHODS. Change its fiscal year or its
method of accounting (other than immaterial changes in methods or as required by
GAAP or to conform an Acquired Business to the Borrower's practices).
7.13 AMENDMENT AND WAIVERS OF SENIOR NOTES. Change or permit any Restricted
Subsidiary to change or amend or accept any waiver or consent with respect to,
any document, instrument or agreement relating to the Senior Notes or the Senior
Note Indenture that would result in (a) an increase in the principal, interest,
overdue interest, fees or other amounts payable under the Senior Notes, (b) an
acceleration in any date fixed for payment or prepayment of principal, interest,
fees or other amounts payable under the Senior Notes (including, without
limitation, as a result of any redemption), (c) a change in the definition of
"CHANGE OF CONTROL" or "CHANGE IN CONTROL" or similar event or circumstance,
however defined or designated, as provided in the Senior Notes or the Senior
Note Indenture which would result in such definition being more restrictive than
such definition in this Agreement, (d) a change in any covenant, term or
71
provision in the Senior Notes or the Senior Note Indenture which would result in
such term or provision being more restrictive than the terms of this Agreement
and the other Loan Documents or (e) a change in any term or provision of the
Senior Notes or the Senior Note Indenture that could reasonably be expected to
have, in any material respect, an adverse effect in the interest of the Lenders.
7.14 SALE AND LEASEBACK. Enter into any Sale and Leaseback Transaction
(directly or indirectly) with any person other than among the Borrower and any
Subsidiary Guarantor (to the extent such transaction is otherwise permitted
hereunder), except for the sale and leaseback of Model Units.
7.15 OFF-BALANCE SHEET LIABILITIES. Create, incur, assume or suffer to
exist any Off-Balance Sheet Liabilities.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an Event of
Default:
(a) NON-PAYMENT. The Borrower or any other Loan Party fails to pay (i) when
and as required to be paid herein, any amount of principal of any Loan or any
L/C Obligation, or (ii) within three days after the same becomes due, any
interest on any Loan or on any L/C Obligation, or any commitment or other fee
due hereunder, or (iii) within five days after the same becomes due, any other
amount payable hereunder or under any other Loan Document; or
(b) SPECIFIC COVENANTS. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of SECTION 6.03(a), 6.05 (with respect to
the existence of the Borrower or its Restricted Subsidiaries), 6.10 or 6.12 or
ARTICLE VII; or
(c) OTHER DEFAULTS. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or
(d) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or
(e) CROSS-DEFAULT. (i) The Borrower or any Restricted Subsidiary (A) fails
to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness
or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn Revolving or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $7,500,000 and such
failure continues after the expiration of any applicable grace period, or (B)
fails to observe or perform any other agreement or condition (after the
expiration of any applicable grace period and after notice from the holders
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thereof, if required) relating to any such Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, the effect of which default or other event
is to cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which the Borrower or any Restricted Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which the Borrower or any Restricted
Subsidiary is an Affected Party (as so defined) and, in either event, the Swap
Termination Value owed by the Borrower or such Restricted Subsidiary as a result
thereof is greater $7,500,000; or
(f) INSOLVENCY PROCEEDINGS, ETC. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or
(g) INABILITY TO PAY DEBTS; ATTACHMENT. (i) The Borrower or any Restricted
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or
(h) JUDGMENTS. There is entered against the Borrower or any Restricted
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding $7,500,000 (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of 10 consecutive days
during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $7,500,000,
or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the
73
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $7,500,000; or
(j) INVALIDITY OF LOAN DOCUMENTS. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or thereunder or satisfaction in full of all the Obligations, ceases
to be in full force and effect; or any Loan Party contests in any manner the
validity or enforceability of any Loan Document; or any Loan Party denies that
it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document; or
(k) CHANGE OF CONTROL. There occurs any Change of Control with respect to
the Borrower.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs and is
continuing, the Administrative Agent may in its discretion, or shall, at the
request of, the Required Lenders (or any Non-Consenting Lender that is not paid
all amounts due and owing to such Non-Consenting Lender on the date and as
further provided in the third sentence of SECTION 2.14(b)), take any or all of
the following actions:
(a) declare the commitment of each Lender to make Loans and/or any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and/or obligations shall be terminated, as
applicable;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;
PROVIDED, HOWEVER, that upon the occurrence of an actual or deemed entry of
an order for relief with respect to the Borrower or any Guarantor under the
Bankruptcy Code of the United States, the obligation of each Lender to make
Loans and any obligation of any L/C Issuer to make L/C Credit Extensions shall
automatically terminate, the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable, and the obligation of the Borrower to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.
