Exhibit 10.29
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
September 30, 1998
Among
NVR, INC., as Borrower
and
CERTAIN BANKS
and
BANKBOSTON, N.A., as Agent
for itself and certain Banks
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is
made as of September 30, 1998, by and among (i) NVR, INC. ("Borrower"), a
corporation organized and existing under the laws of Virginia having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
(ii) BANKBOSTON, N.A. ("BKB"), having its principal place of business at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (iii) certain other lending
institutions which are signatories hereto (BKB and such lending institutions are
individually each a "Bank" and, collectively the "Banks") and (iv) BANKBOSTON,
N.A., as agent (in its capacity as agent, the "Agent") for itself and the Banks.
W I T N E S S E T H:
WHEREAS, Borrower, NVR Homes, Inc. ("NVR Homes"), certain lending
institutions and BKB, as Agent, entered into that certain Credit and Security
Agreement dated as of September 30, 1993, as amended by that certain First
Amendment dated as of April 28, 1994, that certain Second Amendment dated as of
September 13, 1994, and that certain Third Amendment dated as of November 1,
1994 (collectively, the "Original Credit Agreement"); and
WHEREAS, Borrower, NVR Homes, certain lending institutions and BKB, as
Agent, entered into that certain Amended and Restated Credit and Security
Agreement dated as of May 5, 1995; as amended and modified by that certain First
Modification of Amended and Restated Credit and Security Agreement, dated as of
January 16, 1996; by that certain Second Modification of Amended and Restated
Credit and Security Agreement, dated as of May 16, 1996; by that certain Third
Modification of Amended and Restated Credit and Security Agreement, dated as of
December 31, 1996; by that certain Fourth Modification of Amended and Restated
Credit and Security Agreement, dated as of June 19, 1997; by that certain Fifth
Modification of Amended and Restated Credit and Security Agreement, dated as of
October 30, 1997; by that certain Sixth Modification of Amended and Restated
Credit and Security Agreement, dated as of January 29, 1998; and by that certain
Seventh Modification of Amended and Restated Credit and Security Agreement,
dated as of April 3, 1998 (the Amended and Restated Credit and Security
Agreement, as so amended, is hereinafter referred to as the "Credit Agreement");
and
WHEREAS, Borrower, NVR Homes, certain lending institutions and BKB, as
Agent, entered into that certain Second Amended and Restated Credit Agreement
dated as of June 19, 1998 (the "Second Amended and Restated Agreement"); and
WHEREAS, Borrower acknowledges and agrees that (a) the Obligations (as
defined herein) represent, among other things, the amendment, restatement and
modifications of the Obligations (as defined in the Credit Agreement) arising in
connection with the Original Credit Agreement, the Credit Agreement, the Second
Amended and Restated Agreement and the other Loan Documents (as defined in the
Credit Agreement) executed in connection therewith, and (b) the Loan Documents
(as defined herein) are intended to restructure, restate, renew, extend,
consolidate, expand, amend and modify the original Credit Agreement, the Credit
Agreement, the Second Amended and Restated Agreement and the other Loan
Documents (as defined in the original Credit Agreement) executed in connection
therewith; and
WHEREAS, the parties hereto intend that the provisions of the Original
Credit Agreement, the Credit Agreement, the Second Amended and Restated
Agreement and the other Loan Documents (as defined in the Credit Agreement)
executed in connection therewith, to the extent restructured, restated, renewed,
expanded, extended, consolidated, amended and modified by this agreement are
hereby superseded and replaced by the provisions hereof and of the Loan
Documents (as defined herein), but irrespective of such changes, this Agreement
and the Loan Documents (as defined herein) shall in all respects be considered
and treated as (i) "Senior Bank Indebtedness" for all purposes as that term is
defined in the Original Indenture (as defined herein) for the 1993 Senior Notes
(as defined herein) and (ii) a "Bank Credit Facility" for all purposes as that
term is defined in the New Indenture (as defined herein); and
WHEREAS, Borrower has requested that the Banks (a) continue to finance the
working capital requirements of Borrower and (b) provide funds to Borrower for
other corporate purposes; and
WHEREAS, the Banks are willing to make funds available for such purposes
upon the terms and subject to the conditions set forth herein; and
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WHEREAS, Borrower has requested that the Agent commit to provide Borrower
with letters of credit for general corporate purposes and the Agent is willing
to issue credit upon the terms and subject to the conditions contained herein;
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree that the Credit
Agreement is hereby amended and restated to read in its entirety as follows:
ss.1 DEFINITIONS. The following terms shall have the meanings set forth in this
ss.1 or elsewhere in the provisions of this Agreement referred to below:
1993 Senior Notes. The 11% Senior Notes due April 15, 2003 in an aggregate
principal amount not to exceed $160,000,000 issued by Borrower pursuant to the
Original Indenture.
1998 Senior Notes. The 8% Senior Notes due June 1, 2005 in an aggregate
principal amount not to exceed $175,000,000 issued by Borrower pursuant to the
New Indenture.
Advance or Advances. Those amounts of the Loans advanced by the Banks to
Borrower pursuant to ss.2 hereof on the occasion of any borrowing.
Affiliate. With respect to any Person, any other Person (i) which directly
or indirectly controls, or is controlled by, or is under common control with,
such Person, (ii) which beneficially owns or holds 20% or more of any class of
the voting stock of such Person, or (iii) 20% or more of the voting stock (or in
the case of a Person which is not a corporation, 20% or more of the equity
interest) of which is beneficially owned or held, directly or indirectly, by
such Person. The term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, including the power to elect a majority of the directors or trustees
of a corporation or trust, as the case may be.
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Agent. BankBoston, N.A. and any successor thereto.
Agent's Fee. See ss.4.3.
Aggregate Lot Option Deposits. With respect to any Person as of any date
of determination, the aggregate amount of lot option deposits shown on the books
and records of such Person as of such date, as determined in accordance with
GAAP.
Agreement. This Third Amended and Restated Credit Agreement, including the
schedules and Exhibits hereto, as originally executed, or if this Agreement is
amended, restated, varied or supplemented from time to time, as so amended,
restated, varied or supplemented.
Assignment and Acceptance. See ss.17.1.
Authorized Signatory. Such senior personnel of Borrower as may be duly
authorized and designated in writing by Borrower to execute documents,
agreements and instruments on behalf of Borrower.
Balance Sheet Date. See ss.6.7(a).
Banks. See preamble.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts as its "base
rate" and (b) one-half of one percent (1/2%) above the overnight federal funds
effective rate, as published by the Board of Governors of the Federal Reserve
System, as in effect from time to time, but in no event higher than the maximum
rate permitted by applicable law.
Base Rate Advance. An Advance which Borrower requests to be made as a Base
Rate Advance or which is reborrowed as a Base Rate Advance, in accordance with
the provisions of ss.2.1.5(b) hereof.
BKB. See preamble.
Borrower. See preamble.
Borrowing Base. At any time of determination, an amount equal to the sum
of the following assets of Borrower
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(excluding Fox Ridge and NVRMF): (i) the book value of Sold Units multiplied by
ninety-five percent (95%); plus (ii) the book value of Unsold Units multiplied
by eighty percent (80%); plus (iii) the book value of Manufacturing Materials
multiplied by eighty percent (80%); in each case, as calculated in accordance
with GAAP.
Borrowing Base Report. A report with respect to the Borrowing Base in the
form attached hereto as Exhibit A.
Business Day. Any day on which banking institutions in Boston,
Massachusetts or, with respect to Eurodollar calculations, foreign exchange
markets in New York, New York are not permitted or required by law to remain
closed, as relevant to the determination to be made or the action to be taken.
Capitalized Lease. Any lease under which the obligations of the lessee
therein would, in accordance with GAAP, be included in determining total
liabilities of the lessee as shown on the liability side of its balance sheet.
Cash Equivalent. Any of the Investments listed in ss.9.21(b), (c), (d),
(e), (g), (h) or (q), but, in the case of (q), only to the extent of borrowing
availability at any date of determination under the Warehouse Line.
Closing Date. The effective date of this Agreement as first above written.
Code. The Internal Revenue Code of 1986, as amended and in effect from
time to time. To the extent that reference is made to any particular Section of
the Code, such reference shall be, where the context so admits, to any
corresponding provisions of any succeeding law.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
hereto as the amount of such Bank's commitment to make Loans to Borrower subject
to the terms and conditions of this Agreement as such Schedule may be amended
pursuant to this Agreement.
Commitment Fee. See ss.4.1.
Commitment Percentage. With respect to each Bank, the percentage set forth
in Schedule 1 hereto as such Bank's percentage of the Revolving Credit
Commitment.
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Compliance Certificate. See ss.9.10(d).
Consolidated or Consolidating. With reference to any term used or defined
herein, shall mean that term as applied to the accounts of Borrower and its
Subsidiaries, consolidated in accordance with GAAP.
Consolidated Gross Profit Margin. With respect to any period, the gross
profit margin reported by Borrower and its Subsidiaries in accordance with GAAP.
Consolidated Tangible Net Worth. The Tangible Net Worth of Borrower and
its Subsidiaries as defined herein.
Contract of Sale. A written contract for the sale of a Unit on
arm's-length terms which has been signed by both parties thereto and has been
approved by the division manager of Borrower and which has a firm closing date,
subject only to final financing and good title, has been obtained in good faith
and which Borrower believes will not be canceled for any reason.
Customer Deposit. Any "hand money," "▇▇▇▇▇▇▇ money" or similar deposit
made by any Person to Borrower in connection with the purchase of a Unit.
Daily Eurodollar Advance. An Advance which Borrower requests to be made as
a Daily Eurodollar Advance or which is reborrowed as a Daily Eurodollar Advance
in accordance with the provisions of ss.2.1.5(b).
Daily Eurodollar Rate. The Eurodollar Rate assuming a Eurodollar Advance
Period of thirty (30) days provided that the time of determination shall be on a
daily basis at or approximately 9:00 a.m. local Boston, Massachusetts time.
Debt Service Payments. For any period, all Interest Charges and regularly
scheduled principal payments on any Indebtedness of Borrower and its
subsidiaries (other than NVRMF and its Subsidiaries), net of balloon payments as
determined in accordance with GAAP.
Default. Any event which, but for the giving of notice or the lapse of
time, or both, would constitute an Event of Default.
Delinquent Bank. See ss.12.5(c)
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Distribution. Any of the following: (a) the payment by any Person of any
distributions or other payments to its shareholders or partners as such; (b) the
declaration or payment of any dividend on or in respect of shares of any class
of capital stock of, or partnership interest in, any Person; (c) the purchase or
other retirement of any shares of any class of capital stock of, or partnership
interest in, any Person, directly or indirectly through a Subsidiary or
otherwise; (d) the return of capital by any Person to its shareholders or
partners as such; or (e) any other distribution on or in respect of any shares
of any class of capital stock of, or partnership interest in, any Person.
Drawdown Date. The date on which any Loan is made available to Borrower
pursuant to the provisions hereof.
EBITDA. For any period, without duplication, (i) the sum of the amounts
for such period of (a) Net Income, (b) Interest Charges, (c) charges against
income for all federal, state and local taxes, (d) depreciation expense, (e)
amortization expense, (f) other non-cash charges and expenses and (g) any losses
arising outside of the ordinary course of business which have been included in
the determination of Net Income, less (ii) any gains arising outside of the
ordinary course of business which have been included in the determination of Net
Income, all as determined on a Consolidated basis for Borrower and its
Subsidiaries other than NVRMF and its Subsidiaries in accordance with GAAP.
Eligible Assignee. Any of (a) a commercial bank organized under the laws
of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted accounting
principles; (c) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD); (d) the central bank of any country
which is a member of the OECD; and (e) other commercial
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lending institutions reasonably acceptable to the Agent and Borrower.
ERISA. The Employee Retirement Income Security Act of 1974, as amended
from time to time.
Eurodollar Advance. An Advance which Borrower requests to be made as a
Eurodollar Advance of which is reborrowed as a Eurodollar Advance, in accordance
with the provisions of ss.2.1.5(c) hereof.
Eurodollar Advance Period. For each Eurodollar Advance, each one, two, or
three month period, as selected by Borrower pursuant to ss.2.1.5 (c) hereof,
during which the applicable Eurodollar Rate shall remain unchanged.
Notwithstanding the foregoing, however: (i) any applicable Eurodollar Advance
Period which would otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day, unless such Business Day falls in
another calendar month, in which case such Eurodollar Advance Period shall end
on the preceding Business Day; (ii) any applicable Eurodollar Advance Period
which begins on a day for which there is no numerically corresponding day in the
calendar month during which such Eurodollar Advance Period is to end shall
(subject to clause (i) above) end on the last day of such calendar month; and
(iii) no Eurodollar Advance Period shall extend beyond the Maturity Date or such
earlier date as would interfere with the repayment obligations of Borrower under
ss.2.1.1 hereof. Interest shall be due and payable with respect to any
Eurodollar Advance as provided in ss.2.1.6 (b) hereof.
Eurodollar Basis. A simple per annum interest rate equal to the quotient
of (i) the Eurodollar Rate divided by (ii) one minus the Eurodollar Reserve
Percentage, if any, stated as a decimal. The Eurodollar Basis shall be rounded
upward to the nearest one sixteenth of one percent (1/16%) and, once determined,
shall remain unchanged during the applicable Eurodollar Advance Period, except
for changes to reflect adjustments in the Eurodollar Reserve Percentage.
Eurodollar Rate. For any Eurodollar Advance Period, the average (rounded
upward to the nearest one sixteenth of one percent (1/16%)) of the interest
rates per annum at which deposits in United States dollars for such Eurodollar
Advance Period are offered to prime banks in the New York interbank eurodollar
market on telerate screen page 4756 two
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(2) Business Days before the first day of such Eurodollar Advance Period, in an
amount approximately equal to the principal amount of, and for a length of time
approximately equal to the Eurodollar Advance Period for, the Eurodollar Advance
sought by Borrower. If telerate screen page 4756 is no longer available, such
rate as reported by any internationally recognized reporting service shall be
selected by the Agent or, if no such other service is available, such rate shall
be determined by the Agent based on rate information furnished to it by two or
more banks selected by it which participate in the market for such deposits.
Eurodollar Reserve Percentage. The percentage which is in effect from time
to time under Regulation D of the Board of Governors of the Federal Reserve
System, as such regulation may be amended from time to time, as the maximum
reserve requirement applicable with respect to Eurocurrency Liabilities (as that
term is defined in Regulation DL), whether or not any Bank has any Eurocurrency
Liabilities subject to such reserve requirement at that time. The Eurodollar
Basis for any Eurodollar Advance shall be adjusted as of the effective date by
the same effective basis point change of any change in the Eurodollar Reserve
Percentage.
Event of Default. See ss.10.
Excess Reorganization Value. The reorganization value in excess of amounts
allocable to identifiable assets (as defined by GAAP) and as shown on the
consolidated balance sheet of Borrower.
Finished Lots. Platted lots which have water and sewer service available
at the lot line, which have access to a public street, and for which all permits
necessary for development have been issued.
Fox Ridge. Fox Ridge Homes, Inc., a Tennessee corporation, and its
successors and assigns.
GAAP. Generally Accepted Accounting Principles (as defined below).
Generally Accepted Accounting Principles. Principles which are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting standards Board and its
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predecessors (or successor organizations), and (b) such that a certified public
accountant would, insofar as the use of accounting principles is pertinent, be
in a position to deliver an unqualified opinion as to financial statements in
which such principles have been properly applied, provided, that if any changes
in generally accepted accounting principles with which the Borrower's
independent certified public accountants concur result in a change in the method
of calculation of any of the financial covenants, standards or terms contained
in this Agreement, the parties hereto agree to amend such provisions to reflect
such changes in generally accepted accounting principles so that the criteria
for evaluating the Consolidated financial condition of any Person and its
Subsidiaries, as provided herein, shall be the same after such changes as if
such changes had not been made; and pending the final agreement of the parties
with respect to the foregoing revisions, all such changes in generally accepted
accounting principles will be disregarded for purposes of evaluating the
Borrower's financial condition and compliance with all financial covenants set
forth in this Agreement.
Hazardous Substance. Hazardous Substance(s) shall have the meaning
ascribed to such term in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, the Superfund Amendment and Reauthorization Act of
1986, or The Emergency Planning and Community Right-to-know Act of 1986, each as
amended, and regulations promulgated thereunder.
Indebtedness. For any Person, any of the following:
(i) all indebtedness for borrowed money;
(ii) all indebtedness evidenced by bonds, notes, debentures or
similar instruments;
(iii) indebtedness under letters of credit or reimbursement
agreements in respect thereof;
(iv) indebtedness representing the deferred and unpaid balance of
the purchase price of any property acquired (including
pursuant to Capitalized Leases) or service performed, except
any such balance that represents an accrued expense or trade
payable;
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(v) Rate Hedging Obligations; and
(vi) any guaranty by such Person (other than by endorsement of
negotiable instruments for collection in the ordinary course of
business), direct or indirect, of all or any part of any
Indebtedness described in (i) through (v);
in each case (other than (v) and (vi)) if and to the extend that any of the
foregoing would appear as a liability (or with respect to the reimbursement
indebtedness referenced in (iii) above, a footnote thereto) upon a balance sheet
of such Person prepared in accordance with GAAP.
Interest Charges. For any period, the interest expense of Borrower
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and its Subsidiaries (other than NVRMF and its Subsidiaries) on a Consolidated
basis for such period on all Indebtedness, plus amortization of all Commitment
Fees, Letter of Credit Fees and similar financing charges for such period, all
as determined in accordance with GAAP.
Investments. All expenditures made and all liabilities incurred by any
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Person (contingently or otherwise) for the acquisition of stock or Indebtedness
(excluding Indebtedness incurred or acquired in the ordinary course of business)
of, or for loans, advances, or capital contributions to, or in respect of any
guaranties of Indebtedness (or other commitments as described under
Indebtedness), or obligations in the nature of Indebtedness or securities of,
any other Person.
Letters of Credit. Any and all letters of credit issued or that may be
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issued from time to time by the Agent to secure the performance of certain
undertakings by Borrower, as further described in (S)2.2 of this Agreement.
Letter of Credit Fee. See (S)4.2.
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Loans. Collectively, the Revolving Credit Loans made by the Banks to
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Borrower and all drawings made under the Letters of Credit issued by the Agent
pursuant to this Agreement.
Loan Documents. Collectively, this Agreement, the Revolving Credit
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Notes, the Reimbursement Agreements, and any and all promissory notes or other
agreements,
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instruments or documents delivered or to be delivered in connection with the
Borrower's obligations to the Banks and the Agent pursuant to any of the
foregoing.
Majority Banks. As of any date, the Banks holding at least sixty-six
percent (66%), of the outstanding principal amount of the Revolving Credit Notes
on such date; and if no principal is Outstanding, the Banks whose aggregate
Commitment Percentages total at least sixty-six percent (66%), in each case
including BKB in its capacity as a Bank.
Manufacturing Materials. Any building materials shown as inventory on the
consolidated balance sheet of Borrower.
Maturity Date. See ss.2.1.1.
Maximum Commitment Amount. See ss.3.
Maximum Consolidated Leverage Ratio. See ss.9.9.
Maximum Drawing Amount. The maximum aggregate amount from time to time
which the beneficiaries may draw under outstanding Letters of Credit, as the
same may be reduced from time to time pursuant to the terms of the Letters of
Credit.
Net Income. The net income (or net deficit) of Borrower and its
Subsidiaries on a Consolidated basis, determined in accordance with GAAP
consistently applied.
