$450,000,000 REVOLVING CREDIT FACILITY
SECOND AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
among
▇▇▇ ▇▇▇▇ CORPORATION,
THE BANKS NAMED HEREIN,
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Agent,
and
BANK ONE, ARIZONA, NA, as Co-Agent
Dated as of June 5, 1998
TABLE OF CONTENTS
-----------------
Page
----
Article 1 DEFINITIONS AND ACCOUNTING TERMS...............................1
1.1 Defined Terms...........................................1
1.2 Use of Defined Terms...................................28
1.3 Accounting Terms.......................................28
1.4 Rounding...............................................28
1.5 Exhibits and Schedules.................................28
1.6 References to "Borrower and its Subsidiaries"..........28
1.7 Miscellaneous Terms....................................28
Article 2 LOANS.........................................................30
2.1 Loans-General..........................................30
2.2 Reference Rate Loans...................................31
2.3 Eurodollar Rate Loans..................................32
2.4 Voluntary Reduction of Commitments.....................32
2.5 Extension of Maturity Date/Reduction of Commitments....32
2.6 Optional Termination of Commitments....................34
2.7 Automatic Termination of Commitments...................34
2.8 Agent's Right to Assume Funds Available for Advances...34
2.9 Adjusting Purchase Payments............................34
2.10 Substitute Credit Facility.............................35
2.11 Senior Debt............................................35
2.12 Letters of Credit......................................35
Article 3 PAYMENTS AND FEES.............................................40
3.1 Principal and Interest.................................40
3.2 Arrangement, Agency and Co-Agency Fees.................41
3.3 Underwriting Fee.......................................41
3.4 Facility and Commitment Fees...........................41
3.5 Increased Commitment Costs.............................42
3.6 Eurodollar Costs and Related Matters...................43
3.7 Late Payments..........................................46
3.8 Computation of Interest and Fees.......................47
3.9 Non-Banking Days.......................................47
3.10 Manner and Treatment of Payments.......................47
3.11 Funding Sources........................................48
3.12 Failure to Charge Not Subsequent Waiver................48
3.13 Agent's Right to Assume Payments Will be
Made by Borrower......................................48
3.14 Fee Determination Detail...............................49
i
3.15 Survivability.........................................49
3.16 Accruals Under Pre-Existing Loan Documents............49
Article 4 REPRESENTATIONS AND WARRANTIES................................50
4.1 Existence and Qualification; Power; Compliance
With Laws.............................................50
4.2 Authority; Compliance With Other Agreements and
Instruments and Government Regulations................50
4.3 No Governmental Approvals Required.....................51
4.4 Subsidiaries...........................................51
4.5 Financial Statements...................................52
4.6 No Other Liabilities; No Material Adverse Changes......52
4.7 Title to Property......................................52
4.8 Intangible Assets......................................52
4.9 Public Utility Holding Company Act.....................53
4.10 Litigation.............................................53
4.11 Binding Obligations....................................53
4.12 No Default.............................................53
4.13 ERISA..................................................53
4.14 Regulations G, T, U and X; Investment Company Act......54
4.15 Disclosure.............................................54
4.16 Tax Liability..........................................54
4.17 Strategic Plan.........................................54
4.18 Hazardous Materials. ..................................54
4.19 Year 2000 Compliance...................................55
Article 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS).......................................56
5.1 Payment of Taxes and Other Potential Liens.............56
5.2 Preservation of Existence..............................56
5.3 Maintenance of Properties..............................56
5.4 Maintenance of Insurance...............................57
5.5 Compliance With Laws...................................57
5.6 Inspection Rights......................................57
5.7 Keeping of Records and Books of Account................57
5.8 Compliance With Agreements.............................57
5.9 Use of Proceeds........................................57
5.10 New Guarantor Subsidiaries; Release of Certain
Guaranties............................................58
5.11 Hazardous Materials Laws...............................58
Article 6 NEGATIVE COVENANTS............................................59
6.1 Prepayment of Indebtedness.............................59
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6.2 Payment of Subordinated Obligations....................59
6.3 Mergers and Sale of Assets.............................60
6.4 Hostile Tender Offers..................................60
6.5 Distributions..........................................60
6.6 ERISA..................................................61
6.7 Change in Nature of Business...........................61
6.8 Liens..................................................61
6.9 Indebtedness...........................................63
6.10 Transactions with Affiliates...........................64
6.11 Tangible Net Worth.....................................64
6.12 Consolidated Fixed Charge Coverage.....................64
6.13 Debt to Net Worth......................................65
6.14 Adjusted Senior Debt to Net Worth......................65
6.15 Liquidity..............................................65
6.16 Investments............................................66
6.17 Unentitled Land........................................67
6.18 Unsold Homes in Production.............................67
6.19 Coventry Assets........................................68
Article 7 INFORMATION AND REPORTING REQUIREMENTS........................69
7.1 Financial and Business Information.....................69
7.2 Compliance Certificates................................71
Article 8 CONDITIONS....................................................73
8.1 Initial Advances, Etc..................................73
8.2 Any Increasing Advance.................................74
8.3 Any Advance............................................75
8.4 Return of Pre-Existing Notes...........................75
Article 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT..........76
9.1 Events of Default......................................76
9.2 Remedies Upon Event of Default.........................78
Article 10 THE AGENT.....................................................81
10.1 Appointment and Authorization.........................81
10.2 Agent and Affiliates..................................81
10.3 Proportionate Interest in any Collateral..............81
10.4 Banks' Credit Decisions...............................81
10.5 Action by Agent.......................................82
10.6 Liability of Agent....................................82
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10.7 Indemnification.......................................83
10.8 Successor Agent.......................................84
10.9 No Obligations of Borrower............................84
Article 11 MISCELLANEOUS.................................................86
11.1 Cumulative Remedies; No Waiver........................86
11.2 Amendments; Consents..................................86
11.3 Costs, Expenses and Taxes.............................87
11.4 Nature of Banks' Obligations..........................87
11.5 Survival of Representations and Warranties............88
11.6 Notices...............................................88
11.7 Execution of Loan Documents...........................88
11.8 Binding Effect; Assignment............................89
11.9 Sharing of Setoffs....................................90
11.10 Indemnity by Borrower.................................91
11.11 Nonliability of the Banks.............................92
11.12 No Third Parties Benefited............................93
11.13 Further Assurances....................................93
11.14 Integration...........................................93
11.15 Governing Law.........................................94
11.16 Severability of Provisions............................94
11.17 Headings..............................................94
11.18 Time of the Essence...................................94
11.19 Foreign Banks.........................................94
11.20 Hazardous Material Indemnity..........................94
11.21 Reference to Arbitration..............................95
11.22 Confidentiality.......................................96
11.23 Co-Agent..............................................97
Schedules
1.1 Bank Group Commitments
2.9 Adjusting Purchase Payments
3.3 Allocation of Underwriting Fee
4.3 Governmental Approvals
4.4 Subsidiaries
4.6 Outstanding Indebtedness
4.10 Litigation
6.8 Existing Liens
6.9 Certain Outstanding Credit Commitments
6.16 Existing Investments
iv
Exhibits
A - Commitment Assignment and Acceptance
B - Compliance Certificate
C - Line A Note
D - Line B Note
E - Loan Compliance Certificate
F-1 - Opinion of Counsel (Inside)
F-2 - Opinion of Counsel (Outside)
G - Request for Letter of Credit
H - Request for Loan
I - Subsidiary Guaranty
v
SECOND AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
----------------------------------------------------
Dated as of June 5, 1998
This SECOND AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
("Agreement") is entered into by and among ▇▇▇ ▇▇▇▇ Corporation, a Delaware
corporation ("Borrower"), each bank whose name is set forth on the signature
pages of this Agreement and each lender which may hereafter become a party to
this Agreement pursuant to Section 11.8 (collectively, the "Banks" and
individually, a "Bank"), Bank of America National Trust and Savings Association,
a national banking association, as Agent (the "Agent") and Bank One, Arizona,
NA, as Co-Agent (the "Co-Agent").
This Agreement is intended by the parties hereto as an amendment
and restatement of the First Amended Loan Agreement as of the effective date of
this Agreement. Amounts outstanding and committed under the First Amended Loan
Agreement and evidenced by the Pre-Existing Notes shall, upon the effectiveness
of this Agreement, be deemed to be outstanding and committed hereunder and
evidenced by the Notes, subject, however, to all terms and conditions hereunder
and under the other Loan Documents, including without limitation the allocation
of the Commitments among the Banks as provided herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
Article 1
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"9-3/4% Senior Subordinated Debt Due 2003" means the Indebtedness
outstanding under Borrower's Indenture, dated March 8, 1993 with respect
to $100,000,000 of 9-3/4% Senior Subordinated Debentures due 2003.
"9.00% Senior Subordinated Debt Due 2006" means the Indebtedness
outstanding under Borrower's Indenture, dated February 11, 1994 with
respect to $100,000,000 of 9.00% Senior Subordinated Debentures due 2006.
"9-3/4% Senior Subordinated Debt Due 2008" means the Indebtedness
outstanding under Borrower's Indenture, dated January 21, 1997 with
respect to $150,000,000 of 9-3/4% Senior Subordinated Debentures due
2008.
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"9-3/8% Senior Subordinated Debt Due 2009" means the Indebtedness
outstanding under Borrower's Indenture, dated May 11, 1998, 1998 with
respect to $200,000,000 of 9-3/8% Senior Subordinated Debentures due
2009.
"Adjusted EBITDA" means, for any Fiscal Year, EBITDA for that
Fiscal Year plus net cash proceeds to Borrower from the issuance of
capital stock of Borrower (other than Disqualified Stock) during such
Fiscal Year plus 50% of net cash proceeds to Borrower from new borrowings
constituting Subordinated Obligations during such Fiscal Year minus any
amount paid by Borrower during such Fiscal Year for the acquisition or
cancellation of capital stock of Borrower and minus any amount paid by
Borrower during such Fiscal Year for the repayment or otherwise on
account of the principal portion of any Subordinated Obligations,
provided that the dollar-for -dollar refinancing of Subordinated
Obligations with new Subordinated Obligations during a single Fiscal Year
shall not be treated as resulting in either net cash proceeds to Borrower
nor a repayment of Subordinated Obligations for these purposes. For
purposes of this definition, the proceeds of the 9-3/8% Senior
Subordinated Debt due 2009 shall be treated as having arisen in
Borrower's Fiscal Year ending June 30, 1999.
"Adjusted Senior Debt" means, as of any date of determination,
Senior Debt as of that date minus (to the extent included in Senior Debt,
and without duplication) Non-Recourse Debt as of that date.
"Adjusted Total Indebtedness" means, as of any date of
determination, Total Indebtedness as of that date minus the aggregate
outstanding principal balance (but not in excess of $30,000,000) of
Non-Recourse Debt for which a corresponding Lien is permitted pursuant to
Section 6.8(d).
"Adjusting Purchase Payment(s)" has the meaning given that
term in Section 2.9.
"Advance" means any advance made or to be made by any Bank to
Borrower as provided in Article 2, and includes each Reference Rate
Advance and Eurodollar Rate Advance.
"Affiliate" means, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (and
the correlative terms, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership
of securities or partnership or other ownership interests, by contract or
otherwise); provided that, in any event, any Person that owns, directly
or indirectly, 10% or more of the securities having ordinary voting power
for the election of directors or other governing body of a corporation
that has more than 100 record holders of such securities, or 10% or more
of the partnership or other ownership interests of any other Person that
has more than 100
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record holders of such interests, will be deemed to control such
corporation or other Person.
"Agent" means Bank of America National Trust and Savings
Association, when acting in its capacity as the Agent under any of the
Loan Documents, or any successor Agent.
"Agent's Office" means the Agent's address as set forth on the
signature pages of this Agreement, or such other address as the Agent
hereafter may designate by written notice to Borrower and the Banks.
"Aggregate Effective Amount" means, as of any date of
determination, the sum of (a) the aggregate drawable face amount of all
Letters of Credit then outstanding plus (b) the aggregate amount paid by
the Issuing Bank under Letters of Credit that has not yet been reimbursed
to the Issuing Bank by Borrower pursuant to Section 2.12(d) or by way of
Advances made pursuant to Section 2.12(e).
"Agreement" means this Second Amended and Restated Revolving Loan
Agreement, either as originally executed or as it may from time to time
be supplemented, modified, amended, restated or extended.
"Anniversary Date" means any annual anniversary date of the date
of this Agreement that is at least eleven (11) months prior to the then
existing Maturity Date.
"Applicable Eurodollar Spread" means, as of any date of
determination, the interest rate spread set forth below opposite the
Applicable Pricing Level as of such date:
Applicable
Pricing Level Eurodollar Spread
------------- -----------------
I 1.30%
II 1.45%
III 1.60%
IV 1.70%
V 1.90%
"Applicable Pricing Level" means, for any day during a Pricing
Period, the pricing level set forth below opposite the Leverage Ratio
as of the last day of the Fiscal Quarter most recently ended prior to
the commencement of that Pricing Period:
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Leverage Ratio Applicable to
----------------------------
Applicable Pricing Level Pricing Period
------------------------ --------------
I Leverage Ratio of less than
or equal to 1.50 to 1.00
II Leverage Ratio of higher than
1.50 to 1.00, but less than
or equal to 1.75 to 1.00
III Leverage Ratio of higher than
1.75 to 1.00, but less than
or equal to 2.00 to 1.00
IV Leverage Ratio of higher than
2.00 to 1.00, but less than
or equal to 2.25 to 1.00
V Leverage Ratio of higher than
2.25 to 1.00.
provided that (a) for the period from the effective date of this
Agreement through August 31, 1998, the Applicable Pricing Level shall
be Pricing Level III and (b) if any Compliance Certificate delivered on
or about August 31 is subsequently shown by the Compliance Certificate
delivered on or about the following October 31 to be in error with
respect to its calculation of the Leverage Ratio, then the resulting
change in the Applicable Pricing Level shall be made retroactively to
the beginning of the relevant Pricing Period.
"Bank of America" means Bank of America National Trust and
Savings Association.
"Banking Day" means any Monday, Tuesday, Wednesday, Thursday
or Friday, other than a day on which banks are authorized or required
to be closed in Arizona, California, Massachusetts, New York, Texas or
North Carolina.
"Borrower" means ▇▇▇ ▇▇▇▇ Corporation, a Delaware corporation,
and its successors and permitted assigns.
"Capital Expenditure" means any expenditure that is considered
a capital expenditure under Generally Accepted Accounting Principles,
including any amount which is required to be treated as an asset
subject to a Capital Lease Obligation.
"Capital Lease Obligations" means all monetary obligations of
a Person under any leasing or similar arrangement which, in accordance
with Generally Accepted Accounting Principles, is classified as a
capital lease.
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"Cash" means, when used in connection with any Person, all
monetary and non-monetary items owned by that Person that are treated
as cash in accordance with Generally Accepted Accounting Principles,
consistently applied.
"Cash Equivalents" means, when used in connection with any
Person, that Person's Investments in:
(a) Government Securities due within one year after the date
of the making of the Investment;
(b) readily marketable direct obligations of any State of
the United States of America given on the date of such Investment
a credit rating of at least Aa by ▇▇▇▇▇'▇ Investors Service, Inc.
or AA by Standard & Poor's Ratings Group, in each case due within
one year from the making of the Investment;
(c) certificates of deposit issued by, bank deposits in,
Eurodollar deposits through, bankers' acceptances of, and
repurchase agreements covering Government Securities executed by,
any bank incorporated under the Laws of the United States of
America or any State thereof and having on the date of such
Investment combined capital, surplus and undivided profits of at
least $250,000,000, or total assets of at least $5,000,000,000,
in each case due within one year after the date of the making of
the Investment;
(d) certificates of deposit issued by, bank deposits in,
Eurodollar deposits through, bankers' acceptances of, and
repurchase agreements covering Government Securities executed by,
any branch or office located in the United States of America of a
bank incorporated under the Laws of any jurisdiction outside the
United States of America having on the date of such Investment
combined capital, surplus and undivided profits of at least
$500,000,000, or total assets of at least $15,000,000,000 in each
case due within one year after the date of the making of the
Investment;
(e) repurchase agreements covering Government Securities
executed by a broker or dealer registered under Section 15(b) of
the Securities Exchange Act of 1934, as amended, having on the
date of the Investment capital of at least $100,000,000, due
within 30 days after the date of the making of the Investment;
provided that the maker of the Investment receives written
confirmation of the transfer to it of record ownership of the
Govern ment Securities on the books of a registered broker or
dealer, as soon as practicable after the making of the
Investment;
(f) readily marketable commercial paper of corporations
doing business in and incorporated under the Laws of the United
States of America or
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any State thereof or of any corporation that is the holding
company for a bank described in clauses (c) or (d) above given on
the date of such Investment a credit rating of at least P-1 by
▇▇▇▇▇'▇ Investors Service, Inc. or A-1 by Standard & Poor's
Ratings Group, in each case due within 90 days after the date of
the making of the Investment;
(g) "money market preferred stock" issued by a corporation
incorporated under the Laws of the United States of America or
any State thereof given on the date of such Investment a credit
rating of at least Aa by ▇▇▇▇▇'▇ Investors Service, Inc. and AA
by Standard & Poor's Ratings Group, in each case having an
investment period not exceeding 50 days; provided that (i) the
amount of all such Investments issued by the same issuer does not
exceed $5,000,000 and (ii) the aggregate amount of all such
Investments does not exceed $15,000,000; and
(h) a readily redeemable "money market mutual fund"
sponsored by a bank described in clauses (c) or (d) hereof, or a
registered broker or dealer described in clause (e) hereof, that
has and maintains an investment policy limiting its investments
primarily to instruments of the types described in clauses (a)
through (g) hereof and having on the date of such Investment
total assets of at least $1,000,000,000.
"Cash Land Acquisition Costs" means, for any fiscal period,
cash paid by Borrower and its Subsidiaries for land acquisitions during
such fiscal period, calculated in a manner consistent with that used in
the calculation of "Land acquisitions" as shown under the heading
"Reconciliation of net earnings to net cash used for operating
activities" in the financial statements delivered to Banks for the
Fiscal Quarter ending September 30, 1993.
"Certificate of a Responsible Official" means a certificate
signed by a Responsible Official of the Person providing the
certificate.
"Change in Control" means any transaction or series of related
transactions (a) in which any Unrelated Person or two or more Unrelated
Persons acting in concert acquire beneficial ownership (within the
meaning of Rule 13d-3(a)(1) under the Securities Exchange Act of 1934,
as amended), directly or indirectly, of 50% or more of the Common
Stock, (b) in which any such Unrelated Person or Unrelated Persons
acting in concert acquire the concurrent beneficial ownership of 20% or
more of the Common Stock subsequent to the Closing Date if, while they
continue to hold such 20% ownership, (i) at the first election for the
board of directors of Borrower subsequent to such acquisition,
individuals who prior to such election were directors of Borrower cease
for any reason (other than death or incapacity) to constitute 50% or
more of the board of directors of Borrower or (ii) if the terms of all
directors of Borrower do not expire at the date of such first election,
then at the second election for
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the board of directors of Borrower subsequent to such acquisition,
individuals who prior to such first election were directors of Borrower
cease for any reason (other than death or incapacity) to constitute 50%
or more of the board of directors of Borrower or (c) constituting a
"change in control" or other similar occurrence under documentation
evidencing or governing any Indebtedness of Borrower of $25,000,000 or
more which results in an obligation of Borrower to prepay, purchase,
offer to purchase, redeem or defease such Indebtedness. For purposes of
the foregoing, the term "Unrelated Person" means any Person other than
(a) a Subsidiary of Borrower or (b) an employee stock ownership plan or
other employee benefit plan covering the employees of Borrower and its
Subsidiaries.
"Closing Date" means the time and Banking Day on which the
conditions set forth in Section 8.1 are satisfied or waived. The Agent
shall notify Borrower and the Banks of the date that is the Closing
Date.
"Co-Agent" means Bank One, Arizona, NA, when acting in its
capacity as the Co-Agent under any of the Loan Documents, or any
successor Co-Agent.
"Code" means the Internal Revenue Code of 1986, as amended or
replaced and as in effect from time to time.
"Commitments" means, collectively, the Line A Commitment and
the Line B Commitment. The respective Pro Rata Shares of the Banks with
respect to the Commitments are set forth in Schedule 1.1.
"Commitment Assignment and Acceptance" means a commitment
assignment and acceptance substantially in the form of Exhibit A.
"Common Stock" means the common stock of Borrower or its
successor by merger.
"Compliance Certificate" means a certificate in the form of
Exhibit B (or such modified form as the Agent may reasonably request),
properly completed and signed by a Senior Officer of Borrower.
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to any date of determination, the least of such value as calculated in
the manner specified for such term in any of the Indentures. Should the
manner of any such calculation become subject to dispute between
Borrower and the Banks due to questions of interpretation of such
indenture and the incorporation of such terms herein, the reasonable
interpretation of the manner of calculation made by the Banks shall be
binding on the parties with respect to Sections 8.2(c) and 8.2(d)
unless and until the Agent shall have received written advice from the
then current independent auditors of Borrower, in
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form reasonably acceptable to the Agent, stating their opinion as to
the calculation of such amount.
"Consolidated Total Assets" means, as of any date of
determination, the amount of the consolidated total assets that should
be reflected as such on a consolidated balance sheet of Borrower and
its Subsidiaries on that date, prepared in accordance with Generally
Accepted Accounting Principles, plus any amount by which such assets
may have theretofore been written down to reflect a perceived decrease
in market value other than customary depreciation or amortization.
"Contractual Obligation" means, as to any Person, any
provision of any outstanding security issued by that Person or of any
material agreement, instrument or undertaking to which that Person is a
party or by which it or any of its Property is bound.
"Coventry Assets" means, as of any date of determination, the
amount of the total assets that should be reflected on a consolidated
balance sheet prepared solely for the Coventry Subsidiaries on that
date, prepared in accordance with Generally Accepted Accounting
Principles, plus any amount by which such assets may have theretofore
been written down to reflect a perceived decrease in market value other
than customary depreciation or amortization.
"Coventry Homes Projects" means, as of any date of
determination, all land purchase and home building projects of the
Coventry Subsidiaries on that date.
"Coventry Land Assets" means, as of any date of determination,
the amount of the Land Assets that should be reflected on a
consolidated balance sheet prepared solely for the Coventry
Subsidiaries on that date, prepared in accordance with Generally
Accepted Accounting Principles, plus any amount by which such assets
may have theretofore been written down to reflect a perceived decrease
in market value other than customary depreciation or amortization.
"Coventry Subsidiaries" means ▇▇▇ ▇▇▇▇'▇ Coventry Homes, Inc.,
▇▇▇ ▇▇▇▇ Homes, Inc. and Coventry of California, Inc., and their
Subsidiaries from time to time which, on the date of this Agreement,
are ▇▇▇ ▇▇▇▇'▇ Coventry Homes Construction of Tucson Co., ▇▇▇ ▇▇▇▇'▇
Coventry Homes of Tucson, Inc., ▇▇▇ ▇▇▇▇'▇ Coventry Homes Construction
Co., Trovas Company and Trovas Construction Co. Each Subsidiary of any
Coventry Subsidiary from time to time shall be a Coventry Subsidiary.
"Current Operating Projects" means collectively (a) ▇▇▇ ▇▇▇▇
Construction, Inc.'s, Del ▇. ▇▇▇▇ Development Co., L.P.'s and ▇▇▇ ▇▇▇▇
Communities, Inc.'s approximately 6,575 acre residential community
development located near Phoenix, Arizona and commonly known as Sun
City West, (b) ▇▇▇ ▇▇▇▇ Communities, Inc.'s
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approximately 1,000 acre residential community development located near
Tucson, Arizona and commonly known as Sun City Tucson, (c) ▇▇▇ ▇▇▇▇
Communities, Inc.'s approximately 1,892 acre residential community
development located near Las Vegas, Nevada and commonly known as Sun
City Las Vegas, (d) ▇▇▇ ▇▇▇▇ California Corp.'s approximately 1,574
acre residential community development located near Palm Springs,
California and commonly known as Sun City Palm Springs, (e) the
Coventry Homes Projects, (f) Terravita Corp.'s and Terravita Homes
Construction Co.'s approximately 803 acre master planned residential
land development located in Scottsdale, Arizona, (g) Del ▇. ▇▇▇▇
Foothill Corp.'s approximately 4,140 acre land development project
located in Phoenix, Arizona, (h) ▇▇▇ ▇▇▇▇ California Corp.'s
approximately 1,200 acre residential community development located in
Roseville, California and commonly known as Sun City Roseville, (i) ▇▇▇
▇▇▇▇ Home Construction Inc.'s approximately 4,000 acre (including
interests in acres) residential community development located in
Surprise, Arizona and commonly known as Sun City Grand, (j) Del ▇. ▇▇▇▇
Development Co., L.P.'s approximately 5,300 acre residential community
development located near Austin, Texas and commonly known as Sun City
Georgetown, (k) ▇▇▇ ▇▇▇▇ Communities, Inc.'s approximately 560 acre
residential community development located in Henderson, Nevada and
commonly known as Sun City ▇▇▇▇▇▇▇▇▇ Ranch and (l) ▇▇▇ ▇▇▇▇
Communities, Inc.'s approximately 5,500 acre residential community
development located near Hilton Head Island, South Carolina and
commonly known as Sun City Hilton Head. Also, Current Operating
Projects shall include a replacement for one of the foregoing projects
if such project is located within the same general metropolitan area as
the replaced project and if construction of such project is commenced
at a time that the replaced project has less than a three year expected
sell-out term based upon its current absorption rate.
"Debtor Relief Laws" means the Bankruptcy Code of the United
States of America, as amended from time to time, and all other
applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws from time to time in effect affecting the rights of
creditors generally.
"Default" means any event that, with the giving of any
applicable notice or passage of time specified in Section 9.1, or both,
would be an Event of Default.
"Default Rate" means the interest rate prescribed in Section
3.7.
"Designated Deposit Account" means a deposit account to be
maintained by Borrower with Bank of America, as from time to time
designated by Borrower by written notification to Bank of America.
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"Designated Eurodollar Market" means, with respect to any
Eurodollar Rate Loan, (a) the London Eurodollar Market, or (b) if prime
banks in the London Eurodollar Market are at the relevant time not
accepting deposits of Dollars, the Cayman Islands Eurodollar Market or
(c) if prime banks in the London and Cayman Islands Eurodollar Markets
are at the relevant time not accepting deposits of Dollars, such other
Eurodollar Market as may from time to time be selected by the Agent.
