EXHIBIT 10.23
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REVOLVING LOAN AGREEMENT
Dated as of October 24, 2003
among
KB HOME
as Borrower
THE BANKS PARTY HERETO
BANK OF AMERICA, N.A.
as Administrative Agent
BANK ONE, NA
as Syndication Agent
FLEET NATIONAL BANK
CREDIT LYONNAIS NEW YORK BRANCH
WACHOVIA BANK, NATIONAL ASSOCIATION
KEYBANK NATIONAL ASSOCIATION
SUNTRUST BANK
as Documentation Agents
and
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS................................................................. 1
1.1 Defined Terms ........................................................................ 1
1.2 Accounting Terms ..................................................................... 25
1.3 Rounding ............................................................................. 26
1.4 Other Interpretive Provisions ........................................................ 26
1.5 Exhibits and Schedules ............................................................... 26
1.6 References to "Borrower and its Subsidiaries"......................................... 27
1.7 Time of Day........................................................................... 27
1.8 Letter of Credit Amounts.............................................................. 27
ARTICLE II LOANS AND LETTERS OF CREDIT..................................................................... 28
2.1 Loans-General......................................................................... 28
2.2 Base Rate Loans....................................................................... 29
2.3 Eurodollar Rate Loans................................................................. 29
2.4 Swing Line. .......................................................................... 29
2.5 Letters of Credit. ................................................................... 31
2.6 Reduction of Commitment .............................................................. 37
2.7 [Intentionally Omitted] .............................................................. 38
2.8 Borrowing Base........................................................................ 38
ARTICLE III PAYMENTS AND FEES ............................................................................. 39
3.1 Principal and Interest................................................................ 39
3.2 Commitment Fee........................................................................ 40
3.3 Other Fees ........................................................................... 40
3.4 [Intentionally Omitted] .............................................................. 40
3.5 Capital Adequacy. .................................................................... 41
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3.6 Eurodollar Fees and Costs............................................................. 42
3.7 Late Payments/Default Interest........................................................ 44
3.8 Computation of Interest and Fees ..................................................... 45
3.9 Holidays ............................................................................. 45
3.10 Payment Free of Taxes................................................................. 45
3.11 Funding Sources....................................................................... 46
3.12 Failure to Charge or Making of Payment Not Subsequent Waiver.......................... 46
3.13 Time and Place of Payments; Evidence of Payments; Application of Payments ............ 46
3.14 Administrative Agent's Right to Assume Payments Will be Made.......................... 46
3.15 Survivability ........................................................................ 47
3.16 Bank Calculation Certificate ......................................................... 47
3.17 Transition. .......................................................................... 47
ARTICLE IV REPRESENTATIONS AND WARRANTIES ................................................................. 49
4.1 Existence and Qualification; Power; Compliance with Law............................... 49
4.2 Authority; Compliance with Other Instruments and Government Regulations .............. 49
4.3 No Governmental Approvals Required ................................................... 50
4.4 Subsidiaries.......................................................................... 50
4.5 Financial Statements.................................................................. 50
4.6 No Other Liabilities; No Material Adverse Effect...................................... 51
4.7 Title to Assets....................................................................... 51
4.8 Intangible Assets .................................................................... 51
4.9 Existing Indebtedness and Contingent Guaranty Obligations ............................ 52
4.10 Governmental Regulation .............................................................. 52
4.11 Litigation ........................................................................... 52
4.12 Binding Obligations................................................................... 52
4.13 No Default ........................................................................... 52
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4.14 Pension Plans ........................................................................ 52
4.15 Tax Liability ........................................................................ 52
4.16 Regulation U.......................................................................... 52
4.17 Environmental Matters ................................................................ 52
4.18 Disclosure............................................................................ 53
4.19 Projections .......................................................................... 53
4.20 ERISA Compliance ..................................................................... 53
4.21 Tax Shelter Regulations .............................................................. 53
4.22 Solvency.............................................................................. 53
ARTICLE V AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)........................ 54
5.1 Payment of Taxes and Other Potential Liens .......................................... 54
5.2 Preservation of Existence............................................................. 54
5.3 Maintenance of Properties............................................................. 54
5.4 Maintenance of Insurance ............................................................. 54
5.5 Compliance with Laws ................................................................. 54
5.6 Inspection Rights..................................................................... 55
5.7 Keeping of Records and Books of Account .............................................. 55
5.8 Use of Proceeds....................................................................... 55
5.9 Subsidiary Guaranty .................................................................. 55
ARTICLE VI NEGATIVE COVENANTS.............................................................................. 56
6.1 Payment or Prepayment of Subordinated Obligations .................................... 56
6.2 [Intentionally Omitted] .............................................................. 56
6.3 Mergers and Sale of Assets............................................................ 56
6.4 Investments and Acquisitions ......................................................... 57
6.5 ERISA Compliance ..................................................................... 57
6.6 Change in Business ................................................................... 57
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6.7 Liens and Negative Pledges............................................................ 58
6.8 Transactions with Affiliates ......................................................... 59
6.9 Consolidated Tangible Net Worth....................................................... 59
6.10 Consolidated Leverage Ratio........................................................... 59
6.11 Consolidated Interest Coverage Ratio ................................................. 60
6.12 Distributions ........................................................................ 60
6.13 Amendments............................................................................ 60
6.14 [Intentionally Omitted] .............................................................. 60
6.15 Inventory ............................................................................ 60
6.16 Investment in Subsidiaries and Joint Ventures......................................... 60
6.17 Senior Indebtedness Not to Exceed Borrowing Base...................................... 60
6.18 Maximum Speculative Units ............................................................ 60
ARTICLE VII INFORMATION AND REPORTING REQUIREMENTS......................................................... 61
7.1 Financial and Business Information of Borrower and Its Subsidiaries................... 61
7.2 Compliance Certificate ............................................................... 63
ARTICLE VIII CONDITIONS.................................................................................... 64
8.1 Initial Advances, Etc................................................................. 64
8.2 Any Advance........................................................................... 65
8.3 Any Letter of Credit ................................................................. 66
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES UPON EVENTS OF DEFAULT........................................... 67
9.1 Events of Default..................................................................... 67
9.2 Remedies Upon Event of Default ...................................................... 68
ARTICLE X THE ADMINISTRATIVE AGENT......................................................................... 71
10.1 Appointment and Authorization......................................................... 71
10.2 Delegation of Duties.................................................................. 71
10.3 Liability of Administrative Agent..................................................... 71
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10.4 Reliance by Administrative Agent. ..................................................... 72
10.5 Notice of Default ..................................................................... 72
10.6 Credit Decision; Disclosure of Information by Administrative Agent..................... 72
10.7 Indemnification of Administrative Agent ............................................... 73
10.8 Administrative Agent in its Individual Capacity ....................................... 73
10.9 Successor Administrative Agent......................................................... 74
10.10 Administrative Agent May File Proofs of Claim ......................................... 74
10.11 Guaranty Matters....................................................................... 75
10.12 Other Agents; Arrangers and Managers................................................... 75
10.13 Defaulting Banks....................................................................... 75
10.14 No Obligations of Borrower............................................................. 76
ARTICLE XI MISCELLANEOUS................................................................................... 77
11.1 Cumulative Remedies; No Waiver......................................................... 77
11.2 Amendments; Consents .................................................................. 77
11.3 Costs, Expenses and Taxes.............................................................. 77
11.4 Nature of Banks' Obligations .......................................................... 78
11.5 Survival of Representations and Warranties ............................................ 79
11.6 Notices and Other Communications; Facsimile Copies. ................................... 79
11.7 Execution in Counterparts.............................................................. 80
11.8 Successors and Assigns................................................................. 80
11.9 Sharing of Setoffs..................................................................... 83
11.10 Indemnification by the Borrower........................................................ 83
11.11 Nonliability of Banks.................................................................. 84
11.12 Confidentiality ....................................................................... 84
11.13 No Third Parties Benefited............................................................. 85
11.14 Other Dealings ........................................................................ 85
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11.15 Right of Setoff - Deposit Accounts .................................................... 85
11.16 Further Assurances..................................................................... 85
11.17 Integration ........................................................................... 86
11.18 Governing Law ......................................................................... 86
11.19 Severability of Provisions ............................................................ 86
11.20 Headings............................................................................... 86
11.21 Conflict in Loan Documents............................................................. 86
11.22 Waiver of Right to Trial by Jury....................................................... 86
11.23 Purported Oral Amendments.............................................................. 87
11.24 Payments Set Aside .................................................................... 87
11.25 Hazardous Materials Indemnity.......................................................... 87
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Exhibits
A - Assignment and Assumption
B - Borrowing Base Certificate
C - Compliance Certificate
D - Loan Notice
E - Note
F-1 - Opinion of Counsel
F-2 - Opinion of Counsel
G - Subsidiary Guaranty
H - Swing Line Loan Notice
Schedules
1.1 Pro Rata Shares
3.17 Existing Letters of Credit
4.4 Subsidiaries
4.7 Existing Liens and Rights of Others
4.9 Existing Indebtedness and Contingent Obligations
6.4 Investments
11.6 Administrative Agent's Office
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REVOLVING LOAN AGREEMENT
Dated as of October 24, 2003
This Revolving Loan Agreement (as it may from time to time be supplemented,
modified, amended, renewed, extended or supplanted, this "Agreement"), dated as
of October 24, 2003, is entered into by and among KB HOME, a Delaware
corporation ("Borrower"), each financial institution set forth on the signature
pages of this Agreement or which from time to time becomes party hereto
(collectively, the "Banks " and individually, a "Bank"), Bank of America, N.A.,
as Administrative Agent, Bank One, NA, as Syndication Agent, Fleet National
Bank, Credit Lyonnais New York Branch, Wachovia Bank, National Association,
KeyBank National Association and Suntrust Bank, as Documentation Agents, and
Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager.
RECITALS
This Agreement establishes a new credit facility replacing that certain 2000
Revolving Loan Agreement dated as of October 3, 2000 (as amended, the "Prior
Revolving Loan Agreement") by and among Borrower, the banks named therein, Bank
of America, N.A., as administrative agent, and various other banks in various
agent capacities and the 2000 Term Loan Agreement dated as of October 3, 2000
(as amended, the "2000 Term Loan Agreement") by and among Borrower, the banks
named therein, and Bank of America, N. A., as administrative agent, and various
other banks in various agent capacities. Subject to the transition provisions of
Section 3.17, and as contemplated by Sections 8.1(a)(viii) and (a)(ix), the
terms and provisions of this Agreement shall become effective, and the Prior
Revolving Loan Agreement and the 2000 Term Loan Agreement shall terminate, as of
the Closing Date.
WHEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the meanings set forth below:
"2000 Term Loan Agreement" has the meaning set forth in the recitals of
the parties hereto.
"Acquisition" means any transaction, or any series of related
transactions, consummated after the Closing Date, by which Borrower or
any of its Subsidiaries directly or indirectly (a) acquires any ongoing
business or all or substantially all of the assets of any firm,
corporation or division thereof, whether through purchase of assets,
merger or otherwise, (b) acquires control of securities of a
corporation representing 50% or more of the ordinary voting power for
the election of directors or (c) acquires control of a 50% or more
ownership interest in any partnership, joint venture or other business
entity.
"Administrative Agent" means Bank of America or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account set forth on Schedule 11.6, or
such other address or account as the Administrative Agent may, from
time to time, notify the Borrower and the Banks.
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"Advance" means an advance made or to be made to Borrower by a Bank
pursuant to Article II.
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control"
(including its correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of power
to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership
interests, by contract or otherwise); provided that, in any event, any
Person which owns directly or indirectly 10% or more of the securities
having ordinary voting power for the election of directors or other
governing body of a corporation that has more than 100 record holders
of such securities or 10% or more of the partnership or other ownership
interests of any other Person that has more than 100 record holders of
such interests will be deemed to control such corporation or other
Person.
"Agent-Related Persons" means the Administrative Agent, together with
its Affiliates (including, in the case of Bank of America in its
capacity as the Administrative Agent, the Sole Lead Arranger and Sole
Book Manager), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Agents" mean the Administrative Agent and the Sole Lead Arranger and
Sole Book Manager.
"Agreement" has the meaning set forth in the first paragraph hereof.
"Applicable Base Rate Spread" means the applicable per annum percentage
set forth in the definition of "Applicable Rates".
"Applicable Commitment Fee Rate" means the applicable per annum
percentage set forth in the definition of "Applicable Rates"; provided
that if the Average Daily Usage for any 2 consecutive Fiscal Quarters
is less than 30% of the average amount of the Commitment for such
period, the Applicable Commitment Fee Rate for the immediately
following Fiscal Quarter shall be equal to the sum of (a) the
applicable per annum percentage set forth in the definition of
"Applicable Rates" plus (b) 0.100%.
"Applicable Eurodollar Rate Spread" means the applicable per annum
percentage set forth in the definition of "Applicable Rates".
"Applicable Federal Funds Rate" means, as of any date of determination,
a rate per annum equal to the Federal Funds Rate in effect on such date
and if such Federal Funds Rate is not available to the Swing Line Bank,
such rate per annum as is reasonably determined by the Swing Line Bank
as representing its actual cost of funding Swing Line Loans, without
the addition of fees or markup of any kind.
"Applicable Letter of Credit Fee" means the applicable per annum
percentage set forth in the definition of "Applicable Rates".
"Applicable Pricing Level" means Applicable Pricing Level I for any day
on which Borrower holds an Investment Grade Credit Rating and, for any
day on which Borrower does not hold an Investment Grade Credit Rating,
the Applicable Pricing Level is determined in accordance with
Borrower's Consolidated Leverage Ratio on such date as follows:
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APPLICABLE
PRICING LEVEL CONSOLIDATED LEVERAGE RATIO
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II Consolidated Leverage Ratio of less than or equal
to 1.00 to 1.00
III Consolidated Leverage Ratio of greater than 1.00
to 1.00, but less than or equal to 1.25 to 1.00
IV Consolidated Leverage Ratio of greater than 1.25
to 1.00, but less than or equal to 1.75 to 1.00
V Consolidated Leverage Ratio of greater than 1.75 to
1.00 but less than or equal to 2.00 to 1.00.
VI Consolidated Leverage Ratio of greater than 2.00
to 1.00
Borrower is responsible pursuant to Section 7.1(k) to provide the
Administrative Agent with notice of each change in the Applicable
Pricing Level that is due to the inception or cessation of an
Investment Grade Credit Rating. For any day on which Borrower does not
hold an Investment Grade Credit Rating, the Applicable Pricing Level
will be determined according to the Consolidated Leverage Ratio
reported by Borrower as of the first Business Day immediately following
the date a Compliance Certificate is delivered pursuant to Section 7.2.
"Applicable Rates" means, as of any date of determination, the
following percentages per annum, based upon the Applicable Pricing
Level on that date:
APPLICABLE LETTER OF
APPLICABLE CREDIT FEE
APPLICABLE APPLICABLE BASE COMMITMENT FEE APPLICABLE EURODOLLAR
PRICING LEVEL RATE SPREAD RATE RATE SPREAD
------------- ----------- ---- -----------
I 0.000% 0.200% 1.050%
II 0.000% 0.200% 1.100%
III 0.000% 0.250% 1.300%
IV 0.000% 0.250% 1.500%
V 0.000% 0.275% 1.750%
VI 0.000% 0.300% 2.000%
"Assignment and Assumption" means an assignment and assumption
substantially in the form of Exhibit A.
"Associate" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act, as in
effect on the date hereof.
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"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel.
"Authorizations" has the meaning set forth for that term in Section
4.1.
"Average Daily Usage" means, for any period, the quotient of (a) the
sum of (i) the sum of the principal balance of the Loans for each day
of such period plus (ii) the sum of the Letter of Credit Usage for each
day of such period divided by (b) the number of days in such period.
"Bank" means each financial institution whose name is set forth in the
signature pages of this Agreement and each lender which may hereafter
become a party to this Agreement pursuant to Section 11.8.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time
by Bank of America as its "prime rate." The "prime rate" is a rate set
by Bank of America based upon various factors including Bank of
America's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate. Any change
in such rate announced by Bank of America shall take effect at the
opening of business on the day specified in the public announcement of
such change.
"Base Rate Advance" means an Advance made by a Bank to fund its Pro
Rata Share of a Base Rate Loan.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"Borrower" means KB Home, a Delaware corporation, and its successors
and permitted assigns.
"Borrowing Base" has the meaning set forth in Section 2.8(b).
"Borrowing Base Certificate" means a written calculation of the
Borrowing Base, substantially in the form of Exhibit B signed, on
behalf of Borrower by a Senior Officer of Borrower.
"Borrowing Base Subsidiary" means (a) any Guarantor Subsidiary and (b)
any direct or indirect wholly-owned Domestic Subsidiary of Borrower or
any Guarantor Subsidiary.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or
are in fact closed in, the state where the Administrative Agent's
Office is located and, if such day relates to any Eurodollar Rate Loan,
means any such day on which dealings in Dollar deposits are conducted
by and between banks in the London interbank eurodollar market.
"Capital Lease" means, with respect to any Person, a lease of any
Property by that Person as lessee that is, or should be in accordance
with Financial Accounting Standards Board Statement No. 13, recorded as
a "capital lease" on a balance sheet of that Person prepared in
accordance with Generally Accepted Accounting Principles consistently
applied.
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"Cash" means all monetary items (including currency, coin and bank
demand deposits) that are treated as cash under Generally Accepted
Accounting Principles consistently applied.
"Cash Collateralize" has the meaning set forth in Section 2.5(g).
"Cash Equivalents" means, with respect to any Person, that Person's
Investments in:
(a) Government Securities due within one year of the making of the
Investment;
(b) readily marketable direct obligations of any State of the
United States of America or any political subdivision of any
such State or any public agency or instrumentality thereof
given on the date of such Investment a credit rating of at
least Aa3 by ▇▇▇▇▇'▇ or AA- by S&P, in each case due within
one year from the making of the Investment;
(c) certificates of deposit issued by, deposits in, deposits in
the London interbank eurodollar market made through, bankers'
acceptances of, and repurchase agreements covering Government
Securities executed by, (i) any Bank or (ii) any bank or
savings and loan association doing business in and
incorporated under the Laws of the United States of America,
any state thereof or the District of Columbia and having on
the date of such Investment combined capital, surplus and
undivided profits of at least $500,000,000 and which carries
on the date of such Investment a credit rating of P-1 or
higher by ▇▇▇▇▇'▇ or A-1 or higher by S&P, in each case due
within one year after the date of the making of the
Investment;
(d) certificates of deposit issued by, bank deposits in, deposits
in the London interbank eurodollar market made through,
bankers' acceptances of, and repurchase agreements covering
Government Securities executed by any branch or office located
in the United States of America of a bank incorporated under
the Laws of any jurisdiction outside the United States of
America having on the date of such Investment combined
capital, surplus and undivided profits of at least
$500,000,000 and which carries on the date of such Investment
a credit rating of P-1 or higher by ▇▇▇▇▇'▇ or A-1 or higher
by S&P, in each case due within one year after the date of the
making of the Investment;
(e) readily marketable commercial paper or other debt securities
of (i) any Bank that is a Bank as of the Closing Date, (ii)
corporations, commercial banks or financial institutions doing
business in and incorporated under the Laws of the United
States of America or any state thereof or the District of
Columbia or (iii) a holding company for a bank described in
clause (c) or (d) above, given on the date of such Investment
a credit rating of P-1 or higher by ▇▇▇▇▇'▇, of A-1 or higher
by S&P, or F-1 or higher by Fitch, in each case due within one
year of the making of the Investment;
(f) repurchase agreements covering Government Securities executed
by a broker or dealer registered under Section 15(b) of the
Exchange Act, having on the date of the Investment capital of
at least $50,000,000, due within 90 days after the date of the
making of the Investment; provided, that the maker of the
Investment receives written confirmation of the transfer to it
of record ownership of the Government Securities on the books
of a "primary dealer" in such government Securities or on the
books of such registered broker or dealer, as soon as
practicable after the making of the Investment;
(g) "money market preferred stock" issued by a corporation
incorporated under the Laws of the United States of America or
any State thereof (i) given on the date of such Investment
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a credit rating of at least Aa3 by ▇▇▇▇▇'▇ and AA- by S&P, in
each case having an investment period not exceeding 50 days or
(ii) to the extent that investors therein have the benefit of
a standby letter of credit issued by a Bank or a bank
described in clauses (c) or (d) above; provided, that (y) the
amount of all such Investments issued by the same issuer does
not exceed $10,000,000 and (z) the aggregate amount of all
such Investments does not exceed $25,000,000;
(h) a readily redeemable" money market mutual fund" sponsored by a
bank described in clause (c) or (d) hereof, or a registered
broker or dealer described in clause (f) hereof, that has and
maintains an investment policy limiting its investments
primarily to instruments of the types described in clauses (a)
through (g) hereof and given on the date of such Investment a
credit rating of at least Aa3 by ▇▇▇▇▇'▇ and AA- by S&P; and
(i) corporate notes or bonds having an original term to maturity
of not more than one year issued by a corporation incorporated
under the Laws of the United States of America or any state
thereof, or a participation interest therein; provided, that
(i) commercial paper issued by such corporation is given on
the date of such Investment a credit rating of at least Aa3 by
▇▇▇▇▇'▇ and AA- by S&P, (ii) the amount of all such
Investments issued by the same issuer does not exceed
$10,000,000 and (iii) the aggregate amount of all such
Investments does not exceed $25,000,000.
"Change in Control" means, and shall be deemed to have occurred at such
time as any of the following events shall occur:
(a) there shall be consummated any consolidation or merger of
Borrower in which Borrower is not the continuing or surviving
corporation or pursuant to which the Voting Stock would be
converted into Cash, securities or other property, other than
a merger or consolidation of Borrower where the Borrower is
not the continuing or surviving corporation and in which the
holders of Voting Stock immediately prior to the merger have
75% ownership, directly or indirectly, of the Voting Stock of
the surviving corporation immediately after such merger or
consolidation; or
(b) there is a report filed by any person, including its
Affiliates and Associates, on Schedule 13D or 14D-1 (or any
successor schedule, form or report) pursuant to the Exchange
Act, disclosing that such person (for the purposes of the
definition of Change in Control only, the term "person" is
used as defined in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act or any successor provision to either of the
foregoing) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange
Act) of 50% or more of the voting power of Borrower's Voting
Stock then outstanding; provided, however, that a person shall
not be deemed beneficial owner of, or to own beneficially (1)
any Securities tendered pursuant to a tender or exchange offer
made by or on behalf of such person or any of such person's
Affiliates or Associates until such tendered Securities are
accepted for purchase or exchange thereunder, or (2) any
Securities if such beneficial ownership (a) arises solely as a
result of a revocable proxy delivered in response to a proxy
or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations under the Exchange
Act, and (b) is not also then reportable on Schedule 13D (or
any successor schedule) under the Exchange Act; or
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(c) a "Change in Control" (or analogous term) as defined in one or
more indentures or agreements governing any Subordinated
Obligations occur and $25,000,000 of Subordinated Obligations
thereupon become due and payable by Borrower or its
Subsidiaries.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to have occurred if at any time Borrower, any Subsidiary of Borrower,
any employee stock ownership plan or any other employee benefit plan,
including any Pension Plan of Borrower or any Subsidiary of Borrower,
or any person holding Voting Stock for or pursuant to the terms of such
employee benefit plan, files or becomes obligated to file a report
under or in response to Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report) under the Exchange Act disclosing
beneficial ownership by it of shares of Voting Stock, whether in excess
of 50% or otherwise.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended or replaced
and as in effect from time to time.
"Commission" means the Securities and Exchange Commission and any
successor commission.
"Commitment" means, subject to Sections 2.6, $1,000,000,000. The Pro
Rata Shares of the Banks with respect to the Commitment are set forth
in Schedule 1.1.
"Compensation Period" has the meaning set forth for that term in
Section 3.14.
"Compliance Certificate" means a compliance certificate in the form of
Exhibit C signed, on behalf of Borrower, by a Senior Officer of
Borrower.
"Consolidated Adjusted EBITDA" means, for any period, Consolidated
EBITDA for such period plus (a) the amount of capitalized interest that
was included in cost of sales in determining Consolidated Net Income
for such period plus (b) all non-Cash Net Realizable Value Adjustments
made during such period.
"Consolidated EBITDA" means, for any period, the sum of (a)
Consolidated Net Income for such period, plus (b) any extraordinary
loss reflected in such Consolidated Net Income, minus (c) any
extraordinary gain reflected in such Consolidated Net Income, plus (d)
Consolidated Interest Expense for such period plus (e) the aggregate
amount of federal, state and foreign income taxes for such period, plus
(f) depreciation, amortization and all other non-cash expenses for such
period, in each case as determined in accordance with Generally
Accepted Accounting Principles consistently applied, and in the case of
items (d), (e) and (f), only to the extent deducted in the
determination of Consolidated Net Income for such period.
"Consolidated FIN 46 Subsidiaries" means entities that would not be
Consolidated Subsidiaries but for the issuance of the pronouncement
entitled Financial Interpretation Number 46 ("FIN 46") "Consolidation
of Variable Interest Entities" by the Financial Accounting Standards
Board on January 17, 2003.
"Consolidated Interest Coverage Ratio" means, as of any date of
determination, the ratio of (a) Consolidated Adjusted EBITDA for the 12
month period ending on such date to (b) the sum of (i) Consolidated
Interest Expense for the 12 month period ending on such date plus (ii)
all
-7-
dividends (other than dividends paid in the same class of stock) paid
on any preferred stock of Borrower during the 12 month period ending on
such date.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest, fees, charges and related expenses paid or payable
to a lender by Borrower and its Consolidated Subsidiaries on a
consolidated basis in connection with borrowed money (including any
capitalized interest and accretion of original issue discount on
long-term debt) and the interest portion of any capitalized lease
payments.
"Consolidated Leverage Ratio" means, as of any date of determination,
the ratio of (a) Consolidated Total Indebtedness on that date to (b)
Consolidated Tangible Net Worth on that date.
"Consolidated Net Income" means, for any period, the net income of
Borrower and its Consolidated Subsidiaries on a consolidated basis
determined in accordance with Generally Accepted Accounting Principles
consistently applied.
"Consolidated Subsidiaries" means, with respect to Borrower, all
entities whose financial statements are consolidated with the
consolidated financial statements of Borrower under Generally Accepted
Accounting Principles; provided, however, that the term "Consolidated
Subsidiaries" excludes Consolidated FIN 46 Subsidiaries for the purpose
of determining the Applicable Pricing Level and compliance with
Sections 4.5, 4.6, 4.7, 4.14, 6.9, 6.10, 6.11, 6.15 and 6.16.
"Consolidated Tangible Net Worth" means, as of any date of
determination, the Shareholders' Equity of Borrower and its
Consolidated Subsidiaries on a consolidated basis on that date minus
the Intangible Assets of Borrower and its Consolidated Subsidiaries on
a consolidated basis on that date minus any non-cash gain (or plus any
non-cash loss, as applicable) resulting from any marked to market
adjustments made directly to Consolidated Tangible Net Worth as a
result of fluctuations in the value of foreign currency instruments
owned by Borrower or any of its Consolidated Subsidiaries as mandated
under FAS 133.
"Consolidated Total Indebtedness" means, as of any date of
determination, all Indebtedness and Contingent Guaranty Obligations of
Borrower and its Consolidated Subsidiaries on a consolidated basis on
that date (without duplication for any guaranty by Borrower of a
Consolidated Subsidiary's Indebtedness or any guaranty by a
Consolidated Subsidiary of either Borrower's or another Consolidated
Subsidiary's Indebtedness or otherwise) minus (a) all Indebtedness and
Contingent Guaranty Obligations of Financial Subsidiaries on a
consolidated basis (but only to the extent that such Financial
Subsidiaries are also Consolidated Subsidiaries and there is no
recourse to Borrower or any other Consolidated Subsidiary) on that date
minus (b) the amount, if any, by which the aggregate Cash and Cash
Equivalents of Borrower and its Consolidated Subsidiaries (other than
the Financial Subsidiaries) on a consolidated basis on that date are in
excess of $15,000,000 (but not to exceed $300,000,000).
"Construction Costs" means, as of any date of determination, all costs
actually incurred by Borrower or any Borrowing Base Subsidiary with
respect to the construction of Units on Developed Lots, including land
basis.