Net Sales Proceeds. This term shall mean, (i) for any Unit, an amount
equal to the amount shown as due to the seller on the applicable HUD-1 (or
similar) closing statement for such Unit; provided that the closing costs shown
on such HUD-1 (or similar) closing statement shall only include such closing
costs as are ordinarily and customarily charged in the market area in which such
property is located and shall not exceed the amount of closing costs as are
ordinarily and customarily charged in such market area consistent with
Borrower's business practices, and (ii) for any other asset, an amount equal to
the aggregate amount of cash received in connection with any sale, lease,
transfer or other disposition of such asset after deducting therefrom (A)
reasonable and customary brokerage commissions, legal fees, finder's fees and
other similar fees and commissions and (B) the amount of taxes payable by
Borrower in connection with or as a result of
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such transaction, in each case to the extent, but only to the extent, that the
amounts so deducted are actually paid and (C) the portion thereof used to repay
any Indebtedness permitted under this Agreement and secured by any such asset.
Net Worth. The excess of Total Assets over Total Liabilities.
New Indenture. The Indenture dated as of April 14, 1998 between Borrower
and The Bank of New York, as Trustee, as supplemented by the First Supplemental
Indenture dated as of April 14, 1998 among Borrower, NVR Homes, as Subsidiary
Guarantor, and The Bank of New York, as Trustee.
NVRMF. NVR Mortgage Finance, Inc., a Virginia corporation.
NVR Delaware. NVR, Inc., a Delaware corporation.
Obligations. All Indebtedness, obligations and liabilities of Borrower to
the Banks and the Agent, existing on the date of this Agreement or arising
hereafter, direct or indirect, joint or several, absolute or contingent, matured
or unmatured, liquidated or unliquidated, secured or unsecured, now or hereafter
owing or incurred, arising under or in connection with this Agreement, the other
Loan Documents or in respect of Loans made or the Letters of Credit or other
instruments at any time evidencing any of the foregoing, including, without
limitation, any obligation to pay Letter of Credit Fees, and the Agent's fee, to
the extent applicable, which fee is set forth in a letter agreement between the
Agent and Borrower of even date herewith together with all amounts due under
ss.13 hereof.
Original Indenture. Indenture dated as of September 30, 1993, as amended,
among Borrower and NVR Homes, NVR Financial Services, Inc., NVR Delaware and Fox
Ridge, as Joint and Several Guarantors, and IBJ ▇▇▇▇▇▇▇▇ Bank and Trust Company,
as Trustee.
Outstanding. With respect to the Loans, the unpaid principal thereof, as
of any date of determination.
Overline Advance. An advance of all or a portion of the Overline Amount in
accordance with the provisions of ss.3.4.
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇. $10,000,000.00
Patents and Trademarks. The patents, trademarks and other similar
intellectual property subject to the Patents and Trademarks License.
Patents and Trademarks License. The Service ▇▇▇▇ License and Royalty
Agreement dated as of October 1, 1996 between NVR Delaware, as Licensor, and NVR
Homes, as Licensee, as it may be amended from time to time.
Payment Date. The last day of each Eurodollar Advance Period for a
Eurodollar Advance.
Pension Plan. See ss.6.14(a).
Permitted Distributions. Distributions permitted under ss.9.20 hereof.
Permitted Liens. Mortgages, pledges, security interests and other liens
and encumbrances permitted to exist on the property of Borrower and its
Subsidiaries pursuant to ss.9.19.
Person. Any individual, corporation, association, partnership, trust,
unincorporated association, business, or other legal entity, and any government
or any governmental agency or political subdivision thereof.
Pre-Start Costs. All costs incurred by Borrower with respect to a lot
prior to the purchase of such lot by Borrower.
Rate Hedging Obligations. Any and all obligations of a Person, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced
or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions, including, but not
limited to, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options, puts and
warrants, and
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(ii) any and all cancellations, buy backs, reversals, terminations or
assignments of any of the foregoing.
Receivables. The Net Sales Proceeds payable to, but not yet received by,
Borrower following a Unit Closing. All such Net Sales Proceeds must be held by a
title insurance company, a settlement attorney or a law firm escrow account.
Register. See ss.17.3.
Reimbursement Agreement. The applications made and agreements entered into
between the Agent, the Banks and Borrower relating to the Letters of Credit, in
substantially the form attached as Exhibit D hereto, as the same may be amended
and in effect from time to time.
Release. Any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, storing, escaping, leaching, dumping or discharging,
burying, abandoning or disposing into the environment.
Renewal Fee. See ss.4.4.
Request for Advance. Any certificate signed by an Authorized Signatory or
a request by electronic transmission through systems established by the Agent
requesting an Advance hereunder which will increase the aggregate amount of the
Revolving Credit Loans outstanding, which certificate or electronic request
shall be designated the "Request for Advance," and shall be in substantially the
form of Exhibit B attached hereto. Each Request for Advance shall, among other
things, specify the date of the Advance, which shall be a Business Day, the
amount of the Advance, and the type of Advance.
Restricted Subsidiaries. The following entities: Fox Ridge and NVR
Delaware and such other entities as may be designated as a Restricted Subsidiary
under the terms of the New Indenture and which comply with the provisions of
Section 9.36.
Revolving Credit Commitment. The obligation of the Banks to make Revolving
Credit Loans to Borrower under this Agreement up to an amount equal to the
Maximum Commitment Amount minus the Maximum Drawing Amount.
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Revolving Credit Loans. The revolving credit loans made or to be made to
Borrower as contemplated by ss.2.1 hereof.
Revolving Credit Notes. See ss.2.1.2.
Scheduled Commitment Amount. See ss.3.1.
Senior Note Molders. The holders from time to time of the Senior Notes.
Senior Notes. The 1993 Senior Notes together with the 1998 Senior Notes.
Settled. With respect to any Unit, that title to such Unit has been
conveyed by Borrower to a retail purchaser in accordance with the terms of the
applicable Contract of Sale.
Shares. See ss.9.20.
Sold Units. Any Unit under a Contract of Sale that has not been canceled
for any reason and has not yet Settled that contains a Customer Deposit of at
least $500.00; however, if a customer's mortgage financing does not require a
down payment, such Unit shall qualify as a Sold Unit without such Customer
Deposit, provided, however, if such mortgage financing is provided by NVRMF,
then such financing must be pursuant to a third party take-out commitment. Only
Units owned by Borrower shall be included in Sold Units. Units owned by Fox
Ridge shall be excluded from Sold Units.
Speculative Inventory. With respect to any Person, on any date of
determination, the sum of (i) the dollar value of Finished Lots owned by such
Person which are not subject to a Contract of Sale and the Pre-Start Costs of
such Person; and (ii) the dollar value of all Units owned by such Person which
are not subject to a Contract of Sale, including, without limitation, all Units
used as so-called "model units" in connection with any such Person's marketing
efforts conducted in the ordinary course of its business, in each case
determined in accordance with GAAP and without duplication.
Subsidiary. With respect to any Person, any corporation, association,
trust, or other business entity, a majority (by number of votes) of the
outstanding voting
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power of which is at the time owned or controlled directly or indirectly by such
Person.
Tangible Net Worth. The Net Worth of Borrower and its Subsidiaries on a
Consolidated basis, less the net book value (after deducting reserves applicable
thereto) of all of its intangible assets, including, without limitation, as
intangible assets, (i) goodwill, trademarks, trade names, service marks,
copyrights, patents, licenses, permits and rights related thereto and (ii)
Excess Reorganization Value.
Threat of Release. An imminent and substantial likelihood of a Release
which requires action to prevent or mitigate damage to the environment which may
result from such Release.
Total Assets. All assets of Borrower and its Subsidiaries on a
Consolidated basis.
Total Liabilities. All liabilities of Borrower and its Subsidiaries on a
consolidated basis.
UCC Code. The Uniform Commercial Code as enacted and in effect in each
applicable jurisdiction.
Units. Residential housing units, including townhouses and condominium
units, and the Finished Lots on which such Units are located.
Unit Closing. The closing of a sale of a Unit by Borrower to a bona fide
purchaser for value.
Unsold Unit. Any Unit that is not the subject of a Contract of Sale.
Warehouse Line. Loan Agreement dated as of July 13, 1998 as amended, among
NVRMF, Chase Bank of Texas, National Association, as Agent, and the other
lenders party thereto, as such agreement may be amended, modified, restated or
replaced, with existing or new lenders or agents, from time to time after the
date hereof.
Welfare Plan. See ss.6.14(b).
All terms of an accounting character not specifically defined herein shall
have the meanings assigned thereto by GAAP. All terms not specifically defined
herein which are
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defined in the Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts shall have the same meanings herein as therein. Each reference
herein to a particular Person (including, without limitation, the Agent) shall
include a reference to such Person's successors and permitted assigns. The words
"herein", "hereof", "hereunder" and words of like import shall refer to this
Agreement as a whole and not to any particular section or subsection of this
Agreement.
ss.2 The Credit.
ss.2.1 Revolving Credit Loans.
ss.2.1.1 Commitment to Lend and Borrower's Promise to Pay. Subject to the
terms and conditions set forth in this Agreement, each of the Banks severally
agree to lend to Borrower its Commitment Percentage of, and Borrower may borrow
and reborrow from time to time between the Closing Date and May 31, 2001, upon
notice to the Agent given in accordance with ss.2.1.4 hereof, such amounts as
may be requested by Borrower; provided, however, that the maximum aggregate
principal amount of all Revolving Credit Loans (after giving effect to the
amounts requested) shall not at any one time exceed an amount equal to the
Maximum Commitment Amount minus the Maximum Drawing Amount. The Revolving Credit
Loans shall be made pro rata in accordance with each Bank's Commitment
Percentage. Each request for Revolving Credit Loans hereunder shall constitute a
representation by Borrower that the conditions set forth in ss.ss.7 and 8
hereof, as applicable, have been satisfied on the date of such request. The
Revolving Credit Commitment shall terminate, and the Revolving Credit Loans
shall mature and become due and payable on (i) May 31, 2001; or (ii) as to any
Bank which has extended its Commitment pursuant to the penultimate sentence of
this Section, the last day of such extension; or (iii) on such earlier date on
which the maturity thereof is accelerated pursuant to the provisions of ss.10
hereof (the "Maturity Date") and Borrower hereby promises to pay on such date
all amounts then outstanding hereunder. Each Bank's commitment to lend its
Commitment Amount beyond May 31, 2001 (or such later date to which the Maturity
Date may be extended by the consent of each Bank) to Borrower shall be subject
annually to a one year extension at each Bank's sole discretion beginning on the
first anniversary of the Closing Date and continuing on each anniversary date
thereafter through the Maturity Date,
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provided Borrower delivers to the Agent for the benefit of the Banks no later
than sixty days (60) prior to each such anniversary date a notice requesting a
one year extension of the Commitments. Each Bank shall be paid all interest,
principal and fees owed to it no later than the expiration of its Commitment,
and the Agent shall distribute an amended Schedule 1 to each party.
ss.2.1.2 The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by separate promissory notes of Borrower in substantially the form of
Exhibit C hereto (each a "Revolving Credit Note"), dated as of the Closing Date
and completed with appropriate insertions. One Revolving Credit Note shall be
payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. Borrower
irrevocably authorizes each Bank to make or cause to be made, at or about the
time of the Drawdown Date of any Revolving Credit Loan or at the time of receipt
of any payment of principal on such Bank's Revolving Credit Note, an appropriate
notation on such Bank's Revolving Credit Note Record reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Revolving Credit Loans set forth on such Bank's
Revolving Credit Note Record shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Bank, but the failure to record, or any
error in so recording, any such amount on such Bank's Revolving Credit Note
Record shall not limit or otherwise affect the obligations of Borrower hereunder
or under any Revolving Credit Note to make payments of principal of or interest
on any Revolving Credit Note when due.
ss.2.1.3 Certain Mandatory Prepayments. If at any time the aggregate
principal amount of all Revolving Credit Loans shall exceed an amount equal to
the Maximum Commitment Amount in effect at such time minus the Maximum Drawing
Amount, whether as a result of reductions in the Maximum Commitment Amount or
otherwise, Borrower shall immediately pay to the Agent for the account of the
Banks the amount of such excess.
ss.2.1.4 Requests for Revolving Credit Loans. Whenever Borrower desires to
receive an Advance on a Revolving Credit Loan, Borrower shall give notice by way
of a Request for
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Advance by telex, cable or facsimile, delivered to the Agent's office at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Commercial Loan
Services, Mail Stop: 74-02-05, or by electronic transmission through systems
established by the Agent not later than 11:00 a.m. (Boston time) on the proposed
Drawdown Date or the date established in ss. 2.1.5(c) if applicable, or by such
other standard procedures agreed upon by Borrower and the Agent. Promptly upon
receipt of any such notice, the Agent shall notify each of the Banks thereof.
Each such notice (other than electronic notices) delivered by Borrower shall be
in the form of the Request for Advance attached as Exhibit B, and shall specify
the aggregate principal amount of an Advance of the Revolving Credit Loans
requested. Each such notice shall obligate Borrower to accept the Advance of the
Revolving Credit Loans requested from the Agent on the proposed Drawdown Date
therefor. Whenever there is an Obligation due and payable, the Agent may (but
shall not be required to) make an Advance for a Revolving Credit Loan in the
amount of such Obligation and apply the proceeds of the Revolving Credit Loan to
the payment of the Obligation, provided that the Agent shall promptly notify
Borrower of such Loan and the application of proceeds thereof.
ss.2.1.5 Manner of Borrowing and Disbursement of Loans.
(a) Choice of Interest Rate. etc. Any Advance shall, at the option
of Borrower, be made either as a Base Rate Advance or as a Eurodollar
Advance or a Daily Eurodollar Advance; provided, however, that (i) if
Borrower fails to give the Agent notice in writing or by electronic
transmission through systems established by the Agent specifying whether
an Advance is to be repaid or reborrowed on a Payment Date, such Advance
shall be repaid and then reborrowed as a Base Rate Advance on the Payment
Date, and (ii) Borrower may not select a Eurodollar Advance or a Daily
Eurodollar Advance (A) with respect to an Advance, the proceeds of which
are to reimburse the Agent pursuant to ss.2.2 hereof, or (B) if, at the
time of such Advance, a Default or Event of Default has occurred and is
continuing. Any notice given to the Agent in connection with a requested
Advance hereunder shall be given to the Agent prior to 11:00 a.m. (Boston
time) in order for such Business Day to count toward the minimum number of
Business Days required. The Agent shall, upon reasonable request of
Borrower from time to time,
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provide to Borrower such information with regard to the Eurodollar Rate as
may be so requested.
(b) Ease Rate Advances and Daily Eurodollar Advances.
(i) Initial and Subsequent Advances. Borrower shall give the
Agent in the case of Base Rate Advances not later than 11:00 a.m.
(Boston time) on the date of a proposed Advance, irrevocable prior
notice by telephone or telecopy and shall confirm any such telephone
notice with a written Request for Advance; provided, however, that
the failure by Borrower to confirm any notice by telephone or
telecopy with a Request for Advance shall not invalidate any notice
so given.
(ii) Repayments and Reborrowings. Borrower may repay or prepay
a Base Rate Advance and (a) at any time reborrow all or a portion of
the principal amount thereof as one or more Base Rate Advances, (b)
upon two (2) Business Days' irrevocable prior written notice to the
Agent, reborrow all or a portion of the principal thereof as one or
more Eurodollar Advances, or (c) not reborrow all or any portion of
such Base Rate Advance. Upon the date indicated by Borrower, such
Base Rate Advance shall be so repaid and, as applicable, reborrowed.
(iii) Limitations as to Base Rate Advances. Each Base Rate
Advance shall be in a principal amount of no less than $100,000 and
in integral multiples of $50,000. Requests for any Base Rate Advance
may be made daily (but only once a day), provided Borrower satisfies
all notice requirements as provided for herein.
(iv) Daily Eurodollar Advances. Daily Eurodollar Advances
shall be governed by the same terms and conditions that govern Base
Rate Advances set forth in this ss. 2.1.5.
(c) Eurodollar Advances.
(i) Initial and Subsequent Advances. Borrower shall give the
Agent in the case of
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Eurodollar Advances two (2) Business Days' irrevocable prior notice
by telephone or telecopy provided such notice must be given between
the hours of 9:00 a.m. and 12:00 p.m. Boston time and on such second
Business Day prior to the proposed funding and shall immediately
confirm any such telephone notice with a written Request for
Advance; provided, however, that the failure by Borrower to confirm
any notice by telephone or telecopy with a Request for Advance shall
not invalidate any notice so given. The Agent, whose determination
shall be conclusive, shall determine the Eurodollar Basis as of the
second (2nd) Business Day prior to the date of the requested Advance
and shall promptly notify Borrower of the same and Borrower shall
promptly confirm in writing receipt of such notification. Upon
receipt of such notice from Borrower, the Agent shall promptly
notify each Bank by telephone or telecopy of the contents thereof.
(ii) Procedures After Repayment. of Eurodollar Advance. Two
(2) Business Days prior to each Payment Date for a Eurodollar
Advance, Borrower shall give the Agent written notice specifying
whether all or a portion of any Eurodollar Advance outstanding on
the Payment Date (a) is to be repaid and then reborrowed in whole or
in part as a new Eurodollar Advance, in which case such notice shall
also specify the Eurodollar Advance Period which Borrower shall have
selected for such new Eurodollar Advance, (b) is to be repaid and
then reborrowed in whole or in part as a Base Rate Advance, or (c)
is to be repaid and not reborrowed. Upon such Payment Date such
Eurodollar Advance will, subject to the provisions hereof, be so
repaid and, as applicable, reborrowed.
(iii) Limitations as to Eurodollar Advances. Each Eurodollar
Advance shall be in a principal amount of no less than $100,000 and
in integral multiples of $50,000, and at no time shall the aggregate
number of all Eurodollar Advances then outstanding exceed five (5).
Requests for Eurodollar Advances may be made daily (but only
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once a day) provided Borrower satisfies all notice requirements as
provided for herein.
(iv) Reimbursement. Whenever any Bank shall actually incur any
losses or out-of-pocket expenses in connection with (i) failure by
Borrower to borrow any Eurodollar Advance after having given notice
of its intention to borrow (whether by reason of the election of
Borrower not to proceed or the non-fulfillment of any conditions
precedent), or (ii) prepayment of any Eurodollar Advance in whole or
in part, for any reason, Borrower agrees to pay to such Bank, upon
such Bank's demand, an amount sufficient to compensate such Bank for
all such losses and out-of-pocket expenses. Such Bank's good faith
determination of the amount of such losses and out-of-pocket
expenses, absent manifest error, shall be binding and conclusive.
The Bank shall provide a copy of the determination of such amount to
Borrower showing in reasonable detail the calculation of the amount
thereof.
(d) Notification of Banks. Upon receipt of a (i) Request for Advance
or a telephone or telecopy request for Advance, (ii) notification that a
draw has been made under any Letter of Credit, or (iii) notice from
Borrower with respect to any outstanding Advance prior to the Payment Date
for such Advance, the Agent shall promptly notify each Bank by telephone
or telecopy of the contents thereof and the amount of each Bank's portion
of any such Advance. Each Bank shall, not later than 3:00 p.m. (Boston
time) on the date specified for such Advance in such notice, make
available to the Agent at the Agent's office, or at such account as the
Agent shall designate, the amount of such Bank's portion of the Advance in
immediately available funds.