8.03 APPLICATION OF FUNDS. After the occurrence of an Event of Default, any
amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:
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FIRST, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under ARTICLE III) payable to the Administrative Agent in its capacity
as such (other than the annual administrative fee of the Administrative Agent);
SECOND, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest, amounts owing
under any Swap Contracts and the annual administrative fee of the Administrative
Agent) payable to the Lenders (including Attorney Costs and amounts payable
under Article III), ratably among them in proportion to the amounts described in
this clause SECOND payable to them;
THIRD, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Loans and L/C Borrowings, ratably among the Lenders
in proportion to the respective amounts described in this clause THIRD payable
to them;
FOURTH, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause FOURTH held by
them;
FIFTH, to the Administrative Agent for the account of the L/C Issuer, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit;
SIXTH, to the Administrative Agent, its annual administrative fee;
SEVENTH, to payment of that portion of the Obligations constituting all
amounts owed under any Swap Contract included in the Obligations (at the Swap
Termination Value), ratable among the Lenders in proportion to the respective
amounts described in this clause SEVENTH held by them;
EIGHTH, to any remaining outstanding and unpaid Obligations, ratably among
the Lenders in proportion to the respective amounts described in this clause
EIGHTH held by them; and
LAST, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to SECTION 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause FIFTH above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
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ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) Each L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and each
L/C Issuer shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this ARTICLE IX with respect to any acts taken or
omissions suffered by such L/C Issuer in connection with Letters of Credit
issued by it or proposed to be issued by it and the applications and agreements
for letters of credit pertaining to such Letters of Credit as fully as if the
term "Administrative Agent" as used in this ARTICLE IX and in the definition of
"Agent-Related Person" included such L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to such L/C
Issuer.
9.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.
9.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall (a)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
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Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Loan Party),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or (i) such greater number of Lenders as may be
expressly required hereby in any instance or (ii) any Non-Consenting Lender that
is not paid all amounts due and owing to such Non-Consenting Lender on the date
and as further provided in the third sentence of SECTION 2.14(b)) and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders.
(b) For purposes of determining compliance with the conditions specified in
SECTION 4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default." The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with ARTICLE VIII; PROVIDED, HOWEVER, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.
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9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower and the other Loan Parties hereunder. Each
Lender also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, and other
condition and creditworthiness of the Borrower and the other Loan Parties.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent herein, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any of the Loan
Parties or any of their respective Affiliates which may come into the possession
of any Agent-Related Person.
9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED, THE LENDERS SHALL SEVERALLY
INDEMNIFY UPON DEMAND EACH AGENT-RELATED PERSON (TO THE EXTENT NOT REIMBURSED BY
OR ON BEHALF OF ANY LOAN PARTY AND WITHOUT LIMITING THE OBLIGATION OF ANY LOAN
PARTY TO DO SO), PRO RATA IN ACCORDANCE WITH ITS SPECIFIED PRO RATA SHARE, AND
HOLD HARMLESS EACH AGENT-RELATED PERSON FROM AND AGAINST ANY AND ALL INDEMNIFIED
LIABILITIES INCURRED BY IT; (WHETHER OR NOT ARISING OUT OF THE NEGLIGENCE OF
SUCH AGENT-RELATED PERSON) PROVIDED, HOWEVER, THAT NO LENDER SHALL BE LIABLE FOR
THE PAYMENT TO ANY AGENT-RELATED PERSON OF ANY PORTION OF SUCH INDEMNIFIED
LIABILITIES TO THE EXTENT DETERMINED IN A FINAL, NONAPPEALABLE JUDGMENT BY A
COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH AGENT-RELATED
PERSON'S OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; PROVIDED, HOWEVER, THAT NO
ACTION TAKEN IN ACCORDANCE WITH THE DIRECTIONS OF THE REQUIRED LENDERS SHALL BE
DEEMED TO CONSTITUTE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT FOR PURPOSES OF THIS
SECTION. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER SHALL REIMBURSE THE
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ADMINISTRATIVE AGENT UPON DEMAND FOR ITS RATABLE SHARE OF ANY COSTS OR
OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEY COSTS) INCURRED BY THE ADMINISTRATIVE
AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL
PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY DOCUMENT
CONTEMPLATED BY OR REFERRED TO HEREIN, TO THE EXTENT THAT THE ADMINISTRATIVE
AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY OR ON BEHALF OF THE BORROWER. THE
UNDERTAKING IN THIS SECTION SHALL SURVIVE TERMINATION OF THE AGGREGATE
COMMITMENTS, THE PAYMENT OF ALL OTHER OBLIGATIONS AND THE RESIGNATION OF THE
ADMINISTRATIVE AGENT.