"Contingent Guaranty Obligation" means, as to any Person, any (a)
direct or indirect guarantee of Indebtedness of, or other obligation
performable by, any other Person (other than a performance obligation
undertaken in the ordinary and usual course of business or obligations
with respect to
-8-
letters of credit), including any endorsement (other than for
collection or deposit in the ordinary course of business), co-making or
sale with recourse of the obligations of any other Person or (b)
assurance given to an obligee with respect to the performance of an
obligation (other than a performance obligation undertaken in the
ordinary and usual course of business) by, or the financial condition
of, any other Person, whether direct, indirect or contingent, including
any purchase or repurchase agreement covering such obligation or any
collateral security therefor, any agreement to provide funds (by means
of loans, capital contributions or otherwise) to such other Person, any
agreement to support the solvency or level of any balance sheet item of
such other Person, any "keep-well", "take-or-pay", "through put" or
other arrangement of whatever nature having the effect of assuring or
holding harmless any obligee against loss with respect to any
obligation of such other Person, or the LTV Maintenance Exposure
resulting from any LTV Maintenance Agreement. The amount of any
Contingent Guaranty Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the related primary obligation
(unless the Contingent Guaranty Obligation is limited by its terms to a
lesser amount, in which case to the extent of such amount) or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the Person in good faith.
"Contractual Obligation" means, as to any Person, any provision of any
outstanding Securities issued by that Person or of any material
agreement, instrument or undertaking to which that Person is a party or
by which it or any of its Property is bound, other than, in the case of
Borrower and its Subsidiaries, any of the Loan Documents.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, as amended from time to time, and all other applicable
liquidation, conservatorship, insolvency, reorganization, or similar
debtor relief Laws from time to time in effect affecting the rights of
creditors generally.
"Default" means any event that, with the giving of any notice or
passage of time, or both, would be an Event of Default.
"Default Rate" has the meaning set forth for that term in Section 3.7.
"Defaulting Bank" has the meaning set forth for that term in Section
10.13.
"Designated Deposit Account" means a demand deposit account to be
maintained by Borrower with Bank of America, as from time to time
designated by Borrower by written notification to the Administrative
Agent.
"Developed Lots" means, as of any date of determination, subdivision
lots located in the United States that are wholly-owned by Borrower or
its Borrowing Base Subsidiaries, unencumbered by any Lien or Liens
(other than Permitted Encumbrances), and that are subject to a recorded
plat or subdivision map, in substantial compliance with all applicable
Laws and available for the construction thereon of foundations for
Units.
"Distribution" means, with respect to any shares of capital stock or
any warrant or right to acquire shares of capital stock or any other
equity security issued by a Person, (a) the retirement, redemption,
purchase, or other acquisition for value (other than for capital stock
of the same type of such Person) by such Person of any such security,
(b) the declaration or payment by such Person of any dividend in Cash
or in Property (other than in capital stock of the same type of such
Person) on or with respect to any such security, and (c) any Investment
by such Person in any holder of 5% or more of the capital stock (or
other equity securities) of such Person, if a purpose
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of such Investment is to avoid the characterization of the transaction
between such Person and such holder as a Distribution under clause (a)
or (b) above. In addition, to the extent any loan or advance by
Borrower to one of its Subsidiaries is deemed to be an "Investment" for
purposes of this Agreement, then any principal payment made by such
Subsidiary in respect of such loan or advance shall be considered a
Distribution for purposes of Section 6.12.
"Dollars" means the national currency of the United States of America.
"Domestic Lending Office" means, with respect to each Bank, its office,
branch or affiliate identified on the signature pages hereof as its
Domestic Lending Office or such other office, branch or affiliate as
such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Administrative Agent.
"Domestic Subsidiary" means, with respect to any Person and as of any
date of determination, a Subsidiary of such Person (a) that is
organized under the Laws of the United States of America or any state
thereof and (b) the majority of the assets of which (as reflected on a
balance sheet of such Subsidiary prepared in accordance with Generally
Accepted Accounting Principles consistently applied) is located in the
United States of America; provided that ▇▇▇▇▇▇▇ and Broad
International, Inc., a California corporation, shall in no event be
considered a Domestic Subsidiary of Borrower.
"Domestic Unimproved Land" means, as of any date of determination, real
Property located in the United States of America that is: (a) owned by
Borrower or any of its Subsidiaries if on that date there has been
expended by Borrower or any of its Subsidiaries less than 50% of the
costs reasonably estimated by Borrower (in accordance with its past
practices as of the Closing Date) to develop such real Property into
Developed Lots; or (b) owned by Persons other than Borrower or any of
its Subsidiaries but which, if owned by Borrower or any of its
Subsidiaries on that date, would have satisfied the requirement set
forth in clause (a) and if on that date Borrower or any of its
Subsidiaries holds an option to purchase such real Property for which
it has paid an amount equal to 33% or more of the purchase price
provided for in such option to purchase, provided, that in the event an
option to purchase land covers more than one parcel, phase or lot, any
deposit paid by Borrower or any of its Subsidiaries shall be allocated
to each parcel, phase or lot pro rata in accordance with the purchase
price of the parcels, phases or lots. The "book value" with respect to
Domestic Unimproved Land referred to in Section 6.15 shall be
calculated as if the option to purchase had been exercised as of the
date of determination, and otherwise in accordance with Generally
Accepted Accounting Principles, consistently applied.
"Eligible Assignee" means (a) another Bank, (b) any commercial bank,
savings bank, savings and loan association or similar financial
institution which, (i) has total assets of $5,000,000,000 or more, (ii)
is "well capitalized" within the meaning of such term under the Federal
Depository Institutions Control Act, (iii) is engaged in the business
of lending money and extending credit under credit facilities
substantially similar to those extended under this Agreement and (iv)
is operationally and procedurally able to meet the obligations of a
Bank hereunder to the same degree as a commercial bank, (c) any
insurance company engaged in the business of writing insurance which
(i) has total assets of $5,000,000,000 or more, (ii) is "best
capitalized" under applicable regulations of the National Association
of Insurance Commissioners, and (iii) meets the requirements set forth
in subclauses (iii) and (iv) of clause (b) above and (d) any other
financial institution having total assets of $5,000,000,000 or more
(including a mutual fund or other fund under management of an
investment manager having under its management total assets of
$5,000,000,000 or more) which meets the requirements set forth in
subclauses (iii) and (iv) of clause (b) above; provided that each
Eligible Assignee must (A) be organized under the
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Laws of the United States of America, any state thereof or the District
of Columbia or (B) if a commercial bank, be organized under the Laws
set forth in clause (A) or under the Laws of the Cayman Islands or any
country which is a member of the Organization for Economic Cooperation
and Development, or a political subdivision of such a country, and (C)
act under the Loan Documents through a branch, agency or funding office
located in the United States of America and (D) be exempt from
withholding of tax on interest and deliver the documents related
thereto pursuant to the Code.
"ERISA" means, at any date, the Employee Retirement Income Security Act
of 1974 and the regulations thereunder, all as the same shall be in
effect at such date.
"ERISA Affiliate" means, with respect to any Person, any other Person
(or any trade or business, whether or not incorporated) that is under
common control with that Person within the meaning of Section 414 of
the Code.
"ERISA Event" means: (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations that is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization;
(d) the filing of a notice of intent to terminate, the treatment of a
Plan amendment as a termination under Sections 4041 or 4041A of ERISA,
or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
"Escrow Receivables" means, as of any date of determination, the
amounts due to Borrower or any Borrowing Base Subsidiary and held at an
escrow or title company following the sale and conveyance of title of a
Model Home or Unit to a buyer (including an escrow or title company
that is a Subsidiary of the Borrower) to the extent that such amounts
are free and clear of all Liens and Rights of Others and are not
subject to any restriction pursuant to any Contractual Obligations.
"Eurodollar Advance" means an Advance made by a Bank to fund its Pro
Rata Share of a Eurodollar Rate Loan.
"Eurodollar Base Rate" has the meaning set forth in the definition of
Eurodollar Rate.
"Eurodollar Lending Office" means, with respect to each Bank, its
office, branch or affiliate so designated by written notice to the
Administrative Agent as its Eurodollar Lending Office. If no Eurodollar
Lending Office is designated by a Bank, its Eurodollar Lending Office
shall be its office at its address for purposes of notices hereunder.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the Administrative
Agent pursuant to the following formula:
Eurodollar Base Rate
Eurodollar Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
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Where, "Eurodollar Base Rate" means, for such Interest Period:
(a) the rate per annum equal to the rate determined by
the Administrative Agent to be the offered rate that
appears on the page of the Telerate screen (or any
successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for
deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00
a.m. (London time) 2 Business Days prior to the first
day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a)
does not appear on such page or service or such page
or service shall not be available, the rate per annum
equal to the rate determined by the Administrative
Agent to be the offered rate on such other page or
other service that displays an average British
Bankers Association Interest Settlement Rate for
deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00
a.m. (London time) 2 Business Days prior to the first
day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a)
and (b) are not available, the rate per annum
determined by the Administrative Agent as the rate of
interest at which deposits in Dollars for delivery on
the first day of such Interest Period in same day
funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank
of America and with a term equivalent to such
Interest Period would be offered by Bank of America's
London Branch to major banks in the London interbank
eurodollar market at their request at approximately
4:00 p.m. (London time) 2 Business Days prior to the
first day of such Interest Period.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate based
on the Eurodollar Rate.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to
5 decimal places) in effect on such day, whether or not applicable to
any Bank, under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate
Loan shall be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Event of Default" has the meaning provided in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Letters of Credit" has the meaning set forth in Section 3.17.
"Exposure" means for any Bank, as of any date of determination, the
product obtained by multiplying that Bank's then effective Pro Rata
Share by the then effective Commitment.
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"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
Bank of America on such day on such transactions as determined by the
Administrative Agent.
"Financial Letter of Credit" means any letter of credit issued by an
issuer for the account of the Borrower or a Subsidiary that represents
an irrevocable obligation on the part of the issuer:
(a) to repay money borrowed by or advanced to the Borrower or a
Subsidiary; or
(b) to make payment on account of any indebtedness undertaken by
the Borrower or a Subsidiary, in the event that the Borrower
or Subsidiary fails to fulfill its financial obligations to
the beneficiary.
"Financial Subsidiary" means (a) the Mortgage Company and its
Subsidiaries, so long as such entities continue to engage in the
mortgage banking business, (b) any Subsidiary of Borrower that is
organized and operates solely to issue (i) collateralized mortgage
obligations or (ii) other similar asset-backed obligations, and (c) any
other Subsidiary of Borrower that (i) is engaged primarily in the
business of origination, marketing, and servicing of residential
mortgage loans, the sale of servicing rights, or the financing of long
term residential mortgage loans, (ii) holds not less than 95% of its
total assets in the form of Cash, Cash Equivalents, notes and mortgages
receivable, Cash held by a trustee for the benefit of such Subsidiary
or other financial instruments and (iii) is the subject of an Officer's
Certificate of Borrower delivered to the Administrative Agent stating
that such Subsidiary is a Financial Subsidiary within the meaning
hereof. As of the Closing Date, the Financial Subsidiaries are
International Mortgage Acceptance Corporation, KBASW Mortgage
Acceptance Corporation, KBI/Mortgage Acceptance Corporation, KBRAC IV
Mortgage Acceptance Corporation, KB Home Mortgage Company, rateOne Home
Loans, LLC, Rate One Associates, Inc., Rate One Holdings, Inc.,
Westview Company, KB Home Title Services Inc., KB Home Insurance Agency
Inc., KB Home Insurance Agency of Texas Holdings Inc., Homesafe Company
and San Antonio Title Co.
"Fiscal Quarter" means each of the fiscal quarters of Borrower ending
on each February 28 (or 29, if a leap year), May 31, August 31 and
November 30, or as otherwise changed by the Borrower upon advance
written notice to the Administrative Agent, but subject to the
requirements of Section 1.2.
"Fiscal Year" means each of the fiscal years of Borrower ending on each
November 30 or as otherwise changed by the Borrower upon advance
written notice to the Administrative Agent, but subject to the
requirements of Section 1.2.
"Fitch" means Fitch IBCA, Duff & ▇▇▇▇▇▇, a division of Fitch, Inc., or
any successor thereto.
"Foreign Subsidiary" means, with respect to any Person, a Subsidiary of
that Person which is not a Domestic Subsidiary and with respect to
Borrower, includes ▇▇▇▇▇▇▇ and Broad International, Inc., a California
corporation.
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"GAAP Value" means, with respect to any property or asset, the book
value for such property or asset determined in accordance with
Generally Accepted Accounting Principles consistently applied.
"Generally Accepted Accounting Principles" means, as of any date of
determination, accounting principles set forth as "generally accepted"
in then currently effective statements of the Auditing Standards Board
of the American Institute of Certified Public Accountants, or, if such
statements are not then in effect, accounting principles that are then
approved by a significant segment of the accounting profession in the
United States of America. The term "consistently applied," as used in
connection therewith, means that the accounting principles applied to
financial statements of a Person as of any date or for any period are
consistent in all material respects (subject to Section 1.2) to those
applied to financial statements of that Person as of recent prior dates
and for recent prior periods.
"Government Securities" means (a) readily marketable direct full faith
and credit obligations of the United States of America or obligations
unconditionally guaranteed by the full faith and credit of the United
States of America and (b) obligations of an agency or instrumentality
of, or corporation owned, controlled or sponsored by, the United States
of America that are generally considered in the securities industry to
be implicit obligations of the United States of America.
"Governmental Agency" means (a) any federal, state, county or municipal
government, or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality, or public body, (c) any court or
administrative tribunal, or (d) any arbitration tribunal or other
non-governmental authority to whose jurisdiction a Person has
consented, in each case whether of the United States of America or any
other nation.
"Guarantor Subsidiary" means (a) any Domestic Subsidiary which is a
Significant Subsidiary, other than any Financial Subsidiary and (b) any
other Domestic Subsidiary, other than any Financial Subsidiary, that is
designated in writing by Borrower as a Guarantor Subsidiary.
"Hazardous Materials" means substances defined as "hazardous
substances" pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq.,
or as "hazardous", "toxic" or "pollutant" substances or as "solid
waste" pursuant to the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq., or as "friable asbestos" pursuant
to the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq. or
any other applicable Hazardous Materials Law, in each case as such Laws
are amended from time to time.
"Hazardous Materials Laws" means all Laws governing the treatment,
transportation or disposal of Hazardous Materials applicable to any
real Property of Borrower or its Subsidiaries.
"Indebtedness" means, with respect to any Person, (a) all indebtedness
of such Person for borrowed money, (b) that portion of the obligations
of such Person under Capital Leases which should properly be recorded
as a liability on a balance sheet of that Person prepared in accordance
with Generally Accepted Accounting Principles consistently applied, (c)
any obligation of such Person that is evidenced by a promissory note or
other instrument representing an extension of credit to such Person,
whether or not for borrowed money, (d) any obligation of such Person
for the deferred purchase price of Property or services (other than
trade or other accounts payable in the ordinary course of business in
accordance with customary industry terms), (e) any obligation of the
types referred to in clauses (a) through (d) above that is secured by a
Lien (other than a
-14-
Permitted Encumbrance) on assets of such Person, whether or not that
Person has assumed such obligation or whether or not such obligation is
non-recourse to the credit of such Person, but only to the extent of
the fair market value of the assets so subject to the Lien if such
obligation is non-recourse, (f) obligations of such Person arising
under acceptance facilities or under facilities for the discount of
accounts receivable of such Person and (g) any obligation of such
Person under Financial Letters of Credit issued for the account of such
Person.
"Indemnified Liabilities" has the meaning set forth in Section 11.10.
"Indemnitees" has the meaning set forth in Section 11.10.
"Intangible Assets" means assets that are considered intangible assets
under Generally Accepted Accounting Principles consistently applied,
including (a) customer lists, goodwill, computer software, unamortized
deferred charges, unamortized debt discount, capitalized research and
development costs and other intangible assets and (b) any write-up in
book value of any asset subsequent to its acquisition, but excluding
any existing write-up in book value of any asset acquired by Borrower
or any of its Subsidiaries prior to October 3, 2000, as such write-up
may decrease (but not increase) from time to time.
"Interest Period" means, as to each Eurodollar Rate Loan, a period of
1, 2, 3 or 6 months or, subject to the consent of the Administrative
Agent, in its reasonable discretion, a period of 1, 2 or 3 weeks, as
designated by Borrower; provided that (a) the first day of each
Interest Period must be a Business Day, (b) any Interest Period that
would otherwise end on a day that is not a Business Day shall be
extended to the next succeeding Business Day, unless such Business Day
falls in the next calendar month, in which case the Interest Period
shall end on the next preceding Business Day, and (c) no Interest
Period may extend beyond the Maturity Date.
"Investment" means, with respect to any Person, any investment by that
Person, whether by means of purchase or other acquisition of capital
stock or other Securities of any other Person or by means of loan,
advance, capital contribution, or other debt or equity participation or
interest in any other Person, including any partnership or joint
venture interest in any other Person; provided that an Investment of a
Person shall not include any trade or account receivable arising in the
ordinary course of the business of such Person, whether or not
evidenced by a note or other writing. The amount of any Investment
shall be the amount actually invested, less any return of capital,
without adjustment for subsequent increases or decreases in the market
value of such Investment.
"Investment Grade Credit Rating" means, as of any date of
determination, that at least 2 Rating Agencies have as of that date
issued credit ratings for Borrower's long-term senior unsecured debt of
(a) at least BBB- in the case of S&P, (b) at least Baa3 in the case of
Moody's and (c) at least BBB- in the case of Fitch.
"IRS" means the United States Internal Revenue Service.
"ISP98" has the meaning set forth in Section 2.5(h).
"Issuing Bank" means:
(a) Bank of America or other Bank which is an issuer with respect
to the Existing Letters of Credit; or
-15-
(b) Bank of America or any Bank in its capacity as issuer in
Letters of Credit hereunder.
"Joint Venture" means any Person, other than a Subsidiary, (a) in which
Borrower or any Subsidiary of Borrower holds an equity Investment which
entitles Borrower or such Subsidiary to more than 10% of (i) the
ordinary voting power for the election of the board of directors or
other governing body of such Person or (ii) the partnership, membership
or other ownership interest in such Person, and (b) which has at least
one holder of its equity interests that is not an Affiliate of Borrower
or any Subsidiary of Borrower. Notwithstanding the foregoing, for the
purposes of Section 6.16, the term "Joint Venture" will not include any
equity Investment in any Person if the dollar amount of that investment
is less than $1,000,000, computed in accordance with Generally Accepted
Accounting Principles consistently applied, but only to the extent that
the aggregate dollar amount of such equity Investments is less than
$25,000,000.
"L/C Advance" means, with respect to each Bank, such Bank's funding of
its participation in any L/C Borrowing in accordance with its Pro Rata
Share.
"L/C Borrowing" means an extension of credit resulting from a drawing
under a Letter of Credit which has not been reimbursed on the date
required or refinanced as a Loan.
"Land Parcels" means parcels of land located in the United States
wholly-owned by Borrower or any Borrowing Base Subsidiary that are
unencumbered by any Lien or Liens (other than Permitted Encumbrances).
"Laws" means, collectively, all foreign, federal, state and local
statutes, treaties, codes, ordinances, rules, regulations and
controlling precedents of any Governmental Agency.
"Letter of Credit" means any of the standby letters of credit issued by
an Issuing Bank under the Commitment pursuant to Section 2.5, either as
originally issued or as the same may be supplemented, modified,
amended, renewed, extended or supplanted. A Letter of Credit shall be a
Financial Letter of Credit or a Performance Letter of Credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form, from time
to time, that is in use by the Issuing Bank.
"Letter of Credit Usage" means, as of any date of determination, the
aggregate undrawn face amount of outstanding Letters of Credit plus the
aggregate amount of all Unreimbursed Amounts, including all L/C
Borrowings.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, lien or charge
of any kind, whether voluntarily incurred or arising by operation of
Law or otherwise, affecting any Property, including any agreement to
grant any of the foregoing (other than an agreement which gives to a
Person the right to become equally and ratably secured with any other
Person to whom a Lien is granted on any item of Property) any
conditional sale or other title retention agreement, any lease in the
nature of a security interest, or the filing of or agreement to give
any financing statement (other than a precautionary financing statement
with respect to a lease that is not in the nature of a security
interest) under the Uniform Commercial Code or comparable Law of any
jurisdiction with respect to any Property.
"Loan" means the aggregate of the Advances made at any one time by the
Banks pursuant to Article II.
-16-
"Loan Documents" means, collectively, this Agreement, the Notes, the
Letters of Credit, the Swing Line Documents, the Subsidiary Guaranty,
any Loan Notice, any Swing Line Loan Notice, any Request for Letter of
Credit, any Compliance Certificate, any Borrowing Base Certificate and
any other instruments, documents or agreements of any type or nature
hereafter executed and delivered by Borrower or any of its Subsidiaries
or Affiliates to the Administrative Agent or any other Bank in any way
relating to or in furtherance of this Agreement, in each case either as
originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.
"Loan Notice" means a notice of (a) a request for a Loan, (b) a
conversion of Loans from one Type to the other or (c) a continuation of
Eurodollar Rate Loans, which may be given by telephone and, if in
writing, shall be substantially in the form of Exhibit D.
"Loan Parties" means, collectively, the Borrower and each Guarantor
Subsidiary.
"Lots Under Development" means, as of any date of determination, Land
Parcels that are being developed into Developed Lots or that are
scheduled for the commencement of development into Developed Lots
within 6 calendar months after the date of determination.
"LTV Maintenance Agreement" means a guaranty or other agreement entered
into by the Borrower or any of its Subsidiaries, for the benefit of the
holder of any secured Indebtedness of a Person that is not the Borrower
or any of its Subsidiaries, to maintain a specified loan-to-value ratio
with respect to real Property that secures such Indebtedness.
"LTV Maintenance Exposure" means, with respect to any LTV Maintenance
Agreement, the amount equal to (a) the amount of the Indebtedness with
respect to which the LTV Maintenance Agreement is delivered exceeds (b)
the product of (i) the book value of the real Property securing such
Indebtedness (or such lesser value as is provided in or determined
under the agreements governing such Indebtedness) and (ii) a percentage
equal to the loan-to-value ratio (stated as a fraction) that the
Borrower or any of its Subsidiaries agrees to maintain under the
applicable LTV Maintenance Agreement; provided that if the Borrower and
its Subsidiaries are liable severally but not jointly and severally
with one or more other obligors under the LTV Maintenance Agreement,
the amount of the Contingent Guaranty Obligation in respect of such LTV
Maintenance Agreement shall be the product of (x) the amount determined
as set forth above and (y) the maximum percentage of the aggregate
liability under such LTV Maintenance Agreement with respect to which
the Borrower and its Subsidiaries are liable ; provided further, that
if the LTV Maintenance Exposure with respect to a LTV Maintenance
Agreement is less than zero, the LTV Maintenance Exposure for that LTV
Maintenance Agreement shall be deemed to be zero.
"Material Adverse Effect" means any circumstance or event, or any set
of circumstances or events which, individually or when aggregated with
any other circumstances or events, (a) has or is reasonably likely to
have any material adverse effect upon the validity or enforceability of
any Loan Document, (b) is or is reasonably likely to be material and
adverse to the condition (financial or otherwise) or operations of
Borrower and its Subsidiaries, taken as a whole, or (c) materially
impairs or is reasonably likely to materially impair the ability of
Borrower and its Subsidiaries, taken as a whole, to perform the
Obligations.
"Material Amount of Assets" means, as of any date of determination,
more than 10% of the consolidated total assets (other than assets of
Financial Subsidiaries) of Borrower and its Subsidiaries as of such
date.
-17-
"Maturity Date" means October 24, 2007.
"Model Homes" means housing Units which have been completed, furnished
and landscaped and are used in the marketing efforts with respect to a
residential home community.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
thereto.
"Mortgage Company" means KB Home Mortgage Company, an Illinois
corporation and a wholly owned Financial Subsidiary of Borrower.
"Mortgage Warehousing Agreements" means that certain Mortgage Loan
Warehousing Agreement, dated as of June 30, 2003 by and among Mortgage
Company, rateOne, the lenders from time to time party thereto, and Bank
One, NA, as administrative agent for the lenders and that certain
Master Loan and Security Agreement, dated as of May 13, 2002, by and
among Mortgage Company, rateOne and UBS Warburg Real Estate Securities
Inc., as amended by the First Amendment to Master Loan and Security
Agreement, dated as of November 13, 2002, the Second Amendment to
Master Loan and Security Agreement, dated as of May 12, 2003, the Third
Amendment to Master Loan and Security Agreement, dated as of June 30,
2003, the Fourth Amendment to Master Loan and Security Agreement, dated
as of July 31, 2003, and the Fifth Amendment to Master Loan and
Security Agreement, dated as of October 6, 2003, as the foregoing may
from time to time be amended, modified, refinanced or replaced, and
substantially similar loan or credit agreements or arrangements entered
into from time to time by Mortgage Company for loans to be used for the
purpose of funding the origination of residential mortgage loans,
secured by a pledge of such mortgage loans.
"Multiemployer Plan" means any employee benefit plan of a type
described in Section 4001(a)(3) of ERISA.
"Net Realizable Value Adjustment" means the adjustment required
pursuant to Generally Accepted Accounting Principles consistently
applied (including FAS 121 issued by the Financial Accounting Standards
Board) to reflect a decrease in the book value of assets below their
historical costs.
"Non-Recourse Indebtedness" means Indebtedness incurred in connection
with the purchase or improvement of Property (a) that is secured solely
by the Property purchased or improved, (b) with respect to which the
holder of such Indebtedness has recourse only to such Property, and (c)
that is otherwise non-recourse (whether by contract or under applicable
Law) to any Person.
"Note" means each promissory note made by Borrower to a Bank
evidencing the Advances under that Bank's Pro Rata Share of the
Commitment, substantially in the form of Exhibit E, either as
originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or supplanted.
"Obligations" means all present and future obligations of every kind or
nature of Borrower or any Party at any time and from time to time owed
to the Administrative Agent or the Banks or any one or more of them
under any one or more of the Loan Documents, whether due or to become
due, matured or unmatured, liquidated or unliquidated, or contingent or
noncontingent, including obligations of performance as well as
obligations of payment, and including interest that accrues to the
extent permitted by applicable Law after the commencement of any
proceeding under any Debtor Relief Law by or against Borrower.
-18-
"Officer's Certificate" means, when used with reference to any Person,
a certificate signed by a Senior Officer of such Person.
"Opinions of Counsel" means the favorable written legal opinions of (a)
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel to Borrower and (b)
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President, Corporate Legal Affairs of Borrower,
substantially in the form of Exhibits F-1 and F-2, respectively,
together with copies of all factual certificates and legal opinions
upon which such counsel has relied.
"Outstanding Amount" means:
(a) with respect to Loans and Swing Line Loans on any date, the
aggregate outstanding principal amount thereof after giving
effect to any borrowings and prepayments or repayments of
Loans and Swing Line Loans, as the case may be, occurring on
such date; and
(b) with respect to any Letter of Credit Usage on any date, the
amount of such Letter of Credit Usage on such date, after
giving effect to the issuance, extension, expiry, renewal or
increase of any Letter of Credits occurring on such date and
any other changes in the aggregate amount of the Letter of
Credit Usage as of such date, including as a result of any
reimbursements of outstanding unpaid drawings under any
Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on
such date.
"Participant" has the meaning set forth in Section 11.8(d).
"Party" means any Person other than the Banks or the Agents which now
or hereafter is a party to any of the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto established under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in ERISA) which is subject to Title IV of ERISA and which is
maintained for employees of Borrower or any of its ERISA Affiliates.
"Performance Letter of Credit" means any letter of credit issued by an
issuer for the account of the Borrower or a Subsidiary that is not a
Financial Letter of Credit.