(e) Disbursement. Prior to 3:00 p.m. (Boston time) on the date of an
Advance hereunder, the Agent shall, subject to the satisfaction of the
conditions set forth in ss.2.1.5(d) hereof disburse the amounts made
available to the Agent by the Banks in like funds by transferring the
amounts so made available by deposit into the Borrower's account
maintained with BKB or by wire transfer pursuant to the Borrower's
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instructions. Unless the Agent shall have received notice from a Bank
prior to 11:00 a.m. (Boston time) on the date of any Advance that such
Bank will not make available to the Agent such Bank's ratable portion of
such Advance, the Agent may assume that such Bank has made or will make
such portion available to the Agent on the date of such Advance and the
Agent may, in its sole discretion and in reliance upon such assumption,
make available to Borrower on such date a corresponding amount. If and to
the extent such Bank shall not have so made such ratable portion available
to the Agent, such Bank agrees to repay to the Agent forthwith on demand
such corresponding amount together with interest thereon, for each day
from the date such amount is made available to Borrower until the date
such amount is repaid to the Agent, (x) for the first two Business Days,
at the rate on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for
such day by the Federal Reserve Bank of New York, and (y) thereafter, at
the Base Rate. If such Bank shall repay to the Agent such corresponding
amount, such amount so repaid shall constitute such Bank's portion of the
applicable Advance for purposes of this Agreement and if both such Bank
and Borrower shall pay and repay such corresponding amount, the Agent
shall promptly relend to Borrower such corresponding amount. If such Bank
does not repay such corresponding amount immediately upon the Agent's
demand therefor, the Agent shall notify Borrower and Borrower shall
immediately pay such corresponding amount to the Agent. The failure of any
Bank to fund its portion of any Advance shall not relieve any other Bank
of its obligation, if any, hereunder to fund its respective portion of the
Advance on the date of such borrowing, but no Bank shall be responsible
for any such failure of any other Bank. In the event that a Bank for any
reason fails or refuses to fund its portion of an Advance in violation of
this Agreement, then, until such time as such Bank has funded its portion
of such Advance, or all other Banks have received payment in full (whether
by repayment or prepayment) of the principal and interest due in respect
of such Advance, such non-funding Bank shall (i) have no right to vote
regarding any issue on which voting is required or advisable under this
Agreement or any other Loan Document, and (ii) shall not be entitled to
receive any payments of principal,
-24-
interest or fees from the Agent (or the other Banks) in respect of its
Loans, which amounts may be applied by the Agent for the benefit of the
Agent and the other Banks in accordance with the provisions of Section
13.5(c) and thereafter in a manner determined by the Agent in its sole
discretion.
ss.2.1.6 Interest. Interest on the principal amount of all Advances
outstanding from time to time shall bear interest payable as follows:
(a) On Base Rate Advances. Interest on each Base Rate Advance shall
be computed for the actual number of days elapsed on the basis of a
hypothetical year of 360 days and shall be payable in arrears on the first
day of each calendar month, commencing on the first day of the month for
the month following the Closing Date. Interest on Base Rate Advances then
outstanding shall also be due and payable on the Maturity Date. Interest
shall accrue and be payable on each Base Rate Advance made with respect to
the Revolving Credit Loans at the simple per annum interest rate equal to
the Base Rate.
(b) On Eurodollar Advances. Interest on each Eurodollar Advance
shall be computed on the basis of a hypothetical 360-day year for the
actual number of days elapsed and shall be payable in arrears on the first
day of each calendar month, commencing on the first day of the month for
the month following the Closing Date. Interest on Eurodollar Advances then
outstanding shall also be due and payable on the Maturity Date. Interest
shall accrue and be payable on each Eurodollar Advance made with respect
to the Revolving Credit Loans at a rate per annum equal to (A) the
Eurodollar Basis applicable to such Eurodollar Advance, plus (B) one and
one-half percent (1.50%); and
(c) On Daily Eurodollar Advances. Interest on each Daily Eurodollar
Advance shall be computed for the actual number of days elapsed on the
basis of a hypothetical year of 360 days and shall be payable in arrears
on the first day of each calendar month, commencing on the first day of
the month for the month following the Closing Date. Interest on Daily
Eurodollar Advances then outstanding shall also be due and payable on the
Maturity Date. Interest shall accrue and be payable on each Daily
Eurodollar Advance
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made with respect to the Revolving Credit Loans at the simple per annum
interest rate equal to the sum of (A) the Daily Eurodollar Rate, plus (B)
one and one-half percent (1.50%).
Promptly after calculating the amount of interest then due and owing, the Agent
shall provide a written statement to Borrower, with a copy to the Banks,
showing the basis for such calculation.
ss.2.1.7 Interest on Overdue Amounts. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue amounts
payable hereunder and under the other Loan Documents shall bear interest at a
rate per annum equal to four percent (4%) above the Base Rate, compounded daily
(to the extent permitted by applicable law) and payable on demand, to accrue
from the due date thereof until the obligation of Borrower with respect to the
payment thereof shall be discharged, whether before or after judgment.
ss.2.1.8Funds for Revolving Credit Loans. Not later than 3:00 p.m. (Boston
time) on the proposed Drawdown Date of any Revolving Credit Loans, each of the
Banks will make available to the Agent, at its Head Office, in immediately
available funds, the amount of such Bank's Commitment Percentage of the amount
of the requested Revolving Credit Loans. Upon receipt from each Bank of such
amount, and upon receipt of the documents required by ▇▇.▇▇. 7 and 8 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to Borrower the aggregate amount of
such Revolving Credit Loans made available to the Agent by the Banks. The
failure or refusal of any Bank to make available to the Agent at the aforesaid
time and place on any Drawdown Date the amount of its Commitment Percentage of
the requested Revolving Credit Loans shall not relieve any other Bank from its
several obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment Percentage of any requested Revolving Credit Loans. The
disbursement procedures set forth in Subsection 2.1.5(e) shall be applicable to
Drawdowns under this Section.
ss.2.2 Letters of Credit.
ss.2.2.1 Issuance of Letters of Credit. Subject to the terms and
conditions set forth in this Agreement and the
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applicable Reimbursement Agreement, upon the written request of Borrower to the
Agent and the execution and delivery of a Reimbursement Agreement by Borrower to
the Agent, the Agent, on behalf of the Banks, agrees to issue with pro rata
participation by the Banks, on the Closing Date or on any Business Day
thereafter prior to the Maturity Date, one or more irrevocable stand-by Letters
of Credit: provided, however, that (1) the aggregate Maximum Drawing Amount at
any one time outstanding shall not exceed the lesser of (x) 50.0% of the
Scheduled Commitment Amount then in effect or (y) $24,000,000; and (ii) the sum
of (x) the Maximum Drawing Amount and (y) Outstanding Revolving Credit Loans
shall not at any time exceed the Maximum Commitment Amount. Each written request
for the issuance of a Letter of Credit hereunder shall be received by the Agent
at least three (3) Business Days prior to the proposed date of issuance. The
expiry dates, amounts and beneficiaries of the Letters of Credit will be as
agreed by Borrower and the Agent, and each Letter of Credit shall be in a form
acceptable to Borrower and the Agent, except that no Letter of Credit shall have
an expiry date later than the earlier of (i) the date one year after the date of
issuance of such Letter of Credit (which may be subject to renewal for a renewal
period ending not later than the date one year after the original or any
subsequent expiry date) or (ii) the Maturity Date. Each Letter of Credit shall
be issued pursuant to a Reimbursement Agreement to be entered into between
Borrower and the Agent (for the accounts of the Banks); provided, however, that
to the extent that the terms and conditions of any Reimbursement Agreement are
in conflict with or are inconsistent with the terms and conditions of this
Agreement, the obligations of the Agent, the Banks and Borrower with respect to
Letters of Credit shall be governed by the terms and conditions of this
Agreement. The reimbursement agreements required under this section may be
accomplished by the execution and delivery by Borrower of the amended and
restated reimbursement agreement which affects all letters of credit issued
hereunder.
ss.2.2.2 Effects of Drawings. Upon each drawing under a Letter of Credit,
the unreimbursed amount of the drawing shall automatically be converted into a
Revolving Credit Loan, made on the date of such drawing. The liability of
Borrower under this Agreement to repay the Banks in respect of drawings under
Letters of Credit shall be Obligations under this Agreement and such liability
shall rank pari
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passu with the obligations of Borrower to repay all other Revolving Credit Loans
hereunder.
ss.2.2.3 Bank Credit Facility. This Agreement, the Obligations and the
Commitment are intended to constitute the "Bank Credit Facility" under the New
Indenture and "Senior Bank Indebtedness" under the Original Indenture. This
Agreement represents an amendment and restatement of the "New Working Capital
Facility" under the Original Indenture and the "Bank Credit Facility" under the
New Indenture.
ss.3 MAXIMUM COMMITMENT AMOUNT; REDUCTION AND INCREASE.
ss.3.1 Automatic Reductions. The "Maximum Commitment Amount" at any time
of determination shall be equal to the lesser of (i) the Borrowing Base minus
all amounts outstanding under the 1998 Senior Notes or (ii) the sum of the
several Commitments of the Banks as shown on Schedule 1 hereto, such sum not to
exceed $60,000,000, subject to ss.2.1.1 and ss.3.3 below (the "Scheduled
Commitment Amount"). If, at any time, the amount in (i) above is less than the
amount Outstanding hereunder, Borrower shall make mandatory payments to the
Agent in such amount as necessary to reduce the amount outstanding to the
Maximum Commitment Amount.
ss.3.2 Optional Reductions. Borrower may at any time and from time to time
upon five (5) Business Days' written notice to the Agent permanently reduce the
Scheduled Commitment Amount, by the amount specified in such notice. Upon the
effective date of any such reduction, Borrower agrees to pay to the Agent, for
the accounts of the Banks, the full amount of any Commitment Fee then accrued on
the amount of the reduction. No reduction of any Scheduled Commitment Amount of
the Banks shall be subject to reinstatement.
ss.3.3 Increase in Commitment Amount. Borrower may request, by notice to
the Agent, the Agent's approval of an increase of the Maximum Commitment Amount,
from $60,000,000 to an amount not to exceed $100,000,000. Such approval shall be
granted in the sole and absolute discretion of the Agent. The Commitment of any
Bank shall not be increased without its consent. Borrower shall execute such
documents and instruments as the Agent may request in order to evidence the
increase of the Commitment. The Agent will promptly send each Bank an amended
Schedule 1.
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ss.3.4 Overline Amount. At such time as the Borrower would otherwise be
entitled to an Advance, but the amount of the Obligations is equal to the
Maximum Commitment Amount, then, in such event, the Borrower shall have the
right to an Overline Advance in the additional aggregate amount of up to the
then available Overline Amount in the same manner and upon the same terms as a
Daily Eurodollar Advance with the following exceptions:
(a) All Overline Advances shall bear interest at Daily
Eurodollar Rate plus 162.5 basis points;
(b) The Overline Advance shall be funded by the Agent for the
benefit of any Banks participating in the Overline Amount;
(c) Any Overline Advance shall be used for working capital
purposes;
(d) All amounts outstanding as Overline Advances, when taken
together with the other Obligations, shall be permitted as a borrowing under the
Borrowing Base; and
(e) During any fiscal year of Borrower, any and all Overline
Advances shall only be made during a onetime period of 120 consecutive days.
The Borrower shall be entitled to two (2) Overline Advances in any
calendar month. Any amounts received by the Agent during a period when any
portion of the Overline Amount is outstanding shall be, in the ordinary course,
paid first in accordance with ss.14 and thereafter shall be applied to all
accrued interest on the Overline Amount and then in reduction of the Overline
Amount prior to payment of any amounts to the Banks with respect to the
Obligations. However, if an Event of Default has occurred and is continuing, the
Overline Advances shall be paid pari passu with the other Obligations. In any
event, Borrower shall make mandatory payments of all amounts outstanding of the
Overline Amount together with all accrued and unpaid interest thereon to BKB on
the first day of each calender month.
ss.4 FEES.
ss.4.1 Commitment Fee. Borrower agrees to pay to the Agent, for the
respective accounts of the Banks in accordance with their respective Commitment
Percentages, a
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commitment fee (the "Commitment Fee") calculated at the rate of three-eights of
one percent (.375%) per annum on the average daily amount during each calendar
quarter or portion thereof from the Closing Date to the Maturity ▇▇▇▇ by which
the Scheduled Commitment Amount (as the same may have been reduced pursuant to
ss.3.2 above or increased pursuant to ss.3.3) exceeds the sum of (i) aggregate
amount of Outstanding Revolving Credit Loans, and (ii) the Maximum Drawing
Amount during such period. The Commitment Fee shall be payable quarterly in
arrears on the first Business Day of each calendar quarter for the immediately
preceding calendar quarter, commencing on the first such date after the Closing
Date and ending with a final payment on the Maturity Date. Promptly after
calculating each payment due in respect of the Commitment Fee as aforesaid, the
Agent shall deliver a written statement to Borrower showing the basis therefor
with a copy to the Banks.
ss.4.2 Letter of Credit Fees. Borrower shall pay to the Agent quarterly in
advance a fee (the "Letter of Credit Fee") for each Letter of Credit issued
pursuant to this Agreement to be calculated at the rate of one percent (1%) per
annum on that portion of the Maximum Drawing Mount attributable to such Letter
of Credit which fee shall be deemed earned upon receipt, plus the Agent's
customary issuance and amendment fees, payable in accordance with the Agent's
customary practice. The Letter of Credit Fee shall be payable quarterly in
advance on the date of issuance and pro rated to the end of the current calendar
quarter and thereafter payable on the first day of each subsequent quarter for
the stated term of each such Letter of Credit and upon the date of any renewal,
and thereafter quarterly in advance, for the renewal term of any Letter of
Credit. The Agent shall disburse to the Banks on a pro rata basis their portion
of the Letter of Credit Fee received from Borrower calculated at the rate of
seventy-five hundredths percent (.75%) per annum, giving no consideration to any
issuance or amendment fees.
ss.4.3 Agent's Fee. Borrower agrees and is obligated to pay that separate
fee (the "Agent's Fee") as agreed to between Borrower and the Agent in that
separate fee letter agreement (the "Fee Letter") dated of even date.
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ss.4.4 Renewal Fee. Borrower shall pay to the Agent for the benefit of the
Banks a renewal fee (the "Renewal Fee") as agreed to between Borrower and the
Agent in the Fee Letter.
ss.5 COMPUTATIONS AND INTEREST LIMITATION.
ss.5.1 Computations. All computations of interest on the Loans, the
Commitment Fee, the Agent's Fee and the Letter of Credit Fees shall be based on
a 360-day year and paid for the actual number of days elapsed. Whenever a
payment hereunder becomes due on a day which is not a Business Day, the due date
for such payment shall be extended to the next succeeding Business Day, and
interest shall accrue during such extension for purposes of calculating such
interest or fees in subsequent periods. The Outstanding amount of the Loans as
reflected on the Agent's statement of the Loan account from time to time shall
be considered prima facie evidence of such amounts.
ss.5.2 Interest Limitation. Notwithstanding any other term of this
Agreement or any other document referred to herein or therein, the maximum
amount of interest which may be charged to or collected from any person liable
hereunder by the Agent shall be absolutely limited to, and shall in no event
exceed, the maximum amount of interest which could lawfully be charged or
collected under applicable law, so that the maximum of all amounts constituting
interest under applicable law, howsoever computed, shall never exceed as to any
person liable therefor such lawful maximum, and any term of this Agreement or
any other document referred to herein or therein which could be construed as
providing for interest in excess of such lawful maximum shall be and hereby is
made expressly subject to and modified by the provisions of this paragraph.
ss.6 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to the Banks and the Agent as follows
ss.6.1 Existence, Etc.
(a) Borrower is a corporation duly organized, existing and in good
standing under the laws of the Commonwealth of Virginia and is qualified
to do business and in good standing in the States of Delaware, Maryland,
New Jersey, North
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Carolina, New York, Ohio, Pennsylvania, South Carolina, Tennessee and
Virginia. Further, Borrower and each of the Restricted Subsidiaries are
each qualified to do business and are in good standing and have taken all
actions which, by reason of its ownership of property or carrying on of
business, are required to be taken by it under the laws of any
jurisdiction in which the failure to so qualify may have an adverse
effect on the business, assets or financial condition of Borrower and the
Restricted Subsidiaries taken as a whole, or on the ability of Borrower to
perform its obligations under the Loan Documents.
(b) Borrower has all requisite power and authority and has full
legal right to enter into each of the Loan Documents to which it is or is
to become a party, to perform, observe and comply with all of its
agreements and obligation, under each of such documents. Borrower has all
requisite power and authority and full legal right to make all of the
borrowings and obtain the extensions of credit contemplated by this
Agreement.
(c) Borrower has no Subsidiaries other than as listed on Schedule
6.1(c).
ss.6.2 Business Activity.
(a) Since the Balance Sheet Date, Borrower has conducted its
business in the ordinary course.
(b) Except as disclosed on Schedule 6.2(b) hereto, Borrower does not
own or hold of record and/or beneficially (whether directly or indirectly)
any shares of any class in the capital of any corporations, nor any legal
and/or beneficial interests in any partnership, business trust or joint
venture or in any other unincorporated trade or business enterprise.
ss.6.3 Authority, Etc. The execution and delivery by Borrower of each of
the Loan Documents executed and delivered on the Closing Date, the performance
of all of its agreements and obligations under each of such documents, and the
making by Borrower of all of the borrowings contemplated by this Agreement, are
within the corporate authority of Borrower, have been duly authorized by all
necessary corporate action and do not and will not, with respect to Borrower,
(i) contravene any provisions of its certificate of
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incorporation (or other charter documents), by-laws or any stock provisions, or
any amendment thereof, or (ii) with such exceptions, if any, as do not and will
not materially and adversely affect the Borrower's assets, operations or
financial condition or affect in any respect the enforceability against Borrower
of the Loan Documents, conflict with, or result in a breach of any term,
condition or provision of, or constitute a default under or result in the
creation of any mortgage, lien, pledge, charge, security interest or other
encumbrance upon any of Borrower's properties under any agreement, trust deed,
indenture, mortgage or other instrument to which Borrower is a party or by which
any of its properties is bound or affected or (iii) with such exceptions, if
any, as do not and will not materially and adversely affect the Borrower's
assets, operations or financial condition or affect in any respect the
enforceability against Borrower of the Loan Documents, violate or contravene in
any respect any provision of any law, regulation, order, ruling or
interpretation thereunder or any decree, order or judgment of any court or
governmental or regulatory authority, agency or official or (iv) require any
waiver, consent or approval by any of the creditors or stockholders of Borrower
which has not been obtained or (v) require any approval, consent, order,
authorization or license by, or giving notice to, or taking any other action
(other than (A) such approvals, consents, orders and authorizations that have
been obtained and (B) such action as may be required to perfect liens and
security interests), with respect to, any governmental or regulatory authority
or agency under any provision of any law applicable to Borrower the absence of
which could have a material adverse effect upon the Borrower's assets,
operations or financial condition or which could affect the enforceability
against Borrower of the Loan Documents.
ss.6.4 Binding Effect of Documents. Borrower has duly executed and
delivered each of the Loan Documents and each of such documents is in full force
and effect. The agreements and obligations of Borrower contained in each of the
Loan Documents constitute legal, valid and binding obligations of it,
enforceable against it in accordance with their respective terms, except to the
extent enforceability is affected by bankruptcy and insolvency laws and other
laws affecting the rights of creditors generally.
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ss.6.5 No Events of Default, Etc.
(a) No Default or Event of Default has occurred and is continuing.
(b) Borrower is not (i) in default under any provision of its
charter, by-laws, or stock provisions or (ii) with such exceptions, if
any, as do not and will not materially and adversely affect the Borrower's
assets, operations or financial condition or affect in any respect the
enforceability against Borrower of the Loan Documents, in default under
any indenture, instrument or agreement by which it is bound, or in
violation in any respect of any applicable law, order, regulation, ruling
or requirement of any court or public body or authority by which it or its
properties are bound or affected.
ss.6.6 Chief Executive Offices. The chief executive offices of Borrower
are located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
ss.6.7 Financial Statements; Solvency.
(a) Borrower has furnished to the Banks its audited Consolidated
Balance Sheet as of December 31, 1997 (the "Balance Sheet Date") and its
unaudited Consolidated Balance Sheet as of March 31, 1998 and its
unaudited Consolidated Statement of Operations for the three months ended
March 31, 1998.
(b) The balance sheet and operating statements described above (i)
have been prepared in conformity with generally accepted accounting
principles applied, except as otherwise stated therein, on a consistent
basis through the periods specified and (ii) present fairly the financial
position of Borrower and its Subsidiaries as at the dates thereof.
