EXHIBIT 10.35
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 31, 2001
AMONG
DOMINION HOMES, INC., AS THE COMPANY
THE INSTITUTIONS FROM TIME TO TIME PARTY HERETO, AS LENDERS
THE HUNTINGTON NATIONAL BANK, AS ADMINISTRATIVE AGENT
AND
THE HUNTINGTON NATIONAL BANK, AS ISSUING BANK
Porter, Wright, Xxxxxx & Xxxxxx LLP
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
TABLE OF CONTENTS
PAGE NO.
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1. AMOUNT AND TERMS OF EXTENSIONS OF CREDIT............................................... 1
1.1. Amendment and Restatement..................................................... 1
1.2. The Revolving Credit Facility................................................. 1
1.3. Letters of Credit............................................................. 3
1.4. Swing Line Loans.............................................................. 7
1.5. Potential Defaults............................................................ 8
2. BORROWING BASE DEFINITIONS............................................................. 8
2.1. Borrowing Base................................................................ 8
2.2. Available Cash................................................................ 9
2.3. Developed Lots and Fall Foundation Lots....................................... 9
2.4. [Intentionally Omitted.]...................................................... 10
2.5. [Intentionally Omitted.]...................................................... 10
2.6. Eligible Lumber Inventory..................................................... 9
2.7. Eligible Real Estate.......................................................... 9
2.8. Investments in Joint Ventures................................................. 10
2.9. Lots Under Development........................................................ 10
2.10. Model Homes................................................................... 10
2.11. Real Estate Held for Development.............................................. 10
2.12. Home Work-in-Process.......................................................... 10
2.13. Speculative Homes............................................................. 11
2.14. Mutual Exclusivity............................................................ 11
3. INTEREST RATES, FEES, ADDITIONAL COSTS AND PAYMENTS.................................... 11
3.1. Interest Rates................................................................ 11
3.2. Prepayment.................................................................... 11
3.3. Eurodollar Rate............................................................... 11
3.4. [Intentionally Omitted.]...................................................... 12
3.5. Conversions of Advances....................................................... 12
3.6. Additional Costs.............................................................. 12
3.7. Limitation on Requests and Elections.......................................... 13
3.8. Illegality and Impossibility.................................................. 13
3.9. Compensation.................................................................. 14
3.10. Survival of Obligations....................................................... 14
3.11. Interest Rate Protection...................................................... 14
3.12. Default Interest Rate......................................................... 15
3.13. Fees.......................................................................... 15
3.14. Capital Adequacy and Removal of Affected Lender............................... 16
3.15. Mandatory Reduction........................................................... 17
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4. EVIDENCE OF INDEBTEDNESS............................................................... 17
5. COSTS AND EXPENSES..................................................................... 18
6. CONDITIONS PRECEDENT................................................................... 19
6.1. Effectiveness and Initial Advance............................................. 19
6.2. Conditions Precedent to Subsequent Advances................................... 19
7. WARRANTIES AND REPRESENTATIONS......................................................... 19
7.1. Organization and Authority.................................................... 19
7.2. Borrowing is Legal and Authorized............................................. 20
7.3. Taxes......................................................................... 20
7.4. Corporate Information......................................................... 20
7.5. Compliance with Law........................................................... 20
7.6. Financial Statements; Full Disclosure......................................... 21
7.7. Litigation: Adverse Effects................................................... 21
7.8. No Insolvency................................................................. 21
7.9. Government Consent............................................................ 21
7.10. Title to Properties........................................................... 22
7.11. No Defaults................................................................... 22
7.12. Environmental Protection...................................................... 22
7.13. Margin Loans.................................................................. 22
7.14. Real Estate Ownership......................................................... 23
8. COMPANY BUSINESS COVENANTS............................................................. 24
8.1. Payment of Taxes and Claims................................................... 24
8.2. Maintenance of Properties and Corporate Existence............................. 25
8.3. Sale of Assets................................................................ 25
8.4. Liens and Encumbrances (Negative Pledge)...................................... 26
8.5. Indebtedness.................................................................. 26
8.6. Contingent Liabilities........................................................ 27
8.7. Operating Lease Rentals....................................................... 29
8.8. Acquisition of Capital Stock.................................................. 29
8.9. Restrictions on Dividends..................................................... 29
8.10. Management.................................................................... 29
8.11. Investments, Loans and Advances............................................... 29
8.12. ERISA......................................................................... 29
8.13. Tangible Net Worth............................................................ 29
8.14. Leverage Ratio................................................................ 29
8.15. No Losses..................................................................... 29
8.16. Ratio of Uncommitted Land Holdings to Consolidated Tangible Net Worth......... 30
8.17. Interest Coverage Ratio....................................................... 30
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8.18. Land Held for Development (Unzoned)........................................... 30
8.19. Maintenance of Deposits....................................................... 30
8.20. Model Homes Inventory......................................................... 30
8.21. Speculative Homes............................................................. 30
8.22. Further Real Estate Acquisition Limitations, New Market Investment Amount..... 30
8.23. Conduct of Business, Subsidiaries............................................. 31
8.24. Permitted Acquisitions........................................................ 31
8.25. Restriction on Fundamental Changes............................................ 31
8.26. Fall Foundation Lots.......................................................... 32
9. INFORMATION AS TO COMPANY AND SUBSIDIARIES............................................. 32
10. EVENTS OF DEFAULT...................................................................... 33
10.1. Nature of Events.............................................................. 33
10.2. Default Remedies.............................................................. 35
11. THE ADMINISTRATIVE AGENT............................................................... 38
11.1. Appointment................................................................... 38
11.2. Powers........................................................................ 38
11.3. General Immunity.............................................................. 38
11.4. No Responsibility for Loans, Recitals......................................... 38
11.5. Action on Instructions of Lenders............................................. 39
11.6. Employment of Administrative Agents and Counsel............................... 39
11.7. Reliance on Documents, Counsel................................................ 39
11.8. Reimbursement and Indemnification............................................. 39
11.9. Rights as a Lender............................................................ 40
11.10. Lender Credit Decision........................................................ 38
11.11. Successor Administrative Agent................................................ 39
11.12. Ratable Payments.............................................................. 39
11.13. Application of Payments....................................................... 40
12. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS...................................... 41
12.1. Successors and Assigns........................................................ 41
12.2. Participations................................................................ 41
12.3. Assignments................................................................... 42
12.4. Dissemination of Information.................................................. 43
12.5. Tax Treatment................................................................. 43
13. NOTICES AND GENERAL PROVISIONS......................................................... 43
13.1. Notices....................................................................... 43
13.2. Reproduction of Documents..................................................... 44
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13.3. Survival...................................................................... 44
13.4. Amendments.................................................................... 44
13.5. Duplicate Originals........................................................... 45
13.6. Enforceability and Governing Law.............................................. 45
13.7. Fiscal Year................................................................... 47
13.8. Consent to Jurisdiction and Waiver of Objection to Venue...................... 48
13.9. Waiver of Jury Trial.......................................................... 48
13.10. Confidentiality............................................................... 48
14. DEFINITIONS............................................................................ 49
14.1. Accounting Terms.............................................................. 49
14.2. Other Definitional Provisions................................................. 49
14.3. Defined Terms................................................................. 49
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EXHIBITS
A-1 - Form of Revolving Credit Note
A-2 - Form of Swing Line Note
B - Form of Standby Letter of Credit Reimbursement Agreement
C - Form of Notice of Borrowing or Continuation/Conversion
D - Form of Officer's Certificate to Accompany Reports
E - Form of Assignment and Acceptance
F - Form of Subsidiary Guaranty
SCHEDULES
Schedule 6.1(a) - Conditions Precedent to Initial Disbursement
Schedule 7.4 - Corporate Information
Schedule 7.10 - Schedule of Permitted Encumbrances
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AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement (the "Agreement") dated as of
December 31, 2001, is entered into among Dominion Homes, Inc., an Ohio
corporation (the "Company"), the institutions from time to time party hereto as
lenders, whether by execution of this Agreement or an Assignment and Acceptance
(individually, a "Lender" and collectively, the "Lenders"), The Huntington
National Bank ("Huntington") as issuing bank and as a Lender, and Huntington, in
its separate capacity as administrative agent for the Lenders and the issuing
bank (with its successors in such capacity, "Administrative Agent").
AMOUNT AND TERMS OF EXTENSIONS OF CREDIT
1.1. Amendment and Restatement.
The Indebtedness and obligations evidenced by this Agreement and all
instruments, agreements, and documents executed in connection herewith
constitute an amendment, renewal, and restatement of all Indebtedness and
obligations of the Borrower evidenced by a certain Credit Agreement dated as of
May 29, 1998 (the "Prior Credit Agreement"), all promissory notes, instruments,
applications for letters of credit, letter of credit reimbursement agreements,
and any other document, agreement, waiver or other instrument executed in
connection therewith (collectively the "Existing Credit Documents") and shall
remain in full force and effect except to extent modified by this Agreement. The
terms and conditions of this Agreement and the Administrative Agent's rights and
remedies hereunder, shall apply to all of the obligations incurred under the
Prior Credit Agreement and the Existing Credit Documents. It is expressly
understood and agreed by the parties hereto that this Agreement is in no way
intended to constitute a novation of the obligations and liabilities existing
under the Prior Credit Agreement or evidence payment of all or any of such
obligations and liabilities. All references to the Prior Credit Agreement in the
Existing Credit Documents shall be deemed to refer to this Agreement. If any
inconsistency exists between this Agreement and the Prior Credit Agreement, the
terms of this Agreement shall prevail. Nothing contained in this Agreement or
any other document or instrument executed contemporaneously herewith shall be
deemed to satisfy or discharge the Indebtedness evidenced by the Prior Credit
Agreement or the Existing Credit Documents (this being an amendment and
restatement only).
1.2. The Revolving Credit Facility.
(a) Revolving Loans. Subject to the terms and conditions hereof, each
Lender hereby severally (and not jointly) agrees to make revolving loans, in
U.S. dollars (each individually a "Revolving Loan" and collectively the
"Revolving Loans") to the Company from time to time during the period from the
initial advance hereunder to the Business Day prior to the Revolving Credit
Termination Date, in an amount not to exceed at any time outstanding such
Lender's Revolving Credit Commitment at such time; provided, that the aggregate
amount of the Revolving Loans made to the Company by each Lender at any time
shall not exceed such Lender's Pro Rata Share of the Revolving Credit
Availability on such date. All Revolving Loans hereunder shall be made by such
Lenders simultaneously and proportionately to their then respective Revolving
Credit Commitments.
(b) Borrowing Base Availability. In addition to the foregoing limitation,
the Revolving Credit Obligations shall at no time exceed the Borrowing Base
Availability.
(c) Frequency and Amount of Advances. Subject to the provisions hereof,
the Company may borrow and repay any outstanding advance under the Revolving
Loans on any Business Day, and any amounts so repaid may be reborrowed.
(d) Notices of Borrowing. When the Company desires to borrow or convert an
advance hereunder, it shall deliver to the Administrative Agent an irrevocable
notice of borrowing, in form attached hereto as Exhibit C ("Notice of
Borrowing") or such other form satisfactory to the Administrative Agent, no
later than 12:00 noon (Columbus, Ohio time) (i) at least one Business Day in
advance of the proposed funding or conversion date in the case of a Prime Rate
Advance, and (ii) at least three (3) Business Days in advance of the proposed
funding or conversion date in the case of a Eurodollar Advance. The Notice of
Borrowing shall specify (i) the proposed funding or conversion date, (ii) the
amount of the proposed advance, (iii) whether the proposed advance will be a
Eurodollar Advance or a Prime Rate Advance and if a Eurodollar Advance the
Interest Period therefor, and (iv) instructions for the disbursement of the
proceeds of the advance.
(e) Making of Revolving Loans.
(i) Promptly after receipt of a Notice of Borrowing, the
Administrative Agent shall notify each Lender by telecopy or other similar form
of notice of the proposed borrowing. Each Lender shall deposit with the
Administrative Agent an amount equal to its Pro Rata Share of the amount
requested by the Company to be made as Revolving Loans in immediately available
funds on the funding date specified in the applicable Notice of Borrowing,
subject to the fulfillment of the conditions precedent set forth below. The
Administrative Agent shall make the proceeds of such amounts received by it
available to the Company at the office of the Administrative Agent on such
funding date and shall disburse such proceeds in accordance with the Company's
disbursement instructions set forth in the applicable Notice of Borrowing. The
failure of any Lender to deposit the amount described with the Administrative
Agent on the applicable funding date shall not relieve any other Lender of its
obligations hereunder to make its Revolving Loan on such funding date. No Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make a Revolving Loan hereunder, nor shall the Revolving Credit
Commitment of any Lender be increased or decreased as a result of such failure.
(ii) Unless the Administrative Agent shall have been notified by any
Lender on the Business Day immediately preceding the applicable funding date in
respect of any borrowing of Revolving Loans that such Lender does not intend to
fund its Revolving Loan requested to be made on such funding date, the
Administrative Agent may assume that such Lender has funded its Revolving Loan
and is depositing the proceeds thereof with the Administrative Agent, on such
funding date, and the Administrative Agent, in its sole discretion may, but
shall not be obligated to, disburse a corresponding amount to the Company on
such funding date. If the Revolving Loan proceeds corresponding to that amount
are advanced to the Company by the Administrative Agent, but are not in fact
deposited with the Administrative Agent by such Lender on or prior to the
applicable funding date, such Lender agrees to pay, and in addition the Company
agrees to repay, to the Administrative Agent, forthwith on demand such
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corresponding amount, together with interest thereon, for each day from the date
such amount is disbursed to or for the benefit of the Company until the date
such amount is paid or repaid to the Administrative Agent, (A) in the case of
the Company, at the interest rate applicable to such borrowing and (B) in the
case of such Lender, at the Federal Funds Rate for the first Business Day, and
thereafter at the interest rate applicable to such borrowing. If such Lender
shall pay to the Administrative Agent, the corresponding amount, the amount so
paid shall constitute such Lender's Revolving Loan, and if both such Lender and
the Company shall pay and repay such corresponding amount, the Administrative
Agent shall promptly pay to the Company such corresponding amount. This Section
1.2(e) does not relieve any Lender of its obligation to make its Revolving Loan
on any funding date.
(f) Use of Proceeds of Revolving Loans. The proceeds of the Revolving
Loans may be used (i) to pay the purchase price of any Permitted Acquisition and
other related transaction costs and expenses and to fund any refinancing of
Indebtedness in connection with a Permitted Acquisition as set forth and
certified in the Notice of Borrowing pertaining thereto, (ii) to fund working
capital in the ordinary course of the business of the Company and its
Subsidiaries, (iii) to amend and restate existing Indebtedness under the Prior
Credit Agreement, (iv) to make Investments permitted by Section 8.11 of this
Agreement, and (v) for other lawful general corporate purposes not prohibited
hereunder. Notwithstanding anything herein to the contrary, no proceeds of
Revolving Loans may be used to fund payments not permitted by this Agreement.
(g) Revolving Credit Termination Date. The Revolving Credit Commitments
shall terminate, and all outstanding Revolving Credit Obligations shall be paid
in full (or, in the case of unmatured Letter of Credit Obligations, provision
for payment of cash collateral shall be made to the satisfaction of Huntington
and the Administrative Agent), on the Revolving Credit Termination Date. Each
Lender's obligation to make Revolving Loans shall terminate at the close of
business of the Administrative Agent on the Business Day next preceding the
Revolving Credit Termination Date.
(h) Interest. Accrued interest under the Revolving Loans shall be due and
payable on each Interest Payment Date.
1.3. Letters of Credit.
(a) Issuance. Subject to the terms and conditions set forth herein,
Huntington hereby agrees to issue for the account of the Company, a Restricted
Subsidiary, or an Approved Joint Venture, one or more letters of credit in U.S.
dollars (each individually a "Letter of Credit" and collectively the "Letters of
Credit") from time to time during the period from the date hereof to the
Revolving Credit Termination Date, provided that the Letter of Credit
Obligations shall at no time exceed the sum of $20,000,000, provided that the
Revolving Credit Obligations shall at no time exceed the Revolving Credit
Maximum Amount; and provided further, however, that the Revolving Credit
Obligations shall not exceed the Borrowing Base Availability.
(b) Expiry Dates. The Company, a Restricted Subsidiary or an Approved
Joint Venture, as applicable, shall have no right to obtain issuance of Letters
of Credit which have an expiration date later than the earlier of (i) the
Revolving Credit Termination Date or (ii) 24 months from issuance of such Letter
of Credit.
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(c) Participations.
(i) Immediately upon issuance by Huntington of any Letter of Credit
in accordance with the procedures set forth in this Section 1.3, each Lender
shall be deemed to have irrevocably and unconditionally purchased and received
from Huntington, without recourse or warranty, an undivided interest and
participation in such Letter of Credit to the extent of such Lender's Pro Rata
Share.
(ii) If Huntington makes any payment under any Letter of Credit, and
such amount is not repaid to Huntington within two Business Days, Huntington
shall promptly notify the Administrative Agent, which shall promptly notify each
Lender, and each such Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of Huntington, in immediately available
funds, the amount of such Lender's Pro Rata Share of such payment, and the
Administrative Agent shall promptly pay to Huntington such amounts received by
it, and any other amounts received by the Administrative Agent for Huntington's
account, pursuant to this Section 1.3. All such payments shall constitute
Revolving Loans made to the Company (irrespective of the satisfaction of the
conditions in Section 6 or the requirement to deliver a Notice of Borrowing,
which conditions and requirement, for the purpose of refunding any Reimbursement
Obligation owing to Huntington, the Lenders irrevocably waive) and shall
thereupon cease to be unpaid Reimbursement Obligations. Such Revolving Loans
shall be Prime Rate Advances. If a Lender does not make its Pro Rata Share of
the amount of such payment available to the Administrative Agent, such Lender
agrees to pay to the Administrative Agent for the account of Huntington,
forthwith on demand, such amount together with interest thereon, for the first
Business Day after the date such payment was first due at the Federal Funds
Rate, and thereafter at the interest rate then applicable to Prime Rate
Advances. The failure of any such Lender to make available to the Administrative
Agent for the account of Huntington its Pro Rata Share of any such payment shall
neither relieve any other Lender of its obligation hereunder to make available
to the Administrative Agent for the account of Huntington such other Lender's
Pro Rata Share of any payment on the date such payment is to be made nor
increase the obligation of any other Lender to make such payment to the
Administrative Agent. This Section does not relieve any Lender of its obligation
to purchase Pro Rata Share participations in Letters of Credit; nor does this
Section relieve the Company of its obligation to pay or repay Huntington's
funding of such payment pursuant to this Section or interest on the amount of
such payment from such date such payment is to be made until the date on which
payment is repaid in full.
(iii) In the event that any draw occurs under any of the Letters of
Credit, and such draw is not reimbursed within two Business Days after demand to
the Company, the Company shall be deemed to have made a Notice of Borrowing of a
Prime Rate Advance under the Revolving Loans to repay such amount, and if the
Company has insufficient ability to obtain Revolving Loans to pay such draw, the
Administrative Agent is hereby authorized to repay such draw by charging any or
all of the Company's accounts or checking accounts in such order as it deems
appropriate, in its sole discretion.
(iv) Whenever Huntington receives a payment on account of a
Reimbursement Obligation, including any interest thereon, as to which any Lender
has made a Revolving Loan pursuant to clause (ii) of this Section, Huntington
shall promptly pay to the Administrative Agent such payment. Each such payment
shall be made by Huntington or the Administrative Agent, as
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the case may be, on the Business Day on which such Person receives the funds
paid to such Person, if received prior to 11:00 a.m. (Columbus time) on such
Business Day, and otherwise on the next succeeding Business Day.
(v) Upon the request of any Lender to the Administrative Agent,
Huntington shall furnish such Lender copies of any Letter of Credit or Letter of
Credit Application to which Huntington is party and such other documentation as
reasonably may be requested by such Lender.
(vi) The obligations of a Lender to make payments to the
Administrative Agent for the account of Huntington with respect to a Letter of
Credit, shall be irrevocable, shall not be subject to any qualification or
exception whatsoever, except willful misconduct or gross negligence of
Huntington as such issuing bank as determined in a final, non-appealable
judgment by a court of competent jurisdiction, and shall be honored in
accordance with this Section (irrespective of the satisfaction of the conditions
described in Section 6, as applicable which conditions, for the purposes of the
repayment of Letters of Credit to Huntington, such Lenders irrevocably waive)
under all circumstances, including, without limitation, any of the following
circumstances: (A) any lack of validity or enforceability hereof or of any of
the other Loan Documents; (B) the existence of any claim, setoff, defense or
other right which the Company may have at any time against a beneficiary named
in a Letter of Credit or any transferee of a beneficiary named in a Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any issuing bank, any Lender, or any other Person, whether
in connection herewith, with any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying transactions
between the account party and beneficiary named in any Letter of Credit); (C)
any draft, certificate or any other document presented under the Letter of
Credit having been determined to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; (D) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; (E) any failure by
Huntington to make any reports required pursuant to this Section 1.2 or the
inaccuracy of any such report; or (F) the occurrence of any Event of Default or
Potential Default.
(d) Requirements for Issuance of Letters of Credit.
(i) The Company may request Huntington to issue or cause the
issuance of a Letter of Credit by delivering to the Administrative Agent
Huntington's standard form of Letter of Credit Application and Agreement for
Standby Letter of Credit and/or Reimbursement Agreement (collectively the
"Letter of Credit Application") completed to the satisfaction of Huntington, and
such other certificates, documents and other papers and information as the
Administrative Agent or Huntington may request.
(ii) Each Letter of Credit shall, among other things, provide for
the payment of sight drafts when presented for honor thereunder in accordance
with the terms thereof and when accompanied by the documents described therein.
Each Letter of Credit Application and each Letter of Credit shall be subject to
the Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, and any amendments or
revision thereof and, to the extent not inconsistent therewith, the laws of the
State of Ohio.
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(iii) Huntington shall give the Administrative Agent written notice,
or telephonic notice confirmed promptly thereafter in writing, of the issuance
of a Letter of Credit, which notice to the Administrative Agent shall promptly
transmit by telecopy, telephone or similar transmission to each Lender.
(iv) In connection with the issuance of any Letter of Credit, the
Company shall indemnify, save and hold Huntington, the Administrative Agent, and
each Lender harmless from any loss, cost, expense or liability, including,
without limitation, payments made by Huntington, the Administrative Agent or any
Lender, and expenses and reasonable attorneys' fees incurred by any of the same
arising out of, or in connection with, any Letter of Credit issued on behalf of
the Company, a Restricted Subsidiary or any Approved Joint Venture. The Company
shall be bound by Huntington's or any issuing or accepting bank's regulations
and good faith interpretations of any Letter of Credit, regardless of whether
any such interpretation may be different from the Company's. Neither Huntington,
the Administrative Agent nor any Lender, nor any of its correspondents shall be
liable for any error, negligence, or mistakes, whether of omission or
commission, in following the Company's instructions or those contained in any
Letter of Credit or in any modifications, amendments or supplements thereto or
in issuing or paying any Letter of Credit, except in the case of the
Administrative Agent's, any Lender's, the issuing bank's or such correspondents'
gross negligence or willful misconduct.
(v) The Company shall authorize and direct Huntington with respect
to each Letter of Credit to name the Company, a Restricted Subsidiary or an
Approved Joint Venture as the "Account Party" therein, shall deliver to
Huntington, upon request of Huntington, all instruments, documents, and other
writings and property pursuant to the Letter of Credit and shall accept and rely
upon Huntington's instructions and agreements with respect to all matters
arising in connection with the Letter of Credit or the application therefor.
(e) Use of Proceeds for Letters of Credit. The Letters of Credit shall be
used by the Company, a Restricted Subsidiary or any Approved Joint Venture (i)
to support bonding requirements for real estate site improvements or maintenance
in favor of various municipal entities, (ii) to secure the Company's, a
Restricted Subsidiary's or any Approved Joint Venture's contractual performance
with respect to the Company's land and lot development activities, (iii) to
secure the Company's, a Restricted Subsidiary's or any Approved Joint Venture's
contractual performance in connection with land acquisition activities, and (iv)
to provide admitted capital in connection with the Insurance Sub, subject to the
limitations set forth in this Agreement.
1.4. Swing Line Loans.
(a) Amount of Swing Line Loans. Upon the satisfaction of the conditions
precedent set forth in Section 6 hereof, from and including the date hereof and
prior to the Revolving Credit Termination Date, the Swing Line Bank agrees, on
the terms and conditions set forth in this Agreement, to make swing line loans
to the Company from time to time in an amount not to exceed the Swing Line
Commitment (each, individually, a "Swing Line Loan" and collectively, the "Swing
Line Loans"); provided, however, at no time shall the Revolving Credit
Obligations exceed the Revolving Credit Maximum Amount; and provided, further,
that at no time shall the sum of (i) the outstanding amount of the Swing Line
Loans, plus (ii) the outstanding amount of Revolving Loans made by the Swing
Line Bank, plus (iii) the Swing Line Bank's Pro Rata Share of Letter of Credit
Obligations, exceed the Swing Line Bank's Revolving Credit Commitment at
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such time. Subject to the terms of this Agreement, the Company may borrow, repay
and reborrow Swing Line Loans at any time prior to the Revolving Credit
Termination Date.
(b) Borrowing/Conversion/Continuation Notice. The Company shall deliver to
the Administrative Agent and the Swing Line Bank an executed Notice of
Borrowing, not later than 2:00 p.m. (Columbus, Ohio time) on the proposed
borrowing date of each Swing Line Loan, specifying (i) the applicable borrowing
date (which date shall be a Business Day), and (ii) the aggregate amount of the
requested Swing Line Loan.
(c) Making of Swing Line Loans. Promptly after receipt of the Notice of
Borrowing in respect of Swing Line Loans, the Administrative Agent shall notify
the Swing Line Bank by telex or telecopy, or other similar form of transmission,
of the requested Swing Line Loan. Not later than 3:00 p.m. (Columbus, Ohio time)
on the applicable borrowing date, the Swing Line Bank shall make available its
Swing Line Loan, in funds immediately available in Columbus, Ohio to the
Administrative Agent at its address specified pursuant to Section 13. The
Administrative Agent will promptly make the funds so received from the Swing
Line Bank available to the Company on the borrowing date at the Administrative
Agent's address.
(d) Repayment of Swing Line Loans. Each Swing Line Loan shall be paid in
full by the Company on or before the fifth (5th) Business Day after the
borrowing date for such Swing Line Loan. The Company may at any time pay,
without penalty or premium, all outstanding Swing Line Loans or any portion of
the outstanding Swing Line Loans, upon notice to the Administrative Agent and
the Swing Line Bank. In addition, the Administrative Agent, with respect to any
Swing Line Loan which shall have been advanced by the Swing Line Bank prior to
the Swing Line Bank's actual knowledge of the occurrence of an Event of Default
(i) may at any time in its sole discretion with respect to any such outstanding
Swing Line Loan, or (ii) shall on the earlier of (A) the fifth (5th) Business
Day after the borrowing date of any such Swing Line Loan, or (B) such date that
repayment of any Swing Line Loan is necessary to provide the Company, subject to
the terms of this Agreement, advances pursuant to Revolving Credit Availability,
require each Lender to make a Revolving Loan in the amount of such Lender's
Revolving Loan Pro Rata Share of such Swing Line Loan, for the purpose of
repaying such Swing Line Loan. Not later than 2:00 p.m. (Columbus, Ohio time) on
the date of any notice received pursuant to this Section 1.4(d), each Lender
shall make available its required Revolving Loan, in funds immediately available
in Columbus, Ohio to the Agent at its address specified pursuant to Section 13.
Each Lender's obligation to make Revolving Loans pursuant to this Section 1.4(d)
to repay Swing Line Loans shall be unconditional, continuing, irrevocable and
absolute and shall not be affected by any circumstances, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Administrative Agent, the Swing Line Bank
or any other Person, (ii) the occurrence or continuance of an Event of Default
or Potential Default, (iii) any adverse change in the condition (financial or
otherwise) of the Company, or (iv) any other circumstances, happening or event
whatsoever. In the event that any Lender fails to make payment to the
Administrative Agent of any amount due under this Section 1.4(d), the
Administrative Agent shall be entitled to receive, retain and apply against such
obligation the principal and interest otherwise payable to such Lender hereunder
until the Administrative Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied. In addition to the foregoing, if for
any reason any Lender fails to make payment to the Administrative Agent of any
amount due under this Section 1.4(d), such Lender shall be deemed, at the option
of the Administrative Agent, to have
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unconditionally and irrevocably purchased from the Swing Line Bank, without
recourse or warranty, an undivided interest and participation in the applicable
Swing Line Loan in the amount of such Revolving Loan, and such interest and
participation may be recovered from such Lender together with interest thereon
at the Federal Funds Effective Rate for each day during the period commencing on
the date of demand and ending on the date such amount is received. On the
Revolving Credit Termination Date, the Company shall repay in full the
outstanding principal balance of the Swing Line Loans.
(e) Interest Rate. Interest shall accrue on the unpaid balance of the
Swing Line Loans at the Prime Commercial Rate plus the Applicable Prime Rate
Margin.
1.5. Potential Defaults.
Subject to the obligation, if any, of the Lenders pursuant to Section
1.4(d) hereof, none of the Lenders shall have any obligation to advance or
re-advance any sums pursuant to the Revolving Loans, the Swing Line Bank shall
have no obligation to advance any Swing Line Loan, and Huntington shall have no
obligation to issue or extend any Letters of Credit at any time when (a) an
Event of Default has occurred and is continuing or (b) a set of facts or
circumstances exists, which, by themselves, upon the giving of notice, the lapse
of time, or any one or more of the foregoing, would constitute an Event of
Default under Sections 10.1(g), (h), (i) or (j) of this Agreement (herein a
"Potential Default").