"Disposition" means the sale, transfer or other disposition
("Transfer") of any asset of Borrower or any of its Subsidiaries other
than (a) a Transfer constituting an Investment or a Distribution, (b) a
Transfer of inventory or other assets in the ordinary course of
business of Borrower or a Subsidiary on terms Borrower reasonably
believes are fair market terms, (c) a Transfer of assets constituting
all or part of the Spring Creek Project or ▇▇▇▇ Harbor Project, (d) in
the case of a residential community development being developed by
Borrower (i) a Transfer of, or the payment for, common amenities and
common areas made to or for the benefit of the community association of
such development or (ii) a Transfer of, or the payment for, roads,
sewers, utilities, and other on- and off-site improvements,
infrastructure items and/or other assets associated with such
development made to or for the benefit of a governmental entity or
utility in connection with such development, in either such case
provided that such disposition is reasonably necessary or appropriate
for the development or betterment of such development and whether or
not Borrower may at some future date receive total or partial
reimbursement (with or without interest) of the cost (or value) of such
Transfer or payment, or (e) a Transfer of the capital stock of a
Subsidiary that holds solely the assets of the Spring Creek Project or
the ▇▇▇▇ Harbor Project.
"Disqualified Stock" means any capital stock, warrants,
options or other rights to acquire capital stock (but excluding any
debt security which is convertible, or exchangeable, for capital
stock), which, by its terms (or by the terms of any security into which
it is convertible or for which it is exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is or may be redeemable
at the option of the holder thereof, in whole or in part.
"Distribution" means, with respect to any shares of capital
stock or any warrant or option to purchase an equity security or other
equity security issued by a Person, (i) the retirement, redemption,
purchase, or other acquisition for Cash or for Property (except capital
stock that is not Disqualified Stock) by such Person of any such
security, (ii) the declaration or (without duplication) payment by such
Person of any dividend in Cash or in Property (except capital stock
that is not Disqualified Stock) on or with respect to any such
security, (iii) any Investment by such Person in the holder of 5% or
more of any such security if a purpose of such Investment is to avoid
characterization of the transaction as a Distribution and (iv) any
other payment in
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Cash or Property (except capital stock that is not Disqualified Stock)
by such Person constituting a distribution under applicable Laws with
respect to such security.
"Dollars" or "$" means United States dollars.
"EBITDA" means, for any fiscal period, the sum of (a) Net
Income for that period, without taking into account any extraordinary
loss reflected in such Net Income, minus (b) any extraordinary gain
reflected in such Net Income, plus (c) depreciation, amortization and
all other non-cash expenses of Borrower and its Subsidiaries for that
period, plus (d) Interest Expense for that period, plus (e) the
aggregate amount of federal and state taxes on or measured by income of
Borrower and its Subsidiaries for that period (whether or not payable
during that period), in each case as determined in accordance with
Generally Accepted Accounting Principles and, in the case of items (c),
(d) and (e), only to the extent deducted in the determination of Net
Income for that period.
"Eligible Assignee" means any commercial bank having a
combined capital and surplus of $100,000,000 or more that is (a)
organized under the Laws of the United States of America or any State
thereof or (b) organized under the Laws of any other country which is a
member of the Organization for Economic Cooperation and Development, or
a political subdivision of such a country, provided that (i) such bank
is acting through a branch or agency located in the United States of
America and (ii) is otherwise exempt from withholding of tax on
interest and delivers Form 1001 or Form 4224 pursuant to Section 11.19
at the time of any assignment pursuant to Section 11.8.
"ERISA" means the Employee Retirement Income Security Act of
1974, and any regulations issued pursuant thereto, as amended or
replaced and as in effect from time to time.
"Eurodollar Banking Day" means any Banking Day on which
dealings in Dollar deposits are conducted by and among banks in the
Designated Eurodollar Market.
"Eurodollar Base Rate" means, with respect to any Eurodollar
Rate Loan, the average of the interest rates per annum (rounded upward
to the nearest 1/100 of 1%) at which deposits in Dollars are offered by
the Eurodollar Reference Bank to prime banks in the Designated
Eurodollar Market at or about 11:00 a.m., local time in the locale of
the Designated Eurodollar Market, two (2) Eurodollar Banking Days
before the first day of the applicable Eurodollar Period in an
aggregate amount approximately equal to the amount of the Advance made
by the Eurodollar Reference Bank with respect to such Eurodollar Rate
Loan and for a period of time comparable to the number of days in the
applicable Eurodollar Period. The determination of the Euro dollar Base
Rate by the Agent shall be conclusive in the absence of manifest error.
-11-
"Eurodollar Lending Office" means, as to each Bank, its office
or branch so designated by written notice to Borrower and the Agent as
its Eurodollar Lending Office. If no Eurodollar Lending Office is
designated by a Bank, its Eurodollar Lending Office shall be its office
at its address for purposes of notices hereunder.
"Eurodollar Market" means a regular established market located
outside the United States of America by and among banks for the
solicitation, offer and acceptance of Dollar deposits in such banks.
"Eurodollar Obligations" means eurocurrency liabilities, as
defined in Regulation D.
"Eurodollar Period" means, as to each Eurodollar Rate Loan,
the period commencing on the date specified by Borrower pursuant to
Section 2.1(b) and ending 1, 2, 3 or 6 months (or, with the written
consent of all of the Banks, any other period) thereafter, as specified
by Borrower in the applicable Request for Loan; provided that:
(a) The first day of any Eurodollar Period shall be a
Eurodollar Banking Day;
(b) Any Eurodollar Period that would otherwise end on a day
that is not a Eurodollar Banking Day shall be extended to the
next succeeding Eurodollar Banking Day unless such Eurodollar
Banking Day falls in another calendar month, in which case such
Eurodollar Period shall end on the next preceding Eurodollar
Banking Day;
(c) No Eurodollar Period with respect to a Loan requested
under the Line A Commitment or Line B Commitment, as applicable,
shall extend beyond the next date on which such Commitment is to
be reduced in accordance with Section 2.5 unless the principal
amount of the corresponding Eurodollar Rate Loan plus the
principal amount of all then outstanding Eurodollar Rate Loans
under such Commitment having a Eurodollar Period ending after
said reduction date is less than the amount to which such
Commitment is expected to be reduced on said reduction date; and
(d) No Eurodollar Period shall extend beyond the Maturity
Date.
"Eurodollar Rate" means, with respect to any Eurodollar Rate
Loan, an interest rate per annum (rounded upward to the nearest 1/100
of one percent) determined pursuant to the following formula:
Eurodollar Eurodollar Base Rate
Rate = --------------------
1.00 - Eurodollar Reserve
Percentage
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"Eurodollar Rate Advance" means an Advance made hereunder and
specified to be a Eurodollar Rate Advance in accordance with Article 2.
"Eurodollar Rate Loan" means a Loan made hereunder and
specified to be a Eurodollar Rate Loan in accordance with Article 2.
"Eurodollar Reference Bank" means Bank of America.
"Eurodollar Reserve Percentage" means, with respect to any
Eurodollar Rate Loan, the maximum reserve percentage (expressed as a
decimal, rounded upward to the nearest 1/100th of 1%) in effect on the
date the Eurodollar Base Rate for that Eurodollar Rate Loan is
determined (whether or not applicable to any Bank) under regulations
issued from time to time by the Federal Reserve Board for determining
the maximum reserve requirement (including any emergency, supplemental
or other marginal reserve requirement) with respect to eurocurrency
funding (currently referred to as "eurocurrency liabilities") having a
term comparable to the Interest Period for such Eurodollar Rate Loan.
The determination by the Agent of any applicable Eurodollar Reserve
Percentage shall be conclusive in the absence of manifest error.
"Event of Default" shall have the meaning provided in Section
9.1.
"Federal Funds Rate" means, as of any date of determination,
the rate set forth in the weekly statistical release designated as
H.15(519), or any successor publication, published by the Federal
Reserve Board (including any such successor, "H.15(519)") for such date
opposite the caption "Federal Funds (Effective)". If for any relevant
date such rate is not yet published in H.15(519), the rate for such
date will be the rate set forth in the daily statistical release
designated as the Composite 3:30 p.m. Quotations for U.S. Government
Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite
3:30 p.m. Quotations") for such date under the caption "Federal Funds
Effective Rate". If on any relevant date the appropriate rate for such
date is not yet published in either H.15(519) or the Composite 3:30
p.m. Quotations, the rate for such date will be the arithmetic mean of
the rates for the last transaction in overnight Federal funds arranged
prior to 9:00 a.m. (New York City time) on that date by each of three
leading brokers of Federal funds transactions in New York City selected
by the Agent. For purposes of this Agreement, any change in the Federal
Funds Rate shall be effective as of the opening of business on the
effective date of such change.
"First Amended Loan Agreement" means that certain Amended and
Restated Revolving Loan Agreement, by and among Borrower, certain of
the Banks, the Agent and the Co-Agent, dated as of June 27, 1995, as
amended by that certain First Amendment to Amended and Restated
Revolving Loan Agreement, dated as of December 15, 1995, that certain
Second Amendment to Amended and Restated Revolving Loan Agreement,
dated as of July 22, 1996, that certain Third Amendment
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to Amended and Restated Revolving Loan Agreement, dated as of March 31,
1997, that certain Fourth Amendment to Amended and Restated Revolving
Loan Agreement, dated April 29, 1997, that certain Fifth Amendment to
Amended and Restated Revolving Loan Agreement, dated October 1, 1997,
that certain Sixth Amendment to Amended and Restated Revolving Loan
Agreement, dated as of December 1, 1997, and that certain Seventh
Amendment to Amended and Restated Revolving Loan Agreement, dated as of
January 15, 1998, pursuant to which certain of the Banks agreed to make
revolving loans to Borrower in the original aggregate principal amount
of up to $400,000,000, as such First Amended Loan Agreement existed
immediately prior to the effectiveness of this Agreement.
"Fiscal Quarter" means the fiscal quarter of Borrower
consisting of a three month fiscal period ending on each September 30,
December 31, March 31 and June 30.
"Fiscal Year" means the fiscal year of Borrower consisting of
a twelve month fiscal period ending on each June 30.
"Generally Accepted Accounting Principles" means, as of any
date of determination, accounting principles (a) set forth as generally
accepted in then currently effective Opinions of the Accounting
Principles Board of the American Institute of Certified Public
Accountants, (b) set forth as generally accepted in then currently
effective Statements of the Financial Accounting Standards Board or (c)
that are then approved by such other entity as may be approved by a
significant segment of the accounting profession in the United States
of America. The term "consistently applied," as used in connection
therewith, means that the accounting principles applied are consistent
in all material respects to those applied at prior dates or for prior
periods.
"▇▇▇▇ Harbor Project" means the approximately 416 acre
industrial business park located in Glendale, Arizona held in joint
venture by Del ▇. ▇▇▇▇ Cactus Development Corp. and Del E. ▇▇▇▇ ▇▇▇▇
Harbor Development Corporation.
"Government Securities" means readily marketable (a) direct
full faith and credit obligations of the United States of America or
obligations guaranteed by the full faith and credit of the United
States of America and (b) obligations of an agency or instrumentality
of, or corporation owned, controlled or sponsored by, the United States
of America that are generally considered in the securities industry to
be implicit obligations of the United States of America.
"Governmental Agency" means (a) any international, foreign,
federal, state, county or municipal government, or political
subdivision thereof, (b) any governmental or quasi-governmental agency,
authority, board, bureau, commission, department, instrumentality or
public body, or (c) any court or administrative tribunal.
-▇▇-
"▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇" means, as of any date of determination,
each Subsidiary of Borrower (a) that had on the last day of the Fiscal
Quarter then most recently ended total assets (determined in accordance
with Generally Accepted Accounting Principles) of $2,000,000 or more;
or (b) with respect to whose obligations any guaranty has been given by
Borrower or any other Subsidiary.
"Hazardous Materials" means substances defined as hazardous
substances pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq., or
as hazardous, toxic or pollutant pursuant to the Hazardous Materials
Transportation Act, 49 U.S.C. ss. 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. ss. 6901, et seq., the
Hazardous Waste Control Law, California Health & Safety Code ss. 25100,
et seq., or in any other applicable Hazardous Materials Law, in each
case as such Laws are amended from time to time.
"Hazardous Materials Laws" means all federal, state or local
laws, ordinances, rules or regulations governing the disposal of
Hazardous Materials applicable to any of the Real Property.
"Indebtedness" means, as to any Person, without duplication,
(a) indebtedness of such Person for borrowed money or for the deferred
purchase price of Property or services (excluding trade and other
accounts payable incurred in the ordinary course of business and in
accordance with Borrower's or the Subsidiary's in question customary
trade terms and further excluding obligations with respect to
home-buyer deposits and obligations for local governmental assessments
for local services based upon real property ownership), including any
guaranty for any such indebtedness, (b) indebtedness of such Person of
the nature described in clause (a) that is non-recourse to the credit
of such Person but is secured by assets of such Person, to the extent
of the value of such assets, (c) Capital Lease Obligations of such
Person, (d) indebtedness of such Person arising under acceptance
facilities or under facilities for the discount of accounts receivable
of such Person but not contingent reimbursement obligations of such
Person associated with surety bonds issued in the ordinary course of
such Person's business and (e) any direct or contingent obligations of
such Person under letters of credit issued for the account of such
Person.
"Indentures" means, collectively, the Indenture for the 9-3/4%
Senior Subordinated Debt Due 2003, the Indenture for the 9-3/4% Senior
Subordinated Debt Due 2008, the Indenture for the 9.00% Senior
Subordinated Debt Due 2006 and the Indenture for the 9-3/8% Senior
Subordinated Debt Due 2009.
"Intangible Assets" means assets that are considered
intangible assets under Generally Accepted Accounting Principles,
including customer lists, goodwill, computer software, copyrights,
trade names, trademarks and patents.
-15-
"Interest Differential" means, with respect to any prepayment
of a Eurodollar Rate Loan on a day other than the last day of the
applicable Interest Period and with respect to any failure to borrow a
Eurodollar Rate Loan on the date or in the amount specified in any
Request for Loan, (a) the per annum interest rate payable pursuant to
Section 3.1(c) with respect to the Eurodollar Rate Loan minus (b) the
Eurodollar Rate on, or as near as practicable to the date of the
prepayment or failure to borrow for a Eurodollar Rate Loan commencing
on such date and ending on the last day of the Interest Period of the
Eurodollar Rate Loan so prepaid or which would have been borrowed on
such date.
"Interest Expense" means, with respect to any fiscal period,
the sum of (a) all interest, fees, charges and related expenses paid or
payable by Borrower and its Subsidiaries (without duplication) for that
fiscal period to a lender or seller in connection with borrowed money
or the deferred purchase price of assets that are considered "interest
expense" under Generally Accepted Accounting Principles, plus (b) the
portion of rent paid or payable (without duplication) by Borrower and
its Subsidiaries for that fiscal period under Capital Lease Obligations
that should be treated as interest in accordance with Financial
Accounting Standards Board Statement No. 13, in each case determined on
a consolidated basis in accordance with Generally Accepted Accounting
Principles, consistently applied.
"Interest Period" means, with respect to any Eurodollar Rate
Loan, the related Eurodollar Period.
"Investment" means, when used in connection with any Person,
any investment by or of that Person, whether by means of purchase or
other acquisition of stock or other securities of any other Person or
by means of a loan, advance creating a debt, capital contribution,
guaranty or other debt or equity participation or interest in any other
Person, including any partnership and joint venture interests of such
Person. Unless otherwise specified, the amount of any Investment shall
be the amount actually invested (or fair value thereof), without
adjustment for subsequent increases or decreases in the value of such
Investment. Notwithstanding the foregoing, the provision of credit to
support a surety bond issued to secure the performance of real estate
development work in the ordinary course of Borrower's or its
Subsidiaries' business, for the benefit of any Subsidiary of Borrower,
shall not be considered an Investment, although the payment by a Person
providing credit on such a surety bond shall be considered an
Investment, nor shall any transaction which is excluded from the
definition of Disposition by virtue of clause (d) thereof be considered
an Investment.
"Issuing Bank" means Bank of America.
"Land Assets" means assets of a nature as have been
historically included by Borrower in the line items "Unamortized
improvement and amenity costs",
-16-
"Unamortized capitalized interest", "Land held for housing" and "Land
held for future development or sale" in the notes to its consolidated
financial statements, provided that in any measurement of Land Assets,
only 75% of the amount of assets in the category "Unamortized
capitalized interest" shall be considered.
"Laws" means, collectively, all international, foreign,
federal, state and local statutes, treaties, rules, regulations,
ordinances, codes and administrative or judicial precedents.
"Letters of Credit" means the standby letters of credit issued
by the Issuing Bank under the Line A Commitment pursuant to Section
2.12 (including letters of credit outstanding on the effective date
hereof that were issued under Section 2.12 of the First Amended Loan
Agreement) either as originally issued or as the same may be
supplemented, modified, amended, renewed, extended or supplanted.
"Leverage Ratio" means, as of the end of any Fiscal Quarter,
the ratio of (a) Adjusted Total Indebtedness to (b) [Tangible Net Worth
plus the aggregate principal balance of all Subordinated Obligations
(but not in excess of the lesser of $100,000,000 or 25% of Tangible Net
Worth)] in each case as of the last day of such Fiscal Quarter.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment for security, security interest, encumbrance,
claim, option, lien or charge of any kind, whether voluntarily incurred
or arising by operation of Law or otherwise, affecting any Property,
including any agreement to grant any of the foregoing, any conditional
sale or other title retention agreement, any lease in the nature of a
security interest, and/or the filing of or agreement to give any
financing statement (other than a precautionary financing statement
with respect to a lease that is not in the nature of a security
interest) under the Uniform Commercial Code or comparable Law of any
jurisdiction with respect to any Property.
"Line A Commitment" means, subject to Sections 2.4 and 2.5,
$357,000,000. The respective Pro Rata Shares of the Banks with respect
to the Line A Commitment are set forth in Schedule 1.1.
"Line B Commitment" means, subject to Sections 2.4 and 2.5,
$93,000,000. The respective Pro Rata Shares of the Banks with respect
to the Line B Commitment are set forth in Schedule 1.1.
"Line A Note" means a promissory note made by Borrower to a
Bank evidencing the Advances under that Bank's Pro Rata Share of the
Line A Commitment, substantially in the form of Exhibit C, either as
originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or supplanted.
-17-
"Line B Note" means a promissory note made by Borrower to a
Bank evidencing the Advances under that Bank's Pro Rata Share of the
Line B Commitment, substantially in the form of Exhibit D, either as
originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or supplanted.
"Loan" means the aggregate of the Advances made at any one
time by the Banks pursuant to Article 2.
"Loan Compliance Certificate" means a certification by a
Senior Officer of Borrower or by C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as Assistant
Treasurer of Borrower, in the form of Exhibit E, or such other form as
may reasonably be required by the Agent from time to time, that is
delivered in connection with a Request for Loan in accordance with
Section 8.2(g).
"Loan Documents" means, collectively, this Agreement, the
Notes, the Subsidiary Guaranty, any Request for Loan, any Compliance
Certificate and any other agreements of any type or nature hereafter
executed and delivered by Borrower or any of its Subsidiaries or
Affiliates to the Agent or to any Bank in any way relating to or in
furtherance of this Agreement, in each case either as originally
executed or as the same may from time to time be supplemented,
modified, amended, restated, extended or supplanted.
"Lot and Amenity Development Costs" means, for any fiscal
period, cash paid by Borrower and its Subsidiaries for lot development
and amenity development during such fiscal period, calculated in a
manner consistent with that used in the calculation of "Lot
development" and "Amenity development" as shown under the heading
"Reconciliation of net earnings to net cash used for operating
activities" in the financial statements delivered to Banks for the
Fiscal Quarter ending September 30, 1993.
"Majority Banks" means (a) as of any date of determination if
a Commitment is then in effect, Banks having in the aggregate 66-2/3%
or more of the Commitments then in effect and (b) as of any date of
determination if the Commitments have then been terminated, Banks
holding Notes evidencing in the aggregate 66-2/3% or more of the
aggregate Indebtedness then evidenced by the Notes.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G or U.
"Material Adverse Effect" means any set of circumstances or
events which (a) has or could reasonably be expected to have a material
adverse effect upon the validity or enforceability of any material Loan
Document, (b) is or could reasonably be expected to be material and
adverse to the condition (financial or otherwise) or
-18-
business operations of Borrower and its Subsidiaries, taken as a whole,
or (c) materially impairs or could reasonably be expected to materially
impair the ability of Borrower and its Guarantor Subsidiaries, taken as
a whole, to perform the Obligations.
"Maturity Date" means May 31, 2002, subject to extension as
provided in Section 2.5.
"Monthly Interest Period" means the first calendar day of each
month to the first calendar day of each succeeding month, calculated
from, and including, the first calendar day of each month to, but not
including, first calendar day of each succeeding month.
"Monthly Payment Date" means the fifth Banking Day of each
calendar month.
"Multiemployer Plan" means any employee benefit plan of the
type described in Section 4001(a)(3) of ERISA.
"Negative Pledge" means a Contractual Obligation that contains
a covenant binding on Borrower or any of its Subsidiaries that
prohibits Liens on any of its or their Property, other than (a) any
such covenant contained in a Contractual Obligation granting a Lien
permitted under Section 6.8 which affects only the Property that is the
subject of such permitted Lien and (b) any such covenant that does not
apply to Liens securing the Obligations.
"Net Change in Housing Inventory" means, for any fiscal
period, the net change in homes in production of Borrower and its
Subsidiaries during such fiscal period, calculated in a manner
consistent with that used in the calculation of "Net change in homes in
production" as shown under the heading "Reconciliation of net earnings
to net cash used for operating activities" in the financial statements
delivered to Banks for the Fiscal Quarter ending September 30, 1993.
"Net Income" means, with respect to any fiscal period, the
consolidated net income of Borrower and its Subsidiaries for that
period, determined in accordance with Generally Accepted Accounting
Principles, consistently applied.
"Non-Recourse Debt" means, as of any date of determination
(without duplication), any Indebtedness of Borrower or any of its
Subsidiaries on that date that is secured by a Lien on Property to the
extent the liability for such Indebtedness, and interest thereon, is
limited to the security of such Property, without the liability of any
Person for any such deficiency.
"Note" means any of the Line A Notes or Line B Notes.
-19-
"Obligations" means all present and future obligations of
every kind or nature of Borrower or any Party at any time and from time
to time owed to the Agent or the Banks or any one or more of them,
under any one or more of the Loan Documents, whether due or to become
due, matured or unmatured, liquidated or unliquidated, or contingent or
noncontingent, including obligations of performance as well as
obligations of payment, and including interest that accrues after the
commencement of any proceeding under any Debtor Relief Law by or
against Borrower or any Subsidiary or Affiliate of Borrower.
"Opinions of Counsel" means the favorable written legal
opinions of (a) ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and (b) ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel to Borrower and its Guarantor Subsidiaries, substantially in
the form of Exhibits F-1 and F-2, respectively, together with copies of
all factual certificates and legal opinions upon which such counsel has
relied.
"Pre-Existing Loan Documents" mean the First Amended Loan
Agreement and the Pre-Existing Notes and the Subsidiary Guaranty
delivered thereunder, as existing immediately prior to the
effectiveness of this Agreement.
"Pre-Existing Notes" means those certain promissory notes
delivered under the First Amended Loan Agreement, as existing
immediately prior to the effectiveness of this Agreement.
"Party" means any Person other than the Agent, the Co-Agent
and the Banks, which now or hereafter is a party to any of the Loan
Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as
such term is defined in Section 3(2) of ERISA), other than a
Multiemployer Plan, which is subject to Title IV of ERISA and is
maintained by Borrower or any of its Subsidiaries or to which Borrower
or any of its Subsidiaries contributes or has an obligation to
contribute.
"Permitted Encumbrances" means:
(a) inchoate Liens incident to construction or
maintenance of Real Property; or Liens incident to construction or
maintenance of Real Property now or hereafter filed of record for which
adequate reserves have been set aside (or deposits made pursuant to
applicable Law) and which are being contested in good faith by
appropriate proceedings and have not proceeded to judgment, provided
that no such Real Property is subject to a material risk of loss or
forfeiture;
-20-
(b) Liens for taxes and assessments on Real Property
which are not yet past due; or Liens for taxes and assessments on Real
Property for which adequate reserves have been set aside and are being
contested in good faith by appropriate proceedings and have not
proceeded to judgment, provided that no such Real Property is subject
to a material risk of loss or forfeiture;
(c) minor defects and irregularities in title to any
Real Property which in the aggregate do not materially impair the fair
market value or use of the Real Property for the purposes for which it
is or may reasonably be expected to be held;
(d) easements, exceptions, reservations, or other
agreements of any nature that are reasonable and appropriate for the
development of the Real Property of Borrower or a Subsidiary which in
the aggregate do not materially burden or impair the fair market value
or use of such Real Property (or the project to which it is related)
for the purposes for which it is or may reasonably be expected to be
held;
(e) easements, dedications, assessment district or
similar liens in connection with municipal financing and other similar
encumbrances or charges, in each case reasonably necessary or
appropriate for the development of Real Property of Borrower or a
Subsidiary, and which are granted in the ordinary course of the
business of such Borrower or Subsidiary, and which in the aggregate do
not materially burden or impair the fair market value or use of such
Real Property (or the project to which it is related) for the purposes
for which it is or may reasonably be expected to be held;
(f) easements, exceptions, reservations, or other
agreements for the purpose of facilitating the joint or common use of
property in or adjacent to a commercial Real Property project affecting
Real Property which in the aggregate do not materially burden or impair
the fair market value or use of such property for the purposes for
which it is or may reasonably be expected to be held;
(g) rights reserved to or vested in any Governmental
Agency to control or regulate, or obligations or duties to any
Governmental Agency with respect to, the use of any Real Property;
(h) rights reserved to or vested in any Governmental
Agency to control or regulate, or obligations or duties to any
Governmental Agency with respect to, any right, power, franchise,
grant, license, or permit;
(i) present or future zoning laws and ordinances or
other laws and ordinances restricting the occupancy, use, or enjoyment
of Real Property;
(j) statutory Liens, other than those described in
clauses (a) or (b) above, arising in the ordinary course of business
with respect to obligations which are
-21-
not delinquent or are being contested in good faith, provided that, if
delinquent, appropriate reserves have been set aside with respect
thereto and no property is subject to a material risk of loss or
forfeiture;
(k) covenants, conditions, and restrictions affecting
the use of Real Property which in the aggregate do not materially
impair the fair market value or use of the Real Property for the
purposes for which it is or may reasonably be expected to be held;
(l) rights of tenants under leases and rental
agreements covering Real Property entered into in the ordinary course
of business of the Person owning such Real Property;
(m) Liens consisting of pledges or deposits to secure
obligations under workers' compensation laws or similar legislation,
including Liens of judgments thereunder which are not currently
dischargeable;
(n) Liens consisting of pledges or deposits of
property to secure performance in connection with operating leases made
in the ordinary course of business to which Borrower or a Subsidiary is
a party as lessee, provided the aggregate value of all such pledges and
deposits in connection with any such lease does not at any time exceed
20% of the annual fixed rentals payable under such lease;
(o) Liens consisting of deposits of property to
secure bids made with respect to, or performance of, contracts (other
than contracts creating or evidenc ing an extension of credit to the
depositor) in the ordinary course of business;
(p) Liens consisting of any right of offset, or
statutory bankers' lien, on bank deposit accounts maintained in the
ordinary course of business so long as such bank deposit accounts are
not established or maintained for the purpose of providing such right
of offset or bankers' lien;
(q) Liens consisting of deposits of property to
secure statutory obligations of Borrower or a Subsidiary of Borrower in
the ordinary course of its business;
(r) Liens, other than Liens for which the underlying
obligation calls for the payment of money, that were in existence with
respect to a parcel of Real Property prior to its acquisition by
Borrower or one of its Subsidiaries and that do not materially impair
the intended use of such Real Property;
(s) Liens created by or resulting from any litigation
or legal proceeding involving Borrower or a Subsidiary of Borrower in
the ordinary course of its business which is currently being contested
in good faith by appropriate
-22-
proceedings, provided that adequate reserves have been set aside and no
material property is subject to a material risk of loss or forfeiture;
(t) other non-consensual Liens incurred in the
ordinary course of business but not in connection with an extension of
credit, which do not in the aggregate, when taken together with all
other Liens, materially impair the value or use of the Property of
Borrower and its Subsidiaries, taken as a whole; and
(u) an interest, including an option, held by a
Person under a contract to purchase Real Property, the sale of which is
not prohibited under this Agreement.