(c) Each of Borrower, on the one hand, and its Subsidiaries, on the
other hand, (after giving effect to the transaction contemplated hereby),
is solvent, has assets having a fair value in excess of the amount
required to pay its probable liabilities on its existing debts as they
become absolute and matured, and has, and will have, access to adequate
capital for the conduct of its business and the ability to pay its
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debts from time to time incurred in connection therewith as such debts
mature.
ss.6.8 Changes; None Adverse. Since the Balance Sheet Date, there has not
been any materially adverse change in the financial condition, assets, or
results of operations of Borrower or any of the Restricted Subsidiaries. None of
Borrower or any of the Restricted Subsidiaries is a party to any contract or
agreement the performance of which could reasonably be expected to have a
material adverse effect on its financial condition, assets or operations.
ss.6.9 Mortgages and Liens. None of the property, assets, income or
revenues of any character of Borrower or any Restricted Subsidiary is subject to
any mortgage, lien, pledge, charge, security interest, defect, restrictions on
transfer or assignment thereof or other encumbrance of any kind, other than
mortgages, liens, pledges, charges, security interests, defects and other
encumbrances expressly permitted by ss.9.19 of this Agreement.
ss.6.10 Indebtedness. Borrower and the Restricted Subsidiaries have no
Indebtedness other than Indebtedness expressly permitted by ss.9.6 of this
Agreement.
ss.6.11 Litigation. Except as and to the extent described in the Annual
Report on Form 10-K of Borrower for the fiscal year ended December 31, 1997, and
except for such actions, suits or proceedings that would not have a material
adverse effect on the Borrower's or any Restricted Subsidiary's assets,
operations or financial condition or affect in any respect the enforceability
against Borrower or any Restricted Subsidiary of the Loan Documents, there is no
pending or threatened action, suit, or proceeding before any court, governmental
or regulatory authority, agency, commission, or board of arbitration against
Borrower or any Restricted Subsidiary.
ss.6.12 Taxes. Each of Borrower and each Restricted Subsidiary have filed
all federal and (with such exceptions, if any, as do not relate to a material
amount of taxes) all state and local tax returns required to be filed by it and
has paid, or has made reasonable provision for payment of, all taxes which have
or shall become due and payable pursuant to any of the said returns or pursuant
to any matters heretofore raised by audits or for other reasons known to it,
except for taxes the amount, applicability, or
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validity of which are currently being contested by it in good faith by
appropriate proceedings and with respect to which it has set aside on its books
adequate reserves.
ss.6.13 Liens.
(a) No financing statement which names Borrower or any Restricted
Subsidiary as a debtor has been filed and is in effect in any jurisdiction
in the United States pursuant to Article 9 of the Uniform Commercial Code
of any State (and Borrower has not signed any financing statement or any
security agreement which is in effect authorizing any secured party
thereunder to file any such financing statement in any such jurisdiction)
other than those financing statements or security agreements with respect
to liens, security interests and other encumbrances permitted by ss.9.19
hereof.
(b) No mortgages, chattel mortgages, assignments, statements of
assignment, security agreements or deeds of trust have been filed or
recorded and are in effect with respect to any part of the property or
assets of Borrower or any Restricted Subsidiary except for mortgages and
security agreements which are permitted by the provisions of ss.9.19
hereof.
ss.6.14 ERISA compliance; Severance Obligations.
(a) Schedule 6.14(a) hereto lists each pension plan (as defined in
ss.3(2) of ERISA) established or assumed or maintained, or to which
contributions are made by Borrower or any Person which is a member of the
same controlled group, or under common control (within the meaning of
ss.414(b) or (c) of the Code or ss.4001(b)(1) of ERISA), with any of the
foregoing as of the date hereof (each such plan being referred to herein
as a "Pension Plan"). No such Pension Plan is a multiemployer plan (as
defined in ss.4001(a)(3) of ERISA) and each Pension Plan is, and has at
all times been, in compliance in all material respects with the applicable
provisions of ERISA and the Code, including without limitation any minimum
funding requirements applicable with respect to such Pension Plan under
ss.412 of the Code. Schedule 6.14(a) hereto lists each reportable event
within the meaning of ss.4043 of ERISA and the regulations promulgated
thereunder with respect to any
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Pension Plan which occurred after 1986 and for which the requirement of
notice to the Pension Benefit Guaranty Corporation (the "PBGC") has not
been waived by the PBGC.
(b) Schedule 6.14(b) hereto lists each welfare plan (as defined in
ss.3(1) of ERISA) established or assumed or maintained, or to
which contributions are made, by Borrower (each such plan being referred
to herein as "Welfare Plan") as of the date hereof. No such Welfare Plan
is a multiemployer plan and each Welfare Plan is, and has at all times
been, in compliance in all material respects with the applicable
provisions of ERISA and the Code. Except as set forth in Schedule 6.14(b),
Borrower does not have any material liability for post-retirement benefits
provided or to be provided to employees under any Welfare Plan, except to
make available coverage in satisfaction of the provisions regarding
employee benefit plans set forth in the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended.
(c) On the date hereof, there is no unfulfilled obligation on the
part of Borrower to make any material contribution with respect to either
the Pension Plans or the Welfare Plans.
(d) The execution and delivery of the Loan Documents and the
consummation of the transactions contemplated thereby will not involve any
prohibited transaction within the meaning of ERISA with respect to the
Pension Plans or the Welfare Plans which would have a material adverse
effect on the business, operations or financial condition of Borrower.
(e) Schedule 6.14(e) hereto describes the nature and amount of all
obligations of Borrower to make severance payments or provide
post-employment benefits pursuant to any contract or other arrangement
with any of its employees, officers or directors (other than the Pension
Plans and Welfare Plans).
ss.6.15 Other Representations. Each of the representations and warranties
made by Borrower in any of the Loan Documents was true and correct in all
material respects when made and continues to be true and correct in all material
respects on the Closing Date, except to the
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extent that any of such representations and warranties have been affected by the
consummation of the transactions contemplated and permitted or required by the
Loan Documents.
ss.6.16 Disclosure. No representation or warranty made by Borrower in this
Agreement or in any agreement, instrument, document, certificate, statement or
letter furnished to the Agent by or on behalf of Borrower in connection with any
of the transactions contemplated by any of the Loan Documents contains any
untrue statement as of the date thereof of a material fact or omits to state a
material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances in which they are made.
ss.6.17 Molding Company and Investment Company Acts, Borrower is not a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935; nor is it a "registered investment
company", or an "affiliated company" or a "principal underwriter" of a
"registered investment company, as such terms are defined in the Investment
Company Act of 1940, as amended.
ss.6.18 Regulations U and X. The proceeds of the Loans shall be used by
Borrower solely for the purposes specified in ss.9.4. No portion of any Loan is
to be used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
ss.6.19 Fiscal Year. Borrower has a fiscal year ending December 31 of each
year.
ss.6.20 Compliance With Certain Environmental Laws and Laws Pertaining to
Land Sales.
(a) Except as shown on Schedule 6.20 hereto, Borrower has not received
notice nor does it otherwise have knowledge that it is in violation in any
respect of any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation, those arising
under the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response,
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Compensation and Liability Act of 1980 ("CERCLA"), the Federal Water pollution
Control Act, the Toxic Substances Control Act, the Clean Air Act, the Safe
Drinking Water Act, the Flood Disaster Protection Act of 1973, or any state
statute, regulation, or administrative order addressing subjects the same as or
comparable to those covered by such enumerated federal statutes.
(b) Except as otherwise disclosed on Schedule 6.20 hereto, Borrower has
not received notice that it has been identified by the United States
Environmental Protection Agency as a potentially responsible party under CERCLA.
with respect to a site listed on the National Priorities List, 40 C.F.R. Part
▇▇▇ ▇▇▇▇▇▇▇▇ ▇ (1986); nor has Borrower received any notification that hazardous
substances (as defined under CERCLA) it has disposed of have been found in any
site at which a federal or state agency is conducting a remedial investigation
or other action pursuant to RCRA, CERCLA or any state statute, regulation, or
administrative order addressing subjects the same as or comparable to those
statutes.
(c) Except as disclosed on Schedule 6.20 hereto, to the best of Borrower's
knowledge no portion of the properties of Borrower has been used for the
handling, processing, storage or disposal of "hazardous wastes" except in
compliance with all applicable laws and no underground tank or other underground
storage receptacle for hazardous chemicals (as defined in ss.311(e) of CERCLA)
is located on any properties of Borrower.
(d) Except as disclosed on Schedule 6.20, neither Borrower nor, to the
best of the knowledge of Borrower, any of its directors, officers, agents or
employees has now or at any time in the past, been given notice that it was, in
violation of (1) the Interstate Land Sales Full Disclosure Act (the "Interstate
Land Sales Act") or similar laws pertaining to land sales in any state in which
Borrower owns, sells, transfers, manages, operates, develops or otherwise
disposes of real property (ii) any federal or state securities law, (iii) the
federal Truth in Lending Act (including regulations written under such Act by
the Board of Governors of the Federal Reserve System) or any similar state
statute, (iv) the federal Equal Credit Opportunity Act (including regulations
written under such Act by the Board of Governors of the Federal Reserve System)
or any similar state statute, or (vi) any judgment, decree, order, law,
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license, rule or regulation arising under such statutes or with respect to the
matters covered thereby.
ss.6.21 Insurance. The policies of insurance or certificates of insurance
furnished to the Agent with respect to the business and properties of Borrower,
as described on Schedule 6.21 hereto, are in full force and effect and no notice
of cancellation or non-renewal has been received with respect thereto.
ss.6.22 Compliance with Indentures. Neither Borrower's entering into this
Agreement, nor anything contained herein, violates any covenants contained in
the Original Indenture or the New Indenture nor results or shall result in a
Default or Event of Default thereunder.
ss.6.23 Stock Ownership. (a) Borrower owns all of the stock of the
Restricted Subsidiaries as of the Closing Date and no Person other than Borrower
owns any ownership, beneficial or pledged interest in any Restricted Subsidiary,
except as provided in the Original Indenture.
(b) Borrower owns all of the Stock of NVRMF as of the Closing Date and no
Person other than Borrower owns any ownership, beneficial or pledged interest in
NVRMF.
ss.7 CONDITIONS TO THE FIRST LENDING. The obligations of the Banks to make
the first Advance for a Revolving Credit Loan or of the Agent to issue any
Letters of Credit to be issued on the Closing Date for the account of Borrower
hereunder shall be subject to the satisfaction, prior thereto or concurrently
therewith, of each of the following conditions precedent:
ss.7.1 Loan Documents, Etc. Each of the Loan Documents shall have been
duly and properly authorized, executed and delivered by the respective party or
parties thereto and shall be in full force and effect on and as of the Closing
Date. Executed original counterparts of each of the Loan Documents shall have
been furnished to the Agent.
ss.7.2 Legality of Transactions. No change in applicable law shall have
occurred as a consequence of which it shall have become and continue to be
unlawful (a) for any of the Banks or the Agent to perform any of the agreements
or obligations under any of the Loan Documents to which any of them is a party
on the Closing Date or (b) for Borrower
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to perform any of its agreements or obligations under any of the Loan Documents.
ss.7.3 Representations and Warranties. Each of the representations and
warranties made to the Banks and the Agent by or on behalf of Borrower and the
Restricted Subsidiaries in this Agreement or the other Loan Documents shall be
true and correct in all material respects when made, shall, for all purposes of
this Agreement, be deemed to be repeated on and as of the Closing Date, and
shall be true and correct in all material respects on and as of such date.
ss.7.4 Performance, Etc. Borrower shall have duly and properly performed,
complied with and observed each of its covenants, agreements and obligations
contained in any of the Loan Documents which are required to be performed on or
prior to the Closing Date. No event shall have occurred and be continuing on the
Closing Date, and no condition shall exist on the Closing Date, which
constitutes a Default or an Event of Default.
ss.7.5 Certified Copies of Certain Documents. The Agent shall have
received from Borrower copies, certified by its corporate secretary to be true
and complete on the Closing Date, of the Certificate of Incorporation and
by-laws of Borrower.
ss.7.6 Proof of Action by Borrower. The Agent shall have received copies,
certified by the corporate secretary of Borrower to be true and complete on the
Closing Date, of the records of all actions taken by its directors and
shareholders as may be required to authorize (a) its execution and delivery of
each of the Loan Documents to which it is a party, (b) its performance of all of
its agreements and obligations under each of such documents, and (c) the
borrowings and other transactions contemplated by this Agreement.
ss.7.7 Incumbency Certificate. The Agent shall have received from Borrower
an incumbency certificate, dated the Closing Date, signed by its corporate
secretary and giving the name and bearing a specimen signature of each
individual who shall be authorized: (i) to sign on its behalf each of the Loan
Documents to which it is or is to become a party; (ii) to make application for
the Loans or the issuance of
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Letters of Credit; and (iii) to give notices and to take any other action on its
behalf under the Loan Documents.
ss.7.8 Proceedings and Documents. All corporate, governmental and other
proceedings in connection with the transactions contemplated by the Loan
Documents and all instruments and documents incidental thereto, shall be in form
and substance reasonably satisfactory to the Agent and the Agent shall have
received all such counterpart originals or certified or other copies of all such
instruments and documents as the Agent shall have reasonably requested. With
respect to the Letters of Credit issued on the Closing Date, if any, Borrower
shall have duly authorized, executed and delivered to the Agent a Reimbursement
Agreement.
ss.7.9 Fees. Borrower shall have complied with its obligation under
ss.ss.4.1, 4.2, 4.3 and 4.4 to pay the Commitment Fee, the Letter of Credit Fees
(if applicable), and the Agent's Fee, in addition to its obligation to pay any
fees or other charges, if any, then due under the Loan Documents.
ss.7.10 Legal Opinions. The Agent shall have received the written opinion,
addressed to the Agent and the Banks and dated the Closing Date, from ▇▇▇▇▇ &
▇▇▇▇▇▇▇ L.L.P., Counsel to Borrower in the form acceptable to counsel to the
Agent.
ss.7.11 Borrowing Base Report. The Agent shall have received from Borrower
on the first Business Day preceding the Closing Date a complete and accurate
Borrowing Base Report as of the last Business Day of the preceding month (or the
month preceding such month if the Closing Date occurs during the first nine days
of the month).
ss.7.12 Certificates of Insurance. The Agent shall have received (i) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, or within fifteen (15) days prior thereto, identifying insurers,
types of insurance, insurance limits, and policy terms, and otherwise describing
the insurance to be obtained in accordance with the provisions of this Agreement
and (ii) certified copies of all policies evidencing such insurance (or
certificates therefore signed by the insurer or an agent authorized to bind the
insurer).
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ss.7.13 Legal Fees. Borrower shall have paid in full all of the Agent's
reasonable legal fees and expenses incurred in connection with this Agreement,
and the other Loan Documents, for which preliminary statements have been
presented. It is understood that appropriate adjustments will promptly be made
after the Closing Date to more accurately reflect actual legal fees and expenses
incurred by the Agent, as such fees and expenses shall be set forth in a
detailed statement to be delivered at such time.
ss.8 CONDITIONS TO SUBSEQUENT LOANS AND LETTERS OF CREDIT. The obligation
of the Banks to make any Advances for Revolving Credit Loans subsequent to the
first such Loan and to issue any Letter of Credit to be issued subsequent to the
Closing Date pursuant to ss.2.2.1 shall be subject to the satisfaction of the
following conditions precedent:
ss.8.1 Legality of Transactions. It shall not be unlawful (a) for any of
the Banks to perform any of the agreements or obligations under any of the Loan
Documents to which any of them is a party on the Drawdown Date of such Loan or
the date of issuance of such Letter of Credit other than those waived by
Borrower, or (b) for each party other than the Banks and the Agent to perform
any of their respective agreements or obligations under any of the Loan
Documents to which any of them is a party on such date.
ss.8.2 Representations and Warranties: No Default. Each of the
representations and warranties made to the Banks and the Agent by or on behalf
of Borrower or the Restricted Subsidiaries in this Agreement or any other Loan
Documents shall be true and correct in all material respects when made and
shall, for all purposes of this Agreement, be deemed to be repeated on and as of
the date of the Borrower's Request for Advance for such Loan or request for the
issuance of such Letter of Credit and on and as of the Drawdown Date of such
Loan or the date of the issuance of such Letter of Credit, and shall be true and
correct in all material respects on and as of each of such dates, except, in
each case, as affected by other actions taken or other circumstances hereafter
arising which are not in violation of the Loan Documents; and no Default or
Event of Default shall have occurred and be continuing.
ss.8.3 Performance, Etc. Borrower shall have duly and properly performed,
complied with and observed in all material respects (excluding any breach which
has been
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cured) its covenants, agreements, and obligations in all provisions of this
Agreement, including, without limitation, those set forth in ss.9 hereof, and
any of the other Loan Documents to which it is a party or by which it is bound
on the Drawdown Date of such Loan or the date of the issuance of such Letter of
Credit. No event shall have occurred on or prior to such date and be continuing,
and no condition shall exist on such date, which constitutes a Default or an
Event of Default.
ss.8.4 Proceedings and Documents. Any corporate, governmental and other
proceedings which are undertaken in connection with the transactions
contemplated by such Loan or Letter of Credit and any instruments and documents
incidental to such Loan or Letter of Credit shall be in form and substance
reasonably satisfactory to the Agent, and the Agent shall have received all such
counterpart originals or certified or other copies of all such instruments and
documents as the Agent shall have reasonably requested. With respect to each
Letter of Credit, Borrower shall have duly authorized, executed and delivered to
the Agent a Reimbursement Agreement.
ss.8.5 Payment of Fees. Borrower shall have complied with its obligations
under ss.4 to pay any Commitment Fee, Letter of Credit Fee, Agent's Fee and any
other amount payable hereunder at any time subsequent to the Closing Date and
becoming due and payable on or before the Drawdown Date of such Loan or the date
of the issuance of such Letter of Credit, provided, that the Agent will make
Revolving Credit Loans to pay any such amounts due on any Drawdown Date, subject
to the Borrower's satisfaction of all other conditions precedent to the Banks'
obligation hereunder to fund any such request for Revolving Credit Loans.
ss.9 COVENANTS OF BORROWER. Borrower covenants and agrees, so long as any
Loan or Letter of Credit is Outstanding or the Banks have any obligation to make
Loans or the Agent has an obligation to issue Letters of Credit hereunder, as
follows:
ss.9.1 Punctual Payment. Notwithstanding the Banks' right to make
Revolving Credit Loans in the amount of any Obligation due hereunder, Borrower
will duly and punctually pay or cause to be paid the principal and interest on
the Loans, and the Commitment Fee, Letter of Credit Fee, and all other fees and
other amounts due and payable hereunder, all
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in accordance with the terms of this Agreement and any applicable Loan Document.
ss.9.2 Business Activity. Borrower and the Restricted Subsidiaries shall
at all times, and in all material respects, continue to conduct each of its
business (i) in the ordinary course consistent with its past practices and (ii)
in accordance with the policies and objectives set forth in the most recent
business plan delivered to the Agent from time to time pursuant to ss.9.10(b)
hereof.
ss.9.3 Legal Existence, Etc. Borrower (i) will maintain its legal
existence and good standing under the laws of the state of its incorporation and
(ii) will maintain its qualification to do business in the States of Delaware,
Florida, Maryland, New Jersey, North Carolina, New York, Ohio, Pennsylvania,
South Carolina, Tennessee and Virginia, so long as Borrower continues to do
business or own property in such states. Each of Borrower and the Restricted
Subsidiaries will maintain its qualification to do business in each other state
in which the failure to do so would have a material adverse effect on its
condition, financial or otherwise, and will maintain all of its rights and
franchises, except where the failure to maintain such right or franchise would
not have a material adverse effect on the conduct of its business.
ss.9.4 Use of Loan Proceeds: Letters of Credit. Borrower shall use the
proceeds of Advances for the Revolving Credit Loans solely to provide for the
working capital needs of Borrower and Fox Ridge and to meet such other capital
needs of Borrower as are provided for under this Agreement and to make
Investments and Distributions to the extent expressly permitted under this
Agreement.