BORROWING BASE DEFINITIONS
1.6. Borrowing Base.
"Borrowing Base" means (without duplication) the aggregate sum of the
following:
(a) 100% of Available Cash, plus
(b) 75% of Eligible Lumber Inventory, plus
(c) 90% of Eligible Home Work-in-Process, plus
(d) the lesser of $15,000,000 or 50% of Eligible Real Estate Held for
Development, plus
(e) the lesser of $10,000,000 or 50% of Eligible Investments in Joint
Ventures, plus
(f) the lesser of or $5,850,000 or 90% of the aggregate sum of Eligible
Model Homes, plus
(g) the lesser of $10,000,000 or 90% of Eligible Speculative Homes, plus
(h) 70% of Eligible Developed Lots that have been added to the Developed
Lots category within eighteen (18) months immediately preceding the date of
calculation, and 62.5% of Eligible Developed Lots that have been added to the
Developed Lots category more than
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eighteen (18) months, but less than twenty-four (24) months immediately
preceding the date of calculation, plus
(i) 60% of Eligible Lots Under Development, plus
(j) the lesser of $4,500,000 or 50% of Eligible Fall Foundation Lots.
The Administrative Agent shall deduct from any borrowing availability
under the Borrowing Base 100% of the amounts of outstanding Excess Permitted
Nonrecourse Borrowings (the "Excess Permitted Nonrecourse Borrowings Reserve").
1.7. Available Cash.
"Available Cash" means all of the cash or cash equivalents of the Company
or any Restricted Subsidiary held (a) for its own account at Huntington, or (b)
by title companies or other escrow agents, consisting solely of the net closing
proceeds from residential real estate closings, which cash or cash equivalents
are not subject to a lien or offset in favor of such entity.
1.8. Developed Lots and Fall Foundation Lots.
"Developed Lots" means all lots of the Company and its Restricted
Subsidiaries located in the State of Ohio or any contiguous state on which all
development activity has been completed, including without limitation, all site
development for streets and sewers, and for which application has been made for
final acceptance by the applicable controlling municipality, but excluding any
Fall Foundation Lots, valued at the lesser of cost or market, provided however,
that no Developed Lot which the Company or a Restricted Subsidiary owns for more
than twenty-four (24) months from the time the same became a Developed Lot shall
be an Eligible Developed Lot.
"Fall Foundation Lots" means, during the time period from October 1st of
each calendar year continuing through and including March 31st of the
immediately succeeding calendar year, those Developed Lots on which the Company
has commenced the excavation of a foundation for a single family residential
dwelling through the completion of such foundation, valued at the lesser of cost
or market, provided, however, that no Fall Foundation Lot in excess of 200 Fall
Foundation Lots outstanding at any time shall be an Eligible Fall Foundation
Lot.
1.9. [Intentionally Omitted.]
1.10. [Intentionally Omitted.]
1.11. Eligible Lumber Inventory.
The term "Eligible Lumber Inventory" means that portion of the Company's
or any Restricted Subsidiary's inventory consisting of finished lumber or other
building materials, raw materials and finished goods, which shall be free and
clear of all liens and encumbrances, valued at the lesser of cost or market
(calculated on a FIFO basis and in accordance with GAAP).
1.12. Eligible Real Estate.
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With respect to Developed Lots, Fall Foundation Lots, Lots under
Development, Model Homes, Real Estate Held for Development, Home
Work-In-Process, Speculative Homes, or any other form or type of real estate of
the Company or any Restricted Subsidiary which may be considered for the
purposes of the Borrowing Base, the term "Eligible" used in connection with any
such type of real estate shall mean that portion of real property (a) owned in
fee simple title by the Company or a Restricted Subsidiary, and (b) which is not
subject to any mortgage, lien, or encumbrance, except for Unleveraged Seller
Financing, and except for reservations, exceptions, encroachments, easements,
rights-of-way, restrictions, leases or other similar title exceptions which do
not materially detract from the value of such real estate or interfere with its
use or resale.
1.13. Investments in Joint Ventures.
"Investments in Joint Ventures" shall mean the net equity investment of
the Company or any Restricted Subsidiary in all real estate limited liability
companies, partnerships or joint ventures (including without limitation Approved
Joint Ventures) entered into solely for the purpose of acquiring real property,
developing residential lots or other developments and distributing the same to
the owners of such entities, valued at the equity method. The term "Eligible"
used in connection with Investments in Joint Ventures means any of the foregoing
joint ventures or other entities between the Company or a Restricted Subsidiary
on one hand, and M/I Schottenstein Homes, Inc., Homewood Corporation, Rockford
Homes, Inc., Xxxxxx Investment Company or other joint venture partner or member
whose profitability and balance sheet demonstrate creditworthiness, as
determined by the Administrative Agent.
1.14. Lots Under Development.
"Lots Under Development" shall mean all lots of the Company or any
Restricted Subsidiary that such entity intends to use for residential
development during the time period between the commencement of development of
such lots (by the issuance of a Letter of Credit to support development
activities) and the completion of such lot as a Developed Lot, valued at the
lesser of cost or market.
1.15. Model Homes.
"Model Homes" shall mean residential dwellings of the Company or its
Restricted Subsidiaries that have been or are being constructed for the purpose
of marketing similar dwellings and for which there is no present intention to
sell, valued at the lesser of cost or market.
1.16. Real Estate Held for Development.
"Real Estate Held for Development" shall mean that portion of the real
estate of the Company or its Restricted Subsidiaries consisting of all
undeveloped real estate, prior to the commencement of construction for which
such entity intends to develop into residential lots, valued at the lesser of
cost or market and if such property is subject to Unleveraged Seller Financing,
net of the amount of such Unleveraged Seller Financing.
1.17. Home Work-in-Process.
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"Home Work-in-Process" shall mean that portion of the real estate of the
Company or any Restricted Subsidiary consisting of (a) work-in-process prior to
completion and (b) completed units for which such entity has an effective and
existing, executed arm's-length, bona fide purchase contract (an "Arm's-Length
Contract"), valued at the lesser of cost or market.
1.18. Speculative Homes.
"Speculative Homes" shall mean residential dwellings or lots other than
Fall Foundation Lots on which the Company or a Restricted Subsidiary has
commenced construction for such dwellings, which such entity presently intends
to sell, but for which such entity does not have an Arm's-Length Contract,
valued at the lesser of cost or market.
1.19. Mutual Exclusivity.
Each of the terms defined in Sections 2.1 through 2.13 (excluding Section
2.7) shall be mutually exclusive, and none of the real or personal property of
the Company or any Restricted Subsidiary shall be considered to be in more than
one of the foregoing categories at the same time.
INTEREST RATES, FEES, ADDITIONAL COSTS AND PAYMENTS
1.20. Interest Rates.
(a) All advances under the Revolving Loans shall bear interest upon the
unpaid principal amount thereof from the date such advances are made until paid
in full as follows: at the election of the Company at (i) the Applicable Prime
Rate Margin plus the Prime Commercial Rate from time to time in effect, with
each change in the Prime Commercial Rate automatically and immediately changing
the interest rate on such Revolving Loans without notice to the Company, or (ii)
the Applicable Eurodollar Margin plus the Eurodollar Rate, or (iii) the
Applicable Eligible Acquisition Assets Rate automatically and without the
election of the Company to the extent that the Revolving Credit Obligations
exceed the Borrowing Base calculated without respect to any Eligible Acquisition
Assets.
(b) All advances under the Swing Line Loans shall bear interest upon the
unpaid principal amount thereof from the date such advances are made until paid
in full at the Applicable Prime Rate Margin plus the Prime Commercial Rate from
time to time in effect, with each change in the Prime Commercial Rate
automatically and immediately changing the interest rate on such Swing Line
Loans without notice to the Company. The Swing Line Loans shall be Prime Rate
Advances at all times.
1.21. Prepayment.
The Company shall have the right to prepay without penalty at any time and
from time to time before the Revolving Credit Termination Date any and all Prime
Rate Advances.
1.22. Eurodollar Rate.
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(a) Eurodollar Rate. Each Eurodollar Advance shall be in a minimum amount
of $5,000,000 and integral multiples of $1,000,000 in excess thereof, and no
more than ten (10) Eurodollar Advances shall be outstanding at any time under
the Revolving Loans.
The Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Percentage.
Each Eurodollar Advance shall be reserve adjusted, including all types of
reserve insurance and brokerage costs.
(b) Change in Margin. The Interest Coverage Ratio used to compute the
Applicable Eurodollar Margin initially shall be the Interest Coverage Ratio set
forth in the compliance certificate most recently delivered by the Company to
the Administrative Agent prior to the date hereof, and changes in the Applicable
Eurodollar Margin resulting from a change in the Interest Coverage Ratio shall
become effective as to all Eurodollar Advances upon the first day of the
calendar quarter following delivery by the Company to the Administrative Agent
of a new compliance certificate pursuant to Section 9(a) and notice by the
Company to the Administrative Agent that a rate change is required. If the
Company shall fail to deliver a certificate in respect of the Interest Coverage
Ratio within forty-five (45) days after the end of any fiscal quarter, the
Applicable Eurodollar Margin from and including the first day of the following
quarter to the date the Company delivers to the Administrative Agent such
certificate shall conclusively equal the highest Applicable Eurodollar Margin
set forth herein.
1.23. [Intentionally Omitted.]
1.24. Conversions of Advances.
An outstanding advance may only be converted on the last day of the then
current Interest Period (if applicable) with respect to such advance, and
provided, further, that upon the continuation or conversion of an advance such
notice shall also specify the Interest Period (if applicable) to be applicable
thereto upon such continuation or conversion. If the Company shall fail to
timely deliver such a notice with respect to any outstanding advance, the
Company shall be deemed to have elected to convert such advance to a Prime Rate
Advance on the last day of the then current Interest Period with respect to such
advance.
1.25. Additional Costs.
In the event that any applicable law, treaty, rule or regulation (whether
domestic or foreign) now or hereafter in effect, or any interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by the Administrative
Agent or any of the Lenders with any request or directive of any such authority
(whether or not having the force of law), shall (a) affect the basis of taxation
of payments to the Administrative Agent or any of the Lenders of any amounts
payable by the Company for Revolving Credit Obligations or any advance under
this Agreement (other than taxes imposed on the overall net income of the
Administrative Agent or any of the Lenders by the jurisdiction, or by any
political subdivision or taxing authority of any such jurisdiction, in which the
Administrative Agent or any of the Lenders has its principal office), or (b)
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against
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assets of, deposits with or for the account of, or credit extended by the
Administrative Agent or any of the Lenders, and the result of any of the
foregoing is to increase the cost to the Administrative Agent or any of the
Lenders of making or maintaining the Revolving Credit Obligations or any advance
hereunder, to reduce the amount of any sum receivable by the Administrative
Agent or any of the Lenders thereon, or to reduce the rate of return on the
Administrative Agent's or any Lender's capital, then the Company shall pay to
the Administrative Agent or such Lender, as the case may be, from time to time,
upon request of the Administrative Agent, additional amounts sufficient to
compensate the Administrative Agent or such Lender, as the case may be, for such
increased cost, reduced sum receivable or reduced rate of return to the extent
the Administrative Agent or any Lender, as the case may be, is not compensated
therefor in the computation of the interest rates applicable to the Revolving
Loans. A detailed statement as to the amount of such increased cost, reduced sum
receivable or reduced rate of return, prepared in good faith and submitted by
the Administrative Agent or any Lender, as the case may be, to the Company,
shall be conclusive and binding for all purposes relative hereto, absent
manifest error in computation.
1.26. Limitation on Requests and Elections.
Notwithstanding any other provision of this Agreement to the contrary, if,
upon receiving a request for an advance or a request for a continuation of an
advance as an advance of the then existing type or conversion of an advance to
an advance of another type, the Required Lenders advise the Administrative Agent
(a) that, in the case of any Eurodollar Advance, deposits in dollars for periods
comparable to the Interest Period elected are not generally available in the
London interbank or secondary market, or (b) that the Eurodollar Rate, as
determined by the Administrative Agent, will not accurately cover the cost to
such Lenders of making or maintaining the related Eurodollar Advance or (c) that
by reason of national or international financial, political or economic
conditions or by reason of any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect, or the interpretation
or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by such Lenders with any
request or directive of such authority (whether or not having the force of law),
including without limitation exchange controls, it is impracticable, unlawful or
impossible for such Lenders (i) to make the relevant Eurodollar Advance or (ii)
to continue such advance as a Eurodollar Advance or (iii) to convert an advance
to a Eurodollar Advance, then the Company shall not be entitled, so long as such
circumstances continue, to request a Eurodollar Advance or a conversion to such
advance from the Lenders. In the event that such circumstances no longer exist,
the Lenders shall again consider requests for Eurodollar Advances of the
affected type and requests for continuations of and conversions to such advances
of the affected type.
1.27. Illegality and Impossibility.
In the event that any applicable law, treaty, rule or regulation (whether
domestic or foreign) now or hereafter in effect, or any interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by the Administrative
Agent or any Lender with any request or directive of such authority (whether or
not having the force of law), including without limitation exchange controls,
shall make it unlawful or impossible for the Administrative Agent or any Lender
to maintain any advance under this Agreement, the Company shall upon receipt of
notice thereof from the
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Administrative Agent, repay in full the then outstanding principal amount of all
such advances made by the Administrative Agent together with all accrued
interest thereon to the date of payment and all amounts due to the
Administrative Agent under Section 3.1(b) or 1.2(h) on the last day of the then
current Interest Period, if any, applicable to such advance, if the
Administrative Agent or any Lender may lawfully continue to maintain such
advance to such day, or immediately if the Administrative Agent or any Lender
may not continue to maintain such advance to such day, in which case, the
Administrative Agent will permit such prepayment without payment of any
additional compensation or breakage costs. This Section 3.8 shall apply only as
long as such illegality exists. As an alternative to the repayment obligation
provided in this Section 3.8, the Company may, at its option, and at the time
provided in this Section 3.8, convert any affected advance to a Prime Rate
Advance.
1.28. Compensation.
Subject to Section 3.8 above, in addition to all amounts required to be
paid by the Company pursuant to this Section 3, the Company shall compensate the
Administrative Agent and the Lenders, and each of them, upon demand, for all
losses, expenses and liabilities (including, without limitation, any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by the Administrative Agent or any Lender to fund or
maintain the Eurodollar Advances) which the Administrative Agent or any Lender
may sustain (a) if for any reason an advance, conversion into or continuation of
such an advance does not occur on the date specified therefor in the Notice of
Borrowing or in a telephonic request by the Company for borrowing or conversion
or continuation or a successive Interest Period does not commence after notice
therefor is given to the Administrative Agent, (b) if for any reason any
Eurodollar Advance is prepaid on a date which is not the last day of the
applicable Interest Period, (c) as a consequence of a required conversion of a
Eurodollar Advance to a Prime Rate Advance as a result of any of the events
indicated in Section 3.6 or 3.7, or (d) as a consequence of any failure by the
Company to repay a Eurodollar Advance when required by the terms hereof. The
Company shall reimburse the Administrative Agent and each Lender, or any of
them, as the case may be, on demand for any resulting loss or expense incurred
by such entity, determined in such entity's reasonable opinion, including
without limitation any loss incurred in obtaining, liquidating or employing
deposits or other sources of funding from third parties or funding sources. A
detailed statement as to the amount of such loss or expense, prepared in good
faith and submitted by such entity to the Company shall be conclusive and
binding for all purposes absent manifest error in computation.
1.29. Survival of Obligations.
The provisions of Sections 3.6 and 3.9 shall survive the termination of
this Agreement and the payment in full of all Notes outstanding pursuant hereto.
1.30. Interest Rate Protection.
In the event that on any Business Day any Eurodollar Rate with respect to
any Interest Period available to the Company under this Agreement equals or
exceeds 8.50% per annum, the Company, within fifteen (15) Business Days of such
event, shall enter into or have entered into interest rate contracts with any
financial institution with an aggregate notional amount of not less than 50% of
the Revolving Credit Obligations outstanding on such Business Day for a term
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extending to the Revolving Credit Termination Date on terms reasonably
satisfactory to the Administrative Agent.
1.31. Default Interest Rate.
Upon the occurrence of any Event of Default, at the option of the
Administrative Agent or upon the direction of the Required Lenders, interest
shall thereafter accrue on the principal amount of the Revolving Loans, Swing
Line Loans and upon any unpaid Reimbursement Obligations at a rate equal to the
then effective interest rate(s), plus two percentage points per annum.
1.32. Fees.
Until and unless the Company pays the Revolving Credit Obligations in
full, and has no right to seek further extensions of credit pursuant thereto,
the Company agrees to pay to the Administrative Agent the fees set forth in this
Section 3.13.
(a) On or prior to the effective date of this Agreement, the Company
agrees to pay to the Administrative Agent for the benefit of each of the Lenders
under the Prior Credit Agreement, all fees which have accrued under the Prior
Credit Agreement but which are not yet due and payable under the terms thereof,
which fees shall be shared by each of the Lenders pursuant to the Prior Credit
Agreement.
(b) The Company agrees to pay to the Administrative Agent for the account
of the Lenders fees in respect of the Letters of Credit equal to the Applicable
Eurodollar Margin per annum of the stated amount of each Letter of Credit.
Huntington, as issuing bank, shall retain a fee equal to one-eighth percent of
one percent (1/8%) per annum, and the remainder of such fee shall be shared by
the Lenders pursuant to each Lender's Pro Rata Share. Each such fee shall be
payable quarterly in arrears, beginning on the first day of the calendar quarter
after issuance of each Letter of Credit. In addition, the Company agrees to pay
to Huntington, as issuing bank, its normal and customary issuing, servicing and
amendment fees for each Letter of Credit.
(c) The Company agrees to pay the Administrative Agent for the account of
the Lenders in accordance with their respective Pro Rata Shares, an unused fee
accruing from the initial disbursement of Revolving Loans hereunder through and
including the Revolving Credit Termination Date at the Applicable Unused
Commitment Fee Rate in effect from time to time on the daily amount by which the
Revolving Credit Commitments exceeds the Revolving Credit Obligations for such
period. Such fees shall be payable quarterly in arrears, beginning on the last
day of March, 2002, and continuing on the last day of each June, September,
December and March thereafter.
(d) Change in Unused Commitment Fee Rate. The Interest Coverage Ratio used
to compute the Applicable Unused Commitment Fee Rate initially shall be the
Interest Coverage Ratio set forth in the compliance certificate most recently
delivered by the Company to the Administrative Agent prior to the date hereof,
and changes in the Applicable Unused Commitment Fee Rate resulting from a change
in the Interest Coverage Ratio shall become effective upon the first day of the
calendar quarter following delivery by the Company to the Administrative Agent
of a new compliance certificate pursuant to Section 9(a) and notice by the
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Company to the Administrative Agent that a rate change is required. If the
Company shall fail to deliver a certificate in respect of the Interest Coverage
Ratio within forty-five (45) days after the end of any fiscal quarter, the
Applicable Unused Commitment Fee Rate from and including the first day of the
following fiscal quarter to the date the Company delivers to the Administrative
Agent such certificate shall conclusively equal the highest Applicable Unused
Commitment Fee Rate set forth herein.
(e) The Company shall pay to the Administrative Agent such other fees as
the Company is obligated to pay pursuant to the Letter Agreement.
(f) On the date of the initial funding of the Revolving Loans, The Company
agrees to pay the Administrative Agent for the account of the Lenders in
accordance with their respective Pro Rata Shares a one-time arrangement fee of
30 basis points (.30%) of the maximum amount of the Revolving Credit
Commitments.
1.33. Capital Adequacy and Removal of Affected Lender.
In the event that any Lender shall have determined that the adoption of
any articles of incorporation, bylaws, code of regulations or any other
organizational or governing document, or any law, treaty, rule or regulation, or
determination of any Governmental Authority, regarding capital adequacy, or any
change therein or in the interpretation or application thereof or compliance by
any Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any central bank or Governmental Authority,
does or shall have the effect of reducing the rate of return on such Lender's
capital as a consequence of its obligations hereunder to a level below that
which such Lender could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's policies with respect to
such capital adequacy) by an amount deemed by such Lender to be material, then
from time to time, upon submission by such Lender to the Company (with a copy to
the Administrative Agent), of a written request therefore setting forth in
reasonable detail the assumptions used by such Lender in determining such amount
and the manner in which such amount was calculated, the Company shall pay to
such Lender such additional amount or amounts that will compensate such Lender
for such reduction in rate of return; provided, however, that if such event or
condition with respect to capital adequacy applies only to one Lender and/or the
Company receives notice only from one Lender, then the Company shall not be
required to pay any such additional amount that accrues during the initial 120
day period after notice to the Company of the occurrence of such event or
condition with respect to capital adequacy. If any Lender becomes entitled to
claim any additional amounts pursuant to this subsection, it shall promptly
notify the Company, through the Administrative Agent, of the entitling event. A
certificate as to any additional amounts payable pursuant to this subsection
submitted by any Lender to the Company, through the Administrative Agent, shall
be presumed correct with respect to the Company, absent manifest error.
In the event that (a) the Company receives certification of the type
described in the immediately preceding paragraph from any Lender and (b) such
increase in capital requirements is not generally applicable to the Lenders, the
Company, at its option and in its discretion, shall have the right to designate
an assignee which is not affiliated with the Company and which is acceptable to
the Administrative Agent and the Required Lenders, to purchase for cash,
pursuant to an Assignment and Acceptance in form satisfactory to the
Administrative Agent and the
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Company, the outstanding Revolving Credit Obligations of such Lender and to
assume all of such Lender's other rights and obligations (including, without
limitation, such Lender's obligation to participate in all outstanding Letters
of Credit) hereunder without recourse to or warranty by, or expense to, such
Lender, for a purchase price equal to the principal amount of all of such
Lender's outstanding Revolving Loans plus any accrued but unpaid interest
thereon and the accrued but unpaid fees in respect of such Lender's Revolving
Credit Commitment hereunder and any other amounts that may be owing to such
Lender hereunder.
1.34. Mandatory Reduction.
The Company shall make a mandatory reduction or repayment of the Revolving
Credit Obligations immediately if at any time (a) the sum of the Revolving
Credit Obligations exceeds (b) the Borrowing Base Availability, in an amount
equal to such difference.
EVIDENCE OF INDEBTEDNESS
(a) Evidence of the Revolving Loans. The Company hereby agrees to pay when
due the principal amount of each Revolving Loan and further agrees to pay when
due all unpaid interest accrued thereon, in accordance with the terms hereof and
with the Notes evidencing the Revolving Loans. The Company shall execute and
deliver to each Lender, as applicable, revolving credit promissory notes
substantially in the form of Exhibit A-1 and thereafter shall execute and
deliver such other promissory notes as are necessary to evidence the Revolving
Loans owing to the Lenders after giving any effect to any assignment or
substitution thereof pursuant to this Agreement, all in form and substance
acceptable to the Administrative Agent and the parties to such assignment (all
such promissory notes and all amendments thereto, replacements thereof, and
substitutions therefor being collectively referred to as the "Notes" and
separately as a "Note").
(b) Evidence of the Letters of Credit. Subject to the terms hereof, the
Company unconditionally agrees to pay Huntington the amount of all Reimbursement
Obligations, interest and other amounts payable to Huntington under and in
connection with any Letter of Credit when such amounts are due and payable,
irrespective of any claim, setoff, defense, or other right which the Company may
have at any time against Huntington or any other Person. The Company shall
execute and deliver to Huntington as issuing bank a Standby Letter of Credit
Reimbursement Agreement substantially in the form of Exhibit B. In the event any
payment by the Company received by Huntington with respect to a Letter of Credit
and distributed by the Administrative Agent to the Lenders on account of their
participation is thereafter set aside, voided or recovered from Huntington in
connection with any receivership, liquidation or bankruptcy proceeding, each
such Lender which received such distribution shall, upon demand by Huntington,
contribute such Lender's Pro Rata Share of the amount set aside, voided or
recovered, together with interest at the rate required to be paid by Huntington
upon the amount required to be repaid or returned by it.
(c) Evidence of Swing Line Loans. The Company hereby agrees to pay when
due the principal amount of each Swing Line Loan and further agrees to pay when
due all unpaid interest accrued thereon, in accordance with the terms hereof and
with the Notes evidencing the Swing Line Loans. The Company shall execute and
deliver to each Lender, as applicable, revolving credit promissory notes
substantially in the form of Exhibit A-2.
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COSTS AND EXPENSES
(d) The Company shall pay all reasonable costs and expenses of the
Administrative Agent and Huntington in connection with the preparation,
negotiation and execution of the Loan Documents and any proposal or commitment
letters or otherwise incidental to the Revolving Credit Commitments, any
amendment or modification of this Agreement or any Loan Documents, any
litigation, contest, dispute, proceeding or action in any way relating to this
Agreement or to any instrument, promissory note, agreement, or other document
executed in connection with this Agreement, whether any of the foregoing be
incurred prior to or after maturity, the occurrence of an Event of Default, or
the rendering of a judgment. Such costs shall include, but not be limited to,
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent and Huntington, recording fees, revenue stamps and note and mortgage
taxes.
(e) The Company further agrees to pay or reimburse the Administrative
Agent, Huntington and the Lenders upon demand for all out-of-pocket costs and
expenses, including, without limitation, reasonable attorneys' fees and
out-of-pocket expenses, incurred by any of the foregoing after the occurrence of
an Event of Default (i) in enforcing any Loan Document or exercising or
enforcing any other right or remedy available by reason of any Event of Default;
(ii) in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a "work-out" or any insolvency
or bankruptcy proceeding; and (iii) in commencing, defending or intervening in
any litigation or legal proceeding relating to the Revolving Credit Obligations,
the Company or any Subsidiary related to or arising out of the transactions
contemplated hereby except to the extent that such proceeding (A) involves the
gross negligence or willful conduct of a party hereto other than the Company or
a Restricted Subsidiary or (B) is between or among parties hereto and does not
include the Company or a Restricted Subsidiary.
CONDITIONS PRECEDENT
1.35. Effectiveness and Initial Advance.
This Agreement shall become effective, each Lender shall be obligated to
make the initial advance hereunder, and Huntington shall be required to issue
Letters of Credit only after the Administrative Agent shall have received from
the Company each of the following items in form and substance satisfactory to
the Administrative Agent:
(a) The Administrative Agent shall have received this Agreement, the Notes
and the Letter of Credit reimbursement agreement referenced above and all other
agreements, documents and instruments described in Schedule 6.1(a) attached
hereto and made a part hereof, each duly executed where appropriate in form and
substance satisfactory to the Administrative Agent, and without limiting the
foregoing, the Company hereby directs its counsel Vorys, Xxxxx, Xxxxxxx and
Xxxxx, LLP to prepare and deliver to the Administrative Agent and the Lenders
the opinion referred to in such Schedule.
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(b) The Administrative Agent shall have received a certificate signed by
the chief operating officer and chief financial officer of the Company, stating
to the best of his knowledge after due inquiry, on such effective date no Event
of Default has occurred and is continuing.
1.36. Conditions Precedent to Subsequent Advances.
The obligation of each Lender to make any disbursement or advance
subsequent to the initial disbursement or initial advance under the Revolving
Loans, or of Huntington as issuing bank to issue any Letters of Credit is
subject to all the conditions and requirements of this Agreement and delivery of
the following required documents, or other action, all of which are conditions
precedent:
(a) Warranties and Representations. On the date of each advance pursuant
to the Revolving Loans, the warranties and representations set forth in Section
7 hereof and each of the representations and warranties contained in any
certificate, document or financial or other statement furnished at any time
pursuant to this Agreement or any related document shall be true and correct on
and as of such date with the same effect as though such warranties and
representations had been made on and as of such date, except to the extent that
such warranties and representations expressly relate to an earlier date.
(b) Compliance. The Company and any Subsidiary shall have complied and
shall then be in compliance with all the terms, covenants and conditions of this
Agreement which are binding upon it, and no Event of Default or Potential
Default shall have occurred and be continuing on such date or after giving
effect to the advances requested to be made.
(c) Confirmation of Conditions Precedent. The Company and any Subsidiary
shall then be in compliance with and able to confirm all the foregoing
conditions precedent with the same effect as though such conditions precedent
were requirements to the making of any advance contemplated herein.
WARRANTIES AND REPRESENTATIONS
In order to induce the Administrative Agent and each of the Lenders to
enter into this Agreement and to make the Revolving Loans, the Letters of Credit
and the other financial accommodations to the Company, the Company represents
and warrants to the Administrative Agent and each of the Lenders that each of
the following statements is true and correct:
1.37. Organization and Authority.
The Company and each of the Subsidiaries (a) is a corporation, limited
liability company, partnership or joint venture duly organized, validly existing
and in good standing under the laws of the state of its formation; (b) has all
requisite power and authority and all necessary licenses and permits to own and
operate its properties and to carry on its business as now conducted and as
presently proposed to be conducted; and (c) is not doing business or conducting
any activity in any jurisdiction in which it has not duly qualified and become
authorized to do business, where the failure to do so has or is reasonably
likely to have a Material Adverse Effect.
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1.38. Borrowing is Legal and Authorized.
(a) The execution and delivery of each of the Loan Documents which have
been executed and to which the Company or any Subsidiary is a party has been
authorized by the Board of Directors or other manager of such entity and will
constitute valid and binding obligations enforceable in accordance with their
respective terms; (b) the execution of this Agreement and related Notes and Loan
Documents and the compliance with all the provisions of this Agreement (i) are
within the corporate or constituent powers of such entity; and (ii) are legal
and will not conflict with, result in any breach in any of the provisions of,
constitute a default under, or result in the creation of any lien or encumbrance
upon any property of the Company or any Subsidiary under the provisions of, any
agreement, charter instrument, bylaw, or other instrument to which the Company
or any Subsidiary is a party or by which it may be bound; and (c) there are no
limitations in any indenture, material contract or agreement, mortgage, deed of
trust or other agreement or instrument to which the Company or any Subsidiary is
now a party or by which the Company or any Subsidiary may be bound with respect
to the payment of principal or interest on any Indebtedness, or the Company's or
any Subsidiary's ability to incur Indebtedness, including the Notes to be
executed in connection with this Agreement.
1.39. Taxes.
All tax returns required to be filed by the Company and each Subsidiary in
any jurisdiction have in fact been filed, and all taxes, assessments, fees and
other governmental charges which are required to be paid pursuant to Section 8.1
or other provisions of this Agreement in respect of the Company, and each
Subsidiary, or upon any of properties of the same, which are due and payable
have been paid. The Company does not know of any proposed additional tax
assessment against it or any Subsidiary. The accruals for taxes on the books of
the Company and each Subsidiary for its current fiscal period are adequate.
