EXHIBIT 99.2
$220,000,000
CREDIT AGREEMENT
DATED AS OF JUNE 25, 2002
AMONG
TECHNICAL OLYMPIC USA, INC.
AS BORROWER
AND
THE LENDERS AND ISSUERS PARTY HERETO
AND
CITICORP NORTH AMERICA, INC.
AS ADMINISTRATIVE AGENT
FLEET NATIONAL BANK,
AS DOCUMENTATION AGENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
AS SOLE ARRANGER AND SOLE BOOK MANAGER
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
TABLE OF CONTENTS
PAGE
Article I Definitions, Interpretation And Accounting Terms..................................1
Section 1.1 Defined Terms............................................................1
Section 1.2 Computation of Time Periods.............................................29
Section 1.3 Accounting Terms and Principles.........................................29
Section 1.4 Certain Terms...........................................................30
Article II The Facility.....................................................................30
Section 2.1 The Revolving Credit Commitments........................................30
Section 2.2 Borrowing Procedures....................................................31
Section 2.3 Swing Loans.............................................................32
Section 2.4 Letters of Credit.......................................................34
Section 2.5 Reduction and Termination of the
Revolving Credit Commitments............................................38
Section 2.6 Repayment of Loans......................................................38
Section 2.7 Evidence of Debt........................................................39
Section 2.8 Optional Prepayments....................................................39
Section 2.9 Mandatory Prepayments...................................................40
Section 2.10 Interest................................................................40
Section 2.11 Conversion/Continuation Option..........................................41
Section 2.12 Fees....................................................................42
Section 2.13 Payments and Computations...............................................43
Section 2.14 Special Provisions Governing Eurodollar Rate Loans......................46
Section 2.15 Capital Adequacy........................................................47
Section 2.16 Taxes...................................................................48
Section 2.17 Substitution of Lenders.................................................50
Section 2.18 Facility Extension......................................................50
Section 2.19 Facility Increase.......................................................53
Article III Conditions To Loans And Letters Of Credit........................................53
Section 3.1 Conditions Precedent to Initial Loans and Letters of Credit.............53
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit..................57
Section 3.3 Determinations of Initial Borrowing Conditions..........................58
Article IV Representations and Warranties...................................................58
Section 4.1 Corporate Existence; Compliance with Law................................58
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 4.2 Corporate Power; Authorization; Enforceable Obligations.................59
Section 4.3 Ownership of Borrower; Subsidiaries.....................................60
Section 4.4 Financial Statements....................................................60
Section 4.5 Material Adverse Change.................................................61
Section 4.6 Solvency................................................................61
Section 4.7 Litigation..............................................................61
Section 4.8 Taxes...................................................................62
Section 4.9 Full Disclosure.........................................................62
Section 4.10 Margin Regulations......................................................62
Section 4.11 No Burdensome Restrictions; No Defaults.................................63
Section 4.12 Investment Company Act;
Public Utility Holding Company Act......................................63
Section 4.13 Use of Proceeds.........................................................63
Section 4.14 Insurance...............................................................63
Section 4.15 Labor Matters...........................................................64
Section 4.16 ERISA...................................................................64
Section 4.17 Environmental Matters...................................................64
Section 4.18 Intellectual Property...................................................65
Section 4.19 Title; Real Property....................................................66
Section 4.20 Related Documents.......................................................66
Section 4.21 Non-Guarantor Subsidiaries..............................................67
Article V Financial Covenants..............................................................67
Section 5.1 Consolidated Tangible Net Worth.........................................67
Section 5.2 Maximum Total Liabilities to
Consolidated Tangible Net Worth Ratio...................................68
Section 5.3 Minimum Fixed Charge Coverage Ratio.....................................68
Section 5.4 Unsold Land to Consolidated Tangible Net Worth..........................68
Section 5.5 Unsold Units to Units Closed............................................68
Section 5.6 Unimproved Land to Consolidated Tangible Net Worth......................68
Section 5.7 Model Homes to Units Sold...............................................68
Article VI Reporting Covenants..............................................................68
Section 6.1 Financial Statements....................................................69
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 6.2 Default Notices.........................................................70
Section 6.3 Litigation..............................................................70
Section 6.4 Notices under Related Documents.........................................70
Section 6.5 SEC Filings; Press Releases.............................................70
Section 6.6 Labor Relations.........................................................71
Section 6.7 Tax Returns.............................................................71
Section 6.8 Insurance...............................................................71
Section 6.9 ERISA Matters...........................................................71
Section 6.10 Environmental Matters...................................................72
Section 6.11 Borrowing Base Determination............................................72
Section 6.12 Customer Contracts......................................................73
Section 6.13 Other Information.......................................................73
Article VII Affirmative Covenants............................................................73
Section 7.1 Preservation of Corporate Existence, Etc................................73
Section 7.2 Compliance with Laws, Etc...............................................73
Section 7.3 Conduct of Business.....................................................74
Section 7.4 Payment of Taxes, Etc...................................................74