"Permitted Encumbrances" means:
(a) inchoate Liens incident to construction or maintenance of real
property; or Liens incident to construction or maintenance of
real property now or hereafter filed of record for which
adequate reserves have been set aside and which are being
contested in good faith by appropriate proceedings and have
not proceeded to judgment, provided that, by reason of
nonpayment of the obligations secured by such Liens, no
material property is subject to a material risk of loss or
forfeiture;
(b) Liens for taxes and assessments on real property which are not
yet past due; or Liens for taxes and assessments on real
property for which adequate reserves have been set aside and
are being contested in good faith by appropriate proceedings
and have not proceeded
-19-
to judgment, provided that, by reason of nonpayment of the
obligations secured by such Liens, no material property is
subject to a material risk of loss or forfeiture;
(c) minor defects and irregularities in title to any real property
which in the aggregate do not materially impair the fair
market value or use of the real property for the purposes for
which it is or may reasonably be expected to be held;
(d) easements, exceptions, reservations, or other agreements for
the purpose of pipelines, conduits, cables, wire communication
lines, power lines and substations, streets, trails, walkways,
drainage, irrigation, water, utilities, and sewerage purposes,
dikes, canals, ditches, the removal of oil, gas, coal, or
other minerals, and other like purposes affecting real
property, facilities, or equipment which in the aggregate do
not materially burden or impair the fair market value or use
of such property for the purposes for which it is or may
reasonably be expected to be held;
(e) easements, exceptions, reservations, or other agreements for
the purpose of facilitating the joint or common use of
property affecting real property which in the aggregate do not
materially burden or impair the fair market value or use of
such property for the purposes for which it is or may
reasonably be expected to be held;
(f) rights reserved to or vested in any Governmental Agency to
control or regulate the use of any real property;
(g) any obligations or duties affecting any real property to any
Governmental Agency with respect to any right, power,
franchise, grant, license, or permit;
(h) present or future zoning laws and ordinances or other laws and
ordinances restricting the occupancy, use, or enjoyment of
real property;
(i) statutory Liens, including warehouseman's liens, other than
those described in clauses (a) or (b) above, arising in the
ordinary course of business with respect to obligations which
are not delinquent or are being contested in good faith,
provided that, if delinquent, adequate reserves have been set
aside with respect thereto and, by reason of nonpayment, no
material property is subject to a material risk of loss or
forfeiture;
(j) covenants, conditions, and restrictions affecting the use of
real property which in the aggregate do not materially impair
the fair market value or use of the real property for the
purposes for which it is or may reasonably be expected to be
held;
(k) rights of tenants under leases and rental agreements covering
real property entered into in the ordinary course of business
of the Person owning such real property;
(l) Liens consisting of pledges or deposits to secure obligations
under workers' compensation laws or similar legislation,
including Liens of judgments thereunder which are not
currently dischargeable;
(m) Liens consisting of pledges or deposits of property to secure
performance in connection with operating leases made in the
ordinary course of business to which the Borrower or a
Subsidiary is a party as lessee, provided the aggregate value
of all such pledges and deposits in connection with any such
lease does not at any time exceed 25% of the annual fixed
rentals payable under such lease;
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(n) Liens consisting of deposits of property to secure statutory
obligations of the Borrower or a Subsidiary of Borrower in the
ordinary course of its business; and
(o) Liens consisting of deposits of property to secure (or in lieu
of) surety, appeal or customs bonds in proceedings to which
Borrower or a Subsidiary of Borrower is a party in the
ordinary course of its business.
"Permitted Right of Others" means a Right of Others consisting of (a)
an interest (other than a legal or equitable co-ownership interest, an
option or right to acquire a legal or equitable co-ownership interest
and any interest of a ground lessor under a ground lease), that does
not materially impair the value or use of property for the purposes for
which it is or may reasonably be expected to be held, (b) an option or
right to acquire a Lien that would be a Permitted Encumbrance or (c)
the reversionary interest of a landlord under a lease of Property.
"Person" means an individual, trustee, corporation, general
partnership, limited partnership, limited liability company, joint
stock company, trust, estate, unincorporated organization, union,
tribe, business association or firm, joint venture, Governmental
Agency, or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to
any such plan that is subject to Section 412 of the Code or Title IV of
ERISA, any ERISA Affiliate.
"Prior Loan Agreements" means the Prior Revolving Loan Agreement and
the 2000 Term Loan Agreement.
"Prior Revolving Loan Agreement" has the meaning set forth for that
term in the recitals of the parties hereto.
"Pro Rata Share" of a Bank, as pertains to the Commitment, means the
applicable percentage set forth opposite the name of that Bank on
Schedule 1.1 to this Agreement.
"Projections" means the financial projections of Borrower delivered to
the Banks and dated as of September 5, 2003.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Quarterly Payment Date" means December 31, 2003, and each March 31,
June 30, September 30 and December 31 thereafter through and including
the Maturity Date.
"rateOne" means rateOne Home Loan, LLC, a Delaware limited liability
company and a Subsidiary of Mortgage Company.
"Rating Agencies" means S&P, ▇▇▇▇▇'▇ and Fitch.
"Register" has the meaning set forth in Section 11.8(c).
"Regulation D" means Regulation D, as at any time amended, of the Board
of Governors of the Federal Reserve System or any other regulation in
substance substituted therefor.
-21-
"Regulatory Development" means (a) any change in the Laws, (b) change
in the application of any existing Laws or the interpretation thereof
by any Governmental Agency or central bank or comparable authority
(whether or not having the force of Law), or (c) compliance by any Bank
with any request or directive (whether or not having the force of Law)
of any Governmental Agency or central bank or comparable authority.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been
waived.
"Request for Letter of Credit" means a written request for the
issuance of a Letter of Credit signed by a Responsible Official of
Borrower, in a form reasonably designated from time to time by the
Administrative Agent.
"Required Banks" means, as of any date of determination, Banks having
more than 66 2/3% of the Commitment or, if the commitment of each Bank
to make Advances and the obligation of the Issuing Banks to issue
Letters of Credit have been terminated or suspended, Banks holding in
the aggregate more than 66 2/3% of the Total Outstandings (with the
aggregate amount of each Bank's risk participation and funded
participation in Letter of Credit Usage and Swing Line Loans being
deemed "held" by such Bank for purposes of this definition); provided
that the Commitment of, and the portion of the Total Outstandings held
or deemed held by, any Defaulting Bank shall be excluded for purposes
of making a determination of Required Banks.
"Requirement of Law" means, as to any Person, any Law or any judgment,
award, decree, writ or determination of, or any consent or similar
agreement with, a Governmental Agency, in each case applicable to or
binding upon such Person or any of its Property or to which such Person
or any of its Property is subject.
"Responsible Official" means (a) when used with reference to a Person
other than an individual, any corporate officer of such Person, general
partner of such Person, corporate officer of a corporate general
partner of such Person, or corporate officer of a corporate general
partner of a partnership that is a general partner of such Person, or
any other responsible official thereof duly acting on behalf thereof,
and (b) when used with reference to a Person who is an individual, such
Person. Any document or certificate hereunder that is signed or
executed by a Responsible Official of a Person shall be conclusively
presumed to have been authorized by all necessary corporate,
partnership or other action on the part of that Person.
"Right of Others" means, with respect to any Property in which a Person
has an interest, (a) any legal or equitable claim or other interest
(other than a Lien) in or with respect to that Property held by any
other Person, and (b) any option or right held by any other Person to
acquire any such claim or other interest (including a Lien).
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto.
"Securities" means any capital stock, share, voting trust certificate,
bonds, debentures, notes or other evidences of indebtedness, limited
partnership interests, or any warrant, option or other right to
purchase or acquire any of the foregoing.
"Senior Indebtedness" means, as of any date of determination, the
aggregate amount of Indebtedness for borrowed money, and the aggregate
amount of obligations under Financial
-22-
Letters of Credit, of Borrower and Borrowing Base Subsidiaries that is
not Subordinated Obligations and that is not Non-Recourse Indebtedness.
"Senior Officer" means the (a) chief executive officer, (b) chief
operating officer, (c) chief financial officer, (d) vice president and
controller, (e) vice president, treasury, or (f) treasurer, in each
case whatever the title nomenclature may be, of the Person designated.
"Shareholders' Equity" means, as of any date of determination,
shareholders' equity as of that date determined in accordance with
Generally Accepted Accounting Principles consistently applied; provided
that there shall be excluded from Shareholders' Equity any amount
attributable to capital stock that is, directly or indirectly, required
to be redeemed or repurchased by the issuer thereof prior to the date
which is one year after the Maturity Date or upon the occurrence of
specified events or at the election of the holder thereof.
"Significant Subsidiary" means, as of the Closing Date, those
Subsidiaries of Borrower identified as such in Schedule 4.4 and, as of
any other date of determination, any Subsidiary of Borrower (other than
a Joint Venture) with respect to which any of the following conditions
is met:
(a) the aggregate book value of all Investments of Borrower and
its Subsidiaries in such Subsidiary exceeds 5% of the
consolidated total assets (other than assets of Financial
Subsidiaries) of Borrower and its Subsidiaries as of such
date; or
(b) the proportionate share of Borrower and its Subsidiaries in
the total assets of such Subsidiary (after intercompany
eliminations) exceeds 5% of the consolidated total assets
(other than assets of Financial Subsidiaries) of Borrower and
its Subsidiaries as of such date; or
(c) the equity of Borrower and its Subsidiaries in the net income
of such Subsidiary (before income taxes, extraordinary items
and cumulative effect of a change in accounting principles) as
of the end of the most recently ended fiscal year of such
Subsidiary exceeds the greater of (i) an amount equal to 5% of
the consolidated net income (other than net income of
Financial Subsidiaries) of Borrower and its Subsidiaries
(computed as aforesaid) as of the end of the most recent
Fiscal Year ended prior to such date or (ii) $3,000,000.
"Sole Lead Arranger and Sole Book Manager" means Banc of America
Securities LLC, in its capacity as sole lead arranger and sole book
manager.
"Solvent" means, as to any Person, that such Person (a) owns Property
whose fair saleable value is greater than the amount required to pay
all of such Person's indebtedness and other obligations (including
contingent debts), (b) is able to pay all of its indebtedness and other
obligations as such indebtedness and other obligations mature and (c)
has capital sufficient to carry on its business and transactions and
all business and transactions in which it is about to engage.
"Speculative Units" means Developed Lots having fully or partially
constructed Units thereon (including, at a minimum, a completed
foundation for any such Unit) that are not subject to bona fide
contracts for the sale of such Units to a third party, excluding
Developed Lots containing Units used as Model Homes.
-23-
"Subordinated Notes" means (i) Borrower's 8 5/8% Senior Subordinated
Notes due 2008, (ii) Borrower's 7 3/4% Senior Subordinated Notes due
2010 and (iii) Borrower's 9 1/2% Senior Subordinated Notes due 2011.
"Subordinated Obligations" means, collectively, all obligations of
Borrower or any of its Subsidiaries that (a) do not provide for any
scheduled redemption on or before 30 days after the Maturity Date, (b)
are expressly subordinated to the Obligations by a written instrument
containing subordination and related provisions (including interest
payment blockage, standstill and related provisions) not materially
less favorable to the Banks in any respect whatsoever from those
applicable to Borrower's Subordinated Notes (or such other
subordination and related provisions as may be approved in writing by
the Required Banks), (c) are subject to financial covenants not
materially more burdensome to Borrower taken as a whole than those
applicable to the Subordinated Notes, except such covenants as may be
approved in writing by the Required Banks and (d) are subject to other
covenants (other than the covenant to pay interest) and events of
default which in the aggregate are not materially more burdensome to
Borrower than those applicable to the Subordinated Notes, except such
covenants or events of default as may be approved in writing by the
Required Banks.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership or joint venture whether now
existing or hereafter organized or acquired: (a) in the case of a
corporation or limited liability company, of which securities having a
majority of the ordinary voting power for the election of the board of
directors (other than securities having such power only by reason of
the happening of a contingency) are at the time owned by such Person or
one or more Subsidiaries of such Person; or (b) in the case of a
partnership, joint venture or other business entity, in which such
Person or a Subsidiary of such Person is a general partner.
"Subsidiary Guaranty" means the guaranty of the Indebtedness of
Borrower under this Agreement executed by each Guarantor Subsidiary of
Borrower substantially in the form of Exhibit G, either as originally
executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or supplanted.
"Swing Line" means the revolving line of credit established by the
Swing Line Bank in favor of Borrower pursuant to Section 2.4.
"Swing Line Bank" means Bank of America or any successor swing line
lender hereunder.
"Swing Line Documents" means the promissory note and any other
documents executed by Borrower in favor of the Swing Line Bank in
connection with the Swing Line.
"Swing Line Loan Notice" means a notice of a request for a Swing Line
Loan, which may be given by telephone and, if in writing, shall be
substantially in the form of Exhibit H.
"Swing Line Loans" means loans made by the Swing Line Bank to Borrower
pursuant to Section 2.4.
"Swing Line Maturity Date" means the date 10 days following the date of
disbursement of a Swing Line Loan or, if such day is not a Business
Day, the next Business Day.
"Swing Line Outstandings " means, as of any date of determination, the
aggregate principal Indebtedness of Borrower on all Swing Line Loans
then outstanding.
-24-
"Termination Event" means (a) a "reportable event" as defined in
Section 4043 of ERISA (other than a "reportable event" that is not
subject to the provision for 30 day notice to the PBGC), (b) the
withdrawal of Borrower or any of its ERISA Affiliates from a Pension
Plan during any plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice of
intent to terminate a Pension Plan or the treatment of an amendment to
a Pension Plan as a termination thereof pursuant to Section 4041 of
ERISA, other than pursuant to Section 4041(b) of ERISA, (d) the
institution of proceedings to terminate a Pension Plan by the PBGC or
(e) any other event or condition which might reasonably be expected to
constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan.
"to the best knowledge of" means, when modifying a representation,
warranty or other statement of any Person, that such representation,
warranty or statement is a representation, warranty or statement that
(a) the Person making it has no actual knowledge of the inaccuracy of
the matters therein stated and (b) assuming the exercise by the Person
making it of reasonable due diligence under the circumstances (in
accordance with the standard of what a reasonable Person would have
done under similar circumstances), the Person making it would have no
actual knowledge of the inaccuracy of the matters therein stated. Where
the Person making the representation, warranty or statement is not a
natural Person, the aforesaid actual or constructive knowledge shall be
that of any Senior Officer of that Person.
"Total Outstandings " means the aggregate Outstanding Amount of all
Loans (including Swing Line Loans) and all Letter of Credit Usage.
"Type" means, with respect to a Loan, its character as a Base Rate Loan
or a Eurodollar Rate Loan.
"Unit " means a residential housing unit available for sale located in
the United States.
"Unreimbursed Amount" has the meaning set forth in Section 2.5(c)(i).
"Unrestricted Cash" means, as of any date of determination, the Cash
and Cash Equivalents of Borrower and its Borrowing Base Subsidiaries to
the extent that such Cash and Cash Equivalents are free and clear of
all Liens and Rights of Others and are not subject to any restriction
pursuant to any Contractual Obligations.
"Voting Stock" means, with respect to any Person, the capital stock of
such Person having general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the time
capital stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
1.2 Accounting Terms. All accounting terms not specifically defined in this
Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in
conformity with, Generally Accepted Accounting Principles consistently
applied, except as otherwise specifically prescribed herein. In the
event that Generally Accepted Accounting Principles change during the
term of this Agreement such that the financial covenants contained in
Sections 6.9, 6.10, 6.11, 6.15 or 6.16 would then be calculated in a
different manner or with different components or would render the same
not meaningful criteria for evaluating Borrower's financial condition,
(a) Borrower and the Banks agree to amend this Agreement in such
respects as are necessary to conform those covenants as criteria for
evaluating Borrower's
-25-
financial condition to substantially the same criteria as were
effective prior to such change in Generally Accepted Accounting
Principles and (b) Borrower shall be deemed to be in compliance with
the financial covenants contained in such Sections during the 90 day
period following such change in Generally Accepted Accounting
Principles if and to the extent that Borrower would have been in
compliance therewith under Generally Accepted Accounting Principles as
in effect immediately prior to such change. In the event that the
Borrower changes its Fiscal Year during the term of this Agreement,
Borrower and the Banks agree to amend this Agreement and the other Loan
Documents in such respects as are necessary to conform the definitions,
the financial covenants, the reporting requirements and the other
provisions thereof to fairly reflect such change in the Borrower's
Fiscal Year.
1.3 Rounding. Any financial ratios required to be maintained by Borrower
pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to
one place more than the number of places by which such ratio is
expressed in this Agreement and rounding the result up or down to the
nearest number (with a round-up if there is no nearest number) to the
number of places by which such ratio is expressed in this Agreement.
1.4 Other Interpretive Provisions. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such
other Loan Document:
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) The words "herein," "hereto," "hereof" and "hereunder" and
words of similar import when used in any Loan Document shall
refer to such Loan Document as a whole and not to any
particular provision thereof.
(c) Article, Section, Exhibit and Schedule references are to the
Loan Document in which such reference appears.
(d) The term "including" is by way of example and not limitation.
(e) The term "or" is not exclusive.
(f) The term "documents" includes any and all instruments,
documents, agreements, certificates, notices, reports,
financial statements and other writings, however evidenced,
whether in physical or electronic form.
(g) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and
including;" the words "to" and "until" each mean "to but
excluding;" and the word "through" means "to and including."
(h) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not
affect the interpretation of this Agreement or any other Loan
Document.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this Agreement,
either as originally existing or as the same may from time to time be
supplemented, modified, or amended, are incorporated herein by
reference. A matter disclosed on any Schedule shall be deemed disclosed
on all Schedules.
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1.6 References to "Borrower and its Subsidiaries". Any reference herein to
"Borrower and its Subsidiaries" or the like shall refer solely to
Borrower during such times, if any, as Borrower shall have no
Subsidiaries.
1.7 Time of Day. Unless otherwise specified, all references herein to times
of day shall be references to Central time (daylight or standard, as
applicable).
1.8 Letter of Credit Amounts. Unless otherwise specified, all references
herein to the amount of a Letter of Credit at any time shall be deemed
to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit
or the Letter of Credit Application therefor, whether or not such
maximum face amount is in effect at such time.
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ARTICLE II
LOANS AND LETTERS OF CREDIT
2.1 Loans-General.
(a) Subject to the terms and conditions set forth in this
Agreement (including Section 8.2), at any time and from time
to time from the Closing Date through the Business Day
immediately preceding the Maturity Date, each Bank shall, pro
rata according to that Bank's Pro Rata Share of the Commitment
then in effect, make Advances to Borrower under the Commitment
in such amounts as Borrower may request; provided that after
giving effect to such Advance, the Total Outstandings shall
not exceed the Commitment. Subject to the limitations set
forth herein, Borrower may borrow, repay and reborrow under
this Section 2.1(a) without premium or penalty. In no event
shall the Banks be obligated to make Loans to the Borrower at
any time if, after giving effect to such Loans, the provisions
of Section 6.17 would be violated.
(b) [Intentionally Omitted]
(c) Subject to the next sentence and to Sections 2.4(e) and
2.5(c), each Loan shall be made pursuant to Borrower's
irrevocable Loan Notice to the Administrative Agent, which
shall specify the requested (i) date of such Loan, (ii) type
of Loan, (iii) amount of such Loan and (iv) in the case of a
Eurodollar Rate Loan, Interest Period for such Loan. Each
telephonic Loan Notice by the Borrower pursuant to this
Section 2.1(c) must be confirmed promptly by delivery to the
Administrative Agent of a written Loan Notice, appropriately
completed and signed by a Responsible Official of the
Borrower.
(d) Promptly following receipt of a Loan Notice, the
Administrative Agent shall notify each Bank by telephone,
telecopier or telex of the date and type of the Loan, the
applicable Interest Period in the case of a Eurodollar Rate
Loan, and that Bank's Pro Rata Share of the Loan. Not later
than 12:00 noon, Los Angeles time, on the date specified for
any Loan, each Bank shall make its Pro Rata Share of the Loan
in immediately available funds available to the Administrative
Agent at the Administrative Agent's Office. Upon fulfillment
of the applicable conditions set forth in Article VIII, all
Advances shall be credited in immediately available funds to
the Designated Deposit Account.
(e) The principal amount of each Loan shall be an integral
multiple of $1,000,000 and shall be in an amount not less than
(i) $1,000,000 if such Loan is a Base Rate Loan and (ii)
$5,000,000 if such Loan is a Eurodollar Rate Loan.
(f) A Loan Notice shall be irrevocable upon the Administrative
Agent's first notification thereof. The obligation of each
Bank to make any Advance is several, and not joint or joint
and several, and is not conditioned upon the performance by
any other Bank of its obligation to make Advances. The failure
by any Bank to perform its obligation to make any Advance will
not increase the obligation of any other Bank to make
Advances.
(g) Borrower may redesignate a Base Rate Loan as a Eurodollar Rate
Loan, or a Eurodollar Rate Loan as a Base Rate Loan or a
Eurodollar Rate Loan with a new Interest Period, by delivering
a Loan Notice to the Administrative Agent, within the time
periods and pursuant to the conditions set forth in Section
2.1(c), 2.2 or 2.3, as applicable, and elsewhere in this
Agreement. If no Loan Notice has been made prior to the last
day of the Interest Period for an outstanding Eurodollar Rate
Loan within the requisite notice
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periods set forth in Section 2.3, then Borrower shall be
deemed to have requested that such Eurodollar Rate Loan be
redesignated as a Base Rate Loan.
(h) The Advances made by each Bank under this Section 2.1 shall be
evidenced by that Bank's Note.
2.2 Base Rate Loans. Each request by Borrower for a Base Rate Loan shall be
made pursuant to a Loan Notice received by the Administrative Agent, at
the Administrative Agent's Office, not later than 10:00 a.m., Los
Angeles time, on the Business Day on which the requested Base Rate Loan
is to be made. The Administrative Agent shall notify each Bank of a
request for a Base Rate Loan as soon as practicable after receipt of
the same. All Loans shall constitute Base Rate Loans unless properly
designated as Eurodollar Rate Loans pursuant to Section 2.3.
2.3 Eurodollar Rate Loans.
(a) Each request by Borrower for a Eurodollar Rate Loan shall be
made pursuant to a Loan Notice received by the Administrative
Agent, at the Administrative Agent's Office, not later than
10:00 a.m., Los Angeles time, at least 3 Business Days before
the first day of the applicable Interest Period, provided that
such advance notice period may be reduced by the
Administrative Agent in its discretion with respect to any
Eurodollar Rate Loan made on the Closing Date. The
Administrative Agent shall notify each Bank of a request for a
Eurodollar Rate Loan as soon as practicable after receipt of
the same.
(b) At or about 10:00 a.m., Los Angeles time, 2 Business Days
before the first day of the applicable Interest Period, the
Administrative Agent shall determine the applicable Eurodollar
Rate (which determination shall be conclusive in the absence
of manifest error) and promptly shall give notice of the same
to Borrower and the Banks by telephone, telecopier or, in the
case of Banks, telex.
(c) No more than 10 Eurodollar Rate Loans may be outstanding at
any particular time.
(d) Unless the Required Banks otherwise consent, no Eurodollar
Rate Loan may be requested during the continuance of an Event
of Default.
2.4 Swing Line.
(a) The Swing Line Bank shall from time to time through the day
prior to the Maturity Date make Swing Line Loans to Borrower
in such amounts as Borrower may request, provided that (i)
giving effect to such Swing Line Loan, the Swing Line
Outstandings do not exceed $50,000,000, (ii) the conditions
to an Advance specified in Article VIII have been satisfied
(other than delivery of a Loan Notice), (iii) without the
consent of all of the Banks, no Swing Line Loan may be made
during the continuation of an Event of Default, (iv) the Swing
Line Bank has not given at least 24 hours prior notice to
Borrower that availability under the Swing Line is suspended
or terminated, (v) after giving effect to such Swing Line
Loan, the Total Outstandings shall not exceed the Commitment
and (vi) in no event shall the Swing Line Bank be obligated to
make a Swing Line Loan to Borrower if, after giving effect to
such Swing Line Loan, the provisions of Section 6.17 would be
violated. Borrower may borrow, repay and reborrow under this
Section 2.4. Unless notified to the contrary by the Swing Line
Bank, borrowings under the Swing Line shall be made in amounts
which are integral multiples of $100,000. Unless notified to
the contrary by the Swing Line Bank, each repayment of a Swing
Line Loan
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shall be in an amount which is an integral multiple of
$100,000. A Swing Line Loan may, at any time and from time to
time, voluntarily be prepaid at the election of Borrower in
whole or in part without premium or penalty. Each Swing Line
Loan shall be made pursuant to Borrower's irrevocable Swing
Line Loan Notice to the Administrative Agent at the
Administrative Agent's Office not later than 4:00 p.m. Los
Angeles time on the day the requested Swing Line Loan is to be
made. Each telephonic Swing Line Loan Notice by the Borrower
pursuant to this Section 2.4(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Swing Line
Loan Notice, appropriately completed and signed by a
Responsible Official of the Borrower.
(b) Swing Line Loans shall bear interest at a fluctuating rate per
annum equal to the sum of the Applicable Federal Funds Rate
plus the Applicable Eurodollar Rate Spread plus 0.15%, payable
on the dates principal is due and in any event on the Maturity
Date. The Swing Line Bank shall be responsible for invoicing
Borrower for such interest. The interest payable on Swing Line
Loans is solely for the account of the Swing Line Bank (or, if
applicable, for the account of the Banks funding such Swing
Line Loans pursuant to Section 2.4(d)).
(c) Each Swing Line Loan shall be payable on the applicable Swing
Line Maturity Date and in any event on the Maturity Date.
(d) Upon the making of a Swing Line Loan, each Bank shall be
deemed to have purchased from the Swing Line Bank a
participation therein in an amount equal to that Bank's Pro
Rata Share of the Commitment times the amount of the Swing
Line Loan. Upon demand made by the Swing Line Bank, each Bank
shall, according to its Pro Rata Share of the Commitment,
promptly provide to the Swing Line Bank its purchase price
therefor in an amount equal to its participation therein. The
obligation of each Bank to so provide its purchase price to
the Swing Line Bank shall be absolute and unconditional and
shall not be affected by the occurrence of an Event of Default
or any other occurrence or event.
(e) In the event that any Swing Line Outstandings have not been
repaid by the applicable Swing Line Maturity Date, then on the
next Business Day (unless Borrower has made other arrangements
acceptable to the Swing Line Bank to repay the Swing Line
Outstandings), Borrower shall request a Base Rate Loan under
the Commitment pursuant to Section 2.2 in an amount complying
with Section 2.1(e) and sufficient to repay the Swing Line
Outstandings. The Administrative Agent shall automatically
provide such amount to the Swing Line Bank (which the Swing
Line Bank shall then apply to the Swing Line Outstandings or,
if applicable, pay such amount ratably to such Banks as have
funded their purchase of a participation pursuant to Section
2.4(d) in accordance with their Pro Rata Shares) and credit
any balance of the Loan in immediately available funds to the
Designated Deposit Account. In the event that Borrower fails
to request a Base Rate Loan under the Commitment within the
time specified by Section 2.2 on any such Swing Line Maturity
Date, the Administrative Agent may, but is not required to,
without notice to or the consent of Borrower, cause Base Rate
Advances to be made by the Banks under the Commitment in the
amount necessary to comply with Section 2.1(e) and sufficient
to repay the Swing Line Outstandings and, for this purpose,
the conditions precedent set forth in Section 8.2 shall not
apply. The proceeds of such Advances shall be paid to the
Swing Line Bank for application to the Swing Line
Outstandings, with any balance credited in immediately
available funds to the Designated Deposit Account.
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2.5 Letters of Credit.
(a) Letter of Credit Commitment. Subject to the terms and
conditions of this Agreement (including Section 8.3), Borrower
may request from time to time during the period from the
Closing Date through the day 30 days prior to the Maturity
Date (unless the Issuing Bank otherwise agrees to a later date
prior to the Maturity Date) that the Issuing Bank, in reliance
upon the agreements of the other Banks set forth in this
Section 2.5, issue Letters of Credit for the account of
Borrower, and the Issuing Bank agrees to issue for the account
of Borrower one or more Letters of Credit and to amend Letters
of Credit previously issued by it in accordance with Section
2.5(b), provided that (i) Borrower shall not request that the
Issuing Bank issue any Letter of Credit if, after giving
effect to such issuance, the Total Outstandings exceeds the
Commitment, (ii) Borrower shall not request that the Issuing
Bank issue any Letter of Credit if, after giving effect to
such issuance, Borrower would not be in compliance with
Section 6.17, (iii) Borrower shall not request that the
Issuing Bank issue any Letter of Credit having an expiration
date after the Maturity Date and (iv) the Borrower shall not
request that the Issuing Bank issue any Letter of Credit if,
after giving effect to such issuance, the Letter of Credit
Usage would exceed $300,000,000 or any limit established by
Law after the Closing Date on the Issuing Bank's ability to
issue the requested Letter of Credit at any time.