1.40. Corporate Information.
Schedule 7.4 attached hereto accurately represents as of the date hereof
the following: (a) the classes of capital stock of the Company and each
Subsidiary and par value of each such class, all as authorized by the Company's
or such Subsidiary's Articles of Incorporation, (b) the number of shares of each
such class of stock issued and outstanding, and (c) the Company's and each
Subsidiary's employer tax identification number. All shares of all classes of
capital stock issued and outstanding are fully paid and nonassessable. Except
for options granted pursuant to the Company's Incentive Stock Plan, neither the
Company nor any Subsidiary has outstanding any other stock or other equity
security, or any other instrument convertible to an equity security of the
Company or such Subsidiary, or any commitment, understanding, agreement or
arrangement to issue, sell or have outstanding any of the foregoing.
1.41. Compliance with Law.
Neither the Company nor any Subsidiary (a) is in violation of any laws,
ordinances, governmental rules or regulations to which it is subject, including
without limitation any laws, rulings or regulations relating to ERISA or Section
4975 of the Internal Revenue Code or (b) has failed to obtain any licenses,
permits, franchises or other governmental or environmental authorizations
necessary to the ownership of its properties or to the conduct of its business,
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which violation or failure under clause (a) or clause (b) above has or is
reasonably likely to have a Material Adverse Effect.
1.42. Financial Statements; Full Disclosure.
The financial statements for the fiscal year ending December 31, 2000,
which have been supplied to the Administrative Agent and the Lenders on or prior
to the date hereof, have been prepared in accordance with GAAP and fairly
represent the Company's consolidated financial condition as of such date, and
the financial statements for the interim period ending October 31, 2001, which
have been supplied to the Administrative Agent and the Lenders prior to the date
hereof, fairly represent the Company's consolidated financial condition as of
such date. No material adverse change in the Company's consolidated financial
condition has occurred since such dates. The financial statements referred to in
this paragraph do not, nor does this Agreement or any written statement
furnished by the Company to the Administrative Agent and the Lenders in
connection with obtaining the Revolving Loans and the Letters of Credit, contain
any untrue statement of a material fact or omit a material fact necessary to
make the statements contained therein or herein not misleading. The Company has
disclosed to the Administrative Agent and the Lenders in writing all facts,
including, without limitation, all pending litigation, administrative
proceedings, and arbitration proceedings, which may or is likely to have a
Material Adverse Effect.
1.43. Litigation: Adverse Effects.
There is no action, suit, audit, proceeding, investigation or arbitration
(or series of related actions, suits, proceedings, investigations or
arbitrations) before or by any Governmental Authority or private arbitrator
pending or, to the knowledge of the Company, threatened against the Company or
any Subsidiary or any property of the Company or any Subsidiary (a) challenging
the validity or the enforceability of any of this Agreement, or any Loan
Document, agreement, or instrument executed in connection herewith, or (b) which
has had, shall have or is reasonably likely to have a Material Adverse Effect.
Neither the Company nor any Subsidiary is (i) in violation of any applicable
requirements of law which violation shall have or is likely to result in a
Material Adverse Effect, or (ii) subject to or in default with respect to any
final judgment, writ, injunction, restraining order or order of any nature,
decree, rule or regulation of any court or Governmental Authority, in each case
which shall have or is likely to have a Material Adverse Effect.
1.44. No Insolvency.
On the date of this Agreement and after giving effect to all Indebtedness
of the Company (including, without limitation, the Revolving Credit Obligations
and all Contingent Obligations) and on the date of each advance under the
Revolving Loans or the issuance of any Letter of Credit hereunder, each of the
Company and each Subsidiary (a) will be able to pay its obligations as they
become due and payable; (b) has assets, the present fair saleable value of which
exceeds the amount that will be required to pay its probable liability on its
obligations as the same become absolute and matured; (c) has sufficient
property, the sum of which at a fair valuation exceeds all of its Indebtedness;
and (d) will have sufficient capital to engage in its business.
1.45. Government Consent.
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Neither the nature of the Company or any Subsidiary or of any of their
businesses or properties, nor any relationship between the Company or any
Subsidiary and any other entity or person, nor any circumstance in connection
with the execution of this Agreement, is such as to require a consent, approval
or authorization of, or filing, registration or qualification with, any
Governmental Authority on the part of the Company or any Subsidiary as a
condition to the execution and delivery of this Agreement or the Loan Documents.
1.46. Title to Properties.
The Company and each of its Subsidiaries (a) has good title to all the
property in which it has a property interest, free from any liens and
encumbrances, except as set forth on Schedule 7.10 attached hereto or as
permitted by Section 8.4 of this Agreement, and (b) has not agreed or consented
to cause or permit in the future (upon the happening of a contingency or
otherwise) any of its property whether now owned or hereafter acquired to be
subject to a lien or encumbrance except as provided in this Section 7.10.
1.47. No Defaults.
No event has occurred and no condition exists which would constitute a
Potential Default or an Event of Default pursuant to this Agreement. Neither the
Company nor any Subsidiary is in violation of any term of any agreement, charter
instrument, bylaw or other instrument to which it is a party or by which it may
be bound, which violation has or is reasonably likely to have a Material Adverse
Effect.
1.48. Environmental Protection.
Except for matters, conditions, operations and noncompliance which would
not have or be reasonably likely to have a Material Adverse Effect, neither the
Company nor any Subsidiary has actual knowledge of (a) the permanent placement,
burial or disposal of any Hazardous Substances (as hereinafter defined) on any
real property owned, leased, or used by the Company or any Subsidiary (the
"Premises"), of any spills, releases, discharges, leaks, or disposal of
Hazardous Substances that have occurred or are presently occurring on, under, or
onto the Premises, or of any spills, releases, discharges, leaks or disposal of
Hazardous Substances that have occurred or are occurring off the Premises as a
result of the improvement, operation, or use of the Premises which would result
in non-compliance with any of the Environmental Laws (as hereinafter defined);
(b) a violation of any applicable Environmental Laws; (c) any pending or
threatened environmental civil, criminal or administrative proceedings against
the Company or any Subsidiary relating to Hazardous Substances; (d) any facts or
circumstances that would give rise to any future civil, criminal or
administrative proceeding against the Company or any Subsidiary relating to
Hazardous Substances; or (e) any of its employees, agents, contractors,
subcontractors, or any other person occupying or present on the Premises
generating, manufacturing, storing, disposing or releasing on, about or under
the Premises any Hazardous Substances which would result in the Premises not
complying with the Environmental Laws.
1.49. Margin Loans.
None of the transactions contemplated in the Agreement will violate or
result in a violation of Section 7 of the Securities Exchange Act of 1934, as
amended, or any regulation
- 22 -
issued pursuant thereto, including, without limitation, Regulation U of the
Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. Neither
the Company nor any Subsidiary owns or intends to carry or purchase any "margin
security" within the meaning of said Regulation U. None of the proceeds of the
Revolving Loans or the Letters of Credit have been or will be used to purchase
or refinance any borrowing, the proceeds of which were used to purchase any
"security" within the meaning of the Securities Exchange Act of 1934, as
amended.
1.50. Real Estate Ownership.
With respect to each tract of unimproved or improved real property which
the Company or any Subsidiary now owns or acquires after the date hereof
(hereinafter "Real Property Parcel"), except where a failure, violation,
condition, requirement or noncompliance with any of the items specified below
does not or is not reasonably likely to have a Material Adverse Effect:
(a) Neither the Company nor any Subsidiary has received notice of any
pending or threatened condemnation proceeding or notice of any special
assessment for improvements to and/or for the benefit of any Real Property
Parcel;
(b) Neither the Company nor any Subsidiary has knowledge of any boundary
line dispute, encroachment, access limitation or other survey defect affecting
any Real Property Parcel. Each Real Property Parcel has legal access to a public
street by unrestricted frontage or over a title-insured easement and complies
with applicable subdivision regulations, except for minor survey defects which
do not materially interfere with the Company's or any Subsidiary's intended use
and except for subdivision of acreage into residential lots after acquisition in
the ordinary course of the Company's or any Subsidiary's business. The Company
has a survey of each Real Property Parcel obtained prior to the acquisition
thereof;
(c) The surveys obtained for each Real Property Parcel certify those
portions, if any, of the Real Property Parcel which are located within a flood
hazard area;
(d) The Company or such Subsidiary has a "Phase One" environmental study
prepared by an environmental engineering company obtained prior to acquisition
of each Real Property Parcel;
(e) Neither the Company nor any Subsidiary has filled any Real Property
Parcel which contains "wetlands," or did contain "wetlands," unless such fill
was approved by state and federal authorities having jurisdiction, as "wetlands"
are defined or described in applicable state and federal laws and regulations.
Neither the Company nor any Subsidiary has acquired any Real Property Parcel
without obtaining a wetlands determination study by a qualified expert;
(f) Except to the extent permitted by Section 8.18 below, each Real
Property Parcel is finally and unappealably zoned for the Company's or such
Subsidiary's intended use prior to purchase, except for Real Property Parcels
which will be rezoned by the Company or such Subsidiary for development as
residential lots in the ordinary course of its business in which case the
Company or such Subsidiary will use its best efforts to obtain the appropriate
rezoning as soon as practicable after acquisition;
- 23 -
(g) The Company and each of the Subsidiaries has obtained appropriate
assurances of availability in adequate capacities of all necessary utilities, at
a property line or by extension through publicly dedicated rights-of-way or
recorded easements, prior to acquisition of such Real Property Parcel;
(h) The Company or a Subsidiary has good and marketable fee simple title
to each Real Property Parcel, free and clear of all liens and encumbrances
except: (i) the lien of real estate taxes and assessments not yet due; (ii)
easements, covenants, conditions and restrictions of record which do not
materially interfere with present lawful use or the Company's or a Subsidiary's
intended use; (iii) the effect of zoning and building laws; (iv) the effect of
legal highways; and (v) liens or encumbrances disclosed as set forth on Schedule
7.10 to this Agreement or permitted in connection with borrowings or lease
obligations permitted pursuant to Sections 8.4 or 8.5 or 8.7 hereof. Neither the
Company nor any Subsidiary has knowledge of any off-record or undisclosed legal
or equitable interest claimed by any person in any Real Property Parcel or any
pending or threatened litigation or administrative proceeding against or
affecting any Real Property Parcel or any claim of right to file a mechanic's or
materialman's lien against any Real Property Parcel. The Company or a Subsidiary
has obtained owner's title insurance in the amount of the purchase price showing
good and marketable fee simple title to each Real Property Parcel, free and
clear of all liens and encumbrances except as permitted by this Section 7.14;
and
(i) Upon receipt of written request by the Administrative Agent, the
Company will promptly furnish to the Administrative Agent copies of existing
documentation or certificates in the Company's or a Subsidiary's possession
affecting any Real Property Parcel, as the Administrative Agent may reasonably
request.
COMPANY BUSINESS COVENANTS
Effective on and after the date of this Agreement, so long as any of the
indebtedness or credit provided for herein remains unpaid or outstanding, the
Company covenants and agrees in favor of the Administrative Agent and each
Lender as follows:
1.51. Payment of Taxes and Claims.
The Company and each of the Subsidiaries will pay before they become
delinquent (a) all taxes, assessments and governmental charges or levies imposed
upon it or its property; and (b) all claims or demands of materialmen and
mechanics in excess of $100,000 in the aggregate, carriers, warehousemen,
landlords, bailees and other like persons which, if unpaid, might result in the
creation of a lien or encumbrance upon its property, provided, however, that
items of the foregoing description need not be paid (i) while being contested in
good faith and by appropriate proceedings or (ii) if uncontested, such entity is
able to obtain title insurance insuring against such items, and provided further
that adequate book reserves have been established with respect thereto and
provided further that the such entity's title to, and its right to use, its
property are not materially adversely affected thereby. In the case of any item
of the foregoing description involving in excess of the amount which the
Company's independent public accountants shall fix as the threshold of
materiality for purposes of their audit of the then current year, the
appropriateness of the proceedings shall be supported by an opinion of the
independent counsel
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responsible for such proceedings and the adequacy of such reserves shall be
supported by the opinion of the independent accountants.
1.52. Maintenance of Properties and Corporate Existence.
The Company and the Subsidiaries shall each:
(a) Property -- maintain its property in good condition, ordinary wear and
tear excepted, and make all renewals, replacements, additions, betterments and
improvements thereto which are deemed necessary by the Company or such
Subsidiary;
(b) Insurance - maintain, with financially sound and reputable insurers,
insurance with respect to its properties and business against such casualties
and contingencies, of such types (including but not limited to fire and
casualty, public liability, products liability, larceny, embezzlement or other
criminal misappropriation insurance) and in such amounts as is customary in the
case of corporations of established reputations engaged in the same or a similar
business and similarly situated;
(c) Financial Records -- keep true books of records and accounts in which
full and correct entries will be made of all its business transactions, and
reflect in its financial statements adequate accruals and appropriations to
reserves, all in accordance with GAAP;
(d) Existence and Rights -- except as otherwise permitted by this
Agreement, do or cause to be done all things necessary (i) to preserve and keep
in full force and effect its existence, rights and franchises, and (ii) to
maintain its status as a corporation, limited liability company, partnership or
other entity duly organized and existing and in good standing under the laws of
the state of its formation; and
(e) Compliance with Law -- not be in violation of any laws, ordinances, or
governmental rules and regulations to which it is subject and will not fail to
obtain any licenses, permits, franchises or other governmental authorizations
necessary to the ownership of its properties or to the conduct of its business,
which violation or failure to obtain has or is reasonably likely to have a
Material Adverse Effect.
1.53. Sale of Assets.
Neither the Company nor any Subsidiary shall sell, lease, transfer, assign
or otherwise dispose of, any of its assets or property, whether now owned or
hereafter acquired, or any income or profits therefrom, or enter into any
agreement to do so, except (a) sales, transfers or other distributions of
personal or real property in the ordinary course of business, including without
limitation, the sale of Model Homes, Real Estate Held for Development, Developed
Lots, and Lots Under Development for consideration not less than fair market
value (but in no event less than the amount advanced to the Company under the
Borrowing Base); (b) the disposition of obsolete equipment in the ordinary
course of business; and (c) dispositions by the Company which constitute
Investments in Restricted Subsidiaries permitted by Section 8.11 hereof;
provided however that any such disposition or Investment does not cause the
Company and its Subsidiaries to exceed the Maximum New Market Investment Amount;
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1.54. Liens and Encumbrances (Negative Pledge).
Neither the Company nor any of the Subsidiaries will cause or permit or
agree or consent to cause or permit in the future (upon the happening of a
contingency or otherwise), any of its property, whether now owned or hereafter
acquired, to be subject to a lien or encumbrance except for:
(a) liens securing taxes, assessments or governmental charges or levies or
the claims or demands of materialmen, mechanics, carriers, warehouses, landlords
and other like persons in connection with such items permitted by Section 8.1
above;
(b) liens incurred or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance, social security
and other like laws;
(c) attachment, judgment and other similar liens arising in connection
with court proceedings in an aggregate amount less than $1,000,000;
(d) attachment, judgment or other similar liens arising in connection with
court proceedings for the payment of money aggregating in excess of $1,000,000,
but less than $10,000,000, provided that (i) fewer than 21 days have elapsed
from the date of the filing of such lien or liens, or (ii) such lien or liens
have been discharged in the full amount or the execution or other enforcement of
such lien or liens are effectively stayed or bonded in full, and the claims
secured thereby are being actively contested in good faith and by appropriate
proceedings;
(e) reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other similar title exceptions
or encumbrances affecting real property, provided they do not materially
interfere with its use in the ordinary conduct of the Company's or its
Subsidiary's business;
(f) inchoate liens arising under ERISA to secure the contingent liability
of the Company or any of the Subsidiaries; and
(g) the liens and encumbrances disclosed on Schedule 7.10 to this
Agreement or made pursuant to the Indebtedness and operating lease rentals
permitted by Sections 8.5(b) or (c) and 8.7 below.
In addition, neither the Company nor any of the Subsidiaries will
contractually agree with any other creditor to provide such creditor a negative
pledge, or other covenant similar to this Section 8.4.
1.55. Indebtedness.
Neither the Company nor any of the Subsidiaries shall directly or
indirectly create, incur, assume or otherwise become or remain directly or
indirectly liable with respect to any Indebtedness (other than Contingent
Obligations permitted by Section 8.6 below), except for (a) the Revolving Credit
Obligations; (b) up to the aggregate sum of $10,000,000 outstanding at any time
in (i) secured nonrecourse Indebtedness, and (ii) capital lease or purchase
money Indebtedness incurred to finance the acquisition of capital assets,
provided that such Indebtedness (A) has a scheduled maturity and is not due on
demand, (B) is secured only by the
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property being purchased and does not exceed the purchase price thereof, and (C)
does not exceed the aggregate sum of $3,000,000 outstanding at any time, in
connection with the Company's or any Restricted Subsidiaries' business; (c)
additional nonrecourse Indebtedness to sellers of real estate not to exceed the
purchase price of such real estate incurred in connection with the purchase of
such real estate in an aggregate sum up to $5,000,000 outstanding at any time
(which Indebtedness shall be termed the "Excess Permitted Nonrecourse
Borrowings" if and to the extent that the Company's and its Subsidiaries'
Indebtedness pursuant to clauses (b) and (c) of this paragraph exceeds the
aggregate sum of $10,000,000 outstanding at any time); (d) unsecured
indebtedness subordinated to the Revolving Credit Commitments, which shall be
subordinated in a manner satisfactory to the Administrative Agent; (e)
Indebtedness evidenced by interest rate agreements in respect of interest rate,
swap, collar, cap or similar agreements pursuant to which the Company xxxxxx its
actual interest rate exposure pursuant to the terms of this Agreement; and (f)
intercompany Indebtedness incurred by any Restricted Subsidiary to (i) the
Company or to (ii) any Restricted Subsidiary wholly owning such Restricted
Subsidiary; provided, however, that such Indebtedness constitutes an Investment
permitted by Section 8.11 of this Agreement and does not cause the Company and
its Subsidiaries to exceed the Maximum New Market Investment Amount.
1.56. Contingent Liabilities.
Neither the Company nor any of the Subsidiaries directly or indirectly
will create or become liable with respect to any Contingent Obligations, except
(a) by indorsement of negotiable instruments for deposit or collection in the
ordinary course of business; (b) the guaranty of Letters of Credit issued in
connection with Approved Joint Ventures, (c) up to the maximum aggregate stated
amount of $10,000,000 in guaranteed obligations outstanding at any time in
connection with (i) Non-Facility Contingent Obligations, (ii) Indebtedness
incurred by Approved Joint Ventures to sellers of real property and (iii)
Indebtedness incurred by a Qualified Joint Venture; (d) the guaranty of any
Indebtedness of the Company or any Subsidiary that is permitted to be incurred
under Section 8.5 above; (e) the Company's contingent liability as a partner or
joint venture partner in connection with joint ventures or partnerships; (f) the
guaranty of any other Indebtedness not to exceed the sum of $100,000 in the
aggregate outstanding at any time; (g) obligations, warranties and indemnities
not relating to Indebtedness, which have been or are undertaken or made in the
ordinary course of business; and (h) Contingent Obligations with respect to
surety, appeal and performance bonds obtained by the Company or any Restricted
Subsidiary. "Qualified Joint Venture" means any corporation, partnership,
limited liability company or joint venture which meets all of the following
criteria (i) the Company or a Restricted Subsidiary owns and controls not less
than 50% of the ownership and voting power of such entity, (ii) the interest of
the Company or such Restricted Subsidiary in such entity is an Investment in
Joint Venture, and (iii) the Administrative Agent has approved the guaranty of
such entity's Indebtedness.
1.57. Operating Lease Rentals.
Neither the Company nor any of the Subsidiaries will enter into: (a)
operating leases (excluding Model Home rentals) providing in the aggregate for
annual rentals which exceed $3,000,000, or (b) operating leases for Model Home
rentals providing in the aggregate for annual rentals which exceed $2,000,000.
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1.58. Acquisition of Capital Stock.
The Company shall not redeem or acquire any of its own capital stock or
any options or other interests in respect thereof having an aggregate value in
excess of $500,000 in any fiscal year; except (a) the purchase or redemption of
capital stock in connection with a simultaneous sale of an equivalent or greater
amount of capital stock for not less than the same aggregate purchase or
redemption price, or (b) up to the aggregate amount of $1,000,000 in any fiscal
year for the purchase of capital stock, options or other interests in respect
thereto using funds escrowed pursuant to the Company's Amended and Restated
Executive Deferred Compensation Plan or otherwise pursuant to any of the
Company's management incentive plans. None of the Subsidiaries shall redeem or
acquire any of its own capital stock.
1.59. Restrictions on Dividends.
The Company shall not declare or pay any cash dividends for any fiscal
year, which total in excess of 25% of the Company's Consolidated Net Income
after taxes for such fiscal year. None of the Subsidiaries shall declare or pay
any cash dividends or distributions for any fiscal year, except to or for the
benefit of the Company.
1.60. Management.
The Company shall not replace or change the position of its chief
executive officer or the chief operating officer unless such replacement or
change will not or is not reasonably likely to have or cause a Material Adverse
Effect.
1.61. Investments, Loans and Advances.
Neither the Company nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except: (a) cash or cash equivalents
(marketable direct obligations issued or unconditionally guaranteed and backed
by the full faith and credit of the United States government), bonds or other
obligations of the United States of America, certificates of deposit issued by
commercial banks with a minimum capital of $500,000,000, and commercial paper
rated at least A-1 or P-1 and having a maturity of not more than one year; (b)
Investments in Joint Ventures, provided that such Investment does not cause the
Company and its Subsidiaries to exceed the Maximum New Market Investment Amount;
(c) Investments in Permitted Acquisitions not to exceed the aggregate Purchase
Price of $25,000,000 after the date hereof, provided, however, that such
Acquisition does not cause the Company and its Subsidiaries to exceed the
Maximum New Market Investment Amount; (d) Investments in Restricted
Subsidiaries, provided, however, that such Investments does not cause the
Company and its Subsidiaries to exceed the Maximum New Market Investment Amount;
(e) investments consisting of deposit accounts maintained or managed by the
Company or its Subsidiaries; (f) loans or advances to employees of the Company
or any Subsidiary, which loans and advances shall not in the aggregate exceed
$200,000 outstanding at any time; (g) Investments up to the sum of $2,000,000
after the date hereof in one or more mortgage companies which (i) conduct
business in areas in which the Company or its Subsidiaries also conduct business
and (ii) are principally in the residential mortgage lending business; (h) loans
and advances evidenced by promissory notes from the purchasers of any of the
Company's real property (individually which shall not exceed the purchase price
paid for such property) in an amount not to exceed the
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aggregate sum of $2,000,000 outstanding at any time; (i) Investments in an
Insurance Sub not to exceed the aggregate sum of $2,000,000 outstanding at any
time; and (j) any other Investment (including Alliance Title Agency, Ltd.) not
to exceed the aggregate amount of $100,000 outstanding at any time.
1.62. ERISA.
The Company and each of the Subsidiaries shall with respect to any pension
plan or profit-sharing plan in effect now or in the future:
(a) at all times make prompt payment of contributions required to meet the
minimum funding standards set forth in Section 302 through 305 of ERISA with
respect to its plan,
(b) promptly, after the filing thereof, upon the request of the
Administrative Agent, furnish to the Administrative Agent copies of each annual
report required to be filed pursuant to Section 103 of ERISA in connection with
its plan for the plan year, including any certified financial statements or
actuarial statements required pursuant to said Section 103,
(c) notify the Administrative Agent immediately of any fact, including,
but not limited to, any "Reportable Event," as that term is defined in Section
4043 of ERISA, arising in connection with the plan which might constitute
grounds for termination thereof by the Pension Benefit Guaranty Corporation or
for the appointment by the appropriate United States District Court of a Trustee
to administer the plan, and
(d) notify the Administrative Agent of any "Prohibited Transaction" as
that term is defined in Section 406 of ERISA.
Neither the Company nor any of the Subsidiaries will:
(e) engage in any "Prohibited Transaction," or
(f) terminate any such plan in a manner which could result in the
imposition of a lien on the property of the Company or any Subsidiary pursuant
to Section 4068 of ERISA.
1.63. Tangible Net Worth.
At all times, the Company shall maintain a Consolidated Tangible Net Worth
of not less than the sum of (i) $73,000,000, plus (ii) beginning December 31,
2002, calculated separately for each fiscal year ending on and after such date,
75% of the Company's Consolidated Net Income after taxes in each fiscal year
which the Company's Consolidated Net Income after taxes is positive.
1.64. Leverage Ratio.
The Company at all times shall maintain a Leverage Ratio of not greater
than 2.50 to 1.00.
1.65. No Losses.
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The Company and its consolidated Subsidiaries shall not incur an Adjusted
Loss in any five consecutive fiscal quarters ending on the date of
determination.
1.66. Ratio of Uncommitted Land Holdings to Consolidated Tangible Net Worth.
The Company and its Subsidiaries shall maintain at all times a ratio of
Uncommitted Land Holdings to Consolidated Tangible Net Worth of not greater than
2.00 to 1.00.
1.67. Interest Coverage Ratio.
The Interest Coverage Ratio of the Company and its Subsidiaries on a
consolidated basis, as determined as of the last day of each fiscal quarter for
the twelve month period ending on such date, shall not be less than 2.25 to
1.00.
1.68. Land Held for Development (Unzoned).
Without the consent of the Administrative Agent and the Required Lenders,
the Company and its Subsidiaries shall not purchase or hold any Real Estate Held
for Development, whether now owned or acquired hereafter which is not zoned for
single-family residential use, or any series of purchases of adjacent, related
or contiguous parcels of such property, or such property in the same
geographical location, in excess of the aggregate sum of $2,500,000, valued at
the lesser of cost or market outstanding at any time.
1.69. Maintenance of Deposits.
The Company and each of the Subsidiaries shall maintain its primary
operating and deposit accounts at Huntington, except for those deposits managed
by the Company, but not owned by the Company.
1.70. Model Homes Inventory.
The Company and its Subsidiaries shall not permit at any time Model Homes,
whether now owned or hereafter acquired, to exceed the aggregate sum of
$6,500,000, outstanding at any time, valued at the lesser of cost or market.
1.71. Speculative Homes.
The Company and its Subsidiaries, shall not permit at any time their
inventory of Speculative Homes and other dwellings built for speculation,
whether now owned or hereafter acquired, to exceed $20,000,000 in the aggregate
outstanding at any time, valued at cost.
1.72. Further Real Estate Acquisition Limitations, New Market Investment Amount.
The Company and its Subsidiaries shall not permit the Maximum New Market
Investment Amount to exceed the sum of $25,000,000 outstanding at any time,
valued at cost; provided, however the Company's total Investment or purchase of
any Uncommitted Land Holdings, Speculative Homes, Model Homes and all other real
or personal property constituting one or more "start up operations" or other de
novo entries in any markets outside Central Ohio or
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the metropolitan Louisville, Kentucky area shall not exceed the aggregate sum of
$15,000,000 outstanding at any time, valued at cost. In addition, the Company
shall not build homes or develop real estate in any locations or markets other
than the State of Ohio or any contiguous state.
1.73. Conduct of Business, Subsidiaries.
Neither the Company nor any of its Subsidiaries shall engage in any
business other than the businesses engaged in by them on the date hereof and any
business or activities which are substantially similar, related or incidental
thereto including, without limitation, a mortgage company pursuant to Section
8.11 above. The Company shall not permit any of its Subsidiaries to create,
capitalize or acquire any Subsidiary after the date hereof except in connection
with a Permitted Acquisition or an Investment permitted pursuant to Section 8.11
above.
1.74. Permitted Acquisitions.
(a) Neither the Company nor any Subsidiary shall make any Acquisition
without the prior written consent of the Administrative Agent and the Required
Lenders, except in connection with a Permitted Acquisition, the Purchase Price
of which, together with the aggregate Purchase Price of all other Permitted
Acquisitions made after the date hereof does not exceed the sum of $25,000,000,
provided, however such Acquisition, does not cause the Company and its
Subsidiaries to exceed the Maximum New Market Investment Amount. In addition,
the Company and its Subsidiaries shall not make more than four Acquisitions,
without the consent of the Required Lenders; and
(b) on the funding date for any borrowing of Revolving Loans for the
purpose of consummating a Permitted Acquisition, the Administrative Agent shall
have received an officer's certificate from a Financial Officer certifying that
(i) the Acquisition meets the requirements of the definition of Permitted
Acquisition and sets forth detailed calculations of all financial covenants,
(ii) the liabilities assumed with respect to such Permitted Acquisition do not
or are not reasonably likely to have a Material Adverse Effect, (iii) the
Company shall deliver to the Administrative Agent copies of all material
documentation evidencing the Permitted Acquisition, and (iv) the Company shall
have delivered to the Administrative Agent copies of all material, business and
financial information (with appropriate supporting detail) relating to the
business purchased in the Permitted Acquisition as the Administrative Agent may
reasonably request.
1.75. Restriction on Fundamental Changes.
Neither the Company nor any of its Subsidiaries shall (a) enter into any
merger or consolidation, or (b) liquidate, wind up or dissolve (or suffer any
liquidation or dissolution), or convey, lease, sell, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or substantially
all of the Company's or any such Subsidiary's business or property, whether now
or hereafter acquired, except for a Permitted Acquisition involving the (i)
Company in which the Company is the surviving constituent or (ii) a Subsidiary
in which the Company owns directly or indirectly the Person acquired, and except
for the merger or liquidation of assets of a Subsidiary into the Company. The
Company shall cause each Subsidiary to be a direct or indirect wholly-owned
Subsidiary of the Company.
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1.76. Fall Foundation Lots.
The Company shall not, and shall not permit its Subsidiaries, at any time
to have their consolidated inventories of Fall Foundation Lots exceed 200 lots
or exceed $9,000,000 in the aggregate outstanding, valued at cost.