9.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Guaranty Bank and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with each of
the Loan Parties and their respective Affiliates as though Guaranty Bank were
not the Administrative Agent or a L/C Issuer hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Guaranty Bank or its Affiliates may receive information regarding
any Loan Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Loan Party or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its Loans, Guaranty Bank shall
have the same rights and powers under this Agreement as any other Lender and may
exercise such rights and powers as though it were not the Administrative Agent
or a L/C Issuer, and the terms "Lender" and "Lenders" include Guaranty Bank in
its individual capacity.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign as
Administrative Agent upon 30 days' notice to the Lenders and may be removed at
any time with or without cause by the Required Lenders; provided that any such
removal or resignation by Guaranty Bank shall also constitute its removal and
resignation as a L/C Issuer and Swing Line Lender. If the Administrative Agent
is removed or resigns under this Agreement, the Required Lenders shall appoint
from among the Lenders a successor administrative agent for the Lenders, which
successor administrative agent (a) shall be a commercial bank or federal savings
bank organized under the laws of the United States of America or of any State
thereof and (b) shall be consented to by the Borrower at all times other than
during the existence of an Event of Default (which consent of the Borrower shall
not be unreasonably withheld or delayed). If no successor administrative agent
is appointed prior to the effective date of the removal or resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor administrative agent from among
the Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, the Person acting as such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and Swing Line Lender and the respective terms "Administrative Agent" and
"Swing Line Lender" shall mean such successor administrative agent and swing
line lender, and the retiring Administrative Agent's appointment, powers and
duties as Administrative Agent shall be terminated and the retiring Swing Line
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Lender's rights, powers and duties as such shall be terminated, without any
other or further act or deed on the part of such retiring Administrative Agent
or Swing Line Lender or any other Lender. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this ARTICLE IX and SECTIONS 10.04 and 10.05 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement. If no successor administrative agent has accepted
appointment as Administrative Agent by the date which is 30 days following a
retiring Administrative Agent's notice of resignation or removal by the Required
Lenders, the retiring Administrative Agent's resignation or removal shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
9.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any Loan or L/C Obligation shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on the Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under SECTIONS 2.03(i) and (j), 2.09 and 10.04)
allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under SECTIONS 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
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9.11 GUARANTY MATTERS. The Lenders irrevocably authorize the Administrative
Agent, at its option and in its discretion,
(a) to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit, (ii) that is sold or to be sold as part of or in connection
with any sale permitted hereunder or under any other Loan Document, or (iii)
subject to SECTION 10.01, if approved, authorized or ratified in writing by the
Required Lenders;
(b) to release any Guarantor from its obligations under the Guaranty if
such Person ceases to be a Restricted Subsidiary as a result of a transaction
permitted hereunder.
Upon request by the Administrative Agent at any time, the Required Lenders
will confirm in writing the Administrative Agent's authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this SECTION
9.12.