Notwithstanding the foregoing, the Issuing Bank shall not be
obligated to issue a Letter of Credit if, (A) on or prior to
the Business Day immediately preceding the issuance thereof
any Bank has notified the Issuing Bank in writing that the
conditions set forth in Section 8.3 have not been satisfied
with respect to the issuance of such Letter of Credit, (B) any
order, judgment or decree of any Governmental Agency or
arbitrator shall by its terms purport to enjoin or restrain
the Issuing Bank from issuing such Letter of Credit, or any
Law applicable to the Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental
Agency with jurisdiction over the Issuing Bank shall prohibit,
or request that the Issuing Bank refrain from, the issuance of
letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with respect
to such Letter of Credit any restriction, reserve or capital
requirement (for which the Issuing Bank is not otherwise
compensated hereunder) not in effect on the Closing Date, or
shall impose upon the Issuing Bank any unreimbursed loss, cost
or expense which was not applicable on the Closing Date and
which the Issuing Bank in good ▇▇▇▇▇ ▇▇▇▇▇ material to it,
(C) the issuance of such Letter of Credit would violate one or
more policies of the Issuing Bank, (D) the expiry date of such
requested Letter of Credit would occur after the Maturity
Date, unless all of the Banks have approved such expiry date
or (E) after issuing such Letter of Credit the provisions of
Section 6.17 would be violated.
(b) Procedures for Issuance and Amendment of Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as
the case may be, upon the request of the Borrower
delivered to the Issuing Bank (with a copy to the
Administrative Agent) in the form of a Letter of
Credit Application, appropriately completed and
signed by a Responsible Official of the Borrower.
Such Letter of Credit Application must be received by
the Issuing Bank and the Administrative Agent not
later than 1:00 p.m., Los Angeles time, at least 3
Business Days (or such later date and time as the
Issuing Bank may agree in a particular instance in
its sole discretion) prior to the proposed issuance
date or date of amendment, as the case may be. In the
case of a request for an initial issuance of a Letter
of Credit, such Letter of Credit Application shall
specify in
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form and detail satisfactory to the Issuing Bank: (A)
the proposed issuance date of the requested Letter of
Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof; (D) the
name and address of the beneficiary thereof; (E) the
documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of
any certificate to be presented by such beneficiary
in case of any drawing thereunder; and (G) such other
matters as the Issuing Bank may require. In the case
of a request for an amendment of any outstanding
Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the
Issuing Bank (w) the Letter of Credit to be amended;
(x) the proposed date of amendment thereof (which
shall be a Business Day); (y) the nature of the
proposed amendment; and (z) such other matters as the
Issuing Bank may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the Issuing Bank will confirm with the
Administrative Agent (by telephone or in writing)
that the Administrative Agent has received a copy of
such Letter of Credit Application from the Borrower
and, if not, the Issuing Bank will provide the
Administrative Agent with a copy thereof. Upon
receipt by the Issuing Bank of confirmation from the
Administrative Agent that the requested issuance or
amendment is permitted in accordance with the terms
hereof, then, subject to the terms and conditions
hereof, the Issuing Bank shall, on the requested
date, issue a Letter of Credit for the account of the
Borrower or enter into the applicable amendment, as
the case may be, in each case in accordance with the
Issuing Bank's usual and customary business
practices. Immediately upon the issuance of each
Letter of Credit, each Bank shall be deemed to, and
hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank a risk participation
in such Letter of Credit in an amount equal to the
product of such Bank's Pro Rata Share times the
amount of such Letter of Credit.
(iii) Promptly after its delivery of any Letter of Credit
or any amendment to a Letter of Credit to an advising
bank with respect thereto or to the beneficiary
thereof, the Issuing Bank will also (x) deliver to
the Borrower and the Administrative Agent a true and
complete copy of such Letter of Credit or amendment
and (y) notify the Borrower and the Administrative
Agent of any return, surrender or cancellation of any
Letter of Credit.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of
Credit of any notice of a drawing under such Letter
of Credit, the Issuing Bank shall promptly notify the
Borrower and the Administrative Agent thereof and of
the date the Issuing Bank proposes to pay such
drawing. The Borrower shall reimburse the Issuing
Bank through the Administrative Agent in an amount
equal to the amount of any payment by the Issuing
Bank under a Letter of Credit, which reimbursement
shall be made, (x) if the Issuing Bank notifies the
Borrower and the Administrative Agent of such payment
before 2:00 p.m. Los Angeles time on the Business Day
immediately preceding the date of such payment (the
date of such payment being, the "Honor Date"), then
on the Honor Date, or (y) if the Issuing Bank
notifies the Borrower and the Administrative Agent
after 2:00 p.m. Los Angeles time on the Business Day
immediately preceding the Honor Date or any Business
Day thereafter, then on the Business Day immediately
following such notice
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(with any notice received on or after 2:00 p.m. Los
Angeles time on any day deemed to be received before
2:00 p.m. Los Angeles time on the next Business Day).
If the Borrower fails to so reimburse the Issuing
Bank by such date, the Administrative Agent shall
promptly notify each Bank of the Honor Date, the
amount of the unreimbursed drawing (the "Unreimbursed
Amount"), and the amount of such Bank's Pro Rata
Share thereof. In such event, the Borrower shall be
deemed to have requested a Base Rate Loan in an
amount equal to the Unreimbursed Amount, without
regard to the minimum and multiples specified in
Section 2.1(e) for the principal amount of Base Rate
Loans, but subject to the amount of the unutilized
portion of the Commitments and the conditions set
forth in Section 8.2 (other than the delivery of a
Loan Notice). Any notice given by the Issuing Bank or
the Administrative Agent pursuant to this Section
2.5(c)(i) may be given by telephone if immediately
confirmed in writing; provided that the lack of such
an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
(ii) Each Bank (including the Bank acting as Issuing Bank)
shall upon any notice pursuant to Section 2.5(c)(i)
make funds available to the Administrative Agent for
the account of the Issuing Bank at the Administrative
Agent's Office in an amount equal to its Pro Rata
Share of the Unreimbursed Amount not later than 1:00
p.m. on the Business Day specified in such notice by
the Administrative Agent (provided that the
Administrative Agent gives notice on or prior to
11:00 a.m. on such Business Day), whereupon, subject
to the provisions of Section 2.5(c)(iii), each Bank
that so makes funds available shall be deemed to have
made an Advance to the Borrower in such amount. The
Administrative Agent shall remit the funds so
received to the Issuing Bank.
(iii) With respect to any Unreimbursed Amount that is not
fully refinanced by a Base Rate Loan because the
conditions set forth in Section 8.2 cannot be
satisfied or for any other reason, the Borrower shall
be deemed to have incurred from the Issuing Bank an
L/C Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced, which L/C Borrowing
shall be due and payable on demand (together with
interest) and shall bear interest at the Default
Rate. In such event, each Bank's payment to the
Administrative Agent for the account of the Issuing
Bank pursuant to Section 2.5(c)(ii) shall be deemed
payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from
such Bank in satisfaction of its participation
obligation under this Section 2.5.
(iv) Until each Bank funds its Advance or L/C Advance
pursuant to this Section 2.5(c) to reimburse the
Issuing Bank for any amount drawn under any Letter of
Credit, interest in respect of such Bank's Pro Rata
Share of such amount shall be solely for the account
of the Issuing Bank.
(v) Each Bank's obligation to make Advances or L/C
Advances to reimburse the Issuing Bank for amounts
drawn under Letters of Credit, as contemplated by
this Section 2.5(c), shall be absolute and
unconditional and shall not be affected by any
circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right
which such Bank may have against the Issuing Bank,
the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the
foregoing; provided, however, that each Bank's
obligation to
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make Advances pursuant to this Section 2.5(c) is
subject to the conditions set forth in Section 8.2
(other than delivery by the Borrower of a Loan
Notice). No such making of an L/C Advance shall
relieve or otherwise impair the obligation of the
Borrower to reimburse the Issuing Bank for the amount
of any payment made by the Issuing Bank under any
Letter of Credit, together with interest as provided
herein.
(vi) If any Bank fails to make available to the
Administrative Agent for the account of the Issuing
Bank any amount required to be paid by such Bank
pursuant to the foregoing provisions of this Section
2.5(c) by the time specified in Section 2.5(c)(ii),
the Issuing Bank shall be entitled to recover from
such Bank (acting through the Administrative Agent),
on demand, such amount with interest thereon for the
period from the date such payment is required to the
date on which such payment is immediately available
to the Issuing Bank at a rate per annum equal to the
Federal Funds Rate from time to time in effect. A
certificate of the Issuing Bank submitted to any Bank
(through the Administrative Agent) with respect to
any amounts owing under this clause (vi) shall be
conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after the Issuing Bank has made a payment
under any Letter of Credit and has received from any
Bank such Bank's L/C Advance in respect of such
payment in accordance with Section 2.5(c), if the
Administrative Agent receives for the account of the
Issuing Bank any payment in respect of the related
Unreimbursed Amount or interest thereon (whether
directly from the Borrower or otherwise, including
proceeds of cash collateral applied thereto by the
Administrative Agent), the Administrative Agent will
distribute to such Bank its Pro Rata Share thereof
(appropriately adjusted, in the case of interest
payments, to reflect the period of time during which
such Bank's L/C Advance was outstanding) in the same
funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent
for the account of the Issuing Bank pursuant to
Section 2.5(c)(i) is required to be returned under
any of the circumstances described in Section 11.24
(including pursuant to any settlement entered into by
the Issuing Bank in its discretion), each Bank shall
pay to the Administrative Agent for the account of
the Issuing Bank its Pro Rata Share thereof on demand
of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount
is returned by such Bank, at a rate per annum equal
to the Federal Funds Rate from time to time in
effect.
(e) Obligations Absolute. The obligation of the Borrower to
reimburse the Issuing Bank for each drawing under each Letter
of Credit and to repay each L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all
circumstances (except as otherwise provided in clauses (ii)
through (v) below), including the following:
(i) any lack of validity or enforceability of such Letter
of Credit, this Agreement, or any other agreement or
instrument relating thereto;
-34-
(ii) the existence of any claim, counterclaim, set-off,
defense or other right that the Borrower may have at
any time against any beneficiary or any transferee of
such Letter of Credit (or any Person for whom any
such beneficiary or any such transferee may be
acting), the Issuing Bank or any other Person,
whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of
Credit or any agreement or instrument relating
thereto, or any unrelated transaction, except for
payment with respect to a Letter of Credit when such
payment violates the terms of ISP98;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any
respect (so long as payment under such Letter of
Credit would otherwise be permitted under the terms
of ISP98) or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in
the transmission or otherwise of any document
required in order to make a drawing under such Letter
of Credit;
(iv) any payment by the Issuing Bank under such Letter of
Credit against presentation of a draft or certificate
that does not strictly comply with the terms of such
Letter of Credit (except if such payment violates the
terms of ISP98); or any payment made by the Issuing
Bank under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other
representative of or successor to any beneficiary or
any transferee of such Letter of Credit, including
any arising in connection with any proceeding under
any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing,
including any other circumstance that might otherwise
constitute a defense available to, or a discharge of,
the Borrower (except for payment by an Issuing Bank
(or any other applicable "issuer" within the meaning
of ISP98) with respect to a Letter of Credit that
violates the terms of ISP98).
The Borrower shall promptly examine a copy of each Letter of
Credit and each amendment thereto that is delivered to it and,
in the event of any claim of noncompliance with the Borrower's
instructions or other irregularity, the Borrower will promptly
notify the Issuing Bank. The Borrower shall be conclusively
deemed to have waived any such claim against the Issuing Bank
and its correspondents unless such notice is given as
aforesaid.
(f) Role of Issuing Bank. Each Bank and the Borrower agree that,
in paying any drawing under a Letter of Credit, the Issuing
Bank shall not have any responsibility to obtain any document
(other than any sight draft, certificates and documents
expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or
the authority of the Person executing or delivering any such
document. None of the Issuing Bank, any Agent-Related Person
nor any of the respective correspondents, participants or
assignees of the Issuing Bank shall be liable to any Bank for
(i) any action taken or omitted in connection herewith at the
request or with the approval of the Banks or the Required
Banks, as applicable; (ii) any action taken or omitted in the
absence of gross negligence or willful misconduct; or (iii)
the due execution, effectiveness, validity or enforceability
of any document or instrument related to any Letter of Credit
or Letter of Credit Application. The Borrower hereby assumes
all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of
-35-
any Letter of Credit; provided, however, that this assumption
is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement.
None of the Issuing Bank, any Agent-Related Person, nor any of
the respective correspondents, participants or assignees of
the Issuing Bank, shall be liable or responsible for any of
the matters described in clauses (i) through (v) of Section
2.5(e); provided, however, that anything in such clauses to
the contrary notwithstanding, the Borrower may have a claim
against the Issuing Bank (and any other applicable "issuer"
within the meaning of ISP98), and the Issuing Bank (or such
issuer) may be liable to the Borrower, to the extent, but only
to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower
proves were caused by the Issuing Bank's (or such issuer's)
willful misconduct or gross negligence or the Issuing Bank's
(or such issuer's) failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit or for payment with respect
to a Letter of Credit by an Issuing Bank (or such issuer) when
such payment violates the terms of ISP98. In furtherance and
not in limitation of the foregoing, the Issuing Bank may
accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless
of any notice or information to the contrary, and the Issuing
Bank shall not be responsible for the validity or sufficiency
of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent,
(i) if the Issuing Bank has honored any full or partial
drawing request under any Letter of Credit and such drawing
has resulted in an L/C Borrowing, (ii) if, as of the Maturity
Date or acceleration pursuant to Section 9.2(a)(ii), any
Letter of Credit may for any reason remain outstanding and
partially or wholly undrawn or (iii) if any amount remains
available to be drawn under any Letter of Credit by reason of
the operation of Section 3.14 of the "International Standby
Practices 1998" published by the Institute of International
Banking Law & Practice (or such later version thereof as may
be in effect at the time of issuance), the Borrower shall
immediately Cash Collateralize the then outstanding amount of
the Letter of Credit Usage (in an amount equal to such
outstanding amount determined as of the date of such L/C
Borrowing or the Maturity Date, as the case may be). For
purposes hereof, "Cash Collateralize " means to pledge and
deposit with or deliver to the Administrative Agent, for the
benefit of the Issuing Bank and the Banks, as collateral for
the then outstanding amount of the Letter of Credit Usage,
cash or deposit account balances pursuant to documentation in
form and substance satisfactory to the Administrative Agent
and the Issuing Bank (which documents are hereby consented to
by the Banks). Derivatives of such term have corresponding
meanings. The Borrower hereby grants to the Administrative
Agent, for the benefit of the Issuing Bank and the Banks, a
security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing. Cash
collateral shall be maintained in a blocked, non-interest
bearing deposit account at Bank of America.
(h) Applicability of ISP98. The rules of the "International
Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version
thereof as may be in effect at the time of issuance) ("ISP98")
shall apply to each Letter of Credit, except as provided in
Section 2.5(l) below.
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(i) Conflict with Letter of Credit Application. In the event of
any conflict between the terms hereof and the terms of any
Letter of Credit Application, the terms hereof shall control.
(j) Letter of Credit Fees.
(i) Borrower shall pay to Administrative Agent for the
account of the Banks a letter of credit fee payable
to the Banks in accordance with their Pro Rata Shares
with respect to each Letter of Credit issued or
renewed equal to the Applicable Letter of Credit Fee
times the daily maximum amount available to be drawn
under such Letter of Credit (whether or not such
maximum amount is then in effect under such Letter of
Credit). Such letter of credit fee shall accrue and
be computed on a quarterly basis in arrears, and
shall be due and payable on the Quarterly Payment
Date, commencing with the first such date to occur
after the issuance of such Letter of Credit and on
the Maturity Date.
(ii) Borrower shall pay directly to the applicable Issuing
Bank for its own account a fronting fee with respect
to each Letter of Credit issued or renewed by such
Issuing Bank equal to 0.125% per annum times the
daily maximum amount which is available to be drawn
under such Letter of Credit (whether or not such
maximum amount is then in effect under such Letter of
Credit). Such fronting fee shall accrue and be
computed on a quarterly basis in arrears, and shall
be due and payable on the Quarterly Payment Date,
commencing with the first such date to occur after
the issuance of such Letter of Credit and on the
expiry date of such Letter of Credit. In addition,
Borrower shall pay directly to the applicable Issuing
Bank for its own account the customary issuance,
presentation, amendment, and other processing fees,
and other standard costs and charges, of such Issuing
Bank relating to letters of credit as from time to
time in effect. Such customary fees and standard
costs and charges are due and payable on demand and
are nonrefundable.
(k) Number of Issuing Banks/Reports to the Administrative Agent.
In addition to Bank of America, Borrower may, with the consent
of the Administrative Agent (and the consent of any Bank
requested to be an Issuing Bank), designate up to 3 additional
Issuing Banks, each of which must be Banks, for the purposes
of this Agreement; provided that there shall not be more than
4 Issuing Banks hereunder at any time. Each Issuing Bank
shall, no later than the 3rd Business Day following the last
day of each month, provide to Administrative Agent a report in
form and substance reasonably satisfactory to Administrative
Agent, showing the date of issuance or amendment of each
Letter of Credit, the account party, the original face amount
(if any), the expiration date, and the reference number of any
Letter of Credit issued or amended during such month. Upon
request of any Bank, the Administrative Agent shall forward
copies of such reports to such Bank.
(l) Existing Letters of Credit. For an Existing Letter of Credit,
references to "ISP98" in this Agreement will be deemed to mean
references to UCP500, if such Existing Letter of Credit is
governed by UCP500.
2.6 Reduction of Commitment. Borrower shall have the right, at any time and
from time to time, without penalty or charge, upon at least 5 Business
Days prior written notice voluntarily to reduce or terminate
permanently and irrevocably, in aggregate principal amounts in an
integral multiple of $1,000,000 but not less than $5,000,000 (unless
all of the unused Commitment is being
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terminated), all or a portion of the unused Commitment. Borrower shall
pay to the Administrative Agent on the date of such termination all
unpaid commitment fees which have accrued to such date in respect of
the terminated portion of the Commitment.
2.7 [Intentionally Omitted]
2.8 Borrowing Base.
(a) Reporting of Borrowing Base. Within 45 days after the end of
each Fiscal Quarter, and within 30 days after Borrower loses
an Investment Grade Credit Rating, the Borrower shall provide
the Administrative Agent with a Borrowing Base Certificate in
a form satisfactory to the Administrative Agent showing the
Borrower's calculations of the components of the Borrowing
Base as of the end of the last Fiscal Quarter and such data
supporting such calculations per Exhibit B or in another form
as the Administrative Agent may reasonably require; provided
that Borrower shall have no obligation to provide a Borrowing
Base Certificate to Administrative Agent at any time at which
Borrower holds an Investment Grade Credit Rating. Any change
in the Borrowing Base shall be effective upon receipt of a
Borrowing Base Certificate.
(b) Amount of Borrowing Base. As used in this Agreement, the term
"Borrowing Base" means a Dollar amount equal to the sum of the
following:
(i) Escrow Receivables. 90% of the aggregate GAAP Value
of Escrow Receivables; plus
(ii) Developed Lots. 65% of the aggregate GAAP Value of
Developed Lots; plus
(iii) Lots Under Development. 65% of the aggregate GAAP
Value of Lots Under Development; plus
(iv) Construction Costs. 85% of the aggregate GAAP Value
of Construction Costs; plus
(v) Unrestricted Cash. 100% of Unrestricted Cash in
excess of $15,000,000;
provided, however, that the aggregate of the amounts set forth
in clauses (ii) and (iii) shall be less than 50% of the
Borrowing Base.
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ARTICLE III
PAYMENTS AND FEES
3.1 Principal and Interest.
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Advance from the date of such Advance
until payment in full and shall accrue and be payable at the
rates set forth herein, to the extent permitted by applicable
Laws, before and after default, before and after maturity,
before and after any judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law,
with interest on overdue interest to bear interest at the
Default Rate.
(b) Interest accrued on each Base Rate Loan shall be due and
payable on the last day of each calendar month. Except as
otherwise provided in Section 3.7, the unpaid principal amount
of any Base Rate Loan shall bear interest at a fluctuating
rate per annum equal to the sum of the Base Rate plus the
Applicable Base Rate Spread.
(c) Interest accrued on each Eurodollar Rate Loan shall be due and
payable on the last day of each calendar month. Except as
otherwise provided in Section 3.7, the unpaid principal amount
of any Eurodollar Rate Loan shall bear interest at a rate per
annum equal to the sum of the Eurodollar Rate for that
Eurodollar Rate Loan plus the Applicable Eurodollar Rate
Spread.
(d) If not sooner paid, the principal Indebtedness evidenced by
the Notes shall be payable as follows:
(i) the principal Indebtedness evidenced by the Notes
shall be payable within one Business Day in Cash to
the extent that the Total Outstandings exceeds at any
time the Commitment as then in effect; and
(ii) the principal Indebtedness evidenced by the Notes
shall in any event be immediately payable in Cash on
the Maturity Date.
(e) The Notes may, at any time and from time to time, voluntarily
be prepaid at the election of Borrower in whole or in part
without premium or penalty; provided that: (i) any partial
prepayment shall be in integral multiples of $1,000,000, (ii)
any partial prepayment shall be in an amount not less than
$1,000,000 on a Base Rate Loan, and not less than $5,000,000
on a Eurodollar Rate Loan, (iii) the Administrative Agent must
have received written notice (or telephonic notice confirmed
promptly in writing) of any prepayment at least 3 Business
Days before the date of prepayment in the case of a Eurodollar
Rate Loan and by 10:00 a.m., Los Angeles time, on the date of
prepayment in the case of a Base Rate Loan, (iv) each
prepayment of principal, except for partial prepayments on
Base Rate Loans, shall be accompanied by prepayment of
interest accrued to the date of payment on the amount of
principal paid and (v) in the case of any prepayment of any
Eurodollar Rate Loan, Borrower shall promptly upon demand
reimburse each Bank for any loss or cost directly or
indirectly resulting from the prepayment, determined as set
forth in Section 3.6.
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(f) Change in Control.
(i) If a Change in Control shall have occurred, at the
option of the Required Banks, Borrower shall repay in
Cash the entire principal Indebtedness evidenced by
the Notes, together with interest thereon and all
other amounts due in connection with the Notes and
this Agreement, and deliver to the Administrative
Agent an amount equal to the Letter of Credit Usage
then outstanding, to be held as cash collateral as
provided in Section 9.2(c) (the "Change in Control
Repayment"), on the date that is no more than 27
Business Days after the occurrence of the Change in
Control (the "Change in Control Payment Date"),
subject to receipt by Borrower of a Change in Control
Payment Notice as set forth in Section 3.1(f)(iii).
On the Change in Control Payment Date, the Commitment
shall automatically terminate.
(ii) Within 15 Business Days after the occurrence of a
Change in Control, Borrower shall provide written
notice of the Change in Control to the Administrative
Agent and each Bank. The notice shall state:
(A) the events causing a Change in Control and
the date of such Change in Control;
(B) the date by which the Change in Control
Payment Notice (as defined in Section
3.1(f)(iii)) must be given; and
(C) the Change in Control Payment Date.
(iii) At the direction of the Required Banks, the
Administrative Agent shall, on behalf of the Banks,
exercise the rights specified in Section 3.1(f)(i) by
delivery of a written notice (a "Change in Control
Payment Notice") to Borrower at any time prior to or
on the Change in Control Payment Date, stating that
the Notes shall be prepaid and cash collateral shall
be provided for the Letter of Credit Usage on the
Change in Control Payment Date. On the Change in
Control Payment Date, Borrower shall make the Change
in Control Repayment to the Administrative Agent for
the benefit of the Banks, and the Commitment shall
terminate.
3.2 Commitment Fee. From the Closing Date until the Maturity Date, Borrower
shall pay to the Administrative Agent, for the account of each Bank,
pro rata according to that Bank's Pro Rata Share of the Commitment, a
commitment fee equal to the Applicable Commitment Fee Rate per annum in
effect from time to time times the average daily amount by which the
Commitment exceeds the aggregate outstanding principal of the Loans
evidenced by the Notes plus the Letter of Credit Usage plus the Swing
Line Outstandings. This commitment fee shall accrue daily and be
payable in arrears with respect to each calendar quarter on the
Quarterly Payment Date falling at the end of such calendar quarter. The
Administrative Agent shall calculate the commitment fee and the amount
thereof allocable to each Bank according to that Bank's Pro Rata Share
of the Commitment and shall notify Borrower in writing of such amounts.
3.3 Other Fees. Borrower shall pay to Bank of America such other fees in
such amounts and at such times as heretofore agreed upon by letter
agreement between Borrower and Bank of America.
3.4 [Intentionally Omitted].
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3.5 Capital Adequacy.
(a) If any Bank (an "Affected Bank") determines that compliance
with any Law or regulation or with any guideline or request
from any central bank or other Governmental Agency (whether or
not having the force of Law) enacted or issued after the
Closing Date relating to the capital adequacy of banks or
corporations in control of banks has or would have the effect
of reducing the rate of return on the capital of such Affected
Bank or any corporation controlling such Affected Bank as a
consequence of, or with reference to, such Affected Bank's Pro
Rata Share of the Commitment below the rate which the Bank or
such other corporation could have achieved but for such
compliance (taking into account the policies of such Bank or
corporation with regard to capital adequacy), then Borrower
shall from time to time, upon demand by such Affected Bank in
accordance with this Section 3.5 (with a copy of such demand
to the Administrative Agent), within 15 days after demand pay
to such Affected Bank additional amounts sufficient to
compensate such Affected Bank or other corporation for such
reduction.
(b) An Affected Bank may not seek compensation under Section
3.5(a) unless the demand for such compensation is delivered to
Borrower within 6 months following the date of enactment or
issuance of the Law, regulation, guideline or request giving
rise to such demand for compensation.
(c) A certificate as to any amounts for which an Affected Bank is
seeking compensation under Section 3.5(a), submitted to
Borrower and the Administrative Agent by such Affected Bank,
shall be conclusive and binding for all purposes, absent
manifest error. Each Affected Bank shall calculate such
amounts in a manner which is consistent with the manner in
which it makes calculations for comparable claims with respect
to similarly situated borrowers from such Affected Bank, will
not allocate to Borrower a proportionately greater amount of
such compensation than it allocates to each of its other
commitments to lend or other loans with respect to which it is
entitled to demand comparable compensation, and will not
include amounts already factored into the rates of interest or
fees already provided for herein. Each Bank agrees promptly to
notify Borrower and the Administrative Agent of any
circumstances that would cause Borrower to pay additional
amounts pursuant to this Section, provided that the failure to
give such notice shall not affect Borrower's obligation to pay
such additional amounts hereunder.
(d) Without limiting its obligation to reimburse an Affected Bank
for compensation theretofore claimed by an Affected Bank
pursuant to Section 3.5(a), Borrower may, within 60 days
following any demand by an Affected Bank, request that one or
more Persons that are Eligible Assignees and that are
acceptable to Borrower and approved by the Administrative
Agent (which approval shall not be unreasonably withheld)
purchase all (but not part) of the Affected Bank's then
outstanding Advances, its Note and its participation interest
in outstanding Letters of Credit, and assume its Pro Rata
Share of the Commitment and its obligations hereunder. If one
or more such Banks or banks so agree in writing (each, an
"Assuming Bank" and collectively, the "Assuming Banks"), the
Affected Bank shall assign its Pro Rata Share of the
Commitment, together with the Indebtedness then evidenced by
its Note and its participation interest in outstanding Letters
of Credit, to the Assuming Bank or Assuming Banks in
accordance with Section 11.8. On the date of any such
assignment, the Affected Bank which is being so replaced shall
cease to be a "Bank" for all purposes of this Agreement and
shall receive (x) from the Assuming Bank or Assuming Banks the
principal amount of its Advances then outstanding and (y) from
Borrower all interest and fees accrued and then unpaid
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with respect to such Advances, together with any other amounts
accrued or then payable to such Bank by Borrower. In the event
the Affected Bank is also an Issuing Bank, then the Assuming
Bank shall become an Issuing Bank for all purposes of this
Agreement and shall either (at the Affected Bank's election,
subject to the approval of Borrower, the Administrative Agent
and the Assuming Bank (which approvals shall not be
unreasonably withheld) and, in the case of clause (i) below,
the approval of the applicable Letter of Credit beneficiaries)
(i) issue new letters of credit to replace the outstanding
Letters of Credit issued by the Affected Bank, or (ii) issue
new letters of credit to the Affected Bank in support of the
outstanding Letters of Credit issued by the Affected Bank,
whereupon such outstanding Letters of Credit shall no longer
be considered "Letters of Credit" under this Agreement, and
such new letters of credit shall be considered Letters of
Credit for all purposes of this Agreement (including the
participation therein by the other Banks pursuant to Section
2.5).