ss.9.5 Subordinated Debt. Borrower shall not enter into any debt which is
subordinate to this Loan without the written consent of Agent and the execution
of an intercreditor agreement in a form acceptable to the Agent, other than
indebtedness between Borrower and NVRMF, subject to the limitations of ss.9.6 of
this Agreement.
ss.9.6 Indebtedness. Borrower will not and will not permit a Restricted
Subsidiary to incur or permit to exist or remain outstanding any Indebtedness to
any Person; provided, however, that each, unless otherwise specified below, may
incur or permit to exist or remain outstanding;
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(a) Indebtedness arising under this Agreement or the other Loan
Documents;
(b) Indebtedness not otherwise provided for in this ss.9.6 in
respect of obligations outstanding on the Closing Date but only to the
extent specifically described on Schedule 9.6 annexed hereto;
(c) Indebtedness of Borrower in respect of the 1993 Senior Notes and
related guaranties by certain of the subsidiaries of Borrower;
(d) Indebtedness secured by Permitted Liens;
(e) Indebtedness representing an extension, renewal or refunding of
any Indebtedness listed in Schedule 9.6 or permitted pursuant to clause
(f) of this ss.9.6, to the extent that the aggregate outstanding amount
thereof plus prepayment premiums, consent fees and expenses, is not
increased thereby;
(f) Indebtedness arising from intercompany advances from Borrower to
a Restricted Subsidiary or among Restricted Subsidiaries or from a
Restricted Subsidiary to Borrower to the extent not prohibited by this
Agreement;
(g) purchase money indebtedness, nonrecourse indebtedness and
Indebtedness under capitalized Leases incurred after the Closing Date in
an aggregate principal amount not to exceed $10,000,000 at any time
outstanding;
(h) unsecured Indebtedness of Borrower or Restricted Subsidiaries
set forth on Schedule 9.6(h) hereto;
(i) unsecured Indebtedness not permitted by any other clause of this
ss.9.6 in an aggregate principal amount at any time outstanding not to
exceed $10,000,000;
(j) guarantees by Borrower or any Restricted Subsidiary of any
Indebtedness permitted by any other clause of this ss.9.6;
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(k) Indebtedness of the Borrower to any Subsidiary of Borrower other
than a Restricted Subsidiary in the aggregate amount not to exceed
$20,000,000; provided that such indebtedness shall be expressly
subordinated to the Obligations; and
(l) the 1998 Senior Notes and the guarantee thereof by any
Restricted Subsidiary; provided, however, that any Restricted Subsidiary
that guarantees the 1998 Senior Notes shall also guarantee the Obligations
hereunder on a pari passu basis.
ss.9.7 Minimum Tangible Net Worth. Borrower and its Subsidiaries shall, as
of December 31, 1997, have a Consolidated Tangible Net Worth of at least
positive $45,000,000. Thereafter, on a quarterly basis, Borrower and its
Subsidiaries shall have a Consolidated Tangible Net Worth of at least
$45,000,000 plus fifty percent (50%) of cumulative, quarterly positive Net
Income, plus one hundred percent (100%) of net proceeds of any equity issued
(excluding performance stock awards and employee stock options). Borrower shall
report Consolidated Tangible Net Worth to the Agent as of the last day of each
fiscal quarter.
ss.9.8 Debt Service Coverage. Borrower will not permit the ratio of EBITDA
for any period of four consecutive quarters, to Debt Service Payments determined
for any such period to be less than 2.0:1. For purposes of calculating the
foregoing ratio, the impact of the 1998 Senior Notes shall be excluded until May
19, 1998.
ss.9.9 Maximum Indebtedness Leverage Ratio. At all times, tested on a
quarterly basis as of the last day of each fiscal quarter, the ratio of the
amount of Indebtedness of Borrower and its Subsidiaries (other than NVRMF and
its Subsidiaries) on a Consolidated basis to EBITDA for the four preceding
fiscal quarters shall not be greater than 4.0:1.
9.9 A. Total Liabilities. At all times, tested on a quarterly basis as of
the last day of each fiscal quarter, Borrower shall not permit the ratio of
Total Liabilities determined for any period to EBITDA for the four preceding
fiscal quarters to be greater than 5.5:1. For purposes of the calculation of
Total Liabilities under this Section, the liabilities of NVRMF and its
Subsidiaries shall be excluded.
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ss.9.10 Financial Statements. Borrower will furnish or cause to be
furnished financial statements and other reports to the Agent and the Banks as
follows:
(a) within 90 days after the close of each fiscal year, the
Consolidated balance sheet and statement of operations for Borrower and
its subsidiaries (collectively, the "Financial Statements") for such year,
in reasonable detail, and, setting forth in comparative form the
corresponding figures for the preceding year, prepared in accordance with
GAAP consistently applied (except as otherwise disclosed therein),
accompanied by a report and unqualified opinion on the Financial
Statements of KPMG Peat Marwick, L.L.P., or such other independent
certified public accountant of national standing selected by Borrower;
(b) within 45 days after the close of each fiscal year, the business
plan of Borrower, for the 12 month period commencing at the start of the
then current fiscal year in form and level of detail consistent with the
business plan previously furnished to the Agent by Borrower for calendar
year 1995;
(c) within forty-five (45) days after the end of each quarter, (i)
the unaudited Consolidated balance sheet and statement of operations
similar to those required by clause (a) above as of the end of such period
and for such period then ended and for the period from the beginning of
the current fiscal year to the end of such period prepared (except for the
absence of footnotes) in accordance with GAAP consistently applied and
certified on behalf of Borrower by its treasurer or other authorized
financial officer, subject only to changes resulting from audit and normal
year-end adjustments and (ii) the Borrower's management report which sets
forth operating profit and asset information for each construction
operating profit center in which Borrower is doing business separately and
for all of the Borrower's operations as an entirety, as well as setting
forth in comparative form, the corresponding current annual operating plan
figures for such period;
(d) with the delivery of each quarterly statement, a computation
showing compliance with the
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covenants set forth in ss.9.6 and ss.9.33 hereof, and with the delivery of
each quarterly statement referenced in (c) above, a computation showing
compliance with the covenants set forth in ss.9.7, ss.9.8 and ss.9.9; all
certified on behalf of Borrower by the authorized financial officer of
Borrower in a certificate also stating, without qualification, that the
covenants set forth in ss.9.20 and ss.9.21 have been fully complied with
("Compliance Certificate");
(e) at the end of each calendar quarter, at the time of delivery of
such quarterly and annual statement, a certificate, executed on behalf of
Borrower by its treasurer or other authorized financial officer, stating
that such officer has caused this Agreement to be reviewed and has no
knowledge of any Default by it in the performance or observance of any of
the provisions hereof, during such quarter or at the end of such year,
or, if such officer has such knowledge, specifying each Default and the
nature thereof;
(f) promptly upon receipt thereof, copies of all management letters
which are submitted to it by its independent accountants in connection
with any annual or interim audit of its books made by such accountants;
(g) a Borrowing Base Report, in such form and at such times
specified in ss.9.29;
(h) with reasonable promptness, such other data with respect to the
financial condition of Borrower as the Agent from time to time requests.
ss.9.11 Notice of Litigation and Judgment. Borrower will give notice in
writing, in form and detail satisfactory to the Agent and the Banks, within
twenty days of becoming aware of any litigation or proceeding threatened in
writing or any pending litigation and proceedings to which either of them is or
becomes a party involving an uninsured claim against it or any litigation or
proceeding against any Persons, including a Restricted Subsidiary, which, if
adversely determined would materially and adversely affect the financial
condition, assets or operations of Borrower or the Restricted Subsidiaries and
stating the nature and status of such litigation or proceedings. Borrower will
give notice, in writing, in form and detail satisfactory to
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the Agent, promptly upon becoming aware of any judgment, final or otherwise,
against it in an amount in excess of $1,000,000.
ss.9.12 Notice of Defaults. Borrower will give notice in writing to the
Agent and the Banks promptly upon becoming aware of the occurrence of any
Default under this Agreement.
ss.9.13 Books and Records; Fiscal Year. The books and records relating to
the financial affairs of Borrower shall at all times be maintained in accordance
with, and all financial statements provided for herein (except as otherwise
contemplated herein), shall be prepared in accordance with, GAAP consistently
applied, subject only to changes resulting from audit and normal year-end
adjustments. Such books and records shall be kept by Borrower at its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such
other location as Borrower shall specify by prior written notice given to the
Agent. Borrower shall maintain a fiscal year ending December 31 of each year.
ss.9.14 Insurance. Borrower shall and shall cause the Restricted
Subsidiaries to maintain with financially sound and reputable insurers insurance
with respect to its properties and its business of the kind described in
Schedule 6.21 and against such other casualties and contingencies and in such
types and such additional amounts as shall be in accordance with sound business
practices. All such insurance shall be in such form, for such periods and
written by such companies as may be reasonably satisfactory to the Agent and
(except for third-party liability insurance) shall be payable to the Borrower as
its interests may appear. The Agent may apply all proceeds received by it to
pay Obligations hereunder in such order as it shall determine in its discretion.
All policies of insurance shall provide for thirty (30) days prior written
minimum cancellation notice to the Agent and shall name the Agent as additional
insured party. Certificates of insurance (or, if requested by the Agent,
certified copies of policies) with respect to all renewals or replacements of
such insurance from time to time in force together with evidence of payment of
premiums thereon satisfactory to the Agent shall be delivered to the Agent on or
before the expiration date of then current insurance. No settlement on account
of any loss covered by such insurance (other than third party liability
insurance) which exceeds $1,000,000
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shall be made without the consent of the Agent. In the event of failure to
provide and maintain insurance as herein provided the Agent may, at its option,
after giving notice to Borrower provide such insurance and charge the amount
thereof to Borrower. Borrower shall furnish to the Agent certificates or other
evidence satisfactory to the Agent of compliance with the foregoing insurance
provision. Without limiting the foregoing, Borrower will (i) keep all of its
physical property (excluding furnishings, certain office equipment and other
items of personal property consistent with the Borrower's past business
practices) insured against fire and extended coverage risks in amounts and with
deductibles equal to those generally maintained by businesses engaged in similar
activities in similar geographic areas, (ii) maintain all such workers'
compensation or similar insurance as may be required by law, (iii) maintain, in
amounts and with deductibles equal to those generally maintained by businesses
engaged in similar activities in similar geographic areas, general public
liability insurance against claims for bodily injury, death or property damage
occurring on, in or about its properties and (iv) in the event any of its
properties or any portion thereof are located in a flood hazard area identified
by the Secretary of Housing and Urban Development as an area having special
flood hazards and in which flood insurance has been made available under the
National Flood Insurance Act of 1968, as amended by the Flood Disaster Act of
1973 (and any successor Act thereto), maintain a flood insurance policy to the
extent required by the Flood Disaster Act of 1973. Borrower shall in all
material respects at all times comply with and conform to all provisions of each
such insurance policy and to all requirements of the insurers thereunder
applicable to Borrower, its properties or to the use, occupation, possession,
operation, maintenance or repair of all or any portion of its properties.
ss.9.15 Taxes. Borrower shall and shall cause the Restricted Subsidiaries
to pay all general and special taxes, assessments, rates, dues, charges
(including, without limitation, water and sewer services charges), fees, levies,
fines, impositions, liabilities, obligations and encumbrances of every name,
nature and kind, whatsoever, which are now or hereafter imposed, levied or
assessed upon or against any of its properties or any part thereof as well as
all income taxes, assessments and other governmental charges levied or imposed
by the United States of America or any state, county, municipality or other
taxing authority
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upon or against Borrower or the Restricted Subsidiaries or in respect of any of
the properties of either or any part thereof which could become a lien
thereupon, prior to the time when any penalties or interest accrue with respect
thereto, on non-payment thereof (with allowance, however, for late payment or
non-payment of amounts, including any potential penalties therefor, however
named, which are not in the aggregate material). Notwithstanding anything
foregoing to the contrary, provided that Borrower or any of the Restricted
Subsidiaries, as the case may be, sets aside on its books adequate reserves (in
accordance with GAAP) with respect to any such payment with respect to it, such
Person shall be entitled to contest the same, without prior payment if permitted
by applicable law, by appropriate proceedings diligently pursued in good faith.
Borrower agrees to reimburse the Agent on demand for any and all expenditures so
made, and until paid the amount thereof shall be an Obligation secured
hereunder. The Agent shall have no obligation to Borrower to make any such
expenditures, nor shall the making thereof relieve Borrower of any Default or
Event of Default. The Borrower and its Subsidiaries are parties to a tax-sharing
agreement which has been reviewed and approved by the Agent and the Banks.
ss.9.16 Compliance with Law. Borrower shall and shall cause the Restricted
Subsidiaries to (i) comply in all material respects with all laws, rules,
regulations, codes, ordinances, orders, writs, judgments, injunctions, decrees
or awards, and any lawful private restrictions and other encumbrances
constituting Permitted Liens whether now existing or hereafter arising, to which
it or its properties may be or become subject noncompliance with which could
have a material adverse effect on its business, operations or financial
condition or its ability to fulfill its obligations under this Agreement or the
other Loan Documents, (and will comply in all material respects with any
applicable requirements of the Interstate Land Sales Act and any other laws with
respect to land sales, including without limitation, disclosure laws, in any
state in which it engages in business) and (ii) promptly obtain, maintain, apply
for renewal, and not allow to lapse, any authorization, consent, approval,
license or order, and accomplish any filing or registration with, any court or
judicial, administrative or governmental authority having jurisdiction over it,
its business or properties which may be or may become necessary in order that it
perform all of its obligations under this Agreement or the other Loan
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Documents and in order that the same may be valid and binding and
effective in accordance with their terms and in order that the Agent and the
Banks may be able freely to exercise and enforce any and all of their rights
under this Agreement or the other Loan Documents.
ss.9.17 Access. Except as otherwise required by applicable law or
regulation, Borrower shall and shall cause the Restricted Subsidiaries to permit
the Agent or any of the Banks, by their representatives and agents, to inspect,
during normal business hours, any of its properties, including, to examine and
make copies of its books of accounts and other financial records, and to discuss
its affairs, finances and accounts with, and to be advised as to the same by,
its officers at such reasonable times and intervals as the Agent may designate.
The Banks shall coordinate the exercise of their rights under this Section and
under similar provisions of the Loan Documents with the Agent. Borrower hereby
authorizes and shall cause the Restricted Subsidiaries to authorize the Agent
and the Banks to disclose information obtained pursuant to this Agreement to any
other participant or potential participant in the Loans made hereunder and,
whenever required or requested by governmental or regulatory authorities, to
such authorities.
ss.9.18 ERISA Compliance. Except for the Pension Plans and Welfare Plans
specified on Schedules 6.14(a) and 6.14(b) hereto, neither Borrower nor any of
the Restricted Subsidiaries will establish, assume, maintain or contribute to
any employee benefit plan (as that term is defined in ss.3(3) of ERISA) to which
the annual contributions would have a material adverse affect on the Borrower's
or any of the Restricted Subsidiaries' business, operations or financial
condition or their ability to fulfill their respective obligations under this
Agreement or the other Loan Documents. Borrower shall not, and shall not permit
any Restricted Subsidiary to, permit any Pension Plan or Welfare Plan to (i)
engage in a "prohibited transaction" as such term is defined in ss.4975 of the
Code which would result in a liability for it; (ii) incur any "accumulated
funding deficiency", as such term is defined in ss.302 of ERISA, that is not
waived; or (iii) be terminated in a manner which would result in the imposition
of a lien or encumbrance on its assets pursuant to ss.4068 of ERISA, in each
case if such actions would have a material adverse affect on the Borrower's and
the Restricted Subsidiaries' business, operations or financial condition or
either of their ability
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to fulfill their obligations under this Agreement or the other Loan Documents.
ss.9.19 Security Interests and Liens. Borrower shall and shall cause the
Restricted Subsidiaries not to create or permit to exist any mortgage, pledge,
security interest or other lien or encumbrance on any of its property or assets,
except for the following ("Permitted Liens"):
(i) liens and other encumbrances arising from attachments or
similar proceedings, pending litigation, judgments or taxes or
assessments or government charges in any such event whose validity
or amount is being contested in good faith by appropriate
proceedings in accordance with applicable law and for which adequate
reserves have been established and are maintained in accordance with
generally accepted accounting principles, or taxes and assessments
the payment of which is not then required under the provisions of
ss.9.15 hereof;
(ii) liens of carriers, warehousemen, mechanics and
materialmen and other like liens and liens imposed by law, created
in the ordinary course of business, for amounts not yet due or which
are being contested in good faith by appropriate proceedings in
accordance with applicable law and as to which adequate reserves or
other appropriate provisions are being maintained in accordance with
generally accepted accounting principles;
(iii) pledges or deposits made in connection with worker's
compensation, employee benefit plans, unemployment or other
insurance, old age pensions, or other Social Security benefits;
(iv) all mortgages, pledges, security interests, liens and
other encumbrances in favor of the Agent;
(v) the interests of the lessees under tenant leases of real
or personal property made in the ordinary course of business,
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(vi) liens incurred in the ordinary course of business to
secure performance of statutory obligations, leases and contracts
(other than for money borrowed or for credit received in respect of
property acquired) entered into in the ordinary course of business
or to secure obligations on surety or appeal bonds;
(vii) existing security interests described on Schedule 9.19
annexed hereto;
(viii) such security interests, liens, minor defects,
irregularities, encumbrances, easements, rights of way, zoning
restrictions, variations from building laws and clouds on title with
respect to its properties (including fixtures) or any tangible
personal property of Borrower or the Restricted Subsidiaries as
normally exist with respect to similar properties which do not arise
in connection with the borrowing of money or for credit received and
do not significantly impair the value or utility of any material
portion of the property affected thereby;
(ix) security interests and liens renewing any security
interest or lien listed on Schedule 9.19 which secures Indebtedness
permitted by ss.9.6(e), provided that such security interest or lien
is not extended to any other property;
(x) the pledge of the capital stock of the Subsidiaries of
Borrower contemplated by the Original Indenture;
(xi) liens and security interests securing purchase money
Indebtedness and Capitalized Leases permitted to be incurred
hereunder, provided that any such lien or security interest does not
extend to any property other than the personal property financed by
the proceeds of such Indebtedness or that is the subject of such
Capitalized Lease;
(xii) interests of purchasers of Units in such Units arising
under the applicable Contract of Sale;
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(xiii) liens created by a Restricted Subsidiary with respect
to Permitted Indebtedness; and
(xiv) as to Restricted Subsidiaries, liens in favor of the
Borrower.
ss.9.20 Distributions. Borrower will not and will not permit any
Restricted Subsidiary to make any Distribution except Permitted Distributions.