9.12 OTHER AGENTS; ARRANGERS AND MANAGERS. None of the Lenders or other
Persons identified on the facing page or signature pages of this Agreement as a
"syndication agent," "documentation agent," "co-agent," "book manager," "lead
manager," "arranger," "lead arranger" or "co-arranger" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than, in the case of such Lenders, those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
9.13 RELATED OBLIGATIONS. If and to the extent this Agreement applies, the
benefit of the Loan Documents and of the provisions of this Agreement and the
Guaranty shall extend to and be available in respect of any obligation arising
under any Swap Contract that is otherwise owed to any Lender or any Affiliate of
a Lender (collectively, "RELATED OBLIGATIONS") solely on the condition and
understanding, as among the Administrative Agent and the Lenders, that (a) the
Related Obligations shall be entitled to the benefit of the Loan Documents to
the extent expressly set forth in this Agreement and the other Loan Documents
and to such extent the Administrative Agent shall hold, and have the right and
power to act with respect to, the Guaranty on behalf and as agent for the
holders of the Related Obligations, but the Administrative Agent is otherwise
acting solely as agent for the Lenders and shall have no fiduciary duty, duty of
loyalty, duty of care, duty of disclosure or other obligation whatsoever to any
holder of Related Obligations; (b) all matters, acts and omissions relating in
any manner to the Guaranty shall be governed solely by the provisions of this
Agreement and the Guaranty and no separate Lien, right, power or remedy shall
arise or exist in favor of any Guarantied Party (as defined in the Guaranty)
under any separate instrument or agreement or in respect of any Related
Obligation; (c) each Guarantied Party shall be bound by all actions taken or
omitted, in accordance with the terms of this Agreement and the Guaranty by the
Administrative Agent and the Required Lenders, each of whom shall be entitled to
act at its sole discretion and exclusively in its own interest given its own
Commitment and its own interest in the Loans, L/C Obligations and other
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Obligations to it arising under this Agreement or the other Loan Documents,
without any duty or liability to any other Guarantied Party or as to any Related
Obligation and without regard to whether any Related Obligation remains
outstanding or is otherwise affected or put in jeopardy thereby; (d) no holder
of Related Obligations and no other Guarantied Party (except the Administrative
Agent and the Lenders, to the extent set forth in this Agreement) shall have any
right to be notified of, or to direct, require or be heard with respect to, any
action taken or omitted under this Agreement or the other Loan Documents; and
(e) no holder of any Related Obligation shall exercise any right of setoff,
banker's lien or similar right, except as expressly provided in SECTION 10.09.
Notwithstanding any other provision in this SECTION 9.13, no third party shall
obtain any rights or benefits pursuant to this SECTION 9.13 and no third party
shall exercise any right of setoff, bankers' lien or similar right pursuant to
SECTION 10.09.
ARTICLE X.
MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED, HOWEVER, that no such amendment,
waiver or consent shall:
(a) waive any condition set forth in SECTION 4.01(a) without the written
consent of each Lender;
(b) subject to SECTION 2.14, extend or increase the Commitment of any
Lender (or reinstate any Commitment terminated pursuant to SECTION 8.02) without
the written consent of each Lender;
(c) postpone any date fixed by this Agreement or any other Loan Document
for any payment or mandatory prepayment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein on,
any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to
this SECTION 10.01) any fees or other amounts payable hereunder or under any
other Loan Document without the written consent of each Lender directly affected
thereby; PROVIDED, HOWEVER, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of "Default Rate" or to waive any
obligation of the Borrower to pay interest at the Default Rate or (ii) to amend
any financial covenant hereunder (or any defined term used herein) unless the
effect of such amendment would be to reduce the rate of interest on any Loan or
L/C Borrowing or to reduce any fee payable hereunder;
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(e) change SECTION 2.13 in a manner that would alter the pro rata sharing
of payments required thereby without the written consent of each Lender;
(f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender;
(g) release any Guarantor from the Guaranty without the written consent of
each Lender; or
(h) permit the Borrower to transfer or assign any of its Obligations
hereunder without the written consent of each Lender;
and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by a L/C Issuer in addition to the Lenders required above,
affect the rights or duties of such L/C Issuer under this Agreement or any
Letter of Credit Application relating to any Letter of Credit issued or to be
issued by it; (ii) no amendment, waiver or consent shall, unless in writing and
signed by the Swing Line Lender in addition to the Lenders required above,
affect the rights or duties of the Swing Line Lender under this Agreement; (iii)
no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iv) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) GENERAL. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by
facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to subsection
(c) below) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent, a L/C Issuer or the
Swing Line Lender, to the address, facsimile number, electronic mail
address or telephone number specified for such Person on Schedule 10.02 or
to such other address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a notice to the
other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its Administrative
Questionnaire or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a
notice to the Borrower, the Administrative Agent, the L/C Issuer and the
Swing Line Lender.