INFORMATION AS TO COMPANY AND SUBSIDIARIES
The Company shall deliver the following to the Administrative Agent and
each Lender:
(a) within 45 days after the end of each month, consolidated financial
statements, including a balance sheet, statements of operations of the Company
and the Subsidiaries, and statements of income and surplus, in the form of
Exhibit D attached hereto certified by the president, chief operating officer
and chief financial officer, or treasurer (a "Financial Officer") of the Company
as fairly representing the financial condition of the Company and the
Subsidiaries as of the end of such period;
(b) within 45 days after the end of each month, a statement signed by a
Financial Officer of the Company setting forth and certifying the calculation of
the Borrowing Base as of the end of that period;
(c) within 45 days after the end of each month, a statement signed by a
Financial Officer of the Company certifying that the Company is in compliance
with terms of this Agreement and calculating the financial covenants and ratios
of the Company set forth in Sections 8.13, 8.14, 8.16 and 8.17 above;
(d) within 45 days after the end of each month, and at such other times as
the Administrative Agent may request, a report for the Company and the
Subsidiaries, signed by a Financial Officer of the Company setting forth the
number and dollar total of accounts receivable in format satisfactory to the
Administrative Agent and consistent with past practices;
(e) within 45 days after the end of each month, a report signed by a
Financial Officer of the Company in form substantially similar to that being
currently provided to the Administrative Agent as of the date hereof setting
forth, inter alia, the following consolidated information with respect to the
Company and its Subsidiaries:
(i) work-in-process for each subdivision then under development
specifying the number of units and related costs;
(ii) backlog report, including beginning backlog, sales, closings,
and ending backlog;
(iii) the number of Model Homes for each subdivision then under
development specifying the number of units and related costs;
(iv) sales of units and closings of units for each subdivision then
under development by the Company and its Subsidiaries; and
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(v) Speculative Homes for each subdivision then under development by
the Company and its Subsidiaries specifying the number of units and related
costs;
(f) within 45 days after the end of each month, a Land Development Lot
Availability Report, specifying the completed lots and lots under development
for each subdivision then under development by the Company or any of the
Subsidiaries;
(g) within 45 days after the end of each quarter, (i) consolidating
financial statements, including a balance sheet, statements of the operations of
the Company and each of the Subsidiaries, and statement of income and surplus
certified by a Financial Officer of the Company as fairly representing the
financial condition of the Company and each of the Subsidiaries as of the end of
such period, and (ii) a report substantially similar to the report required by
Section 9(d) above for the Company and for each Subsidiary;
(h) immediately upon the filing, release or disclosure, as the case may
be, copies of all filings, documents, disclosures or other information filed
with the Securities and Exchange Commission or state or local securities
commissions or other regulatory agency and all press releases;
(i) within 90 days of the end of each fiscal year, audited consolidated
financial statements prepared in accordance with GAAP and certified by
independent public accountants satisfactory to the Administrative Agent,
containing a balance sheet and statement of income and surplus, statement of
cash flows and a reconciliation of capital accounts, along with any management
letters written by such accountants, together with consolidating schedules of
each Subsidiary;
(j) immediately upon becoming aware of the existence of any condition or
event which constitutes an Event of Default, a written notice specifying the
nature and period of existence thereof and what action the Company is taking or
proposes to take with respect thereto;
(k) at the request of the Administrative Agent, such other information the
Administrative Agent may from time to time reasonably require; and
(l) within 45 days after the end of each quarter, a real estate
acquisition report for the Company and its Subsidiaries detailing all real
estate acquired or obtained for such quarter and the total of such acquisitions
on a year to date basis through the end of such quarter; which includes (i) the
total amount of acreage or developed lots, both for such quarter and on a year
to date basis through the end of such quarter; (ii) the total dollar amount of
such acquisitions, both for such quarter and on a year to date basis through the
end of such quarter; (iii) the title and common name or subdivision name of such
real property, both for such quarter and on a year to date basis through the end
of such quarter; and (iv) such other information as the Administrative Agent
shall request.
EVENTS OF DEFAULT
1.77. Nature of Events.
An "Event of Default" shall exist if any of the following occurs:
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(a) the Company fails to make any payment of principal (including without
limitation any payment or reduction required under Section 3.15 above) or fails
to reimburse a Lender pursuant to this Agreement or any Note, reimbursement
agreement, or guaranty agreement executed in connection with this Agreement on
or before five days after the date such payment is due;
(b) the Company fails to make any payment of interest on any Note executed
in connection with this Agreement on or before five days after the date such
payment is due;
(c) the Company fails to perform or observe any covenant contained in
Sections 8.2(d), 8.3, or 8.12 of this Agreement;
(d) the Company fails to perform or observe any covenant contained in
Sections 8.4, 8.5, or 8.6 of this Agreement and such failure involves an amount
in excess of the aggregate sum of $1,000,000;
(e) the Company fails to comply (i) with any covenant contained in
Sections 8.4, 8.5 or 8.6 and such failure involves an amount of $1,000,000 or
less or (ii) with any other provision of this Agreement, and such failure
continues for more than 30 days after such failure shall first become known to
any Financial Officer of the Company;
(f) any warranty, representation or other statement by or on behalf of the
Company contained in this Agreement or by a Subsidiary in any Loan Document or
in any instrument furnished by an officer thereof in compliance with or in
reference to this Agreement is false or misleading in any material respect on
the date made (or deemed made);
(g) the Company or any Material Subsidiary makes an assignment for the
benefit of creditors, or consents to the appointment of a trustee, receiver or
liquidator;
(h) bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings are instituted by the Company or any Material Subsidiary;
(i) bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings are instituted against the Company or any of the Subsidiaries, and
remain undismissed for a period of 90 days;
(j) a final judgment or judgments for the payment of money aggregating in
excess of $1,000,000 in excess of applicable insurance coverage (as verified by
the Administrative Agent) is or are outstanding against the Company or any of
the Subsidiaries, and such judgment or judgments have been outstanding for more
than 21 days from the date of entry and have not been discharged, stayed or
bonded in the full amount of such judgment or judgments;
(k) the Company's audited financial statements referred to in Section 9(i)
above, or any discussion draft thereof, reflects that the Company's financial
statement is a "qualified" statement and such circumstance has existed for more
than 48 hours;
(l) the Company or any Subsidiary fails to perform or observe any covenant
not specified in Section 10.1 (a) through (k) above in favor of the
Administrative Agent or any of the Lenders pursuant to any Loan Document or any
agreement, instrument, or document executed in
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connection with this Agreement, including, without limitation, any interest rate
contracts or agreements relating to interest rate limitations or interest rate
"swaps," and such failure continues for more than 30 days after such failure
shall become first known to any Financial Officer of the Company;
(m) any Change of Control shall occur; or
(n) the Administrative Agent and the Required Lenders shall determine that
a Material Adverse Effect has occurred.
1.78. Default Remedies.
(a) Acceleration and Termination. Upon the occurrence of any Event of
Default described in Sections 10.1(g), (h), or (i), the Revolving Credit
Commitments shall automatically and immediately terminate and the unpaid
principal amount of, and any and all accrued interest on, the Revolving Credit
Obligations and all accrued fees shall automatically become immediately due and
payable, without presentment, demand, or protest or other requirements of any
kind, all of which are hereby expressly waived by the Company; and upon the
occurrence of any other Event of Default, the Administrative Agent shall at the
request, or may with the consent, of the Required Lenders, by written notice to
the Company (i) declare that all or any portion of the Revolving Credit
Commitments are terminated, in which case the Revolving Credit Commitments and
the obligations of each Lender to make any Revolving Loan hereunder and of each
Lender or Huntington to issue or participate in any Letter of Credit not then
issued shall immediately terminate, (ii) declare the unpaid principal amount of
and any and all accrued and unpaid interest on the Revolving Credit Obligations
to be immediately due and payable, without presentment, demand or protest or any
requirements of any kind, all of which are hereby expressly waived by the
Company.
(b) Deposit for Letters of Credit. In addition, within five days after the
occurrence of an Event of Default, the Company shall, promptly upon demand by
the Administrative Agent, in its sole discretion, deliver to the Administrative
Agent cash collateral in such form as requested by the Administrative Agent,
together with such endorsements, and execution and delivery of such documents
and instruments as the Administrative Agent may request in an aggregate stated
amount equal to the then outstanding Letter of Credit Obligations. Any such cash
collateral shall be promptly returned to the Company upon the satisfaction or
expiration of the Letter of Credit Obligations.
(c) Nonwaiver; Remedies Cumulative. No course of dealing on the part of
the Administrative Agent or any Lender, nor any delay or failure on the part of
the Administrative Agent or any Lender in exercising any rights, powers or
privileges hereunder, shall operate as a waiver of such rights, powers or
privileges or otherwise prejudice any of the Administrative Agent's or Lenders'
rights and remedies hereunder; nor shall any single or partial exercise thereof
preclude any further exercise thereof or the exercise of any other right, power
or privilege by the Administrative Agent or each Lender. No right or remedy
conferred upon or reserved to the Administrative Agent or any Lender under this
Agreement is intended to be exclusive of any other right or remedy, and every
right and remedy shall be cumulative and in addition to every other right or
remedy given hereunder or now or hereafter existing under any applicable law.
Every right and remedy given by this Agreement or by applicable law to the
Administrative
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Agent or any Lender may be exercised from time to time and as often as may be
deemed expedient by the Administrative Agent or any Lender.
(d) Right of Set-Off. Upon the occurrence and during the continuance of
any Event of Default hereunder, the Administrative Agent, each Lender, and any
of them, subject to the terms of this Agreement, are hereby authorized at any
time and from time to time, without notice to the Company (any such notice being
expressly waived by the Company) and to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Administrative Agent or each Lender, or any of them to or for the credit
or the account of the Company against any and all of the obligations of the
Company now or hereafter existing under this Agreement, irrespective of whether
or not the Administrative Agent or any Lender shall have made any demand
hereunder and although such obligations may be unmatured. Notwithstanding the
foregoing, none of the Lenders shall be permitted to exercise any right of
offset or set-off referred to in this Section 10.2 without the prior written
consent of the Administrative Agent.
THE ADMINISTRATIVE AGENT
1.79. Appointment.
Each of the Lenders hereby designates and appoints Huntington as
Administrative Agent hereunder and under each of the Loan Documents, and each of
the Lenders irrevocably authorizes the Administrative Agent to act as the
contractual representative of such Lender. The Administrative Agent agrees to
act as such contractual representative upon the express conditions contained in
this Section 11. Notwithstanding the use of the defined term "Administrative
Agent," it is expressly understood and agreed that the Administrative Agent
shall not have any fiduciary responsibilities to any Lender or to the Company or
any Subsidiary of the Company by reason of this Agreement and that the
Administrative Agent is merely acting as the representative of the Lenders with
only those duties as are expressly set forth in this Agreement and the other
Loan Documents. In its capacity as the Lenders' contractual representative, (i)
the Administrative Agent shall not assume any fiduciary duties to any of the
Lenders, (ii) the Administrative Agent is a "representative" of the Lenders
within the meaning of Section 9-105 of the Uniform Commercial Code, and (iii)
the Administrative Agent is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Administrative Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender hereby
waives.
1.80. Powers.
The Administrative Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Administrative Agent by the
terms of each thereof, together with such powers as are reasonably incidental
thereto. The Administrative Agent shall have no implied duties to the Lenders,
or any obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Administrative
Agent.
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1.81. General Immunity.
None of the Administrative Agent or any of its directors, officers, agents
or employees shall be liable to any or all of the Company, any Subsidiary of the
Company or the Lenders for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Documents or in connection herewith or
therewith, except to the extent that such action or inaction is found in a final
judgment by a court of competent jurisdiction to have arisen solely from the
gross negligence or willful misconduct of such Persons.
1.82. No Responsibility for Loans, Recitals.
None of the Administrative Agent or any of their respective directors,
officers, or employees shall be responsible for or have any duty to ascertain,
inquire into, or verify (a) any statement, warranty or representation made in
connection with any Loan Documents or any borrowing hereunder; (b) the
performance or observance of any of the covenants or agreements of any obligor
under any Loan Documents, including, without limitation, any agreement by an
obligor to furnish information directly to each Lender; (c) the satisfaction of
any condition specified in Section 6, except receipt of items required to be
delivered to the Administrative Agent; or (d) the validity, effectiveness or
genuineness of any Loan Documents or any other instrument or writing furnished
in connection therewith. The Administrative Agent shall have no duty to disclose
to the Lenders information that is not required to be furnished by the Company
to the Administrative Agent at such time, but is voluntarily furnished by the
Company to the Administrative Agent (either in its capacity as Administrative
Agent or in its individual capacity).
1.83. Action on Instructions of Lenders.
The Administrative Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder and under any other Loan Document in
accordance with written instructions signed by the Required Lenders or, in the
case of any act or failure to act calculated to give rise to any of the events
or circumstances described in clauses (a) through (e) of Section 13.4, each
affected Lender, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Administrative Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Documents unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, costs and expense that it may incur by reason of taking or
continuing to take any such action.
1.84. Employment of Administrative Agents and Counsel.
The Administrative Agent may execute any of its duties as Administrative
Agent hereunder and under any other Loan Documents by or through employees,
agents, and attorneys-in-fact and shall not be answerable to the Lenders, except
as to money or securities received by it or its authorized agents, for the
default or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. The Administrative Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Documents.
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1.85. Reliance on Documents, Counsel.
The Administrative Agent shall be entitled to rely upon any note, notice,
consent, certificate, affidavit, letter, telegram, statement, paper or document
believed to be genuine and correct and to have been signed or sent by the proper
person or persons, and, in respect of legal matters, upon the opinion of counsel
selected by the Administrative Agent, which counsel may be employees of the
Administrative Agent.
1.86. Reimbursement and Indemnification.
The Lenders agree to reimburse and indemnify the Administrative Agent
ratably in proportion to their respective Revolving Credit Commitments (a) for
any amounts not reimbursed by the Company for which the Administrative Agent is
entitled to reimbursement by the Company under the Loan Documents, (b) for any
amounts not reimbursed by the Company for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents, and (c) for any amounts not reimbursed by the Company for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of the Loan Documents or any other document delivered
in connection therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent they are
determined in a final judgment of a court of competent jurisdiction to have
arisen solely from the gross negligence or willful misconduct of the
Administrative Agent. The obligations of the Lenders under this Section 11.8
shall survive payment of the Revolving Credit Obligations and termination of
this Agreement.
1.87. Rights as a Lender.
In the event the Administrative Agent is a Lender, the Administrative
Agent shall have the same rights and powers hereunder and under any other Loan
Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, and the term "Lender" or "Lenders" shall at any time when
the Administrative Agent is a Lender, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent may accept deposits from, lend money to, and generally engage in any kind
of trust, debt, equity or other transaction, in addition to those contemplated
by this Agreement or any other Loan Documents, with the Company or any of its
Subsidiaries in which the Company or any of its Subsidiaries is not restricted
hereby from engaging with any other Person. The Administrative Agent, in its
individual capacity, is not obligated to remain a Lender, provided, however,
that in the event that the Administrative Agent ceases to be a Lender hereunder,
the Required Lenders may remove the Administrative Agent and appoint a successor
Administrative Agent, if no Event of Default has occurred and is continuing,
with the consent of the Company.
1.88. Lender Credit Decision.
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Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on the financial
statements prepared by the Company and such other documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement and the other Loan Documents. Each Lender also acknowledges
that it will, independently and without reliance upon the Administrative Agent
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents.
1.89. Successor Administrative Agent.
The Administrative Agent may resign at any time by giving written notice
thereof to the Lenders and the Company, such resignation to be effective upon
the appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, 45 days after the resigning
Administrative Agent gives notice of its intention to resign. Upon any such
resignation the Required Lenders shall have the right to appoint, on behalf of
the Company and the Lenders, a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Lenders within
30 days after the resigning Administrative Agent's giving notice of its
intention to resign, then the resigning Administrative Agent may appoint, on
behalf of the Company and the Lenders, a successor Administrative Agent. If the
Administrative Agent has resigned and no successor Administrative Agent has been
appointed, the Lenders may perform all the duties of the Administrative Agent
hereunder and the Company shall make all payments in respect of the Revolving
Credit Obligations to the applicable Lender and for all other purposes shall
deal directly with the Lenders. No successor Administrative Agent shall be
deemed to be appointed hereunder until such successor Administrative Agent has
accepted the appointment and, if no Event of Default or Potential Default has
occurred and is continuing, the Company has consented to such appointment. Any
such successor Administrative Agent shall be a commercial bank having capital
and retained earnings of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
Administrative Agent, shall be obligated to issue substitute Letters of Credit
for the outstanding Letters of Credit issued by the resigning Administrative
Agent or otherwise to provide credit assurance satisfactory to the resigning
Administrative Agent with respect to such outstanding Letters of Credit. Upon
the effectiveness of the resignation of the Administrative Agent, the resigning
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the
resignation of an Administrative Agent, the provisions of this Section 11 shall
continue in effect for the benefit of such Administrative Agent in respect of
any actions taken or omitted to be taken by it while it was acting as the
Administrative Agent hereunder and under the other Loan Documents.
1.90. Ratable Payments.
If any Lender, whether by setoff or otherwise has payment made to it upon
its Revolving Loans (other than payments received pursuant to Sections 3.6, 3.9
or 3.14 in a greater proportion than that received by any other Lender, such
Lender agrees, promptly upon demand, to purchase a portion of the Revolving
Loans held by the other Lenders so that after such purchase each Lender will
hold its Pro Rata Share of Revolving Loans. If any Lender, whether in connection
- 39 -
with setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Revolving Credit Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral in respect of their Pro Rata Shares. In case any
such payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
1.91. Application of Payments.
Subject to the provisions hereof, the Administrative Agent shall, unless
otherwise specified at the direction of the Required Lenders, which direction
shall be consistent with the last sentence of this Section 11.13, apply all
payments and prepayments in respect of any obligations in the following order:
(a) first, to pay interest on and then principal of any portion of the
Loans which the Administrative Agent may have advanced on behalf of any Lender
for which the Administrative Agent has not then been reimbursed by such Lender
or the Borrower;
(b) second, to pay obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Administrative Agent;
(c) third, to pay obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders;
(d) fourth, to pay interest due in respect of Swing Line Loans;
(e) fifth, to pay interest due in respect of Loans (other than Swing Line
Loans);
(f) sixth, to the ratable payment or prepayment of principal outstanding
on Swing Line Loans;
(g) seventh, to the ratable payment or prepayment of principal outstanding
on Loans (other than Swing Line Loans); and
(h) eighth, to the payment of Hedging Obligations in such order as the
Administrative Agent may determine at its sole discretion and to the ratable
payment of all other obligations owing to the Lenders.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of an Event of Default) by the Company, all principal payments in
respect of Loans (other than Swing Line Loans) shall be applied first to repay
outstanding Prime Rate Advances. The order of priority set forth in this Section
11.13 and the related provisions of this Agreement are set forth solely to
determine the rights and priorities of the Administrative Agent, the Lenders and
the Swing Line Bank as among themselves. The order of priority set forth in
clauses (c) through (h) of this Section 11.13 may at any time and from time to
time be changed by the Required Lenders without necessity of notice to or
consent of or approval by the Borrower, or any other Person; provided that the
order of priority of payments in respect of Swing Line Loans may be changed only
with the prior written consent of the Swing Line Bank. The order of priority set
- 40 -
forth in clauses (a) through (c) of this Section 11.13 may be changed only with
the prior written consent of the Administrative Agent.
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
1.92. Successors and Assigns.
The terms and provisions of the Loan Documents shall be binding upon and
inure to the benefit of the Company, the Administrative Agent and the Lenders
and their respective successors and assigns, except that (a) the Company shall
not have the right to assign its rights or obligations under the Loan Documents
without the consent of all of the Lenders and (b) any assignment by any Lender
must be made in compliance with Section 12.3. Notwithstanding clause (b) of the
preceding sentence, any Lender may at any time, without the consent of the
Company or the Administrative Agent, assign all or any portion of its rights
under this Agreement and its Notes to a Federal Reserve Bank for the purpose of
securing loans from such Federal Reserve Bank to any such Lender; provided,
however, that no such assignment shall release the transferor Lender from its
obligations hereunder. The Administrative Agent may treat the payee of any Note
as the owner thereof for all purposes hereof unless and until such payee
complies with Section 12.3 in the case of an assignment thereof or, in the case
of any other transfer, a written notice of the transfer is filed with the
Administrative Agent. Any assignee or transferee of an Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issues in exchange therefor.
1.93. Participations.
(a) Permitted Participants; Effect. Any Lender, in the ordinary course of
its business and in accordance with the applicable law, at any time may sell to
one or more entities (each such entity being referred to herein as a
"Participant") participating interests in any Revolving Loan owing to such
Lender, any Note held by such Lender, any interest in Letters of Credit held by
such Lender, the Revolving Credit Commitment of such Lender or any other
interest of such Lender under the Loan Documents. In the event of any such sale
by a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the Company under this
Agreement shall be determined as if such Lender had not sold such participating
interests, and the Company and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents. The participation agreement effecting the
sale of any participating interest shall contain a representation by the
Participant to the effect that none of the consideration used to make the
purchase of the participating interest in the Revolving Credit Commitment,
Revolving Loans and interests in Letters of Credit under such participation
agreement are "plan assets" as defined under ERISA and that the rights and
interests of the Participant in and under the Loan Documents will not be "plan
assets" under ERISA.
- 41 -
(b) Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents.
(c) Benefit of Setoff. The Company agrees that to the extent permitted by
applicable law each Participant shall be deemed to have the right of setoff
provided in Section 10.2(d) in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the Loan
Documents, provided that each Lender shall retain the right of setoff provided
in Section 10.2(d) with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each Participant, and each
Participant shall be deemed to agree, by exercising the right of setoff provided
in Section 10.2(d) to share with each Lender, any amount received pursuant to
the exercise of its right of setoff, such amounts to be shared in accordance
with Section 10.2(d) as if each Participant were a Lender.
1.94. Assignments.
(a) Permitted Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or any part of its Revolving
Credit Commitment and outstanding Revolving Loans and interests in the Letters
of Credit, together with its rights and obligations under the Loan Documents
with respect thereof; provided, however, that (i) each such assignment shall be
of a constant, and not a varying percentage of all of the assigning Lender's
rights and obligations so assigned; (ii) the amount of the Revolving Credit
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of such assignment) may be in the amount
of such Lender's entire Revolving Credit Commitment but otherwise shall not be
less than $5,000,000 or an integral multiple of $1,000,000 in excess of that
amount; and (iii) notwithstanding the foregoing clause (ii), (A) if the
assignment is made to a Lender, the amount of the Revolving Credit Commitment
assigned shall not be less than $5,000,000 or an integral multiple thereof and
(B) if the assignment is made pursuant to Section 3.14, the Revolving Credit
Commitment assigned may be in the amount of the relevant Lender's entire
remaining Revolving Credit Commitment. Such assignment shall be substantially in
the form of Exhibit E hereto or in such other form as may be agreed to by the
parties thereto. The consent of the Company and the Administrative Agent shall
be required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender; provided, however, that if an Event of Default
has occurred and is continuing, or if the assignment is made to an affiliate of
the assigning Lender, the consent of the Company shall not be required. Such
consents shall not be unreasonably withheld.
(b) Effect; Effective Date. Following delivery to the Administrative Agent
of a notice of assignment, substantially in the form attached to Exhibit E
hereof (a "Notice of Assignment"), together with any consents required by
Section 12.3(a), and payment by the Purchaser of a $3,500 fee (which the Company
shall not be obligated to pay or reimburse) to the Administrative Agent for
processing such assignment, upon the date certain specified in such Notice of
Assignment, such assignment shall become effective (the "Effective Assignment
Date"). The Notice of Assignment shall contain a representation by the Purchaser
to the effect that none of the consideration used to make the purchase of the
Revolving Credit Commitment, Revolving Loans and interests in the Letters of
Credit under the applicable assignment agreement are "loan assets" as defined
under ERISA and that the rights and interests of the
- 42 -
Purchaser in and under the Loan Documents will not be "plan assets" under ERISA.
On and after the Effective Assignment Date of such assignment, such Purchaser
shall for all purposes be a Lender party to this Agreement and any other Loan
Documents executed by the Lenders and shall have all the rights and obligations
of a Lender under the Loan Documents, to the same extent as if it were an
original party hereto and thereto, and no further consent or action by the
Company, the Lenders or the Administrative Agent shall be required to release
the transferor Lender with respect to the percentage of the aggregate Revolving
Credit Commitments assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3(b) the transferor
Lender, the Administrative Agent, and the Company shall make appropriate
arrangements so that replacement Notes are issued to such transferor Lender and
new Notes or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting its Revolving Credit Commitment, as
adjusted pursuant to such assignment.
1.95. Dissemination of Information.
The Company authorizes each Lender to disclose to any Participant or
Purchaser or any other person acquiring an interest in the Loan Documents by
operation of law (each a "Transferee") and any prospective Transferee any and
all information in such Lender's possession concerning the creditworthiness of
the Company and its Subsidiaries; provided that each Transferee and prospective
Transferee agrees to be bound by Section 13.10.
1.96. Tax Treatment.
If any interest in any Loan Documents is transferred to any Transferee
which is organized under the laws of any jurisdiction other than the United
States of America or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the following provisions: with respect to any Lender that is not incorporated
under the laws of the United States of America, or a state thereof, such Lender
agrees that it will deliver to each of the Company and the Administrative Agent
two duly completed copies of United States Internal Revenue Service Form 1001 or
4224, certifying in either case that such Lender is entitled to receive payments
under this Agreement and the Notes without deduction or withholding of any
United States or federal income taxes. Each Lender which so delivers such form
further agrees and undertakes to deliver to each of the Company and the
Administrative Agent two additional copies of such form (or successor or related
form) on or before the date such form expires.
NOTICES AND GENERAL PROVISIONS
1.97. Notices.
(a) Giving Notice. Except as otherwise permitted by Section 1.2(d) with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted.
- 43 -
(b) Change of Address. The Company, the Administrative Agent and any
Lender may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
1.98. Reproduction of Documents.
This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by the Administrative Agent or any Lender at
the closing or otherwise, and (c) financial statements, certificates and other
information previously or hereafter furnished to the Administrative Agent or any
Lender, may be reproduced by the Administrative Agent or any Lender by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process and the Administrative Agent or any Lender may destroy any
original document so reproduced. The Company agrees and stipulates that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Administrative
Agent or any Lender in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
1.99. Survival.
All warranties, representations, and covenants made by the Company herein
or on any certificate or other instrument delivered by it or on its behalf under
this Agreement shall be considered to have been relied upon by the
Administrative Agent and each Lender and shall survive the closing of the
Revolving Credit Commitments regardless of any investigation made by the
Administrative Agent or any Lender on their behalf. All statements in any such
certificate or other instrument shall constitute warranties and representations
by the Company. This Agreement shall inure to the benefit of and be binding upon
the heirs, successors and assigns of each of the parties.
1.100. Amendments.
Subject to the provisions of this Section 13.4, the Required Lenders (or
the Administrative Agent with the consent in writing of the Required Lenders)
and the Company may enter into agreements supplemental hereto for the purpose of
adding to or modifying any provisions of the Loan Documents or changing in any
manner the rights of the Lenders and the Company hereunder or waiving any Event
of Default hereunder; provided, however, that no such supplemental agreement,
waiver or amendment or modification shall, without the consent of each Lender
affected thereby,
(a) extend the Revolving Credit Termination Date, any Note, or
Reimbursement Obligation or forgive all of any portion of the principal amount
thereof, any interest thereon, or any fees or other amounts payable hereunder
(except that the Administrative Agent may waive payment of the fee required
under Section 12.3(b) without obtaining the consent of any other party to this
Agreement) or reduce the rate or rates of interest or extend the time of payment
of interest, fees or other amounts payable hereunder;
- 44 -
(b) reduce the percentage specified in the definition of Required Lenders
or change the aggregate Pro Rata Share required for the Lenders or any of them
to take action hereunder;
(c) reduce the amount or extend the payment date for any payments required
under Section 3.16 or increase the amount of the Revolving Credit Commitment of
any Lender hereunder or permit the Company to assign its rights or obligations
under this Agreement;
(d) change or amend the percentages applicable to any component of the
Borrowing Base; or
(e) amend this Section 13.4.
No amendment of any provision of this Agreement relating in any way to (i) the
Administrative Agent or any of the Letters of Credit shall be effective without
the written consent of the Administrative Agent or Huntington, as the case may
be, and (ii) Swing Line Loans shall be effective without the written consent of
the Swing Line Bank. The Administrative Agent may waive payment of the fee
required under Section 12.3(b) without obtaining the consent of the any of the
Lenders. No delay or failure or other course of conduct by the Administrative
Agent or any Lender in the exercise of any power or right shall operate as a
waiver thereof; nor shall any single or partial exercise of the same preclude
any other or further exercise thereof, or the exercise of any other power or
right.
1.101. Duplicate Originals.
Multiple duplicate originals of this Agreement may be signed by the
parties, each of which shall be an original but all of which together shall
constitute one and the same instrument.
1.102. Enforceability and Governing Law.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction, as to such jurisdiction, shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. No delay or omission on the part of the Administrative Agent
or any of the Lenders in exercising any right shall operate as a waiver of such
right or any other right. All of the Administrative Agent's or any Lender's
rights and remedies, whether evidenced hereby or by any other agreement or
instrument, shall be cumulative and may be exercised singularly or concurrently.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Ohio.
1.103. Fiscal Year.
The Company's fiscal year begins January 1 and ends December 31 of each
calendar year, and the Company will not change its fiscal year without the prior
written consent of the Administrative Agent and the Required Lenders.
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1.104. Consent to Jurisdiction and Waiver of Objection to Venue.
The Company, the Administrative Agent and each Lender agree that any legal
action or proceeding with respect to this Agreement, the Notes or the other Loan
Documents or the transactions contemplated hereby may be brought in the Court of
Common Pleas of Franklin County, Ohio, or in the United States District Court
for the Southern District of Ohio, Eastern Division, and the Company, the
Administrative Agent and each Lender hereby irrevocably submit to and accept
generally and unconditionally the jurisdiction of those courts with respect to
its person, property and revenues and irrevocably consent to service of process
in any such action or proceeding by the mailing thereof by U.S. mail to the
designated party at the address referenced in Section 13.1 hereof.