3.6 Eurodollar Fees and Costs.
(a) If the occurrence of any Regulatory Development after the
Closing Date:
(i) shall subject any Bank or its Eurodollar Lending
Office to any tax, duty or other charge or cost with
respect to any Eurodollar Advance or its obligation
to make Eurodollar Advances, or shall change the
basis of taxation of payments to any Bank of the
principal of or interest on any Eurodollar Advance or
any other amounts due under this Agreement in respect
of any Eurodollar Advance or its obligation to make
Eurodollar Advances (except for changes in any tax on
the overall net income, gross income or gross
receipts of such Bank or its Eurodollar Lending
Office);
(ii) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the Board of
Governors of the Federal Reserve System), special
deposit or similar requirements (excluding any such
requirement included in any applicable Eurodollar
Reserve Percentage) against assets of, deposits with
or for the account of, or credit extended by, any
Bank or its Eurodollar Lending Office; or
(iii) shall impose on any Bank or its Eurodollar Lending
Office or the London interbank eurodollar market any
other condition affecting any Eurodollar Advance or
its obligation to make Eurodollar Advances, or shall
otherwise affect any of the same;
and the result of any of the foregoing, as determined by such
Bank, increases the cost to such Bank or its Eurodollar
Lending Office of making or maintaining any Eurodollar Advance
or in respect of any Eurodollar Advance or its obligation to
make Eurodollar Advances or reduces the amount of any sum
received or receivable by such Bank or its Eurodollar Lending
Office with respect to any Eurodollar Advance or its
obligation to make Eurodollar Advances (assuming such Bank's
Eurodollar Lending Office had funded 100% of its Eurodollar
Advance in the London interbank eurodollar market), then,
within 15 days after demand by such Bank (with a copy to the
Administrative Agent), Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for
such increased cost or reduction (determined as though such
Bank's Eurodollar Lending Office had funded 100% of its
Eurodollar Advance in the London interbank eurodollar market);
provided that Borrower shall not be liable to any Bank for any
such
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increased cost or reduction pursuant to this Section in
respect of any period which is more than 6 months prior to
such Bank's demand for such compensation. A statement of any
Bank claiming compensation under this subsection and setting
forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest
error. Each Bank agrees to endeavor promptly to notify
Borrower of any event of which it has actual knowledge which
will entitle such Bank to compensation pursuant to this
Section, and agrees to designate a different Eurodollar
Lending Office if such designation will avoid the need for or
reduce the amount of such compensation and will not, in the
judgment of such Bank, otherwise be disadvantageous to such
Bank. If any Bank claims compensation under this Section,
Borrower may at any time, upon at least 4 Business Days' prior
notice to the Administrative Agent and such Bank and upon
payment in full of the amounts provided for in this Section
through the date of such payment plus any prepayment fee
required by Section 3.6(d), pay in full the affected
Eurodollar Advances of such Bank or request that such
Eurodollar Advances be converted to Base Rate Advances.
(b) If after the Closing Date the occurrence of any Regulatory
Development shall, in the opinion of any Bank, make it
unlawful or impossible for such Bank or its Eurodollar Lending
Office to make, maintain or fund its portion of any Eurodollar
Rate Loan, or to take deposits of, dollars in the London
interbank eurodollar market, or to determine or charge
interest rates based upon the Eurodollar Rate, and such Bank
shall so notify the Administrative Agent, then such Bank's
obligation to make Eurodollar Advances shall be suspended for
the duration of such illegality or impossibility and the
Administrative Agent forthwith shall give notice thereof to
the other Banks and Borrower. Before giving any notice to the
Administrative Agent pursuant to this Section, such Bank shall
designate a different Lending Office if such designation will
avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank. Upon receipt of such notice, the outstanding principal
amount of such Bank's Eurodollar Advances, together with
accrued interest thereon, automatically shall be converted to
Base Rate Advances with Interest Periods corresponding to the
Eurodollar Rate Loans of which such Eurodollar Advances were a
part on either (1) the last day of the Interest Period(s)
applicable to such Eurodollar Advances if such Bank may
lawfully continue to maintain and fund such Eurodollar
Advances to such day(s) or (2) immediately if such Bank may
not lawfully continue to fund and maintain such Eurodollar
Advances to such day(s), provided that in such event the
conversion shall not be subject to payment of a prepayment fee
under Section 3.6(d). In the event that any Bank is unable,
for the reasons set forth above, to make, maintain or fund its
portion of any Eurodollar Rate Loan, such Bank shall fund such
amount as a Base Rate Advance for the same period of time, and
such amount shall be treated in all respects as a Base Rate
Advance.
(c) If, with respect to any proposed Eurodollar Rate Loan:
(i) the Administrative Agent reasonably determines that,
by reason of circumstances affecting the London
interbank eurodollar market generally that are beyond
the reasonable control of the Banks, deposits in
dollars (in the applicable amounts) are not being
offered to each of the Banks in the London interbank
eurodollar market for the applicable Interest Period;
or
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(ii) the Required Banks advise the Administrative Agent
that the Eurodollar Rate as determined by the
Administrative Agent will not adequately and fairly
reflect the cost to such Banks of making the
applicable Eurodollar Advances;
then the Administrative Agent forthwith shall give notice
thereof to Borrower and the Banks, whereupon until the
Administrative Agent notifies Borrower that the circumstances
giving rise to such suspension no longer exist, the obligation
of the Banks to make any future Eurodollar Advances shall be
suspended. If at the time of such notice there is then pending
a Loan Notice that specifies a Eurodollar Rate Loan, such Loan
Notice shall be deemed to specify a Base Rate Loan.
(d) Upon payment or prepayment of any Eurodollar Advance (other
than as the result of a conversion required under Section
3.6(b)) on a day other than the last day in the applicable
Interest Period (whether voluntarily, involuntarily, by reason
of acceleration, or otherwise), or upon the failure of
Borrower to borrow on the date or in the amount specified for
a Eurodollar Rate Loan in any Loan Notice, Borrower shall pay
to each Bank an amount equal to the sum of
(i) $250; plus
(ii) the amount, if any, by which (x) the additional
interest that would have accrued (without any
Applicable Eurodollar Rate Spread) on the principal
amount prepaid on account of the Eurodollar Advance
had it remained outstanding until the last day of the
applicable Interest Period, exceeds (y) the interest
that Bank could recover by placing funds in the
amount of the prepayment on deposit in the London
interbank eurodollar market selected by that Bank for
a period beginning on the date of the prepayment and
ending on the last day of the applicable Interest
Period, or for a comparable period for which an
appropriate rate quote may be obtained; plus
(iii) an amount equal to all costs and expenses which that
Bank incurred or reasonably expects to incur in
liquidating and reinvesting the prepayment.
Each Bank's determination of the amount of any prepayment fee
or failure to borrow fee payable under this Section 3.6(d)
shall be conclusive in the absence of manifest error.
(e) Any statement or certificate given by a Bank under this
Section 3.6 shall satisfy the requirements set forth in
Section 3.6(c) with respect to requests for reimbursement
under Section 3.6(a).
(f) Should any Bank demand payment under the provisions of Section
3.6(a) or should any Bank's Eurodollar Advances be suspended
under the provisions of Section 3.6(b), then without limiting
its obligation to reimburse any Bank for compensation claimed
by such Bank pursuant to this Section 3.6, Borrower may,
within 60 days following such occurrence, treat that Bank as
an "Affected Bank" under Section 3.5(d), and exercise the
remedies set forth in such Section 3.5(d).
3.7 Late Payments/Default Interest. If any installment of principal or
interest under the Notes or any other amount payable to the Banks under
any Loan Document is not paid when due, it shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to
the sum of the Base Rate plus the Applicable Base Rate Spread plus 2%
(the "Default Rate"), provided however
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that, subject to the following sentence, principal, interest or other
amounts due with respect to Eurodollar Rate Loans shall bear interest
at a fluctuating rate per annum at all times equal to the sum of the
Eurodollar Rate plus the Applicable Eurodollar Rate Spread plus 2%; in
each case, to the extent permitted by applicable Law, until paid in
full (whether before or after judgment). Upon and during the
continuance of any Event of Default, the Indebtedness evidenced by the
Notes shall, at the election of the Required Banks and upon notice to
Borrower (and in lieu of interest provided for in the preceding
sentence), bear interest at a fluctuating interest rate per annum at
all times equal to the Default Rate, to the extent permitted by
applicable Law, until no Event of Default exists (whether before or
after judgment). Notwithstanding the preceding sentence, after the
occurrence of any Event of Default under Sections 6.7, 6.10 or 6.16,
the Indebtedness evidenced by the Notes may not bear interest at the
increased rate provided for in the preceding sentence until such Event
of Default has continued for at least 15 days, in the case of Section
6.7, or 30 days, in the case of Sections 6.10 or 6.16.
3.8 Computation of Interest and Fees. All computations of interest and fees
hereunder shall be calculated on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day and
excluding the last day), which results in greater interest than if a
year of 365 days were used. Any Loan that is repaid on the same day on
which it is made shall bear interest for one day.
3.9 Holidays. If any payment to be made by the Borrower shall come due on a
day other than a Business Day, payment shall be made on the next
following Business Day, and such extension of time shall be reflected
in computing interest or fees, as the case may be.
3.10 Payment Free of Taxes.
(a) Any payments made by any Party under the Loan Documents shall
be made free and clear of, and without reduction by reason of,
any tax, assessment or other charge imposed by any
Governmental Agency, central bank or comparable authority
(other than taxes on income or gross receipts generally
applicable to banks). To the extent that Borrower is obligated
by applicable Laws to make any deduction or withholding on
account of taxes, assessments or other charges imposed by any
Governmental Agency from any amount payable to any Bank under
this Agreement, Borrower shall (a) make such deduction or
withholding and pay the same to the relevant Governmental
Agency and (b) pay such additional amount to that Bank as is
necessary to result in that Bank's receiving a net after-tax
(or after-assessment or after-charge) amount equal to the
amount to which that Bank would have been entitled under this
Agreement absent such deduction or withholding. If and when
receipt of such payment results in an excess payment or credit
to that Bank on account of such taxes, assessments or other
charges, that Bank shall refund such excess to Borrower. Each
Bank that is incorporated under the Laws of a jurisdiction
other than the United States of America or any state thereof
shall deliver to Borrower, with a copy to the Administrative
Agent, within twenty days after the Closing Date (or such
later date on which such Bank becomes a "Bank" hereunder), a
certificate signed by a Responsible Official of that Bank to
the effect that such Bank is entitled to receive payments of
interest and other amounts payable under this Agreement
without deduction or withholding on account of United States
of America federal income taxes, which certificate shall be
accompanied by 2 copies of Internal Revenue Service Form
W-8BEN, or any successor thereto, or Form W-8ECI, or any
successor thereto, as applicable, also executed by a
Responsible Official of that Bank. Each such Bank agrees (i)
promptly to notify the Administrative Agent and Borrower if
any fact set forth in such certificate ceases to be true and
correct and (ii) to take such steps as may be reasonably
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necessary to avoid any requirement of applicable Laws that
Borrower make any deduction or withholding for taxes from
amounts payable to that Bank under this Agreement.
(b) Without limiting its obligation to pay any additional amount
to a Bank pursuant to Section 3.10(a), Borrower may, within 60
days following any such payment by that Bank, treat that Bank
as an "Affected Bank" under Section 3.5(d), and exercise the
remedies set forth in such Section 3.5(d).
3.11 Funding Sources. Nothing in this Agreement shall be deemed to obligate
any Bank to obtain the funds for its share of any Loan in any
particular place or manner or to constitute a representation by any
Bank that it has obtained or will obtain the funds for its share of any
Loan in any particular place or manner.
3.12 Failure to Charge or Making of Payment Not Subsequent Waiver. Any
decision by any Bank not to require payment of any fee or costs, or to
reduce the amount of the payment required for any fee or costs, or to
calculate any fee or any cost in any particular manner, shall not limit
or be deemed a waiver of any Bank's right to require full payment of
any fee or costs, or to calculate any fee or any costs in any other
manner. Any decision by Borrower to pay any fee or costs shall not
limit or be deemed a waiver of any right of Borrower to protest or
dispute the payment amount of such fee or costs.
3.13 Time and Place of Payments; Evidence of Payments; Application of
Payments. All payments to be made by the Borrower shall be made without
conditions or deduction for any counterclaim, defense, recoupment or
setoff. The amount of each payment hereunder, under the Notes or under
any Loan Document shall be made to the Administrative Agent at the
Administrative Agent's Office, for the account of each of the Banks or
the Administrative Agent, as the case may be, in lawful money of the
United States of America without deduction, offset or counterclaim and
in immediately available funds on the day of payment (which must be a
Business Day). All payments of principal received after 10:00 a.m., Los
Angeles time, on any Business Day, shall be deemed received on the next
succeeding Business Day for purposes of calculating interest thereon.
The amount of all payments received by the Administrative Agent for the
account of a Bank shall be promptly paid by the Administrative Agent to
that Bank in immediately available funds. Each Bank shall keep a record
of Advances made by it and payments of principal with respect to each
Note, and such record shall be presumptive evidence of the principal
amount owing under such Note; provided that failure to keep such record
shall in no way affect the Obligations of Borrower hereunder. Prior to
the Maturity Date or an acceleration of the maturity of the Loans,
payments under the Loan Documents shall be applied first to amounts
owing under the Loan Documents other than the principal amount of and
accrued interest on the Loans and Borrower's obligations with respect
to Letter of Credit Usage, second to accrued interest on the Swing Line
Loans, third to accrued interest on the Loans (other than the Swing
Line Loans), fourth, to the principal amount of the Swing Line Loans,
fifth, to the principal amount of the Loans (other than the Swing Line
Loans) and sixth to Borrower's Obligations with respect to Letter of
Credit Usage then due and owing. Following the Maturity Date or an
acceleration of the maturity of the Loans, payments and recoveries
under the Loan Documents shall be applied in a manner designated in
Section 9.2(e). All payments with respect to principal and interest
shall be applied ratably in accordance with the Pro Rata Shares.
3.14 Administrative Agent's Right to Assume Payments Will be Made. Unless
the Borrower or any Bank has notified the Administrative Agent, prior
to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Bank, as the
case may be,
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will not make such payment, the Administrative Agent may assume that
the Borrower or such Bank, as the case may be, has timely made such
payment and may (but shall not be so required to), in reliance thereon,
make available a corresponding amount to the Person entitled thereto.
If and to the extent that such payment was not in fact made to the
Administrative Agent in immediately available funds, then:
(a) if the Borrower failed to make such payment, each Bank shall
forthwith on demand repay to the Administrative Agent the
portion of such assumed payment that was made available to
such Bank in immediately available funds, together with
interest thereon in respect of each day from and including the
date such amount was made available by the Administrative
Agent to such Bank to the date such amount is repaid to the
Administrative Agent in immediately available funds at the
Federal Funds Rate from time to time in effect; and
(b) if any Bank failed to make such payment, such Bank shall
forthwith on demand pay to the Administrative Agent the amount
thereof in immediately available funds, together with interest
thereon for the period from the date such amount was made
available by the Administrative Agent to the Borrower to the
date such amount is recovered by the Administrative Agent (the
"Compensation Period") at a rate per annum equal to the
Federal Funds Rate from time to time in effect. If such Bank
pays such amount to the Administrative Agent, then such amount
shall constitute such Bank's Advance included in the
applicable Loan. If such Bank does not pay such amount
forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent may make a demand therefor upon the
Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the
Compensation Period at a rate per annum equal to the rate of
interest applicable to the applicable Advance. Nothing herein
shall be deemed to relieve any Bank from its obligation to
fulfill its Pro Rata Share of the Commitment or to prejudice
any rights which the Administrative Agent or the Borrower may
have against any Bank as a result of any default by such Bank
hereunder.
A notice of the Administrative Agent to any Bank or the Borrower with
respect to any amount owing under this Section 3.14 shall be
conclusive, absent manifest error.
3.15 Survivability. All of Borrower's obligations under this Article III
shall survive termination of the Commitments and repayment of all other
Obligations hereunder.
3.16 Bank Calculation Certificate. Any request for compensation pursuant to
Section 3.5 or 3.6 shall be accompanied by a statement of an officer of
the Bank requesting such compensation and describing the methodology
used by such Bank in calculating the amount of such compensation, which
methodology (i) may consist of any reasonable averaging and attribution
methods and (ii) in the case of Section 3.5 hereof shall be consistent
with the methodology used by such Bank in making similar calculations
in respect of loans or commitments to other borrowers.
3.17 Transition.
(a) Borrower warrants and covenants that as of the Closing Date
there will be no loans of any nature outstanding under the
Prior Loan Agreements. The parties hereto agree that as of the
Closing Date all commitments to extend credit under the Prior
Loan Agreements shall terminate.
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(b) The letters of credit identified on Schedule 3.17 ("Existing
Letters of Credit") were issued by Bank of America for the
account of Borrower as "Letters of Credit" pursuant to the
terms of the Prior Revolving Loan Agreement and are expected
to remain outstanding on the Closing Date. The parties hereto
agree that the Existing Letters of Credit shall be deemed for
all purposes to be Letters of Credit issued pursuant to the
terms of Section 2.5.
(c) The Banks hereby agree to make appropriate adjustments among
themselves (and any "Bank" under the Prior Revolving Loan
Agreement who is not a party to this Agreement) with respect
to the letter of credit fees to be paid with respect to the
Existing Letters of Credit. Such adjustments shall be as of
the Closing Date and shall be based upon any change in the pro
rata share held by each such Bank in the Commitment under this
Agreement from the pro rata share held by each such Bank in
the "Commitment" under the Prior Revolving Loan Agreement. The
Administrative Agent shall, on or prior to January 31, 2004,
send a settlement billing to each such Bank with respect to
such adjustments, which settlement billing shall be conclusive
in the absence of manifest error.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Banks that:
4.1 Existence and Qualification; Power; Compliance with Law. Borrower is a
corporation duly organized, validly existing and in good standing under
the Laws of Delaware, and its certificate of incorporation does not
provide for the termination of its existence. Borrower is duly
qualified or registered to transact business as a foreign corporation
in the State of California, and in each other jurisdiction in which the
conduct of its business or the ownership of its properties makes such
qualification or registration necessary, except where the failure so to
qualify or register would not constitute a Material Adverse Effect.
Borrower has all requisite corporate power and authority to conduct its
business, to own and lease its Properties and to execute, deliver and
perform all of its obligations under the Loan Documents. All
outstanding shares of capital stock of Borrower are duly authorized,
validly issued, fully paid, non-assessable, and were issued in
compliance with all applicable state and federal securities Laws,
except where the failure to so comply would not constitute a Material
Adverse Effect. Borrower is in substantial compliance with all Laws and
other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits
(collectively, "Authorizations") from, and has accomplished all
filings, registrations and qualifications with, or obtained exemptions
from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, except where the failure
so to obtain Authorizations, comply, file, register, qualify or obtain
exemptions does not constitute a Material Adverse Effect.
4.2 Authority; Compliance with Other Instruments and Government
Regulations. The execution, delivery, and performance by Borrower, and
by each Guarantor Subsidiary of Borrower, of the Loan Documents to
which it is a Party, have been duly authorized by all necessary
corporate action, and do not:
(a) require any consent or approval not heretofore obtained of any
stockholder, partner, security holder, or creditor of such
Party;
(b) violate or conflict with any provision of such Party's
charter, certificate or articles of incorporation, bylaws,
certificate or articles of organization, operating agreement,
partnership agreement or other organizational or governing
documents of such Party;
(c) result in or require the creation or imposition of any Lien or
Right of Others upon or with respect to any Property now owned
or leased or hereafter acquired by such Party;
(d) constitute a "transfer of an interest" or an "obligation
incurred" that is avoidable by a trustee under Section 548 of
the Bankruptcy Code of 1978, as amended, or constitute a
"fraudulent transfer" or "fraudulent obligation" within the
meaning of the Uniform Fraudulent Transfer Act as enacted in
any jurisdiction or any analogous Law;
(e) violate any Requirement of Law applicable to such Party; or
(f) result in a breach of or constitute a default under, or cause
or permit the acceleration of any obligation owed under, any
indenture or loan or credit agreement or any other Contractual
Obligation to which such Party or any of its Property is bound
or affected;
-49-
and neither Borrower nor any Subsidiary of Borrower is in violation of,
or default under, any Requirement of Law or Contractual Obligation, or
any indenture, loan or credit agreement described in Section 4.2(f) in
any respect that would constitute a Material Adverse Effect.
4.3 No Governmental Approvals Required. Except such as have heretofore been
obtained, no authorization, consent, approval, order, license or permit
from, or filing, registration, or qualification with, or exemption from
any of the foregoing from, any Governmental Agency is or will be
required to authorize or permit the execution, delivery and performance
by Borrower or any Significant Subsidiary of Borrower of the Loan
Documents to which it is a Party.
4.4 Subsidiaries.
(a) Schedule 4.4 correctly sets forth the names, the form of legal
entity and jurisdictions of organization of all Subsidiaries
of Borrower as of the Closing Date and identifies each such
Subsidiary that is a Consolidated Subsidiary, a Significant
Subsidiary, a Guarantor Subsidiary, a Foreign Subsidiary and a
Financial Subsidiary. As of the Closing Date, unless otherwise
indicated in Schedule 4.4, all of the outstanding shares of
capital stock, or all of the units of equity interest, as the
case may be, of each Subsidiary indicated thereon are owned of
record and beneficially by Borrower or one of such
Subsidiaries, and all such shares or equity interests so owned
were issued in compliance with all state and federal
securities Laws and are duly authorized, validly issued, fully
paid and non-assessable (other than with respect to required
capital contributions to any joint venture in accordance with
customary terms and provisions of the related joint venture
agreement), except where the failure to so comply would not
constitute a Material Adverse Effect, and are free and clear
of all Liens and Rights of Others, except for Permitted
Encumbrances and Permitted Rights of Others.
(b) Each Significant Subsidiary is duly organized, validly
existing and in good standing under the Laws of its
jurisdiction of organization, is duly qualified to do business
as a foreign organization and is in good standing as such in
each jurisdiction in which the conduct of its business or the
ownership or leasing of its Properties makes such
qualification necessary (except where the failure to be so
duly qualified and in good standing does not constitute a
Material Adverse Effect) and has all requisite power and
authority to conduct its business, to own and lease its
Properties and to execute, deliver and perform the Loan
Documents to which it is a Party.
(c) Each Significant Subsidiary is in substantial compliance with
all Laws and other requirements applicable to its business and
has obtained all Authorizations from, and each such
Significant Subsidiary has accomplished all filings,
registrations, and qualifications with, or obtained exemptions
from any of the foregoing from, any Governmental Agency that
are necessary for the transaction of its business, except
where the failure so to obtain Authorizations, comply, file,
register, qualify or obtain exemptions does not constitute a
Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to each Bank the following
financial statements:
(a) the audited consolidated financial statements of Borrower and
its Consolidated Subsidiaries as at November 30, 2002 and for
the Fiscal Year then ended; and
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(b) the unaudited consolidating financial statements of Borrower
and its Consolidated Subsidiaries as at August 31, 2003 for
the Fiscal Quarter then ended and for the portion of the
Fiscal Year ended with such Fiscal Quarter.
The audited financial statements described in clause (a) are in
accordance with the books and records of Borrower and its Consolidated
Subsidiaries, were prepared in accordance with Generally Accepted
Accounting Principles consistently applied and fairly present in
accordance with Generally Accepted Accounting Principles consistently
applied the consolidated financial condition and results of operations
of Borrower and its Consolidated Subsidiaries as at the date and for
the period covered thereby. The unaudited financial statements
described in clause (b), are in accordance with the books and records
of Borrower and its Consolidated Subsidiaries, were prepared in
accordance with Generally Accepted Accounting Principles consistently
applied and fairly present in accordance with Generally Accepted
Accounting Principles consistently applied the consolidating financial
condition and results of operation of Borrower and its Consolidated
Subsidiaries as at the date and for the period covered thereby.
4.6 No Other Liabilities; No Material Adverse Effect. Borrower and its
Consolidated Subsidiaries do not have any material liability or
material contingent liability not reflected or disclosed in the
financial statements or in the notes to the financial statements
described in Section 4.5, other than liabilities and contingent
liabilities arising in the ordinary course of business subsequent to
November 30, 2002. Since November 30, 2002, no event or circumstance
has occurred that constitutes a Material Adverse Effect with respect to
Borrower and its Subsidiaries.
4.7 Title to Assets.
(a) Borrower and its Consolidated Subsidiaries have good and valid
title to all of the assets reflected in the financial
statements described in Section 4.5 owned by them or any of
them (other than assets disposed of in the ordinary course of
business), free and clear of all Liens and Rights of Others
other than (i) those reflected or disclosed in the notes to
the financial statements described in Section 4.5, (ii)
immaterial Liens or Rights of Others not required under
Generally Accepted Accounting Principles consistently applied
to be so reflected or disclosed, (iii) Liens permitted
pursuant to Section 6.7, (iv) Permitted Rights of Others, and
(v) such existing Liens or Rights of Others as are described
on Schedule 4.7 hereto.
(b) The Borrower and its Borrowing Base Subsidiaries have good
record and marketable title in fee simple to all Developed
Lots, Lots Under Development and Units being constructed on
Developed Lots included in the Borrowing Base (as set forth in
the Borrowing Base Certificate delivered by Borrower to the
Administrative Agent pursuant to Section 8.1(a)(x)), except
for defects in title that do not interfere in any material
respect with its ability to conduct its business as currently
conducted or to utilize such properties for their intended
purposes.
4.8 Intangible Assets. Borrower and its Subsidiaries own, or possess the
unrestricted right to use, all trademarks, trade names, copyrights,
patents, patent rights, licenses and other intangible assets that are
necessary in the conduct of their businesses as operated, and no such
intangible asset, to the best knowledge of Borrower, conflicts with the
valid trademark, trade name, copyright, patent, patent right or
intangible asset of any other Person to the extent that such conflict
would constitute a Material Adverse Effect.
-51-
4.9 Existing Indebtedness and Contingent Guaranty Obligations. As of August
31, 2003, except as set forth in Schedule 4.9, neither Borrower nor any
of its Subsidiaries has (a) any Indebtedness owed to any Person or (b)
outstanding any Contingent Guaranty Obligation with respect to
obligations of another Person that is not a Subsidiary of Borrower.
4.10 Governmental Regulation. Neither Borrower nor any of its Subsidiaries
is subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940.
4.11 Litigation. There are no actions, suits, or proceedings pending or, to
the best knowledge of Borrower, threatened against or affecting
Borrower or any of its Subsidiaries or any Property of any of them
before any Governmental Agency which would constitute a Material
Adverse Effect. To the best knowledge of the Borrower, there are no
investigations by any Governmental Agency pending or threatened against
or affecting Borrower or any of its Subsidiaries or any Property of any
of them which would constitute a Material Adverse Effect.
4.12 Binding Obligations. Each of the Loan Documents to which Borrower or
any Guarantor Subsidiary of Borrower is a Party constitutes the legal,
valid and binding obligation of Borrower or the Guarantor Subsidiary,
as the case may be, enforceable against Borrower or the Guarantor
Subsidiary, as the case may be, in accordance with its terms, except as
enforcement may be limited by Debtor Relief Laws or by equitable
principles relating to the granting of specific performance and other
equitable remedies as a matter of judicial discretion.
4.13 No Default. No event has occurred and is continuing that is a Default
or an Event of Default.
4.14 Pension Plans. All contributions required to be made under any Pension
Plan maintained by Borrower or any of its ERISA Affiliates (or to which
Borrower or any ERISA Affiliate contributes or is required to
contribute) have been made or accrued in the most recent balance sheet
of Borrower and its Consolidated Subsidiaries. There is no "accumulated
funding deficiency" within the meaning of Section 302 of ERISA or any
liability to the PBGC (other than for premiums) with respect to any
such Pension Plan other than a Multiemployer Plan.
4.15 Tax Liability. Borrower and its Subsidiaries have filed all tax returns
which are required to be filed, and have paid, or made provision for
the payment of, all taxes which have become due pursuant to said
returns or pursuant to any assessment received by Borrower or any
Subsidiary, except (a) such taxes, if any, as are being contested in
good faith by appropriate proceedings (and with respect to which
Borrower or its Subsidiary has established adequate reserves for the
payment of the same), and (b) such taxes the failure of which to pay
will not constitute a Material Adverse Effect.
4.16 Regulation U. Neither Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" within the meanings of Regulation U of the Board of
Governors of the Federal Reserve System, and no Loan hereunder will be
used to purchase or carry any such margin stock in violation of
Regulation U.