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All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; PROVIDED, HOWEVER, that notices and other communications
to the Administrative Agent, the L/C Issuer and the Swing Line Lender pursuant
to ARTICLE II shall not be effective until actually received by such Person. In
no event shall a voicemail message be effective as a notice, communication or
confirmation hereunder.
(b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Loan Documents may
be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a
manually-signed original thereof; PROVIDED, HOWEVER, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.
(c) LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) RELIANCE BY ADMINISTRATIVE AGENT AND LENDERS. The Administrative Agent
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Revolving Loan Notices and Swing Line Loan Notices) purportedly given
by or on behalf of the Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. The Borrower shall
indemnify each Agent-Related Person and each Lender from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Borrower. All telephonic notices
to and other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and Arranger for all reasonable costs and
expenses incurred in connection with the development, preparation, negotiation
and execution of this Agreement and the other Loan Documents and any amendment,
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waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all reasonable Attorney Costs, and
(b) to pay or reimburse the Administrative Agent and each Lender for all costs
and expenses incurred in connection with the enforcement, attempted enforcement,
or preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any "workout"
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs. The foregoing costs and expenses shall include all search, filing,
recording, title insurance and appraisal charges and fees and taxes related
thereto, and other out-of-pocket expenses incurred by the Administrative Agent
and the cost of independent public accountants and other outside experts
retained by the Administrative Agent or any Lender. All amounts due under this
SECTION 10.04 shall be payable within ten Business Days after demand therefor.
The agreements in this Section shall survive the termination of the Aggregate
Commitments and repayment of all other Obligations.
10.05 INDEMNIFICATION BY THE BORROWER. WHETHER OR NOT THE TRANSACTIONS
CONTEMPLATED HEREBY ARE CONSUMMATED, THE BORROWER SHALL INDEMNIFY AND HOLD
HARMLESS EACH AGENT-RELATED PERSON, EACH LENDER AND THEIR RESPECTIVE AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, AGENTS AND ATTORNEYS-IN-FACT
(COLLECTIVELY THE "INDEMNITEES") FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES AND DISBURSEMENTS (INCLUDING ATTORNEY COSTS) OF ANY KIND
OR NATURE WHATSOEVER WHICH MAY AT ANY TIME BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST ANY SUCH INDEMNITEE IN ANY WAY RELATING TO OR ARISING OUT OF OR
IN CONNECTION WITH (A) THE EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE OR
ADMINISTRATION OF ANY LOAN DOCUMENT OR ANY OTHER AGREEMENT, LETTER OR INSTRUMENT
DELIVERED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY, (B) ANY COMMITMENT, LOAN
OR LETTER OF CREDIT OR THE USE OR PROPOSED USE OF THE PROCEEDS THEREFROM
(INCLUDING ANY REFUSAL BY THE L/C ISSUER TO HONOR A DEMAND FOR PAYMENT UNDER A
LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO
NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT), OR (C) ANY ACTUAL
OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY
CURRENTLY OR FORMERLY OWNED OR OPERATED BY THE BORROWER, ANY SUBSIDIARY OR ANY
OTHER LOAN PARTY, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE
BORROWER, ANY SUBSIDIARY OR ANY OTHER LOAN PARTY, IN EACH CASE WHICH ARISES
BECAUSE OF ANY TRANSACTIONS UNDER OR IN CONNECTION WITH ANY LOAN DOCUMENT OR
WHICH RELATES TO PROPERTY OBTAINED BY ANY LENDER PURSUANT TO OR AS A RESULT OF
ANY LOAN DOCUMENT, OR (D) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION,
INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY (INCLUDING ANY INVESTIGATION OF, PREPARATION
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FOR, SETTLEMENT OF, OR DEFENSE OF ANY PENDING OR THREATENED CLAIM,
INVESTIGATION, LITIGATION OR PROCEEDING) AND REGARDLESS OF WHETHER ANY
INDEMNITEE IS A PARTY THERETO (ALL THE FOREGOING, COLLECTIVELY, THE "INDEMNIFIED
LIABILITIES"), IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN
PART, OUT OF THE NEGLIGENCE OF THE INDEMNITEE; PROVIDED THAT SUCH INDEMNITY
SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS ARE DETERMINED BY A COURT OF
COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE. NO INDEMNITEE
SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY
INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR
INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT, UNLESS SUCH
DAMAGES ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND
NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SUCH INDEMNITEE. NO INDEMNITEE SHALL HAVE ANY LIABILITY FOR ANY
INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ARISING OUT OF ITS ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH
(WHETHER BEFORE OR AFTER THE CLOSING DATE). ALL AMOUNTS DUE UNDER THIS SECTION
10.05 SHALL BE PAYABLE WITHIN TEN BUSINESS DAYS AFTER DEMAND THEREFOR. THE
AGREEMENTS IN THIS SECTION SHALL SURVIVE THE RESIGNATION OF THE ADMINISTRATIVE
AGENT, THE REPLACEMENT OF ANY LENDER, THE TERMINATION OF THE AGGREGATE
COMMITMENTS AND THE REPAYMENT, SATISFACTION OR DISCHARGE OF ALL THE OTHER
OBLIGATIONS.