The Company, the Administrative Agent and each Lender hereby irrevocably
waive any objection to the laying of venue of any such suit or proceeding in the
above described courts, and unconditionally waive and agree not to plead or
claim that any such suit or proceeding brought in any such court has been
brought in an inconvenient forum, provided, that this provision shall not
preclude any party from seeking to consolidate actions brought against it.
Nothing in this paragraph shall affect the right of the Administrative
Agent or any Lender to serve process in any other manner permitted by law or
limit the right of the Administrative Agent or any Lender to bring any such
action or proceeding against the Company or to obtain execution on any judgment
in any other jurisdiction or in any other manner permitted by law.
1.105. Waiver of Jury Trial.
THE PARTIES ACKNOWLEDGE THAT, AS TO ANY AND ALL DISPUTES THAT MAY ARISE
BETWEEN THE PARTIES, THE COMMERCIAL NATURE OF THE TRANSACTION OUT OF WHICH THIS
AGREEMENT ARISES WOULD MAKE ANY SUCH DISPUTE UNSUITABLE FOR TRIAL BY JURY.
ACCORDINGLY, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY AS TO ANY AND ALL DISPUTES THAT MAY ARISE RELATING TO THIS
AGREEMENT OR TO ANY OF THE OTHER INSTRUMENTS OR DOCUMENTS EXECUTED IN CONNECTION
HEREWITH.
1.106. Confidentiality.
The Administrative Agent and each Lender shall hold all non-public
information obtained pursuant to the requirements hereof and identified as such
by the Company in accordance with the customary procedures of the Administrative
Agent and each of the Lenders respectively for handling confidential information
of this nature and in accordance with safe and sound banking practices, and in
any event may make disclosures reasonably required by a bona fide participant or
co-lender in connection with the contemplated participation or assignment, or as
required or requested by any Governmental Authority or any representative
thereof, or pursuant to any legal process, or to its accountants, lawyers and
other advisors.
DEFINITIONS
1.107. Accounting Terms.
- 46 -
As used in this Agreement, and any promissory notes, certificates, reports
or other documents made or delivered pursuant hereto, accounting terms not
defined in this Agreement shall have the respective meanings given to such terms
under GAAP. "GAAP" means generally accepted accounting principles consistently
applied set forth in the opinions and pronouncements of the Accounting
Principles Board, the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board as in effect on the date hereof.
1.108. Other Definitional Provisions.
(a) The words "hereof," "herein," and "hereunder," and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement;
(b) Whenever required by the context of this Agreement, the Notes or other
Loan Documents executed in connection herewith, the singular shall include the
plural, and vice versa and the masculine and feminine genders shall include the
neuter gender and vice versa.
1.109. Defined Terms.
"Account Party" is defined in Section 1.3 (d) (v).
"Acquisition" means any transaction, or any series of related
transactions, by which the Company or any of its Subsidiaries (a) acquires any
going business or all or substantially all of the assets of any firm,
corporation or division thereof which constitutes a going business, whether
through purchase of assets, merger or otherwise, or (b) directly or indirectly
acquires (in one transaction or in a series of transactions) at least a majority
(in number of votes) of the securities of a corporation which have ordinary
voting power for the election of directors or a majority (by percentage or
voting power) of the outstanding partnership interest of a partnership or a
majority (by percentage or voting power) of the outstanding ownership interest
of a limited liability company.
"Adjusted EBITDA" means for any period the sum of such Person's (a)
EBITDA, plus (b) the compensation of any shareholders and affiliates of such
Person and other expenses outside of the ordinary course of business for such
shareholders or affiliates (if such shareholders and affiliates will not remain
with the business or if such related expenses will not be continued in the
operation of the acquired entity), plus (c) any extraordinary losses, as
determined by GAAP, minus (d) any extraordinary gains, as determined by GAAP.
"Adjusted Loss" shall mean with respect to any fiscal quarter, if the
Company and its consolidated Subsidiaries' (a) Consolidated Net Income before
taxes as determined in accordance with GAAP, minus (b) the sum of all
extraordinary gains (and any unusual gains arising outside the ordinary course
of business not included in extraordinary gains determined in accordance with
GAAP), is less than $1.00.
"Administrative Agent" is defined in the Preamble.
"Agreement" is defined in the Preamble.
- 47 -
"Applicable Eurodollar Margin" means the applicable rate per annum set
forth below based on the Interest Coverage Ratio as of the end of the Company's
most recently ended fiscal quarter:
-------------------------------------------------------------------------------------
Interest Coverage Ratio Applicable Eurodollar Margin
----------------------- ----------------------------
-------------------------------------------------------------------------------------
greater than 3.75 to 1.00 1.75%
-------------------------------------------------------------------------------------
greater than or equal to 3.25 to 1.00,
but less than or equal to 3.75 to 1.00 2.00%
-------------------------------------------------------------------------------------
greater than or equal to 2.75 to 1.00,
but less than 3.25 to 1.00 2.25%
-------------------------------------------------------------------------------------
less than 2.75 to 1.00 2.50%
-------------------------------------------------------------------------------------
"Applicable Prime Rate Margin" means zero percent (0%).
"Applicable Unused Commitment Fee Rate" means the applicable rate per
annum set forth below based on the Interest Coverage Ratio as of the end of the
Company's most recently ended quarter:
----------------------------------------------------------------------------------------------
Interest Coverage Ratio Applicable Unused Commitment Fee Rate
----------------------- -------------------------------------
----------------------------------------------------------------------------------------------
greater than or equal to 2.75 to 1.00 0.25%
----------------------------------------------------------------------------------------------
less than 2.75 to 1.00 0.375%
----------------------------------------------------------------------------------------------
"Approved Joint Venture" means (a) any entity which satisfies all the
requirements of the last sentence of this paragraph, or (b) any other entity in
which the Company has an Investment in Joint Venture for which for which (A) the
Company acts as managing partner or similar manager, as applicable, (B) the
Administrative Agent for the benefit of the Lenders has received guaranty
agreements or other undertakings satisfactory to the Administrative Agent in an
aggregate amount not less than the full amount of any Letter of Credit issued on
account of such entity, and (C) such entity satisfies the following conditions
to the satisfaction of the Administrative Agent and the Required Lenders (i)
review and approval by the Administrative Agent of financial statements and
financial condition of such partner or partners, including confirmation of the
absence of any borrowings by such entity (other than purchase money seller
financing in an amount not to exceed the purchase price of any undeveloped real
property), (ii) review and approval by the Administrative Agent of articles of
incorporation of such partner or partners, joint venture agreement or
partnership agreement or other evidence of the Company's ownership interest in
such entity, (iii) execution and delivery to the Administrative Agent of an
application and agreement for standby letter of credit for such entity in form
satisfactory to the Administrative Agent, (iv) review and approval by the
Administrative Agent of resolutions or other indicia of authority for those
persons signing on behalf of such entity, (v) execution and delivery of a
guaranty agreement in form acceptable to the Administrative Agent by each of the
partners or owners in such entity, (vi) review and approval by the
Administrative Agent of resolutions or other indicia of authority of those
persons executing such guaranty agreements,
- 48 -
(vii) review and approval by the Administrative Agent of any other documents,
instruments or agreements deemed necessary by the Administrative Agent with
respect to the issuance of such Letters of Credit in respect of such entity or
the other partner or owner therein, and (viii) evidence that all of the real
property owned by such entity is located in the State of Ohio or any state
contiguous thereto. The Administrative Agent and each Lender stipulate that
until the Administrative Agent gives the Company notice to the contrary, any
limited liability company, partnership or joint venture (a) in which (i) the
Company and (ii) M/I Schottenstein Homes, Inc., Homewood Corporation or Rockford
Homes, Inc. or Xxxxxx Investment Company (or any combination thereof) are the
sole owners or partners, (b) for which the Company is liable for the full amount
of all Letters of Credit issued on behalf of such entity, and (c) for which the
Company acts as managing partner or similar manager, as applicable, shall
constitute an Approved Joint Venture.
"Arm's-Length Contract" is defined in Section 2.12.
"Assignment and Acceptance" means an assignment and acceptance in
substantially the form of Exhibit E attached hereto and made a part hereof (with
blanks appropriately completed) delivered to the Administrative Agent in
connection with an assignment of a Lender's interest hereunder in accordance
with the provisions of this Agreement.
"Available Cash" is defined in Section 2.2.
"Xxxxxx Group" means (a) any corporation, partnership, entity or trust in
respect of which Xxxxxx X. Xxxxxx and/or his lineal descendants directly or
indirectly (i) exercise voting control and (ii) have a majority of the
beneficial interests thereof, (b) any individual shareholder of Xxxxxx Realty
Company as of the date of this Agreement, (c) any lineal descendant of Xxxxxx X.
Xxxxxx, or (d) any combination thereof.
"Borrowing Base" is defined in Section 2.1.
"Borrowing Base Availability" means, at any time, the sum of the Borrowing
Base, minus the amount of the Excess Permitted Nonrecourse Borrowings Reserve,
if any.
"Business Day" means a day, in the applicable local time, which is not a
Saturday or Sunday or a legal holiday and on which banks are not required or
permitted by law or other governmental action to close (a) in Columbus, Ohio,
and (b) in the case of a Eurodollar Advance, in London, England.
"Central Ohio" means any area within a 60 mile radius from the Company's
corporate headquarters, Franklin County, Ohio.
"Change in Control" shall mean (a) the replacement of a majority of the
Board of Directors of the Company or Xxxxxx Realty Company from the directors
who constituted the Board of Directors on the date of this Agreement for any
reason other than death or disability, and such replacement shall not have been
approved by the Board of Directors of the Company or of Xxxxxx Realty Company,
as the case may be, as constituted on the date of this Agreement (or as changed
over time with the approval of the Board of Directors of such entity) or (b) a
company, person, entity or group of companies, person or entities (other than
any of the Xxxxxx
- 49 -
Group) acting in concert, shall, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases, exercise of the stock pledge
or otherwise, have become the beneficial owner (within the meaning of Rule 13d.3
under the Securities Exchange Act of 1934, as amended) of securities of the
Company or Xxxxxx Realty Company representing more than 30% of the combined
voting power of the outstanding securities of the Company ordinarily having the
right to vote in the election of directors from the beneficial owners as of the
date hereof; or (c) the failure of the Xxxxxx Group at any time to (i) have at
least a majority (on a fully diluted basis) of the beneficial ownership and
voting control of the outstanding securities of the Company or of Xxxxxx Realty
Company, as the case may be, or (ii) have the right to designate or nominate at
least a majority of the Board of Directors of the Company.
"Company" is defined in the Preamble.
"Consolidated Net Income" means, for any period on a consolidated basis
for the Company and its Subsidiaries, the net income (or loss) after taxes for
such period taken as a single accounting period, determined in conformity with
GAAP.
"Consolidated Tangible Net Worth" shall mean the consolidated
stockholders' equity of the Company and its consolidated Subsidiaries, minus the
sum of all the following: (a) the excess of cost over the value of net assets of
purchased businesses, rights, and other similar intangibles, (b) organization
expenses, (c) intangible assets (to the extent not reflected in the foregoing),
(d) goodwill, (e) deferred charges or deferred financing costs, (f) loans or
advances to and/or accounts receivable or notes receivable from affiliates
(other than funds in escrow due from affiliates in connection with holdbacks or
other amounts to ensure the completion of performance for the sale of
residential dwellings), (g) non-compete agreements, and (h) to the extent
included in stockholders' equity, minority interests in any Subsidiaries held by
other persons or entities.
"Consolidated Total Liabilities" shall mean with respect to the Company
and its consolidated Subsidiaries (a) all indebtedness and obligations which, in
accordance with GAAP, would be classified upon a balance sheet as liabilities
(except capital stock and surplus earned), and further, including, without
limitation, the amount of Noncancellable Land Commitments, and (b) to the
extent, if any, not included within a GAAP classification of liabilities, all
liabilities secured by any lien or encumbrance on any property owned by the
Company even though the Company has not assumed or otherwise become liable for
the payment thereof.
"Contingent Obligations" means any agreement, undertaking or arrangement
by which the Company or any Subsidiary assumes, guaranties, endorses, agrees to
provide funding, or otherwise becomes or is contingently liable upon the
obligation or liability of any other Person.
"Developed Lots" is defined in Section 2.3.
"EBITDA" means for any period, the sum of the amounts for such period of
(a) Consolidated Net Income, (b) Interest Expense, (c) charges for federal,
state, local and foreign income taxes, and (d) depreciation, amortization
expense and non-cash charges which were deducted in determining net income.
"Effective Assignment Date" is defined in Section 12.3(b).
- 50 -
"Eligible" with respect to real estate is defined in Section 2.7 and
"Eligible" with respect to Investments in Joint Ventures is defined in Section
2.8.
"Eligible Investments in Joint Ventures" is defined in Section 2.8.
"Eligible Lumber Inventory" is defined in Section 2.6.
"Environmental Laws" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act, as amended (42 U.S.C. Section 9601, et seq.),
the Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1801,
et seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601,
et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Section 6901, et seq.), the Water Quality Act of 1987, as amended (33 U.S.C.
Section 1251, et seq.), the Clean Water Act, as amended (33 U.S.C. Section 1321
et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7
U.S.C. Sec. 136, et seq.), the National Environmental Policy Act of 1969, as
amended (42 U.S.C. Sec. 4321, et seq.), and the Clean Air Act, as amended (42
U.S.C. Section 7401, et seq.), and any other federal, state or local statute,
ordinance, law, code, rule, regulation or order regulating or imposing liability
(including strict liability) or standards of conduct regarding Hazardous
Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"Eurodollar Advance" shall mean any amount borrowed as part of the
Revolving Loans that bears interest at a rate calculated with a reference to the
Eurodollar Rate.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Advance and
the related Interest Period, the per annum rate that is obtained by dividing:
(a) the actual or estimated arithmetic mean of the per annum rates of interest
at which deposits in U.S. dollars for the related Interest Period and in an
aggregate amount comparable to the amount of such Eurodollar Advance are being
offered to U.S. banks by one or more prime banks in the London interbank market,
as determined by the Administrative Agent in its sole discretion based upon
reference to information appearing in Telerate, a service of Telerate Systems
Incorporated, or any successor thereto, in the section captioned "British
Bankers Assoc. Interest Settlement Rates," or any comparable index selected by
the Administrative Agent for the obtaining of rate quotations, or any other
reasonable procedure, at approximately 11:00 a.m. London, England time, on the
second Business Day prior to the first day of the related Interest Period, all
as determined by the Administrative Agent, such interest rate to be rounded up
to the nearest whole multiple of 1/16 of 1% per annum, by (b) a percentage equal
to 100%, minus the Eurodollar Reserve Percentage.
"Eurodollar Reserve Percentage" means, for any day, that percentage which
is in effect on such day, as prescribed by the Federal Reserve Board for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental, or other marginal reserve requirement) for a member
bank of the Federal Reserve System in respect of "Certificate of Deposit
Liabilities" or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Eurodollar Advances is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any bank to United States
residents, or with respect to any "Eurocurrency Liabilities" under
- 51 -
Regulation D of the Board of Governors of the Federal Reserve System, or any
other regulations of any Governmental Authority having jurisdiction with respect
thereto.
"Event of Default" is defined in Section 10.1.
"Excess Permitted Nonrecourse Borrowings" is defined in Section 8.5.
"Excess Permitted Nonrecourse Borrowings Reserve" is defined in Section
2.1.
"Existing Credit Documents" is defined in Section 1.1.
"Fall Foundation Lots" is defined in Section 2.3.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day or
the next preceding Business Day by the Federal Reserve Bank of New York.
"Financial Officer" is defined in Section 9(a).
"GAAP" is defined in Section 14.1.
"Governmental Authority" means any arbitrator or court, government, state,
or political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Hazardous Substances" shall mean and include all hazardous and toxic
substances, wastes, materials, compounds, pollutants and contaminants
(including, without limitation, asbestos, polychlorinated biphenyls, and
petroleum products) which are included under or regulated by any Environmental
Laws, but does not include such substances as are permanently incorporated into
a structure or any part thereof in such a way as to preclude their subsequent
release into the environment, or the permanent or temporary storage or disposal
of household hazardous substances by tenants, and which are thereby exempt from
or do not give rise to any violation of any Environmental Laws.
"Hedging Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whenever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Home Work-in-Process" is defined in Section 2.12.
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"Hostile Acquisition" shall mean to acquire, or obtain the right to
acquire, beneficial ownership of 5% or more of common stock or 5% or more of
assets then outstanding of any other business entity pursuant to a tender offer,
exchange offer, or other offer not expressly authorized in writing by the Board
of Directors of such business entity.
"Huntington" is defined in the Preamble.
"Indebtedness," as applied to the Company or any other Person shall mean,
at any time, (a) all indebtedness, obligations or other liabilities (other than
accounts payable arising in the ordinary course of business payable on terms
customary in the trade) which in accordance with GAAP should be classified upon
such Person's balance sheet as liabilities, including, without limitation (i)
for borrowed money or evidenced by debt securities, debentures, acceptances,
notes or other similar instruments, and any accrued interest, fees and charges
relating thereto, (ii) payable out of the proceeds or production of property
owned by such Person, or in respect of obligations to redeem, repurchase or
exchange any securities or to pay dividends in respect of any stock, (iii) with
respect to letters of credit issued, (iv) to pay the deferred purchase price of
property or services, except accounts payable and accrued expenses arising in
the ordinary course of business, or (v) in respect of capital leases; (b) all
indebtedness, obligations or other liabilities secured by a lien on any
property, whether or not such indebtedness, obligations or liabilities are
assumed by the owner of the same; and (c) all indebtedness, obligations or other
liabilities in respect of Hedging Obligations interest rate contracts and
currency agreements, net of liabilities owed by the counterparties thereon.
"Insurance Sub" means any domestic Subsidiary formed by the Company for
the purpose of insuring residential structural warranties of the Company and its
Subsidiaries.
"Interest Coverage Ratio" means, with respect to any period, the ratio of
(a) EBITDA of the Company and its Subsidiaries for such period to (b) Interest
Expense for such period.
"Interest Expense" means, for any period, as determined in conformity with
GAAP, total interest expense, whether paid or accrued or due and payable
(without duplication), including without limitation the interest component of
capital lease obligations for such period, all bank fees, commissions, discounts
and other fees and charges owed with respect to the Letters of Credit and net
costs under interest rate contracts.
"Interest Payment Date" shall mean in respect of the Revolving Loans, the
last day of each Interest Period, and for any Interest Period that exceeds three
months, on the 90th day after the commencement of such Interest Period.
"Interest Period" shall mean:
(a) With respect to any Prime Rate Advance, an initial period commencing,
as the case may be, on the day such an advance shall be made by the
Administrative Agent, or on the day of conversion of any then outstanding
advance to an advance of such type, and ending the last day of each month and on
the day of conversion to an advance of a different type.
(b) With respect to any Eurodollar Advance, an initial period commencing,
as the
- 53 -
case may be, on the day such an advance shall be made by the Administrative
Agent, or on the day of conversion of any then outstanding advance to an advance
of such type, and ending on the date one (1), two (2), three (3) or six (6)
months thereafter, all as the Company may elect pursuant to this Agreement;
provided, that (i) any Interest Period with respect to a Eurodollar Advance that
shall commence on the last Business Day of the calendar month (or any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the respective subsequent
calendar month; and (ii) each Interest Period with respect to a Eurodollar
Advance that would otherwise end on a day which is not a Business Day or, if
such next succeeding Business Day falls in the next succeeding calendar month,
on the next preceding Business Day. Notwithstanding the provisions of paragraphs
(a) and (b) above, no Interest Period shall be permitted which would end after
the Revolving Credit Termination Date.
(c) Interest with respect to all advances under the Revolving Loans shall
be calculated on a 360 day year basis and shall be based on the actual number of
days which elapse during the interest calculation period.
"Investment" means any loan, advance, extensions of credit (other than
accounts receivable arising in the ordinary course of business on terms
customary in the trade), deposit accounts or contribution of capital in or to
any other entity or any investment in, or purchase or other acquisition of, the
stock, partnership interests, ownership interests in any limited liability
company, notes debentures, or other securities of any other entity.
"Investments in Joint Ventures" is defined in Section 2.8.
"Land Deposits" shall mean the sum of down payments, deposits, or other
funds paid pursuant to noncancellable, bona fide, arm's length contracts for the
purchase of real property by the Company.
"Lender" and "Lenders" are defined in the Preamble.
"Letter Agreement" means the fee letter dated December 31, 2001, from the
Administrative Agent and accepted and agreed to by the Company.
"Letter of Credit" and "Letters of Credit" are defined in Section 1.3(a).
"Letter of Credit Application" is defined in Section 1.3(d).
"Letter of Credit Obligations" means, at any time, the sum of (i) the
aggregate non-contingent reimbursement or repayment obligations of the Company,
any Subsidiary or any Approved Joint Venture with respect to amounts drawn under
the Letters of Credit, plus (ii) the aggregate undrawn stated amount of all
outstanding Letters of Credit, plus (iii) the aggregate stated amount of all
Letters of Credit requested hereunder, but not yet issued or rejected.
"Leverage Ratio" means, for any period, the ratio of Consolidated Total
Liabilities to Consolidated Tangible Net Worth for such period.
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"Loans" means, with respect to a Lender, such Lender's portion of any
advance made pursuant to Section 1.2, hereof and in the case of the Swing Line
Bank, any Swing Line Loan made pursuant to Section 1.4 hereof, and collectively,
all Revolving Loans and Swing Line Loans, whether made or continued as or
converted to Prime Rate Advances or Eurodollar Advances.
"Loan Document" and "Loan Documents" means this Agreement, the Notes, any
Letter of Credit Application, the documents executed or delivered pursuant to
this Agreement, any interest rate contracts to which any Lender or affiliate of
a Lender is a party, and all other instruments, guaranties, agreements and
contracts between (a) the Company or any Subsidiary of the Company and (b) any
of the Administrative Agent, the Lenders or Huntington, in each case delivered
to either the Administrative Agent, such Lender or Huntington pursuant to or in
connection with this Agreement or the Revolving Credit Commitments.
"Lots Under Development" is defined in Section 2.9.
"Material Adverse Effect" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Company and its Subsidiaries taken as a whole,
(b) the ability of the Company or any Subsidiary to perform its obligations
under this Agreement, any Loan Document or any document, agreement, guaranty, or
instrument executed in connection herewith, or (c) the ability of the
Administrative Agent or the Lenders to enforce the terms of this Agreement, or
any document, agreement, guaranty, or instrument executed in connection
herewith.
"Material Subsidiary" means any Subsidiary in which the sum of the
Company's (a) Investment in such Subsidiary and (b) Contingent Obligations with
respect to such Subsidiary equals or exceeds $1,000,000.
"Maximum New Market Investment Amount" means, with respect to the Company
and its Subsidiaries, (i) the aggregate amount of (a) each Purchase Price for an
Acquisition of a Person or the assets of a Person whose principal business is
outside Central Ohio or the metropolitan Louisville, Kentucky area, (b) the
aggregate amount of Investments in Restricted Subsidiaries and in Investments in
Joint Ventures, whose principal operations or property are outside Central Ohio
or the metropolitan Louisville, Kentucky area, and (c) the aggregate cost of all
Uncommitted Land Holdings, Speculative Homes, Model Homes and all other real or
personal property located outside Central Ohio or the metropolitan Louisville,
Kentucky area, and (ii) for the purposes of Sections 8.3, 8.5, 8.11 and 8.24 of
this Agreement, such maximum aggregate amount of (a), (b) and (c) above shall be
$25,000,000, whether such investment or investments are made prior to, on or
after the date of this Agreement.
"Model Homes" is defined in Section 2.10.
"Noncancellable Land Commitments" shall mean the amount of the Company's
obligations with respect to the unpaid purchase price of noncancellable
contracts for the purchase of real property by the Company.
"Non-Facility Contingent Obligations" means the aggregate stated amount of
the Company's or any Subsidiary's Contingent Obligations in connection with
letters of credit or
- 55 -
other forms of surety issued by a financial institution other than pursuant to
the terms of this Agreement.
"Note" and "Notes" are defined in Section 4(a).
"Notice of Assignment" is defined in Section 12.3(b).
"Notice of Borrowing" is defined in Section 1.2(d).
"Participant" is defined in Section 12.2(a).
"Permitted Acquisition" shall mean an Acquisition by the Company or any
Subsidiary, for which the Company or a Restricted Subsidiary satisfies each of
the following conditions to the good faith satisfaction of the Administrative
Agent and the Required Lenders:
(a) such Acquisition is of or with a Person in the homebuilding or related
industry;
(b) such Acquisition is made at a time when, after giving effect thereto
and the related financing thereof, (i) no Event of Default exists or would occur
based upon (A) a pro forma prospective calculation for the next twelve (12)
month period and (B) a pro forma historical calculation (using Adjusted EBITDA
if applicable) for the most recent twelve (12) month period of the financial
covenants set forth in this Agreement performed in accordance with GAAP giving
effect to any higher levels of Indebtedness associated with the acquired
operations, together with interest thereon to be accrued for such twelve (12)
month period, and (ii) after giving effect to such Acquisition, the Company and
each Subsidiary would remain solvent pursuant to the warranties contained in
this Agreement;
(c) the acquired business entity shall have had positive Adjusted EBITDA
for the twelve (12) month period immediately prior to the effective date of the
Acquisition;
(d) on the date of the closing of the Permitted Acquisition and after
giving effect thereto and to any advances under the Revolving Loan made to
finance such Permitted Acquisition, (i) no Event of Default shall have occurred
and be continuing and (ii) all representations and warranties under this
Agreement shall be true and correct as though made on and as of such date,
except to the extent that any such representation or warranty expressly relates
to an earlier date;
(e) the acquired business entity, if the acquisition is of capital stock
and such entity constitutes a Subsidiary, obligates itself on the Revolving
Loans or this Agreement pursuant to a guaranty or supplement substantially in
the form of Exhibit F hereto or other loan documents satisfactory to the
Administrative Agent and otherwise complies with the requirements of this
Agreement and executes and delivers such documentation as the Administrative
Agent deems appropriate with respect to intercompany borrowings from the
Company;
(f) the acquired assets are free and clear of all liens or encumbrances
except as permitted under this Agreement;
- 56 -
(g) the Company delivers written notice to the Administrative Agent of its
intention to make such Acquisition no less than 45 days prior to the proposed
closing date for such acquisition that sets forth, among other things,
information regarding liabilities and obligations with respect to the
environmental matters, labor matters, or ERISA matters to be incurred by the
Company (including, without limitation, the acquired business entity in the
event of an acquisition of capital stock) as a result of such Acquisition, any
indemnities afforded under the terms of such acquisition and the scope and
results of any environmental review, labor review, or ERISA review undertaken by
the Company in connection therewith and the results of any further due diligence
required by the Administrative Agent;
(h) the Company shall provide the Administrative Agent with copies of
financial statements of the proposed acquired business entity;
(i) the Company shall not engage in a Hostile Acquisition; and
(j) all assets and/or Subsidiaries acquired shall be subject to the
provisions of this Agreement.
"Person" means any natural person, corporation, limited partnership,
limited liability company, general partnership, joint stock company, joint
venture, association, company, trust, business trust, or other organization
whether the same constitutes a legal entity, and any Governmental Authority.
"Potential Default" is defined in Section 1.5.
"Premises" is defined in Section 7.12.
"Prime Commercial Rate" as used herein shall mean the rate established by
Huntington from time to time based on its consideration of economic, money
market, business and competitive factors, and it is not necessarily Huntington's
most favored rate.
"Prime Rate Advance" shall mean any amount borrowed as part of the
Revolving Loans that bears interest at a rate calculated with reference to the
Prime Commercial Rate.
"Prior Credit Agreement" is defined in Section 1.1.
"Pro Rata Share" means, with respect to any Lender, the percentage
obtained by dividing (a) the sum of such Lender's Revolving Credit Commitment at
such time by (b) the sum of the aggregate amount of all Revolving Credit
Commitments at such time (as adjusted from time to time in accordance with the
provisions of this Agreement); provided, however, if all of the Revolving Credit
Commitments are terminated pursuant to the terms of this Agreement, then "Pro
Rata Share" means the percentage obtained by dividing (c) the sum of the
aggregate amount of such Lender's Revolving Credit Obligations, plus such
Lender's share of its obligations to purchase participations in Swing Line
Loans, by (d) the sum of the aggregate amount of all Revolving Credit
Obligations:
- 57 -
"Purchase Price" shall mean the sum of cash and cash equivalents paid,
notes or other indebtedness given, liabilities assumed, or the fair market value
of property transferred in connection with any Acquisition.
"Purchasers" is defined in Section 12.3(a).
"Qualified Joint Venture" is defined in Section 8.6.
"Real Estate Held for Development" is defined in Section 2.11.
"Real Property Parcel" is defined in Section 7.14.
"Reimbursement Obligations" means the aggregate non-contingent
reimbursement or repayment obligations of the Company with respect to amounts
drawn under Letters of Credit issued for the account of the Company, a
Restricted Subsidiary or any Approved Joint Venture.
"Required Lenders" means, at any time, Lenders holding in the aggregate at
least sixty-six and two-thirds percent (66 2/3%) of the sum of the then
aggregate amount of the Revolving Credit Commitments in effect at such time;
provided, however, that in the event any of the Lenders shall have failed to
fund its Pro Rata Share of (i) any Revolving Loan requested by the Company or
(ii) any Swing Line Loan as requested by Administrative Agent, which such
Lenders are obligated to fund under the terms hereof and any such failure has
not been cured, then for so long as such failure continues, "Required Lenders"
means Lenders (excluding the Lenders whose failure to fund their respective Pro
Rata Share of such Revolving Loans or Swing Line Loans have not been cured)
whose Pro Rata Shares represent at least sixty-six and two-thirds percent (66
2/3%) of the aggregate Pro Rata Shares of such Lenders. Provided, however,
further that, in the event that the Revolving Credit Commitments have been
terminated pursuant to the terms hereof, "Required Lenders" means Lenders
(without regard to such Lenders' performance of their respective obligations
hereunder) whose aggregate ratable shares (stated as a percentage) of the
aggregate outstanding principal balance of all Revolving Credit Obligations are
at least sixty-six and two-thirds percent (66 2/3%).