The following constitute Permitted Distributions:
(a) The Restricted Subsidiaries may make Distributions to
Borrower, and to the other Restricted Subsidiaries at all times; and
(b) Provided no Default or Event of Default exists or would
result from such Distribution, Borrower may make Distributions for
the purchase, from time to time, of its common stock, par value $.01
per share (the "Shares") to the extent permitted pursuant to ss.9.22.
ss.9.21 Investments. Borrower shall not, and shall not permit the
Restricted Subsidiaries to, make any Investment in any person, including any
Investment in a Subsidiary of the Borrower or Restricted Subsidiaries, except
for Investments which consist of:
(a) trade or customer accounts or notes receivable arising, or other
Indebtedness acquired, in the ordinary course of business;
(b) obligations issued or guaranteed as to principal and interest by
the United States of America or its agencies, GNMA securities or debt
issued by other agencies of the United States of America;
(c) certificates of deposit, foreign time deposits, bankers
acceptances or bank money market accounts which are issued by the Agent or
any other bank or savings and loan association whose short-term debt is
rated either "A1" or comparable by Standard & Poor's Corporation or "P1"
or comparable by ▇▇▇▇▇'▇ Investors Service, Inc. or a comparable rating by
▇▇▇▇▇▇▇▇'▇ Bank Watch, or if such an institution is a subsidiary, then its
parent corporation may have such a rating;
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(d) commercial paper or finance company paper which is rated not
less than prime-one or A-1 or their equivalents by ▇▇▇▇▇'▇ Investors
Service, Inc. or Standard & Poor's Corporation or their successors or
Dutch auction preferred stocks rated either "AA" or comparable by Standard
& Poor's Corporation or "P1" or comparable by ▇▇▇▇▇'▇ Investors Service,
Inc.,
(e) repurchase agreements secured by any one or more of the
Investments permitted by paragraphs (b), (c) or (d) above;
(f) intercompany loans permitted pursuant to ss.9.6;
(g) existing Investments (other than as contemplated in paragraphs
(a) through (t) hereof) as described on Schedule 9.21 hereto;
(h) mutual funds that are registered under the Investment Company
Act of 1940, as amended, which have net assets of at least $100,000,000
and at least 85% of whose underlying assets consist of bonds having a
rating of not less than AAA or its equivalent by ▇▇▇▇▇'▇ Investors
Service, Inc., and/or securities of the type listed in (b), (c), (d) or
(e) above, and money market accounts a majority of whose assets are
composed of items described by any of the foregoing clauses (b), (c), (d)
or (e) above;
(i) Investments after the Closing Date by Borrower in its
Subsidiaries (other than NVRMF and its Subsidiaries and Fox Ridge) in an
aggregate amount not to exceed $1,000,000 in any fiscal year;
(j) Investments after the Closing Date by Borrower in joint venture
partnerships comprised of Persons who are not Affiliates of Borrower or
any of its Subsidiaries that (i) provide Borrower with a preferential
right to purchase Finished Lots and (ii) limit the capital contribution of
Borrower to a specified maximum amount not to exceed $3,000,000 for any
such joint venture Investment, provided, that the aggregate of all such
Investments shall at no time exceed $15,000,000;
-57-
(k) Investments by a Restricted Subsidiary in the Borrower or in
other Restricted Subsidiaries:
(l) intercompany advances from Borrower to its Subsidiaries to pay
payroll and other general administrative overhead expenses, subject to
reimbursement of such advances in cash promptly and in any event on the
fifteenth and last day of each calendar month (or next Business Day if
such date is not a Business Day) provided, that the aggregate of all such
intercompany advances outstanding at any time shall not exceed $5,000,000;
(m) Lot Option Deposits made by Borrower in the ordinary course of
business to the extent permitted by ss.9.32(c);
(n) advances to employees for travel and other business expenses
incurred by such employees in the ordinary course of the conduct of
Borrower's business;
(o) provided, in the event any amounts are Outstanding and no
Default or Event of Default has occurred and remains uncured, Investments
in Fox Ridge from time to time outstanding, in an amount up to
$40,000,000.00, plus the aggregate amount of dividends and return of
capital received by Borrower from Fox Ridge;
(p) home sales and readily marketable mortgage loans to employees,
officers and directors of Borrower and Subsidiaries in the ordinary course
of business; and
(q) Provided, in the event any amounts are Outstanding, Investments
in NVRMF from time to time outstanding, in an amount up to $30,000,000.00;
if, however, no amounts are Outstanding, other Investments in NVRMF from
time to time outstanding, in an amount equal to (i) the amount then
allowed under the New Indenture if any of the 1998 Senior Notes are
outstanding; or (ii) $50,000,000.00 if the 1998 Senior Notes are not
outstanding.
ss.9.22 Shares and Repurchases. Borrower may repurchase Shares and/or
Senior Notes subject to the following conditions precedent at the time of such
proposed
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purchase: (i) Borrower is in compliance with all the covenants set forth herein
and there exist no Defaults or Events of Default which have occurred and are
continuing and no Default or Event of Default occurs immediately after the
repurchase; and (ii) Borrower must maintain for the month end immediately
preceding the purchase of any shares and/or Senior Notes and the month end
immediately succeeding such purchase $50,000,000 in aggregate liquidity, where
liquidity is defined as cash, Cash Equivalents and unused availability of the
Commitments under this Agreement based upon the Borrowing Base. Borrower and its
Subsidiaries shall be permanently prohibited from repurchasing any of its Shares
upon a violation of this ss.9.22.
ss.9.23 Change in Terms or Prepayment of Existing Indebtedness. Borrower
shall not effect or permit, and Borrower shall not permit a Restricted
Subsidiary to, make any material change in the terms of, nor directly or
indirectly make any payment of principal or interest on or in redemption,
retirement or repurchase of any Indebtedness listed on Schedule 9.6., except
for: (i) payment of principal and interest on such Indebtedness in accordance
with the terms governing the same without prepayment or acceleration (ii)
repayment of Cash Equivalents prior to the maturity thereof, and (iii) payments
of Indebtedness by a Restricted Subsidiary to any other Restricted Subsidiary or
to Borrower. In addition, Borrower shall not effect or permit any material
change in the terms of, nor directly or indirectly make any payment of principal
or interest on or in redemption, retirement or repurchase of the 1998 Senior
Notes, except for payment of principal and interest on such Indebtedness in
accordance with the terms governing the same without prepayment or acceleration.
Notwithstanding the foregoing, Borrower is permitted to (i) repurchase in the
open market or redeem in accordance with the terms of the Original Indenture the
1993 Senior Notes, (ii) effect changes in the Senior Notes which do not
adversely effect Borrower (iii) prepay Indebtedness incurred in connection with
the Borrower's office buildings in Pittsburgh, Pennsylvania and its
manufacturing facilities and (iv) repurchase Senior Notes in accordance with
Section 9.22. Borrower shall repay in full the indebtedness evidenced by the
1993 Senior Notes on or before December 31, 1998. Borrower shall at all times
comply with the terms and conditions of the Senior Notes. The 1998 Senior Notes
shall at all time remain pari passu, with the Obligations. Borrower shall not
permit the execution and delivery of any
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Restricted Subsidiary guaranty of the 1998 Senior Notes without the concurrent
guaranty of the Obligations by such Restricted Subsidiary.
ss.9.24 Merger, Consolidation and Disposition of Assets.
(i) Borrower shall not, and shall not permit any of the
Restricted Subsidiaries to, at any time merge or consolidate with or
into any Person. None of Borrower or any Restricted Subsidiary shall
sell or dispose of any of its assets other than in the ordinary
course of its business (including, without limitation, the sale of
Units, land, model unit furnishings and obsolete equipment), subject
to, and in accordance with the requirements and limitations on such
Unit sales provided for in this Agreement without the consent of the
Majority Banks provided, however, the foregoing shall not restrict
or apply to the transfer of assets from Restricted Subsidiaries to
Borrower or other Restricted Subsidiaries. Borrower shall provide
prior notice to Agent of any proposed sale or disposal of its or a
Restricted Subsidiary's assets outside the ordinary course of
business (other than dispositions from the Restricted Subsidiaries
to Borrower or another Restricted Subsidiary). Consent of the
Majority Banks shall be deemed given unless Agent provides a notice
of disapproval to Borrower within seven (7) days of Agent's receipt
of said notice;
(ii) Borrower shall not transfer any shares of stock or any
beneficial interest in any Restricted Subsidiary other than to
another Restricted Subsidiary.
ss.9.25 Change of Corporate Name. Borrower shall notify the Bank at least
fifteen days prior to any change in the Borrower's corporate name or any other
name under which Borrower conducts its business or in the location of the
executive offices of Borrower.
ss.9.26 Acquisition Covenants. (a) Borrower shall not enter into or permit
any Restricted Subsidiary to enter into any sale and leaseback transactions as
seller-lessee or make any acquisitions without the prior written consent of the
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Majority Banks and the Agent other than (i) the sale and leaseback of model
units in the ordinary course of Borrower's or Fox Ridge's business consistent
with past practices or as may be provided for in this Agreement; (ii)
acquisitions of real estate to the extent permitted by this Agreement; (iii)
capital expenditures; (iv) building materials, fixtures, supplies and all other
personal property acquired by Borrower and Fox Ridge in the ordinary course of
business consistent with past practices; (v) Investments and Distributions
permitted pursuant to ss.ss.9.20 and 9.21; and (vi) other acquisitions in the
aggregate amount of $5,000,000 during the term hereof.
(b) Borrower and its Subsidiaries shall not permit Fox Ridge to acquire
any assets outside of the normal course of its business from any person other
than the Borrower and the Restricted Subsidiaries.
(c) Raw Land Acquisitions. Borrower shall not make, and shall not allow
any of its Subsidiaries to make, acquisitions of raw land or lots which are not
Finished Lots other than those set forth on Schedule 9.33(a).
(d) Zoning Requirements. Borrower shall not acquire, and shall not permit
any of its Subsidiaries to acquire, any Finished Lot unless all proper zoning
and entitlements with respect to such Finished Lot have been obtained.
(e) Environmental Matters. Borrower shall maintain, and shall cause each
of the Subsidiaries to maintain, a policy of reviewing "phase I" environmental
reports on each tract or group of Finished Lots prior to entering into any Lot
Option Agreement with respect to such Finished Lots and, if indicated thereby,
Borrower shall cause a "phase II" environmental audit to be performed on such
tract or group of Finished Lots prior to entering into an option contract;
provided, however, that Borrower may enter into Lot Option Agreements prior to
reviewing "phase I" environmental reports if performance of such agreements is
contingent upon the review and satisfaction by Borrower of such "phase I"
environmental reports. If any remedial steps are recommended in such reports,
such contract will not be entered into unless (i) such steps are implemented
prior to entering into any such contract and (ii) the cost to Borrower and its
Subsidiaries of performing such steps will not exceed $10,000 for any tract or
group of substantially contiguous Finished Lots or in excess of $30,000 for all
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such remedial performance from the date hereof. Borrower shall promptly notify
the Agent and the Banks of any claims, obligations or discoveries relating to
any violation or potential violation by Borrower, or any of its Subsidiaries of
any Environmental Law applicable to Borrower or its Subsidiaries or any of their
respective properties if such violation could create any liability, absolute or
contingent, for Borrower or any of its Subsidiaries in excess of $10,000 for any
one such violation or in excess of $30,000 for all such violations.
ss.9.27 Further Assurances. Borrower shall at any time and from time to
time execute and deliver such further instruments and take such further action
as may reasonably be requested by the Agent, in each case to further and more
perfectly effect the purposes of this Agreement and the other Loan Documents.
ss.9.28 Maximum Commitment Amount. Borrower will not cause or permit the
sum of (a) Outstanding Revolving Credit Loans and (b) the Maximum Drawing
Amount, to exceed the Maximum Commitment Amount, without immediately paying down
the Loans to the extent of such excess.
ss.9.29 Borrowing Base. Borrower represents, warrants and covenants as
follows:
(a) Borrower is and shall be the owner of all Units and the Finished
Lots upon which they are located, and shall neither create nor suffer to
exist any lien or encumbrance thereon or security interest therein (other
than Permitted Liens) nor sell, assign, transfer or create or suffer to
exist any lien or encumbrance on or security interest in any Contract of
Sale or other right constituting proceeds thereof to or in favor of any
Person other than the Agent on behalf of the Banks.
(b) For the purposes of computing the Borrowing Base, Borrower shall
furnish by the tenth Business Day of each month, or more frequently at
Borrower's option to the Agent and the Banks information regarding the
composition of the Borrowing Base, complete and accurate as of the last
Business Day of the preceding month with such specificity as the Agent
shall from time to time require in the form of Exhibit A hereto (the
"Borrowing Base Report"), or in such other form
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and substance, and at such times as may be requested by the Agent.
Borrower shall further, at Borrower's sole cost and expense, have a
Borrowing Base Report reviewed, at least annually, by an accounting firm
of Borrower's choice. Simultaneously with the monthly delivery of each
Borrowing Base Report to the Agents and the Banks, Borrower shall also
deliver a certificate signed on behalf of Borrower by an authorized
officer of Borrower showing the calculation of the Borrowing Base together
with such other information and supporting documentation requested by the
Agent.
(c) Upon the occurrence of any cancellation of a Contract of Sale,
the Borrowing Base shall be reduced appropriately with the next Borrowing
Base Report.
ss.9.30 Certain Environmental Matters. Borrower will, and Borrower will
cause all Restricted Subsidiaries to, comply in all material respects with all
requirements of any applicable federal, state and local law, license, rule,
regulation, judgment, decree or order pertaining to environmental matters. The
Agent may, in its discretion, from time to time, by or through any of its
authorized officers, agents or professional consultants, and, upon reasonable
notice to Borrower, visit, inspect and conduct tests or otherwise examine the
Properties and the Borrower's records to verify compliance with such
requirements to its satisfaction.
ss.9.31 Transactions with Affiliated Persons. Borrower shall not, and
Borrower shall not allow the Restricted Subsidiaries to, pay or enter into any
agreement to pay any fees, wages, salary, bonus, commission, contributions to
benefit plans or any other compensation for goods or services to or for the
benefit of any Person who is a director or officer of Borrower or who has, or
any of whose Affiliates has, a beneficial interest in the capital stock of
Borrower, unless such compensation is approved by a majority of the nonemployee
directors then on the Borrower's Board of Directors or the Compensation
Committee of Borrower's Board of Directors, as applicable. Borrower shall not,
and shall not allow the Restricted Subsidiaries to, enter into any other
agreement or arrangement with its directors, officers, shareholders or
Affiliates (other than its wholly-owned Subsidiaries) except upon terms and
conditions no more favorable than those with which it would
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be willing to enter into such an agreement or arrangement with an unaffiliated
third party. Agent and the Banks acknowledge and recognize that NVR Homes has
entered into the Patents and Trademarks License and that the Patents and
Trademarks have been transferred by NVR Homes to NVR Delaware and Borrower and
its Subsidiaries have entered into a tax sharing agreement.
ss.9.32 Material Adverse Changes. Borrower shall disclose in writing to
the Agent and the Banks, promptly upon becoming aware of it, any fact that
materially and adversely affects, or which, in the reasonable judgment of its
officers, could in the future materially and adversely affect, the financial
position, assets or operations of Borrower or the Restricted Subsidiaries taken
as a whole and, within five Business Days of such time as it provides such
disclosure to the Agent, it shall also deliver to the Agent and the Banks, in
writing its proposal for addressing such material, adverse effect. The Agent
hereby agrees that the payment of license fees under the Patents and Trademarks
License shall not constitute a material adverse change.
ss.9.33 Housing Covenants.
(a) Total Speculative Inventory. Until January 1, 1999, Borrower and
its Subsidiaries shall not permit aggregate of Speculative Inventory for
Borrower and its Subsidiaries (measured in dollars, in accordance with
GAAP) to exceed at any time 35% of the Borrower's "total inventory", as
such total inventory has been reported by Borrower to the Agent in
connection with the Borrower's delivery of its most recent Financial
Statements pursuant to ss.9.10(d) hereof. Beginning on January 1, 1999,
Borrower and its Subsidiaries shall not permit aggregate of Speculative
Inventory for Borrower and its Subsidiaries (measured in dollars, in
accordance with GAAP) to exceed at any time 30% of the Borrower's and its
Subsidiaries' "total inventory", as such total inventory has been reported
by Borrower to the Agent in connection with the Borrower's delivery of its
most recent Financial Statements pursuant to ss.9.10(d) hereof.
(b) Lot Option Deposits. Borrower and its Subsidiaries shall not
permit Aggregate Lot Option Deposits (measured in dollars, in accordance
with GAAP) to exceed at any time 100% of Tangible Net Worth.
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(c) Development Activity. Borrower and its Subsidiaries shall not
perform, and shall not permit any of its Subsidiaries to perform, any
activities involving the development or improvement of land except (i) the
construction and sale of Units in accordance with the Borrower's normal
conduct of its business consistent with past practices; (ii) with respect
to the projects listed on Schedule 9.33(c) hereto or (iii) development
work performed by Borrower or any of its Subsidiaries on land owned by
Persons other than Borrower or its Subsidiaries, solely on a fee basis and
with no financial commitment on the part of Borrower or any of its
Subsidiaries. Borrower hereby represents and warrants that the only
projects that are the subject of land development as of the Closing Date
are those set forth on Schedule 9.33(c).
(d) Preliminary Approval. Borrower and its Subsidiaries shall
maintain the practice of obtaining a preliminary indication of mortgage
approval prior to commencing construction on a Unit, other than with
respect to Speculative Inventory.
ss.9.34 Additional Covenants Relating to Environmental Matters.
(a) Borrower shall comply with, and require each of its Subsidiaries
and all partners, agents, servants and employees and each tenant and other
occupant and user of any property used or owned by Borrower or its
Subsidiaries (such properties, the "Applicable Properties"), and the
officers, directors, shareholders, partners, agents, servants and
employees of such tenants, occupants and users to comply with, each and
every Environmental Law applicable to Borrower and its Subsidiaries and
each such tenant, occupant or user with respect to any such property.
Specifically, but without limitation,
(i) Borrower shall obtain and maintain, or require each
Subsidiary, tenant, occupant and user, as appropriate, to obtain and
maintain, all permits, certificates, licenses and other consents and
approvals required by each Environmental Law from time to time
applicable to Borrower and its Subsidiaries, each and every part of
the
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Applicable Properties and/or the conduct of any business thereat or
related thereto;
(ii) Borrower shall not cause, and shall not permit any of its
Subsidiaries to cause, any Release on or off the Applicable
Properties and will not suffer or permit any Release, or the
presence of a Hazardous Substance (unless such presence is in
compliance with all Environmental Laws), in, on or at any of the
Applicable Properties;
(iii) if Borrower or any Subsidiary causes a Release on or off
any of the Applicable Properties, or if a Release occurs on any of
the Applicable Properties, Borrower shall promptly effect, or shall
promptly cause the person(s) who caused the Release promptly to
effect, the cleanup of any resulting contamination in accordance
with and as required by the provisions of all applicable
Environmental Laws; and
(iv) within thirty (30) days after the date that any lien is
imposed against any Applicable Properties owned by Borrower or any
Subsidiary or any part thereof under any Environmental Law, Borrower
shall cause such lien to be discharged or bonded or otherwise
secured to the Agent's satisfaction.
(b) Notwithstanding any provision of this Agreement or any other
Loan Document to the contrary, neither the execution by Borrower, nor the
acceptance by the Agent, of this Agreement nor any provision of this
Agreement or of any other Loan Document shall be deemed to obligate the
Agent or any of the Banks to (a) cure any failure by Borrower or any
Subsidiary to comply with any Environmental Law or (b) take any actions or
complete any actions taken, or expend any sums, to cure any failure by
Borrower, its Subsidiaries or any other Person (other than the Agent or
any of the Banks) to comply with any Environmental Law; nor shall the
execution by Borrower or any other Person, or the acceptance by the Agent
or any of the Banks, of this Agreement and the liens and security
interests provided herein, operate to place upon the Agent or any Bank any
responsibility for the operation, control, care,
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management or repair of any of the Applicable Properties, or any
responsibility for the storage, transportation, release, removal,
containment, encapsulation, remediation or other disposition of any
Hazardous Substances, or make the Agent or any Bank an "owner" or an
"operator" of the Applicable Properties or any part thereof within the
meaning of any Environmental Laws.