4.17 Environmental Matters. To the best knowledge of Borrower, Borrower and
its Subsidiaries are in substantial compliance with all applicable Laws
relating to environmental protection where the failure to comply would
constitute a Material Adverse Effect. To Borrower's best knowledge,
neither Borrower nor any of its Subsidiaries has received any notice
from any Governmental
-52-
Agency respecting the alleged violation by Borrower or any Subsidiary
of such Laws which would constitute a Material Adverse Effect and which
has not been or is not being corrected.
4.18 Disclosure. The information provided by Borrower to the Banks in
connection with this Agreement or any Loan, taken as a whole, has not
contained any untrue statement of a material fact and has not omitted a
material fact necessary to make the statements contained therein, taken
as a whole, not misleading under the totality of the circumstances
existing at the date such information was provided and in the context
in which it was provided.
4.19 Projections. As of the Closing Date, the assumptions upon which the
Projections are based are reasonable and consistent with each other
assumption and with all facts known to Borrower and that the
Projections are reasonably based on those assumptions. Nothing in this
Section 4.19 shall be construed as a representation or warranty as of
any date other than the Closing Date or that the Projections will in
fact be achieved by Borrower.
4.20 ERISA Compliance
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or
state Laws. Each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a
letter is currently being processed by the IRS with respect
thereto and, to the best knowledge of the Borrower, nothing
has occurred which would prevent, or cause the loss of, such
qualification. Neither the Borrower nor any ERISA Affiliate
sponsors, or has sponsored within the past 10 years, a defined
benefit pension plan, or is a participant, or has participated
within the past 10 years, in a Multiemployer Plan.
(b) There are no pending or, to the best knowledge of the
Borrower, threatened claims, actions or lawsuits, or action by
any Governmental Agency, with respect to any Plan that could
be reasonably be expected to have a Material Adverse Effect.
There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that
has resulted or could reasonably be expected to result in a
Material Adverse Effect. No ERISA Event has occurred or is
reasonably expected to occur.
4.21 Tax Shelter Regulations. The Borrower does not intend to treat the
Loans or Letters of Credit as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4). In the event the
Borrower determines to take any action inconsistent with such
intention, it will promptly notify the Administrative Agent thereof.
Accordingly, if the Borrower so notifies the Administrative Agent, the
Borrower acknowledges that one or more of the Banks may treat its Loans
or its interest in Swing Line Loans or Letters of Credit as part of a
transaction that is subject to Treasury Regulation Section 301.6112-1,
and such Bank or Banks, as applicable, will maintain the lists and
other records required by such Treasury Regulation.
4.22 Solvency. The Borrower and each Guarantor Subsidiary is and will be,
after giving effect to the making of the Loans and issuance of the
Letters of Credit, Solvent.
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ARTICLE V
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)
As long as any Loan remains unpaid, or any other Obligation remains unpaid, or
any portion of the Commitment or any Letter of Credit remains outstanding,
Borrower shall, and shall cause each of its Subsidiaries to, unless the
Administrative Agent (with the approval of the Required Banks) otherwise
consents in writing:
5.1 Payment of Taxes and Other Potential Liens. Pay and discharge promptly,
all taxes, assessments, and governmental charges or levies imposed upon
Borrower or any of its Subsidiaries, upon their respective Property or
any part thereof, upon their respective income or profits or any part
thereof, except any tax, assessment, charge, or levy that is not yet
past due, or is being contested in good faith by appropriate
proceedings, as long as Borrower or its Subsidiary has established and
maintains adequate reserves for the payment of the same and by reason
of such nonpayment no material Property of Borrower or its Subsidiaries
is subject to a risk of loss or forfeiture.
5.2 Preservation of Existence. Preserve and maintain their respective
existence, licenses, rights, franchises, and privileges in the
jurisdiction of their formation and all authorizations, consents,
approvals, orders, licenses, permits, or exemptions from, or
registrations with, any Governmental Agency that are necessary for the
transaction of their respective business, and qualify and remain
qualified to transact business in each jurisdiction in which such
qualification is necessary in view of their respective business or the
ownership or leasing of their respective Properties; provided that (a)
the failure to preserve and maintain any particular right, franchise,
privilege, authorization, consent, approval, order, license, permit,
exemption, or registration, or to qualify or remain qualified in any
jurisdiction, that does not constitute a Material Adverse Effect will
not constitute a violation of this covenant, and (b) nothing in this
Section 5.2 shall prevent any consolidation or merger or disposition of
assets permitted by Section 6.3 or shall prevent the termination of the
business or existence (corporate or otherwise) of any Subsidiary of
Borrower which in the reasonable judgment of the management of Borrower
is no longer necessary or desirable.
5.3 Maintenance of Properties. Maintain, preserve and protect all of their
respective real Properties in good order and condition, subject to wear
and tear in the ordinary course of business and damage caused by the
natural elements, and not permit any waste of their respective real
Properties, except that the failure to so maintain, preserve or protect
any particular real Property, or the permitting of waste on any
particular real Property, where such failure or waste with respect to
all real Properties of Borrower and its Subsidiaries, in the aggregate,
would not constitute a Material Adverse Effect.
5.4 Maintenance of Insurance. Maintain insurance with responsible insurance
companies in such amounts and against such risks as in Borrower's
reasonable business judgment is adequate in light of Borrower's and its
Subsidiaries' size, business, assets and location of operations.
5.5 Compliance with Laws. Comply with all Requirements of Laws
noncompliance with which would constitute a Material Adverse Effect,
except that Borrower and its Subsidiaries need not comply with a
Requirement of Law then being contested by any of them in good faith by
appropriate procedures, so long as such contest (or a bond or surety
posted in connection therewith) operates as a stay of enforcement of
any penalty that would otherwise apply as a result of such failure to
comply.
-54-
5.6 Inspection Rights. At any time during regular business hours and as
often as reasonably requested (and, in any event, upon 24 hours' prior
notice), permit any Bank or any appropriately designated employee,
agent or representative thereof at the expense of such Bank (unless a
Default or an Event of Default has occurred and is continuing) to
examine, audit and make copies and abstracts from the records and books
of account of, and to visit and inspect the Properties of Borrower and
its Subsidiaries, and to discuss the affairs, finances and accounts of
Borrower and its Subsidiaries with any of their officers or employees;
provided that none of the foregoing unreasonably interferes with the
normal business operations of Borrower or any of its Subsidiaries and
that the Banks shall engage in any such inspections on a cooperative
basis, if there has been no Default or Event of Default.
5.7 Keeping of Records and Books of Account. Keep adequate records and
books of account fairly reflecting all financial transactions in
conformity with Generally Accepted Accounting Principles applied on a
consistent basis (except for changes concurred with by Borrower's
independent certified public accountants) and all applicable
requirements of any Governmental Agency having jurisdiction over
Borrower or any of its Subsidiaries.
5.8 Use of Proceeds. Use the proceeds of all Loans solely for working
capital, Acquisitions permitted hereunder and other general corporate
purposes of Borrower and its Subsidiaries and not in contravention of
any Law or of any Loan Document.
5.9 Subsidiary Guaranty. Cause each of its Guarantor Subsidiaries hereafter
formed, acquired or qualifying as a Guarantor Subsidiary, to execute
and deliver a joinder of the Subsidiary Guaranty promptly following
such formation, acquisition or qualification.
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ARTICLE VI
NEGATIVE COVENANTS
As long as any Loan remains unpaid, or any other Obligation remains unpaid, or
any portion of the Commitment or any Letter of Credit remains outstanding,
Borrower shall not, and shall not permit any of its Subsidiaries to, unless the
Administrative Agent (with the approval of the Required Banks) otherwise
consents in writing:
6.1 Payment or Prepayment of Subordinated Obligations.
(a) Make any payment with respect to any Subordinated Obligation
in violation of the provisions in the instruments governing
such Subordinated Obligation; or
(b) if a Default or Event of Default then exists or would result
therefrom:
(i) make an optional or unscheduled payment or prepayment
of any principal (including an optional or
unscheduled sinking fund payment), interest or any
other amount with respect to any Subordinated
Obligation; or
(ii) make a purchase or redemption of any Subordinated
Obligation.
6.2 [Intentionally Omitted]
6.3 Mergers and Sale of Assets. Merge or consolidate with or into any
Person, or sell a Material Amount of Assets to any Person, except,
subject to Section 6.6;
(a) a merger of Borrower into a wholly-owned Subsidiary of
Borrower that has nominal assets and liabilities, the primary
purpose of which is to effect the reincorporation of Borrower
in another state;
(b) mergers or consolidations of a Subsidiary of Borrower into
Borrower (with Borrower as the surviving corporation) or into
any other Subsidiary of Borrower, provided that (i) the
reduction in the proportionate share of Borrower and its
Subsidiaries in the total assets of such resulting Subsidiary
(after intercompany eliminations) does not constitute a
Material Amount of Assets and (ii) immediately after giving
effect to such transaction, no Default or Event of Default
shall have occurred and be continuing;
(c) mergers, consolidations, liquidations, or sales of all or
substantially all of the assets of a Subsidiary; provided that
(i) any such transaction does not involve a transfer by
Borrower or its Subsidiaries of a Material Amount of Assets
and (ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be
continuing; or
(d) a merger or consolidation of Borrower with another Person if
(i) no Change in Control results therefrom, (ii) Borrower does
not transfer a Material Amount of Assets to one or more
Persons in connection with the merger or consolidation and
(iii) immediately after giving effect to such merger, no
Default or Event of Default shall have occurred and be
continuing.
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6.4 Investments and Acquisitions. Make any Acquisition, or enter into an
agreement to make any Acquisition, or make or suffer to exist any
Investment, other than:
(a) Investments in Cash or Cash Equivalents;
(b) advances to officers, directors and employees of Borrower or
its Subsidiaries for travel, entertainment, housing expenses,
relocation, stock option plans, or otherwise in connection
with their employment or the business of Borrower or any of
its Subsidiaries;
(c) Investments of Borrower in any of its wholly-owned
Subsidiaries and Investments of any Subsidiary of Borrower in
Borrower or any of Borrower's wholly-owned Subsidiaries;
(d) Acquisitions of or Investments in Persons engaged primarily in
the same businesses as Borrower and its Subsidiaries, or in a
business reasonably related to such businesses, including
electronic commerce and similar activities related to real
estate;
(e) Acquisitions and Investments by the Mortgage Company permitted
under the Mortgage Warehousing Agreements;
(f) Acquisitions of or Investments in Persons engaged primarily in
businesses other than those permitted by Sections 6.4(d),
provided that the aggregate cost of all such Acquisitions and
Investments made in any fiscal year does not exceed
$50,000,000;
(g) Investments in Subsidiaries in existence on the Closing Date
or as otherwise disclosed on Schedule 6.4;
(h) Investments received in connection with the settlement of a
bona fide dispute with another Person;
(i) Investments consisting of readily marketable securities
actively traded on a public exchange, provided that the
aggregate amount of any such Investments at any one time do
not exceed $50,000,000; and
(j) Investments consisting of the extension of credit to suppliers
in the ordinary course of business and any Investments
received in satisfaction or partial satisfaction thereof,
provided that the aggregate amount of any such Investments at
any one time do not exceed $25,000,000;
but in all events, subject to the restrictions of Section 6.16.
6.5 ERISA Compliance. Permit any Pension Plan maintained by Borrower or any
of its ERISA Affiliates (or to which Borrower or any ERISA Affiliate
contributes or is required to contribute), other than a Multiemployer
Plan, to incur any material "accumulated funding deficiency," as such
term is defined in Section 302 of ERISA, unless waived, or permit any
Pension Plan maintained by any of them to suffer a Termination Event or
incur withdrawal liability under any Multiemployer Plan if any of such
events would result in a liability of Borrower or any ERISA affiliate
exceeding in the aggregate $25,000,000.
6.6 Change in Business. Engage in any business other than the businesses as
now conducted by Borrower or its Subsidiaries, and any business
reasonably related to such businesses, other than:
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(a) businesses in which Borrower and its Subsidiaries have
invested no more than $50,000,000 in any Fiscal Year; and
(b) as permitted pursuant to Section 6.4(f).
6.7 Liens and Negative Pledges. Create, incur, assume, or suffer to exist,
any Lien of any nature upon or with respect to any of their respective
Properties, whether now owned or hereafter acquired, or enter or suffer
to exist any Contractual Obligation wherein Borrower or any of its
Subsidiaries agrees not to grant any Lien on any of their Properties,
except:
(a) Liens and Contractual Obligations existing on the date hereof
and described in Schedule 4.7, provided that the obligations
secured by such Liens are not increased and that no such Lien
extends to any Property of Borrower or any Subsidiary other
than the Property subject to such Lien on the Closing Date;
(b) Liens on Property of any Financial Subsidiary or Foreign
Subsidiary securing Indebtedness of that Financial Subsidiary
or Foreign Subsidiary;
(c) Liens on Property securing Indebtedness of Borrower or any of
its Subsidiaries, provided that the aggregate Indebtedness
(other than Indebtedness described in clause (b) above and
clause (q) below) secured by all such Liens shall at no time
exceed $100,000,000;
(d) Liens that may exist from time to time under the Loan
Documents;
(e) Liens consisting of a Capital Lease covering personal
Property;
(f) Permitted Encumbrances;
(g) attachment, judgment and other similar Liens arising in
connection with court proceedings; provided that the execution
or enforcement of such Lien is effectively stayed and the
claims secured thereby do not in the aggregate exceed
$25,000,000 and are being contested in good faith by
appropriate proceedings timely commenced and diligently
prosecuted;
(h) Liens existing on any asset of any Person at the time such
Person becomes a Subsidiary and not created in contemplation
of such event;
(i) Liens on any asset of any Person existing at the time such
Person is merged or consolidated with or into Borrower or any
of its Subsidiaries and not created in contemplation of such
event;
(j) Liens existing on any asset prior to the acquisition thereof
by Borrower or any of its Subsidiaries and not created in
contemplation of such acquisition;
(k) Liens arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by
any of the foregoing clauses of this Section, provided that
such Indebtedness is not increased and is not secured by
additional assets;
(l) Liens arising in the ordinary course of business which (i) do
not secure Indebtedness, (ii) do not secure any obligation in
an amount exceeding $1,000,000 individually, or $5,000,000 in
the aggregate, and (iii) do not in the aggregate materially
detract from the
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value of the assets covered by such Liens or materially impair
the use thereof in the operation of Borrower's business;
(m) Liens not otherwise permitted by the foregoing clauses of this
Section which secure Indebtedness not exceeding $5,000,000 in
the aggregate;
(n) assessment district or similar Liens in connection with
municipal financings;
(o) a Contractual Obligation wherein Borrower or any of its
Subsidiaries agrees to grant any Lien on any of their
Properties, if such Contractual Obligation provides for the
grant of a Lien on a pari passu basis in favor of the
Administrative Agent for the benefit of the Banks with respect
to the Obligations and in favor of the holders of such other
Senior Indebtedness, if any, as the Borrower designates (and
Borrower shall, as soon as reasonably possible, provide to the
Banks a copy of any such Contractual Obligation);
(p) Liens on Property of a Joint Venture; and
(q) Liens on Property of the Borrower or any of its Subsidiaries
that secure Non-Recourse Indebtedness to the seller of such
Property incurred by the Borrower or any of its Subsidiaries
upon acquisition of such Property.
For purposes of compliance with this Section: (x) in the event that any
Lien meets the criteria set forth in more than one of clauses (a)
through (q) of this Section, Borrower, in its sole discretion, may
classify or reclassify such Lien in any manner that complies with this
Section and such Lien shall be treated as having been permitted
pursuant to only one of the clauses of this Section; and (y) any
Indebtedness secured by a Lien may be divided and classified among more
than one of the clauses of this Section.
6.8 Transactions with Affiliates. Enter into any transaction of any kind
with any Affiliate of Borrower other than (a) a transaction that
results in Subordinated Obligations, (b) a transaction between or among
Borrower and its wholly-owned Subsidiaries, (c) a transaction that has
been authorized by the board of directors of Borrower with the
favorable vote of a majority of the directors who have no financial or
other interest in the transaction or by the vote of a majority of the
outstanding shares of capital stock of Borrower, (d) a transaction
entered into on terms and under conditions not less favorable to
Borrower or any of its Subsidiaries than could be obtained from a
Person that is not an Affiliate of Borrower, (e) salary, bonus,
employee stock options and other compensation arrangements and
indemnification arrangements with directors or officers or (f)
transactions permitted by Sections 6.4 or 6.16.
6.9 Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth
to be, at the end of any Fiscal Quarter, less than an amount equal to
(a) $901,469,000, plus (b) an amount equal to 50% of aggregate of
Consolidated Net Income for each Fiscal Quarter contained in the fiscal
period commencing on September 1, 2003 and ending as of the last day of
such Fiscal Quarter (provided that there shall be no reduction
hereunder in the event of a consolidated net loss in any such Fiscal
Quarter), plus (c) an amount equal to 50% of the cumulative net
proceeds received by Borrower from the issuance of its capital stock
subsequent to August 31, 2003.
6.10 Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio to
be, at the end of any Fiscal Quarter, greater than 2.25 to 1.00.
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6.11 Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio to be, at the end of any Fiscal Quarter, less than 2.25
to 1.00.
6.12 Distributions. Make any Distribution (other than a Distribution made to
Borrower or to a Guarantor Subsidiary) if an Event of Default then
exists or if an Event of Default or Default would result therefrom.
6.13 Amendments. Amend, waive or terminate any provision in any instrument
or agreement governing Subordinated Obligations unless such amendment,
waiver or termination would not be materially adverse to the interests
of the Banks under this Agreement.
6.14 [Intentionally Omitted]
6.15 Inventory. Permit, as of the end of any Fiscal Quarter, the book value
of Domestic Unimproved Land to exceed an amount equal to 100% of
Consolidated Tangible Net Worth.
6.16 Investment in Subsidiaries and Joint Ventures. Permit, as of the last
day of any Fiscal Quarter, Borrower's equity interest, computed in
accordance with Generally Accepted Accounting Principles consistently
applied, in all Subsidiaries of Borrower (other than Guarantor
Subsidiaries), Financial Subsidiaries, Foreign Subsidiaries, all Joint
Ventures and all other entities with financial statements not
consolidated with those of Borrower under Generally Accepted Accounting
Principles consistently applied to exceed 30% of Consolidated Tangible
Net Worth.
6.17 Senior Indebtedness Not to Exceed Borrowing Base. Permit, at any time
at which the Borrower does not hold an Investment Grade Credit Rating,
the Senior Indebtedness at such time to exceed the Borrowing Base (as
set forth in the then most recent Borrowing Base Certificate delivered
hereunder by Borrower to the Administrative Agent).
6.18 Maximum Speculative Units. Permit, at any time at which the Borrower
does not hold an Investment Grade Credit Rating, the total number of
Speculative Units to exceed 40% of the number of Units that were sold
and conveyed to buyers during the previous 4 Fiscal Quarters.
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ARTICLE VII
INFORMATION AND REPORTING REQUIREMENTS
7.1 Financial and Business Information of Borrower and Its Subsidiaries. As
long as any Loan remains unpaid or any other Obligation remains unpaid,
or any portion of the Commitment or any Letter of Credit remains
outstanding, Borrower shall, unless the Administrative Agent (with the
approval of the Required Banks) otherwise consents in writing, deliver
to the Administrative Agent and each of the Banks (except as otherwise
provided below) at its own expense:
(a) As soon as reasonably possible, and in any event within 50
days after the close of each Fiscal Quarter of Borrower (other
than the fourth Fiscal Quarter), (i) the consolidated and
consolidating balance sheet of Borrower and its Consolidated
Subsidiaries as of the end of such Fiscal Quarter, setting
forth in comparative form the corresponding figures for the
corresponding Fiscal Quarter of the preceding Fiscal Year, if
available, and (ii) the consolidated and consolidating
statements of profit and loss and the consolidated statements
of cash flows of Borrower and its Consolidated Subsidiaries
for such Fiscal Quarter and for the portion of the Fiscal Year
ended with such Fiscal Quarter, setting forth in comparative
form the corresponding periods of the preceding Fiscal Year.
Such consolidated and consolidating balance sheets and
statements shall be prepared in reasonable detail in
accordance with Generally Accepted Accounting Principles
consistently applied (other than those which require footnote
disclosure of certain matters), and shall be certified by the
principal financial officer of Borrower, subject to normal
year-end accruals and audit adjustments;
(b) As soon as reasonably possible, and in any event within 90
days after the close of each Fiscal Year of Borrower, (i) the
consolidated and consolidating (in accordance with past
practices of Borrower) balance sheets of Borrower and its
Consolidated Subsidiaries as at the end of such Fiscal Year,
setting forth in comparative form the corresponding figures at
the end of the preceding Fiscal Year and (ii) the consolidated
and consolidating (in accordance with past practices of
Borrower) statements of profit and loss and the consolidated
statements of cash flows of Borrower and its Consolidated
Subsidiaries for such Fiscal Year, setting forth in
comparative form the corresponding figures for the previous
Fiscal Year. Such consolidated and consolidating balance sheet
and statements shall be prepared in reasonable detail in
accordance with Generally Accepted Accounting Principles
consistently applied. Such consolidated balance sheet and
statements shall be accompanied by a report and opinion of
Ernst & Young LLP or other independent certified public
accountants of recognized national standing selected by
Borrower, which report and opinion shall state that the
examination of such consolidated financial statements by such
accountants was made in accordance with generally accepted
auditing standards and that such consolidated financial
statements fairly present the financial condition, results of
operations and of cash flows of Borrower and its Subsidiaries
subject to no exceptions as to scope of audit and subject to
no other exceptions or qualifications (other than changes in
accounting principles in which the auditors concur) unless
such other exceptions or qualifications are approved by the
Required Banks in their reasonable discretion. Such
accountants' report and opinion shall be accompanied by a
certificate stating that, in conducting the audit examination
of books and records necessary for the certification of such
financial statements, such accountants have obtained no
knowledge of any Default or Event of Default hereunder or, if
in the opinion of such accountants, any such Default or Event
of Default shall exist, stating the nature and status of such
event, and setting forth the applicable calculations under
Sections 6.9, 6.10, 6.11, 6.15 (without requiring any physical
count of inventory), 6.16, 6.17 and 6.18 as of the date of
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the balance sheet. Such consolidating balance sheet and
statements shall be certified by a Responsible Official of
Borrower;
(c) Promptly after the receipt thereof by Borrower, copies of any
audit or management reports submitted to it by independent
accountants in connection with any audit or interim audit
submitted to the board of directors of Borrower or any of its
Subsidiaries;
(d) Promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or
communication sent to its stockholders, and copies of all
annual, regular, periodic and special reports and registration
statements which Borrower may file or be required to file with
the Commission or any similar or corresponding Governmental
Agency or with any securities exchange;
(e) Promptly upon a Senior Officer of Borrower becoming aware, and
in any event within 10 Business Days after becoming aware, of
the occurrence of any (i) "reportable event" (as such term is
defined in Section 4043 of ERISA) other than any such event as
to which the PBGC has by regulation waived the requirement of
30 days' notice or (ii) "prohibited transaction" (as such term
is defined in Section 406 of ERISA or Section 4975 of the
Code) in connection with any Pension Plan, other than a
Multiemployer Plan, or any trust created thereunder, a written
notice specifying the nature thereof, what action Borrower and
any of its Subsidiaries is taking or proposes to take with
respect thereto, and, when known, any action taken by the
Internal Revenue Service with respect thereto;
(f) Promptly upon a Senior Officer of Borrower becoming aware, and
in any event within 5 Business Days after becoming aware, of
the existence of a Default or an Event of Default, a written
notice specifying the nature and period of existence thereof
and what action Borrower is taking or proposes to take with
respect thereto;
(g) Promptly upon a Senior Officer of Borrower becoming aware, and
in any event within 5 Business Days after becoming aware, that
the holder of any evidence of Indebtedness (in a principal
amount in excess of $25,000,000) of Borrower or any of its
Subsidiaries has given notice or taken any other action with
respect to a default or event of default, a written notice
specifying the notice given or action taken by such holder and
the nature of such default or event of default and what action
Borrower or its Subsidiary is taking or proposes to take with
respect thereto;
(h) Promptly upon a Senior Officer of Borrower becoming aware, and
in any event within 5 Business Days after becoming aware, of
the existence of any pending or threatened litigation or any
investigation by any Governmental Agency that would constitute
a Material Adverse Effect (provided, that no failure of a
Senior Officer to provide notice of any such event shall be
the sole basis for any Default or Event of Default hereunder);
(i) [Intentionally Omitted];
(j) As soon as reasonably possible, and in any event prior to the
date that is 60 days after the commencement of each Fiscal
Year, deliver to the Administrative Agent the business plan of
Borrower and its Subsidiaries for that Fiscal Year, together
with projections (in substantially the same format as the
Projections) covering the next 2 Fiscal Years;
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(k) Promptly following obtaining knowledge thereof by a Senior
Officer of Borrower, written notice to the Administrative
Agent of the inception or cessation of the Investment Grade
Credit Rating;
(l) Promptly after the Borrower has notified the Administrative
Agent of any intention by the Borrower to treat the Loans or
Letters of Credit as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4), a duly
completed copy of IRS Form 8886 or any successor form; and
(m) Such other data and information as from time to time may be
reasonably requested by any of the Banks.
7.2 Compliance Certificate. Concurrently with the delivery of the financial
statements described in Section 7.1(a) and (b), Borrower shall deliver
to the Administrative Agent and the Banks, at Borrower's sole expense,
a Compliance Certificate dated as of the last day of the Fiscal Quarter
or Fiscal Year, as the case may be:
(a) setting forth computations showing, in detail reasonably
satisfactory to the Administrative Agent, whether Borrower and
its Subsidiaries were in compliance with their obligations to
the Banks pursuant to Sections 6.9, 6.10, 6.11, 6.15, 6.16,
6.17 and 6.18;
(b) certifying a sales report by geographical region, in the form
attached to the Compliance Certificate, setting forth the
number of homes or other units sold and delivered during such
period and in backlog at the end of such period;
(c) certifying an inventory report for such period in the form
attached to the Compliance Certificate, summarizing such
inventory by type and geographical region;
(d) reporting any change, as of the last day of such Fiscal
Quarter, in the listing of Subsidiaries set forth in Schedule
4.4 (as the same may have been revised by previous Compliance
Certificates), including changes in Guarantor Subsidiaries;
(e) either
(i) stating that to the best knowledge of the certifying
officer as of the date of such certificate there is
no Default or Event of Default, or
(ii) if there is a Default or Event of Default as of the
date of such certificate, specifying all such
Defaults or Events of Default and their nature and
status; and
(f) stating, to the best knowledge of the certifying officer,
whether any event or circumstance constituting a Material
Adverse Effect (other than a Material Adverse Effect which is
not particular to the Borrower and which is generally known)
has occurred since the date of the most recent Compliance
Certificate delivered under this Section and, if so,
describing such Material Adverse Effect in reasonable detail.
No failure of the certifying officer to describe the existence
of an event or circumstance constituting a Material Adverse
Effect shall be the sole basis for any Default or Event of
Default hereunder.
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ARTICLE VIII
CONDITIONS
8.1 Initial Advances, Etc. The obligation of each Bank to make the initial
Advance to be made by it and of the Issuing Bank to issue the initial
Letter of Credit are subject to the following conditions precedent,
each of which shall be satisfied prior to the making of the initial
Advances (unless all of the Banks, in their sole and absolute
discretion, shall agree otherwise):
(a) The Administrative Agent shall have received all of the
following, each dated as of the Closing Date (unless otherwise
specified or unless the Administrative Agent otherwise agrees)
and all in form and substance satisfactory to the
Administrative Agent and legal counsel for the Administrative
Agent:
(i) executed counterparts of this Agreement, sufficient
in number for distribution to the Banks and Borrower;
(ii) a Note executed by Borrower in favor of each Bank,
each in a principal amount equal to that Bank's Pro
Rata Share of the Commitment. Promptly following the
Closing Date, the promissory notes delivered to the
Banks pursuant to the Prior Loan Agreements shall be
canceled and promptly returned to Borrower;
(iii) the Subsidiary Guaranty executed by each Subsidiary
which is a Guarantor Subsidiary as of the Closing
Date;
(iv) the Swing Line Documents, executed by Borrower;
(v) with respect to Borrower and each Subsidiary which is
a Guarantor Subsidiary as of the Closing Date, such
documentation as the Administrative Agent may
reasonably require to establish the due organization,
valid existence and good standing of Borrower and
each such Subsidiary, its qualification to engage in
business in each jurisdiction in which it is required
to be so qualified, its authority to execute, deliver
and perform any Loan Documents to which it is a
Party, and the identity, authority and capacity of
each Responsible Official thereof authorized to act
on its behalf, including certified copies of articles
of incorporation and amendments thereto, bylaws and
amendments thereto, certificates of good standing or
qualification to engage in business, tax clearance
certificates, certificates of corporate resolutions,
incumbency certificates, and the like;
(vi) the Opinions of Counsel;
(vii) an Officer's Certificate of Borrower affirming, to
the best knowledge of the certifying Senior Officer,
that the conditions set forth in Sections 8.1(c) and
8.1(d) have been satisfied;
(viii) a side letter executed by each "Bank" under the Prior
Revolving Loan Agreement that is not a "Bank"
hereunder acknowledging a termination of the
"Commitments" under the Prior Revolving Loan
Agreement without charge to Borrower (except for
Eurodollar Rate breakage fees, if any) and agreeing
to the other matters specified in Section 3.17;
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(ix) a side letter executed by each "Bank" under the 2000
Term Loan Agreement that is not a "Bank" hereunder
acknowledging a termination of the "Commitment" under
the 2000 Term Loan Agreement without charge to
Borrower (except for Eurodollar Rate breakage fees,
if any); and
(x) a Borrowing Base Certificate calculated as of the
last day of the Fiscal Quarter ending on August 31,
2003, showing the Borrower to be in compliance with
Section 6.17 after giving effect to the Loans made
and Letters of Credit issued on the Closing Date;
(xi) the financial statements described in Section 4.5;
(xii) a Compliance Certificate calculated as of the last
day of the Fiscal Quarter ending on August 31, 2003;
and
(xiii) such other assurances, certificates, documents,
consents or opinions relevant hereto as the
Administrative Agent may reasonably require.