"Person" means an individual or any entity, whether trustee,
corporation, general partnership, limited partnership, joint stock
company, trust, estate, unincorpo rated organization, business
association, firm, joint venture, Governmental Agency, or otherwise.
"Plant Expenditures" means, for any fiscal period, Borrower
and its Subsidiaries' aggregate cash expenditures made during such
fiscal period for the acquisition of furniture, fixtures and equipment.
"Pricing Period" means the three month periods of (a) June 1
through August 31, (b) September 1 through November 30, (c) December 1
through the last day of February, and (d) March 1 through May 31, and
the Leverage Ratio applicable to any Pricing Period shall be the one
that is calculated as of the Fiscal Quarter end that falls
approximately 61 days prior to the beginning of such Pricing Period.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Pro Rata Share" means, with respect to each Bank, the
percentage of the Commitments set forth opposite the name of that Bank
on Schedule 1.1.
"Quarterly Payment Date" means the fifth Banking Day of each
January, April, July and October.
"Quarterly Period" means a period from the Closing Date until
the earlier of the next following June 30 or September 30 and each
subsequent three (3) month period commencing on the first calendar day
of each April, July, October and January thereafter.
"Real Property" means, as of any date of determination, all
real property then or theretofore owned, leased or occupied by Borrower
or any of its Subsidiaries.
-23-
"Reference Rate" means the rate of interest publicly announced
from time to time by Bank of America as its "reference rate." It is a
rate set by Bank of America based upon various factors including Bank
of America's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate. Any change
in the Reference Rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement
of such change.
"Reference Rate Advance" means an Advance made hereunder and
specified to be a Reference Rate Advance in accordance with Article 2.
"Reference Rate Loan" means a Loan made hereunder and
specified to be a Reference Rate Loan in accordance with Article 2.
"Regulation D" means Regulation D, as at any time amended, of
the Board of Governors of the Federal Reserve System, or any other
regulation in substance substituted therefor.
"Regulations G, T, U and X" means Regulations G, T, U and X,
as at any time amended, of the Board of Governors of the Federal
Reserve System, or any other regulations in substance substituted
therefor.
"Request for Letter of Credit" means a Request for Loan
accompanied by a written request for a Letter of Credit substantially
in the form of Exhibit G, signed by a Responsible Official of Borrower,
on behalf of Borrower, and properly completed to provide all
information required to be included therein.
"Request for Loan" means a written request for a Loan
substantially in the form of Exhibit H, signed by a Responsible
Official of Borrower, on behalf of Borrower, and properly completed to
provide all information required to be included therein.
"Required Banks" means as of any date of determination, Banks
having in the aggregate 80% or more of the Commitments then in effect.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, or judgment, award,
decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Responsible Official" means (a) when used with reference to a
Person other than an individual, any corporate officer of such Person,
general partner of such
-24-
Person, corporate officer of a corporate general partner of such
Person, or corporate officer of a corporate general partner of a
partnership that is a general partner of such Person, or any other
responsible official thereof duly acting on behalf thereof, and (b)
when used with reference to a Person who is an individual, such Person.
Any document or certificate hereunder that is signed or executed by a
Responsible Official of another Person shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or
other action on the part of such other Person.
"Senior Debt" means, as of any date of determination, Total
Indebtedness as of that date, other than Subordinated Obligations.
"Senior Officer" means Borrower's (a) chief executive officer,
(b) president, (c) chief financial officer, (d) treasurer or (e) vice
president and controller.
"Special Eurodollar Circumstance" means the adoption, on or
after the date of this Agreement, of any Law or interpretation, or any
change therein or thereof, or any change in the interpretation or
administration thereof by any Governmental Agency, central bank or
comparable authority charged with the interpretation or administration
thereof, or compliance by any Bank or its Eurodollar Lending Office
with any request or directive (whether or not having the force of Law)
of any such Governmental Agency, central bank or comparable authority,
or the existence or occurrence of circumstances affecting the
Designated Eurodollar Market generally that are beyond the reasonable
control of the Banks.
"Specified Charges" means, as of the end of any Fiscal
Quarter, the sum of (a) Plant Expenditures for the four (4) Fiscal
Quarters then ending plus (b) Total Development Expenditures as of such
date plus (c) Interest Expense for the four (4) Fiscal Quarters then
ending plus (d) the aggregate amount of federal and state taxes on or
measured by income of Borrower and its Subsidiaries paid in Cash during
the four (4) Fiscal Quarters then ending.
"Spring Creek Project" means the approximately 473 acre mixed
use/industrial park in Colorado Springs, Colorado held by Del ▇. ▇▇▇▇
Spring Creek Corporation.
"Stockholders' Equity" means, as of any date of determination
and with respect to any Person, the consolidated stockholders' equity
of the Person as of that date determined in accordance with Generally
Accepted Accounting Principles; provided that there shall be excluded
from Stockholders' Equity any amount attributable to Disqualified
Stock.
"Strategic Plan" means Borrower's 1995 Strategic Plan,
delivered to the Agent by Borrower under letter dated March 8, 1995.
-25-
"Subordinated Obligations" means, as of any date of
determination (without duplication), (a) the 9-3/4% Senior Subordinated
Debt Due 2003 outstanding as of such date, (b) the 9.00% Senior
Subordinated Debt Due 2006 outstanding as of such date, (c) the 9-3/4%
Senior Subordinated Debt Due 2008 outstanding as of such date, (d) the
9-3/8% Senior Subordinated Debt Due 2009 outstanding as of such date,
and (e) any other Indebtedness of Borrower or any of its Subsidiaries
on that date which has been subordinated in right of payment to the
Obligations in a manner reasonably satisfactory to the Banks and does
not require any principal repayment thereunder (other than through
acceleration) on a date prior to the Maturity Date and contains such
other protective terms with respect to senior debt (such as payment
blockage) as the Banks may reasonably require. Subordination provisions
and protective terms with respect to senior debt under Indebtedness
issued publicly or pursuant to Securities and Exchange Commission Rule
144A shall be deemed to be acceptable to the Banks if they include all
of those protections given to "Designated Senior Debt", as that term is
used in the Indentures for the 9-3/4% Senior Subordinated Debt Due 2003
and the 9.00% Senior Subordinated Debt Due 2006.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the voting stock, membership interests
or other equity interests (in the case of Persons other than
corporations or limited liability companies), is owned or controlled
directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof.
"Subsidiary Guaranty" means the continuing guaranty of the
Obligations to be executed and delivered by the Guarantor Subsidiaries
pursuant to Section 8.1(a)(3), in the form of Exhibit I, either as
originally executed or as it may from time to time be supplemented,
modified, amended, extended or supplemented.
"Substituted Credit Facilities" means (a) the Senior Credit
Agreement between Borrower and the Valley National Bank of Arizona, as
agent for certain lenders, dated July 17, 1989, as amended, and (b) the
Revolving Loan Agreement between ▇▇▇ ▇▇▇▇ Communities Inc. and First
Interstate Bank of Nevada, as agent for certain lenders, dated June 23,
1988, as amended.
"Tangible Net Worth" means, as of any date of determination,
the Stockholders' Equity of Borrower and its Subsidiaries on that date
minus the aggregate Intangible Assets (not including the value of any
intangible deferred tax assets that have been included in the
calculation of Intangible Assets for this purpose) of Borrower and its
Subsidiaries on that date.
"Total Development Expenditures" means, as of the last day of
any four (4) Fiscal Quarter period, Net Change in Housing Inventory
plus Lot and Amenity
-26-
Development Costs plus Cash Land Acquisition Costs for such four (4)
Fiscal Quarter period, but in no event less than zero.
"Total Indebtedness" means, as of any date of determination
(without duplication), all Indebtedness of Borrower or any of its
Subsidiaries on that date.
"to the best knowledge of" means, when modifying a
representation, warranty or other statement of any Person, that the
fact or situation described therein is known by the Person (or, in the
case of a Person other than a natural Person, known by a Responsible
Official of that Person) making the representation, warranty or other
statement, or with the exercise of reasonable due diligence under the
circumstances (in accordance with the standard of what a reasonable
Person in similar circumstances would have done) should have been known
by the Person (or, in the case of a Person other than a natural Person,
should have been known by a Responsible Official of that Person).
"type", when used with respect to any Loan or Advance, means
the designation of whether such Loan or Advance is a Reference Rate
Loan or Advance, or a Eurodollar Rate Loan or Advance.
"Unentitled Land" means Real Property (other than Real
Property used and reasonably necessary for the general corporate and
administrative purposes of Borrower and its Subsidiaries) that does not
meet all of the following conditions: (a) its intended use is
permissible under the applicable General Plan, (b) its intended use is
permissible under the applicable Specific Plan, development agreement
or by applicable zoning, (c) the environmental impact report for the
intended use, if required, has been certified by the applicable
Governmental Agency, (d) the time to file any challenge to the
environmental impact report under the California Environmental Quality
Act has passed without such a lawsuit being filed or such a lawsuit has
been finally resolved successfully, and (e) in states other than
California, a status comparable to each of the foregoing, to the extent
required, has been met under applicable local Laws.
"Unsold Home" means a housing unit owned by Borrower or a
Guarantor Subsidiary with respect to which construction has begun
(measured by the laying of a foundation for such housing unit) and for
which a sales contract has not been entered into with, and a cash
deposit received from, a consumer purchaser of such housing unit.
1.2 Use of Defined Terms. Any defined term used in the plural
shall refer to all members of the relevant class, and any defined term used in
the singular shall refer to any one or more of the members of the relevant
class.
-27-
1.3 Accounting Terms. All accounting terms not specifically
defined in this Agreement shall be construed in conformity with, and all
financial data required to be submitted by this Agreement shall be prepared in
conformity with, Generally Accepted Accounting Principles applied on a
consistent basis, except as otherwise specifically prescribed herein. In the
event that Generally Accepted Accounting Principles change during the term of
this Agreement such that the covenants contained in Sections 6.11 through 6.15
would then be calculated in a different manner or with different components, (a)
Borrower and the Banks agree to amend this Agreement in such respects as are
necessary to conform those covenants as criteria for evaluating Borrower's
financial condition to substantially the same criteria as were effective prior
to such change in Generally Accepted Accounting Principles and (b) Borrower
shall be deemed to be in compliance with the covenants contained in the
aforesaid Sections during the 90 day period following any such change in
Generally Accepted Accounting Principles if and to the extent that Borrower
would have been in compliance therewith under Generally Accepted Accounting
Principles as in effect immediately prior to such change.
1.4 Rounding. Any financial ratios required to be maintained
or achieved by Borrower pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed in
this Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.6 References to "Borrower and its Subsidiaries". Any
reference herein to "Borrower and its Subsidiaries" or the like shall refer
solely to Borrower during such times, if any, as Borrower shall have no
Subsidiaries.
1.7 Miscellaneous Terms. The term "or" is disjunctive; the
term "and" is conjunctive. The term "shall" is mandatory; the term "may" is
permissive. Masculine terms also apply to females; feminine terms also apply to
males. The term "including" is by way of example and not limitation. Unless
otherwise specified, reference to any document or agreement shall mean such
document or agreement as it may be amended or restated from time to time.
-28-
Article 2
LOANS
-----
2.1 Loans-General.
(a) Subject to the terms and conditions set forth in
this Agreement, at any time and from time to time from the Closing Date
through and including the Banking Day prior to the Maturity Date, each
Bank shall, pro rata according to that Bank's Pro Rata Share of the
then applicable Commitments, make Advances to Borrower in such amounts
as Borrower may request that do not exceed in the aggregate at any one
time outstanding the amount of that Bank's Pro Rata Share of the
Commitments; provided that, giving effect to the Loan of which such
Advance is a part, (i) the then outstanding principal indebtedness
evidenced by the Line A Notes plus the Aggregate Effective Amount shall
not exceed the Line A Commitment and (ii) the then outstanding
principal indebtedness evidenced by the Line B Notes shall not exceed
the Line B Commitment. Subject to the limitations set forth herein,
Borrower may borrow, repay and reborrow under the Commitments without
premium or penalty.
(b) Subject to the next sentence, each Loan shall be
made pursuant to a Request for Loan which shall specify the requested
(i) date of such Loan, (ii) type of Loan, (iii) amount of such Loan,
(iv) in the case of a Eurodollar Rate Loan, the Interest Period for
such Loan and (v) whether such Loan is to be made under the Line A or
Line B Commitment. Unless the Agent has notified, in its sole and
absolute discretion, Borrower to the contrary, a Loan may be requested
by telephone by a Responsible Official of Borrower, in which case
Borrower shall confirm such request by promptly delivering a Request
for Loan in person or by telecopier conforming to the preceding
sentence to the Agent. Borrower and the Agent may enter into a
memorandum of understanding setting forth specific procedures for such
telephonic requests; if the Agent complies with such procedures (or if
no such memorandum is entered into), Agent shall incur no liability
whatsoever hereunder in acting upon any telephonic request for loan
purportedly made by a Responsible Official of Borrower, which hereby
agrees to indemnify the Agent from any loss, cost, expense or liability
as a result of so acting.
(c) Promptly following receipt of a Request for Loan,
the Agent shall notify each Bank by telephone or telecopier (and if by
telephone, promptly confirmed by telecopier) of the date and type of
the Loan, the applicable Interest Period, the applicable Commitment,
and that Bank's Pro Rata Share of the Loan. Not later than 11:00 a.m.,
San Francisco time, on the date specified for any Loan (which must be a
Banking Day), each Bank shall make its Pro Rata Share of the Loan in
immediately available funds available to the Agent at the Agent's
Office. Upon satisfaction or waiver of the applicable conditions set
forth in Article 8, all Advances
-29-
shall be credited on that date in immediately available funds to the
Designated Deposit Account.
(d) Unless the Majority Banks otherwise consent, each
Reference Rate Loan shall be an integral multiple of $1,000,000 and
shall be not less than $1,000,000 and each Eurodollar Loan shall be an
integral multiple of $1,000,000 and shall be not less than $10,000,000.
(e) The Advances made by each Bank shall be evidenced
by that Bank's Line A Note or Line B Note, as applicable.
(f) A Request for Loan shall be irrevocable upon the
Agent's first notification thereof.
(g) If no Request for Loan (or telephonic request for
loan referred to in the second sentence of Section 2.1(b), if
applicable) has been made within the requisite notice periods set forth
in Sections 2.2 or 2.3 in connection with a Loan which, if made and
giving effect to the application of the proceeds thereof, would not
increase the outstanding principal Indebtedness evidenced by the Line A
Notes or Line B Notes, as applicable, then Borrower shall be deemed to
have requested, as of the date upon which the related then outstanding
Loan is due pursuant to Sec tion 3.1(e)(i), a Reference Rate Loan under
the Line A Commitment or Line B Commitment, as applicable, in an amount
equal to the amount necessary to cause the outstanding principal
Indebtedness evidenced by the Notes to remain the same and the Banks
shall make the Advances necessary to make such Loan notwithstanding
Sections 2.1(b) and 2.2.
(h) If a Loan is to be made on the same date that
another Loan is due and payable, Borrower or the Banks, as the case may
be, shall make available to the Agent the net amount of funds giving
effect to both such Loans and the effect for purposes of this Agreement
shall be the same as if separate transfers of funds had been made with
respect to each such Loan, provided that no such netting of payments
shall be made of a Loan under the Line A Commitment against the
repayment of a Loan under the Line B Commitment.
2.2 Reference Rate Loans. Each request by Borrower for a
Reference Rate Loan shall be made pursuant to a Request for Loan, with a
concurrent telephone notification, received by the Agent, at the Agent's Office
(and such additional office of the Agent as it may designate from time to time),
not later than 1:00 p.m. San Francisco time, at least one (1) Banking Day before
the date of the requested Reference Rate Loan. All Loans shall constitute
Reference Rate Loans unless properly designated or redesignated as a Eurodollar
Rate Loan pursuant to Section 2.3. -30-
2.3 Eurodollar Rate Loans.
(a) Each request by Borrower for a Eurodollar Rate
Loan shall be made pursuant to a Request for Loan (or telephonic or
other request for loan referred to in the second sentence of Section
2.1(b), if applicable) received by the Agent, at the Agent's Office
(and such additional office of the Agent as it may designate from time
to time), not later than 9:00 a.m., San Francisco time, at least three
(3) Eurodollar Banking Days before the first day of the applicable
Eurodollar Period.
(b) On the date which is two (2) Eurodollar Banking
Days before the first day of the applicable Eurodollar Period, the
Agent shall confirm its determination of the applicable Eurodollar Rate
(which determination shall be conclusive in the absence of manifest
error) and promptly shall give notice of the same to Borrower and the
Banks by telephone or telecopier (and if by telephone, promptly
confirmed by telecopier).
(c) Unless the Agent and the Majority Banks otherwise
consent, no more than four (4) Eurodollar Rate Loans shall be
outstanding at any one time.
(d) Unless the Agent and the Majority Banks otherwise
consent, no Eurodollar Rate Loan may be requested during the existence
of a Default or Event of Default.
(e) Nothing contained herein shall require any Bank
to fund any Eurodollar Rate Advance in the Designated Eurodollar
Market.
2.4 Voluntary Reduction of Commitments. Borrower shall have
the right, at any time and from time to time, without penalty or charge, upon at
least three (3) Banking Days prior written notice by a Responsible Official of
Borrower to the Agent, voluntarily to reduce, permanently and irrevocably, in
aggregate principal amounts in an integral multiple of $1,000,000 but not less
than $5,000,000, or to terminate, all of the then undisbursed portion of the
Line A Commitment or Line B Commitment, provided that any such reduction or
termination shall be accompanied by payment of all accrued and unpaid commitment
fees with respect to the portion of the Commitments being reduced or terminated.
The Agent shall promptly notify the Banks of any reduction of a Commitment under
this Section 2.4.
2.5 Extension of Maturity Date/Reduction of Commitments
(a) No earlier than 120 days nor later than 60 days
prior to any Anniversary Date, and so long as no Default or Event of
Default then exists hereunder, Borrower may make a written request to
the Agent to extend the then existing Maturity Date (the "Prior
Maturity Date") for a period of an additional one (1) year. If written
consent to such extension request is given by the Required Banks to the
Agent within 45 days of such request by Borrower, then the Maturity
Date shall be
-31-
so extended subject to the payment by Borrower to the Agent, within 10
days following notice of such consent to Borrower, of an extension fee
as may be determined by such consenting Banks. Each such extension fee
shall be for the account of the consenting Banks, based upon their
pro-rata shares of the Commitments. If written consent is not so given
by the Required Banks, no extension of the Maturity Date shall occur,
but the request therefor can be renewed at any future Anniversary Date.
(b) In the event that a request to extend a Maturity
Date under clause (a), above, is approved by the Required Banks but
less than all of the Banks, then, subject to clause (c), below, the
portion of the Commitments attributable to the Banks that did not grant
consent to such extension (each, a "Non-Consenting Bank") shall
terminate on the Prior Maturity Date.
(c) In the event that a portion of the Commitments
are to be terminated on a Prior Maturity Date pursuant to the terms of
clause (b), above, Borrower may, at any time until six (6) months prior
to the Prior Maturity Date, have the right to arrange for one or more
Persons that are either existing Banks or Eligible Assignees (each, for
these purposes, a "New Bank") and that (if not an existing Bank) are
approved by the Agent (which approval shall not be unreasonably
withheld) purchase all (but not part) of any Non-Consenting Bank's then
outstanding Advances, its Notes and its participation interest in
outstanding Letters of Credit, and assume its Pro Rata Share of the
Commitments and its obligations hereunder. Upon the agreement in
writing by one or more New Banks, the Non-Consenting Bank shall be
required to assign its Pro Rata Share of the Commitments, together with
the Indebtedness then evidenced by its Notes and its participation
interest in outstanding Letters of Credit, to the New Bank or New Banks
in accordance with Section 11.8. On the date of any such assignment,
the Non-Consenting Bank which is being so replaced shall cease to be a
"Bank" for all purposes of this Agreement and shall receive (i) from
the New Bank or New Banks the principal amount of its Advances then
outstanding and (ii) from Borrower all interest and fees accrued and
then unpaid with respect to such Advances, together with any other
amounts then payable to such Bank by Borrower. In the event the
Non-Consenting Bank is also the Issuing Bank, then the New Bank shall
become the Issuing Bank for all purposes of this Agreement and shall
either (at the Non-Consenting Bank's election, subject to the approval
of Borrower, the Agent and the New Bank (which approvals shall not be
unreasonably withheld) and, in the case of clause (A) below, the
approval of the applicable Letter of Credit beneficiaries) (A) issue
new letters of credit to replace the outstanding Letters of Credit
issued by the Non-Consenting Bank, or (B) issue new letters of credit
to the Non-Consenting Bank in support of the outstanding Letters of
Credit issued by the Non-Consenting Bank, whereupon such outstanding
Letters of Credit shall no longer be considered "Letters of Credit"
under this Agreement, and such new letters of credit shall be
considered Letters of Credit for all purposes of this Agreement
(including the participation therein by the other Banks pursuant to
Section 2.12). Any such purchase
-32-
by a New Bank pursuant to this clause (c) shall be further evidenced by
a revised version of Schedule 1.1 hereto prepared by the Agent and
delivered to Borrower and each of the Banks and replacement Notes
delivered by Borrower to the Agent for distribution to the applicable
Banks in exchange for the corresponding existing Notes.
2.6 Optional Termination of Commitments. Following the
occurrence of a Change in Control, the Majority Banks may in their sole and
absolute discretion elect, at any time until sixty (60) days immediately
subsequent to the later of (a) such occurrence and (b) receipt of Borrower's
written notice to the Agent of such occurrence, to terminate the Commitments, in
which case the Commitments shall be terminated and reduced to zero effective on
the date of such election.
2.7 Automatic Termination of Commitments. The Commitments
shall automatically terminate and be reduced to zero upon the occurrence of a
Disposition consisting of (a) all or substantially all of the assets of
Borrower, or (b) all or substantially all of the capital stock of any Guarantor
Subsidiary (except a Guarantor Subsidiary holding solely the assets of the ▇▇▇▇
Harbor Project or the Spring Creek Project), or (c) all or substantially all of
the assets of any Guarantor Subsidiary (not including those assets constituting
the ▇▇▇▇ Harbor Project or Spring Creek Project).
2.8 Agent's Right to Assume Funds Available for Advances.
Unless the Agent shall have been notified by any Bank no later than the Banking
Day or Eurodollar Banking Day, as applicable, prior to the funding by the Agent
of any Loan that such Bank does not intend to make available to the Agent such
Bank's portion of the total amount of such Loan, the Agent may assume that such
Bank has made such amount available to the Agent on the date of the Loan and the
Agent may, in reliance upon such assumption, make available to Borrower a
corresponding amount. If the Agent has made funds available to Borrower based on
such assumption and such corresponding amount is not in fact made available to
the Agent by such Bank, the Agent shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
promptly shall notify Borrower and Borrower shall pay such corresponding amount
to the Agent. The Agent also shall be entitled to recover from such Bank
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to Borrower to the date
such corres ponding amount is recovered by the Agent, at a rate per annum equal
to the daily Federal Funds Rate. Nothing herein shall be deemed to relieve any
Bank from its obligation to fulfill its share of the Commitments or to prejudice
any rights which the Agent or Borrower may have against any Bank as a result of
any default by such Bank hereunder.
2.9 Adjusting Purchase Payments. Principal amounts outstanding
under the Line A Commitment or the Line B Commitment of the First Amended Loan
Agreement on the effective date of this Agreement (the "Carryover Principal
Balance") remain outstanding under the Line A Commitment or Line B Commitment,
as applicable, hereunder. Concurrently with the effectiveness of this Agreement
and the making of the initial Loan as
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provided in Section 8.1, the Banks agree to purchase and sell undivided
interests in the Carryover Principal Balance by making or receiving Adjusting
Purchase Payments as specified in Schedule 2.9 (the "Adjusting Purchase
Payment(s)") so that the Carryover Principal Balance will be properly allocated
and owing to the Banks under the Notes in accordance with the Pro-Rata Shares
specified in Schedule 1.1. Each Bank making an Adjusting Purchase Payment shall
deliver it to the Agent together with its funding of its initial Advance, and
the Agent shall forward such Adjusting Purchase Payments to the Banks entitled
thereto promptly after receipt in accordance with the allocations specified in
Schedule 2.9. On the effective date of this Agreement, in addition to any other
Advances that may be made, each Bank shall be deemed as having made an Advance
in the amount of its Pro-Rata Share of the Carryover Principal Balance. The
Aggregate Effective Amount with respect to Letters of Credit outstanding
hereunder as of the effective date hereof is $9,013,765. As of the effective
date hereof, the Banks shall hold participations in such Letters of Credit as
provided in Section 2.12 in accordance with their Pro Rata Shares as specified
in Schedule 1.1 hereof.
2.10 Substitute Credit Facility. Borrower hereby requests, and
the parties hereto agree, that the Line B Commitment constitutes a restatement
of the Line B Commitment under the First Amended Loan Agreement.
2.11 Senior Debt. Without limitation, all outstanding
principal and interest under the Notes constitutes "Senior Debt", as that term
is defined in each or any of the Indentures.