(c) The provisions of this ss.9.34 shall survive any satisfaction,
release, discharge or reconveyance of this Agreement or the liens and
security interests granted hereunder or the payment in full of the
Obligations.
ss.9.35 Patents and Trademarks License. Borrower shall not terminate the
Patents and Trademarks License without the prior consent of the Agent.
ss.9.36 Restricted Subsidiaries. Borrower shall not create a Restricted
Subsidiary under the New Indenture without the prior approval of the Agent.
ss.10 EVENTS OF DEFAULT; ACCELERATION; REMEDIES.
ss.10.1 Events of Default: Acceleration. If any of the following events
(an "Event of Default") shall occur and be continuing:
(a) if Borrower shall fail to pay any principal of or interest on
the Loans or on the Overline Advance when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;
(b) if Borrower shall fail to pay any Letter of Credit Fee,
Commitment Fee or other fees and amounts due and payable hereunder or in
connection herewith within three (3) Business Days of when the same shall
become due and payable whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(c) if Borrower shall fail to comply with any of the covenants
contained in ss.9.2, ss.9.3, ss.9.4, ss.9.S. ss.9.7, ss.9.8, ss.9.9,
ss.9.9A, ss.9.11, ss.9.12, ss.9.19, ss.9.23,
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ss.9.24, ss.9.25, ss.9.26(a), ss.9.26(b), ss.9.26(c) or ss.9.33(d) hereof;
(d) if Borrower shall fail to comply with any of the covenants
contained in ss.9.20, ss.9.21, ss.9.22, ss.9.26(d), ss.9.26(e), ss.9.29,
ss.9.30, ss.9.31, ss.9.32, ss.9.33(a), ss.9.33(b), ss.9.33(c) or ss.9.34
hereof, and such failure continues for 30 days with respect to any of the
foregoing sections other than ss.9.33(a) and ss.9.33(b), or in the case of
ss.9.33(b), such failure continues for 90 days or in the case of
ss.9.33(a), such failure continues for 45 days;
(e) if Borrower shall fail to comply with any of its covenants
contained in ss.9.6, ss.9.10, ss.9.14, ss.9.16, ss.9.18, ss.9.25, ss.9.27
and ss.9.28 and such failure shall continue for 5 Business Days after
written notice of such failure has been given to Borrower by the Agent;
(f) if Borrower shall fail to perform any term, covenant or
agreement contained herein (other than those specified in subsections (a),
(b), (c), (d), (e) and (f) above) and such failure shall continue for 30
days after written notice of such failure has been given to Borrower by
the Agent;
(g) if any representation or warranty of Borrower in any Loan
Document or in any document or instrument delivered pursuant to or in
connection with this Agreement shall prove to have been false in any
material respect upon the date when made;
(h) if Borrower shall fail to make any payment or otherwise shall
fail to observe or perform when due or within any applicable period of
grace any term, covenant or agreement contained in any agreement by which
it is bound, evidencing or securing borrowed money in an aggregate
principal amount greater than $3,000,000 or as would permit the holder or
holders thereof or of any such obligations to accelerate the maturity
thereof;
(i) if Borrower shall be involved in financial difficulties as
evidenced:
(i) by its commencement of a voluntary case under Title 11 of
the United States Code as
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from time to time in effect, or by its authorizing, by appropriate
proceedings of its board of directors, managing partner or other
governing body, the commencement of such a voluntary case;
(ii) by its filing an answer or other pleading admitting or
failing to deny the material allegations of a petition filed against
it commencing an involuntary case under said Title 11, or seeking,
consenting to or acquiescing in the relief therein provided, or by
its failing to convert timely the material allegations of any such
petition;
(iii) by the entry of an order for relief against it in any
involuntary case commenced under said Title 11 or if an involuntary
case is commenced against it under Title 11 and is not dismissed
within 60 days;
(iv) by its seeking relief as a debtor under any applicable
law, other than said Title 11, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors, or by its consenting to or
acquiescing in such relief;
(v) by entry of an order by a court of competent jurisdiction
(A) finding it to be bankrupt or insolvent or (B) ordering or
approving its liquidation, reorganization or any modification or
alteration of the rights of the Agent or the Borrower's creditors
generally which remains undischarged and unstayed for more than
thirty (30) days;
(vi) by the entry of an order by a court of competent
jurisdiction assuming custody of, or appointing a receiver or other
custodian for, all or a substantial part of its property which
remains undischarged and unstayed for more than thirty (30) days; or
(vii) by its making an assignment for the benefit of, or
entering into a composition with,
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its creditors, or appointing or consenting to the appointment of a
receiver or other custodian for all or a substantial part of its
property;
(j) if there shall remain in force, undischarged, unsatisfied,
unstayed and unbonded, for more than thirty (30) days, whether or not
consecutive, any final judgment against Borrower which, with other
outstanding final judgments, undischarged, unsatisfied, unstayed and
unbonded for more than thirty (30) days against such Person(s) exceeds
$1,000,000;
(k) if Borrower shall default in the performance of any material
term, covenant or agreement contained in any Reimbursement Agreement;
(l) if Borrower, by contract or otherwise, shall relinquish control
over the conduct of its business or the use or disposition of any
substantial portion of its assets; or
(m) if there shall occur any default under the Senior Notes or under
the Original Indenture or the New Indenture;
then, the Agent may or if directed by the Majority Banks shall by notice to
Borrower terminate the Commitments under this Agreement and upon such
termination the Banks and the Agent shall have no further obligation to make
Loans to, or issue Letters of Credit for the account of, Borrower, and may or if
directed by the Majority Banks shall declare all amounts owing with respect to
this Agreement to be, and they shall thereupon forthwith mature and become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the parties hereto;
provided, that in the event of any Event of Default specified in ss.10.1(i)
hereof, all such amounts shall become immediately due and payable automatically
and without any requirement of notice from the Agent.
ss.10.2 Remedies. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to ss.10.1, each Bank, if owed
any amount with respect to the Loans, or the Agent on behalf of the Banks as
provided for herein, may proceed to protect and
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enforce all rights by suit in equity, action at law or other appropriate
proceedings, whether for the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or any instrument
pursuant to which the Obligations to such Bank are evidenced, including the
obtaining of the appointment of a receiver, and, if such amount shall have
become due, by declaration or otherwise, proceed to enforce the payment thereof
or any other legal or equitable right of a Bank. No remedy herein conferred upon
any Bank or the Agent or the holder of any Revolving Credit Note is intended to
be exclusive of any other remedy and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision of
law.
ss.10.3 Further Rights. With respect to the obligations, Borrower assents
to any extension or postponement of the time of payment or any other indulgence,
and Borrower assents to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Agent may deem advisable.
ss.10.4 Proceeds of Collection or Sale. After deducting all expenses owed
to the Agent in respect of this Agreement and the other Loan Documents and the
exercise of its rights hereunder and thereunder as provided in ss.12 hereof, the
residue of any proceeds of collection or sale of the obligations shall be
applied to the payment of principal or interest on the Obligations on a pro
rata basis in such order or preference as the Agent in its discretion may
determine, and any excess shall be returned to Borrower or to such other person
or persons as shall be lawfully entitled to receive such excess, and Borrower
shall remain liable for any deficiency.
ss.10.5 Marshalling. The Agent shall not be required to marshal any future
security granted by Borrower for the Obligations or any of them, or to resort to
such security in any particular order; and all of its rights hereunder and in
respect of such securities shall be cumulative and in addition to all other
rights, however existing or arising. To the extent that it lawfully may,
Borrower hereby agrees that it will not invoke any law that might cause delay in
or impede the enforcement of the Agent's rights under this
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Agreement or under any other instrument evidencing any of the obligations or
pursuant to which any of the Obligations were issued and to the fullest extent
it lawfully may, Borrower irrevocably waives the benefits of all such laws.
Section 11. SETOFF. During the continuance of any Event of Default, any
deposits or other sums credited by or due from any of the Banks to Borrower
and any securities or other property of Borrower in the possession of such Bank,
other than amounts required to be maintained by law, may be applied in
accordance with applicable law to or set off against the payment of Obligations
and any and all other liabilities, direct, or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, of Borrower to such
Bank. Each of the Banks agrees with each other Bank that (a) if an amount to be
set off is to be applied to Indebtedness of Borrower to such Bank, other than
Indebtedness evidenced by the Revolving Credit Notes held by such Bank, such
amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Revolving Credit Notes held by such Bank, and
(b) if such Bank shall receive from Borrower, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of the
claim evidenced by the Revolving Credit Notes held by such Bank by proceedings
against Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Revolving Credit Note or
Revolving Credit Notes held by such Bank any amount in excess of its ratable
portion of the payments received by all of the Banks with respect to the
Revolving Credit Notes held by all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Revolving
Credit Notes held by it its proportionate payment as contemplated by this
Agreement; provided that if all or any part of such excess payment is thereafter
recovered from such Bank, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but without interest.
ss.12 THE AGENT.
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ss.12.1 Appointment and Authorization.
(a) Each Bank hereby irrevocably appoints and authorizes, and hereby
agrees that it will require any transferee of any of its interest in the
Loans and in the Revolving Credit Notes irrevocably to appoint and
authorize the Agent to take such actions as its agent on its behalf and to
exercise such ▇▇▇▇▇▇ hereunder as are delegated by the terms hereof,
together with such powers as are reasonably incidental thereto. Neither
the Agent or any of its directors, officers, employees, or agents shall be
liable for any action taken or omitted to be taken by it or them hereunder
or in connection herewith, except for its or their own gross negligence or
willful misconduct.
(b) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any
of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein
or therein shall be implied to have been assumed by the Agent. The
relationship between the Agent and the Banks is and shall be that of agent
and principal only, and nothing contained in this Agreement or any of the
other Loan Documents shall be construed to constitute the Agent as a
trustee for any Bank.
ss.12.2 Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by Borrower.
ss.12.3 No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or
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therewith, or be responsible for the consequences of any oversight or error of
judgment whatsoever, except that the Agent or such other Person, as the case may
be, may be liable for losses due to its willful misconduct or gross negligence.
ss.12.4 No Representations. The Agent shall not be responsible for the
execution or validity or enforceability of this Agreement, the Revolving Credit
Notes or any of the other Loan Documents or for the validity, enforceability or
collectability of any such amounts owing with respect to the Revolving Credit
Notes, or for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of Borrower or any of its
Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein. The
Agent shall not be bound to ascertain whether any notice, consent, waiver or
request delivered to it by Borrower or any holder of any of the Revolving Credit
Notes shall have been duly authorized or is true, accurate and complete. The
Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Banks, with respect
to the credit worthiness or financial condition of Borrower. Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.
ss.12.5 Payments.
(a) A payment by Borrower to the Agent hereunder or any of the other
Loan Documents for the account of any Bank shall constitute a payment to
such Bank. The Agent agrees promptly to distribute to each Bank such
Bank's pro rata share of payments received by the Agent for the account of
the Banks except as otherwise expressly provided herein or in any of the
other Loan Documents.
(b) If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder, under the Revolving Credit
Notes or under any of the other Loan Documents might involve it
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in liability, it may refrain from making distribution until its right to
make distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person
to whom any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be repaid
or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails (i) to
make available to the Agent its pro rata share of any Loan or (ii) to
comply with the provisions of ss.11 with respect to making dispositions
and arrangements with the other Banks, where such Bank's share of any
payment received, whether by setoff or otherwise, is in excess of its pro
rata share of such payments due and payable to all of the Banks, in each
case as, when and to the full extent required by the provisions of this
Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall be
deemed a Delinquent Bank until such time as such delinquency is satisfied.
A Delinquent Bank shall be deemed to have assigned any and all payments
due to it from Borrower, whether on account of outstanding Loans, unpaid
reimbursement Obligations, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective
pro rata shares of all Outstanding Loans. The Delinquent Bank hereby
authorizes the Agent to distribute such payments to the nondelinquent
Banks in proportion to their respective pro rata shares of all Outstanding
Loans. A Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the assigned
payments to all outstanding Loans of the nondelinquent Banks, the Banks'
respective pro rata shares of all Outstanding Loans have returned to those
in effect immediately prior to such delinquency and without giving effect
to the nonpayment causing such delinquency.
ss.12.6 Holders of Revolving Credit Notes. The Agent may deem and treat
the payee of any Revolving Credit Note as the absolute owner or purchaser
thereof for all purposes hereof until it shall have been furnished in writing
with a
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different name by such payee or by a subsequent holder, assignee or transferee.
ss.12.7 Indemnity. The Banks ratably agree hereby to indemnify and hold
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by Borrower as required
by ss.14), and liabilities of every nature and character arising out of or
related to this Agreement, the Revolving Credit Notes, or any of the other Loan
Documents or the transactions contemplated or evidenced hereby or thereby, or
the Agent's actions taken hereunder or thereunder, except to the extent that any
of the same shall be caused by the Agent's willful misconduct or gross
negligence.
ss.12.8 Agent as Bank. In its individual capacity, BKG shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Revolving
Credit Notes as it would have were it not also the Agent.
ss.12.9 Resignation. The Agent may resign at any time by giving sixty (60)
days' prior written notice thereof to the Banks and Borrower. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to Borrower. If
no successor Agent shall have been so appointed by the Majority Banks and shall
have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a commercial paper rating of not less than A-2 or its equivalent by
Standard & Poor's Corporation. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation, the provisions of
this Agreement and the other Loan Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
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ss.12.10 Notification of Defaults and Events of Default and Material
Conditions or Information. Each Bank hereby agrees that, upon learning of the
existence of a Default or an Event of Default, or any material condition which
differs from conditions existing as of even date, it shall promptly notify the
Agent thereof. The Agent hereby agrees that upon receipt of any notice under
this ss.12.10 it shall promptly notify the other Banks of the existence of such
Default or Event of Default or material condition.
ss.13 YIELD PROTECTION.
ss.13.1 Unavailability. Notwithstanding anything contained herein which
may be construed to the contrary, if with respect to any proposed Eurodollar
Rate Advance for any Eurodollar Advance Period, the Agent determines that
deposits in dollars (in the applicable amount) are not being offered to the
Agent in the relevant market for such Eurodollar Advance Period, the Agent
shall forthwith give notice thereof to Borrower and the Banks, whereupon until
the Agent notifies Borrower that the circumstances giving rise to such situation
no longer exist, the obligations of the Banks to make such types of Eurodollar
Rate Advances shall be suspended.
ss.13.2 Illegality. If any applicable law, rule, or regulation, or any
change therein, or any interpretation or change in interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank with any request or directive (whether or not having the
force of law) of any such authority, central bank, or comparable agency, shall
make it unlawful or impossible for any Bank to make, maintain, or fund its
Eurodollar Rate Advances, such Bank shall so notify the Agent, and the Agent
shall forthwith give notice thereof to the other Banks and Borrower. Before
giving any notice to the Agent pursuant to this ss.13.2, such Bank shall
designate a different lending office if such designation will avoid the need for
giving such notice and will not, in the reasonable judgment of such Bank, be
otherwise materially disadvantageous to such Bank. Upon receipt of such notice,
notwithstanding anything contained in ss.2 hereof, Borrower shall repay in full
the then outstanding principal amount of each affected Eurodollar Rate Advance
of such Bank, together with accrued interest thereon, either (a) on the last day
of the then current Eurodollar Advance
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Period applicable to such Eurodollar Rate Advance if such Bank may lawfully
continue to maintain and fund such Eurodollar Rate Advance to such day or (b)
immediately if such Bank may not lawfully continue to fund and maintain such
Eurodollar Rate Advance to such day; provided, however, that notwithstanding any
provision contained in this Agreement to the contrary, Borrower shall not be
required to compensate any Bank for any losses, including any loss or expenses
incurred by reason of the liquidation, reemployment of deposits or other funds
acquired to obtain the Eurodollar Rate Loan, incurred as a consequence of any
required conversion of a Eurodollar Rate Loan to a Base Rate Loan as hereinafter
provided, as a result of the events described in this Section. Concurrently with
repaying each affected Eurodollar Rate Advance of such Bank, notwithstanding
anything contained in ss.2 hereof, Borrower shall borrow a Base Rate Advance (or
the other type of Eurodollar Rate Advance, if available) from such Bank, and
such Bank shall make such Advance in an amount such that the outstanding
principal amount of the Note held by such Bank shall equal the outstanding
principal amount of such Note immediately prior to such repayment.
ss.13.3 Increased Costs.
(a) If, after the date hereof, any applicable law, rule, or
regulation, or any change therein, or any interpretation or change in
interpretation or administration thereof by any governmental authority,
central bank, or comparable agency charged with the interpretation or
administration thereof or compliance by any Bank with any request or
directive (whether or not having the any such authority, central bank, or
comparable agency:
(i) Shall subject any Bank to any tax, duty, or other charge
with respect to its obligation to make Eurodollar Rate Advances, or
its Eurodollar Rate Advances, or shall change the basis of taxation
of payments to any Bank of the principal of or interest on its
Eurodollar Rate Advances or in respect of any other amounts due
under this Agreement in respect of its Eurodollar Rate Advances or
its obligation to make Eurodollar Rate Advances (except for taxes
imposed upon or measured by net income or alternative minimum
taxable income or taxable assets in lieu of income
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imposed by the United States and the jurisdiction in which such
Bank's principal executive office is located); or
(ii) Shall impose, modify, or deem applicable with respect to
the making, funding or maintaining any Advance hereunder, any
reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System, but excluding any included
in an applicable Eurodollar Reserve Percentage), special deposit,
capital adequacy, assessment, or other requirement or condition
against assets of, deposits with or for the account of, or
commitments or credit extended by any Bank, or shall impose on any
Bank or the eurodollar interbank borrowing market any other
condition affecting its obligation to make such Eurodollar Rate
Advances or its Eurodollar Rate Advances;
and the result of any of the foregoing is to increase the cost to such Bank of
making or maintaining any such Eurodollar Rate Advances, or to reduce the amount
of any sum received or receivable by such Bank under this Agreement or under its
Notes with respect thereto, and such increase is not given effect in the
determination of the Eurodollar Rate then, on the earlier of thirty (30) days
after written demand by such Bank or the Maturity Date, Borrower agrees to pay
to such Bank such additional amount or amounts as such Bank determines is
attributable to making, funding and maintaining its Eurodollar Rate Advances.
Each Bank will promptly notify Borrower and the Agent of any event of which it
has knowledge, occurring after the date hereof, which will entitle such Bank to
compensation pursuant to this ss.13.3 and will designate a different lending
office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the reasonable judgment of such Bank, be
otherwise materially disadvantageous to such Bank.
(b) A certificate of any Bank claiming compensation under this
ss.13.3 and setting forth the additional amount or amounts to be paid to
it hereunder and calculations therefor shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods. If any Bank demands
compensation
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under this ss.13.3, Borrower may at any time, upon at least five (5)
Business Days' prior notice to such Bank, prepay in full the then
outstanding affected Eurodollar Rate Advances of such Bank, together with
accrued interest thereon to the date of prepayment, along with any
reimbursement required under ss.2.1.5(c) hereof. Concurrently with
prepaying such Eurodollar Rate Advances Borrower shall borrow a Base Rate
Advance, or a Eurodollar Rate Advance not so affected, from such Bank, and
such Bank shall make such Advance in an amount such that the outstanding
principal amount of the Notes held by such Bank shall equal the
outstanding principal amount of such Notes immediately prior to such
prepayment.
ss.13.4 Effect On Other Advances. If notice has been given pursuant to
ss.13.1, ss.13.2 or ss.13.3 suspending the obligation of any Bank to make any
type of Eurodollar Rate Advance, or requiring Eurodollar Rate Advances of any
Bank to be repaid or prepaid, then, unless and until such Bank notifies Borrower
that the circumstances giving rise to such repayment no longer apply, all
Advances which would otherwise be made by such Bank as to the type of Eurodollar
Rate Advances affected shall, at the option of Borrower, be made instead as
Base Rate Advances.
ss.13.5 Capital Adequacy. If after the date hereof, any Bank (or any
Affiliate of the foregoing) shall have reasonably determined that the adoption
of any applicable law, governmental rule, regulation or order regarding the
capital adequacy of banks or bank holding companies, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by such Bank (or any Affiliate of the
foregoing) with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such governmental authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Bank's (or any Affiliate of the foregoing) capital as a consequence of
such Bank's Commitment or Obligations hereunder to a level below that which it
could have achieved but for such adoption, change or compliance (taking into
consideration such Bank's (or any Affiliate of the foregoing) policies with
respect to capital adequacy immediately before such adoption, change or
compliance and
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assuming that such Bank's (or any Affiliate of the foregoing) capital was fully
utilized prior to such adoption, change or compliance), then, within thirty (30)
days after written demand by such Bank, Borrower shall pay to such Bank such
additional amounts as shall be sufficient to compensate such Bank for any such
reduction actually suffered; provided, however, that there shall be no
duplication of amounts paid to a Bank pursuant to this sentence and ss.13.3
hereof. A certificate of such Bank setting forth the amount to be paid to such
Bank by Borrower as a result of any event referred to in this paragraph shall,
absent manifest error, be conclusive.
ss.14 EXPENSES. Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Agent or any of the
Banks (other than taxes based upon the Agent's or any Bank's net income) on or
with respect to the transactions contemplated by this Agreement (Borrower hereby
agreeing to indemnify the Agent and each Bank with respect thereto), (c) the
reasonable fees, expenses and disbursements of the Agent's legal counsel or any
local counsel to the Agent incurred in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, each closing hereunder, and amendments, modifications,
approvals, consents or waivers hereto or hereunder, (d) all reasonable
out-of-pocket expenses (including appraisal fees, investment banking fees and
reasonable attorneys' fees and costs, which attorneys may be employees of any
Bank or the Agent) incurred by any Bank or the Agent in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents
against Borrower or the administration thereof after the occurrence of a Default
or Event of Default and (ii) any litigation, proceeding or dispute whether
arising hereunder or otherwise, in any way related to any Bank's or the Agent's
relationship with Borrower and (e) all reasonable fees, expenses and
disbursements of any Bank or the Agent incurred in connection with UCC searches,
and (f) all reasonable costs, fees and expenses incurred by the Agent in the
Agent's efforts to administer and collect the Loans evidenced by this Agreement.