"Restricted Subsidiary" means a Subsidiary of the Company which (a) is
organized and existing under the laws of any state of the United States of
America, and (b) which has become obligated under the terms of this Agreement
pursuant to a supplement or guaranty agreement satisfactory to the
Administrative Agent, in its sole and absolute discretion.
"Revolving Credit Availability" means, at any time, the amount by which
the Revolving Credit Maximum Amount exceeds the Revolving Credit Obligations
outstanding at such time.
"Revolving Credit Commitment" means, with respect to any Lender, the
obligation of such Lender to make Revolving Loans and to participate in Letters
of Credit and Swing Line Loans pursuant to the terms and conditions hereof,
which obligation shall not exceed the amount set forth opposite the heading
Revolving Credit Commitment under such Lender's name on the signature pages
hereof, the signature pages of any amendment or modification hereto or the
signature page of the Assignment and Acceptance by which it became a Lender, as
modified from time to time pursuant to the terms hereof or to give effect to any
applicable Assignment and Acceptance.
- 58 -
"Revolving Credit Commitments" means the aggregate amount of the Revolving
Credit Commitments of all the Lenders, provided that the maximum aggregate
principal amount of Revolving Loans, Swing Line Loans and stated amount of
Letters of Credit shall not exceed $175,000,000, as reduced from time to time
pursuant to the terms hereof.
"Revolving Credit Maximum Amount" means, at any time, an amount equal to
the Revolving Credit Commitments, less the amount of the Excess Permitted
Nonrecourse Borrowings Reserve in effect at such time.
"Revolving Credit Obligations" means, at any time, the sum of (a) the
outstanding principal amount of the Revolving Loans at such time, plus (b) the
stated amount of Letter of Credit Obligations outstanding at such time, plus (c)
the outstanding principal amount of the Swing Line Loans at such time.
"Revolving Credit Termination Date" means the earlier to occur of (a) the
date of termination of the Revolving Credit Commitments pursuant to the terms
hereof, and (b) May 31, 2005.
"Revolving Loan" and "Revolving Loans" are defined in Section 1.2(a).
"Speculative Homes" is defined in Section 2.13.
"Subsidiary" of the Company means any corporation or other entity more
than 50% of the outstanding securities or other ownership interest having
ordinary voting power or the equivalent thereof which shall at the time be owned
or controlled, directly or indirectly, by the Company or by one or more of its
Subsidiaries, and shall exclude Alliance Title Agency, Ltd.
"Swing Line Bank" means Huntington pursuant to the terms hereof.
"Swing Line Commitment" means the obligation of the Swing Line Bank to
make Swing Line Loans up to a maximum principal amount of $10,000,000 at any one
time outstanding.
"Swing Line Loan" and "Swing Line Loans" are defined in Section 1.4(a).
"Transferee" is defined in Section 12.4.
"Uncommitted Land Holdings" shall mean the sum of all of the following,
valued at cost or market: (a) Real Estate Held for Development, (b) Lots Under
Development, (c) Developed Lots, (d) Land Deposits, (e) Noncancellable Land
Commitments, and (f) the Company's net equity investment in Investments in Joint
Venture.
"Unleveraged Seller Financing" means Real Estate Held for Development
which is subject to seller financing and secured by a mortgage or deed of trust
on such property permitted under the terms of Sections 8.4 and 8.5 of this
Agreement, for which the cost of such real property is equal to or greater than
two (2) times the amount of the Indebtedness owing to such seller, and the value
of any such Real Estate Held for Development shall be calculated in accordance
with Section 2.11 above.
- 59 -
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- 60 -
Each of the undersigned parties has signed this Agreement as of the date
set forth in the Preamble hereto.
THE COMPANY AS BORROWER:
DOMINION HOMES, INC.
By: /s/ Xxxxx X. X'Xxxxxx
---------------------
Xxxxx X. X'Xxxxxx
Its: Chief Financial Officer
-----------------------
Dominion Homes, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxx 00000-0000
Attention: Xxx X. Xxxxxxx,
President and Chief Operating Officer
Fax: 614/000-0000
with a copy to:
Xxxxxx X. Xxxxx, Xx., Esq.
Senior Vice President and General Counsel
Dominion Homes, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxx 00000-0000
Fax: 614/000-0000
THE ADMINISTRATIVE AGENT
THE HUNTINGTON NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Its: Vice President
--------------
The Huntington National Bank, Administrative Agent
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx,
Vice President
Fax: 614/000-0000
- 61 -
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
PORTER, WRIGHT, XXXXXX & XXXXXX LLP
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Fax: 614/000-0000
THE LENDERS:
THE HUNTINGTON NATIONAL BANK,
as Lender and Issuing Bank
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Its: Vice President
--------------
REVOLVING CREDIT COMMITMENT: $40,000,000
The Huntington National Bank
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx,
Vice President
Fax: 614/000-0000
BANK ONE, NATIONAL ASSOCIATION
By: /s/ Xxxxx X. XxXxxxxx
---------------------
Xxxxx X. XxXxxxxx
Its: Vice President
--------------
REVOLVING CREDIT COMMITMENT: $20,000,000
Bank One, National Association
Mail Code XX0-0000, 00xx Xxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. XxXxxxxx, Vice President
Fax: 614/000-0000
- 62 -
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Its: Vice President
--------------
REVOLVING CREDIT COMMITMENT: $35,000,000
KeyBank National Association
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Vice President
Fax: 614/000-0000
NATIONAL CITY BANK
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Its: Vice President
--------------
REVOLVING CREDIT COMMITMENT: $21,000,000
National City Bank
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Vice President
Fax: 614/000-0000
COMERICA BANK
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
Its: Vice President
--------------
REVOLVING CREDIT COMMITMENT: $15,000,000
Comerica Bank
000 Xxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Vice President
Fax: 313/000-0000
FIRSTAR BANK, N.A.
- 63 -
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Its: Vice President
--------------
REVOLVING CREDIT COMMITMENT: $25,000,000
FirStar Bank, N.A.
000 Xxxxx 0xx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Vice President
Fax: 614/000-0000
THE PROVIDENT BANK
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Its: Vice President
--------------
REVOLVING CREDIT COMMITMENT: $9,000,000
The Provident Bank
One Columbus
00 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Xx. Vice President
Fax: 614/000-0000
FIFTH THIRD BANK (CENTRAL OHIO)
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Xxxxx X. Xxxxxxxx
Its: Sr. Vice President
-------------------
REVOLVING CREDIT COMMITMENT: $10,000,000
Fifth Third Bank (Central Ohio)
00 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Xx. Vice President
Fax: 614/000-0000
- 64 -
SCHEDULE 6.1(a) - CONDITIONS PRECEDENT TO INITIAL DISBURSEMENT
Execution and delivery by all parties signatory thereto, delivery of
original, or completion as the case may be, to the satisfaction of The
Huntington National Bank (the "Agent") and its counsel of each of the following
documents, certificates, exhibits, schedules and items containing such
information requested by the Agent and its counsel and reflecting the absence of
any material fact or issues and in all respect satisfactory to the Agent:
DOCUMENT
A. LOAN DOCUMENTS
1. Amended and Restated Credit Agreement
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Swing Line Note
Exhibit B - Form of Standby Letter of
Credit Reimbursement Agreement
Exhibit C - Form of Notice of Borrowing or
Continuation/Conversion
Exhibit D - Form of Officer's Certificate to
Accompany Reports
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Subsidiary Guaranty
Schedule 6.1(a) - Conditions Precedent to
Initial Disbursement (Closing Memorandum)
Schedule 7.4 - Corporate Information
Schedule 7.10 - Schedule of Permitted Encumbrances
Other Schedules required by Amended and Restated
Credit Agreement
2. HNB Revolving Credit Note $40,000,000
3. KeyBank Revolving Credit Note $35,000,000
4. Bank One Revolving Credit Note $20,000,000
5. Firstar Bank Revolving Credit Note $25,000,000
6. NCB Revolving Credit Note $21,000,000
7. Comerica Bank Revolving Credit Note $15,000,000
8. The Provident Bank Revolving Credit Note $9,000,000
9. Fifth Third Revolving Credit Note $10,000,000
10. Swing Note $10,000,000
11. Standby Letter of Credit Reimbursement Agreement
DOCUMENT
12. Subsidiary Guaranty by Dominion Homes of
Kentucky, Ltd. ("DHK") and Dominion Homes
of Kentucky GP, LLC ("DHKGP")
B. ORGANIZATIONAL DOCUMENTS/CERTIFICATES
BORROWER
13. Certification of Secretary or Assistant Secretary
certifying corporate resolutions authorizing
execution of loan documents for Borrower
14. Closing Certificate of Borrower with the
following Exhibits:
a. Certificate of Good Standing -
State of Ohio
b. Certified Copy of Articles of Incorporation -
State of Ohio
c. Code of Regulations
SUBSIDIARIES
15. Certification of partners of DHK certifying
partnership resolutions authorizing execution of loan
documents for DHK
16. Closing Certificate of DHK with the following
Exhibits:
a. Certificate of Good Standing -
State of Kentucky
b. Agreement of Limited Partnership
c. Certificate of Limited Partnership
certified by the State of Kentucky
17. Certification of members of DHKGP certifying
resolutions authorizing execution of loan
documents for DHKGP
18. Closing Certificate of DHKGP with the
following Exhibits:
a. Certificate of Good Standing -
State of Kentucky
b. Articles of Organization certified by the
State of Kentucky
c. Operating Agreement
C. MISCELLANEOUS CLOSING REQUIREMENTS
19. Judgment, tax lien and pending litigation
searches on Borrower
x. Xxxxxxxx County, Ohio
- 2 -
DOCUMENT
20. UCC lien searches on Borrower
a. Ohio Secretary of State
x. Xxxxxxxx County Recorder
21. UCC lien searches on DHK and DHKGP
a. Kentucky Secretary of State
22. Payoff letters from lenders, if necessary
23. Evidence of Insurance for personal property, real
property and liability insurance
- 3 -
SCHEDULE 7.4 - CORPORATE INFORMATION
As of November 12, 2001, Dominion Homes, Inc. has:
One class of capital stock authorized by the Company's Articles of Incorporation
consisting of 12 million common shares without par value. In addition, the
Company has 3 million preferred shares of stock; consisting of 1.5 million
voting preferred shares without par value and 1.5 million non-voting preferred
shares without par value. The Company has the following subsidiaries:
1. Dominion Homes of Kentucky GP, LLC, a Kentucky limited liability company
("DHKGPLLC"), which is wholly owned by the Company; and
2. Dominion Homes of Kentucky Ltd, a Kentucky limited partnership, which is
99% owned by the Company and 1% by DHKGPLLC.
3. Dominion Homes Financial Services, Ltd., an Ohio limited liability company
("DHFS"), which has 100 Membership Units, consisting of 95 Class A units
owned by the Company and 5 Class B units owned by Xxxxxx X. Xxxxx.
4. Reserved
6,407,907 common shares issued and outstanding.
The Company's federal tax identification number is 00-0000000.
DHKGPLLC's federal tax identification number is 00-0000000.
Dominion Homes of Kentucky Ltd's federal tax identification number is
00-0000000.
DHFS's federal tax identification number is 00-0000000.
SCHEDULE 7.10 - SCHEDULE OF PERMITTED ENCUMBRANCES
------------------------------------------------------------------------------------------------------
SECURED PARTY, LESSOR OR MORTGAGOR DESCRIPTION OF ITEM
------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxxxx, Deceased Mortgage on Xxxxxxx Farm Land
National City Bank, Trustee
------------------------------------------------------------------------------------------------------
Xxxxxxx X. and Xxxxx X. Xxxxxx, Mortgage on River Valley Highlands land
Xxxx Xxxxxx Custom Builders
------------------------------------------------------------------------------------------------------
Locust Curve, Inc. Mortgage on Locust Curve Land
------------------------------------------------------------------------------------------------------
BRC Properties Inc. (formerly Xxxxxx Realty Company) Lease - 0000 Xxxxxx Xxxx Office Building
------------------------------------------------------------------------------------------------------
National Model Homes, Inc. Lease - Model Homes
------------------------------------------------------------------------------------------------------
Xxx Xxxxx Lease - Model Homes
------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx Xx. Lease - Model Homes
------------------------------------------------------------------------------------------------------
Xxxxxx Furniture Store Lease - Model Home Furniture
------------------------------------------------------------------------------------------------------
LeaseNet, Inc. Assigned to Star Bank, NA, - Leased computer equipment and
now known as FirStar Bank, NA software, programs, system
consultation and projection
equipment; more particularly
described in various UCC Financing
Statements filed with the Ohio
Secretary of State and the Franklin
County Recorder;
- Leased office equipment and furniture
more particularly described in
various UCC financing statements
filed with the Ohio Secretary of
State and the Franklin County
Recorder
- Leased Hyster orderpicker pursuant to
UCC financing statement nos.
AP0181778 filed with the Ohio
Secretary of State and
199909270242431 filed with the
Franklin County Recorder
- Leased Hyster precrusher pursuant to
UCC financing statement nos. AP331653
filed with the Ohio Secretary of
State and 200105010093329 filed with
the Franklin County Recorder
- Leased XXX Engineering Copier
pursuant to UCC financing statement
no. AP0117109 filed with the Ohio
Secretary of State
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
SECURED PARTY, LESSOR OR MORTGAGOR DESCRIPTION OF ITEM
------------------------------------------------------------------------------------------------------
Firstar Bank Equipment Finance - Leased computer equipment and
software, programs, system
consultation and projection
equipment; more particularly
described in various UCC Financing
Statements filed with the Ohio
Secretary of State;
- Leased office equipment and furniture
more particularly described in
various UCC financing statements
filed with the Ohio Secretary of State
------------------------------------------------------------------------------------------------------
Pitney Xxxxx Credit Corporation Leased office equipment pursuant to UCC
financing statement no AP0178252 filed
with the Ohio Secretary of State;
------------------------------------------------------------------------------------------------------
Hyster Credit Company Hyster lift trucks pursuant to UCC
financing statement nos. AP0144015,
AP0145078, and AP0152374 filed with the
Ohio Secretary of State and
199904270103842, 199904300108170, and
199905250131257 filed with the Franklin
County Recorder
------------------------------------------------------------------------------------------------------
GFC Leasing Leased copiers, fax machines and other
equipment pursuant to UCC financing
statement nos. XX0000000, AP305366 and
OH00042567484 filed with the Ohio
Secretary of State and 200004180074885
and 200011210235970 filed with the
Franklin County Recorder
------------------------------------------------------------------------------------------------------
Ameritech Credit Corporation Leased telecommunications and data
equipment pursuant to UCC financing
statement no. 04951D07 filed with the
Xxxxxxxx Xxxxxx, Xxxx, 0000000 filed with
the Kentucky Secretary of State
------------------------------------------------------------------------------------------------------
Ford Motor Credit Co. Various vehicle leases, including,
without limitation, the vehicles
referenced on UCC financing statement
nos. XX0000000 and XX0000000 filed with
the Ohio Secretary of State and
199711240150197, 199803100054714,
000000000000000, 199804140088315,
199711240150192, 199711240150193 and
199711240150195 filed with the Franklin
County Recorder
------------------------------------------------------------------------------------------------------
The Huntington National Bank Various vehicle leases
------------------------------------------------------------------------------------------------------
Star Bank, NA Various vehicle leases
------------------------------------------------------------------------------------------------------
EXHIBIT A-2 TO AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 31, 2001
Form of Swing Line Note
THE HUNTINGTON NATIONAL BANK
SWING LINE NOTE
City Office Division Branch | | Secured
------------- ---------------- --------
Account No. Note No. |X| Unsecured
--------------------------------- ------------
Account Name DOMINION HOMES, INC.
--------------------------------------------------------------------
|X| Corporation | | Partnership | | Individual/Proprietorship
$10,000,000 Columbus, Ohio December ____, 2001
FOR VALUE RECEIVED, the undersigned Dominion Homes, Inc., an Ohio
corporation (the "Company") promises to pay to the order of THE HUNTINGTON
NATIONAL BANK (hereinafter called the "Swing Line Bank," which term shall
include any holder hereof) at the office of the Administrative Agent (as defined
below) at 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, the sum of Ten Million
Dollars ($10,000,000) or so much thereof as shall have been advanced by the
Swing Line Bank at any time and not hereafter repaid (hereinafter referred to as
"Principal Sum") together with interest as hereinafter provided and payable at
the time and in the manner hereinafter provided. Subject to the terms of the
Credit Agreement (as defined below), the proceeds of the loan evidenced hereby
may be advanced, repaid and readvanced in partial amounts during the term of
this swing line note (this "Note"). Subject to the terms of the Credit
Agreement, each such advance shall be made to the Company upon receipt by the
Administrative Agent of the undersigned's Notice of Borrowing, which shall be in
such form prescribed by the Credit Agreement. The Administrative Agent shall be
entitled to rely on any oral or telephonic communication requesting an advance
and/or providing disbursement instructions hereunder, which shall be received by
it in good faith from anyone reasonably believed by the Administrative Agent to
be the undersigned, or the undersigned's authorized agent. The undersigned
agrees that all advances made by the Swing Line Bank will be evidenced by
entries made into the electronic data processing system or internal memoranda
maintained by the Administrative Agent. The undersigned further agrees that the
sum or sums shown on the most recent printout from the Administrative Agent's
electronic data processing system or on such memoranda shall be rebuttably
presumptive evidence of the amount of the Principal Sum and of the amount of any
accrued interest.
This Note is issued pursuant to, is entitled to the benefits of, and the
advances contemplated hereunder are to be made pursuant to a certain Amended and
Restated Credit Agreement by, between, and among the undersigned, the Swing Line
Bank and the institutions from time to time party thereto as lenders
(collectively, the "Lenders"), The Huntington National Bank ("Huntington") in
its separate capacity as issuing bank (the "Issuing Bank"), and Huntington in
its separate capacity as administrative agent for the Lenders and the Issuing
Bank (with its successors in such capacity, the "Administrative Agent"), dated
as of December 31, 2001, and all amendments, modifications, and supplements
thereto from time to time (hereinafter called the "Credit Agreement"), to which
reference is hereby made for a more complete statement of the terms and
conditions under which the Swing Line Loans evidenced hereby are made and are to
be repaid. Terms defined in the Credit Agreement and not otherwise defined
herein shall have the meanings so defined in the Credit Agreement.
INTEREST
Interest will accrue on the unpaid balance of the Principal Sum at the
rates set forth in the Credit Agreement.
MANNER OF PAYMENT
All payments of the Principal Sum and accrued interest in respect of this
Note shall be made to the Administrative Agent not later than 1:00 p.m. (Ohio
time) on the date due at the address set forth above to the Administrative Agent
in lawful money of the United States of America in immediately available funds.
The Principal Sum shall be due and payable pursuant to the terms set forth in
the Credit Agreement, and upon acceleration of the Principal Sum in accordance
with the terms of the Credit Agreement. The Company also promises to pay
interest on the unpaid Principal Sum borrowed hereunder from the date advanced
until paid at the rates (which shall not exceed the maximum rate permitted by
applicable law) and at the time determined in accordance with the provisions of
the Credit Agreement.
LATE CHARGE
In addition to all of the Swing Line Bank's other rights and remedies, any
installment or other payment not made within 10 days of the date such payment or
installment is due shall be subject to a late charge equal to 5% of the amount
of the installment or payment.
DEFAULT
Upon the occurrence of any Event of Default specified in the Credit
Agreement, the Principal Sum and accrued interest may become forthwith due and
payable, all as provided in the Credit Agreement.
GENERAL PROVISIONS
The undersigned, and any indorser, surety, or guarantor, hereby severally
waive presentment, notice of dishonor, protest, notice of protest, and diligence
in bringing suit against
any party hereto, and consent that, without discharging any of them, the time of
payment may be extended an unlimited number of times before or after maturity
without notice. The Swing Line Bank shall not be required to pursue any party
hereto, including any guarantor, or to exercise any rights against any
collateral herefor before exercising any other such rights.
The obligations evidenced hereby may from time to time be evidenced by
another note or notes given in substitution, renewal or extension hereof.
The captions used herein are for references only and shall not be deemed a
part of this Note. If any of the terms or provisions of this Note shall be
deemed unenforceable, the enforceability of the remaining terms and provisions
shall not be affected. This Note shall be governed by and construed in
accordance with the law of the State of Ohio.
WAIVER OF RIGHT TO TRIAL BY JURY
THE UNDERSIGNED HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS NOTE OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE UNDERSIGNED OR THE SWING LINE BANK WITH RESPECT TO THIS NOTE OR
ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; AND THE UNDERSIGNED 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 THE UNDERSIGNED OR THE SWING LINE BANK MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE UNDERSIGNED TO THE WAIVER OF THE RIGHT OF THE UNDERSIGNED TO
TRIAL BY JURY.
WARRANT OF ATTORNEY
The undersigned authorizes any attorney at law to appear in any court of
record in the State of Ohio or in any state or territory of the United States
after the above indebtedness becomes due, whether by acceleration or otherwise,
to waive the issuing and service of process, and to confess judgment against the
undersigned in favor of the Swing Line Bank for the amount then appearing due
together with costs of suit, and thereupon to waive all errors and all rights of
appeal and stays of execution. The attorney at law authorized hereby to appear
for the undersigned may be an attorney at law representing the Swing Line Bank,
and the undersigned hereby expressly waives any conflict of interest that may
exist by virtue of such representation.
WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
DOMINION HOMES, INC.
By:__________________________________
Its:_________________________________
EXHIBIT B TO AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 31, 2001
Form of Standby Letter of Credit Reimbursement Agreement
STANDBY LETTER OF CREDIT REIMBURSEMENT AGREEMENT
To The Huntington National Bank: December ___, 2001
In consideration of the issuance by The Huntington National Bank (the
"Issuing Bank"), or the Issuing Bank's application for the issuance by the
Issuing Bank's correspondent at the request of Dominion Homes, Inc. (the
"Company"), a Subsidiary thereof or an Approved Joint Venture, of one or more
Letters of Credit (herein separately a "Credit and collectively the "Credits")
substantially in accordance with the application attached hereto, or such
applications as may hereafter be executed and made a part hereof (collectively
the "Applications" and each one separately an "Application"), the Company agrees
as follows:
1. This Standby Letter of Credit Reimbursement Agreement (this
"Agreement") is executed and the Credits contemplated hereunder are made
pursuant to a certain Amended and Restated Credit Agreement by, between, and
among the Company, the Issuing Bank and the institutions from time to time party
thereto as lenders (collectively, the "Lenders"), The Huntington National Bank
("Huntington") in its separate capacity as issuing bank, and Huntington in its
separate capacity as administrative agent for the Lenders and the Issuing Bank
(with its successors in such capacity, "Administrative Agent"), dated as of
December , 2001, and all amendments, modifications, and supplements thereto from
time to time (hereinafter called the "Credit Agreement"), to which reference is
hereby made for a more complete statement of the terms and conditions under
which the Letters of Credit are issued and the Reimbursement Obligations are to
be repaid. To the extent that any provisions of this Agreement are inconsistent
with the terms of the Credit Agreement, the terms of the Credit Agreement shall
control. All Applications shall be made on forms substantially identical to
Exhibit A attached hereto. Upon execution by the Company, each Application shall
become a part of, and subject to, the terms and conditions of the Credit
Agreement and this Agreement.
2. As to drafts drawn under or purporting to be drawn under a Credit which
are payable in United States currency, the Company agrees (a) in the case of
each sight draft, to reimburse the Issuing Bank at the Issuing Bank's issuing
office on demand, in United States legal tender, the amount paid on such draft;
or (b) if so demanded by the Issuing Bank, to pay to the Issuing Bank at said
office in advance, in such legal tender, the amount required to pay such draft.
3. As to drafts drawn under or purporting to be drawn under a Credit which
are payable in currency other than United States currency, the Company agrees in
the case of each sight draft to reimburse the Issuing Bank at the Issuing Bank's
issuing office, on demand, the equivalent of the amount paid, in United States
legal tender, at the rate of exchange then current
for cable transfers to the place of payment, in the currency in which such draft
is drawn. A demand made on the Company shall fix the exchange rate. If for any
reason whatsoever, there shall be, at the time of the Issuing Bank's demand of
reimbursement or payment, no rate of exchange current for effective cable
transfers to the place of payment and in the currency in which any such draft is
drawn, the Company agrees to pay the Issuing Bank, on demand, in United States
legal tender, an amount which, in the Issuing Bank's sole judgment, shall be
sufficient to meet the Company's obligations hereunder, which amount may be
applied by the Issuing Bank at any time as a payment on account of such
obligations; or, at the Issuing Bank's option, held as security therefor; it
being understood, however, that the Company shall remain liable for any
deficiency which may result if such amount in the United States legal tender
shall prove to be insufficient to effect full payment or reimbursement to the
Issuing Bank at the time when a rate of exchange for such transfers shall again
be current.
4. The Company also agrees to pay to the Issuing Bank, on demand, the fees
as set forth in the Credit Agreement, and all charges and expenses (including
all charges for legal services) paid or incurred by the Issuing Bank in
connection with the issuance of each Credit, plus correspondent's charges, if
any, and interest where chargeable. The Company agrees to pay the Issuing Bank
after demand for reimbursement interest upon any amounts disbursed hereunder at
the applicable rate of interest set forth in the Credit Agreement.
5. The Company agrees that, in the event of any extension of the maturity
or time for presentation of drafts, documents, or any other modification of the
terms of any Credit, at the Company's request, or in the event of any increase
in the amount of any Credit at the Company's request, this Agreement shall be
binding upon the Company with regard to such Credit so increased or otherwise
modified, to drafts, documents and to any action taken by the Issuing Bank or
any of the Issuing Bank's correspondents in accordance with such extension,
increase, or other modification.
6. The Company hereby expressly authorizes the Issuing Bank and any of the
Issuing Bank's correspondents to pay any drafts drawn under or purporting to be
drawn under any Credit, notwithstanding any discrepancies or irregularities
between the drafts and documents presented, and those required by the terms of
any Credit; provided that as to discrepancies and irregularities not otherwise
covered by the provisions of this Agreement, the Issuing Bank or the Issuing
Bank's correspondent so accepting or paying must be furnished with an indemnity
satisfactory to the Issuing Bank, which, running in the Company's favor as well
as the Issuing Bank, covers the discrepancies or irregularities, but is limited
to the actual damage directly attributable to such discrepancies or
irregularities.
7. The Company assumes all risks of the acts or omissions of the users of
the Credits. The Company agrees that, should the beneficiary under a Credit upon
receipt of advice, by cable or otherwise, of the issuance of a Credit, but prior
to its actual receipt, negotiate drafts by virtue of such advice, such
negotiation shall be considered a proper one and shall be included under the
terms and subject to all conditions hereof, and the Company assumes all the
risks of the misuses of the Credits, whatsoever. Neither the Issuing Bank nor
the Issuing Bank's correspondents shall be responsible for the form, validity,
sufficiency, genuineness, or legal effect of documents, even if such documents
should in fact prove to be in any or all respect
- 9 -
invalid, insufficient, fraudulent, or forged; for the validity or sufficiency of
any instrument assigning or transferring or purporting to assign or transfer any
Credit or the rights or benefits thereunder or proceeds thereof in whole or in
part, which may prove to be invalid or ineffective for any reason; for failure
of any draft to bear any reference or adequate reference to any Credit, or
failure of documents to accompany any draft at negotiation, or failure of
documents to accompany any draft at payment if sent by duplicate mail, or
failure of any person to note the amount of any draft on the reverse of any
Credit, or to surrender to take up any Credit or to send forward documents apart
from drafts, as required by the terms of any Credit, each of which provisions,
if contained in any Credit itself, it is agreed, may be waived by the Issuing
Bank; or for errors, omissions, interruptions, or delays in transmission or
delivery of any messages by mail, cable, telegraph, wireless, or otherwise,
whether or not they be in cipher; nor shall the Issuing Bank be responsible for
any error, neglect, or default of any of the Issuing Bank's correspondents for
errors in translation, or for errors in interpretation of technical terms, or
for any consequences arising from causes beyond the Issuing Bank's control; and
none of the above shall affect, impair, or prevent the vesting of any of the
Issuing Bank's rights or powers hereunder. The Issuing Bank shall have the right
to transmit the terms of any Credit without translating them. The Company shall
protect the Issuing Bank and any other drawee in paying any draft dated on or
before the expiration of any time limit expressed in any Credit, regardless of
when drawn and when or whether negotiated. If any Credit provides that payment
is to be made by the Issuing Bank's correspondent, neither the Issuing Bank nor
such correspondent shall be responsible for the failure of any of the documents
specified in any Credit to come into the Issuing Bank's hands, or for any delay
in connection therewith; and the Company's obligation to reimburse the Issuing
Bank for payments made or obligations incurred shall not be affected by such
failure or delay in the receipt by the Issuing Bank of any of such documents. In
furtherance and extension and not in limitation of the specific provisions
herein before set forth, the Company agrees that any action taken by the Issuing
Bank or any correspondent of the Issuing Bank, under or in connection with any
Credit or the relative drafts and documents, if taken in good faith, shall be
binding on the Company, and shall not put the Issuing Bank or the Issuing Bank's
correspondent under any resulting liability to the Company, and the Company
makes the same agreement as to any inaction or omission, unless in breach of
good faith.
The Issuing Bank shall not in any way be liable for any failure by the
Issuing Bank or anyone else to pay any draft under any Credit resulting from any
censorship, law, control or restriction rightfully or wrongfully exercised by
any de facto or de jure domestic or foreign government or agency, or from any
other cause beyond the Issuing Bank's control or the control of the Issuing
Bank's correspondents, agents, or sub-agents, or for any loss or damage to the
Issuing Bank or anyone else resulting from any such failure to pay, all such
risks being expressly assumed by the Company, and the Company agrees to
indemnify and hold the Issuing Bank harmless from any claim, loss, liability, or
expense arising by reason of any such failure to pay. The Company is responsible
to the Issuing Bank for all obligations imposed upon the Issuing Bank with
respect to any Credit or the relative drafts and documents.