2.12 Letters of Credit.
(a) Subject to the terms and conditions hereof, at
any time and from time to time from the Closing Date through the
Maturity Date, the Issuing Bank shall issue such Letters of Credit
under the Line A Commitment as Borrower may request by a Request for
Letter of Credit; provided that (i) giving effect to all such Letters
of Credit, the sum of (A) the aggregate principal amount outstanding
under the Line A Notes plus (B) the Aggregate Effective Amount does not
exceed the then applicable Line A Commitment and (ii) the Aggregate
Effective Amount shall not exceed $20,000,000. Each Letter of Credit
shall be in a form acceptable to the Issuing Bank. The expiry date of
any Letter of Credit shall not extend more than one (1) year beyond its
issuance date (unless otherwise agreed by the Issuing Bank) nor, in any
event, beyond the Maturity Date. A Request for Letter of Credit shall
be irrevocable absent the consent of the Issuing Bank.
(b) Each Request for Letter of Credit shall be
submitted to the Issuing Bank, with a copy to the Agent, at least five
(5) Banking Days prior to the date upon which the related Letter of
Credit is proposed to be issued. The Agent shall promptly notify the
Issuing Bank whether such Request for Letter of Credit, and the
issuance of a Letter of Credit pursuant thereto, conforms to the
requirements of this
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Agreement. Upon receipt of favorable notice from the Agent, and
promptly after issuing each Letter of Credit, the Issuing Bank shall
promptly notify the Agent, and the Agent shall promptly notify the
Banks, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each
Bank shall be deemed to have purchased a participation in such Letter
of Credit from the Issuing Bank in a proportion of the total equal to
that Bank's Pro Rata Share. Without limiting the scope and nature of
each Bank's participation in any Letter of Credit, to the extent that
the Issuing Bank has not been reimbursed by Borrower for any payment
required to be made by the Issuing Bank under any Letter of Credit,
each Bank shall, pro rata according to its Pro Rata Share, reimburse
the Issuing Bank through the Agent promptly upon demand for the amount
of such payment. The obligation of each Bank to so reimburse the
Issuing Bank shall be absolute and unconditional and shall not be
affected by the occurrence of an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of Borrower to reimburse the Issuing
Bank for the amount of any payment made by the Issuing Bank under any
Letter of Credit together with interest as hereinafter provided. Each
Bank that has reimbursed the Issuing Bank pursuant to this Section
2.12(c) for its Pro-Rata Share of any payment made by the Issuing Bank
under a Letter of Credit shall thereupon acquire a pro-rata
participation, to the extent of such reimbursement, in the claim of the
Issuing Bank against Borrower under Section 2.12(d) and shall share, in
accordance with that pro-rata participation, in any payment made by
Borrower with respect to such claim.
(d) Borrower agrees to pay to the Issuing Bank
through the Agent an amount equal to any payment made by the Issuing
Bank with respect to each Letter of Credit no later than one (1)
Banking Day after demand made by the Issuing Bank therefor, together
with interest on such amount from the date of any payment made by the
Issuing Bank. Interest on such amount shall accrue at the Reference
Rate until the second Banking Day following the payment made by the
Issuing Bank with respect to the Letter of Credit, and at the Default
Rate thereafter. The principal amount of any such payment by Borrower
shall be used to reimburse the Issuing Bank for the pay ment made by it
under the Letter of Credit. Should Borrower request a Loan under the
Line A Commitment for the purpose of making such payment and make
written request to the Agent to pay the proceeds of the Loan directly
to the Issuing Bank, then the amount to be so paid shall be deducted
from the Aggregate Effective Amount for purposes of Section 2.1(a) in
connection with such Request for Loan.
(e) If Borrower fails to make the payment required by
Section 2.12(d) within the time period therein set forth, in lieu of
the reimbursement to the Issuing Bank under Section 2.12(c) the Issuing
Bank may (but is not required to), without notice to or the consent of
Borrower, instruct the Agent to cause Advances to be made by the Banks
under the Line A Commitment in an aggregate amount equal to the amount
paid by the Issuing Bank with respect to that Letter of Credit and, for
this
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purpose, the conditions precedent set forth in Articles 2 and 8 shall
not apply. The proceeds of such Advances shall be paid to the Issuing
Bank to reimburse it for the payment made by it under the Letter of
Credit.
(f) The issuance of any supplement, modification,
amendment, renewal, or extension to or of any Letter of Credit shall be
subject to such preconditions as the Issuing Bank may establish.
(g) The obligation of Borrower to pay to the Issuing
Bank the amount of any payment made by the Issuing Bank under any
Letter of Credit shall be absolute, unconditional, and irrevocable,
subject only to performance by the Issuing Bank of its obligations to
Borrower under California Uniform Commercial Code Section 5109. Without
limiting the foregoing, subject to California Uniform Commercial Code
Section 5109, Borrower's obligations shall not be affected by any of
the following circumstances:
(1) any lack of validity or enforceability
of the Letter of Credit, this Agreement, or any other
agreement or instrument relating thereto;
(2) any amendment or waiver of or any
consent to departure from the Letter of Credit, this
Agreement, or any other agreement or instrument relating
thereto, with the consent of Borrower;
(3) the existence of any claim, setoff,
defense, or other rights which Borrower may have at any time
against the Issuing Bank, the Agent, the Co-Agent or any Bank,
any beneficiary of the Letter of Credit (or any persons or
entities for whom any such beneficiary may be acting) or any
other Person, whether in connection with the Letter of Credit,
this Agreement, or any other agreement or instrument relating
thereto, or any unrelated transactions;
(4) any demand, statement, or any other
document presented under the Letter of Credit proving to be
forged, fraudulent, invalid, or insufficient in any respect or
any statement therein being untrue or inaccurate in any
respect whatsoever so long as any such document appeared to
comply with the terms of the Letter of Credit;
(5) payment by the Issuing Bank in good
faith under the Letter of Credit against presentation of a
draft or any accompanying document which does not strictly
comply with the terms of the Letter of Credit;
(6) the existence, character, quality,
quantity, condition, packing, value or delivery of any
property purported to be represented by documents presented in
connection with any Letter of Credit or for any
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difference between any such property and the character,
quality, quantity, condition, or value of such property as
described in such documents;
(7) the time, place, manner, order or
contents of shipments or deliveries of property as described
in documents presented in connection with any Letter of Credit
or the existence, nature and extent of any insurance relative
thereto;
(8) the solvency or financial responsibility
of any party issuing any documents in connection with a Letter
of Credit;
(9) any failure or delay in notice of
shipments or arrival of any property;
(10) any error in the transmission of any
message relating to a Letter of Credit not caused by the
Issuing Bank, or any delay or interruption in any such
message;
(11) any error, neglect or default of any
correspondent of the Issuing Bank in connection with a Letter
of Credit;
(12) any consequence arising from acts of
God, war, insurrection, civil unrest, disturbances, labor
disputes, emergency conditions or other causes beyond the
control of the Issuing Bank;
(13) so long as the Issuing Bank in good
faith determines that the contract or document appears to
comply with the terms of the Letter of Credit, the form,
accuracy, genuineness or legal effect of any contract or
document referred to in any document submitted to the Issuing
Bank in con nection with a Letter of Credit; and
(14) where the Issuing Bank has acted in
good faith and observed general banking usage, any other
circumstances whatsoever.
(h) The Issuing Bank shall be entitled to the
protection accorded to the Agent pursuant to Section 10.7.
(i) The Uniform Code of Practice for Documentary
Credits, as published in its most current version by the International
Chamber of Commerce, shall be deemed a part of this Section and shall
apply to all Letters of Credit to the extent not inconsistent with
applicable Law.
(j) Concurrently with the issuance of each Letter of
Credit, Borrower shall pay a letter of credit origination fee to the
Issuing Bank, for the sole
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account of the Issuing Bank, in an amount established from time to time
by the Issuing Bank. Borrower shall also pay to the Agent for the
ratable account of the Banks in accordance with their Pro Rata Shares,
a standby letter of credit fee in an amount equal to 1.25% per annum
times the face amount of such Letter of Credit, which fee shall be
payable quarterly in arrears on each Quarterly Payment Date after the
issuance of the Letter of Credit and on the termination or expiration
of such Letter of Credit. The Agent shall promptly make available to
the Banks in immediately available funds, pro-rata according to their
Pro Rata Shares, the standby letter of credit fees which are for the
account of the Banks. Borrower shall also pay transfer fees, check
fees, foreign currency exchange fees and costs, and such other fees as
the Issuing Bank normally charges in connection with standby letters of
credit and activity pursuant thereto, which fees shall be solely for
the account of the Issuing Bank.
(k) To the extent of any inconsistency between the
provisions of this Agreement regarding Letters of Credit and those of
Exhibit G, the provisions of this Agreement shall govern, provided that
the grant of additional (though not contrary) rights or remedies to the
Issuing Bank under Exhibit G shall not be construed as inconsistent
with the provisions of this Agreement.
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Article 3
PAYMENTS AND FEES
-----------------
3.1 Principal and Interest.
(a) Interest shall be payable on the outstanding
daily unpaid principal amount of each Advance from the date thereof
until payment in full is made and shall accrue and be payable at the
rates set forth or provided for herein before and after default, before
and after maturity, before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law, with
interest on overdue interest to bear interest at the Default Rate to
the fullest extent permitted by applicable Laws.
(b) Unless previously paid as provided in this
Agreement, interest accrued during each Monthly Interest Period on each
Reference Rate Loan shall be due and payable on the next succeeding
Monthly Payment Date and on the Maturity Date. Except as otherwise
provided in Section 3.7, the unpaid principal amount of any Reference
Rate Loan shall bear interest at a fluctuating rate per annum equal to
the Reference Rate. Each change in the interest rate under this Section
3.1(b) due to a change in the Reference Rate shall take effect
simultaneously with the corresponding change in the Reference Rate.
(c) Unless previously paid as provided in this
Agreement, interest accrued during each Monthly Interest Period on each
Eurodollar Rate Loan shall be due and payable on the next succeeding
Monthly Payment Date and on the Maturity Date. Except as otherwise
provided in Sections 3.1(d) and 3.7, the unpaid principal amount of any
Eurodollar Rate Loan shall bear interest at a rate per annum equal to
the Eurodollar Rate for that Eurodollar Rate Loan plus the Applicable
Eurodollar Spread.
(d) During the existence of a Default or Event of
Default, the Majority Banks may determine that any or all then
outstanding Eurodollar Rate Loans shall be converted to Reference Rate
Loans. Such conversion shall be effective upon notice to Borrower from
the Majority Banks (or from the Agent on behalf of the Majority Banks)
and shall continue so long as such Default or Event of Default
continues to exist.
(e) If not sooner paid, the principal Indebtedness
evidenced by the Notes shall be payable as follows:
(i) the principal amount of each Eurodollar
Rate Loan shall be payable on the last day of the Interest
Period for such Loan;
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(ii) the amount, if any, by which (A) the
outstanding principal Indebtedness evidenced by the Line A
Notes plus the Aggregate Effective Amount at any time exceeds
the Line A Commitment or (B) the outstanding principal
Indebtedness evidenced by the Line B Notes at any time exceeds
the Line B Commitment, shall be payable immediately, and shall
be applied to the applicable Notes or, if no amount is then
outstanding under the applicable Notes, shall be applied and
held in a manner specified in Section 9.2(a)(2); and
(iii) the principal Indebtedness evidenced by
the Notes shall in any event be payable on the Maturity Date.
(f) The principal Indebtedness under the Notes may,
at any time and from time to time, voluntarily be paid or prepaid in
whole or in part without premium or penalty, except that with respect
to any voluntary prepayment under this Section 3.1(f), (i) any partial
prepayment shall be in an integral multiple of $1,000,000, (ii) the
Agent shall have received written notice of any prepayment by 9:00 a.m.
San Francisco time on a Banking Day on the date of prepayment in the
case of a Reference Rate Loan, and three (3) Banking Days, in the case
of a Eurodollar Rate Loan, before the date of prepayment, which notice
shall identify the date and amount of the prepayment and the Loan(s)
being prepaid, and (iii) any payment or prepayment of all or any part
of any Eurodollar Rate Loan on a day other than the last day of the
applicable Interest Period shall be subject to Section 3.6(d).
3.2 Arrangement, Agency and Co-Agency Fees. Borrower shall pay
to Bank of America arrangement and agency fees in amounts heretofore agreed upon
in one or more letter agreements between Borrower and Bank of America. Such fees
are solely for the account of Bank of America and are fully earned and
nonrefundable upon the applicable due dates. Borrower shall pay to the Co-Agent
co-agency fees in amounts heretofore agreed upon by letter agreement between
Borrower and the Co-Agent. Such fees are solely for the account of the Co-Agent
and are fully earned and nonrefundable upon the applicable due dates.
3.3 Underwriting Fee. On the Closing Date, Borrower shall pay
to the Agent, for the account of the Banks, allocated as indicated on Schedule
3.3 hereof, an underwriting fee equal to $190,000.00. This underwriting fee is
fully earned on the Closing Date and is nonrefundable.
3.4 Facility and Commitment Fees.
(a) Facility Fee. From and after the Closing Date,
Borrower shall pay to the Agent, for the respective accounts of the
Banks, pro rata according to their Pro Rata Shares of the Commitments,
a facility fee equal to the percentage shown below, per annum, times
the average daily amount of the Commitments. The facility
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fee shall be payable quarterly in arrears on each Quarterly Payment
Date and on the Maturity Date.
Applicable Pricing Level On Applicable Date
I II III IV V
- -- --- -- -
0.10% 0.125% 0.15% 0.15% 0.20%
(b) Commitment Fees. From and after the Closing Date,
Borrower shall pay to the Agent, for the respective accounts of the
Banks, pro rata according to their Pro Rata Shares of the Commitments,
a commitment fee equal to the following indicated percentage per annum
times the average daily amount by which the Commitments exceed the sum
of the aggregate principal Indebtedness evidenced by the Notes plus the
Aggregate Effective Amount. The commitment fee shall be pay able
quarterly in arrears on each Quarterly Payment Date and on the Maturity
Date.
Applicable Pricing Level on Applicable Date
I II III IV V
For such days that the aggregate - -- --- -- -
principal indebtedness evidenced by 0.10% 0.125% 0.125% 0.1875% 0.1875%
the Notes plus the Aggregate
Effective Amount exceeds 66% of
the Commitments.
For such days that the aggregate 0.15 0.2125 0.2125 0.25 0.25
principal indebtedness evidenced by
the Notes plus the Aggregate Effective
Amount is less than or equal to 66% but
greater than 33% of the Commitments.
For such days that the aggregate 0.20 0.30 0.30 0.325 0.325
principal indebtedness evidenced by the
Notes plus the Aggregate Effective
Amount is equal to or less than 33% of the
Commitments.
3.5 Increased Commitment Costs. If any Bank shall determine
that the introduction after the Closing Date of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change therein or any
change in the interpretation or administration thereof by any central bank or
other Governmental Agency charged with the interpretation or administration
thereof, or compliance by such Bank (or its Eurodollar
-41-
Lending Office) or any corporation controlling the Bank, with any request,
guidelines or directive regarding capital adequacy (whether or not having the
force of law) of any such central bank or other authority, affects or would
affect the amount of capital required or expected to be maintained by such Bank
or any corporation controlling such Bank and (taking into consideration such
Bank's or such corporation's policies with respect to capital adequacy and such
Bank's desired return on capital) determines that the amount of such capital is
increased, or the rate of return on capital is reduced, as a consequence of its
obligations under this Agreement, then, within five (5) Banking Days after
demand of such Bank, Borrower shall pay to such Bank, from time to time as
specified by such Bank, additional amounts sufficient to compensate such Bank in
light of such circumstances, to the extent reasonably allocable to such
obligations under this Agreement. Each Bank agrees to endeavor promptly to
notify Borrower of any event of which it has actual knowledge, occurring after
the Closing Date, which will cause it to make a demand hereunder.
3.6 Eurodollar Costs and Related Matters.
(a) If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance:
(1) shall subject any Bank or its Eurodollar
Lending Office to any tax, duty or other charge or cost with
respect to any Eurodollar Rate Advance, any of its Notes
evidencing Eurodollar Rate Loans or its obligation to make
Eurodollar Rate Advances, or shall change the basis of
taxation of payments to any Bank of the principal of or
interest on any Eurodollar Rate Advance or any other amounts
due under this Agreement in respect of any Eurodollar Rate
Advance, any of its Notes evidencing Eurodollar Rate Loans or
its obligation to make Eurodollar Rate Advances, excluding, in
the case of each Bank, the Agent, and each Eligible Assignee,
and any Affiliate or Eurodollar Lending Office thereof, (i)
taxes imposed on or measured in whole or in part by its
overall net income, gross income or gross receipts or capital
and franchise taxes imposed on it, by (A) any jurisdiction (or
political subdivision thereof) in which it is organized or
maintains its principal office or Eurodollar Lending Office or
(B) any jurisdiction (or political subdivision thereof) in
which it is "doing business" (unless it would not be doing
business in such jurisdiction (or political subdivision
thereof) absent the transactions contemplated hereby), (ii)
any withholding taxes or other taxes based on gross income
imposed by the United States of America (other than
withholding taxes and taxes based on gross income resulting
from or attributable to any change in any law, rule or
regulation or any change in the interpretation or
administration of any law, rule or regulation by any
Governmental Agency after the date of this Agreement) or (iii)
any withholding taxes or other taxes based on gross income
imposed by the United States of America for any period with
respect to which it has failed to provide Borrower with the
appropriate form or forms
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required by Section 11.19, to the extent such forms are then
required by applicable Laws;
(2) shall impose, modify or deem applicable
any reserve not applicable or deemed applicable on the date
hereof (including, without limitation, any reserve imposed by
the Board of Governors of the Federal Reserve System, but
excluding the Eurodollar Reserve Percentage taken into account
in calculating the Eurodollar Rate), special deposit, capital
or similar requirements against assets of, deposits with or
for the account of, or credit extended by, any Bank or its
Eurodollar Lending Office; or
(3) shall impose on any Bank or its
Eurodollar Lending Office or the Designated Eurodollar Market
any other condition affecting any Eurodollar Rate Advance, any
of its Notes evidencing Eurodollar Rate Loans, its obligation
to make Eurodollar Rate Advances or this Agreement, or shall
otherwise affect any of the same;
and the result of any of the foregoing, as determined by such Bank,
increases the cost to such Bank or its Eurodollar Lending Office of
making or maintaining any Eurodollar Rate Advance or in respect of any
Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate
Loans or its obligation to make Eurodollar Rate Advances or reduces the
amount of any sum received or receivable by such Bank or its Eurodollar
Lending Office with respect to any Eurodollar Rate Advance, any of its
Notes evidencing Eurodollar Rate Loans or its obligation to make
Eurodollar Rate Advances (assuming such Bank's Eurodollar Lending
Office had funded 100% of its Eurodollar Rate Advance in the Designated
Eurodollar Market), then, within five (5) Banking Days after demand by
such Bank (with a copy to the Agent), Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank for such
increased cost or reduction (determined as though such Bank's
Eurodollar Lending Office had funded 100% of its Eurodollar Rate
Advance in the Designated Eurodollar Market). Borrower hereby
indemnifies each Bank against, and agrees to hold each Bank harmless
from and reimburse such Bank within five (5) Banking Days after demand
for (without duplication) all costs, expenses, claims, penalties,
liabilities, losses, legal fees and damages incurred or sustained by
each Bank in connection with this Agreement, or any of the rights,
obligations or transactions provided for or contemplated herein, as a
result of the existence or occurrence of any Special Eurodollar
Circumstance. A statement of any Bank claiming compensation under this
subsection and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive in the absence of manifest
error. Each Bank agrees to endeavor promptly to notify Borrower of any
event of which it has actual knowledge, occurring after the Closing
Date, which will entitle such Bank to compensation pursuant to this
Section, and agrees to designate a different Eurodollar Lending Office
if such designation will avoid the need for or reduce the amount of
such compensation and will not, in the judgment of such Bank, otherwise
be materially disadvantageous
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to such Bank. If any Bank claims compensation under this Section,
Borrower may at any time, upon at least four (4) Eurodollar Banking
Days' prior notice to the Agent and such Bank and upon payment in full
of the amounts provided for in this Section through the date of such
payment plus any prepayment fee required by Section 3.6(d), pay in full
the affected Eurodollar Rate Advances of such Bank or request that such
Eurodollar Rate Advances be converted to Reference Rate Advances.
(b) If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance shall, in the opinion
of any Bank, make it unlawful, impossible or impracticable for such
Bank or its Eurodollar Lending Office to make, maintain or fund its
portion of any Eurodollar Rate Loan, or materially restrict the
authority of such Bank to purchase or sell, or to take deposits of,
Dollars in the Designated Eurodollar Market, or to determine or charge
interest rates based upon the Eurodollar Rate, and such Bank shall so
notify the Agent, then such Bank's obligation to make Eurodollar Rate
Advances shall be suspended for the duration of such illegality,
impossibility or impracticability and the Agent forthwith shall give
notice thereof to the other Banks and Borrower. Upon receipt of such
notice, the outstanding principal amount of such Bank's Eurodollar Rate
Advances, together with accrued interest thereon, automatically shall
be converted to Reference Rate Advances with Interest Periods
corresponding to the Eurodollar Loans of which such Eurodollar Rate
Advances were a part on either (1) the last day of the Eurodollar
Period(s) applicable to such Eurodollar Rate Advances if such Bank may
lawfully continue to maintain and fund such Eurodollar Rate Advances to
such day(s) or (2) immediately if such Bank may not lawfully continue
to fund and maintain such Eurodollar Rate Advances to such day(s),
provided that in such event the conversion shall not be subject to
payment of a prepayment fee under Section 3.6(d). Each Bank agrees to
endeavor promptly to notify Borrower of any event of which it has
actual knowledge, occurring after the Closing Date, which will cause
that Bank to notify the Agent under this Section 3.6(b), and agrees to
designate a different Eurodollar Lending Office if such designation
will avoid the need for such notice and will not, in the judgment of
such Bank, otherwise be disadvantageous to such Bank. In the event that
any Bank is unable, for the reasons set forth above, to make, maintain
or fund its portion of any Eurodollar Rate Loan, such Bank shall fund
such amount as a Reference Rate Advance for the same period of time,
and such amount shall be treated in all respects as a Reference Rate
Advance. Any Bank whose obligation to make Eurodollar Rate Advances has
been suspended under this Section 3.6(b) shall promptly notify the
Agent and Borrower of the cessation of the Special Eurodollar
Circumstance which gave rise to such suspension.
(c) If, with respect to any proposed Eurodollar Rate
Loan:
(1) the Agent reasonably determines that, by
reason of circumstances affecting the Designated Eurodollar
Market generally that are beyond the reasonable control of the
Banks, deposits in Dollars (in the
-44-
applicable amounts) are not being offered to any Bank in the
Designated Eurodollar Market for the applicable Eurodollar
Period; or
(2) the Majority Banks advise the Agent that
the Eurodollar Rate as determined by the Agent (i) does not
represent the effective pricing to such Banks for deposits in
Dollars in the Designated Eurodollar Market in the relevant
amount for the applicable Eurodollar Period, or (ii) will not
adequately and fairly reflect the cost to such Banks of making
the applicable Eurodollar Rate Advances;
then the Agent forthwith shall give notice thereof to Borrower and the
Banks, whereupon until the Agent notifies Borrower that the
circumstances giving rise to such suspension no longer exist, the
obligation of the Banks to make any future Eurodollar Rate Advances
shall be suspended. If at the time of such notice there is then pending
a Request for Loan that specifies a Eurodollar Rate Loan, such Request
for Loan shall be deemed to specify a Reference Rate Loan.
(d) Upon payment or prepayment of any Eurodollar Rate
Advance, (other than as the result of a conversion required under
Section 3.6(b)), on a day other than the last day in the applicable
Eurodollar Period (whether voluntarily, involuntarily, by reason of
acceleration, or otherwise), or upon the failure of Borrower (for a
reason other than the failure of a Bank to make an Advance) to borrow
on the date or in the amount specified for a Eurodollar Rate Loan in
any Request for Loan, Borrower shall pay to the appropriate Bank within
five (5) Banking Days after demand a prepayment fee or failure to
borrow fee, as the case may be, (determined as though 100% of the
Eurodollar Rate Advance had been funded in the Designated Eurodollar
Market) equal to the sum of:
(1) principal amount of the Eurodollar Rate
Advance prepaid or not borrowed, as the case may be, times
[number of days between the date of prepayment or failure to
borrow, as applicable, and the last day in the applicable
Eurodollar Period], divided by 360, times the applicable
Interest Differential (provided that the product of the
foregoing formula must be a positive number); plus
(2) all out-of-pocket expenses incurred by
the Bank reasonably attributable to such payment, prepayment
or failure to borrow.
Each Bank's determination of the amount of any prepayment fee payable
under this Section 3.6(d) shall be conclusive in the absence of
manifest error.
3.7 Late Payments. If any installment of principal or interest
or any fee or cost or other amount payable under any Loan Document to the Agent
or any Bank is not paid when due, it shall thereafter bear interest at a
fluctuating interest rate per annum at all times
-45-
equal to the sum of the Reference Rate plus 3%, to the fullest extent permitted
by applicable Laws. Accrued and unpaid interest on past due amounts (including,
without limitation, interest on past due interest) shall be compounded monthly,
on the last day of each calendar month, to the fullest extent permitted by
applicable Laws.
3.8 Computation of Interest and Fees. Computation of interest
on Eurodollar Rate Loans, Reference Rate Loans and all fees under this Agreement
shall be calculated on the basis of a year of 360 days and the actual number of
days elapsed. Borrower acknowledges that such latter calculation method will
result in a higher yield to the Banks than a method based on a year of 365 or
366 days. Interest shall accrue on each Loan for the day on which the Loan is
made. Interest shall not accrue on a Loan, or any portion thereof, for the day
on which the Loan or such portion is paid, except that any Loan that is repaid
on the same day on which it is made shall bear interest for one day.
3.9 Non-Banking Days. If any payment to be made by Borrower or
any other Party under any Loan Document shall come due on a day other than a
Banking Day, payment shall instead be considered due on the next succeeding
Banking Day and the extension of time shall be reflected in computing interest
and fees.
3.10 Manner and Treatment of Payments.
(a) Each payment hereunder (except payments pursuant
to Sections 3.5, 3.6, 11.3, 11.10 and 11.20) or on the Notes or under
any other Loan Document shall be made to the Agent, at the Agent's
Office, for the account of each of the Banks or the Agent, as the case
may be, in immediately available funds (for which evidence may be given
by notification of a Fed Funds reference number) not later than 11:00
a.m., San Francisco time, on the day of payment (which must be a
Banking Day). All payments received after 11:00 a.m., San Francisco
time, on any Banking Day, shall be deemed received on the next
succeeding Banking Day. The amount of all payments received by the
Agent for the account of each Bank shall be immediately paid by the
Agent to the applicable Bank in immediately available funds and, if
such payment was received by the Agent by 11:00 a.m., San Francisco
time, on a Banking Day and not so made available to the account of a
Bank on that Banking Day, the Agent shall reimburse that Bank for the
cost to such Bank of funding the amount of such payment at the Federal
Funds Rate. All payments shall be made in lawful money of the United
States of America.