The covenants of this ss.14 shall survive payment or satisfaction of payment of
amounts owing with respect to the Revolving Credit Notes and Borrower shall be
responsible for the amounts listed above,
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regardless of whether the costs were incurred prior to or subsequent to the
Closing Date.
ss.15 INDEMNIFICATION. Borrower agrees to indemnify and hold harmless the
Agent and the Banks from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of this
Agreement or any of the other Loan Documents or the transactions contemplated
hereby including, without limitation, (a) any actual or proposed use by Borrower
of the proceeds of any of the Loans, (b) Borrower entering into or performing
this Agreement or any of the other Loan Documents or (c) with respect to
Borrower and its properties and assets, the violation of any Environmental Law,
the presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated costs
of internal counsel incurred in connection with any such investigation,
litigation or other proceeding. In litigation, or the preparation therefor, the
Banks and the Agent shall be entitled to select their own counsel and, in
addition to the foregoing indemnity, Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of Borrower under this ss.15 are unenforceable for any reason,
Borrower hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law.
ss.16 SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Revolving Credit Notes, in
any of the other Loan Documents or in any documents or other papers delivered by
or on behalf of Borrower pursuant hereto shall be deemed to have been relied
upon by the Banks and the Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Banks of any
of the Loans, as herein contemplated, and shall continue in full force and
effect so long as any amount due under this Agreement or the Revolving Credit
Notes or any of the other Loan Documents remains outstanding or any Bank has
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any obligation to make any Loans. All statements contained in any certificate or
other paper delivered to any Bank or the Agent at any time by or on behalf of
Borrower pursuant hereto or in connection with the transactions contemplated
hereby shall constitute representations and warranties by Borrower hereunder.
ss.17 ASSIGNMENT AND PARTICIPATION.
ss.17.1 Conditions to Assignment by Banks. Except as provided herein, each
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it, and the Revolving Credit Notes held by it;
provided that (a) the Agent and Borrower shall have given their prior written
consent to such assignment, (b) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Bank's rights and obligations
under this Agreement, (c) each assignment shall be in an amount that is a whole
multiple of $1,000,000, (d) each Bank which is a Bank on the date hereof shall
retain, free of any such assignment, an amount of its Commitment of not less
than $10,000,000 and (e) the parties to such assignment shall execute and
deliver to the Agent, for recording in the Register (as hereinafter defined), an
Assignment and Acceptance, substantially in the form of Exhibit E hereto (an
"Assignment and Acceptance"), together with any Revolving Credit Notes subject
to such assignment. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five (5) Business Days after the
execution thereof, (i) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in ss.17.3, be released from its obligations under
this Agreement. Notwithstanding the foregoing, BKB shall at all times during the
effectiveness of this Agreement maintain a minimum commitment of $24,000,000.
ss.17.2 Certain Representations and Warranties; Limitations; Covenants. By
executing and delivering an Assignment and Acceptance, the parties thereunder
confirm
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and agree with each other and the other parties hereto as follows: (a) other
than the representation and warranty that it is the legal and beneficial owner
of the interest being assigned thereby free and clear of any adverse claim, the
assigning Bank makes 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, sufficiency or value of this Agreement, the other
Loan Documents or any other instrument or document furnished pursuant hereto;
(b) the assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower and its
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations, or the performance or observance by Borrower or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Agreement or any of the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; (c) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in ss.9.10 hereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (d) such assignee will, independently and without
reliance upon the assigning Bank, the Agent or any other 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; (e) such assignee represents and warrants that it is an Eligible
Assignee; (f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto; (g)
such assignee agrees that it will perform in accordance with their terms all of
the obligations that by the terms of this Agreement are required to be performed
by it as a Bank; and (h) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and Acceptance.
ss.17.3 Register. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the
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recordation of the names and addresses of the Banks and the Commitment
Percentages of, and principal amount of the Loans owing to the Banks from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by Borrower and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $6,000.
ss.17.4 New Revolving Credit Notes. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each
Revolving Credit Note subject to such assignment, the Agent shall (a) record the
information contained therein in the Register, and (b) give prompt notice
thereof to Borrower and the Banks (other than the assigning Bank). Within five
(5) Business Days after receipt of such notice, Borrower, at its own expense,
shall execute and deliver to the Agent, in exchange for each surrendered
Revolving Credit Note, a new Revolving Credit Note to the order of such Eligible
Assignee in an amount equal to the amount assumed by such Eligible Assignee
pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained some portion of its obligations hereunder, a new Revolving Credit Note
to the order of the assigning Bank in an amount equal to the amount retained by
it hereunder. Such new Revolving Credit Notes shall provide that they are
replacements for the surrendered Revolving Credit Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Revolving Credit Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
the assigned Revolving Credit Notes. Within five (5) days of issuance of any new
Revolving Credit Notes pursuant to this ss.17.4, Borrower shall deliver an
opinion of counsel, addressed to the Banks and the Agent, relating to the due
authorization, execution and delivery of such new Revolving Credit Notes and the
legality, validity and binding effect thereof, in form and substance
satisfactory to the Banks. The surrendered Revolving Credit Notes shall be
canceled and returned to Borrower.
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ss.17.5 Disclosure. Borrower agrees that in addition to disclosures made
in accordance with standard banking practices any Bank may disclose information
obtained by such Bank pursuant to this Agreement to assignees and potential
assignees hereunder; provided that such assignees or potential assignees shall
agree (a) to treat in confidence such information, (b) not to disclose such
information to a third party and (c) not to make use of such information for
purposes of transactions unrelated to such contemplated assignment or
participation.
ss.17.6 Miscellaneous Assignment Provisions. If any assignee Bank is not
incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. Anything contained in
this ss.17.6 to the contrary notwithstanding, any Bank may at any time pledge
all or any portion of its interest and rights under this Agreement (including
all or any portion of its Revolving Credit Notes) to any of the twelve Federal
Reserve Banks organized under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341.
No such pledge or the enforcement thereof shall release the pledgor Bank from
its obligations hereunder or under any of the other Loan Documents.
ss.17.7 Assignment by Borrower. Borrower shall not assign or transfer any
of its rights or obligations under any of the Loan Documents without the prior
written consent of each of the Banks.
ss.18 NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the Revolving Credit Notes shall be in writing and
shall be delivered in hand, mailed by United States registered or certified
first class mail, postage prepaid, sent by overnight courier, or sent by
telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, at the following address, or at such other
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address as having been last furnished in writing to the person giving notice:
(a) if to Borrower:
NVR, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇▇
Columbia Square
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Agent:
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice) to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
Suite 2400
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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(b) if to the Banks:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ Dominus
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Bank of New York
Legal Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
U.S. Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Chase Bank of Texas, N.A.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (i) if delivered by hand, overnight courier or facsimile
to a responsible officer of the party to which it is directed, at the time of
the receipt thereof by such officer or the sending of such facsimile and (ii)
if sent by registered or certified first class mail, postage prepaid, on the
third Business Day following the mailing thereof.
ss.19 GOVERNING LAW. THIS AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS, ARE CONTRACTS UNDER THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). BORROWER AGREES THAT ANY SUIT
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FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS HAY BE
BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT
SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN ss.18. BORROWER HEREBY WAIVES ANY OBJECTION THAT IT HAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.
ss.20 HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
ss.21 SOURCE OF FUNDS. Notwithstanding the use by the Banks of the Base
Rate and the Eurodollar Rate as reference rates for the determination of
interest on the Loans, the Banks shall be under no obligation to obtain funds
from any particular source in order to charge interest to Borrower at interest
rates tied to such reference rates.
ss.22 COUNTERPARTS. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument. In proving this Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
ss.23 ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in ss.25.
ss.24 WAIVER OF JURY TRIAL. Borrower hereby waives its right to a jury
trial with respect to any action or claim arising out of any dispute in
connection with this Agreement, the Revolving Credit Notes or any of the other
Loan Documents, any rights or obligations hereunder or thereunder or the
performance of such rights and obligations. Except as prohibited by law,
Borrower hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any
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damages other than, or in addition to, actual damages. Borrower (a) certifies
that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Agent and the Banks have been induced to enter into this
Agreement, the other Loan Documents to which it is a party by, among other
things, the waivers and certifications contained herein.
ss.25 CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval required
or permitted by this Agreement to be given by the Banks may be given, and any
term of this Agreement, the other Loan Documents or any other instrument related
hereto or mentioned herein may be amended, and the performance or observance by
Borrower or any of its Subsidiaries of any terms of this Agreement, the other
Loan Documents or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of Borrower and the written consent of the Majority Banks. Notwithstanding the
foregoing, the rate of interest on and the term of the Revolving Credit Notes,
the amount of the Commitments of the Banks, and the amount of the fees hereunder
may not be changed; the definition of Majority Banks may not be amended without
the written consent of all of the Banks; and the amount of the Agent's fee
payable for the Agent's account and ss.12 may not be amended without the written
consent of the Agent. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of the Agent or any Bank in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon Borrower shall entitle Borrower to other or further notice or
demand in similar or other circumstances.
ss.26 SEVERABILITY. The provisions of this Agreement are severable and if
any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
under seal as of the date first set forth above.
Borrower: NVR, INC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Sr. Vice President Finance, Chief
Financial Officer & Treasurer
---------------------------------
Agent: BANKBOSTON, N.A., Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Banks: BANKBOSTON, N.A.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CHASE BANK OF TEXAS, N.A.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE BANK OF NEW YORK
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
U.S. BANK
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT A
Exhibit A Borrowing Base Report
Exhibit B Request for Advance
Exhibit C The Revolving Credit Notes
Exhibit D Reimbursement Agreement
Exhibit E Assignment and Acceptance
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SCHEDULES
1 Commitments
1 Commitment Percentage
1.2 Certain other entities
6.1(c) List of Subsidiaries of Borrower
6.2(b) Shares (Business Activity)
6.14(a) ERISA list of pension plans
6.14(b) Welfare Plans
6.14(e) Obligations
6.20 Environmental Compliance
6.21 Insurance
9.6 Indebtedness
9.6(h) Unsecured Indebtedness
9.19 Security Interests and Liens
9.21 Investments
9.33(c) Development Activity
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TABLE OF CONTENTS
Page
ss.1 DEFINITIONS ........................................................... 3
ss.2 THE CREDIT ............................................................ 18
ss.2.1 Revolving Credit Loans ........................................ 18
ss.2.2 Letters of Credit ............................................. 27
ss.3 MAXIMUM COMMITMENT AMOUNT; REDUCTION AND INCREASE ..................... 28
ss.3.1 Automatic Reductions .......................................... 29
ss.3.2 Optional Reductions ........................................... 29
ss.3.3 Increase in Commitment Amount ................................. 29
ss.3.4 Overline Amount. .............................................. 29
ss.4 FEES .................................................................. 30
ss.4.1 Commitment Fee ................................................ 30
ss.4.2 Letter of Credit Fees ......................................... 31
ss.4.3 Agent's Fee ................................................... 31
ss.4.4 Renewal Fee ................................................... 31
ss.5 COMPUTATIONS AND INTEREST LIMITATION .................................. 31
ss.5.1 Computations .................................................. 31
ss.5.2 Interest Limitation ........................................... 32
ss.6 REPRESENTATIONS AND WARRANTIES ........................................ 32
ss.6.1 Existence, Etc ................................................ 32
ss.6.2 Business Activity ............................................. 33
ss.6.3 Authority, Etc ................................................ 33
ss.6.4 Binding Effect of Documents ................................... 34
ss.6.5 No events of Default, Etc ..................................... 35
ss.6.6 Chief Executive Offices ....................................... 35
ss.6.7 Financial Statements; Solvency ................................ 35
ss.6.8 Changes; None Adverse ......................................... 36
ss.6.9 Mortgages and Liens ........................................... 36
ss.6.10 Indebtedness .................................................. 36
ss.6.11 Litigation .................................................... 36
ss.6.12 Taxes ......................................................... 37
ss.6.13 Liens ......................................................... 37
ss.6.14 ERISA Compliance; Severance Obligations ....................... 37
ss.6.15 Other Representations ......................................... 39
ss.6.16 Disclosure .................................................... 39
ss.6.17 Holding Company and Investment Company Acts ................... 39
ss.6.18 Regulations U and X ........................................... 39
ss.6.19 Fiscal Year ................................................... 39
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Page
ss.6.20 Compliance With Certain Environmental Laws and
Laws Pertaining to Land Sales ................................. 40
ss.6.21 Insurance ..................................................... 41
ss.6.22 Compliance with Indentures .................................... 41
ss.6.23 Stock Ownership ............................................... 41
ss.7 CONDITIONS TO THE FIRST LENDING ....................................... 41
ss.7.1 Loan Documents, Etc. .......................................... 42
ss.7.2 Legality of Transactions ...................................... 42
ss.7.3 Representations and Warranties . . . .......................... 42
ss.7.4 Performance, Etc. ............................................. 42
ss.7.5 Certified Copies of Certain Documents ......................... 42
ss.7.6 Proof of Action by Borrower ................................... 43
ss.7.7 Incumbency Certificate ........................................ 43
ss.7.8 Proceedings and Documents ..................................... 43
ss.7.9 Fees .......................................................... 43
ss.7.10 Legal Opinions ................................................ 43
ss.7.11 Borrowing Base Report ......................................... 44
ss.7.12 Certificates of Insurance ..................................... 44
ss.7.13 Legal Fees .................................................... 44
ss.8 CONDITIONS TO SUBSEQUENT LOANS AND LETTERS OF CREDIT .................. 44
ss.8.1 Legality of Transactions ...................................... 44
ss.8.2 Representations and Warranties; No Default .................... 44
ss.8.3 Performance, Etc. ............................................. 45
ss.8.4 Proceedings and Documents ..................................... 45
ss.8.5 Payment of Fees ............................................... 45
ss.9 COVENANTS OF BORROWER ................................................. 46
ss.9.1 Punctual Payment .............................................. 46
ss.9.2 Business Activity ............................................. 46
ss.9.3 Legal Existence, Etc. ......................................... 46
ss.9.4 Use of Loan Proceeds; Letters of Credit ....................... 47
ss.9.5 Subordinated Debt ............................................. 47
ss.9.6 Indebtedness .................................................. 47
ss.9.7 Minimum Tangible Net Worth .................................... 48
ss.9.8 Debt Service Coverage ......................................... 49
ss.9.9 Maximum Indebtedness Leverage Ratio ........................... 49
ss.9.10 Financial Statements .......................................... 49
ss.9.11 Notice of Litigation and Judgment ............................. 51
ss.9.12 Notice of Defaults ............................................ 51
ss.9.13 Books and Records; Fiscal Year ................................ 52
ss.9.14 Insurance ..................................................... 52
ss.9.15 Taxes ......................................................... 53
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Page
ss.9.16 Compliance with Law ........................................... 54
ss.9.17 Access ........................................................ 55
ss.9.18 ERISA compliance .............................................. 55
ss.9.19 Security Interests and Liens .................................. 55
ss.9.20 Distributions ................................................. 58
ss.9.21 Investments ................................................... 58
ss.9.23 Change in Terms or Prepayment of Existing
Indebtedness .................................................. 61
ss.9.24 Merger, Consolidation and Disposition of Assets ............... 62
ss.9.25 Change of Corporate Name ...................................... 63
ss.9.26 Acquisition Covenants ......................................... 63
ss.9.27 Further Assurances ............................................ 64
ss.9.28 Maximum Commitment Amount ..................................... 64
ss.9.29 Borrowing Base ................................................ 65
ss.9.30 Certain Environmental Matters ................................. 65
ss.9.31 Transactions with Affiliated Persons .......................... 66
ss.9.32 Material Adverse Changes ...................................... 66
ss.9.33 Housing Covenants ............................................. 67
ss.9.34 Additional Covenants Relating to Environmental
Matters ....................................................... 68
ss.9.35 Patents and Trademarks License ................................ 69
ss.9.36 Restricted Subsidiaries ....................................... 70
ss.9.37 Total Liabilities ............................................. 70
ss.10 EVENTS OF DEFAULT; ACCELERATION; REMEDIES ............................ 70
ss.10.1 Events of Default; Acceleration . . . ......................... 70
ss.10.2 Remedies ...................................................... 73
ss.10.3 Further Rights ................................................ 74
ss.10.4 Proceeds of Collection or Sale ................................ 74
ss.10.5 Marshalling ................................................... 74
ss.11 SETOFF ............................................................... 75
ss.12 THE AGENT ............................................................ 75
ss.12.1 Appointment and Authorization ................................. 75
ss.12.2 Employees and Agents .......................................... 76
ss.12.3 No Liability .................................................. 76
ss.12.4 No Representations ............................................ 77
ss.12.5 Payments ...................................................... 77
ss.12.6 Holders of Revolving Credit Notes ............................. 78
ss.12.7 Indemnity ..................................................... 79
ss.12.8 Agent as Bank ................................................. 79
ss.12.9 Resignation ................................................... 79
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ss.12.10 Notification of Defaults and Events of Default
and Material Conditions or Information ........................ 79
ss.13 YIELD PROTECTION ..................................................... 80
ss.13.1 Unavailability ................................................ 80
ss.13.2 Illegality .................................................... 80
ss.13.3 Increased Costs ............................................... 81
ss.13.4 Effect On Other Advances ...................................... 83
ss.13.5 Capital Adequacy .............................................. 83
ss.14 EXPENSES ............................................................. 84
ss.15 INDEMNIFICATION ...................................................... 85
ss.16 SURVIVAL OF COVENANTS, ETC ........................................... 85
ss.17 ASSIGNMENT AND PARTICIPATION ......................................... 86
ss.17.1 Conditions to Assignment by Banks ........................... 86
ss.17.2 Certain Representations and Warranties;
Limitations; Covenants ...................................... 86
ss.17.3 Register .................................................... 87
ss.17.4 New Revolving Credit Notes .................................. 88
ss.17.5 Disclosure .................................................. 89
ss.17.6 Miscellaneous Assignment Provisions ......................... 89
ss.17.7 Assignment by Borrower ...................................... 89
ss.18 NOTICES, ETC ......................................................... 89
ss.19 GOVERNING LAW ........................................................ 91
ss.20 HEADINGS ............................................................. 92
ss.21 SOURCE OF FUNDS ...................................................... 92
ss.22 COUNTERPARTS ......................................................... 92
ss.23 ENTIRE AGREEMENT, ETC ................................................ 92
ss.24 WAIVER OF JURY TRIAL ................................................. 92
ss.25 CONSENTS, AMENDMENTS, WAIVERS, ETC. .................................. 93
ss.26 SEVERABILITY ......................................................... 93
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