8. The Company agrees that the balance of every account of the Company
with the Issuing Bank and each claim of the Company against the Issuing Bank
existing from time to time, shall be subject to a lien and subject to be set off
against any and all such liabilities of the Company; and the Issuing Bank may at
any time or from time to time at the Issuing Bank's
- 10 -
option and without notice after an "Event of Default" under the Credit
Agreement, appropriate and apply toward the payment of any of such liabilities
of the Company the balance of each such account of the Company with the Issuing
Bank and each such claim of the Company against the Issuing Bank, and the
Company will continue to be liable for any deficiency. The Company agrees that
all property of every description, now or hereafter in the Issuing Bank's
possession or custody, or in transit to the Issuing Bank for any purpose,
including safekeeping, collection, or pledge, for the account of the Company, or
as to which the Company may have any interest, right, or power, whether or not
such property is in whole or in part released to the Company on trust or bailee
receipt, are hereby made security and subject to a lien and security interest in
the Issuing Bank's favor for any and all such liabilities of the Company. The
Issuing Bank may at any time and from time to time, without notice, transfer
into the Issuing Bank's own name or that of the Issuing Bank's nominee, any
property so held as collateral. The Company agrees that upon the occurrence of
an "Event of Default" under the Credit Agreement or a breach of any of the
terms, conditions, or provisions of this Agreement (a) any and all such
liabilities of the Company shall, at the Issuing Bank's option, become and be
immediately due and payable, without notice, presentation, demand of payment or
protest, all such being hereby expressly waived, and notwithstanding any credit
or time allowed to the Company, or any instrument evidencing such liabilities or
otherwise, and (b) the Issuing Bank shall have the right from time to time to
sell, re-sell, assign, and deliver all or any part of the property, securing any
liabilities of the Company, arrived or to arrive, at any brokers' Board of
Exchange, or at public or private sale, at the Issuing Bank's option, without
having the property at the place of sale, in such parcel or parcels and at such
time or times and at such place or places, and upon such terms and conditions as
the Issuing Bank may deem proper, and in connection therewith, may grant
options, all without demand, advertisement or notice to the Company, all of
which are hereby expressly waived, and to apply the net proceeds of such sale or
sales to the payment of any and all such liabilities and the Company will
continue to be liable to the Issuing Bank for any deficiency, with interest.
Upon such sale, the Issuing Bank may purchase the whole or any part of the
property of the Company being sold, free from any right of redemption, which the
Company hereby expressly waives and releases. Demands or calls for collateral on
or any notices to the Company shall be made or given by the Issuing Bank by
complying with the notice provision contained in Section 13.1 of the Credit
Agreement. The Company agrees that with or without notification to the Company,
the Issuing Bank may exchange, release, surrender, realize upon, release on
trust receipt to the Company, or otherwise deal with any property by whomsoever
pledged, mortgaged, or subjected to a security interest to secure directly or
indirectly any of the obligations hereunder or for which the Company may be
liable.
Subject to the terms and conditions of the Credit Agreement, the Company
will bear and pay all expenses of every kind (including all reasonable charges
for legal services to the extent permitted by applicable law) of the enforcement
of any of the Issuing Bank's rights herein mentioned, of any claim or demand by
the Issuing Bank against the Company, and of any actual or attempted sale,
exchange, enforcement, collection maintenance, retention, insurance, compromise,
settlement, release, delivery on trust receipt, or delivery of any such
security, and of the receipt of proceeds thereof, and will repay to the Issuing
Bank any such expenses incurred by the Issuing Bank.
- 11 -
9. None of the Issuing Bank's options, powers or rights (including those
hereunder) shall be waived unless the Issuing Bank or the Issuing Bank's
authorized agent shall have signed such waiver in writing. No such waiver,
unless expressly as stated herein, shall be effective as to any transaction
which occurs subsequent to the date of such waiver, nor as to any continuance of
a breach after such waiver. No segregation or specific allocation by the Issuing
Bank of specified collateral against any liability shall waive or affect any
lien of any sort against other securities or property or any of the Issuing
Bank's options, powers or rights (including those hereunder).
10. The word "property" as used in this Agreement includes goods,
merchandise, securities, funds, choses in action, and any and all other forms of
property, whether real, personal, or mixed, and any right or interest therein.
Property in the Issuing Bank's possession shall include property in possession
of anyone for the Issuing Bank in any manner whatsoever. The Issuing Bank's
options, powers and rights specified in this Agreement are in addition to those
otherwise created. The Issuing Bank is hereby expressly given the right and
power in furtherance of any right, power or privilege which the Issuing Bank may
have hereunder or in connection with the Credits to execute any endorsements,
assignments, or other instruments of conveyance or transfer in the Company's
name, place and stead, covering any property standing in the Company's name or
belonging to the Company of every kind and description which the Issuing Bank
may hold or which may come into the Issuing Bank's possession under the Credits
or by reason of this Agreement.
11. If any Credit states that except so far as otherwise expressly stated,
it is subject to the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce (Publication No. 500) (herein
called the "Uniform Customs"), such Credit shall be so subject in all respects;
and (a) that, if such Credit does not state that except so far as otherwise
expressly stated it is subject to the Uniform Customs, the Issuing Bank and any
of the Issuing Bank's correspondents may, without limiting the type of document
acceptable according to any other provisions of this Agreement, accept documents
of any character which comply with the Uniform Customs, or which comply with the
laws or regulations in force and customs and usages of the place of negotiation,
and (b) that the Issuing Bank and any of the Issuing Bank's correspondents may
receive, negotiate, and pay as complying with the terms of such Credit, any
drafts or other documents, otherwise in order, which may be signed by, or issued
to, the administrator or executor of, or the trustee in bankruptcy of, or the
receiver for any of the property of the party in whose name such Credit provides
that any drafts or other documents should be drawn or issued.
12. The Issuing Bank is hereby expressly authorized and directed to honor
any request for payment which is made under and in compliance with the terms of
any Credit without regard to, and without any duty on the Issuing Bank's part to
inquire into, the existence of any disputes or controversies between the
Company, the beneficiary of such Credit, or any other person, firm or
corporation, or the respective rights, duties, or liabilities of any of them or
whether any facts or occurrences represented in any of the documents presented
under such Credit are true or correct. Furthermore, the Company fully
understands and agrees that the Issuing Bank's sole obligation to the Company
shall be limited to honoring requests for payment made under and in compliance
with the terms of the Credits and this Agreement and the Issuing
- 12 -
Bank's obligation remains so limited even if the Issuing Bank may have assisted
the Company in the preparation of the wording of the Credits or any documents
required to be presented thereunder or that the Issuing Bank may otherwise be
aware of the underlying transaction giving rise to the Credits and this
Agreement.
13. If any Credit shall be issued by the Issuing Bank's correspondent in
accordance with this Agreement, each of the warranties, liabilities and other
terms of this Agreement or of any Credit shall run in the Issuing Bank's favor
as well as that of the Issuing Bank's correspondent so issuing such Credit.
14. The Company authorizes any attorney at law to appear in any court of
record in the State of Ohio or in any state or territory of the United States
after the above indebtedness becomes due, whether by acceleration or otherwise,
to waive the issuing and service of process, and to confess judgment against the
Company in favor of the Issuing Bank for the amount then appearing due together
with costs of suit, and thereupon to waive all errors and all rights of appeal
and stays of execution.
15. THE COMPANY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; AND THE COMPANY 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
COMPANY TO THE WAIVER OF THE COMPANY'S RIGHT TO TRIAL BY JURY.
16. This Agreement shall be binding upon the Company, its heirs,
executors, administrators, successors, and assigns, and shall inure to the
benefit of, and to be enforceable by, the Issuing Bank, its successors,
transferees and assigns. If this Agreement should be terminated or revoked by
operation of law as to the Company, the Company will indemnify and save the
Issuing Bank harmless from any loss which may be suffered or incurred by the
Issuing Bank in acting hereunder, prior to the receipt by the Issuing Bank or
the Issuing Bank's transferees or assigns of notice in writing of such
termination or revocation. This Agreement shall be governed by and construed in
accordance with the law of the State of Ohio.
- 13 -
WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
DOMINION HOMES, INC.
By:__________________________________
Its:_________________________________
- 14 -
EXHIBIT A
ATTACHMENT TO STANDBY LETTER
OF CREDIT REIMBURSEMENT AGREEMENT
BETWEEN THE HUNTINGTON NATIONAL BANK AND DOMINION HOMES, INC.
EXECUTED AND DELIVERED DECEMBER , 2001.
The Huntington National Bank __________________, 20
International Division
P.O. Box 1558 Letter of Credit No.
Xxxxxxxx, Xxxx 00000
FOR BANK USE ONLY
Please issue by ___ Cable ____ Airmail DATE AND PLACE OF EXPIRY
For Our Account An Irrevocable Letter
of Credit as Follows:
Applicant Beneficiary
Dominion Homes, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxx 00000-0000
or
__________________________
__________________________
__________________________
Advising Bank Amount
Credit available with
By __ payment __ negotiation against
presentation of the documents
detailed herein.
LIST BELOW DOCUMENTS/ And of beneficiary's draft(s) at SIGHT
STATEMENTS REQUIRED, IF ANY
Drawn on
DOMINION HOMES, INC.
By:__________________________________
Its:_________________________________
EXHIBIT C TO AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 31, 2001
Form of Notice of Borrowing
The Huntington National Bank, Administrative Agent
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Vice President
Re: Amended and Restated Credit Agreement dated December 31, 2001
Ladies and Gentlemen:
The undersigned, a duly authorized officer of Dominion Homes, Inc.,
borrower under the above-referenced Credit Agreement, hereby requests the
(disbursement) (conversion) of a (Prime Rate Advance) (Eurodollar Advance) in
the amount of $ (to a (Prime Rate Advance) (Eurodollar Advance) in the amount of
$ )) (for a period of (months)). The date of (disbursement) (conversion) will be
, 200 . This request corresponds to the (Revolving Loans) (Swing Line Loan) to
the Borrower provided for in the Credit Agreement.
The proceeds of the advance shall be disbursed as follows:_____________
________________________________________________________________________________
DOMINION HOMES, INC.
By:__________________________________
Its:_________________________________
Date:_____________________
EXHIBIT D TO AMENDED AND RESTATED CREDIT AGREEMENT
DATED DECEMBER 31, 2001
Form of Officer's Certificate
OFFICER'S CERTIFICATE
To: To the institutions from time to time party thereto as Lenders,
(individually, a "Lender" and collectively, the "Lenders"), The Huntington
National Bank ("Huntington") as issuing bank and as a Lender, and
Huntington, in its separate capacity as administrative agent for the
Lenders and the issuing bank (with its successors in such capacity,
"Administrative Agent") under the Amended and Restated Credit Agreement
dated as of December , 2001, among Dominion Homes, Inc. (the "Company"),
the Lenders, Huntington and the Administrative Agent (as amended,
restated, supplemented or otherwise modified from time to time, the
"Credit Agreement").
Pursuant to Section 9 of the Credit Agreement, the [President] [Chief
Operating Officer and Chief Financial Officer] [Treasurer] of the undersigned,
hereby certifies that:
1. I am the duly elected, qualified and acting [President] [Chief
Operating Officer and Chief Financial Officer] [Treasurer] of the Company.
2. Unless otherwise defined herein, terms defined in the Credit Agreement
shall have the same meanings in this Certificate.
3. The consolidated financial statements attached hereto as Exhibit A,
including a balance sheet, statements of operations of the Company and the
Subsidiaries, and statements of income and surplus, fairly represent the
financial condition of the Company and the Subsidiaries as of _____________,
200__.
4. The calculation of the Borrowing Base as of the end of __________,
200__. (including, without limitation, a complete listing of the Non-Facility
Contingent Obligations) is attached hereto as Exhibit B.
5. The Company is in compliance with terms of the Credit Agreement and the
calculating the financial covenants and ratios of the Company set forth in
Sections 8.13, 8.14, 8.16 and 8.17 of the Credit Agreement. A copy of the
calculations of the financial covenants and ratios are set forth in Exhibit C.
6. No Event of Default or Potential Default has occurred and is
continuing.
By: __________________, ________________
of the Company, Dominion Homes, Inc.
EXHIBIT E TO AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 31, 2001
Form of Assignment and Acceptance
ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE dated ________________, 200__, between _________
_______________________________(the "Assignor") and ______________ (the
"Assignee").
PRELIMINARY STATEMENTS
A. Reference is made to the Amended and Restated Credit Agreement dated as
of December , 2001, among Dominion Homes, Inc., an Ohio corporation (the
"Company"), the institutions from time to time party thereto as Lenders
(individually, a "Lender" and collectively, the "Lenders"), The Huntington
National Bank ("Huntington") in its separate capacity as issuing bank (the
"Issuing Bank"), and Huntington, in its separate capacity as administrative
agent for the Lenders and the Issuing Bank (with its successors in such
capacity, "Administrative Agent") (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Terms defined in
the Credit Agreement and not otherwise defined herein are used herein with the
meanings ascribed thereto in the Credit Agreement.
B. The Assignor is a Lender under the Credit Agreement and desires to sell
and assign to the Assignee, and the Assignee desires to purchase and assume from
the Assignor, on the terms and conditions set forth below, a percentage interest
in the aggregate Revolving Credit Commitments (the "Assigned Percentage") as
specified in Item 4 of Schedule 1 attached hereto, together with the Assignor's
rights and obligations under the Credit Agreement with respect to the Assigned
Percentage.
NOW, THEREFORE, the Assignor and the Assignee hereby agree as follows:
1. In consideration of the Assignee's payment to the Assignor of
$_________, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, the Assigned
Percentage, together with the Assignor's rights and obligations under the Credit
Agreement with respect to such Assigned Percentage, including, without
limitation, the obligation to make Revolving Loans and to participate in Letters
of Credit.
2. The Assignor (i) represents and warrants that as of the date hereof its
Pro Rata Share (without giving effect to assignments thereof which have not yet
become effective) is as set forth in Item 3(a) of Schedule 1 attached hereto,
and that its Revolving Credit Commitment (without giving effect to assignments
thereof which have not yet become effective) is equal to the amount set forth in
Item 3(b) of Schedule 1 attached hereto; (ii) represents and warrants that it
has legal and beneficial title to the interests being assigned by it hereunder
free and clear of
any claim adverse to such title; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any of the Loan Documents, or any other instrument or
document furnished pursuant thereto or executed and delivered in connection
therewith; (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or any of
the Company's Subsidiaries or the performance or observance by the Company or
any of the Company's Subsidiaries of any of such Persons' respective obligations
under the Credit Agreement, any other Loan Document or any instrument or
document furnished pursuant thereto; and (v) attaches the Revolving Credit Note
delivered to it under the Credit Agreement and has requested that the Company
exchange such Note for the following new Note(s):
Revolving Credit
Note Payable Revolving
to the Order of: Note Amount:
---------------- ------------
[Name of Assignor] $___________
[Name of Assignee] $___________
3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Credit Agreement, together with copies of such other Loan
Documents, information, exhibits, reports, projections and forecasts which the
Assignee has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance; (iii) agrees that it shall have no
recourse against the Assignor with respect to any matters relating to the Credit
Agreement, any other Loan Document or this Assignment and Acceptance (except
with respect to the representations and warranties made by the Assignor in
clauses (i) and (ii) of Paragraph 2 above); (iv) agrees that it will,
independently and without reliance upon the Administrative Agent, the Issuing
Bank, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement and
the other Loan Documents; (v) appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under the
Credit Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (vi) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement and other Loan Documents are required to be performed by it as a
Lender; (vii) represents and warrants that none of the consideration used to
make the purchase of the Revolving Credit Commitment and Revolving Loans under
this Assignment and Acceptance are "loan assets" as defined under ERISA and that
the rights and interests of the Assignee in and under the Loan Documents will
not be "plan assets" under ERISA, and (viii) specifies as its address for
notices the address set forth in Item 6 of Schedule 1 attached hereto, together
with the name and address of its applicable lending office.
4. The effective date for this Assignment and Acceptance shall be the
later of (i) the date set forth in Item 2 of Schedule 1 attached hereto, or (ii)
the date upon which a completed Notice of Assignment substantially in the form
of Exhibit 1 attached hereto, together with any consents and fees required by
and otherwise in accordance with Section 12.3 of the Credit Agreement shall have
been delivered to the Administrative Agent, provided the Administrative Agent
accepts the Notice of Assignment and the assignment and transfer referenced
therein (the "Effective Assignment Date").(1)
5. As of the Effective Assignment Date, provided that the Administrative
Agent accepts the Notice of Assignment and the assignment and transfer
referenced therein, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall relinquish
its rights and be released from its obligations under the Credit Agreement with
respect to the Assigned Percentage.
6. From and after the Effective Assignment Date, provided that the
Administrative Agent accepts the Notice of Assignment and the assignment and
transfer referenced therein, the Administrative Agent shall make all payments
under the Credit Agreement in respect of the Assigned Percentage (including,
without limitation, all payments of principal, interest and fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Effective Assignment Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Ohio.
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of __________, 200__.
[NAME OF ASSIGNOR]
By_____________________________________
Name:________________________________
Title:_______________________________
[NAME OF ASSIGNEE]
By_____________________________________
Name:________________________________
Title:_______________________________
----------
(1) Such date shall be at least two (2) Business Days after the date of
execution of this Assignment and Acceptance by the Assignor and Assignee and the
delivery to the Administrative Agent of the Notice of Assignment and any
consents and fees required by Section 12.3 of the Credit Agreement.
Exhibit 1
to
Assignment and Acceptance
Form of Notice of Assignment
To: Dominion Homes, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxx 00000
Attention: Chief Financial Officer
The Huntington National Bank,
Administrative Agent
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the ("Assignee")
1. We refer to the Amended and Restated Credit Agreement dated as of December
__, 2001, among Dominion Homes, Inc., an Ohio corporation (the "Company"),
the institutions from time to time party thereto as Lenders (individually,
a "Lender" and collectively, the "Lenders"), The Huntington National Bank
("Huntington") in its separate capacity as issuing bank (the "Issuing
Bank"), and Huntington, in its separate capacity as administrative agent
for the Lenders and the Issuing Bank (with its successors in such
capacity, "Administrative Agent") (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to the
Company and the Administrative Agent pursuant to Section 12.3(b) of the
Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment and
Acceptance, dated as of _________________________________ (the
"Assignment"), pursuant to which, among other things, the Assignor has
sold, assigned, delegated and transferred to the Assignee, and the
Assignee has purchased, accepted and assumed from the Assignor the
percentage interest specified in Item 4 of Schedule 1 attached hereto of
all the aggregate Revolving Credit Commitments under the Credit Agreement.
After giving effect to the assignment and transfer referenced in the
Assignment, Assignor's Pro Rata Share will be as set forth in Item 5(a) of
Schedule 1 attached hereto, Assignor's Revolving Credit
Commitment will be the amount set forth in Item 5(b) of Schedule 1
attached hereto, Assignee's Pro Rata Share will be as set forth in Item 4
of Schedule 1 attached hereto and Assignee's Revolving Credit Commitment
will be the amount set forth in Item 5(c) of Schedule 1 attached hereto.
The Effective Assignment Date of the Assignment shall be the later of the
date specified in Item 2 of Schedule 1 or two Business Days (or such
shorter period as agreed to by the Administrative Agent) after this Notice
of Assignment and any consents and fees required by Sections 12.3(a) and
12.3(b) of the Credit Agreement have been delivered to the Administrative
Agent, provided that the Administrative accepts this Notice of Assignment
and the assignment and transfer referenced herein, and provided that the
Effective Assignment Date shall not occur if any condition precedent
agreed to by the Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to the Company and the
Administrative Agent notice of the Assignment and delegation referred to
herein. The Assignor will confer with the Administrative Agent before the
date specified in Item 2 of Schedule 1 to determine if the Assignment will
become effective on such date pursuant to Section 3 hereof, and will
confer with the Administrative Agent to determine the Effective Assignment
Date pursuant to Section 3 hereof if it occurs thereafter. The Assignor
shall notify the Administrative Agent if the Assignment does not become
effective on any proposed Effective Assignment Date as a result of the
failure to satisfy the conditions precedent agreed to by the Assignor and
the Assignee. At the request of the Administrative Agent, the Assignor
will give the Administrative Agent written confirmation of the
satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Administrative Agent on or
before the Effective Assignment Date the processing fee of $2,500 required
by Section 12.3(b) of the Credit Agreement.
6. If Notes are outstanding on the Effective Assignment Date in favor of
Assignor, the Assignor and the Assignee request and direct that the
Administrative Agent prepare and cause the Company to execute and deliver
new Notes or, as appropriate, replacement Notes, to the Assignor and the
Assignee. The Assignor and, if applicable, the Assignee each agree to
deliver to the Administrative Agent the original Notes received by it from
the Company upon its receipt of new Notes in the appropriate amount.
7. The Assignee advises the Administrative Agent that its notice and payment
instructions are set forth in Schedule 1.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and
that its rights, benefits, and interests and under the Loan Documents will
not be "plan assets" under ERISA.
9. The Assignee authorizes the Administrative Agent to act as its agent under
the Loan Documents in accordance with the terms thereof. The Assignee
acknowledges that the Administrative Agent has no duty to supply
information with respect to the Company or the
Loan Documents to the Assignee until the Assignee becomes a party to the
Credit Agreement.(2)
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: ________________________________ By: ________________________________
Its:________________________________ Its:________________________________
ACKNOWLEDGED AND CONSENTED ACKNOWLEDGED AND CONSENTED
TO BY THE HUNTINGTON NATIONAL TO BY DOMINION HOMES, INC.
BANK, AS ADMINISTRATIVE AGENT
By: ________________________________ By: ________________________________
Its:________________________________ Its:________________________________
(Attach photocopy of Schedule 1 to Assignment and Acceptance as Schedule 1
hereto)
----------
(2) This paragraph may be eliminated if the Assignee is a party to the Credit
Agreement prior to the Effective Assignment Date.
Schedule 1
to
to Assignment and Acceptance
and to
Notice of Assignment
1. Date of Assignment and Acceptance ________________
2. Proposed Effective Assignment Date: ________________
3. Amounts (As of Date of Item 1 above):
a. Assignor's Pro Rata Share ________________%
b. Assignor's Revolving Credit Commitment* $_______________
4. Assignee's percentage interest in the
aggregate Revolving Credit
Commitments (the "Assigned
Percentage") ________________%
5. Amounts (Immediately after Effective
Assignment Date)
a. Assignor's Pro Rata Share ________________%
b. Assignor's Revolving Credit Commitment* $_______________
c. Assignee's Revolving Credit
Commitment (subject to minimum
amount, if applicable)* $_______________
6. Notice Address and address of lending
office for Assignee ________________
________________
________________
7. Payment Instructions ________________
________________
________________
*If the Revolving Credit Commitments have been terminated, insert Pro Rata Share
of Revolving Credit Obligations.
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: ________________________________ By: ________________________________
Title:______________________________ Title:______________________________
EXHIBIT F TO AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 31, 2001
Form of Subsidiary Guaranty
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY ("Guaranty") is made as of the _________
day of ______________________, 200__, by each Restricted Subsidiary of Dominion
Homes, Inc. which is listed on the signature pages hereof or which becomes a
party hereto pursuant to Section 23 hereof (each a "Guarantor" and collectively,
the "Guarantors"), in favor of The Huntington National Bank (in its individual
capacity, "Huntington"), as administrative agent for the Lenders and the issuing
bank (with its successors and permitted assigns in such capacity, the
"Administrative Agent"), for the ratable benefit of the Lenders and the issuing
bank under the Credit Agreement. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to them in the Credit
Agreement referred to below.
PRELIMINARY STATEMENTS
A. Dominion Homes, Inc., an Ohio corporation (the "Company"), the Lenders,
Huntington in its separate capacity as issuing bank (with its successors and
permitted assigns in such capacity, the "Issuing Bank") and Huntington, in its
separate capacity as Administrative Agent, have entered into that certain
Amended and Restated Credit Agreement, dated as of December , 2001 (as the same
may be amended, restated, modified or supplemented from time to time, the
"Credit Agreement");
B. Each Guarantor is a direct or indirect wholly-owned Subsidiary of
Company;
C. The Lenders, the Issuing Bank and the Administrative Agent have
required as a condition, among others, to entering into the Credit Agreement,
that each Guarantor guarantee the Obligations (as defined below) of the Company;
NOW THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Guaranty. (i) For value received and in consideration of any
loan, advance or financial accommodation of any kind whatsoever heretofore, now
or hereafter made, given or granted to the Company by the Lenders and the
Issuing Bank, each Guarantor jointly and severally unconditionally guarantees
for the benefit of the Administrative Agent, the Issuing Bank and the Lenders
the full and prompt payment when due, whether at maturity or earlier, by reason
of acceleration or otherwise, and at all times thereafter, of all the
Obligations (including, without limitation, interest accruing following the
filing of a bankruptcy petition by or against the Company, at the applicable
rate specified in the Credit Agreement, whether or not such interest is allowed
as a claim in bankruptcy). As used herein, "Obligations" means, to the extent
arising under the Credit Agreement, under the Notes or under any other Loan
Document, all Revolving Credit Obligations, advances, debts, liabilities,
obligations, covenants and duties owing by the Company to the Administrative
Agent, any Lender, the Issuing Bank, any affiliate of the Administrative Agent,
any Lender or the Issuing Bank, or any Person entitled to indemnification
pursuant to the Credit Agreement or any Loan Document, of any kind or nature,
present or future, whether or not evidenced by any note, guaranty or other
instrument, whether or not for the payment of money, whether arising under or in
connection with an interest rate agreement with any Lender or any affiliate of a
Lender, or by reason of an extension of credit, opening or amendment of a Letter
of Credit or payment of any draft drawn thereunder, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term "Obligations"
includes, without limitation, all interest, charges, expenses, fees, reasonable
attorneys' fees and disbursements and any other sum chargeable to the Company
under the Credit Agreement or under any other Loan Document. The term
"Obligations" also includes, without limitation, all indebtedness owed by
Company to the Administrative Agent, any Lender, the Issuing Bank, any affiliate
of the Administrative Agent, any Lender or the Issuing Bank, or any Person
entitled to indemnification pursuant to the Credit Agreement or any Loan
Document, by reason of credit extended or to be extended to Borrower in the
principal amount of $175,000,000.00, pursuant to one or more instruments of
indebtedness and related documents.
(ii) At any time after the occurrence of an Event of Default, each
Guarantor shall pay to the Administrative Agent, for the benefit of the
Administrative Agent, the Issuing Bank and the Lenders, on demand and in
immediately available funds, the full amount of the Obligations (including any
portion thereof which is not yet due and payable). Each Guarantor further agrees
to pay and reimburse the Administrative Agent, the Issuing Bank and the Lenders
for, on demand and in immediately available funds, (a) all fees, costs and
expenses (including, without limitation, all court costs and attorneys' and
paralegals' fees, costs and expenses) paid or incurred by the Administrative
Agent, the Issuing Bank or the Lenders in: (1) endeavoring to collect all or any
part of the Obligations from, or in prosecuting any action against, the Company
or such Guarantor relating to the Credit Agreement, this Guaranty or the
transactions contemplated thereby; (2) taking any action with respect to any
security or collateral securing the Obligations or such Guarantor's obligations
hereunder; and (3) preserving, protecting or defending the enforceability of, or
enforcing, this Guaranty or the Administrative Agent's rights hereunder (all
such costs and expenses are hereinafter referred to as the "Expenses") and (b)
interest on (1) the Obligations which do not constitute interest, (2) to the
extent permitted by applicable law, the Obligations which constitute interest,
and (3) the Expenses, from the date of demand under this Guaranty until paid in
full at the per annum rate of interest described in Section 3 of the Credit
Agreement. Each Guarantor hereby agrees that this Guaranty is an absolute
guaranty of payment and is not a guaranty of collection.
(iii) The Guarantors agree as between themselves and without
limiting any liability of any Guarantor hereunder to the Administrative Agent,
the Issuing Bank or the Lenders, that to the extent any payment of the
Obligations of the Company is required to be made under this Guaranty, each
Guarantor shall be responsible for a portion of such payment equal to the
product of (a) a fraction, the numerator of which is the net worth (determined
in
7
accordance with GAAP) of such Guarantor on the date of such payment and the
denominator of which is the aggregate net worth (computed as aforesaid) of the
Guarantors, multiplied by (b) the amount of such payment (such product being
such Guarantor's "Contribution Amount"). To the extent that any Guarantor (the
"Paying Guarantor") shall make a payment in respect of the Obligations of the
Company under this Guaranty in excess of its Contribution Amount, the other
Guarantors shall reimburse the Paying Guarantor in an amount equal to the excess
of such payment over the Paying Guarantor's Contribution Amount, pro rata based
on the respective net worths of such other Guarantors at the date enforcement
under this Guaranty is sought.
2. Obligations Unconditional. Each Guarantor hereby agrees that its
obligations under this Guaranty shall be unconditional, irrespective of:
(i) the validity, enforceability, avoidance or subordination of any
of the Obligations or any of the Loan Documents;
(ii) the absence of any attempt by, or on behalf of, the
Administrative Agent, the Issuing Bank or any of the Lenders to collect,
or to take any other action to enforce, all or any part of the Obligations
whether from or against the Company, any Guarantor or other guarantor of
the Obligations or any other Person;
(iii) the election of any remedy by, or on behalf of, the
Administrative Agent, the Issuing Bank or any of the Lenders with respect
to all or any part of the Obligations;
(iv) the waiver, consent, extension, forbearance or granting of any
indulgence by, or on behalf of, the Administrative Agent, the Issuing Bank
or any of the Lenders with respect to any provision of any of the Loan
Documents;
(v) the failure of the Administrative Agent, the Issuing Bank or any
of the Lenders to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral for
the Obligations;
(vi) the election by, or on behalf of, the Administrative Agent, the
Issuing Bank or any of the Lenders, in any proceeding instituted under
Chapter 11 of Title 11 of the United States Code (11 U.S.C. 101 et seq.)