(b) Each payment or prepayment on account of any Loan
shall be applied pro rata according to the outstanding Advances made by
each Bank comprising such Loan.
(c) Each payment of any amount payable by Borrower or
any other Party under this Agreement or any other Loan Document shall
be made free and clear of, and without reduction by reason of, any
taxes, assessments or other charges
-46-
imposed by any Governmental Agency, central bank or comparable
authority, excluding, in the case of each Bank, the Agent, the Co-Agent
and each Eligible Assignee, and any Affiliate or Eurodollar Lending
Office thereof, (i) taxes imposed on or measured in whole or in part by
its overall net income, gross income or gross receipts or capital and
franchise taxes imposed on it, by (A) any jurisdiction (or political
subdivision thereof) in which it is organized or maintains its
principal office or Eurodollar Lending Office or (B) any jurisdiction
(or political subdivision thereof) in which it is "doing business"
(unless it would not be doing business in such jurisdiction (or
political subdivision thereof) absent the transactions contemplated
hereby), (ii) any withholding taxes or other taxes based on gross
income imposed by the United States of America (other than withholding
taxes and taxes based on gross income resulting from or attributable to
any change in any law, rule or regulation or any change in the
interpretation or administration of any law, rule or regulation by any
Governmental Agency after the date of this Agreement) or (iii) any
withholding taxes or other taxes based on gross income imposed by the
United States of America for any period with respect to which it has
failed to provide Borrower with the appropriate form or forms required
by Section 11.19, to the extent such forms are then required by
applicable Laws, (all such non-excluded taxes, assessments or other
charges being hereinafter referred to as "Taxes"). To the extent that
Borrower is obligated by applicable Laws to make any deduction or
withholding on account of Taxes from any amount payable to any Bank
under this Agreement, Borrower shall (i) make such deduction or
withholding and pay the same to the relevant Governmental Agency and
(ii) pay such additional amount to that Bank as is necessary to result
in that Bank's receiving a net after-Tax amount equal to the amount to
which that Bank would have been entitled under this Agreement absent
such deduction or withholding. If and when receipt of such payment
results in an excess payment or credit to that Bank on account of such
Taxes, that Bank shall promptly refund such excess to Borrower.
3.11 Funding Sources. Nothing in this Agreement shall be
deemed to obligate any Bank to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Bank that it
has obtained or will obtain the funds for any Loan or Advance in any particular
place or manner.
3.12 Failure to Charge Not Subsequent Waiver. Any decision by
the Agent or any Bank not to require payment of any interest (including interest
arising under Section 3.7), fee, cost or other amount payable under any Loan
Document, or to calculate any amount payable by a particular method, on any
occasion shall in no way limit or be deemed a waiver of the Agent's or such
Bank's right to require full payment of any interest (including interest arising
under Section 3.7), fee, cost or other amount payable under any Loan Document,
or to calculate an amount payable by another method that is not inconsistent
with this Agreement, on any other or subsequent occasion.
3.13 Agent's Right to Assume Payments Will be Made by
Borrower. Unless the Agent shall have been notified by Borrower prior to the
date on which any payment to be
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made by Borrower hereunder is due that Borrower does not intend to remit such
payment, the Agent may, in its discretion, assume that Borrower has remitted
such payment when so due and the Agent may, in its discretion and in reliance
upon such assumption, make available to each Bank on such payment date an amount
equal to such Bank's share of such assumed payment. If Borrower has not in fact
remitted such payment to the Agent, each Bank shall forthwith on demand repay to
the Agent the amount of such assumed payment made available to such Bank,
together with interest thereon in respect of each day from and including the
date such amount was made available by the Agent to such Bank to the date such
amount is repaid to the Agent at the Federal Funds Rate.
3.14 Fee Determination Detail. The Agent, and any Bank, shall
provide reasonable detail to Borrower regarding the manner in which the amount
of any payment to the Agent and the Banks, or that Bank, under Article 3 has
been determined, concurrently with demand for such payment.
3.15 Survivability. All of Borrower's obligations under
Sections 3.5 and 3.6 shall survive for ninety (90) days following the date on
which the Commitments are terminated and all Loans hereunder are fully paid.
Following such termination and repayment, and the expiration of any bankruptcy
preference or similar period, each Bank shall cancel and return its Notes to
Borrower.
3.16 Accruals Under Pre-Existing Loan Documents. The accrual
of interest and fees payable by Borrower under the Pre-Existing Loan Documents
shall be calculated as provided therein through the effective date of this
Agreement. Such fees include, without limitation, those specified in Sections
3.2, 3.3 and 3.4 of the First Amended Loan Agreement. All such accrued interest
and fees through the effective date of this Agreement shall, notwithstanding any
provision of the Pre-Existing Loan Documents or hereunder to the contrary, be
due on the effective date of this Agreement and shall be payable immediately
upon submission of an invoice therefor to Borrower by the Agent. Upon receipt by
the Agent, all such amounts shall be promptly distributed by the Agent in
accordance with the terms of the Pre-Existing Loan Documents.
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Article 4
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to the Banks, as of the date
hereof and as of the Closing Date, that:
4.1 Existence and Qualification; Power; Compliance With Laws.
Borrower is a corporation duly formed, validly existing and in good standing
under the Laws of Delaware. Borrower is duly qualified or registered to transact
business and is in good stand ing in each other jurisdiction in which the
conduct of its business or the ownership or leasing of its Properties makes such
qualification or registration necessary, except where the failure so to qualify
or register and to be in good standing would not constitute a Material Adverse
Effect. Borrower has all requisite corporate power and authority to conduct its
business, to own and lease its Properties and to execute and deliver each Loan
Document to which it is a Party and to perform its Obligations. All outstanding
shares of capital stock of Borrower are duly authorized, validly issued, fully
paid, non-assessable and no holder thereof has any enforceable right of
rescission under any applicable state or federal securities Laws. Borrower is in
compliance with all Laws and other legal requirements applicable to its busi
ness, has obtained all authorizations, consents, approvals, orders, licenses and
permits from, and has accomplished all filings, registrations and qualifications
with, or obtained exemptions from any of the foregoing from, any Governmental
Agency that are necessary for the transaction of its business, except where the
failure so to comply, file, register, qualify or obtain exemptions does not
constitute a Material Adverse Effect.
4.2 Authority; Compliance With Other Agreements and
Instruments and Government Regulations. The execution, delivery and performance
by Borrower and each Guarantor Subsidiary of the Loan Documents to which it is a
Party have been duly authorized by all necessary corporate and/or partnership
action, and do not and will not:
(a) Require any consent or approval not heretofore
obtained of any partner, director, stockholder, security holder or
creditor of such Party;
(b) Violate or conflict with any provision of such
Party's charter, articles of incorporation or bylaws, as applicable;
(c) Result in or require the creation or imposition
of any Lien upon or with respect to any Property now owned or leased or
hereafter acquired by such Party;
(d) Violate any Requirement of Law applicable to such
Party, subject to obtaining the authorizations from, or filings with,
the Governmental Agencies described in Schedule 4.3;
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(e) Result in a breach of or constitute a default
under, or cause or permit the acceleration of any obligation owed
under, any indenture or loan or credit agreement or any other
Contractual Obligation to which such Party is a party or by which such
Party or any of its Property is bound or affected;
and none of Borrower or any Guarantor Subsidiary is in violation of, or default
under, any Requirement of Law or Contractual Obligation, or any indenture, loan
or credit agreement described in Section 4.2(e), in any respect that constitutes
a Material Adverse Effect.
4.3 No Governmental Approvals Required. Except as set forth in
Schedule 4.3 or previously obtained or made, no authorization, consent,
approval, order, license or permit from, or filing, registration or
qualification with, any Governmental Agency is or will be required to authorize
or permit under applicable Laws the execution, delivery and performance by
Borrower and the Guarantor Subsidiaries of the Loan Documents to which it is a
Party. All authorizations from, or filings with, any Governmental Agency
described in Schedule 4.3 will be accomplished as of the Closing Date or such
other date as is specified in Schedule 4.3.
4.4 Subsidiaries.
(a) Schedule 4.4 hereto correctly sets forth the
names, form of legal entity, number of shares of capital stock issued
and outstanding, number of shares owned by Borrower or a Subsidiary
(specifying such owner) and jurisdictions of organization of all
Subsidiaries and specifies which thereof, as of the Closing Date, are
Guarantor Subsidiaries. Except as described in Schedule 4.4, Borrower
does not own any capital stock, equity interest or debt security which
is convertible, or exchangeable, for capital stock or equity interests
in any Person. Unless otherwise indicated in Schedule 4.4, all of the
outstanding shares of capital stock, or all of the units of equity
interest, as the case may be, of each Subsidiary are owned of record
and beneficially by Borrower, there are no outstanding options,
warrants or other rights to purchase capital stock of any such
Subsidiary, and all such shares or equity interests so owned are duly
authorized, validly issued, fully paid, non-assessable, and were issued
in compliance with all applicable state and federal securities and
other Laws, and are free and clear of all Liens, except for Permitted
Encumbrances.
(b) Each Subsidiary is a corporation or limited
partnership duly formed, validly existing and in good standing under
the Laws of its jurisdiction of organization, is duly qualified to do
business as a foreign organization and is in good standing as such in
each jurisdiction in which the conduct of its business or the ownership
or leasing of its properties makes such qualification necessary (except
where the failure to be so duly qualified and in good standing does not
constitute a Material Adverse Effect), and has all requisite power and
authority to conduct its business and to own and lease its Properties.
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(c) Each Subsidiary is in compliance with all Laws
and other requirements applicable to its business and has obtained all
authorizations, consents, approvals, orders, licenses, and permits
from, and each such Subsidiary has accomplished all filings,
registrations, and qualifications with, or obtained exemptions from any
of the foregoing from, any Governmental Agency that are necessary for
the transaction of its business, except where the failure to be in such
compliance, obtain such authorizations, consents, approvals, orders,
licenses, and permits, accomplish such filings, registrations, and
qualifications, or obtain such exemptions, does not con stitute a
Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to the Banks
(a) the audited consolidated financial statements of Borrower and its
Subsidiaries for the Fiscal Year ended June 30, 1997 and (b) the unaudited
consolidated financial statements of Borrower and its Subsidiaries for the
Fiscal Quarter ended March 31, 1998. The financial statements des cribed in
clauses (a) and (b) fairly present in all material respects the financial
condition, results of operations and changes in financial position of Borrower
and its Subsidiaries as of such dates and for such periods, in conformity with
Generally Accepted Accounting Principles, consistently applied.
4.6 No Other Liabilities; No Material Adverse Changes.
Borrower and its Subsidiaries do not have any material liability or material
contingent liability not reflected or disclosed in the financial statements
described in Section 4.5(b), other than liabilities and contingent liabilities
arising in the ordinary course of business since the date of such financial
statements. Neither Borrower nor any of its Subsidiaries has, as of the Closing
Date, any Indebtedness other than under the Loan Documents or as described on
Schedule 4.6. As of the Closing Date, no circumstance or event has occurred that
constitutes a Material Adverse Effect since June 30, 1997, or, as of any date
subsequent to the Closing Date, since the Closing Date.
4.7 Title to Property. Borrower and its Subsidiaries have
valid title to the Property reflected in the financial statements described in
Section 4.5(b), other than immaterial items of Property and Property
subsequently sold or disposed of in the ordinary course of business, free and
clear of all Liens, other than Liens described in Schedule 6.8 or otherwise
permitted by Section 6.8. Schedule 6.8 identifies, without limitation, all Liens
on Property of Borrower or any of its Subsidiaries securing an obligation to pay
money.
4.8 Intangible Assets. Borrower and its Guarantor Subsidiaries
own, or possess the right to use to the extent necessary in their respective
businesses, all material trademarks, trade names, copyrights, patents, patent
rights, computer software, licenses and other Intangible Assets that are used in
the conduct of their businesses as now operated, and no such Intangible Asset,
to the best knowledge of Borrower, conflicts with the valid trademark, trade
name, copyright, patent, patent right or Intangible Asset of any other Person to
the extent that such conflict constitutes a Material Adverse Effect.
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4.9 Public Utility Holding Company Act. Neither Borrower nor
any Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
4.10 Litigation. Except for (a) any matter fully covered as to
subject matter and amount (subject to applicable deductibles and retentions) by
insurance for which the insurance carrier has not asserted lack of subject
matter coverage or reserved its right to do so, (b) any matter, or series of
related matters, involving a claim against Borrower or any of its Subsidiaries
of less than $1,000,000, (c) matters of an administrative nature not involving a
claim or charge against Borrower or any of its Subsidiaries and (d) matters set
forth in Sched ule 4.10, there are no actions, suits, proceedings or
investigations pending as to which Borrower or any of its Subsidiaries have been
served or have received notice or, to the best knowledge of Borrower, threatened
against or affecting Borrower or any of its Subsidiaries or any Property of any
of them before any Governmental Agency.
4.11 Binding Obligations. Each of the Loan Documents to which
Borrower or any of its Guarantor Subsidiaries is a Party will, when executed and
delivered by such Party, constitute the legal, valid and binding obligation of
such Party, enforceable against such Party in accordance with its terms, except
as enforcement may be limited by Debtor Relief Laws or equitable principles
relating to the granting of specific performance and other equitable remedies as
a matter of judicial discretion.
4.12 No Default. No event has occurred and is continuing that
is a Default or Event of Default.
4.13 ERISA.
(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all
material respects with ERISA and any other applicable Laws to
the extent that noncompliance could reasonably be expected to
have a Material Adverse Effect;
(ii) such Pension Plan has not incurred any
"accumulated funding deficiency" (as defined in Section 302 of
ERISA) that could reasonably be expected to have a Material
Adverse Effect;
(iii) no "reportable event" (as defined in
Section 4043 of ERISA) has occurred that could reasonably be
expected to have a Material Adverse Effect; and
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(iv) neither Borrower nor any of its
Subsidiaries has engaged in any non-exempt "prohibited
transaction" (as defined in Section 4975 of the Code) that
could reasonably be expected to have a Material Adverse
Effect.
(b) Neither Borrower nor any of its Subsidiaries has
incurred or expects to incur any withdrawal liability to any
Multiemployer Plan that could reasonably be expected to have a Material
Adverse Effect.
4.14 Regulations G, T, U and X; Investment Company Act. No
part of the proceeds of any Loan hereunder will be used to purchase or carry, or
to extend credit to others for the purpose of purchasing or carrying, any Margin
Stock in violation of Regulations G, T, U and X. Neither Borrower nor any of its
Subsidiaries is or is required to be registered as an "investment company" under
the Investment Company Act of 1940.
4.15 Disclosure. No written statement made by a Senior Officer
to the Agent or any Bank in connection with this Agreement, or in connection
with any Loan, as of the date thereof contained any untrue statement of a
material fact or omitted a material fact necessary to make the statement made
not misleading in light of all the circumstances existing at the date the
statement was made.
4.16 Tax Liability. Borrower and its Subsidiaries have filed
all tax returns which are required to be filed, and have paid, or made provision
for the payment of, all taxes with respect to the periods, Property or
transactions covered by said returns, or pursuant to any assessment received by
Borrower or any of its Subsidiaries, except (a) such taxes, if any, as are being
contested in good faith by appropriate proceedings and as to which adequate
reserves have been established and maintained and (b) immaterial taxes so long
as no material item or portion of Property of Borrower or any of its
Subsidiaries is in jeopardy of being seized, levied upon or forfeited.
4.17 Strategic Plan. The Strategic Plan was prepared in
accordance with Borrower's customary procedures therefor and, in the case of the
first year's budget, was approved by Borrower's board of directors and, in the
case of subsequent years, represents the final version thereof for such years
that was reviewed by Borrower's board of directors.
4.18 Hazardous Materials. To the best knowledge of Borrower,
no condition exists that violates any Hazardous Material Law affecting any Real
Property except for such violations that would not individually or in the
aggregate have a Material Adverse Effect. No Real Property now owned by Borrower
or any of its Subsidiaries, or any portion thereof, is or has been utilized by
Borrower or any of its Subsidiaries as a site for the manufacture of any
Hazardous Materials. To the extent that any Hazardous Materials are used,
generated or stored by Borrower or any of its Subsidiaries on any Real Property,
or transported to or from such Real Property by Borrower or any of its
Subsidiaries, such use, generation, storage and transportation are in compliance
in all material respects with all Hazardous Materials Laws.
-53-
4.19 Year 2000 Compliance. Borrower has adopted a plan (the
"Year 2000 Plan") which, in the judgment of senior management of Borrower, will
adequately address the operational and financial issues (the "Year 2000 Issues")
arising from data in Borrower's computer-based data processing and information
systems respecting dates subsequent to December 31, 1999 (and, to the extent
relevant, arising from such data in the data processing systems of its material
customers and vendors). The Year 2000 Plan is in the process of implementation.
Borrower believes that it will be implemented in all material respects by
December 31, 1999 and, as a result thereof, in the judgement of senior
management of Borrower, Year 2000 Issues are not expected to result in a
Material Adverse Effect.
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Article 5
AFFIRMATIVE COVENANTS
---------------------
(OTHER THAN INFORMATION AND
---------------------------
REPORTING REQUIREMENTS)
-----------------------
So long as any Advance remains unpaid, or any other Obligation
remains unpaid or unperformed, or any portion of a Commitment remains in force,
Borrower shall, and shall cause each of its Subsidiaries to, unless the Agent
(with the written approval of the Majority Banks) otherwise consents:
5.1 Payment of Taxes and Other Potential Liens. Pay and
discharge promptly all taxes, assessments and governmental charges or levies
imposed upon any of them, upon their respective Property or any part thereof and
upon their respective income or profits or any part thereof, except that
Borrower and its Subsidiaries shall not be required to pay or cause to be paid
(a) any tax, assessment, charge or levy that is not yet past due, or is being
contested in good faith by appropriate proceedings so long as the relevant
entity has established and maintains adequate reserves for the payment of the
same or (b) any immaterial tax, assessment, governmental charge or levy so long
as (i) no material item or portion of Property of Borrower and any of its
Subsidiaries, taken as a whole, is in jeopardy of being seized, levied upon or
forfeited and (ii) the failure to make such payment would not constitute a
Material Adverse Effect.
5.2 Preservation of Existence. Preserve and maintain their
respective existences in the jurisdiction of their formation and all material
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of their respective business ("Authorizations"),
except where the failure to so preserve and maintain the existence of any
Subsidiary and such Authorizations would not constitute a Material Adverse
Effect and except that a merger permitted by Section 6.3 shall not constitute a
violation of this covenant; and qualify and remain qualified to transact
business in each jurisdiction in which such qual ification is necessary in view
of their respective business or the ownership or leasing of their respective
Properties except where the failure to so qualify or remain qualified would not
constitute a Material Adverse Effect.
5.3 Maintenance of Properties. Maintain, preserve and protect
all of their then owned respective depreciable Properties in good order and
condition, subject to wear and tear in the ordinary course of business, and not
permit any waste of their respective Properties, except that the failure to
maintain, preserve and protect a particular item of depreciable Property that is
not of significant value, either intrinsically or to the operations of Borrower
and its Subsidiaries, taken as a whole, shall not constitute a violation of this
covenant.
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5.4 Maintenance of Insurance. Maintain liability, casualty and
other insurance (subject to customary deductibles and retentions) with
responsible insurance companies in such amounts and against such risks as is
carried by responsible companies engaged in similar businesses and owning
similar assets in the general areas in which Borrower and its Subsidiaries
operate.
5.5 Compliance With Laws. Comply, within the time period, if
any, given for such compliance by the relevant Governmental Agency or Agencies
with enforcement authority, with all Requirements of Law noncompliance with
which constitutes a Material Adverse Effect, except that Borrower and its
Subsidiaries need not comply with a Require ment of Law then being contested by
any of them in good faith by appropriate proceedings.
5.6 Inspection Rights. Upon reasonable notice, at any time
during regular business hours and as often as requested (but not so as to
materially interfere with the business of Borrower or any of its Subsidiaries),
permit the Agent or any Bank, or any authorized employee, agent or
representative thereof, to examine, audit and make copies and abstracts from the
records and books of account of, and to visit and inspect the Properties of,
Borrower and its Subsidiaries and to discuss the affairs, finances and accounts
of Borrower and its Subsidiaries with any of their officers, key employees or
accountants and, upon request, furnish promptly to the Agent or any Bank true
copies of all financial information made available to the board of directors or
audit committee of the board of directors of Bor rower.
5.7 Keeping of Records and Books of Account. Keep adequate
records and books of account reflecting all financial transactions in conformity
with Generally Accepted Accounting Principles, consistently applied, and in
material conformity with all applicable requirements of any Governmental Agency
having regulatory jurisdiction over Borrower or any of its Subsidiaries.
5.8 Compliance With Agreements. Promptly and fully comply with
all Contractual Obligations under all material agreements, indentures, leases
and/or instruments to which any one or more of them is a party, whether such
material agreements, indentures, leases or instruments are with a Bank or
another Person, except for any such Contractual Obligations (a) the performance
of which would cause a Default or (b) then being contested by any of them in
good faith by appropriate proceedings or if the failure to comply with such
agreements, indentures, leases or instruments does not constitute a Material
Adverse Effect.
5.9 Use of Proceeds. Use the proceeds of Loans solely for (a)
retirement of outstanding Indebtedness under the Substituted Credit Facilities
and (b) general working capital and corporate purposes of Borrower and its
Subsidiaries, provided that in no event shall the proceeds of a Loan under the
Line A Commitment be used to repay an outstanding Loan under the Line B
Commitment.
-56-
5.10 New Guarantor Subsidiaries; Release of Certain
Guaranties. Cause each of its Subsidiaries which hereafter becomes a Guarantor
Subsidiary to immediately execute and deliver to the Agent an instrument of
joinder of the Subsidiary Guaranty. Should the stock of a Subsidiary holding
only the assets of the ▇▇▇▇ Harbor Project or the Spring Creek Project be
transferred or such a Subsidiary be disposed of by merger in accordance herewith
to an entity that is not an Affiliate of Borrower, then, subject to receipt of
reaffirmations of other Guarantor Subsidiaries and such other documentation as
the Agent may reasonably request, the Banks will release such Subsidiary from
the Subsidiary Guaranty.
5.11 Hazardous Materials Laws. Keep and maintain all Real
Property and each portion thereof in compliance in all material respects with
all applicable Hazardous Materials Laws and promptly notify the Agent in writing
of (a) any and all material enforcement, cleanup, removal or other governmental
or regulatory actions instituted, completed or threatened in writing by a
Governmental Agency pursuant to any applicable Hazardous Materials Laws, (b) any
and all material claims made or threatened in writing by any Person against
Borrower relating to damage, contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Materials and (c) discovery by any Senior
Officer of Borrower of any material occurrence or condition on any real property
adjoining or in the vicinity of such Real Property that could reasonably be
expected to cause such Real Property or any part thereof to be subject to any
restrictions on the ownership, occupancy, trans ferability or use of such Real
Property under any applicable Hazardous Materials Laws.
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Article 6
NEGATIVE COVENANTS
------------------
So long as any Advance remains unpaid, or any other Obligation
remains unpaid or unperformed, or any portion of a Commitment remains in force,
Borrower shall not, and shall not permit any of its Subsidiaries to, unless the
Agent (with the written approval of the Majority Banks or, if required by
Section 11.2, of all of the Banks) otherwise consents:
6.1 Prepayment of Indebtedness. Pay any principal or interest
on any Indebtedness of Borrower or any of its Subsidiaries (other than
Indebtedness under the Notes) prior to the date when due, or make any payment or
deposit with any Person that has the effect of providing for the satisfaction of
any Indebtedness of Borrower or any of its Subsidiaries prior to the date when
due, in each case if an Event of Default then exists or would result therefrom.
6.2 Payment of Subordinated Obligations. Pay any (a) principal
(including sinking fund payments) or any other amount (other than scheduled
interest payments) with respect to any Subordinated Obligation except as
expressly permitted in the last sentence of this Section 6.2, or (b) scheduled
interest on any Subordinated Obligation, if an Event of Default described in
Sections 9.1(a) or 9.1(b) then exists or would result therefrom; provided,
however, that this Section 6.2 is in no way in limitation of any additional
rights the Banks may have to block payments with respect to any Subordinated
Obligation. The principal amount of Subordinated Obligations may be prepaid or
redeemed but only (A) if (i) an Event of Default does not then exist and would
not result therefrom and (ii) Borrower has not received written notice from the
Agent or a Bank that a Default has occurred and such Default remains uncured;
and (B) to the extent of an amount equal to the sum of (x) the net cash proceeds
from the issuance by Borrower of its capital stock (that is not Disqualified
Stock) after January 1, 1994 plus (y) the following percentages of new cash
Subordinated Obligation borrowings by Borrower after January 1, 1994, provided
that such borrowings have a maturity no earlier than one (1) year after the
Maturity Date.
Principal Amount
Percentage Borrowed in Cash
---------- ----------------
-0- first $50,000,000
50% next $50,000,000
100% amounts over $100,000,000
-58-
6.3 Mergers and Sale of Assets.
(a) Merge or consolidate with or into any Person,
except mergers and consolidations of a Subsidiary of Borrower (other
than a Coventry Subsidiary) into Borrower or a Guarantor Subsidiary
(other than a Coventry Subsidiary) with, if applicable, Borrower as the
surviving entity, provided that Borrower and each of its Subsidiaries
has executed such amendments to the Loan Documents as the Agent may
reasonably determine are appropriate as a result of such merger. This
Section 6.3(a) shall not restrict a merger implemented solely to effect
a Disposition specified in clause (e) of the definition of
"Disposition."
(b) Make any Disposition of its Property other than
the sale of Property for cash and/or other Property which in the
aggregate have the fair equivalent value to the Property sold;
provided, however, that no Property shall be sold by way of Disposition
(nor shall there be any related sales of Property) if the value of the
Property sold is in excess of $5,000,000.
(c) Notwithstanding the foregoing provisions of this
Section 6.3 or any other provision of this Agreement, the following
Transfers of Property (including Cash) for reasonably equivalent value
are not restricted:
(i) by and among Borrower and any of its wholly-owned
Subsidiaries that are not Coventry Subsidiaries; or
(ii) by and among the Coventry Subsidiaries.
Notwithstanding the foregoing provisions of this Section 6.3 or any
other provision of this Agreement, Transfers of Property (including
Cash) by any directly or indirectly wholly-owned Subsidiary of Borrower
to its parent corporation(s) are not restricted.
6.4 Hostile Tender Offers. Make any offer to purchase or
acquire, or consummate a purchase or acquisition of, 5% or more of the capital
stock of any corporation or other business entity if the board of directors or
management of such corporation or business entity has notified Borrower that it
opposes such offer or purchase and such notice has not been withdrawn or
superseded.