10.06 PAYMENTS SET ASIDE. To the extent that any payment by or on behalf of
the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
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10.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in L/C Obligations and in Swing Line Loans) at
the time owing to it); PROVIDED that (i) except in the case of an assignment of
the entire remaining amount of the assigning Lender's Commitment and the Loans
at the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund (as defined in subsection (g) of this
Section) with respect to a Lender, the aggregate amount of the Commitment (which
for this purpose includes Loans outstanding thereunder) subject to each such
assignment, determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent or, if "Trade Date"
is specified in the Assignment and Assumption, as of the Trade Date, shall not
be less than $5,000,000 unless each of the Administrative Agent and, so long as
no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed); (ii)
each partial assignment shall be made as an assignment of a proportionate part
of all the assigning Lender's rights and obligations under this Agreement with
respect to the Loans or the Commitment assigned, except that this clause (ii)
shall not apply to rights in respect of Swing Line Loans; (iii) any assignment
of a Commitment must be approved by the Administrative Agent, each L/C Issuer
and the Swing Line Lender (each such consent not to be unreasonably withheld or
delayed) unless the Person that is the proposed assignee is itself a Lender
(whether or not the proposed assignee would otherwise qualify as an Eligible
Assignee); and (iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500. Subject to acceptance and recording
thereof by the Administrative Agent pursuant to subsection (c) of this Section,
from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of SECTIONS
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3.01, 3.04, 3.05, 10.04 and 10.05 with respect to facts and circumstances
occurring prior to the effective date of such assignment). Upon request, the
Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at the Administrative Agent's Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "REGISTER"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to, the
Borrower, the Administrative Agent, or any other Person, sell participations to
any Person (other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries) (each, a "PARTICIPANT") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's
participations in L/C Obligations and/or Swing Line Loans) owing to it);
PROVIDED that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; PROVIDED that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to SECTION 10.01 that directly affects such
Participant. Subject to subsection (e) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of SECTIONS 3.01, 3.04 and
3.05 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of SECTION 10.09
as though it were a Lender, PROVIDED such Participant agrees to be subject to
SECTION 2.13 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under SECTION 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of SECTION 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with SECTION 10.15 as though
it were a Lender.
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(f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement (including under its Note, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; PROVIDED that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural
person) approved by (i) the Administrative Agent, the L/C Issuer and the
Swing Line Lender, and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed); PROVIDED that notwithstanding the foregoing,
"Eligible Assignee" shall not include the Borrower or any of the Borrower's
Affiliates or Subsidiaries.
"FUND" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its business.