(b) All fees then payable under the letter agreement referred to
in Section 3.3 shall have been paid.
(c) The representations and warranties of Borrower contained in
Article IV shall be true and correct in all material respects
on and as of the Closing Date.
(d) Borrower and its Subsidiaries and any other Parties shall be
in compliance with all the terms and provisions of the Loan
Documents, and at and after giving effect to the initial
Advance, no Default or Event of Default shall have occurred
and be continuing.
8.2 Any Advance. The obligations of the Banks to make any Advance are
subject to the following conditions precedent:
(a) the Administrative Agent shall have received a Loan Notice;
(b) the representations and warranties contained in Article IV
(other than the representations and warranties contained in
Sections 4.4(a), 4.6, 4.9, 4.18 and 4.19) shall be true and
correct in all material respects on and as of the date of the
Loan as though made on and as of that date (except that the
financial statements referred to in Section 4.5(a) shall be
deemed to refer to the most recent statements furnished
pursuant to Section 7.1(b) and the financial statements
referred to in Section 4.5(b) shall be deemed to refer to the
most recent statements furnished pursuant to Section 7.1(a))
and no event or circumstance that constitutes a Material
Adverse Effect shall have occurred since the Closing Date;
(c) the Administrative Agent shall have received such other
information relating to any matters which are the subject of
Section 8.2(b) or the compliance by Borrower with this
Agreement as may reasonably be requested by the Administrative
Agent on behalf of a Bank; and
(d) at and after giving effect to such Advance, no Default or
Event of Default shall have occurred and be continuing.
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Each Loan Notice (or Swing Line Loan Notice) submitted by the Borrower
shall be deemed to be a representation and warranty that the conditions
specified in this Section have been satisfied on and as of the date of
the Loan requested thereby.
8.3 Any Letter of Credit. The obligations of an Issuing Bank to issue any
Letter of Credit are subject to the following conditions precedent:
(a) the Administrative Agent and the Issuing Bank shall have
received a Request for Letter of Credit;
(b) the representations and warranties contained in Article IV
(other than the representations and warranties contained in
Sections 4.4(a), 4.6, 4.9, 4.18 and 4.19) shall be true and
correct in all material respects on and as of the date of the
issuance of the Letter of Credit as though made on and as of
that date (except that the financial statements referred to in
Section 4.5(a) shall be deemed to refer to the most recent
statements furnished pursuant to Section 7.1(b) and the
financial statements referred to in Section 4.5(b) shall be
deemed to refer to the most recent statements furnished
pursuant to Section 7.1(a)) and no event or circumstance that
constitutes a Material Adverse Effect shall have occurred
since the Closing Date;
(c) the Administrative Agent shall have received such other
information relating to any matters which are the subject of
Section 8.3(b) or the compliance by Borrower with this
Agreement as may reasonably be requested by the Administrative
Agent on behalf of a Bank; and
(d) at and after giving effect to the issuance of such Letter of
Credit, no Default or Event of Default shall have occurred and
be continuing.
Each Request for Letter of Credit submitted by the Borrower shall be
deemed to be a representation and warranty that the conditions
specified in this Section have been satisfied on and as of the date of
the issuance of the Letter of Credit requested thereby.
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ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES UPON EVENTS OF DEFAULT
9.1 Events of Default. There will be a default hereunder if any one or more
of the following events ("Events of Default") occurs and is continuing,
whatever the reason therefor:
(a) failure to pay any installment of principal on any of the
Notes or a Swing Line note on the date, or any payment in
respect of a Letter of Credit pursuant to Section 2.5, when
due; or
(b) failure to pay any installment of interest on any of the
Notes, or to pay any fee or other amounts due the
Administrative Agent or any Bank hereunder, within 5 Business
Days after the date when due; or
(c) any failure to comply with Sections 6.1, 6.3, 6.4 (with
respect to Acquisitions), 6.7, 6.10, 6.11, 6.17 or 7.1(f); or
(d) any failure to comply with Sections 2.8(a), 5.8, 5.9, 6.4
(with respect to Investments), 6.8, 6.9, 6.15, 6.16 or 6.18
that remains unremedied for a period of 15 calendar days after
notice by the Administrative Agent of such Default or 20
calendar days after a Senior Officer becomes aware of such
Default, whichever occurs first; or
(e) Borrower or any other Party fails to perform or observe any
other term, covenant, or agreement contained in any Loan
Document on its part to be performed or observed within 30
calendar days after notice by the Administrative Agent of
such Default; or
(f) any representation or warranty in any Loan Document or in any
certificate, agreement, instrument, or other document made or
delivered, on or after the Closing Date, pursuant to or in
connection with any Loan Document proves to have been
incorrect when made in any respect material to the ability of
Borrower to duly and punctually perform all of the
Obligations; or
(g) Borrower or any of its Significant Subsidiaries (i) fails to
pay the principal, or any principal installment, of any
present or future Indebtedness (other than Non-Recourse
Indebtedness, and in the case of the Mortgage Company, arising
under the Mortgage Warehousing Agreements), or any guaranty of
present or future Indebtedness (other than Non-Recourse
Indebtedness) on its part to be paid, when due (or within any
stated grace period), whether at the stated maturity, upon
acceleration, by reason of required prepayment or otherwise in
excess of $25,000,000 individually or $50,000,000 in the
aggregate or (ii) fails to perform or observe any other
material term, covenant, or agreement on its part to be
performed or observed, or suffers to exist any condition, in
connection with any present or future Indebtedness (other than
Non-Recourse Indebtedness, and in the case of the Mortgage
Company, arising under the Mortgage Warehousing Agreements) or
any guaranty of present or future Indebtedness (other than
Non-Recourse Indebtedness), in excess of $25,000,000
individually or $50,000,000 in the aggregate, if as a result
of such failure or such condition any holder or holders
thereof (or an agent or trustee on its or their behalf) has
the right to declare it due before the date on which it
otherwise would become due; or
(h) any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement of all
the Banks or satisfaction in full of all the Obligations,
ceases to
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be in full force and effect or is declared by a court of
competent jurisdiction to be null and void, invalid, or
unenforceable in any respect which is, in the reasonable
opinion of the Required Banks, materially adverse to the
interest of the Banks; or
(i) a final judgment (or judgments) against Borrower or any of its
Significant Subsidiaries is entered for the payment of money
in excess of $25,000,000 individually or $50,000,000 in the
aggregate over the amount of any insurance proceeds reasonably
expected to be received and remains unsatisfied without
procurement of a stay of execution within thirty (30) calendar
days after the issuance of any writ of execution or similar
legal process or the date of entry of judgment, whichever is
earlier, or in any event at least 5 calendar days prior to the
sale of any assets pursuant to such legal process; or
(j) Borrower or any Significant Subsidiary of Borrower institutes
or consents to any proceeding under a Debtor Relief Law
relating to it or to all or any part of its Property, or fails
generally, or admits in writing its inability, to pay its
debts as they mature, or makes a general assignment for the
benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator, or similar officer for it or for
all or any part of its property; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator, or similar
officer is appointed without the application or consent of
that Person and the appointment continues undischarged or
unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any
part of its Property is instituted without the consent of that
Person, and continues undismissed or unstayed for 60 calendar
days; or
(k) the occurrence of a Termination Event with respect to any
Pension Plan if the aggregate liability of Borrower and its
ERISA Affiliates under ERISA as a result thereof exceeds
$25,000,000; or the complete or partial withdrawal by Borrower
or any of its ERISA Affiliates from any Multiemployer Plan if
the aggregate liability of Borrower and its ERISA Affiliates
as a result thereof exceeds $25,000,000; or
(l) any determination is made by a court of competent jurisdiction
that payment of principal or interest or both is due to the
holder of any Subordinated Obligations which would not be
permitted by Section 6.1 or that any Subordinated Obligation
is not subordinated in accordance with its terms to the
Obligations.
9.2 Remedies Upon Event of Default. Without limiting any other rights or
remedies of the Administrative Agent or the Banks provided for
elsewhere in this Agreement or the Loan Documents, or by applicable Law
or in equity, or otherwise:
(a) Upon the occurrence of any Event of Default, and so long as
any such Event of Default shall be continuing (other than an
Event of Default described in Section 9.1(j) with respect to
Borrower or a Guarantor Subsidiary):
(i) all commitments to make Advances or issue Letters of
Credit, and all other obligations of the
Administrative Agent, any Issuing Bank or the Banks
shall be suspended without notice to or demand upon
Borrower, which are expressly waived by Borrower,
except that the Required Banks (or greater number, if
so required) may waive the Event of Default or,
without waiving, determine, upon terms and conditions
satisfactory to the Required Banks (or greater
number, if so required), to reinstate the Commitment
and make further Advances or issue
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Letters of Credit, which waiver or determination
shall apply equally to, and shall be binding upon,
all the Banks; and
(ii) the Required Banks may request the Administrative
Agent to, and the Administrative Agent thereupon
shall, declare the unpaid principal of all
Obligations due to the Banks hereunder and under the
Notes, an amount equal to the Letter of Credit Usage,
all interest accrued and unpaid thereon, and all
other amounts payable to the Banks under the Loan
Documents to be forthwith due and payable, whereupon
the same shall become and be forthwith due and
payable, without protest, presentment, notice of
dishonor, demand, or further notice of any kind, all
of which are expressly waived by Borrower; provided
that the Administrative Agent shall notify Borrower
(by telecopy and, if practicable, by telephone)
substantially concurrently with any such acceleration
(but the failure of Borrower to receive such notice
shall not affect such acceleration); provided
further, that all commitments to make Advances or
issue Letters of Credit, and all other obligations of
the Administrative Agent, any Issuing Bank or the
Banks under the Loan Documents shall terminate
concurrently with such acceleration.
(b) Upon the occurrence of any Event of Default described in
Section 9.1(j) with respect to Borrower or a Guarantor
Subsidiary:
(i) all commitments to make Advances or issue Letters of
Credit, and all other obligations of the
Administrative Agent, any Issuing Bank or the Banks
under the Loan Documents shall terminate without
notice to or demand upon Borrower, which are
expressly waived by Borrower, except that all the
Banks may waive the Event of Default or, without
waiving, determine, upon terms and conditions
satisfactory to all the Banks, to reinstate the
Commitment and make further Advances; and
(ii) the unpaid principal of all Obligations due to the
Banks hereunder and under the Notes, an amount equal
to the Letter of Credit Usage and all interest
accrued and unpaid on such Obligations, and all other
amounts payable under the Loan Documents shall be
forthwith due and payable, without protest,
presentment, notice of dishonor, demand, or further
notice of any kind, all of which are expressly waived
by Borrower.
(c) So long as any Letter of Credit shall remain outstanding, any
amounts received by the Administrative Agent in respect of the
Letter of Credit Usage pursuant to Section 9.2(a)(ii) or
9.2(b)(ii) may be held as cash collateral for the obligation
of Borrower to reimburse the Issuing Bank in event of any
drawing under any Letter of Credit (and Borrower hereby grants
to the Administrative Agent a security interest in such cash
collateral). In the event any Letter of Credit in respect of
which Borrower has deposited cash collateral with the
Administrative Agent is canceled or expires, the cash
collateral shall be applied first to the reimbursement of the
Issuing Bank (or all of the Banks, as the case may be) for any
drawings thereunder, and second to the payment of any
outstanding Obligations of Borrower hereunder or under any
other Loan Document.
(d) Upon the occurrence of an Event of Default, the Banks and the
Administrative Agent, or any of them, may proceed to protect,
exercise, and enforce their rights and remedies under the Loan
Documents against Borrower or any other Party and such other
rights and remedies as are provided by Law or equity, without
notice to or demand upon Borrower
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(which are expressly waived by Borrower) except to the extent
required by applicable Laws. The order and manner in which the
rights and remedies of the Banks under the Loan Documents and
otherwise are exercised shall be determined by the Required
Banks.
(e) All payments received by the Administrative Agent and the
Banks, or any of them, after the acceleration of the maturity
of the Loans shall be applied first to the costs and expenses
(including Attorney Costs) of the Administrative Agent, acting
as Administrative Agent, and of the Banks and thereafter paid
pro rata to the Banks in the same proportion that the
aggregate of the unpaid principal amount owing on the
Obligations of Borrower to each Bank, plus accrued and unpaid
interest thereon, bears to the aggregate of the unpaid
principal amount owing on all the Obligations, plus accrued
and unpaid interest thereon. Regardless of how each Bank may
treat the payments for the purpose of its own accounting, for
the purpose of computing Borrower's Obligations, the payments
shall be applied first, to the costs and expenses of the
Administrative Agent, acting as Administrative Agent, and the
Banks as set forth above, second, to the payment of accrued
and unpaid fees hereunder and interest on all Obligations to
the Banks, to and including the date of such application
(ratably according to the accrued and unpaid interest on the
Loans), third, to the ratable payment of the unpaid principal
of all Obligations to the Banks, and fourth, to the payment of
all other amounts then owing to the Administrative Agent or
the Banks under the Loan Documents. Subject to Section
9.2(a)(i), no application of the payments will cure any Event
of Default or prevent acceleration, or continued acceleration,
of amounts payable under the Loan Documents or prevent the
exercise, or continued exercise, of rights or remedies of the
Banks hereunder or under applicable Law unless all amounts
then due (whether by acceleration or otherwise) have been paid
in full.
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ARTICLE X
THE ADMINISTRATIVE AGENT
10.1 Appointment and Authorization.
(a) Each Bank hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such
duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere herein or in
any other Loan Document, the Administrative Agent shall not
have any duties or responsibilities, except those expressly
set forth herein, nor shall the Administrative Agent have or
be deemed to have any fiduciary relationship with any Bank or
participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be
read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent. Without
limiting the generality of the foregoing sentence, the use of
the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to
connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable
Law. Instead, such term is used merely as a matter of market
custom, and is intended to create or reflect only an
administrative relationship between independent contracting
parties.
(b) The Issuing Bank shall act on behalf of the Banks with respect
to any Letters of Credit issued by it and the documents
associated therewith, and the Issuing Bank shall have all of
the benefits and immunities (i) provided to the Administrative
Agent in this Article X with respect to any acts taken or
omissions suffered by the Issuing Bank in connection with
Letters of Credit issued by it or proposed to be issued by it
and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in this Article X and in the
definition of "Agent-Related Person" included the Issuing Bank
with respect to such acts or omissions, and (ii) as
additionally provided herein with respect to the Issuing Bank.
10.2 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel and other consultants or experts concerning all matters
pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or
willful misconduct.
10.3 Liability of Administrative Agent. No Agent-Related Person shall (a) be
liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence
or willful misconduct in connection with its duties expressly set forth
herein, and with respect to the Borrower, except as set forth in
Sections 2.5(e) and 2.5(f) and for any failure to comply with Section
11.12), or (b) be responsible in any manner to any Bank or participant
for any recital, statement, representation or warranty made by any
Party or any officer thereof, contained herein or in any other Loan
Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan Document,
or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for
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any failure of any Party or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Bank or participant to
ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of
any Party or any Affiliate thereof.
10.4 Reliance by Administrative Agent.
(a) The Administrative Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing,
communication, signature, resolution, representation, notice,
consent, certificate, affidavit, letter, telegram, facsimile,
telex or telephone message, electronic mail message, statement
or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to any Party), independent
accountants and other experts selected by the Administrative
Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under any Loan Document
unless it shall first receive such advice or concurrence of
the Required Banks as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by
the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take
any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance
with a request or consent of the Required Banks (or such
greater number of Banks as may be expressly required hereby in
any instance) and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 8.1, each Bank that has signed this
Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other
matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Bank unless the
Administrative Agent shall have received notice from such Bank
prior to the proposed Closing Date specifying its objection
thereto.
10.5 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal,
interest and fees required to be paid to the Administrative Agent for
the account of the Banks, unless the Administrative Agent shall have
received written notice from a Bank or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." The Administrative Agent will
notify the Banks of its receipt of any such notice. The Administrative
Agent shall take such action with respect to such Default or Event of
Default as may be directed by the Required Banks in accordance with
Article IX; provided, however, that unless and until the Administrative
Agent has received any such direction, the Administrative Agent may
(but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as
it shall deem advisable or in the best interest of the Banks.
10.6 Credit Decision; Disclosure of Information by Administrative Agent.
Each Bank acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative
Agent hereafter taken, including any consent to and acceptance of any
assignment or review of the affairs of any Party or any Affiliate
thereof, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Bank as to any matter, including
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whether Agent-Related Persons have disclosed material information in
their possession. Each Bank represents to the Administrative Agent that
it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other
condition and creditworthiness of the Parties and their respective
Subsidiaries, and all applicable bank or other regulatory Laws relating
to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to the Borrower
hereunder. Each Bank also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to
inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of the Borrower and
the other Parties. Except for notices, reports and other documents
expressly required to be furnished to the Banks by the Administrative
Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and
other condition or creditworthiness of any of the Parties or any of
their respective Affiliates which may come into the possession of any
Agent- Related Person.
10.7 Indemnification of Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, the Banks shall,
ratably in accordance with their respective Pro Rata Shares, indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by
or on behalf of any Party and without limiting the obligation of any
Party to do so), and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it; provided,
however, that no Bank shall be liable for the payment to any
Agent-Related Person of any portion of such Indemnified Liabilities to
the extent determined in a final, nonappealable judgment by a court of
competent jurisdiction to have resulted from such Agent-Related
Person's own gross negligence or willful misconduct; provided, however,
that no action taken in accordance with the directions of the Required
Banks (or greater number, if so required) shall be deemed to constitute
gross negligence or willful misconduct for purposes of this Section.
Without limitation of the foregoing, each Bank shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the
Commitments, the payment of all other Obligations and the resignation
of the Administrative Agent.
10.8 Administrative Agent in its Individual Capacity. Bank of America and
its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with each of the Loan Parties and their
respective Affiliates as though Bank of America were not the
Administrative Agent or the Issuing Bank hereunder and without notice
to or consent of the Banks. The Banks acknowledge that, pursuant to
such activities, Bank of America or its Affiliates may receive
information regarding any Party or its Affiliates (including
information that may be subject to confidentiality obligations in favor
of such Party or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such
information to them. With respect to its Loans, Bank of America shall
have the same rights
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and powers under this Agreement as any other Bank and may exercise such
rights and powers as though it were not the Administrative Agent or the
Issuing Bank, and the terms "Bank" and "Banks" include Bank of America
in its individual capacity.
10.9 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 60 days' notice to the Banks. If the
Administrative Agent resigns under this Agreement, the Required Banks
shall appoint from among the Banks a successor administrative agent for
the Banks, which successor administrative agent shall be consented to
by the Borrower at all times other than during the existence of an
Event of Default (which consent of the Borrower shall not be
unreasonably withheld or delayed). If no successor administrative agent
is appointed 15 days prior to the effective date of the resignation of
the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Banks and the Borrower, a successor administrative
agent from among the Banks. Upon the acceptance of its appointment as
successor administrative agent hereunder, the Person acting as such
successor administrative agent shall succeed to all the rights, powers
and duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor administrative agent
and the retiring Administrative Agent's appointment, powers and duties
as Administrative Agent shall be terminated. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article X and Sections 11.3 and 11.10 shall
inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent under this Agreement. If no
successor administrative agent has accepted appointment as
Administrative Agent by the date which is 60 days following a retiring
Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective and the Banks shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required
Banks appoint a successor agent as provided for above. In addition,
upon a good faith, written allegation by the Required Banks that the
Administrative Agent has committed an act of gross negligence or
wilfull misconduct, which written allegation sets forth the specifics
of such alleged gross negligence or wilfull misconduct, the Required
Banks may remove the Administrative Agent by giving written notice to
the Administrative Agent to that effect to be effective on such date as
the Required Banks designate, provided however that no such removal
shall be effective until Required Banks have appointed a Bank, and such
Bank has accepted its appointment as, successor administrative agent,
which successor administrative agent shall be consented to by the
Borrower at all times other than during the existence of an Event of
Default (which consent of the Borrower shall not be unreasonably
withheld or delayed).
10.10 Administrative Agent May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Party, the Administrative Agent
(irrespective of whether the principal of any Loan or other Obligation
shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether the Administrative Agent shall
have made any demand on the Borrower) shall be entitled and empowered,
by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the
Loans and all other Obligations that are owing and unpaid and
to file such other documents as may be necessary or advisable
in order to have the claims of the Banks and the
Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the
Banks and the Administrative Agent and their respective agents
and counsel and all other amounts due
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the Banks and the Administrative Agent under Sections 2.5, 3.2
and 11.3) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding
is hereby authorized by each Bank to make such payments to the
Administrative Agent and, in the event that the Administrative Agent
shall consent to the making of such payments directly to the Banks, to
pay to the Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts
due the Administrative Agent under Sections 3.2, 3.3 and 11.3.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on
behalf of any Bank any plan of reorganization, arrangement, adjustment
or composition affecting the Obligations or the rights of any Bank or
to authorize the Administrative Agent to vote in respect of the claim
of any Bank in any such proceeding.
10.11 Guaranty Matters. The Banks irrevocably authorize the Administrative
Agent, at its option and in its discretion, to release any Guarantor
Subsidiary from its obligations under the Subsidiary Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder. Upon request by the Administrative Agent at any time, the
Required Banks will confirm in writing the Administrative Agent's
authority to release any Guarantor Subsidiary from its obligations
under the Subsidiary Guaranty pursuant to this Section 10.11.
10.12 Other Agents; Arrangers and Managers. None of the Banks or other
Persons identified on the facing page or signature pages of this
Agreement as a "syndication agent," "documentation agent," "senior
managing agent," "managing agent," "co-agent," "sole book manager,"
"lead manager," "sole lead arranger," "arranger" or "co-arranger" shall
have any right, power, obligation, liability, responsibility or duty
under this Agreement other than, in the case of such Banks, those
applicable to all Banks as such. Without limiting the foregoing, none
of the Banks or other Persons so identified shall have or be deemed to
have any fiduciary relationship with any Bank. Each Bank acknowledges
that it has not relied, and will not rely, on any of the Banks or other
Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
10.13 Defaulting Banks. If for any reason any Bank wrongfully (in violation
of this Agreement) fails or refuses to timely make any Advance required
of it, or otherwise defaults on any of its material obligations under
this Agreement, and fails to cure its default within 5 Business Days of
receiving notice of its failure to perform (such Bank being a
"Defaulting Bank"), then in addition to the rights and remedies that
may be available to the Administrative Agent and the Banks at law or in
equity, the Defaulting Bank's right to participate in the Loan and the
Agreement will be suspended during the pendency of the Defaulting
Bank's uncured default, and (without limiting the foregoing) the
Administrative Agent may (or at the direction of the Required Banks,
shall) withhold from the Defaulting Bank any interest payments, fees,
principal payments or other sums otherwise payable to such Defaulting
Bank under the Loan Documents until such default of such Defaulting
Bank has been cured. Each non-defaulting Bank will have the right, but
not the obligation, in its sole discretion, to acquire at par a
proportionate share (based on the ratio of its Pro Rata Share of the
Commitment to the aggregate amount of the Pro Rata Shares of the
Commitments of all of the non-defaulting Banks that elect to acquire a
share of the Defaulting
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Bank's Pro Rata Share of the Commitment) of the Defaulting Bank's Pro
Rata Share of the Commitment, including its proportionate share in the
outstanding principal balance of the Loans. The Defaulting Bank will
pay and protect, defend and indemnify Administrative Agent and each of
the other Banks against, and hold Administrative Agent, and each of the
other Banks harmless from, all claims, actions, proceedings,
liabilities, damages, losses, and expenses (including Attorney Costs,
and interest at the Base Rate plus 2.0% per annum for the funds
advanced by Administrative Agent or any Banks on account of the
Defaulting Bank) they may sustain or incur by reason of or in
consequence of the Defaulting Bank's failure or refusal to perform its
obligations under the Loan Documents. Administrative Agent may set off
against payments due to the Defaulting Bank for the claims of
Administrative Agent and the other Banks against the Defaulting Bank.
The exercise of these remedies will not reduce, diminish or liquidate
the Defaulting Bank's Pro Rata Share of the Commitment (except to the
extent that part or all of such Pro Rata Share of the Commitment is
acquired by the other Banks as specified above) or its obligations to
share losses and reimbursement for costs, liabilities and expenses
under this Agreement. This indemnification will survive the payment and
satisfaction of all of the Borrower's obligations and liabilities to
the Banks. The foregoing provisions of this Section 10.13 are solely
for the benefit of the Administrative Agent and the Banks, and may not
be enforced or relied upon by the Borrower.
10.14 No Obligations of Borrower. Nothing contained in this Article X shall
be deemed to impose upon Borrower any obligation in respect of the due
and punctual performance by the Administrative Agent of its obligations
to the Banks under any provision of this Agreement, and Borrower shall
have no liability to the Administrative Agent or any of the Banks in
respect of any failure by the Administrative Agent or any Bank to
perform any of its obligations to the Administrative Agent or the Banks
under this Agreement. Without limiting the generality of the foregoing,
where any provision of this Agreement relating to the payment of any
amounts due and owing under the Loan Documents provides that such
payments shall be made by Borrower to the Administrative Agent for the
account of the Banks, Borrower's obligations to the Banks in respect of
such payments shall be deemed to be satisfied upon the making of such
payments to the Administrative Agent in the manner provided by this
Agreement.
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ARTICLE XI
MISCELLANEOUS
11.1 Cumulative Remedies; No Waiver. The rights, powers, and remedies of the
Administrative Agent or any Bank provided herein or in any Note or
other Loan Document are cumulative and not exclusive of any right,
power, or remedy provided by law or equity. No failure or delay on the
part of the Administrative Agent or any Bank in exercising any right,
power, or remedy may be, or may be deemed to be, a waiver thereof; nor
may any single or partial exercise of any right, power, or remedy
preclude any other or further exercise of any other right, power, or
remedy. The terms and conditions of Sections 8.1, 8.2, and 8.3 hereof
are inserted for the sole benefit of the Banks and the Administrative
Agent may (with the approval of the Required Banks) waive them in whole
or in part with or without terms or conditions in respect of any Loan,
without prejudicing the Banks' rights to assert them in whole or in
part in respect of any other Loans.
11.2 Amendments; Consents. No amendment, modification, supplement,
termination, or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by Borrower or any other
Party therefrom, may in any event be effective unless in writing signed
by the Administrative Agent with the approval of the Required Banks and
Borrower, and then only in the specific instance and for the specific
purpose given; and without the approval in writing of all of the
affected Banks, no amendment, modification, supplement, termination,
waiver, or consent may be effective:
(a) to amend or modify the principal of, or the amount of
principal or principal prepayments, payable on any Obligation
or (except as provided in Section 2.6) the amount of the
Commitment, to decrease the rate of any interest or fee
payable to any Bank, or to reduce or waive any interest or
other amount payable to any Bank;
(b) to postpone any date fixed for any payment of principal of,
prepayment of principal of, or any installment of interest on,
any Obligation or any installment of any fee or to extend the
term of the Commitment;
(c) to amend or modify the provisions of the definitions in
Section 1.1 of "Required Banks" or of Sections 11.2, 11.9,
11.10, or 11.11, or any provision providing for the ratable or
pro rata treatment of the Banks;
(d) release any Guarantor Subsidiary from liability under the
Subsidiary Guaranty (except as provided below); or
(e) to amend or modify any provision of this Agreement or the Loan
Documents that expressly requires the consent or approval of
all the Banks.