6.5 Distributions. As to Borrower and any Subsidiaries of
Borrower which are not wholly-owned Subsidiaries of Borrower, make any
Distribution, whether from capital, income or otherwise, and whether in Cash or
other Property, unless (a) such Distribution could have been made on the last
day of the most recently ended Fiscal Quarter without causing a violation of
Section 6.11 as of such last day of such Fiscal Quarter and (b) in the case of a
Distribution by Borrower (i) an Event of Default does not then exist and would
not result therefrom and (ii) Borrower has not theretofore received written
notice from the Agent or a Bank that a Default has occurred and such Default
remains uncured, provided however
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that a Distribution may be made if such Distribution constitutes a dividend on
capital stock of Borrower that was otherwise permissible to be made at the time
it was declared payable by Borrower's board of directors and that is in fact
paid within 60 days after such declaration.
6.6 ERISA.
(a) At any time, permit any Pension Plan to:
(i) engage in any non-exempt "prohibited
transaction" (as defined in Section 4975 of the Code);
(ii) fail to comply with ERISA or any other
applicable Laws to the extent that noncompliance could
reasonably be expected to have a Material Adverse Effect;
(iii) incur any material "accumulated funding
deficiency" (as defined in Section 302 of ERISA); or
(iv) terminate in any manner, which, with
respect to each event listed above, could reasonably be
expected to result in a Material Adverse Effect.
(b) Withdraw, completely or partially, from any
Multiemployer Plan if to do so could reasonably be expected to result
in a Material Adverse Effect.
6.7 Change in Nature of Business. Make any material change in
the nature of the business of Borrower and its Subsidiaries, taken as a whole.
In addition, Borrower shall not (except through a Subsidiary) engage, in any
material respect, in business activities other than acting as a holding company
for its Subsidiaries. In addition, no Coventry Subsidiary shall engage, in any
material respect, in business activities other than conventional single-family
residential home development and related activities (not to include
age-restricted planned community residential development).
6.8 Liens. Create, incur, assume or suffer to exist any Lien
of any nature upon or with respect to any of their respective Properties,
whether now owned or hereafter acquired, except:
(a) Permitted Encumbrances;
(b) Liens that may exist from time to time under the
Loan Documents;
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(c) existing Liens disclosed in Schedule 6.8 and any
renewals or extensions thereof; provided that the obligations secured
or benefited thereby are not increased;
(d) Liens on Real Property acquired (whether before
or after the Closing Date) by Borrower or any of its Subsidiaries that
both (i) secure solely Non-Recourse Debt and (ii) (A) secure solely
purchase money indebtedness with respect to the Real Property (which
indebtedness, within the limitations set out below, may include a
profit or a revenue sharing component arising from such Real Property
for the benefit of the seller) or (B) encumbered the Real Property at
the time of its acquisition by Borrower or its Subsidiary or were
placed thereon to refinance or borrow an amount up to the purchase
price within 90 days after the acquisition (which indebtedness, within
the limitations set out below, may include a profit or a revenue
sharing component arising from such Real Property for the benefit of
the seller). Profit or revenue sharing rights in favor of a seller of
Real Property shall be permissible hereunder only if the aggregate of
Borrower's Real Property purchase cost and direct construction costs
for all Real Property then subject to such rights does not, when added
to any amount calculated under Sections 6.8(e),(g) and (h), at any time
exceed 10% of Tangible Net Worth;
(e) Liens on Administrative Property owned by
Borrower or any of its Subsidiaries that (i) secure solely Non-Recourse
Debt, (ii) each secure a loan of no more than 150% of the direct costs
of construction of constructing non-residential improvements located on
the applicable Administrative Property, which loan is procured within
three (3) months following the issuance of the final occupancy permits
for such improvements, provided that any amounts secured by such Liens,
together with amounts calculated under the last sentence of Section
6.8(d), under Section 6.8(g) and under Section 6.8(h), do not, in the
aggregate, exceed 10% of Tangible Net Worth at any time. Administrative
Property shall mean a building or buildings (and a reasonable amount of
Real Property under each such building not to exceed ten (10) acres)
used primarily for the administrative purposes of Borrower and it
Subsidiaries in the ordinary course of the their business.
(f) [Intentionally Left Blank]
(g) Liens that may exist on property of Borrower or
one of its Subsidiaries that has been used in the construction of
improvements on real property that is not then owned by Borrower or one
of its Subsidiaries, or Liens on such real property, provided that (i)
Borrower or a Guarantor Subsidiary holds a written contractual or other
legal right to acquire title to such real property (or to direct the
acquisition of such title) and intends to do so and (ii) the cost to
Borrower or the Subsidiary of any and all such improvements, together
with the amounts calculated under the last sentence of Section 6.8(d)
and under Sections 6.8(e) and (h), do not, in the aggregate, exceed 10%
of Tangible Net Worth at any time; and
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(h) Liens otherwise permissible under Section 6.8(d)
with respect to Real Property owned by Borrower or one of its
Subsidiaries on which Real Property improvements have been constructed
by Borrower or a Subsidiary, provided that the cost to Borrower or a
Subsidiary of such improvements, together with the amounts calculated
under the last sentence of Section 6.8(d) and under Sections 6.8(e) and
(g) do not, in the aggregate, exceed 10% of Tangible Net Worth at any
time.
6.9 Indebtedness. Create, incur or assume any Indebtedness
(other than accrual of interest) except the following but only if a Default or
Event of Default does not then exist and would not result therefrom:
(a) Non-Recourse Debt for which the corresponding
Lien is otherwise permissible under Section 6.8(d) (e), (g) or (h),
provided that such Indebtedness is in compliance with the requirements
of such Section,
(b) [Intentionally Left Blank],
(c) Indebtedness incurred pursuant to commitments and
proposed commitments therefor that are identified on Schedule 6.9
(including replacements of such commitments), but only to the maximum
amount available shown on such Schedule,
(d) Indebtedness that constitutes Subordinated
Obligations so long as no principal repayment (or any nature of reserve
therefor) is due until at least one (1) year after the Maturity Date,
(e) Indebtedness outstanding under the Notes,
(f) Indebtedness constituting a refinancing on not
materially less favorable terms of Indebtedness permitted under this
Section 6.9,
(g) Indebtedness constituting reimbursement
obligations incurred with respect to standby letters of credit issued
in the ordinary course of Borrower's and its Subsidiaries real estate
development business,
(h) Indebtedness by and among Borrower and its
Subsidiaries, so long as such Indebtedness is not otherwise restricted
hereunder (such as under Section 6.16(d) with respect to certain
Investments), and
(i) Unsecured Indebtedness incurred by Borrower (and
any guaranty of such Indebtedness by a Subsidiary), provided that any
such unsecured Indebtedness having an initial maturity of one (1) year
or less and outstanding under either a working capital facility or a
bid line of credit shall be limited to an aggregate
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principal amount outstanding at any one time of $25,000,000 and,
provided further, that a guaranty of any such unsecured Indebtedness by
one or more Subsidiaries shall be permissible only if such unsecured
Indebtedness constitutes a loan of money (or a reimbursement obligation
under a letter of credit) and only if the credit instrument evidencing
such unsecured Indebtedness expressly states that the funds loaned
thereunder are being made available to Borrower solely for the general
working capital and corporate purposes of Borrower and its
Subsidiaries, without any portion thereof being required to be used for
any particular purpose.
6.10 Transactions with Affiliates. Enter into any transaction
of any kind with any Affiliate of Borrower other than (a) salary, bonus,
employee stock option and other compensation arrangements and indemnification
arrangements with directors or officers in the ordinary course of business, (b)
transactions between or among Borrower and its Guarantor Subsidiaries (other
than Coventry Subsidiaries), (c) Investments in Subsidiaries specifically
permitted in Section 6.16(d)(ii) and (d) transactions on overall terms at least
as favorable to Borrower and its Guarantor Subsidiaries as would be the case in
an arm's-length transaction between unrelated parties of equal bargaining power.
6.11 Tangible Net Worth. Permit Tangible Net Worth, as of the
last day of any Fiscal Quarter ending on or after December 31, 1997, to be less
than the sum of (a) $282,620,000 plus (b) an amount equal to 75% of the
cumulative Net Income earned in all Fiscal Quarters ending after December 31,
1997 (with no deduction for a net loss in any such Fiscal Quarter), plus (c) an
amount equal to 50% of the aggregate cumulative increases in Stockholders'
Equity after December 31, 1997 by reason of the issuance and sale of capital
stock by Borrower (including upon any conversion or exchange of debt securities
of Borrower into such capital stock).
6.12 Consolidated Fixed Charge Coverage.
(a) Permit the Consolidated Fixed Charge Coverage
Ratio, as of the last day of any Fiscal Quarter ending on or after June
30, 1995, to be less than 1.75:1.00, or
(b) Permit, as of the last day of any two consecutive
Fiscal Quarters, both (i) the Leverage Ratio to be greater than 2.00 to
1.00 and (ii) the Consolidated Fixed Charge Coverage Ratio to be less
than 2.50 to 1.00, or
(c) Permit, as of the last day of any two consecutive
Fiscal Quarters, both (i) the Leverage Ratio to be greater than 2.25 to
1.00 and (ii) the Consolidated Fixed Charge Coverage Ratio to be less
than 2.75 to 1.00.
6.13 Debt to Net Worth. Permit the Leverage Ratio, as of any
Fiscal Quarter ending on or after March 31, 1998, to be greater than the ratio
set forth below opposite the period during which such Fiscal Quarter ends:
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Leverage
Period Ratio
------ -----
Jan. 1, 1998 through 2.50:1.00
March 31, 1999
April 1, 1999 through 2.35:1.00
March 31, 2000
April 1, 2000 and thereafter 2.15:1.00
6.14 Adjusted Senior Debt to Net Worth. Permit the ratio of
Adjusted Senior Debt to Tangible Net Worth, each as of any Fiscal Quarter ending
on or after March 31, 1998, to be greater than the ratio set forth below
opposite the period during which such Fiscal Quarter ends:
Period Ratio
------ -----
Jan. 1, 1998 through 1.50:1.00
March 31, 1999
April 1, 1999 through 1.40:1.00
March 31, 2000
April 1, 2000 and 1.30:1.00
thereafter
6.15 Liquidity. Permit, as of the last day of any Fiscal Year,
beginning June 30, 1995, the ratio of Adjusted EBIDTA for such Fiscal Year to
Specified Charges for such Fiscal Year to be less than (a) 0.50:1.00 for the
Fiscal Year ending June 30, 1995, (b) 0.75:1.00 for the Fiscal Years ending June
30, 1996 and 1997, (c) 0.65:1.00 for the Fiscal Years ending June 30, 1998 and
1999 or (d) 0.75:1.00 for the Fiscal Years ending June 30, 2000 or thereafter,
provided that any such failing shall not constitute an Event of Default under
Section 9.1(c) unless and until Borrower shall also permit, as of the last day
of the immediately succeeding Fiscal Quarter, the ratio of Adjusted EBIDTA for
the four (4) Fiscal Quarter period then ending to Specified Charges for such
four (4) Fiscal Quarter period to also be less than said specified ratio.
6.16 Investments. Make or suffer to exist any Investment,
other than:
(a) Investments in existence on the Closing Date and
disclosed on Schedule 6.16;
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(b) Investments consisting of Cash and Cash
Equivalents;
(c) Investments consisting of or evidencing the
extension of credit to customers of Borrower and its Subsidiaries in
the ordinary course of business and any Investments received in
satisfaction or partial satisfaction thereof;
(d) Investments of Borrower in any of its
Subsidiaries and Investments of any Subsidiary in Borrower or another
Subsidiary provided that (i) the book value of Investments in
Subsidiaries that engage in activities other than the acquisition,
development, construction or financing of residential real estate as a
material portion of their business activities shall not exceed, in the
aggregate at any date of determination, more than 10% of Tangible Net
Worth as of the end of the then most recently ended Fiscal Quarter and
(ii) the book value of Investments in Subsidiaries that are not
Guarantor Subsidiaries shall not exceed, in the aggregate at any date
of determination, $5,000,000. All references to "Investments" in
clauses (i) and (ii) shall specifically include guaranties, as provided
in the definition of "Investments". The termination or release (in
whole or in part) of any such guaranty that is treated as an Investment
(in the absence of payment thereunder) shall thereupon result in a
corresponding reduction in the measured amount of such Investment;
(e) Investments received in connection with the
settlement of a bona fide dispute with another Person; and
(f) Investments representing all or a portion of the
sales price for Property sold to another Person.
(g) Investments (i) consisting of readily marketable
securities actively traded on a public exchange or (ii) in Persons
(other than Subsidiaries), each of which Persons does not, as a
material portion of its business, engage in activities other than those
related to the acquisition, development, construction or financing of
residential real estate, provided that (A) the cumulative dollar amount
of Investments under clause (i) (net of cumulative cash payments in
respect of such Investments) shall at no time exceed $2,000,000 and (B)
the cumulative dollar amount of Investments under clauses (i) and (ii)
(net of cumulative cash payments in respect of such Investments) shall
at no time exceed $10,000,000.
6.17 Unentitled Land.
(a) Permit the total amount of Borrower's and its
Subsidiaries' Cash investment in Unentitled Land that (i) is part of
Current Operating Projects other than Coventry Homes Projects or (ii)
is part of a Coventry Homes Project for which home sale closings have
commenced (including in either case, without limitation, all Cash
expenditures reasonably allocated to the acquisition, development,
maintenance and
-65-
holding of such Unentitled Land) to exceed 25% of Tangible Net Worth at
any time on or after June 30, 1995; or
(b) Permit the total amount of Borrower's and its
Subsidiaries Cash investment in Unentitled Land that (i) is not part of
Current Operating Projects or (ii) is part of a Coventry Homes Project
for which home sale closings have not yet commenced (including in
either case, without limitation, all Cash expenditures reasonably
allocated to the acquisition, development, maintenance and holding of
such Unentitled Land) to exceed 10% of Tangible Net Worth at any time
on or after June 30, 1995.
6.18 Unsold Homes in Production. For any two (2) consecutive
Fiscal Quarters, beginning with the Fiscal Quarter ending March 31, 1995:
(a) Permit the number of Unsold Homes (other than (i)
Unsold Homes that are part of the Coventry Homes Projects, (ii) Unsold
Homes included in development projects with respect to which, on the
date of determination, 12 months has not elapsed since the closing of
the sale of the first housing unit and (iii) Unsold Homes within any
Current Operating Project that are then being used as sales models or
as vacation apartments for marketing purposes (collectively, "Excluded
Unsold Homes")), as of the end of such Fiscal Quarters to exceed the
applicable percentage shown below of the number of housing unit sale
closings of Borrower and its Guarantor Subsidiaries (other than sale
closings of housing units that are Excluded Unsold Homes) that occurred
in the twelve (12) months immediately prior to each such Fiscal Quarter
end:
Applicable
Any Fiscal Quarter Ending Percentage
------------------------- ----------
September 30th 35%
December 31st 35%
March 31st 30%
June 30th 25%; or
(b) Permit the number of Unsold Homes that are part of the
Coventry Homes Projects as of the end of such Fiscal Quarters to exceed
25% of the number of housing unit sale closings in the Coventry Homes
Projects that occurred in the twelve (12) months immediately prior to
each such Fiscal Quarter end.
6.19 Coventry Assets. Permit, as of the last day of any Fiscal
Quarter, beginning June 30, 1995, the ratio of Coventry Assets to Consolidated
Total Assets to be
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greater than 0.20:1.00 or the ratio of Coventry Land Assets to Consolidated
Total Assets to be greater than 0.15:1.00.
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Article 7
INFORMATION AND REPORTING REQUIREMENTS
--------------------------------------
7.1 Financial and Business Information. So long as any Advance
remains unpaid, or any other Obligation remains unpaid or unperformed, or any
portion of a Commitment remains in force, Borrower shall, unless the Agent (with
the written approval of the Majority Banks) otherwise consents, deliver to the
Agent and the Banks, at Borrower's sole expense:
(a) As soon as practicable, and in any event within 60 days
after the end of each Fiscal Quarter (other than the fourth Fiscal
Quarter in any Fiscal Year), (i) the consolidated balance sheet of
Borrower and its Subsidiaries as at the end of such Fiscal Quarter and
the consolidated statement of operations for each Fiscal Quarter, and its
statement of cash flows for the portion of the Fiscal Year ended with
such Fiscal Quarter and (ii) the consolidating (in accordance with past
consolidating practices of Borrower) balance sheets and statements of
operations as at and for the portion of the Fiscal Year ended with such
Fiscal Quarter, all in reasonable detail. Such financial statements shall
be certified by a Senior Officer of Borrower as fairly presenting the
financial condition, results of operations and cash flows of Borrower and
its Subsidiaries in accordance with Generally Accepted Accounting
Principles (other than footnote disclosures), consistently applied, as at
such date and for such periods, subject only to normal year-end accruals
and audit adjustments;
(b) As soon as practicable, and in any event within 120 days
after the end of each Fiscal Year (including the Fiscal Year ending June
30, 1995), (i) the con solidated balance sheet of Borrower and its
Subsidiaries as at the end of such Fiscal Year and the consolidated
statements of operations, shareholders' equity and cash flows, in each
case of Borrower and its Subsidiaries for such Fiscal Year and (ii)
consolidating (in accordance with past consolidating practices of
Borrower) balance sheets and statements of operations, in each case as at
and for the Fiscal Year, all in reasonable detail. In the case of clause
(i), such financial statements shall be prepared in accordance with
Generally Accepted Accounting Principles, consistently applied, and such
consolidated balance sheet and consolidated statements shall be
accompanied by a report and opinion of KPMG Peat Marwick or other
independent public accountants of recognized standing selected by
Borrower and reasonably satisfactory to the Majority Banks, which report
and opinion shall be prepared in accordance with generally accepted
auditing standards as at such date, and shall not be subject to any
qualifications or exceptions as to the scope of the audit nor to any
other qualification or exception reasonably determined by the Majority
Banks in their good faith business judgment to be adverse to the
interests of the Banks. Such accountants' report and opinion shall be
accompanied by a certificate stating that, in making the examination
pursuant to gener ally accepted auditing standards necessary for the
certification of such financial statements and such report, such
accountants have obtained no knowledge of any
-68-
Default or, if, in the opinion of such accountants, any such Default
shall exist, stating the nature and status of such Default, and stating
that such accountants have reviewed Borrower's financial calculations as
at the end of such Fiscal Year (which shall accompany such certificate)
under Sections 6.11 through 6.15, have read such Sections (including the
definitions of all defined terms used therein) and that nothing has come
to the attention of such accountants in the course of such examination
that would cause them to believe that the same were not calculated by
Borrower in the manner prescribed by this Agreement. In the case of
clause (ii), such financial statements shall be certified by a Senior
Officer of Borrower as fairly presenting the financial condition, results
of operations and cash flows of Borrower and its Subsidiaries in
accordance with Generally Accepted Accounting Principles (other than
footnote disclosures), consistently applied, as at such date and for such
periods;
(c) As soon as practicable, and in any event within 60 days
after the commencement of each Fiscal Year (including the Fiscal Year
beginning July 1, 1995), a budget by Fiscal Quarter for that Fiscal Year
and a strategic plan by Fiscal Year for the three Fiscal Years following
the budgeted year, including for the Fiscal Year just commenced,
projected consolidated balance sheets, statements of operations and
statements of cash flow and, for the next three succeeding Fiscal Years,
projected consolidated condensed balance sheets and statements of
operations and cash flow, of Borrower and its Subsidiaries, all in
reasonable detail;
(d) Promptly after request by the Agent or any Bank, copies
of any detailed audit reports, management letters or recommendations
submitted to the board of directors (or the audit committee of the board
of directors) of Borrower by independent accountants in connection with
the accounts or books of Borrower or any of its Subsidiaries, or any
audit of any of them;
(e) Promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or
communication sent to the shareholders of Borrower, and copies of all
annual, regular, periodic and special reports and registration statements
which Borrower may file or be required to file with the Securities and
Exchange Commission under Sections 13 or 15(d) of the Securities Exchange
Act of 1934 and not otherwise required to be delivered to the Banks
pursuant to other provisions of this Section 7.1;
(f) Except as prohibited by Law, promptly after request by
the Agent or any Bank, copies of any other report or other document that
was filed by Borrower or any of its Subsidiaries with any Governmental
Agency;
(g) Promptly upon a Senior Officer becoming aware, and in
any event within five (5) Banking Days after becoming aware, of the
occurrence of any (i) "report able event" (as such term is defined in
Section 4043 of ERISA) or (ii) "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the
-69-
Code) in connection with any Pension Plan or any trust created
thereunder, telephonic notice specifying the nature thereof, and, no more
than five (5) Banking Days after such telephonic notice, written notice
again specifying the nature thereof and specifying what action Borrower
or any of its Subsidiaries is taking or proposes to take with respect
thereto, and, when known, any action taken by the Internal Revenue
Service with respect thereto;
(h) As soon as practicable, and in any event within two
Banking Days after a Senior Officer becomes aware of the existence of any
condition or event which constitutes a Default, telephonic notice
specifying the nature and period of existence thereof, and, no more than
two Banking Days after such telephonic notice, written notice again
specifying the nature and period of existence thereof and specifying what
action Borrower or any of its Subsidiaries are taking or propose to take
with respect thereto;
(i) Promptly upon a Senior Officer becoming aware that (i)
any Person commenced a legal proceeding with respect to a claim against
Borrower or any of its Subsidiaries that is $500,000 or more in excess of
the amount thereof that is fully covered by insurance, (ii) any creditor
or lessor under a written credit agreement or material lease has asserted
a default thereunder on the part of Borrower or any of its Subsidiaries,
(iii) any Person commenced a legal proceeding with respect to a claim
against Borrower or any of its Subsidiaries under a contract that is not
a credit agreement or material lease in excess of $500,000 or which
otherwise may reasonably be expected to result in a Material Adverse
Effect, or (iv) any labor union has notified Borrower of its intent to
strike Borrower or any of its Subsidiaries on a date certain and such
strike would involve more than 100 employees of Borrower and its
Subsidiaries, a written notice describing the pertinent facts relating
thereto and what action Borrower or its Subsidiaries are taking or
propose to take with respect thereto;
(j) No later than 7 days prior to its creation, written
notice of any Lien to be created pursuant to Section 6.8(e) or (f),
together with a reasonably detailed description of such Lien and the
Indebtedness to be secured thereby; and
(k) Such other data and information as from time to time may
be reasonably requested by the Agent, any Bank (through the Agent) or the
Majority Banks.
7.2 Compliance Certificates. So long as any Advance remains
unpaid, or any other Obligation remains unpaid or unperformed, or any portion of
a Commitment remains outstanding, Borrower shall deliver to the Agent and the
Banks, at Borrower's sole expense, (a) a Compliance Certificate concurrently
with each financial statement required pursuant to Sections 7.1(a) and 7.1(b),
and (b) a Compliance Certificate (limited to showing the calculation of the
Leverage Ratio as of the previous June 30) on or before each August 29. In the
case of the Compliance Certificates delivered on or before each August 29,
calculations
-70-
shall be based on the preliminary unaudited financial statements of Borrower and
its Subsidiaries for such Fiscal Quarter.
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Article 8
CONDITIONS
----------
8.1 Initial Advances, Etc.. The effectiveness of this Agreement as
an amendment and restatement of the First Amended Loan Agreement, and the
effectiveness of the other Loan Documents as amendments and restatements of the
other Pre-Existing Loan Documents, and the obligation of each Bank to make the
initial Advance to be made by it and, if applicable, to make or accept an
Adjusting Purchase Payment, and the obligation of the Issuing Bank to issue any
Letter of Credit are subject to the following conditions precedent, each of
which must be satisfied unless all of the Banks, in their sole and absolute
discretion, shall agree otherwise:
(a) The Agent shall have received all of the following, each
of which shall be originals unless otherwise specified, each properly
executed by a Responsible Official of each party thereto, each dated as
of the Closing Date and each in form and substance satisfactory to the
Agent and its legal counsel (unless otherwise specified or, in the case
of the date of any of the following, unless the Agent otherwise agrees or
directs):
(1) at least one (1) executed counterpart of this
Agreement, together with arrangements satisfactory to the Agent
for additional executed counterparts, sufficient in number for
distribution to the Banks and Borrower;
(2) a Line A Note and a Line B Note executed by
Borrower in favor of each Bank, each such Note in a principal
amount equal to that Bank's Pro Rata Share of the applicable
Commitment;
(3) the Subsidiary Guaranty executed by each
Guarantor Subsidiary;
(4) with respect to Borrower and each Guarantor
Subsidiary, such documentation as may be required to establish the
due organization, valid existence and good standing of Borrower
and each such Subsidiary, its qualification to engage in business
in each material jurisdiction in which it is engaged in business
or required to be so qualified, its authority to execute, deliver
and perform any Loan Documents to which it is a Party, the
identity, authority and capacity of each Responsible Official
thereof authorized to act on its behalf, including certified
copies of articles of incorporation and amendments thereto, bylaws
and amendments thereto, certificates of good standing and/or
qualification to engage in business, tax clearance certificates,
certificates of corporate resolutions, incumbency certificates,
Certificates of Responsible Officials, and the like;
-72-
(5) the Opinions of Counsel;
(6) a Certificate of a Responsible Official
certifying that the copies of the Indentures attached thereto are
true, current and complete copies;
(7) a Certificate of a Responsible Official signed
by a Senior Officer certifying that the conditions specified in
Sections 8.1(a)(8), 8.1(d) and 8.1(e) have been satisfied; and
(8) such other assurances, certificates, documents,
consents or opinions as the Agent reasonably may require.
(b) The fees payable pursuant to Sections 3.2 and 3.3 shall
have been paid and any accrued interest and fees under the Pre-Existing
Loan Documents shall have been paid as specified in Section 3.16.
(c) The reasonable costs and expenses of the Agent in
connection with the preparation of the Loan Documents payable pursuant to
Section 11.3, and invoiced to Borrower prior to the Closing Date, shall
have been paid.
(d) The representations and warranties of Borrower contained
in Article 4 shall be true and correct.
(e) Borrower and any other Parties shall be in compliance
with all the terms and provisions of the Loan Documents, and giving
effect to the initial Advance no Default or Event of Default shall have
occurred and be continuing.
(f) The Consolidated Fixed Charge Coverage Ratio shall be no
less than 3.00:1.00.
(g) The applicable Banks shall have made the Adjusting
Purchase Payments as specified in Section 2.9 hereof.