"APPROVED FUND" means any Fund that is administered or managed by (a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, if at any
time Guaranty Bank assigns all of its Commitment and Loans pursuant to
subsection (b) above, Guaranty Bank may, (i) upon 30 days' notice to the
Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days' notice
to the Borrower, resign as Swing Line Lender. In the event of any such
resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled
to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender
hereunder; PROVIDED, HOWEVER, that no failure by the Borrower to appoint any
such successor shall affect the resignation of Guaranty Bank as L/C Issuer or
Swing Line Lender, as the case may be. If Guaranty Bank resigns as a L/C Issuer,
it shall retain all the rights and obligations of a L/C Issuer hereunder with
respect to all Letters of Credit issued by it and outstanding as of the
effective date of its resignation as a L/C Issuer and all L/C Obligations with
respect thereto (including the right to require the Lenders to make Base Rate
Revolving Loans or fund risk participations in Unreimbursed Amounts pursuant to
SECTION 2.03(c)). If Guaranty Bank resigns as Swing Line Lender, it shall retain
all the rights of the Swing Line Lender provided for hereunder with respect to
Swing Line Loans made by it and outstanding as of the effective date of such
resignation, including the right to require the Lenders to make Base Rate
Revolving Loans or fund risk participations in outstanding Swing Line Loans
pursuant to SECTION 2.04(cC).
10.08 CONFIDENTIALITY. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
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is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent requested
by any regulatory authority; (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement; (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any Eligible Assignee of
or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any direct or
indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's professional advisor)
to any credit derivative transaction relating to obligations of the Loan
Parties; (g) with the consent of the Borrower; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than the Borrower; or (i) to the
National Association of Insurance Commissioners or any other similar
organization. In addition, the Administrative Agent and the Lenders may disclose
the existence of this Agreement and information about this Agreement to market
data collectors, similar service providers to the lending industry, and service
providers to the Administrative Agent and the Lenders in connection with the
administration and management of this Agreement, the other Loan Documents, the
Commitments, and the Credit Extensions. For the purposes of this Section,
"INFORMATION" means all information received from any Loan Party relating to any
Loan Party or its business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Loan Party; PROVIDED that, in the case of information received
from a Loan Party after the date hereof, such information is clearly identified
in writing at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
10.09 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the respective Loan Parties against any and all Obligations owing
to such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or indebtedness. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent after
any such set-off and application made by such Lender; PROVIDED, HOWEVER, that
the failure to give such notice shall not affect the validity of such set-off
and application.
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10.10 INTEREST RATE LIMITATION. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the Highest Lawful Rate. If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Highest
Lawful Rate, the excess interest shall be applied to the principal of the Loans
or, if it exceeds such unpaid principal, refunded to the Borrower. In
determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Highest Lawful Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any payment
that is not principal as an expense, fee, or premium rather than interest, (b)
exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.
10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12 INTEGRATION. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; PROVIDED that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension other than pursuant to a notice
in writing to the Administrative Agent from a Responsible Officer of the
Borrower stating that a Default has occurred, and shall continue in full force
and effect until all Loans and other Obligation hereunder are paid in full or
any Letters of Credit are either cancelled or fully collateralized in accordance
with SECTION 2.03(g).
10.14 SEVERABILITY. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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10.15 TAX FORMS. (a) (i) Each Lender that is not a "United States person"
within the meaning of Section 7701(a)(30) of the Code (a "FOREIGN LENDER") shall
deliver to the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or upon accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Foreign Lender and entitling it to an
exemption from, or reduction of, withholding tax on all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement) or IRS Form
W-8ECI or any successor thereto (relating to all payments to be made to such
Foreign Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the Code.
Thereafter and from time to time, each such Foreign Lender shall (A) promptly
submit to the Administrative Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Administrative Agent of
any available exemption from or reduction of, United States withholding taxes in
respect of all payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement, (B) promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction, and (C) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable Laws that the Borrower make any deduction or
withholding for taxes from amounts payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or ceases to act
for its own account with respect to any portion of any sums paid or payable to
such Lender under any of the Loan Documents (for example, in the case of a
typical participation by such Lender), shall deliver to the Administrative Agent
on the date when such Foreign Lender ceases to act for its own account with
respect to any portion of any such sums paid or payable, and at such other times
as may be necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two duly signed completed copies of
the forms or statements required to be provided by such Lender as set forth
above, to establish the portion of any such sums paid or payable with respect to
which such Lender acts for its own account that is not subject to U.S.
withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or
any successor thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such Lender.