Section 7.5 Maintenance of Insurance................................................74
Section 7.6 Maintenance of Contractual Obligations..................................74
Section 7.7 Transactions with Affiliates............................................74
Section 7.8 Access..................................................................75
Section 7.9 Keeping of Books........................................................75
Section 7.10 Maintenance of Properties, Etc..........................................75
Section 7.11 Application of Proceeds.................................................75
Section 7.12 Environmental...........................................................75
Section 7.13 Additional Collateral and Guaranties....................................76
Section 7.14 Interest Rate Contracts.................................................77
Section 7.15 Real Property...........................................................77
Article VIII Negative Covenants...............................................................77
Section 8.1 Indebtedness............................................................77
Section 8.2 Liens, Etc..............................................................79
Section 8.3 Investments.............................................................79
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(CONTINUED)
PAGE
Section 8.4 Sale of Assets..........................................................80
Section 8.5 Restricted Payments.....................................................81
Section 8.6 Restriction on Fundamental Changes......................................81
Section 8.7 Change in Nature of Business............................................82
Section 8.8 Transactions with Affiliates............................................82
Section 8.9 Restrictions on Subsidiary Distributions;
No New Negative Pledge..................................................82
Section 8.10 Modification of Constituent Documents...................................83
Section 8.11 Modification of Related Documents.......................................83
Section 8.12 Modification of Other Indebtedness Agreements...........................83
Section 8.13 Accounting Changes; Fiscal Year.........................................84
Section 8.14 Margin Regulations......................................................84
Section 8.15 Operating Leases; Sale/Leasebacks.......................................84
Section 8.16 Cancellation, Prepayment of Indebtedness................................84
Section 8.17 No Speculative Transactions.............................................84
Section 8.18 Compliance with ERISA...................................................85
Section 8.19 Environmental...........................................................85
Section 8.20 Acquisitions of Unentitled Land Prohibited..............................85
Section 8.21 High-Rise Construction Prohibited.......................................85
Article IX Events of Default................................................................85
Section 9.1 Events of Default.......................................................85
Section 9.2 Remedies................................................................87
Section 9.3 Actions in Respect of Letters of Credit.................................88
Section 9.4 Rescission..............................................................88
Article X The Administrative Agent.........................................................88
Section 10.1 Authorization and Action................................................88
Section 10.2 Administrative Agent's Reliance, Etc....................................89
Section 10.3 The Administrative Agent Individually...................................90
Section 10.4 Lender Credit Decision..................................................90
Section 10.5 Indemnification.........................................................90
Section 10.6 Successor Administrative Agent..........................................91
Section 10.7 Concerning the Collateral and the Collateral Documents..................91
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(CONTINUED)
PAGE
Section 10.8 Collateral Matters Relating to Related Obligations......................92
Article XI Miscellaneous....................................................................93
Section 11.1 Amendments, Waivers, Etc................................................93
Section 11.2 Assignments and Participations..........................................95
Section 11.3 Costs and Expenses......................................................98
Section 11.4 Indemnities.............................................................99
Section 11.5 Limitation of Liability................................................100
Section 11.6 Right of Set-off.......................................................100
Section 11.7 Sharing of Payments, Etc...............................................101
Section 11.8 Notices, Etc...........................................................101
Section 11.9 No Waiver; Remedies....................................................102
Section 11.10 Binding Effect.........................................................103
Section 11.11 Governing Law..........................................................103
Section 11.12 Submission to Jurisdiction; Service of Process.........................103
Section 11.13 Waiver of Jury Trial...................................................104
Section 11.14 Marshaling; Payments Set Aside.........................................104
Section 11.15 Section Titles.........................................................104
Section 11.16 Execution in Counterparts..............................................104
Section 11.17 Entire Agreement.......................................................104
Section 11.18 Confidentiality........................................................105
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TABLE OF CONTENTS
(CONTINUED)
SCHEDULES
Schedule I - Revolving Credit Commitments
Schedule II - Applicable Lending Offices and Addresses for Notices
Schedule 1.1 - Refinanced Indebtedness
Schedule 4.2 - Consents
Schedule 4.3 - Ownership of Subsidiaries
Schedule 4.4 - Material Obligations
Schedule 4.7 - Litigation
Schedule 4.8 - Taxes
Schedule 4.14 - Insurance
Schedule 4.15 - Labor Matters
Schedule 4.16 - List of Plans
Schedule 4.17 - Environmental Matters
Schedule 4.19 - Real Property
Schedule 8.1 - Existing Indebtedness
Schedule 8.2 - Existing Liens
Schedule 8.3 - Existing Investments
Schedule 8.9 - Restrictions on Subsidiary Distributions
Schedule 8.10 - Dual Class Structure of Capital Stock
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Assumption Agreement
Exhibit C - Form of Revolving Credit Note
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Letter of Credit Request
Exhibit F - Form of Borrowing Base Certificate
Exhibit G - Form of Notice of Conversion or Continuation
Exhibit H - Form of Opinion of Counsel for the Loan Parties
Exhibit I - Form of Guaranty
Exhibit J - Form of Pledge Agreement
vi
CREDIT AGREEMENT, dated as of June 25, 2002, among TECHNICAL
OLYMPIC USA, INC., a Delaware corporation (the "Borrower"), the Lenders (as
defined below), the Issuers (as defined below), CITICORP NORTH AMERICA, INC.