8.2 Any Increasing Advance. The obligation of each Bank to make
any Advance which would increase the principal amount outstanding under the
Notes and the obligation of the Issuing Bank to issue a Letter of Credit are
subject to the following condi tions precedent:
(a) except (i) for representations and warranties which
expressly speak as of a particular date or are no longer true and correct
as a result of a change which is permitted by this Agreement or (ii) as
disclosed by Borrower and approved in writing by the Majority Banks, the
representations and warranties contained in Article 4 (other than
Sections 4.4(a), 4.6 (first sentence), and 4.10), shall be true and
complete on and as of the date of the Advance as though made on that
date;
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(b) other than matters described in Schedule 4.10 or not
required as of the Closing Date to be therein described, there shall not
be then pending or threatened any action, suit, proceeding or
investigation against or affecting Borrower or any of its Subsidiaries or
any Property of any of them before any Governmental Agency that
constitutes a Material Adverse Effect;
(c) the Consolidated Fixed Charge Coverage Ratio shall be no
less than 2.25:1.00;
(d) in the case of any Letter of Credit or any Advance with
respect to the Line A Commitment, the Consolidated Fixed Charge Coverage
Ratio shall be no less than 3.00:1.00;
(e) the Agent shall have timely received a Request for Loan
in compliance with Article 2 (or telephonic or other request for loan
referred to in the second sentence of Section 2.1(b), if applicable) and
the Issuing Bank shall, in the case of a Letter of Credit, have received
a Request for Letter of Credit in compliance with Article 2;
(f) the Agent shall have received, in form and substance
satisfactory to the Agent, such other assurances, certificates, documents
or consents related to the fore going as the Agent or Majority Banks
reasonably may require; and
(g) the Agent shall have received, concurrently with the
corresponding Request for Loan (or, if applicable, the telephonic notice
thereof, under Section 2.1(b)), a fully and accurately completed Loan
Compliance Certificate, dated the date the Loan is to be made, and, on
the date of the Loan, Borrower and its Subsidiaries shall be in
compliance with all requirements specified thereon with respect to the
nature and amount of the requested Loan.
8.3 Any Advance. The obligation of each Bank to make any Advance
is subject to the condition precedent that, except as provided for in Section
2.1(g), the Agent shall have timely received a Request for Loan in compliance
with Article 2 (or telephonic or other request for loan referred to in the
second sentence of Section 2.1(b), if applicable).
8.4 Return of Pre-Existing Notes. Upon the effectiveness of this
Agreement, including the delivery by Borrower of all documents required under
Section 8.1, the Banks holding the Pre-Existing Notes shall return them to
Borrower, in each case marked "Canceled and Replaced."
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Article 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
----------------------------------------------------
9.1 Events of Default. The existence or occurrence of any one or
more of the following events, whatever the reason therefor and under any
circumstances whatsoever, shall constitute an Event of Default:
(a) Borrower fails to pay any principal Indebtedness on any
Note on the date when due or fails to pay to the Issuing Bank the amount
drawn under any Letter of Credit as required under Section 2.12(d); or
(b) Borrower fails to pay any interest on any Note, or any
fees under Sections 3.2, 3.3 or 3.4 or any portion thereof, within five
(5) Banking Days after the date when due; or fails to pay any other fee
or amount payable to the Banks under any Loan Document, or any portion
thereof, within five (5) Banking Days after written notice of such
failure; or
(c) Borrower fails to comply with any of the covenants
contained in Sections 5.2, 5.9, 6.1, 6.2, 6.3, 6.4, 6.5, 6.7, 6.11, 6.12,
6.13, 6.14, 6.15, 6.16, 6.18, or 7.1(h), and, in the case of Sections
6.4, 6.7 or 6.16 only, ten (10) days have elapsed without cure after
either a Senior Officer of Borrower has actual knowledge of such failing
or the Agent shall have given Borrower notice of such failing; or
(d) Borrower, any of its Guarantor Subsidiaries or any other
Party fails to perform or observe any other covenant or agreement (not
specified in clauses (a), (b) or (c) above) contained in any Loan
Document on its part to be performed or observed within ten (10) days
after the giving of notice by the Agent on behalf of the Majority Banks
of such Default; or
(e) Any representation or warranty of Borrower or any of its
Subsidiaries made in any Loan Document, or in any certificate or other
writing delivered by Borrower pursuant to any Loan Document, proves to
have been incorrect when made or reaffirmed in any material respect; or
(f) Borrower or any of its Guarantor Subsidiaries (i) fails
to pay the principal, or any principal installment, of any present or
future Indebtedness for borrowed money of $1,500,000 or more (other than
Non-Recourse Debt specified in Section 6.8(d)), or any guaranty of
present or future Indebtedness for borrowed money of $1,500,000 or more,
on its part to be paid, when due (or within any stated grace period),
whether at the stated maturity, upon acceleration, by reason of required
prepayment or otherwise or (ii) fails to perform or observe any other
term, covenant or agreement on its part to be performed or observed, or
suffers any event to occur, in connection with any present or future
indebtedness for borrowed money of $1,500,000
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or more (other than Non-Recourse Debt specified in Section 6.8(d)), or of
any guaranty of present or future indebtedness for borrowed money of
$1,500,000 or more, if as a result of such failure or sufferance any
holder or holders thereof (or an agent or trustee on its or their behalf)
has the right to declare such indebtedness due before the date on which
it otherwise would become due; or
(g) Any event occurs which gives the holder or holders of
any Subordinated Obligation (or an agent or trustee on its or their
behalf) the right to declare such indebtedness due before the date on
which it otherwise would become due, or the right to require the issuer
thereof to redeem or purchase, or offer to redeem or purchase, all or any
portion of any Subordinated Obligation; or
(h) Any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement of the Banks or
satisfaction in full of all the Obligations ceases to be in full force
and effect or is declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any respect which, in any such
event in the reasonable opinion of the Majority Banks, is materially
adverse to the interests of the Banks; or any Party thereto denies that
it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind same; or
(i) A final judgment against Borrower or any of its
Guarantor Subsidiaries is entered for the payment of money in excess of
$1,000,000 and, absent procurement of a stay of execution, such judgment
remains unsatisfied for thirty (30) calendar days after the date of entry
of judgment, or in any event later than five (5) days prior to the date
of any proposed sale thereunder; or any writ or warrant of attachment or
execution or similar process is issued or levied against all or any
material part of the Property of any such Person and is not released,
vacated or fully bonded within thirty (30) calendar days after its issue
or levy; or
(j) Borrower or any of its Guarantor Subsidiaries (other
than a Guarantor Subsidiary that holds as its principal assets the Spring
Creek Project or the ▇▇▇▇ Harbor Project) institutes or consents to the
institution of any proceeding under a Debtor Relief Law relating to it or
to all or any part of its Property, or is unable or admits in writing its
inability to pay its debts as they mature, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of
any receiver, trustee, custodian, conservator, liquidator, rehabilitator
or similar officer for it or for all or any part of its Property; or any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of that
Person and the appointment continues undischarged or unstayed for sixty
(60) calendar days; or any proceeding under a Debtor Relief Law relating
to any such Person or to all or any part of its Property is instituted
without the consent of that Person and continues undismissed or unstayed
for sixty (60) calendar days; or
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(k) The occurrence of an Event of Default (as such term is
or may hereafter be specifically defined in any other Loan Document)
under any other Loan Document; or
(l) Any determination is made by a court of competent
jurisdiction that the 9-3/4% Senior Subordinated Debt Due 2003, the
9-3/4% Senior Subordinated Debt Due 2008, the 9.00% Senior Subordinated
Debt Due 2006, the 9-3/8% Senior Subordinated Debt Due 2009 or any other
Subordinated Obligation is not subordinated in accordance with its terms
to the principal or interest under the Notes; or
(m) Any Pension Plan maintained by Borrower or any of its
Subsidiaries is determined to have a material "accumulated funding
deficiency" as that term is defined in Section 302 of ERISA and the
result is a Material Adverse Effect.
9.2 Remedies Upon Event of Default. Without limiting any other
rights or remedies of the Agent or the Banks provided for elsewhere in this
Agreement, or the Loan Documents, or by applicable Law, or in equity, or
otherwise:
(a) Upon the occurrence, and during the continuance, of any
Event of Default other than an Event of Default described in Section
9.1(j):
(1) the commitment to make Advances and all other
obligations of the Agent or the Banks and all rights of Borrower
and any other Parties under the Loan Documents shall be suspended
without notice to or demand upon Borrower, which are expressly
waived by Borrower, except that all of the Banks or the Majority
Banks (as the case may be, in accordance with Section 11.2) may
waive an Event of Default or, without waiving, determine, upon
terms and conditions satisfactory to the Banks or Majority Banks,
as the case may be, to reinstate the Commitments and make further
Advances, which waiver or determination shall apply equally to,
and shall be binding upon, all the Banks;
(2) the Issuing Bank may, with the approval of the
Majority Banks, demand immediate payment by Borrower of an amount
equal to the aggregate drawable face amount of all then
outstanding Letters of Credit to be held by the Issuing Bank in an
interest-bearing cash collateral account as collateral hereunder,
and Borrower hereby grants to the Agent, on behalf of the Banks, a
security interest in such funds and any such account to secure the
Obligations; and
(3) the Majority Banks may request the Agent to,
and the Agent thereupon shall, terminate the Commitments and/or
declare all or any part of the unpaid principal of all Notes, all
interest accrued and unpaid thereon and all other amounts payable
under the Loan Documents to be forthwith due and payable,
whereupon the same shall become and be forthwith due and payable,
without
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protest, presentment, notice of dishonor, demand or further notice
of any kind, all of which are expressly waived by Borrower.
(b) Upon the occurrence of any Event of Default described in
Section 9.1(j):
(1) the commitment to make Advances and all other
obligations of the Agent or the Banks and all rights of Borrower
and any other Parties under the Loan Documents shall terminate
without notice to or demand upon Borrower, which are expressly
waived by Borrower;
(2) an amount equal to the aggregate drawable face
amount of all then outstanding Letters of Credit shall be
immediately due and payable to the Issuing Bank without notice to
or demand upon Borrower, which are expressly waived by Borrower,
to be held by the Issuing Bank in an interest-bearing cash
collateral account as collateral hereunder, and Borrower hereby
grants to the Agent, on behalf of the Banks, a security interest
in such funds and any such account to secure the Obligations; and
(3) the unpaid principal of all Notes, all interest
accrued and unpaid thereon and all other amounts payable under the
Loan Documents shall be forthwith due and payable, without
protest, presentment, notice of dishonor, demand or further notice
of any kind, all of which are expressly waived by Borrower.
(c) Upon the occurrence of any Event of Default, the Agent
or (but only upon directive of the Majority Banks) any of the Banks,
without notice to (except as expressly provided for in any Loan Document)
or demand upon Borrower, which are expressly waived by Borrower (except
as to notices expressly provided for in any Loan Document), may proceed
to protect, exercise and enforce the rights and remedies of the Agent and
the Banks under the Loan Documents against Borrower and any other Party
and such other rights and remedies as are provided by Law or equity.
(d) The order and manner in which the Banks' rights and
remedies are to be exercised shall be determined by the Majority Banks in
their sole discretion, and all payments received by the Agent and the
Banks, or any of them, shall be applied first to the costs and expenses
(including attorneys' fees and disbursements and the allocated costs of
attorneys employed by the Agent) of the Agent and of the Banks, and
thereafter paid pro rata to the Banks in the same proportions that the
aggregate Obligations owed to each Bank under the Loan Documents bear to
the aggregate Obligations owed under the Loan Documents to all the Banks,
without priority or preference among the Banks. Regardless of how each
Bank may treat payments for the purpose of its own accounting, for the
purpose of computing Borrower's Obligations hereunder and under the
Notes, payments shall be applied first, to the costs and expenses of the
Agent and the Banks, as
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set forth above, second, to the payment of accrued and unpaid interest
due under any Loan Documents to and including the date of such
application (ratably, and without duplication, according to the accrued
and unpaid interest due under each of the Loan Documents), and third, to
the payment of all other amounts (including principal and fees) then
owing to the Agent or the Banks under the Loan Documents. No application
of payments will cure any Event of Default, or prevent acceleration, or
continued accel eration, of amounts payable under the Loan Documents, or
prevent the exercise, or continued exercise, of rights or remedies of the
Banks hereunder or thereunder or at Law or in equity.
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Article 10
THE AGENT
---------
10.1 Appointment and Authorization. Subject to Section 10.8, each
Bank hereby irrevocably appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof or are reasonably incidental, as
determined by the Agent, thereto. This appointment and authorization is intended
solely for the purpose of facilitating the servicing of the Loans and does not
constitute appointment of the Agent as trustee for any Bank or as representative
of any Bank for any other purpose and, except as specifically set forth in the
Loan Documents to the contrary, the Agent shall take such action and exercise
such powers only in an administrative and ministerial capacity.
10.2 Agent and Affiliates. Bank of America (and each successor
Agent) has the same rights and powers under the Loan Documents as any other Bank
and may exercise the same as though it was not the Agent, and the term "Bank" or
"Banks" includes Bank of America in its individual capacity. Bank of America
(and each successor Agent) and its Affiliates may accept deposits from, lend
money to and generally engage in any kind of banking, trust or other business
with Borrower, any Subsidiary thereof, or any Affiliate of Borrower or any
Subsidiary thereof, as if it was not the Agent and without any duty to account
therefor to the Banks. Bank of America (and each successor Agent) need not
account to any other Bank for any monies received by it for reimbursement of its
costs and expenses as Agent hereunder, or (except as expressly provided
elsewhere herein) for any monies received by it in its capacity as a Bank
hereunder. The Agent shall not be deemed to hold a fiduciary relationship with
any Bank and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Agent.
10.3 Proportionate Interest in any Collateral. The Agent, on
behalf of all the Banks, shall hold in accordance with the Loan Documents all
items of any collateral or inter ests therein received or held by the Agent.
Subject to the Agent's and the Banks' rights to reimbursement for their costs
and expenses hereunder (including attorneys' fees and disburse ments and other
professional services and the allocated costs of attorneys employed by the Agent
or a Bank) and subject to the application of payments in accordance with Sec
tion 9.2(d), each Bank shall have an interest in the Banks' interest in any
collateral or interests therein in the same proportions that the aggregate
Obligations owed such Bank under the Loan Documents bear to the aggregate
Obligations owed under the Loan Documents to all the Banks, without priority or
preference among the Banks.
10.4 Banks' Credit Decisions. Each Bank agrees that it has,
independently and without reliance upon the Agent, any other Bank or the
directors, officers, agents, employees or attorneys of the Agent or of any other
Bank, and instead in reliance upon information supplied to it by or on behalf of
Borrower and upon such other information as it has deemed
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appropriate, made its own independent credit analysis and decision to enter into
this Agreement. Each Bank also agrees that it shall, independently and without
reliance upon the Agent, any other Bank or the directors, officers, agents,
employees or attorneys of the Agent or of any other Bank, continue to make its
own independent credit analyses and decisions in acting or not acting under the
Loan Documents.
10.5 Action by Agent.
(a) The Agent may assume that no Default has occurred and is
continuing, unless the Agent has received notice from Borrower stating
the nature of the Default or has received notice from a Bank stating the
nature of the Default and that such Bank considers the Default to have
occurred and to be continuing.
(b) The Agent has only those obligations under the Loan
Documents as are expressly set forth therein.
(c) Both before and after any Default, the Agent shall be
required to act or not act upon the instructions of the Majority Banks
(or all of the Banks, to the extent required by Section 11.2) and those
instructions shall be binding upon the Agent and all the Banks, provided
that the Agent shall not be required to act or not act if to do so would
be contrary to any Loan Document or to applicable Law or would result, in
the reasonable judgment of the Agent, in a risk of liability to the
Agent. The Agent may, without the consent of the Majority Banks, take
such actions and exercise such discre tion as is specified herein. In
addition, should the Agent propose a course of conduct with respect to
the administration of the Loan Documents in writing to the Banks and
should the Majority Banks (or any of the Banks, if unanimous approval of
such action is required under Section 11.2) fail, for five (5) Banking
Days after the receipt of notice from the Agent of the proposed course of
action, to instruct the Agent to the contrary, then the Agent, in its
sole discretion, may act or not act as the Agent deems advisable pursuant
to such course of conduct.
(d) The Agent shall have no liability to any Bank for
acting, or not acting, as instructed by the Majority Banks (or all the
Banks, if required under Section 11.2) or as permitted under clause (c),
above, notwithstanding any other provision hereof.
10.6 Liability of Agent. Neither the Agent nor any of its
directors, officers, agents, employees or attorneys shall be liable for any
action taken or not taken by them under or in connection with the Loan
Documents, except for their own gross negligence or willful misconduct. Without
limitation on the foregoing, the Agent and its directors, officers, agents,
employees and attorneys:
(a) May treat the payee of any Note as the holder thereof
until the Agent receives notice of the assignment or transfer thereof, in
form satisfactory to the Agent,
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signed by the payee, and may treat each Bank as the owner of that Bank's
interest in the Obligations for all purposes of this Agreement until the
Agent receives notice of the assignment or transfer thereof, in form
satisfactory to the Agent, signed by that Bank.
(b) May consult with legal counsel (including in-house legal
counsel), accountants (including in-house accountants) and other
professionals or experts selected by it, or with legal counsel,
accountants or other professionals or experts for Borrower and/or its
Subsidiaries or the Banks, and shall not be liable for any action taken
or not taken by it in good faith in accordance with any advice of such
legal counsel, accountants or other professionals or experts.
(c) Shall not be responsible to any Bank for any statement,
warranty or representation made in any of the Loan Documents or in any
notice, certificate, report, request or other statement (written or oral)
given or made in connection with any of the Loan Documents.
(d) Except to the extent expressly set forth in the Loan
Documents, shall have no duty to ask or inquire as to the performance or
observance by Borrower or its Subsidiaries of any of the terms,
conditions or covenants of any of the Loan Documents or to inspect any
collateral or the Property, books or records of Borrower or its
Subsidiaries.
(e) Will not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness,
effectiveness, sufficiency or value of any Loan Document, any other
instrument or writing furnished pursuant thereto or in connection
therewith, or any collateral.
(f) Will not incur any liability by acting or not acting in
reliance upon any Loan Document, notice, consent, certificate, statement,
request or other instrument or writing believed by it to be genuine and
signed or sent by the proper party or parties.
(g) Will not incur any liability for any arithmetical error
in computing any amount paid or payable by Borrower or any Subsidiary or
Affiliate thereof or paid or payable to or received or receivable from
any Bank under any Loan Document, including, without limitation,
principal, interest, commitment fees, Advances and other amounts;
provided that, promptly upon discovery of such an error in computation,
the Agent, the Banks and (to the extent applicable) Borrower and/or its
Subsidiaries or Affiliates shall make such adjustments as are necessary
to correct such error and to restore the parties to the position that
they would have occupied had the error not occurred.
10.7 Indemnification. Each Bank shall, ratably in accordance with
its Pro Rata Share of the Commitments, indemnify and hold the Agent and its
directors, officers, agents, employees and attorneys harmless against any and
all liabilities, obligations, losses, damages,
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penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, attorneys' fees and
disbursements and allocated costs of attorneys employed by the Agent) that may
be imposed on, incurred by or asserted against it or them in any way relating to
or arising out of the Loan Documents (other than losses incurred by reason of
the failure of Borrower to pay the indebtedness represented by the Notes) or any
action taken or not taken by it as Agent thereunder, except such as result from
its own gross negligence or willful misconduct. Without limitation on the
foregoing, each Bank shall reimburse the Agent upon demand for that Bank's Pro
Rata Share of any out-of-pocket cost or expense incurred by the Agent in
connection with the negotiation, preparation, execution, delivery, amendment,
waiver, restructuring, reorganization (including a bankruptcy reorganization),
enforcement or attempted enforcement of the Loan Documents, to the extent that
Borrower or any other Party is required by Section 11.3 to pay that cost or
expense but fails to do so upon demand. If payment is made by Borrower or
another Party to the Agent for such cost or expense after reimbursement to the
Agent by a Bank, the Agent shall reimburse such Bank, as applicable. Nothing in
this Section 10.7 shall entitle the Agent to recover any amount from the Banks
if and to the extent that such amount has theretofore been recovered from
Borrower or any of its Subsidiaries.
10.8 Successor Agent. The Agent may, and at the request of the
Majority Banks shall, resign as Agent upon thirty (30) days notice to the Banks
and Borrower. If the Agent shall resign as Agent under this Agreement, the
Majority Banks shall appoint from among the Banks a successor managing agent for
the Banks, which successor managing agent shall be approved by Borrower (and
such approval shall not be unreasonably withheld). If no successor managing
agent is appointed prior to the effective date of the resignation of the Agent,
the Agent may appoint, after consulting with the Banks and Borrower, a successor
managing agent from among the Banks. Upon the acceptance of its appointment as
successor managing agent hereunder, such successor managing agent shall succeed
to all the rights, powers and duties of the retiring Agent and the term "Agent"
shall mean such successor managing agent and the retiring Agent's appointment,
powers and duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article 10, and Sections
11.3, 11.10 and 11.20, shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
10.9 No Obligations of Borrower. Nothing contained in this Article
10 shall be deemed to impose upon Borrower any obligation in respect of the due
and punctual performance by the Agent of its obligations to the Banks under any
provision of this Agreement, and Borrower shall have no liability to the Agent
or any of the Banks in respect of any failure by the Agent or any Bank to
perform any of its obligations to the Agent or the Banks under this Agreement.
Without limiting the generality of the foregoing, where any provision of this
Agreement relating to the payment of any amounts due and owing under the Loan
Documents provides that such payments shall be made by Borrower to the Agent for
the account of the Banks, Borrower's obligations to the Banks in respect of such
payments shall be deemed to be satisfied upon the making of such payments to the
Agent in the manner provided by this Agreement.
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Article 11
MISCELLANEOUS
-------------
11.1 Cumulative Remedies; No Waiver. The rights, powers,
privileges and remedies of the Agent and the Banks provided herein or in any
Note or other Loan Document are cumulative and not exclusive of any right,
power, privilege or remedy provided by Law or equity. No failure or delay on the
part of the Agent or any Bank in exercising any right, power, privilege or
remedy may be, or may be deemed to be, a waiver thereof; nor may any single or
partial exercise of any right, power, privilege or remedy preclude any other or
further exercise of the same or any other right, power, privilege or remedy. The
terms and conditions of Article 8 hereof are inserted for the sole benefit of
the Agent and the Banks; the same may be waived in whole or in part, with or
without terms or conditions, in respect of any Loan without prejudicing the
Agent's or the Banks' rights to assert them in whole or in part in respect of
any other Loan.
11.2 Amendments; Consents. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Majority Banks (and, in the case of
any amendment, modification or supplement of or to any Loan Document to which
Borrower is a Party, signed by Borrower), and then only in the specific instance
and for the specific purpose given; and, without the approval in writing of all
the Banks, no amendment, modification, supplement, termination, waiver or
consent may be effective:
(a) To amend or modify (i) the amount or payment terms of
principal or interest payable on the Notes, (ii) the amount of the
Commitments, (iii) the amount or payment terms of any commitment or other
fee or amount payable to the Banks generally under the Loan Documents;
(b) To extend the term of the Commitments or to release a
guarantor under the Subsidiary Guaranty (except as provided in Section
5.10);
(c) To amend the provisions of the definition of "Majority
Banks", Section 9.2(d), 10.3, 11.2, 11.9 or 11.10; or
(d) To amend any provision of this Agreement that expressly
requires the consent or approval of all the Banks.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 11.2 shall apply equally to, and shall be binding upon, all the
Banks and the Agent. The provisions of Article 10 and the provisions of the Loan
Documents dealing with the rights and responsibilities of the Agent may not be
amended without the consent of the Agent.
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11.3 Costs, Expenses and Taxes. Borrower shall pay within five (5)
Banking Days after demand, accompanied by an invoice therefor, the reasonable
costs and expenses of the Agent in connection with the negotiation, preparation,
syndication, execution and delivery of the Loan Documents and any amendment
thereto or waiver thereof. Borrower shall also pay on demand, accompanied by an
invoice therefor, the reasonable costs and expenses of the Agent and the Banks
in connection with the refinancing, restructuring, reorganization (including a
bankruptcy reorganization) and enforcement or attempted enforcement of the Loan
Documents, and any matter related thereto. The foregoing costs and expenses
shall include filing fees, recording fees, title insurance fees, appraisal fees,
search fees, and other out-of-pocket expenses and the reasonable fees and
out-of-pocket expenses of any legal coun sel (including allocated costs of
in-house legal counsel employed by the Agent or any Bank), independent public
accountants and other outside experts retained by the Agent or any Bank, whether
or not such costs and expenses are incurred or suffered by the Agent or any Bank
in connection with or during the course of any bankruptcy or insolvency
proceedings of Borrower or any Subsidiary thereof. Such costs and expenses shall
also include, in the case of any amendment or waiver of any Loan Document
requested by Borrower, the administrative costs of the Agent reasonably
attributable thereto. Borrower shall pay any and all documentary and other
taxes, excluding, in the case of each Bank, the Agent, and each Eligible
Assignee, and any Affiliate or Eurodollar Lending Office thereof, (i) taxes
imposed on or measured in whole or in part by its overall net income, gross
income or gross receipts or capital and franchise taxes imposed on its by (A)
any jurisdiction (or political subdivision thereof) in which it is organized or
maintains its principal office or Eurodollar Lending Office or (B) any
jurisdiction (or political subdivision thereof) in which it is "doing business"
(unless it would not be doing business in such jurisdiction (or political
subdivision thereof) absent the transactions contemplated hereby), (ii) any
withholding taxes or other taxes based on gross income imposed by the United
States of America (other than withholding taxes and taxes based on gross income
resulting from or attributable to any change in any law, rule or regulation or
any change in the interpretation or administration of any law, rule or
regulation by any governmental authority) or (iii) any withholding taxes or
other taxes based on gross income imposed by the United States of America for
any period with respect to which it has failed to provide Borrower with the
appropriate form or forms required by Section 11.19, to the extent such forms
are then required by applicable Laws, and all costs, expenses, fees and charges
payable or determined to be payable in connection with the filing or recording
of this Agreement, any other Loan Document or any other instrument or writing to
be delivered here under or thereunder, or in connection with any transaction
pursuant hereto or thereto, and shall reimburse, hold harmless and indemnify the
Agent and the Banks from and against any and all loss, liability or legal or
other expense with respect to or resulting from any delay in paying or failure
to pay any such tax, cost, expense, fee or charge or that any of them may suffer
or incur by reason of the failure of any Party to perform any of its
Obligations. Any amount payable to the Agent or any Bank under this Section 11.3
shall bear interest from the tenth day following the date of demand for payment
at the Default Rate.
11.4 Nature of Banks' Obligations. The obligations of the Banks
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other
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Loan Document and no action taken by the Agent or the Banks or any of them
pursuant hereto or thereto may, or may be deemed to, make the Banks a
partnership, an association, a joint venture or other entity, either among
themselves or with Borrower or any Affiliate of Borrower. Each Bank's obligation
to make any Advance pursuant hereto is several and not joint or joint and
several. A default by any Bank will not increase the Pro Rata Share of the
Commitments attributable to any other Bank. Any Bank not in default may, if it
desires, assume in such proportion as the nondefaulting Banks agree the
obligations of any Bank in default, but is not obligated to do so. The Agent
agrees that it will use its best efforts either to induce the other Banks to
assume the obligations of a Bank in default or to obtain another Bank,
reasonably satisfactory to Borrower, to replace such a Bank in default.