Any amendment, modification, supplement, termination, waiver or consent
pursuant to this Section 11.2 shall apply equally to, and shall be
binding upon, all the Banks and the Agents. Any amendment,
modification, supplement, termination, waiver or consent pursuant to
this Section 11.2 that permits the sale or other transfer of the
capital stock of (or all or substantially all of the assets of) a
Guarantor Subsidiary shall automatically release the Guarantor
Subsidiary effective concurrently with such sale or other transfer.
11.3 Costs, Expenses and Taxes. Borrower shall pay within 30 days after
demand (which demand shall be accompanied by an invoice in reasonable
detail) the reasonable actual out-of-pocket costs and expenses of the
Administrative Agent and the Sole Lead Arranger and Sole Book Manager
in
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connection with (a) the negotiation, preparation, execution, delivery,
arrangement, syndication and closing of the Loan Documents, (b)
administration of the Loan Documents and (c) any amendment, waiver or
modification of the Loan Documents. Borrower shall pay within 30 days
after demand the reasonable actual out-of-pocket costs and expenses of
the Administrative Agent and each of the Banks in connection with the
enforcement of any Loan Documents following the occurrence of a Default
or an Event of Default, including in connection with any refinancing,
restructuring, reorganization (including a bankruptcy reorganization,
if such payment is approved by the bankruptcy court or any similar
proceeding). The costs and expenses referred to in the first sentence
above (for which Borrower shall be liable solely with respect to costs
and expenses of the Administrative Agent and the Sole Lead Arranger and
Sole Book Manager) and the second sentence above (which shall apply to
costs and expenses of the Administrative Agent and the Banks) shall
include filing fees, recording fees, title insurance fees, appraisal
fees, search fees, and other out-of-pocket expenses and Attorney Costs
of the Administrative Agent and the Sole Lead Arranger and Sole Book
Manager or any of the Banks, as the case may be, or independent public
accountants and other outside experts retained by the Administrative
Agent and the Sole Lead Arranger and Sole Book Manager (provided that
(i) Borrower shall not be liable under this Section 11.3 for fees and
expenses of more than one firm of independent public accountants, or
more than one expert with respect to a specific subject matter, at any
one time and (ii) with respect to the costs and expenses referred to in
the second sentence above (pertaining to enforcement matters), Borrower
shall not be liable for the fees and expenses of more than one firm of
outside legal counsel retained to represent the Administrative Agent
and the Banks, but if any of such parties does not consent to such
joint representation, Borrower shall be liable for the fees and
expenses of not more than one firm of outside legal counsel retained to
represent the Administrative Agent and also for not more than one
additional firm of outside legal counsel retained to otherwise
represent one or more of the Banks). Nothing herein shall obligate
Borrower to pay any costs and expenses in connection with an assignment
of or participation in a Bank's Pro Rata Share of a Commitment.
Borrower shall pay any and all documentary and transfer taxes,
assessments or charges made by any Governmental Agency and all
reasonable actual costs, expenses, fees, and charges of Persons (other
than the Administrative Agent and the Sole Lead Arranger and Sole Book
Manager or the Banks) payable or determined to be payable in connection
with the execution, delivery, filing or recording of this Agreement,
any other Loan Document, or any other instrument or writing to be
delivered hereunder or thereunder, and shall reimburse, hold harmless,
and indemnify the Administrative Agent and the Sole Lead Arranger and
Sole Book Manager and each Bank from and against any and all loss,
liability, or legal or other expense with respect to or resulting from
any delay in paying or failure to pay any such tax, cost, expense, fee,
or charge or that any of them may suffer or incur by reason of the
failure of Borrower to perform any of its Obligations. Any amount
payable to the Administrative Agent and the Sole Lead Arranger and Sole
Book Manager or any Bank under this Section shall bear interest from
the date which is 30 days after Borrower's receipt of demand (together
with reasonable supporting documentation) for payment at the rate then
in effect for Base Rate Loans.
11.4 Nature of Banks' Obligations. Nothing contained in this Agreement or
any other Loan Document and no action taken by the Administrative Agent
or the Banks or any of them pursuant hereto or thereto may, or may be
deemed to, make the Banks a partnership, an association, a joint
venture, or other entity, either among themselves or with Borrower. The
obligations of the Banks hereunder to make Advances and to fund
participations in Letters of Credit and Swing Line Loans are several
and not joint or joint and several. The failure of any Bank to make any
Advance or to fund any such participation on any date required
hereunder shall not relieve any other Bank of its corresponding
obligation to do so on such date, and no Bank shall be responsible for
the failure of any other Bank to so make its Advance or purchase its
participation.
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11.5 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other
document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and
thereof. Such representations and warranties have been or will be
relied upon by the Administrative Agent and each Bank, regardless of
any investigation made by the Administrative Agent or any Bank or on
their behalf and notwithstanding that the Administrative Agent or any
Bank may have had notice or knowledge of any Default at the time of the
making of any Advance or the issuance of any Letter of Credit, and
shall continue in full force and effect as long as any Loan or any
other Obligation hereunder shall remain unpaid or unsatisfied or any
Letter of Credit shall remain outstanding.
11.6 Notices and Other Communications; Facsimile Copies.
(a) General. Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall
be in writing (including by facsimile transmission). All such
written notices shall be mailed, faxed or delivered to the
applicable address, facsimile number or (subject to subsection
(c) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as
follows:
(i) if to the Borrower, the Administrative Agent, the
Issuing Bank or the Swing Line Bank, to the address,
facsimile number, electronic mail address or
telephone number specified for such Person on
Schedule 11.6 or to such other address, facsimile
number, electronic mail address or telephone number
as shall be designated by such party in a notice to
the other parties; and
(ii) if to any other Bank, to the address, facsimile
number, electronic mail address or telephone number
specified in its Administrative Questionnaire or to
such other address, facsimile number, electronic mail
address or telephone number as shall be designated by
such party in a notice to the Borrower, the
Administrative Agent, the Issuing Bank and the Swing
Line Bank.
All such notices and other communications shall be deemed to
be given or made upon the earlier to occur of (i) actual
receipt by the relevant party hereto and (ii) (A) if delivered
by hand or by courier, when signed for by or on behalf of the
relevant party hereto; (B) if delivered by mail, 4 Business
Days after deposit in the mails, postage prepaid; (C) if
delivered by facsimile, when sent and receipt has been
confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of
subsection (c) below), when delivered; provided, however, that
notices and other communications to the Administrative Agent,
the Issuing Bank and the Swing Line Bank pursuant to Article
II shall not be effective until actually received by such
Person. In no event shall a voicemail message be effective as
a notice, communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan
Documents may be transmitted or signed by facsimile. The
effectiveness of any such documents and signatures shall,
subject to applicable Law, have the same force and effect as
manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Banks. The
Administrative Agent may also require that any such documents
and signatures be confirmed by a manually-signed original
thereof; provided, however, that
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the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet
and intranet websites may be used only to distribute routine
communications, such as financial statements and other
information as provided in Section 7.1, and to distribute Loan
Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) Reliance by Administrative Agent and Banks. The Administrative
Agent and the Banks shall be entitled to rely and act upon any
notices (including telephonic requests for Loans and Swing
Line Loans) that, in the reasonable judgment of the
Administrative Agent and the Banks, are purportedly given by
or on behalf of the Borrower even if (i) such notices were not
made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified
herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower
shall indemnify each Agent-Related Person and each Bank from
all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice that, in the reasonable
judgment of such Agent-Related Person, is purportedly given by
or on behalf of the Borrower. All telephonic notices to and
other communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties
hereto hereby consents to such recording.
11.7 Execution in Counterparts. This Agreement and any other Loan Document
to which Borrower is a Party may be executed in any number of
counterparts and any party hereto or thereto may execute any
counterpart, each of which when executed and delivered will be deemed
to be an original and all of which counterparts of this Agreement or
any other Loan Document, as the case may be, taken together will be
deemed to be but one and the same instrument. Such counterparts may be
sent by telecopy, with the original counterparts to follow by mail or
courier. The execution of this Agreement or any other Loan Document by
any party hereto or thereto will not become effective until executed
counterparts hereof or thereof (or other evidence of execution
satisfactory to the Administrative Agent and Borrower) have been
delivered to the Administrative Agent and Borrower.
11.8 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except
that the Borrower may not assign or otherwise transfer any of
its rights or obligations hereunder without the prior written
consent of each Bank and no Bank may assign or otherwise
transfer any of its rights or obligations hereunder except (i)
to an Eligible Assignee in accordance with the provisions of
subsection (b) of this Section, (ii) by way of participation
in accordance with the provisions of subsection (d) of this
Section, or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of subsection (f) of this
Section (and any other attempted assignment or transfer by any
party hereto shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
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(b) Any Bank may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment
and the Loans (including for purposes of this subsection (b),
participations in Letters of Credit and in Swing Line Loans)
at the time owing to it); provided that (i) except in the case
of an assignment of the entire remaining amount of the
assigning Bank's Commitment and the Loans at the time owing to
it or in the case of an assignment to a Bank or an Affiliate
of a Bank the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) subject to
each such assignment, determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to
the Administrative Agent or, if "Trade Date" is specified in
the Assignment and Assumption, as of the Trade Date, shall not
be less than $10,000,000 and shall be an integral multiple of
$5,000,000 unless each of the Administrative Agent and, so
long as no Event of Default has occurred and is continuing,
the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial
assignment shall be made as an assignment of a proportionate
part of all the assigning Bank's rights and obligations under
this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to
rights in respect of Swing Line Loans; (iii) any assignment to
an Eligible Assignee other than a Bank or an Affiliate of a
Bank shall be subject to the prior written consent of the
Administrative Agent and the Swing Line Bank, not to be
unreasonably withheld or delayed; (iv) the parties to each
assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; and (v) any assignment to an
Eligible Assignee other than a Bank or an Affiliate of a Bank
shall be subject to the prior written consent of the Borrower,
not to be unreasonably withheld or delayed, but such consent
of Borrower shall not be required if a Default or an Event of
Default has then occurred and is continuing. Subject to
acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the
effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of
a Bank under this Agreement, and the assigning Bank thereunder
shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Bank's rights and
obligations under this Agreement, such Bank shall cease to be
a party hereto but shall continue to be entitled to the
benefits of Sections 3.5, 3.6, 3.10, 11.3 and 11.10 with
respect to facts and circumstances occurring prior to the
effective date of such assignment). Upon request, the Borrower
(at the assignor Bank's or the assignee Bank's expense) shall
execute and deliver a Note to the assignee Bank. Any
assignment or transfer by a Bank of rights or obligations
under this Agreement that does not comply with this subsection
shall be treated for purposes of this Agreement as a sale by
such Bank of a participation in such rights and obligations in
accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative
Agent's Office a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the
names and addresses of the Banks, and the Commitments of, and
principal amounts of the Loans and other Obligations owing to,
each Bank pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive,
and the Borrower, the Administrative Agent and the Banks may
treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Bank hereunder for all
purposes of this
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Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and
any Bank, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Any Bank may at any time, without the consent of, or notice
to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or
the Borrower or any of the Borrower's Affiliates or
Subsidiaries) (each, a "Participant") in all or a portion of
such Bank's rights or obligations under this Agreement
(including all or a portion of its Commitment or the Loans
(including such Bank's participations in Letters of Credit or
Swing Line Loans) owing to it); provided that (i) such Bank's
obligations under this Agreement shall remain unchanged, (ii)
such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent and the other Banks shall
continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a
Bank sells such a participation shall provide that such Bank
shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision
of this Agreement; provided further, that such agreement or
instrument may provide that such Bank will not, without the
consent of the Participant, agree to any amendment, waiver or
other modification described in Sections 11.2(a), 11.2(b) or
11.2(d) that directly affects such Participant; provided
further, that any Bank selling a participation shall endeavor
promptly to give Borrower notice following any such sale, but
the failure to give such notice will not give rise to any
liability on the part of such Bank or otherwise affect the
validity of any such sale. Subject to clause (e) of this
Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 3.5, 3.6 and 3.10 to the
same extent as if it were a Bank and had acquired its interest
by assignment pursuant to subsection (b) of this Section. To
the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.15 as though it were a
Bank, provided such Participant agrees to be subject to
Section 11.9 as though it were a Bank.
(e) A Participant shall not be entitled to receive any greater
payment under Sections 3.5, 3.6 and 3.10 than the applicable
Bank would have been entitled to receive with respect to the
participation sold to such Participant.
(f) Any Bank may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of
such Bank, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such
pledge or assignment shall release such Bank from any of its
obligations hereunder or substitute any such pledgee or
assignee for such Bank as a party hereto.
(g) [Intentionally Omitted]
(h) Notwithstanding anything to the contrary contained herein, if
at any time Bank of America assigns all of its Commitment and
Loans pursuant to subsection (b) above, Bank of America may,
(i) upon 60 days' notice to the Borrower and the Banks, resign
as Issuing Bank or (ii) upon 60 days' notice to the Borrower,
resign as Swing Line Bank. Notwithstanding anything to the
contrary contained herein, if at any time Bank of America is
removed as Administrative Agent by the Required Banks pursuant
to Section 10.9 herein, then Bank of America shall resign as
Swing Line Bank on the effective date of such removal. In the
event of any such resignation as Issuing Bank or Swing Line
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Bank, the Borrower shall be entitled to appoint from among the
Banks a successor Issuing Bank or Swing Line Bank hereunder;
provided, however, that no failure by the Borrower to appoint
any such successor shall affect the resignation of Bank of
America as Issuing Bank or Swing Line Bank, as the case may
be. If Bank of America resigns as Issuing Bank, it shall
retain all the rights and obligations of the Issuing Bank
hereunder with respect to all Letters of Credit outstanding as
of the effective date of its resignation as Issuing Bank and
all Obligations with respect thereto (including the right to
require the Banks to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section
2.5). If Bank of America resigns as Swing Line Bank, it shall
retain all the rights of the Swing Line Bank provided for
hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such resignation,
including the right to require the Banks to make Base Rate
Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.4.
11.9 Sharing of Setoffs. Each Bank severally agrees that if it, through the
exercise of the right of setoff, banker's lien, or counterclaim against
Borrower or otherwise, receives payment of the Obligations due it
hereunder and under the Notes that is ratably more than that to which
it is entitled hereunder pursuant to Section 3.13 or 9.2(e), then: (a)
the Bank exercising the right of setoff, banker's lien, or counterclaim
or otherwise receiving such payment shall purchase, and shall be deemed
to have simultaneously purchased, from the other Bank a participation
in the Obligations held by the other Bank and shall pay to the other
Bank a purchase price in an amount so that the share of the Obligations
held by each Bank after the exercise of the right of setoff, banker's
lien, or counterclaim or receipt of payment shall be in the same
proportion that existed prior to the exercise of the right of setoff,
banker's lien, or counterclaim or receipt of payment, and (b) such
other adjustments and purchases of participations shall be made from
time to time as shall be equitable to ensure that all of the Banks
share any payment obtained in respect of the Obligations ratably in
accordance with the provisions of Section 3.13 and 9.2(e), provided
that, if all or any portion of a disproportionate payment obtained as a
result of the exercise of the right of setoff, banker's lien,
counterclaim or otherwise is thereafter recovered from the purchasing
Bank by Borrower or any Person claiming through or succeeding to the
rights of Borrower, the purchase of a participation shall be rescinded
and the purchase price thereof shall be restored to the extent of the
recovery, but without interest. Each Bank that purchases a
participation in the Obligations pursuant to this Section shall from
and after the purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with
respect to the portion of the Obligations purchased to the same extent
as though the purchasing Bank were the original owner of the
Obligations purchased. Borrower expressly consents to the foregoing
arrangements and agrees that, to the extent permitted by Law, any Bank
holding a participation in an Obligation so purchased may exercise any
and all rights of setoff, banker's lien or counterclaim with respect to
the participation as fully as if the Bank were the original owner of
the Obligation purchased.
11.10 Indemnification by the Borrower. The Borrower shall indemnify and hold
harmless each Agent-Related Person, each Bank and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the "Indemnitees") from and against any
and all liabilities, obligations, losses, damages, penalties, claims,
demands, actions, judgments, suits, costs, expenses and disbursements
(including Attorney Costs) of any kind or nature whatsoever which may
at any time be imposed on, incurred by or asserted against any such
Indemnitee in any way relating to or arising out of or in connection
with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or
instrument delivered in connection with the transactions contemplated
thereby or the consummation of the transactions contemplated thereby,
(b) any Commitment, Loan or Letter of
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Credit or the use or proposed use of the proceeds therefrom (including
any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit)
or (c) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract,
tort or any other theory (including any investigation of, preparation
for, or defense of any pending or threatened claim, investigation,
litigation or proceeding) and regardless of whether any Indemnitee is a
party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such liabilities,
obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a
court of competent jurisdiction by final and nonappealable judgment to
have resulted from the (x) gross negligence or willful misconduct of
such Indemnitee, (y) payment with respect to a Letter of Credit by such
Indemnitee (or any other applicable "issuer" within the meaning of
ISP98) when such payment violated the terms of ISP98 or (z) for any
failure to comply with Section 11.12 by such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other
similar information transmission systems in connection with this
Agreement, nor shall any Indemnitee have any liability for any indirect
or consequential damages relating to this Agreement or any other Loan
Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date). All amounts due
under this Section 11.10 shall be payable within 10 Business Days after
demand therefor. The agreements in this Section shall survive the
resignation of the Administrative Agent, the replacement of any Bank,
the termination of the Commitments and the repayment, satisfaction or
discharge of all the other Obligations.
11.11 Nonliability of Banks. The relationship between Borrower and the Banks
is, and shall at all times remain, solely that of borrower and lenders,
and the Banks and the Administrative Agent neither undertake nor assume
any responsibility or duty to Borrower to review, inspect, supervise,
pass judgment upon, or inform Borrower of any matter in connection with
any phase of Borrower's business, operations, or condition, financial
or otherwise. Borrower shall rely entirely upon its own judgment with
respect to such matters, and any review, inspection, supervision,
exercise of judgment, or information supplied to Borrower by any Bank
or the Agents in connection with any such matter is for the protection
of the Banks and the Agents, and neither Borrower nor any third party
is entitled to rely thereon.
11.12 Confidentiality. Each Bank agrees that it and its employees shall use
any confidential information that such Bank may receive, directly or
indirectly, from Borrower or any of its Subsidiaries pursuant to this
Agreement or the Subsidiary Guaranty only for the purposes of this
Agreement and shall hold such confidential information in confidence,
except for disclosure: to Affiliates of the Bank (provided that any
such Affiliate who is a "person" described in Rule 100(b)(1) of
Regulation FD of the Commission expressly agrees to maintain the
disclosed information in confidence or otherwise falls within the
exceptions to Rule 100(a) of Regulation FD set forth in Rule 100(b)(2)
of Regulation FD); to other Banks; to legal counsel, accountants and
other professional advisors to that Bank; to regulatory officials
having jurisdiction over that Bank; as required by Law or legal process
(provided that the Bank shall, to the extent possible give sufficient
notice to Borrower of such legal process to enable Borrower to oppose
such legal process, and in any event, give written notice to Borrower
of such legal process as soon as practicable) or in connection with any
legal proceeding to which that Bank and Borrower are adverse parties;
and to another financial institution in connection with a disposition
or proposed disposition to that financial institution of all or part of
that Bank's interests hereunder or a participation interest in its
Notes (provided that such disclosure is made subject to an
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appropriate confidentiality agreement by such institution on terms
substantially similar to this Section). For purposes of the foregoing,
"confidential information" shall mean any information respecting
Borrower or its Subsidiaries reasonably considered by Borrower to be
confidential, other than (a) information previously filed with any
Governmental Agency and available to the public, (b) information
previously published in any public medium from a source other than,
directly or indirectly, the Agents or any Bank, and (c) information
previously disclosed by Borrower to any Person not associated with
Borrower without any reasonable expectation of confidentiality.
Notwithstanding anything herein to the contrary, "confidential
information" shall not include, and the Administrative Agent and each
Bank, together with their employees, representatives and other agents,
may disclose without limitation of any kind, any information with
respect to the "tax treatment" and "tax structure" (in each case,
within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to the
Administrative Agent or such Bank relating to such tax treatment and
tax structure; provided that with respect to any document or similar
item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other
information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax
structure of the Loans, Letters of Credit and transactions contemplated
hereby. Nothing in this Section shall be construed to create or give
rise to any fiduciary duty on the part of any parties hereto to each
other.
11.13 No Third Parties Benefited. This Agreement is made for the purpose of
defining and setting forth certain obligations, rights and duties of
Borrower, the Agents and the Banks in connection with the Commitment,
and is made for the sole benefit of Borrower, the Administrative Agent
and the Banks, and the Administrative Agent's and the Banks' successors
and assigns. Except as provided in Sections 11.8 and 11.10, no other
Person shall have any rights of any nature hereunder or by reason
hereof.
11.14 Other Dealings. Any Bank may, without liability to account to the other
Banks, accept deposits from, lend money or provide credit facilities to
and generally engage in any kind of banking or other business with
Borrower and its Subsidiaries.
11.15 Right of Setoff - Deposit Accounts. Upon the occurrence of an Event of
Default and the acceleration of maturity of the principal indebtedness
under any of the Notes pursuant to Section 9.2, Borrower hereby
specifically authorizes each Bank in which Borrower maintains a deposit
account (whether a general or special deposit account, other than trust
accounts) or a certificate of deposit to setoff any Obligations owed to
the Banks against such deposit account or certificate of deposit
without prior notice to Borrower (which notice is hereby waived)
whether or not such deposit account or certificate of deposit has then
matured. Nothing in this Section shall limit or restrict the exercise
by a Bank of any right to setoff or banker's lien under applicable Law,
subject to the approval of the Required Banks.
11.16 Further Assurances. Borrower shall, at its expense and without expense
to the Banks or the Administrative Agent, do, execute, and deliver such
further acts and documents as any Bank or the Administrative Agent from
time to time reasonably requires for the assuring and confirming unto
the Banks or the Administrative Agent the rights hereby created or
intended now or hereafter so to be, or for carrying out the intention
or facilitating the performance of the terms of any Loan Document;
provided that this Section 11.16 is not intended to create any
affirmative obligation on the part of Borrower to provide collateral
security, additional guarantors or other credit enhancement with
respect to the Obligations.
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11.17 Integration. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or
oral (including the mandate letter and the summary of terms relating to
this Agreement), on the subject matter hereof except as provided in
Section 3.3 hereof or otherwise expressly provided herein to the
contrary. The Loan Documents were drafted with the joint participation
of Borrower and the Banks and shall be construed neither against nor in
favor of either, but rather in accordance with the fair meaning
thereof.
11.18 Governing Law
(a) This Agreement shall be governed by, and construed in
accordance with, the law of the state of California applicable
to agreements made and to be performed entirely within such
state; provided that the parties hereto shall retain all
rights arising under federal law.
(b) Any legal action or proceeding with respect to this Agreement
or any other Loan Document may be brought in the Superior
Court of the State of California for the County of Los Angeles
or the United States District Court for the Central District
of California, and by execution and delivery of this
agreement, the Borrower, the Administrative Agent and each
Bank consents, for itself and in respect of its property, to
the non-exclusive jurisdiction of those courts. The Borrower,
the Administrative Agent and each Bank irrevocably waives any
objection, including any objection to the laying of venue or
based on the grounds of forum non conveniens, which it may now
or hereafter have to the bringing of any action or proceeding
in such jurisdiction in respect of any Loan Document or other
document related thereto. The Borrower, the Administrative
Agent and each Bank waives personal service of any summons,
complaint or other process, which may be made by any other
means permitted by California law.
11.19 Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction
or the operation, enforceability, or validity of that provision in any
other jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
11.20 Headings. Article and section headings in this Agreement and the other
Loan Documents are included for convenience of reference only and are
not part of this Agreement or the other Loan Documents for any other
purpose.
11.21 Conflict in Loan Documents. To the extent there is any actual
irreconcilable conflict between the provisions of this Agreement and
any other Loan Document, the provisions of this Agreement shall
prevail.
11.22 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT
-86-
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.23 Purported Oral Amendments. BORROWER EXPRESSLY ACKNOWLEDGES THAT THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED,
OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN
INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2. BORROWER AGREES
THAT IT WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE,
OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF ANY AGENT OR ANY
BANK THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT,
MODIFICATION, WAIVER OR SUPPLEMENT TO THE AGREEMENT OR THE OTHER LOAN
DOCUMENTS.
11.24 Payments Set Aside. To the extent that any payment by or on behalf of
the Borrower is made to the Administrative Agent or any Bank, or the
Administrative Agent or any Bank exercises its right of set-off, and
such payment or the proceeds of such set-off or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered
into by the Administrative Agent or such Bank in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with
any proceeding under any Debtor Relief Law or otherwise, then (a) to
the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such set-off had not
occurred, and (b) each Bank severally agrees to pay to the
Administrative Agent upon demand its applicable share of any amount so
recovered from or repaid by the Administrative Agent, plus interest
thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time
in effect.
11.25 Hazardous Materials Indemnity. Without limiting any other indemnity
provided for in the Loan Documents, Borrower agrees to indemnify the
Indemnitees from any claim, liability, loss, cost or expense (including
Attorney Costs) directly or indirectly arising out of the use,
generation, manufacture, production, storage, release, threatened
release, discharge, disposal or presence of any Hazardous Materials if
such Hazardous Materials are on, under, about or relate to Borrower's
Property or operations, so long as such claim, liability, loss, cost or
expense arises out of or relates to a Commitment, the use of proceeds
of any Loans, any transaction contemplated pursuant to this Agreement,
or any relationship or alleged relationship of any Indemnitee to
Borrower related to this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
KB HOME, a Delaware Corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Treasury
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
BANK OF AMERICA, N.A., as Administrative
Agent and a Bank
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇-▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇-▇▇▇▇▇▇
Title: MANAGING DIRECTOR
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
BANK ONE, NA, as Syndication Agent and a
Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: ASSOCIATE DIRECTOR
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
FLEET NATIONAL BANK, as a Documentation
Agent and a Bank
By: /s/ ▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: VICE PRESIDENT
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
CREDIT LYONNAIS NEW YORK BRANCH, as a
Documentation Agent and a Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇
Title: SENIOR VICE PRESIDENT
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
WACHOVIA BANK, NATIONAL ASSOCIATION, as a
Documentation Agent and a Bank
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
KEYBANK NATIONAL ASSOCIATION, a national
banking association, as a Documentation
Agent and a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
SUNTRUST BANK, as a Documentation Agent
and a Bank
By: /s/ W. ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: W. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
THE ROYAL BANK OF SCOTLAND PLC, as a
Senior Managing Agent and a Bank
By: /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Senior Vice President
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
BNP PARIBAS, as a Senior Managing Agent
and a Bank
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Director
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
GUARANTY BANK, as a Senior Managing Agent
and a Bank
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
WASHINGTON MUTUAL BANK, FA, as a Senior
Managing Agent and a Bank
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name:
Title:
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
JPMORGAN CHASE BANK, as a Senior Managing
Agent and a Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: VICE PRESIDENT
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
COMERICA BANK, as a Managing Agent and a
Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: VICE PRESIDENT
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
U.S. BANK NATIONAL ASSOCIATION, as a
Managing Agent and a Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
PNC BANK, NATIONAL ASSOCIATION, as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
AMSOUTH BANK, as a Bank
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: SR VP
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
CALIFORNIA BANK & TRUST, a California
banking corporation, as a Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
CITICORP NORTH AMERICA, INC., as a Bank
By: /s/ ▇▇▇▇▇▇▇ Chiopak
--------------------------------------
Name: ▇▇▇▇▇▇▇ Chiopak
Title: Vice President
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
HSBC BANK USA, as a Bank
By: /s/ ▇▇▇ ▇▇▇ Kiong
--------------------------------------
Name: ▇▇▇ ▇▇▇ Kiong
Title: Vice President
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
KBC BANK N.V., as a Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: First Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice President
Real Estate Finance Group
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
COMPASS BANK, as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
FIFTH THIRD BANK, as a Bank
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
KB HOME REVOLVING LOAN
AGREEMENT - SIGNATURE PAGE
Exhibits omitted.