(the "Bankruptcy Code"), of the application of Section 1111(b)(2) of the
Bankruptcy Code;
(vii) any borrowing or grant of a security interest by the Company,
as debtor-in-possession, under Section 364 of the Bankruptcy Code;
(viii) the disallowance, under Section 502 of the Bankruptcy Code,
of all or any portion of the claims of any of the Lenders, the Issuing
Bank, or the Administrative Agent for repayment of all or any part of the
Obligations or any Expenses; or
(ix) any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of the Company or the Guarantors.
8
3. Enforcement; Application of Payments. Upon the occurrence of an
Event of Default, the Administrative Agent, the Issuing Bank and/or the Lenders
may proceed directly and at once, without notice, against any Guarantor to
obtain performance of and to collect and recover the full amount, or any
portion, of the Obligations, without first proceeding against the Company or any
other Person, or against any security or collateral for the Obligations. Subject
only to the terms and provisions of the Credit Agreement, the Lenders and the
Issuing Bank shall have the exclusive right to determine the application of
payments and credits, if any, from any Guarantors, the Company or from any other
Person on account of the Obligations or any other liability of the Guarantors to
the Administrative Agent, the Issuing Bank or any of the Lenders.
4. Waivers. (i) Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of receivership or
bankruptcy of the Company, protest or notice with respect to the Obligations,
all setoffs and counterclaims and all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor and
notices of acceptance of this Guaranty, the benefits of all statutes of
limitation, and all other demands whatsoever (and shall not require that the
same be made on the Company as a condition precedent to such Guarantor's
obligations hereunder), and covenants that this Guaranty will not be discharged,
except by complete payment (in cash) and performance of the Obligations and any
other obligations contained herein. Each Guarantor further waives all notices of
the existence, creation or incurring of new or additional Indebtedness, arising
either from additional loans extended to the Company or otherwise, and also
waives all notices that the principal amount, or any portion thereof, and/or any
interest on any instrument or document evidencing all or any part of the
Obligations is due, notices of any and all proceedings to collect from the
maker, any endorser or any other guarantor of all or any part of the
Obligations, or from any other Person, and, to the extent permitted by law,
notices of exchange, sale, surrender or other handling of any security or
collateral given to the Administrative Agent, the Issuing Bank or any of the
Lenders to secure payment of all or any part of the Obligations.
(ii) The Administrative Agent, the Issuing Bank and/or the Lenders
are hereby authorized, without notice or demand and without affecting the
liability of the Guarantors hereunder, from time to time, (a) to renew, extend,
accelerate or otherwise change the time for payment of, or other terms relating
to, all or any part of the Obligations, or to otherwise modify, amend or change
the terms of any of the Loan Documents; (b) to accept partial payments on all or
any part of the Obligations; (c) to take and hold security or collateral for the
payment of all or any part of the Obligations, this Guaranty, or any other
guaranties of all or any part of the Obligations or other liabilities of the
Company, (d) to exchange, enforce, waive and release any such security or
collateral; (e) to apply such security or collateral and direct the order or
manner of sale thereof as in its discretion it may determine; (f) to settle,
release, exchange, enforce, waive, compromise or collect or otherwise liquidate
all or any part of the Obligations, this Guaranty, any other guaranty of all or
any part of the Obligations, and any security or collateral for the Obligations
or for any such guaranty. Any of the foregoing may be done in any manner,
without affecting or impairing the obligations of the Guarantors hereunder.
5. Setoff. At any time after all or any part of the Obligations have
become due and payable (by acceleration or otherwise), the Lenders and the
Issuing Bank may, without notice to any Guarantor and regardless of the
acceptance of any security or collateral for the
9
payment hereof, appropriate and apply toward the payment of all or any part of
the Obligations (i) any Indebtedness due or to become due from the Lenders or
the Issuing Bank to such Guarantor, and (ii) any moneys, credits or other
property belonging to such Guarantor, at any time held by or coming into the
possession of the Lenders or the Issuing Bank or their respective affiliates.
6. Financial Information. Each Guarantor hereby assumes
responsibility for keeping itself informed of the financial condition of the
Company and any and all other Guarantors and endorsers and/or other guarantors
of all or any part of the Obligations, and of all other circumstances bearing
upon the risk of nonpayment of the Obligations, or any part thereof, that
diligent inquiry would reveal, and such Guarantor hereby agrees that the
Administrative Agent, the Issuing Bank and the Lenders shall have no duty to
advise any Guarantor of information known to it regarding such condition or any
such circumstances. In the event the Administrative Agent, the Issuing Bank or
any of the Lenders, in its sole discretion, undertakes at any time or from time
to time to provide any such information to any Guarantor, the Administrative
Agent, the Issuing Bank or such Lender shall be under no obligation (i) to
undertake any investigation not a part of its regular business routine, (ii) to
disclose any information which the Administrative Agent, the Issuing Bank or
such Lender, pursuant to accepted or reasonable commercial finance or banking
practices, wishes to maintain confidential or (iii) to make any other or future
disclosures of such information or any other information to such Guarantor.
7. No Marshalling; Reinstatement. Each Guarantor consents and agrees
that none of the Administrative Agent, the Issuing Bank or any of the Lenders or
any Person acting for or on behalf of the Administrative Agent shall be under
any obligation to xxxxxxxx any assets in favor of any Guarantor or against or in
payment of any or all of the Obligations. Each Guarantor further agrees that, to
the extent that the Company, any Guarantor or any other guarantor of all or any
part of the Obligations makes a payment or payments to the Administrative Agent,
or the Lenders or the Issuing Bank, or the Administrative Agent, or any Lender
or the Issuing Bank receives any proceeds of collateral, which payment or
payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to the
Company, any Guarantor, such other guarantor or any other Person, or their
respective estates, trustees, receivers or any other party, including, without
limitation, such Guarantor, under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or repayment,
the part of the Obligations which has been paid, reduced or satisfied by such
amount shall be reinstated and continued in full force and effect as of the time
immediately preceding such initial payment, reduction or satisfaction.
8. Subordination of Subrogation Rights. Each Guarantor hereby
subordinates (i) all rights of subrogation (whether contractual, under section
509 of the Bankruptcy Code, under common law, or otherwise) to the claims of the
Administrative Agent, the Issuing Bank or any of the Lenders against Company and
all contractual, statutory or common law rights of contribution, reimbursement,
indemnification and similar rights and "claims" (as such term is defined in the
Bankruptcy Code) against Company which arise in connection with, or as a result
of, this Guaranty, to (ii) the prior payment in full (in cash) of the
Obligations.
10
9. Subordination. Each Guarantor agrees that any and all claims of
such Guarantor against the Company, any other Guarantor or any endorser or other
guarantor of all or any part of the Obligations, or against any of their
respective properties, shall be subordinated to all of the Obligations. No
Guarantor shall have any right to possession of any asset of the Company or to
foreclose upon any such asset, whether by judicial action or otherwise, unless
and until all of the Obligations shall have been fully paid and satisfied and
all financing arrangements between the Company and the Lenders and the Issuing
Bank have been terminated. Notwithstanding anything contained in this Guaranty
to the contrary (but subject to any applicable provisions of the Credit
Agreement), if no Event of Default shall have occurred and be continuing, the
Company may make regularly scheduled payments of principal of and interest on
Indebtedness owing to each Guarantor. If all or any part of the assets of the
Company, or the proceeds thereof, are subject to any distribution, division or
application to the creditors of the Company, whether partial or complete,
voluntary or involuntary, and whether by reason of liquidation, bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding, or if the business of the Company is dissolved or if
substantially all of the assets of the Company are sold, then, and in any such
event, any payment or distribution of any kind or character, either in cash,
securities or other property, which shall be payable or deliverable upon or with
respect to any Indebtedness of the Company to such Guarantor ("Company
Indebtedness") shall be paid or delivered directly to the Lenders and the
Issuing Bank for application on any of the Obligations, due or to become due,
until such Obligations shall have first been fully paid and satisfied. Each
Guarantor irrevocably authorizes and empowers the Administrative Agent and each
of the Lenders and the Issuing Bank to demand, xxx for, collect and receive
every such payment or distribution and give acquittance therefor and to make and
present for and on behalf of such Guarantor such proofs of claim and take such
other action, in the Administrative Agent's or such Lender's or the Issuing
Bank's own name or in the name of such Guarantor or otherwise, as the
Administrative Agent or any Lender or the Issuing Bank may deem necessary or
advisable for the enforcement of this Guaranty. Each Lender and the Issuing Bank
may vote such proofs of claim in any such proceeding, receive and collect any
and all dividends or other payments or disbursements made thereon in whatever
form the same may be paid or issued and apply the same on account of any of the
Obligations. Should any payment, distribution, security or instrument or
proceeds thereof be received by any Guarantor upon or with respect to the
Company Indebtedness prior to the satisfaction of all of the Obligations and the
termination of all financing arrangements between the Company and the Lenders
and the Issuing Bank, such Guarantor shall receive and hold the same in trust,
as trustee, for the benefit of the Administrative Agent, the Issuing Bank and
the Lenders and shall forthwith deliver the same to the Administrative Agent, in
precisely the form received (except for the endorsement or assignment of such
Guarantor where necessary), for application to any of the Obligations, due or
not due, and, until so delivered, the same shall be held in trust by such
Guarantor as the property of the Administrative Agent, the Issuing Bank and the
Lenders. If any Guarantor fails to make any such endorsement or assignment to
the Administrative Agent, the Issuing Bank or the Lenders, the Administrative
Agent, the Issuing Bank or the Lenders, or any of its officers or employees, are
hereby irrevocably authorized to make the same. Each Guarantor agrees that until
the Obligations have been paid in full (in cash) and satisfied and all financing
arrangements between the Company and the Lenders and the Issuing Bank have been
terminated, such Guarantor will not assign or transfer to any Person any claim
such Guarantor has or may have against the Company.
11
10. Enforcement; Amendments; Waivers. No delay on the part of the
Administrative Agent, the Issuing Bank or any of the Lenders in the exercise of
any right or remedy arising under this Guaranty, the Credit Agreement, any of
the other Loan Documents or otherwise with respect to all or any part of the
Obligations, or any other guaranty of, or security, for all or any part of the
Obligations, shall operate as a waiver thereof, and no single or partial
exercise by the Administrative Agent, the Issuing Bank or any of the Lenders of
any such right or remedy shall preclude any further exercise thereof. No
modification or waiver of any of the provisions of this Guaranty shall be
binding upon the Administrative Agent, the Issuing Bank or any of the Lenders,
except as expressly set forth in a writing duly signed and delivered by the
Administrative Agent. Failure by the Administrative Agent or any of the Lenders
at any time or times hereafter to require strict performance by the Company, any
Guarantor, any other guarantor of all or any part of the Obligations or any
other Person of any of the provisions, warranties, terms and conditions
contained in any of the Loan Documents now or at any time or times hereafter
executed by such Persons and delivered to the Administrative Agent, the Issuing
Bank or any of the Lenders shall not waive, affect or diminish any right of the
Administrative Agent, the Issuing Bank or any of the Lenders at any time or
times hereafter to demand strict performance thereof and such right shall not be
deemed to have been waived by any act or knowledge of the Administrative Agent,
the Issuing Bank or any of the Lenders, or its agents, officers or employees,
unless such waiver is contained in an instrument in writing, directed and
delivered to the Company or the Guarantors, as applicable, specifying such
waiver, and is signed by the Administrative Agent. No waiver of any Event of
Default by the Lenders shall operate as a waiver of any other Event of Default
or the same Event of Default on a future occasion, and no action by the
Administrative Agent, the Issuing Bank or any of the Lenders permitted hereunder
shall in any way affect or impair the Administrative Agent's, the Issuing Bank's
or any Lender's rights and remedies or the obligations of the Guarantors under
this Guaranty. Any determination by a court of competent jurisdiction of the
amount of any principal and/or interest owing by the Company to the
Administrative Agent, the Lenders and the Issuing Bank shall be conclusive and
binding on each Guarantor irrespective of whether such Guarantor was a party to
the suit or action in which such determination was made.
11. Effectiveness; Termination. This Guaranty shall become effective
against any Guarantor upon its execution by such Guarantor and shall continue in
full force and effect and may not be terminated or otherwise revoked until the
Obligations (other than indemnities not yet due) shall have been fully paid (in
cash) and discharged and the Credit Agreement and the Revolving Credit
Commitments shall have been terminated. If, notwithstanding the foregoing, any
Guarantor shall have any right under applicable law to terminate or revoke its
obligations under this Guaranty, such Guarantor agrees that such termination or
revocation shall not be effective until a written notice of such revocation or
termination, specifically referring hereto, signed by such Guarantor, is
actually received by the Administrative Agent. Such notice shall not affect the
right and power of the Administrative Agent, the Issuing Bank or any of the
Lenders to enforce rights arising prior to receipt thereof by the Administrative
Agent, the Issuing Bank and the Lenders. If any of the Lenders or the Issuing
Bank grants loans or takes other action after such Guarantor terminates or
revokes its obligations under this Guaranty but before such Lender or the
Issuing Bank receives such written notice, the rights of such Lender or the
12
Issuing Bank with respect thereto shall be the same as if such termination or
revocation had not occurred.
12. Successors and Assigns. This Guaranty shall be binding upon each
Guarantor and upon the successors and assigns of such Guarantor and shall inure
to the benefit of the Administrative Agent, the Issuing Bank and the Lenders and
their respective successors and assigns; all references herein to the Company
and to the Guarantors shall be deemed to include their respective successors and
assigns. The successors and assigns of the Guarantors and the Company shall
include, without limitation, their respective receivers, trustees or
debtors-in-possession. All references to the singular shall be deemed to include
the plural where the context so requires.
13. Officer Authority. Each Guarantor authorizes any one of the
officers specifically identified in certified resolutions delivered to the
Administrative Agent prior to the date hereof or contemporaneously herewith,
from time to time, severally and not jointly, on behalf and in the name of such
Guarantor from time to time in the discretion of such officer, to take or omit
to take any and all action and to execute and deliver any and all documents and
instruments which such officer may determine to be necessary or desirable in
relation to, and perform any obligations arising in connection with, this
Guaranty and any of the transactions contemplated hereby, and, without limiting
the generality of the foregoing, hereby gives to each such officer severally the
power and right on behalf of such Guarantor, without notice to or assent by such
Guarantor, to do the following: (i) to execute and deliver any amendment,
waiver, consent, supplement, other modification or reaffirmation of its
obligations under this Guaranty or any document covering any of the security for
such Guarantor's obligations under this Guaranty, and to perform any obligation
arising in connection herewith or therewith; (ii) to sell, transfer, assign,
encumber or otherwise deal in or with the security for such Guarantor's
obligations under this Guaranty or any part thereof; (iii) to grant liens,
security interests or other encumbrances on or in respect of any property or
assets of such Guarantor, whether now owned or hereafter acquired, in favor of
the Administrative Agent; (iv) to send notices, directions, orders and other
communications to any Person relating to this Guaranty, or the security, if any,
for all or any part of the Obligations; (v) to take or omit to take any other
action contemplated by or referred to in this Guaranty or any document covering
any of the security for all or any part of the Obligations; and (vi) to take or
omit to take any action with respect to this Guaranty, any security for all or
any part of the Obligations or any document covering any such security, all as
such officer may determine in his or her sole discretion. The undersigned with
respect to each Guarantor hereby certifies that he/she has all necessary
authority to grant and execute this Guaranty on behalf of such Guarantor.
14. Governing Law. This Guaranty has been executed and delivered by
the parties hereto in Columbus, Ohio. Any dispute between the Administrative
Agent and any Guarantor arising out of or related to the relationship
established between them in connection with this Guaranty, and whether arising
in contract, tort, equity, or otherwise, shall be resolved in accordance with
the laws of the State of Ohio, without regard to the conflicts of laws
principles thereof.
13
15. Certain Consents and Waivers.
(a) Jurisdiction and Service of Process. Each of the Guarantors
agrees that any legal action or proceeding with respect to this Guaranty may be
brought in the Court of Common Pleas of Franklin County, Ohio, or in the United
States District Court for the Southern District of Ohio, and, by execution and
delivery of this Guaranty, each Guarantor hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. Nothing herein shall affect the right of the
Administrative Agent, the Issuing Bank or any of the Lenders to proceed against
any Guarantor in any other jurisdiction.
(b) Venue. Each Guarantor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Guaranty or any other Loan Document brought in the courts referred to in section
15(a) above and hereby further irrevocably waives and agrees not to plead or
claim in any such court that such action or proceeding brought in any such court
has been brought in an inconvenient forum.
(c) Waiver of Right to Trial by Jury. EACH OF THE GUARANTORS HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (1) ARISING UNDER THIS GUARANTY OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (2) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF SUCH
GUARANTOR OR THE ADMINISTRATIVE AGENT WITH RESPECT TO THIS GUARANTY OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH OF THE GUARANTORS 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 EACH OF THE GUARANTORS OR THE ADMINISTRATIVE AGENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF GUARANTORS TO THE WAIVER OF THE RIGHT OF GUARANTORS TO TRIAL BY JURY.
16. Advice of Counsel. Each Guarantor represents and warrants to the
Administrative Agent that it has discussed this Guaranty and, specifically, the
provisions of Sections 14 through 17 hereof, with such Guarantor's lawyers.
17. Notices. All notices and other communications required or
desired to be served, given or delivered hereunder shall be in writing or by a
telecommunications device capable of creating a printed record and shall be
addressed to the party to be notified as follows:
if to any Guarantor, at:
14
c/o Dominion Homes, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxx 00000-0000
Attention: Xxx X. Xxxxxxx
Chief Operating Officer
Fax: 614/000-0000
with a copy to:
Xxxxxx X. Xxxxx, Xx., Esq.
Senior Vice President and General Counsel
Dominion Homes, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxx 00000-0000
Fax: 614/000-0000
if to the Administrative Agent, at
The Huntington National Bank, Administrative Agent
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Vice President
Fax: 614/000-0000
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
PORTER, WRIGHT, XXXXXX & XXXXXX
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Fax: 614/000-0000
or, as to each party, at such other address as designated by such party in a
written notice to the other party. All such notices and communications shall be
deemed to be validly served, given or delivered (i) three (3) days following
deposit in the United States mails, with proper postage prepaid; (ii) upon
delivery thereof, if delivered by hand to the party to be notified; (iii) upon
delivery thereof to a reputable overnight courier service, with delivery charges
prepaid; or (iv) upon confirmation of receipt thereof, if transmitted by a
telecommunications device.
18. Severability. Wherever possible, each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
15
19. Merger. This Guaranty represents the final agreement of each
Guarantor with respect to the matters contained herein and may not be
contradicted by evidence of prior or contemporaneous agreements, or subsequent
oral agreements, between such Guarantor and the Administrative Agent.
20. Representations and Warranties. Each Guarantor represents and
warrants that:
(a) it is a duly organized or formed and validly existing
corporation, partnership, limited partnership, limited liability partnership or
limited liability company, as the case may be, in good standing under the laws
of the jurisdiction of its formation and has the corporate, partnership or
limited liability company power and authority, as applicable, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage;
(b) it has the corporate or other organizational power and authority
to execute, deliver and carry out the terms and provisions of the Loan Documents
to which it is party and has taken all necessary corporate or other
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is party;
(c) it has duly executed and delivered each Loan Document to which
it is party and each Loan Document to which it is party constitutes the legal,
valid and binding agreement or obligation of such Guarantor enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law);
(d) neither the execution, delivery and performance by such
Guarantor of the Loan Documents to which it is party nor compliance with the
terms and provisions thereof will contravene any provision of any law, statute,
rule, regulation, order, writ, injunction or decree of any court or governmental
instrumentality applicable to such Guarantor or its properties and assets, will
conflict with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any lien or
encumbrance upon any of the property or assets of such Guarantor pursuant to the
terms of any promissory note, bond, debenture, indenture, mortgage, deed of
trust, credit or loan agreement, or any other material agreement or other
instrument, to which such Guarantor is a party or by which it or any of its
property or assets are bound or to which it may be subject, or will violate any
provision of the certificate or articles of incorporation, code of regulations
or by-laws, or other charter documents of such Guarantor;
(d) no order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
foreign or domestic governmental or public body or authority, or any subdivision
thereof, is required to authorize or is required as a condition to (i) the
execution, delivery and performance by such Guarantor of any Loan Document to
which it is a party, or (ii) the legality, validity, binding effect or
enforceability of any Loan Document to which such Guarantor is a party;
16
(e) there are no actions, suits or proceedings pending or, to, the
knowledge of such Guarantor, threatened with respect to such Guarantor which
question the validity or enforceability of any of the Loan Documents to which
such Guarantor is a party, or of any action to be taken by such Guarantor
pursuant to any of the Loan Documents to which it is a party; and
(f) as of the date such Guarantor has become a party to this
Guaranty, such Guarantor has received consideration which is the reasonable
equivalent value of the obligations and liabilities that such Guarantor has
incurred to the Administrative Agent, the Issuing Bank and the Lenders under
this Guaranty and the other Loan Documents to which such Guarantor is a party;
such Guarantor has capital sufficient to carry on its business and transactions
and all business and transactions in which it is about to engage and is solvent
and able to pay its debts as they mature; such Guarantor owns property having a
value, both at fair valuation and at present fair salable value, greater than
the amount required to pay its debts; and such Guarantor is not entering into
the Loan Documents to which it is a party with the intent to hinder, delay or
defraud its creditors.
21. Warrant of Attorney. Each of the Guarantors hereby authorizes
any attorney at law to appear for such Guarantor in any action on any or all
Obligations guaranteed hereby at any time after such Obligations become due,
whether by acceleration or otherwise, in any court of record in or of the State
of Ohio or elsewhere, to waive the issuing and service of process against, and
to confess judgment against, such Guarantor in favor of the Administrative
Agent, the Issuing Bank, the Lenders, or any of them, for the amount that may be
due, including interest, late charges, collection costs, attorneys' fees and the
like as provided for in said Obligations, and costs of suit, and to waive and
release all errors in said proceedings and judgments, and all petitions in error
and rights of appeal from the judgments rendered.
22. Execution in Counterparts. This Guaranty may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
23. Additional Guarantors. Each of the Guarantors agrees that, if
pursuant to Section 8.24 (e) of the Credit Agreement, the Company shall be
required to cause any Subsidiary to become a Guarantor, or if for any reason the
Company desires any Subsidiary to become a Guarantor, such Subsidiary shall
execute and deliver a Subsidiary Guaranty Supplement in the form of Exhibit A
attached hereto and shall for all purposes be a party hereto and have the same
rights, benefits and obligations as a Guarantor party hereto as of the date of
closing.
IN WITNESS WHEREOF, this Guaranty has been duly executed by each
Guarantor as of the day and year first set forth above.
WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS
17
OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS,
FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER
CAUSE.
[NAME OF GUARANTOR]
By:_____________________________________
Name:________________________________
Title:_______________________________
Acknowledged and agreed to as of the _________ day of ____________________,
200_____.
The Huntington National Bank, as Administrative Agent
By:_____________________________________
Name:________________________________
Title:_______________________________
EXHIBIT A
TO
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY SUPPLEMENT
The undersigned hereby agrees to be bound as a Guarantor for
purposes of the Subsidiary Guaranty dated as of __________________, 200__, among
certain Restricted Subsidiaries of Dominion Homes, Inc. listed on the signature
pages thereof and acknowledged by The Huntington National Bank, as
Administrative Agent, and the undersigned hereby acknowledges receipt of a copy
of the Guaranty. Capitalized terms used herein are used with the meanings given
them in the Guaranty.
The undersigned hereby authorizes any attorney at law to appear for
the undersigned in any action on any or all Obligations guaranteed hereby at any
time after such Obligations become due, whether by acceleration or otherwise, in
any court of record in or of the State of Ohio or elsewhere, to waive the
issuing and service of process against, and to confess judgment against, the
undersigned in favor of the Administrative Agent, the Issuing Bank, the Lenders,
or any of them, for the amount that may be due, including interest, late
charges, collection costs, attorneys' fees and the like as provided for in said
Obligations, and costs of suit, and to waive and release all errors in said
proceedings and judgments, and all petitions in error and rights of appeal from
the judgments rendered.
Agreed to this __________ day of _________________, 200__.
WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE
18
POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU
MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE
ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.
[NAME OF GUARANTOR]
By:_____________________________________
Name:___________________________________
Title:__________________________________
Notice Address:
19
EXHIBIT A-1 TO AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 31, 2001
Form of Revolving Credit Note
REVOLVING CREDIT NOTE
$____________________ Columbus, Ohio December ______, 2001
FOR VALUE RECEIVED, the undersigned Dominion Homes, Inc., an Ohio
corporation (the "Company") promises to pay to the order of ____________________
(hereinafter called the "Lender," which term shall include any holder hereof) at
the office of the Administrative Agent (as defined below) at 00 Xxxxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxx 00000, the sum of_____________________ Dollars
($____________) or so much thereof as shall have been advanced by the Lender at
any time and not hereafter repaid (hereinafter referred to as "Principal Sum")
together with interest as hereinafter provided and payable at the time and in
the manner hereinafter provided. Subject to the terms of the Credit Agreement,
the proceeds of the loan evidenced hereby may be advanced, repaid and readvanced
in partial amounts during the term of this revolving credit note (this "Note")
and prior to maturity. Subject to the terms of the Credit Agreement, each such
advance shall be made to the Company upon receipt by the Administrative Agent of
the undersigned's Notice of Borrowing, which shall be in such form prescribed by
the Credit Agreement. The Administrative Agent shall be entitled to rely on any
oral or telephonic communication requesting an advance and/or providing
disbursement instructions hereunder, which shall be received by it in good faith
from anyone reasonably believed by the Administrative Agent to be the
undersigned, or the undersigned's authorized agent. The undersigned agrees that
all advances made by the Lender will be evidenced by entries made into the
electronic data processing system or internal memoranda maintained by the
Administrative Agent. The undersigned further agrees that the sum or sums shown
on the most recent printout from the Administrative Agent's electronic data
processing system or on such memoranda shall be rebuttably presumptive evidence
of the amount of the Principal Sum and of the amount of any accrued interest.
This Note is issued pursuant to, is entitled to the benefits of, and the
advances contemplated hereunder are to be made pursuant to a certain Amended and
Restated Credit Agreement by, between, and among the undersigned, the Lender and
the institutions from time to time party thereto as lenders (collectively, the
"Lenders"), The Huntington National Bank ("Huntington") in its separate capacity
as issuing bank (the "Issuing Bank"), and Huntington in its separate capacity as
administrative agent for the Lenders and the Issuing Bank (with its successors
in such capacity, "Administrative Agent"), dated as of December , 2001, and all
amendments, modifications, and supplements thereto from time to time (herein the
"Credit Agreement"), to which reference is hereby made for a more complete
statement of the terms and conditions under which the Revolving Loans evidenced
hereby are made and are to be repaid. Terms defined in the Credit Agreement and
not otherwise defined herein shall have the meanings so defined in the Credit
Agreement.
20
INTEREST
Interest will accrue on the unpaid balance of the Principal Sum at the
rates set forth in Section 3 of the Credit Agreement.
MANNER OF PAYMENT
All payments of the Principal Sum and accrued interest in respect of this
Note shall be made to the Administrative Agent not later than 1:00 p.m. (Ohio
time) on the date due at the address set forth above to the Administrative Agent
in lawful money of the United States of America in immediately available funds.
The Principal Sum shall be due and payable on the Revolving Credit Termination
Date, and upon acceleration of the Principal Sum in accordance with the terms of
the Credit Agreement. The Company also promises to pay interest on the unpaid
Principal Sum borrowed hereunder from the date advanced until paid at the rates
(which shall not exceed the maximum rate permitted by applicable law) and at the
time determined in accordance with the provisions of the Credit Agreement.
LATE CHARGE
In addition to all of the Lender's other rights and remedies, any
installment or other payment not made within 10 days of the date such payment or
installment is due shall be subject to a late charge equal to 5% of the amount
of the installment or payment.
DEFAULT
Upon the occurrence of any Event of Default specified in the Credit
Agreement, the Principal Sum and accrued interest may become forthwith due and
payable, all as provided in the Credit Agreement.
GENERAL PROVISIONS
The undersigned, and any indorser, surety, or guarantor, hereby severally
waive presentment, notice of dishonor, protest, notice of protest, and diligence
in bringing suit against any party hereto, and consent that, without discharging
any of them, the time of payment may be extended an unlimited number of times
before or after maturity without notice. The Lender shall not be required to
pursue any party hereto, including any guarantor, or to exercise any rights
against any collateral herefor before exercising any other such rights.
The obligations evidenced hereby may from time to time be evidenced by
another note or notes given in substitution, renewal or extension hereof.
The captions used herein are for references only and shall not be deemed a
part of this Note. If any of the terms or provisions of this Note shall be
deemed unenforceable, the enforceability of the remaining terms and provisions
shall not be affected. This Note shall be governed by and construed in
accordance with the law of the State of Ohio.
WAIVER OF RIGHT TO TRIAL BY JURY
THE UNDERSIGNED HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS NOTE OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE UNDERSIGNED OR THE LENDER WITH RESPECT TO THIS NOTE OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
THE UNDERSIGNED 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 THE
UNDERSIGNED OR THE LENDER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE UNDERSIGNED TO
THE WAIVER OF THE RIGHT OF THE UNDERSIGNED TO TRIAL BY JURY.
WARRANT OF ATTORNEY
The undersigned authorizes any attorney at law to appear in any court of
record in the State of Ohio or in any state or territory of the United States
after the above indebtedness becomes due, whether by acceleration or otherwise,
to waive the issuing and service of process, and to confess judgment against the
undersigned in favor of the Lender for the amount then appearing due together
with costs of suit, and thereupon to waive all errors and all rights of appeal
and stays of execution. The attorney at law authorized hereby to appear for the
undersigned may be an attorney at law representing the Lender, and the
undersigned hereby expressly waives any conflict of interest that may exist by
virtue of such representation.
WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
DOMINION HOMES, INC.
By:________________________________
Its:_______________________________