11.5 Survival of Representations and Warranties. All
representations and warranties contained herein or in any other Loan Document,
or in any certificate or other writing delivered by or on behalf of any one or
more of the Parties to any Loan Document, will survive the making of the Loans
hereunder and the execution and delivery of the Notes, and have been or will be
relied upon by the Agent and each Bank, notwithstanding any investigation made
by the Agent or any Bank or on their behalf.
11.6 Notices. Except as otherwise expressly provided in the Loan
Documents, all notices, requests, demands, directions and other communications
provided for hereunder or under any other Loan Document must be in writing and
must be mailed, telegraphed, telecopied or delivered to the appropriate party at
the address set forth on the signature pages of this Agreement or other
applicable Loan Document or, as to any party to any Loan Document, at any other
address as may be designated by it in a written notice sent to all other parties
to such Loan Document in accordance with this Section 11.6. Except as otherwise
expressly provided in any Loan Document, if any notice, request, demand, direc
tion or other communication required or permitted by any Loan Document is given
by mail it will be effective on the earlier of receipt or the third calendar day
after deposit in the United States mail with first class or airmail postage
prepaid; if given by telegraph or cable, when delivered to the telegraph company
with charges prepaid; if given by telecopier, when sent; or if given by personal
delivery (including delivery by courier), when delivered. If a notice is being
given of the occurrence of a Default or Event of Default, the Person giving the
notice shall use reasonable efforts to either give or supplement such notice
with a notice by telecopy.
11.7 Execution of Loan Documents. Unless the Agent otherwise
specifies with respect to any Loan Document, (a) this Agreement and any other
Loan Document may be executed in any number of counterparts and any party hereto
or thereto may execute any counterpart, each of which when executed and
delivered will be deemed to be an original and all of which counterparts of this
Agreement or any other Loan Document, as the case may be, when taken together
will be deemed to be but one and the same instrument and (b) execution of any
such counterpart may be evidenced by a telecopier transmission of the signature
of such party. The execution of this Agreement or any other Loan Document by any
party hereto or thereto will not become effective until counterparts hereof or
thereof, as the case may be, have been executed by all the parties hereto or
thereto.
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11.8 Binding Effect; Assignment.
(a) This Agreement and the other Loan Documents to which
Borrower is a Party will be binding upon and inure to the benefit of
Borrower, the Agent, the Co-Agent, each of the Banks, and their
respective successors and assigns, except that Borrower may not assign
its rights or responsibilities hereunder or thereunder or any interest
herein or therein without the prior written consent of all the Banks.
Each Bank represents that it is not acquiring its Note with a view to the
distribution thereof within the meaning of the Securities Act of 1933, as
amended (subject to any requirement that disposition of such Note must be
within the control of such Bank). Any Bank may at any time pledge its
Note or any other instrument evidencing its rights as a Bank under this
Agreement to a Federal Reserve Bank, but no such pledge shall release
that Bank from its obligations hereunder or grant to such Federal Reserve
Bank the rights of a Bank hereunder absent foreclosure of such pledge.
(b) From time to time following the Closing Date, each Bank
may assign to one or more Eligible Assignees a portion of its Pro Rata
Share of the Commitments; provided that (i) in no event shall an
assignment be made that would reduce the remaining Pro Rata Share of the
Commitment held by the assigning Bank below $10,000,000 (ii) such
Eligible Assignee shall be subject to the prior reasonable approval of
the Agent and Borrower, (iii) such assignment shall be evidenced by a
Commitment Assignment and Acceptance, a copy of which shall be furnished
to the Agent as hereinbelow provided, (iv) the assignment shall not
assign a Pro Rata Share of the Commitments equivalent to less than
$10,000,000, (v) any such assignment must be made pro-rata with respect
to the Line A and Line B Commitments, and (vi) the effective date of any
such assignment shall be as specified in the Commitment Assignment and
Acceptance, but not earlier than the date which is five (5) Banking Days
after the date the Agent has received the Commitment Assignment and Accep
tance. Upon the effective date of such Commitment Assignment and
Acceptance, the Eligible Assignee named therein shall be a Bank for all
purposes of this Agreement, with the Pro Rata Share of the Commitments
therein set forth and, to the extent of such Pro Rata Share, the
assigning Bank shall be released from its further obligations under this
Agreement. Borrower agrees that it shall execute and deliver (against
delivery by the assigning Bank to Borrower of its Notes) to such assignee
Bank, Notes evidencing that assignee Bank's Pro Rata Share of the Line A
and Line B Commitments, and to the assigning Bank, Notes evidencing the
remaining balance Pro Rata Share retained by the assigning Bank. Other
than as specifically permitted under Sections 11.8(a), 11.8(b), or
11.8(e), or as may be approved by the Majority Banks, no Bank shall be
permitted to assign or otherwise transfer (including by participation)
its interest in the Commitments, any Loan or any of the Loan Documents.
(c) By executing and delivering a Commitment Assignment and
Acceptance, the Eligible Assignee thereunder acknowledges and agrees
that: (i) other
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than the representation and warranty that it is the legal and beneficial
owner of the Pro Rata Share of the Commitments being assigned thereby
free and clear of any adverse claim, the assigning Bank has made no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection
with this Agreement or the execution, legality, validity, enforceability,
genuineness or sufficiency of this Agreement or any other Loan Document;
(ii) the assigning Bank has made no representation or warranty and
assumes no responsibility with respect to the financial condition of
Borrower or the performance by Borrower of the Obligations; (iii) it has
received a copy of this Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 7.1 and such
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Commitment Assignment
and Acceptance; (iv) it will, independently and without reliance upon the
Agent, the Co-Agent or any Bank 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; (v) it appoints and authorizes the Agent to take such action
and to exercise such powers under this Agreement as are delegated to the
Agent by this Agreement; and (vi) it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement
are required to be performed by it as a Bank.
(d) The Agent shall maintain at the Agent's Office a copy of
each Commitment Assignment and Acceptance delivered to it. After receipt
of a completed Commitment Assignment and Acceptance executed by any Bank
and an Eligible Assignee, and receipt of an assignment fee of $2,500 from
such Eligible Assignee, Agent shall, promptly following the effective
date thereof, provide to Borrower and the Banks a revised Schedule 1.1
giving effect thereto.
(e) Each Bank may from time to time grant participations to
a commercial bank Affiliate of such Bank in a portion of its Pro-Rata
Share of the Commitments; provided, however, that (i) such Bank's
obligations under this Agreement shall remain unchanged, (ii) such Bank
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks or other
financial institutions shall not be a Bank hereunder for any purposes
except, if the participation agreement so provides, for the purposes of
Sections 3.5, 3.6, 11.10 and 11.21, (iv) Borrower, the Agent and the
other Banks shall continue to deal solely and directly with such Bank in
connection such Bank's rights and obligations under this Agreement and
(v) the holder of such participation shall not be provided under its
participation agreement with consent or approval rights with respect to
any matters concerning the Loan Documents or the Loans except for those
matters designated as requiring the consent or approval of all of the
Banks under Section 11.2.
11.9 Sharing of Setoffs. Each Bank severally agrees that if it,
through the exercise of any right of setoff, banker's lien or counterclaim
against Borrower, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Bank,
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through any means, receives in payment of the Obligations held by that Bank,
then, subject to applicable Laws: (a) The Bank exercising the right of setoff,
banker's lien or counterclaim or otherwise receiving such payment shall
purchase, and shall be deemed to have simultaneously purchased, from the other
Bank a participation in the Obligations held by the other Bank and shall pay to
the other Bank a purchase price in an amount so that the share of the
Obligations held by each Bank after the exercise of the right of setoff,
banker's lien or counterclaim or receipt of payment shall be in the same
proportion that existed prior to the exercise of the right of setoff, banker's
lien or counterclaim or receipt of payment; and (b) Such other adjustments and
purchases of participations shall be made from time to time as shall be
equitable to ensure that all of the Banks share any payment obtained in respect
of the Obligations ratably in accordance with each Bank's share of the
Obligations immediately prior to, and without taking into account, the payment;
provided that, if all or any portion of a disproportionate payment obtained as a
result of the exercise of the right of setoff, banker's lien, counterclaim or
otherwise is thereafter recovered from the purchasing Bank by Borrower or any
Person claiming through or succeeding to the rights of Borrower, the purchase of
a participation shall be rescinded and the purchase price thereof shall be
restored to the extent of the recovery, but without interest. Each Bank that
purchases a participation in the Obligations pursuant to this Section 11.9 shall
from and after the purchase have the right to give all notices, requests,
demands, directions and other communications under this Agree ment with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Bank were the original owner of the Obligations purchased.
11.10 Indemnity by Borrower. Borrower agrees to indemnify, save
and hold harmless the Agent, the Co-Agent and each Bank and their directors,
officers, agents, and employees (collectively the "Indemnitees") from and
against: (a) Any and all claims, demands, actions or causes of action (except a
claim, demand, action, or cause of action for any amount excluded from the
definition of "Taxes" in Section 3.10(c)) if the claim, demand, action or cause
of action arises out of or relates to any act or omission (or alleged act or
omission) of Borrower, its Affiliates or any of its officers, directors or
shareholders relating to the Commitments, the use or contemplated use of
proceeds of any Loan, or the relationship of Borrower and the Banks under this
Agreement; (b) Any administrative or investigative proceeding by any
Governmental Agency arising out of or related to a claim, demand, action or
cause of action described in clause (a) above; and (c) Any and all liabilities,
losses, costs or expenses (including attorneys' fees and the allocated costs of
attorneys employed by any Indemnitee and disbursements of such attorneys and
other professional services) that any Indemnitee suffers or incurs as a result
of the assertion of any foregoing claim, demand, action or cause of action;
provided that no Indemnitee shall be entitled to indemnification for any loss
caused by its own gross negligence or willful misconduct or for any loss
asserted against it by another Indemnitee. If any claim, demand, action or cause
of action is asserted against any Indemnitee, such Indemnitee shall promptly
notify Borrower, but the failure to so promptly notify Borrower shall not affect
Borrower's obligations under this Section unless such failure materially
prejudices Borrower's right to participate in the contest of such claim, demand,
action or cause of action, as hereinafter provided. Such Indemnitee may (and
shall, if requested by Borrower in writing) contest the validity, applicability
and amount of such
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claim, demand, action or cause of action and shall permit Borrower to
participate in such contest. Any Indemnitee that proposes to settle or
compromise any claim or proceeding for which Borrower may be liable for payment
of indemnity hereunder shall give Borrower written notice of the terms of such
proposed settlement or compromise reasonably in advance of settling or
compromising such claim or proceeding and shall obtain Borrower's prior consent
(which shall not be unreasonably withheld). In connection with any claim,
demand, action or cause of action covered by this Section 11.10 against more
than one Indemnitee, all such Indemnitees shall be represented by the same legal
counsel (which may be a law firm engaged by the Indemnitees or attorneys
employed by an Indemnitee or a combination of the foregoing) selected by the
Indemnitees and reasonably acceptable to Borrower; provided, that if such legal
counsel determines in good faith that representing all such Indemnitees would or
could result in a conflict of interest under Laws or ethical principles
applicable to such legal counsel or that a defense or counterclaim is available
to an Indemnitee that is not available to all such Indemnitees, then to the
extent reasonably necessary to avoid such a conflict of interest or to permit
unqualified assertion of such a defense or counterclaim, each Indemnitee shall
be entitled to separate representation by legal counsel selected by that
Indemnitee and reasonably acceptable to Borrower, with all such legal counsel
using reasonable efforts to avoid unnecessary duplication of effort by counsel
for all Indemnitees; and further provided that the Agent (as an Indemnitee)
shall at all times be entitled to representation by separate legal counsel
(which may be a law firm or attorneys employed by the Agent or a combination of
the foregoing). Any obligation or liability of Borrower to any Indemnitee under
this Section 11.10 shall survive the expiration or termination of this Agreement
and the repayment of all Loans and the payment and performance of all other
Obligations owed to the Banks.
11.11 Nonliability of the Banks. Borrower acknowledges and agrees
that:
(a) Any inspections of any Property of Borrower made by or
through the Agent or the Banks are for purposes of administration of the
Loan only and Borrower is not entitled to rely upon the same (whether or
not such inspections are at the expense of Borrower);
(b) By accepting or approving anything required to be
observed, performed, fulfilled or given to the Agent or the Banks
pursuant to the Loan Documents, neither the Agent nor the Banks shall be
deemed to have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the same, or of any term, provision or
condition thereof, and such acceptance or approval thereof shall not
constitute a warranty or representation to anyone with respect thereto by
the Agent or the Banks;
(c) The relationship between Borrower, on the one hand, and
the Agent, the Co-Agent and/or any of the Banks, on the other, is, and
shall at all times remain, solely that of a borrower and lenders; neither
the Agent, the Co-Agent nor the Banks shall under any circumstance be
construed to be partners or joint venturers of Borrower or its
Affiliates; neither the Agent, the Co-Agent nor the Banks shall under any
circumstance be deemed to be in a relationship of confidence (other than
as specified in
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Section 11.22) or trust or a fiduciary relationship with Borrower or its
Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates;
neither the Agent, the Co-Agent nor the Banks undertake or assume any
responsibility or duty to Borrower or its Affiliates to select, review,
inspect, supervise, pass judgment upon or inform Borrower or its
Affiliates of any matter in connection with their Property or the
operations of Borrower or its Affiliates; Borrower and its Affiliates
shall rely entirely upon their own judgment with respect to such matters;
and any review, inspection, supervision, exercise of judgment or supply
of information undertaken or assumed by the Agent, the Co-Agent or the
Banks in connection with such matters is solely for the protection of the
Agent, the Co-Agent and the Banks and neither Borrower nor any other
Person is entitled to rely thereon; and
(d) Neither the Agent, the Co-Agent nor the Banks shall be
responsible or liable to any Person for any loss, damage, liability or
claim of any kind relating to injury or death to Persons or damage to
Property caused by the actions, inaction or negligence of Borrower and/or
its Affiliates and Borrower hereby indemnifies and holds the Agent, the
Co-Agent and the Banks harmless from any such loss, damage, liability or
claim.
11.12 No Third Parties Benefited. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrower, the Agent, the Co-Agent and the Banks in connection with the Loans,
and is made for the sole benefit of Borrower, the Agent, the Co-Agent and the
Banks, and the Agent's, the Co-Agent's and the Banks' successors and assigns.
Except as provided in Sections 11.8 and 11.10, no other Person shall have any
rights of any nature hereunder or by reason hereof.
11.13 Further Assurances. Borrower and its Subsidiaries shall, at
their expense and without expense to the Banks or the Agent, do, execute and
deliver such further acts and documents as any Bank or the Agent from time to
time reasonably requires for the assuring and confirming unto the Banks or the
Agent of the rights hereby created or intended now or hereafter so to be, or for
carrying out the intention or facilitating the performance of the terms of any
Loan Document.
11.14 Integration. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict between the provisions
of this Agreement and those of any other Loan Docu ment, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
rights or remedies in favor of the Agent or the Banks in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
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11.15 Governing Law. Except to the extent otherwise provided
therein, each Loan Document shall be governed by, and construed and enforced in
accordance with, the local Laws of California.
11.16 Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable or invalid as to any
party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions
or the operation, enforceability or validity of that provision as to any other
party or in any other jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
11.17 Headings. Article and Section headings in this Agreement and
the other Loan Documents are included for convenience of reference only and are
not part of this Agreement or the other Loan Documents for any other purpose.
11.18 Time of the Essence. Time is of the essence of the Loan
Documents.
11.19 Foreign Banks. Each Bank that is incorporated under the Laws
of a jurisdiction other than the United States of America or any state thereof
shall deliver to Borrower (with a copy to the Agent), within twenty days after
the Closing Date (or after accepting an assignment interest herein pursuant to
Section 11.8, if applicable) two duly completed copies, signed by a Responsible
Official, of either Form 1001 (relating to such Person and entitling it to a
complete exemption from withholding on all payments to be made to such Person by
Borrower pursuant to this Agreement) or Form 4224 (relating to all payments to
be made to such Person by Borrower pursuant to this Agreement) of the United
States Internal Revenue Service or such other evidence (including, if reasonably
necessary, Form W-9) satisfactory to Borrower and the Agent that no withholding
under the federal income tax laws is required with respect to such Person.
Thereafter and from time to time, each such Person shall (a) promptly submit to
Borrower (with a copy to the Agent), such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to Borrower and the Agent of any available
exemption from, United States withholding taxes in respect of all payments to be
made to such Person by Borrower pursuant to this Agreement and (b) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Bank, and as may be reasonably necessary (including the
re-designation of its Eurodollar Lending Office, if any) to avoid any
requirement of applicable laws that Borrower make any deduction or withholding
for taxes from amounts payable to such Person.
11.20 Hazardous Material Indemnity. Borrower hereby agrees to
indemnify, hold harmless and defend (by counsel reasonably satisfactory to the
Agent) the Agent, the Co-Agent and each of the Banks and their respective
directors, officers, employees, agents, successors and assigns from and against
any and all claims, losses, damages, liabilities, fines,
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penalties, charges, administrative and judicial proceedings and orders,
judgments, remedial action requirements, enforcement actions of any kind, and
all costs and expenses incurred in connection therewith (including but not
limited to reasonable attorneys' fees and the allocated costs of attorneys
employed by the Agent, the Co-Agent or any Bank, and expenses to the extent that
the defense of any such action has not been assumed by Borrower), arising
directly or indirectly, in whole or in part, out of (i) the presence on or under
any Real Property of any Hazardous Materials, or any releases or discharges of
any Hazardous Materials on, under or from any Real Property and (ii) any
activity carried on or undertaken on or off any Real Property by Borrower or any
of its predecessors in title, whether prior to or during the term of this
Agreement, and whether by Borrower or any predecessor in title or any employees,
agents, contractors or subcontractors of Borrower or any predecessor in title,
or any third persons at any time occupying or present on any Real Property, in
connection with the handling, treatment, removal, storage, decontamination,
clean-up, transport or disposal of any Hazardous Materials at any time located
or present on or under any Real Property. The foregoing indemnity shall further
apply to any residual contamination on or under any Real Property, or affecting
any natural resources, and to any contamination of any property or natural
resources arising in connection with the generation, use, handling, storage,
transport or disposal of any such Hazardous Materials, and irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable Laws, but the foregoing indemnity shall not apply to Hazardous
Materials on any Real Property, the presence of which is caused solely by the
Agent, the Co-Agent or the Banks. Borrower hereby acknowledges and agrees that,
notwithstanding any other provision of this Agreement or any of the other Loan
Documents to the contrary, the obligations of Borrower under this Section shall
be unlimited personal corporate obligations of Borrower and shall not be secured
by any deed of trust on any Real Property.
11.21 Reference to Arbitration.
(a) Mandatory Arbitration. Any controversy or claim between
any Party or group of Parties, on the one hand, and the Agent, the
Co-Agent or any Bank, or any group thereof, on the other hand, including
but not limited to those arising out of or relating to this Agreement or
any agreements or instruments relating hereto or delivered in connection
herewith and any claim based on or arising from an alleged tort, shall at
the request of any party be determined by arbitration. The arbitration
shall be conducted in accordance with the United States Arbitration Act
(Title 9, U.S. Code), notwithstanding any choice of law provision in this
Agreement, and under the Commercial Rules of the American Arbitration
Association ("AAA"). The arbitrators shall give effect to statutes of
limitation in determining any claim. Any controversy concerning whether
an issue is arbitrable shall be determined by the arbitrators. Judgment
upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial
relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff,
to submit the controversy or claim to arbitration if any other party
contests such action for judicial relief.
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(b) Real Property Collateral. Should real property
collateral hereafter be taken by the Banks to secure the Obligations,
then, notwithstanding the provisions of Section 11.21(a), no controversy
or claim shall be submitted to arbitration without the consent of all
parties if, at the time of the proposed submission, such controversy or
claim arises from or relates to an obligation to the Bank which is
secured by such real property collateral. If all parties do not consent
to submission of such a controversy or claim to arbitration, the
controversy or claim shall be determined as provided in Section 11.21(c).
(c) Judicial Reference. A controversy or claim which is not
submitted to arbitration as provided and limited in Sections 11.21(a) and
(b) shall, at the request of any party, be determined by a reference in
accordance with California Code of Civil Procedure Sections 638 et seq.
If such an election is made, the parties shall designate to the court a
referee or referees selected under the auspices of the AAA in the same
manner as arbitrators are selected in AAA-sponsored proceedings. The
presiding referee of the panel, or the referee if there is a single
referee, shall be an active attorney or retired judge. Judgment upon the
award rendered by such referee or referees shall be entered in the court
in which such proceeding was commenced in accordance with California Code
of Civil Procedure Sections 644 and 645.
(d) Provisional Remedies, Self-Help and Foreclosure. No
provision of this Section 11.21 shall limit the right of any party to
this Agreement to exercise self-help remedies such as setoff, to
foreclose against collateral or to obtain provisional or ancillary
remedies from a court of competent jurisdiction before, after, or during
the pendency of any arbitration or other proceeding. The exercise of a
remedy does not waive the right of any party to resort to arbitration or
reference. Should real property collateral hereafter be taken by the
Banks to secure the Obligations, then, at the Banks' option, foreclosure
under any deed of trust or mortgage may be accomplished either by
exercise of power or sale under the deed of trust or mortgage or by
judicial foreclosure.
11.22 Confidentiality. Each Bank agrees to hold any confidential
information that it may receive from Borrower or Agent pursuant to this
Agreement in confidence, except for disclosure: (a) To other Banks; (b) To legal
counsel and accountants or other professional advisors to Borrower or any Bank,
provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section 11.22; (c) To
regulatory officials having jurisdiction over that Bank; (d) As required by Law
or legal process or in connection with any legal proceeding to which that Bank
is involved and that relates in some manner to the Loan Documents; and (e) To
another financial institution in connection with a disposition or proposed
disposition to that financial institution of all or part of that Bank's
interests hereunder or a participation interest in one of its Notes, provided
that the recipient has accepted such information subject to a confidentiality
agreement substantially similar to this Section 11.22. For purposes of the
foregoing, "confidential information" shall mean the Strategic Plan, the
information provided pursuant to
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Section 7.1(c) and any other written information respecting Borrower or its
Subsidiaries provided to the applicable Bank and designated thereon to be
confidential, other than (i) information previously filed with any Governmental
Agency and available to the public, (ii) information previously published in any
public medium from a source other than, directly or indirectly, that Bank, and
(iii) information disclosed by Borrower to any Person not associated with
Borrower without a confidentiality agreement substantially similar to this
Section 11.22. Nothing in this Section shall be construed to create or give rise
to any fiduciary duty on the part of the Agent or the Banks to Borrower.
11.23 Co-Agent. Each Bank acknowledges that it has not relied, and
will not rely, upon the Co-Agent in deciding to enter into this Agreement or in
taking or not taking any action hereunder. The Co-Agent shall have no right,
power, obligation, liability, responsibility or duty under this Agreement or the
other Loan Documents other than those applicable to all Banks and in its
capacity as such.
11.24 Purported Oral Amendments. BORROWER EXPRESSLY ACKNOWLEDGES
THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR
MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN
INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2. BORROWER AGREES THAT IT
WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR
WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE AGENT OR ANY BANK THAT DOES NOT
COMPLY WITH SECTION 11.2 TO EFFECT AN
-95-
AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
▇▇▇ ▇▇▇▇ CORPORATION BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President ---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
---------------------------------
Address: Printed Name and Title
▇▇▇ ▇▇▇▇ Corporation Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank of America National Trust and
Attn: Treasurer Savings Association
CRESG-L.A. - Unit #1357
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to: Vice President
▇▇▇ ▇▇▇▇ Corporation Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, NA, as the BANK OF AMERICA NATIONAL
Co-Agent TRUST AND SAVINGS ASSOCIATION,
as a Bank
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Vice Pres.
--------------------------------- By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice Pres.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Vice Pres. --------------------------------
--------------------------------- ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice Pres.
Printed Name and Title --------------------------------
Printed Name and Title
Address:
Address:
Bank One, Arizona, NA
Bank One Center Bank of America National Trust and
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ Savings Association
Mail Code A21-1321 CRES Homebuilder-L.A. ▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
BANK ONE, ARIZONA, NA, as a Bank
GUARANTY FEDERAL BANK, F.S.B.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Vice Pres.
---------------------------------- By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Vice Pres. --------------------------------
--------------------------- ▇▇▇▇▇▇▇ ▇. ▇▇▇▇/ Vice President
Printed Name and Title --------------------------------
Printed Name and Title
Address:
Address:
Bank One, Arizona, NA
Bank One Center Guaranty Federal Bank, F.S.B.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ Residential Real Estate Lending
Mail Code A21-1321 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-97-
BANKBOSTON, N.A. (formerly known as FIRST UNION NATIONAL BANK
The First National Bank of Boston) (formerly known as First Union National
Bank of North Carolina)
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------- By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Vice Pres. ---------------------------
-------------------------- R. ▇▇▇▇▇▇ ▇▇▇▇/Vice Pres.
Printed Name and Title ---------------------------
Printed Name and Title
Address:
Address:
BankBoston, N.A.
Real Estate Development First Union National Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ Suite 500 One First ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
Attn: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Vice President Attn: Mr. R. ▇▇▇▇▇▇ ▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
CREDIT LYONNAIS
LOS ANGELES BRANCH BANK OF HAWAII
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------- -------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ VP & Manager ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice Pres.
---------------------------- -------------------------------
Printed Name and Title Printed Name and Title
Address: Address:
Credit Lyonnais Los Angeles Branch Bank of Hawaii, Arizona
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ c/o Pacific Century Bank
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-98-
FLEET NATIONAL BANK M&I THUNDERBIRD BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, V.P. ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- Executive Vice President
Printed Name and Title ---------------------------
Printed Name and Title
Address:
Fleet National Bank By: /s/ ▇▇▇▇▇▇▇▇ ▇. Treat
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ---------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇. Treat
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Vice President
---------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Printed Name and Title
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Address:
NATIONSBANK, N.A. (formerly known M&I Thunderbird Bank
as NationsBank, N.A. (Carolinas)) ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇ Treat
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Vice President
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, SVP Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
----------------------------- Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Printed Name and Title
Address:
NationsBank, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇ ▇▇▇▇▇
Senior Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇ ▇▇▇▇ ARIZONA,
National Association
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ COMERICA BANK
----------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ Vice President
---------------------------- By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Printed Name and Title ---------------------------------
Address: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Acctount Officer
---------------------------------
Norwest Bank Arizona, Printed Name and Title
National Association Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Comerica Bank
Attn: Mr. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Vice President Detroit, Michigan 48226-3256
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
PNC BANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President
---------------------------
Printed Name and Title
Address:
PNC Bank, N.A.
Two Tower Center
Real Estate Banking Group, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇-▇▇▇▇-▇▇-▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-100-