(iii) The Borrower shall not be required to pay any additional amount to
any Foreign Lender under SECTION 3.01 (A) with respect to any Taxes required to
be deducted or withheld on the basis of the information, certificates or
statements of exemption such Lender transmits with an IRS Form W-8IMY pursuant
to this SECTION 10.15(a) or (B) if such Lender shall have failed to satisfy the
foregoing provisions of this SECTION 10.15(a); PROVIDED that if such Lender
shall have satisfied the requirement of this SECTION 10.15(a) on the date such
Lender became a Lender or ceased to act for its own account with respect to any
payment under any of the Loan Documents, nothing in this SECTION 10.15(a) shall
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relieve the Borrower of its obligation to pay any amounts pursuant to SECTION
3.01 in the event that, as a result of any change in any applicable law, treaty
or governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate.
(iv) The Administrative Agent may, without reduction, withhold any Taxes
required to be deducted and withheld from any payment under any of the Loan
Documents with respect to which the Borrower is not required to pay additional
amounts under this SECTION 10.15(A).
(b) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative Agent did
not properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender shall
indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Aggregate Commitments,
repayment of all other Obligations hereunder and the resignation of the
Administrative Agent.
10.16 REPLACEMENT OF LENDERS. Under any circumstances set forth herein
providing that the Borrower shall have the right to replace a Lender as a party
to this Agreement, the Borrower may, upon notice to such Lender and the
Administrative Agent, replace such Lender by causing such Lender to assign its
Commitment (with the assignment fee to be paid by the Borrower in such instance)
pursuant to SECTION 10.07(b) to one or more other Lenders or Eligible Assignees
procured by the Borrower; PROVIDED, HOWEVER, that if the Borrower elects to
exercise such right with respect to any Lender pursuant to SECTION 3.06(b), it
shall be obligated to replace all Lenders that have made similar requests for
compensation pursuant to SECTION 3.01 or 3.04. The Borrower shall (x) pay in
full all principal, interest, fees and other amounts owing to such Lender
through the date of replacement (including any amounts payable pursuant to
SECTION 3.05), (y) provide appropriate assurances and indemnities (which may
include letters of credit) to the L/C Issuer and the Swing Line Lender as each
may reasonably require with respect to any continuing obligation to fund
participation interests in any L/C Obligations or any Swing Line Loans then
outstanding, and (z) release such Lender from its obligations under the Loan
Documents. Any Lender being replaced shall execute and deliver an Assignment and
Assumption with respect to such Lender's Commitment and outstanding Loans and
participations in L/C Obligations and Swing Line Loans.
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10.17 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
the LAW OF THE STATE OF TEXAS applicable to agreements made and to be performed
entirely within such State; PROVIDED THAT THE ADMINISTRATIVE Agent AND EACH
LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING
IN DALLAS COUNTY OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF TEXAS
(DALLAS DIVISION), AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER, THE ADMINISTRATIVE Agent AND EACH LENDER CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE
BORROWER, THE ADMINISTRATIVE Agent AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE
Agent AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.
10.18 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.19 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
MERITAGE CORPORATION
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Financial Officer
95
GUARANTY BANK, AS ADMINISTRATIVE AGENT
By: /s/ Xxx X. Xxxxx
------------------------------------
Name: Xxx X. Xxxxx
Title: Senior Vice President
96
GUARANTY BANK, AS A LENDER AND SWING
LINE LENDER
By: /s/ Xxx X. Xxxxx
------------------------------------
Name: Xxx X. Xxxxx
Title: Senior Vice President
97
FLEET NATIONAL BANK, AS A LENDER
By: /s/ Xxxx Xxxx
------------------------------------
Name: Xxxx Xxxx
Title: Vice President
98
BANK ONE, NA, A NATIONAL ASSOCIATION,
AS A LENDER
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
99
XXXXX FARGO BANK ARIZONA NATIONAL
ASSOCIATION, AS A LENDER
By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Senior Vice President
100
U.S. BANK NATIONAL ASSOCIATION,
A NATIONAL BANKING ASSOCIATION,
AS A LENDER
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Relationship Manager
101
CALIFORNIA BANK AND TRUST, A CALIFORNIA
BANKING CORPORATION, AS A LENDER
By: /s/ Xxxxxxxxx Xxxx
------------------------------------
Name: Xxxxxxxxx Xxxx
----------------------------------
Title: Vice President
---------------------------------
102
COMPASS BANK, AN ALABAMA BANKING
CORPORATION, AS A LENDER
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
103