("CNAI"), as agent for the Lenders and the Issuers (in such capacity and as
agent for the Secured Parties under the Collateral Documents the "Administrative
Agent") and FLEET NATIONAL BANK, as documentation agent for the lenders.
WITNESSETH:
WHEREAS, the Borrower has requested that the Lenders and
Issuers make available for the purposes specified in this Agreement a revolving
credit and letter of credit facility; and
WHEREAS, the Lenders and Issuers are willing to make available
to the Borrower such revolving credit and letter of credit facility upon the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
SECTION 1.1 DEFINED TERMS
As used in this Agreement, the following terms have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"Account" has the meaning specified in the Pledge Agreement.
"Account Debtor" has the meaning specified in the Pledge
Agreement.
"Adjusted EBITDA" means, with respect to any Person for any
period, (a) Consolidated Net Income of such Person for such period plus (b) the
sum of, in each case to the extent included in the calculation of such
Consolidated Net Income but without duplication, (i) any provision for income
taxes, (ii) Interest Expense, (iii) loss from extraordinary items and (iv)
depreciation, depletion and amortization of intangibles or financing or
acquisition costs and (v) all other non-cash charges and non-cash losses for
such period, including the amount of any compensation deduction as the result of
any grant of Stock or Stock Equivalents to employees, officers, directors or
consultants minus (c) the sum of, in each case to the extent included in the
calculation of such Consolidated Net Income but without duplication, (i) any
credit for income tax, (ii) interest income, (iii) gains from extraordinary
items for such period, (iv) any aggregate net gain (but not any aggregate net
loss) from the sale, exchange or other disposition of capital assets by such
Person, (v) any other non-cash gains or other items which have been added in
determining Consolidated Net Income, including any reversal of a change referred
to in clause (b)(v) above by reason of a decrease in the value of any Stock or
Stock Equivalent, and (vi) one time charges for expenses related to the Merger.
1
"Administrative Agent" has the meaning specified in the
preamble to this Agreement.
"Advance Rate" means (a) up to 50% in the case of Unimproved
Land, (b) up to 65% in the case of Land/Lots Under Development, (c) up to 65% in
the case of Finished Lots, (d) up to 80% in the case of Unsold Homes Under
Construction, (e) up to 80% in the case of Completed Unsold Homes Less Than 180
Days Since Completion, (f) up to 50% in the case of Completed Unsold Homes Over
180 Days Since Completion, (h) up to 90% in the case of Sold Homes, and (h) up
to 90% in the case of Escrow Proceeds Receivables.
"Affiliate" means, with respect to any Person, any other
Person which, directly or indirectly, controls, is controlled by or is under
common control with such Person, each officer, director, general partner or
joint-venturer of such Person, and each Person who is the beneficial owner of
10% or more of any class of Voting Stock of such Person. For the purposes of
this definition, "control" means the possession of the power to direct or cause
the direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise
"Agreement" means this
Credit Agreement.
"Applicable Lending Office" means, with respect to each
Lender, its Domestic Lending Office in the case of a Base Rate Loan, and its
Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means from and after the Closing Date, as
of any date of determination, a per annum rate equal to the rate set forth below
for the applicable type of Loan and the then applicable Total Liabilities to
Consolidated Tangible Net Worth Ratio (determined for the twelve-month period
ending on the last day of the most recent Fiscal Quarter or Fiscal Year, as
applicable, for which a Compliance Certificate has been delivered pursuant to
Section 6.1 (Financial Statements)) set forth below:
TOTAL LIABILITIES TO CONSOLIDATED
TANGIBLE NET WORTH RATIO BASE RATE LOANS EURODOLLAR RATE LOANS
--------------------------------- --------------- ---------------------
Greater than or equal to 2.25 to 1 2.00% 3.00%
Less than 2.25 to 1 and equal to or greater than 2.00 to 1 1.75% 2.75%
Less than 2.00 to 1 and equal to or greater than 1.75 to 1 1.50% 2.50%
Less than 1.75 to 1 and equal to or greater than 1.50 to 1 1.25% 2.25%
Less than 1.50 to 1 1.00% 2.00%
Subsequent changes in the Applicable Margin resulting from a change in the Total
Liabilities to Consolidated Tangible Net Worth Ratio shall become effective as
to all Loans upon the delivery by the Borrower to the Administrative Agent of a
new Compliance Certificate required to be delivered pursuant to Section 6.1(c)
(Compliance Certificate) as of the last day such Compliance Certificate was
required to be delivered pursuant to Section 6.1(c) (Compliance Certificate).
2
Notwithstanding anything to the contrary set forth in this Agreement (including
the then effective Total Liabilities to Consolidated Tangible Net Worth Ratio),
if the Borrower shall fail to deliver such Compliance Certificate within any of
the time periods specified in Section 6.1(c) (Compliance Certificate), the
Applicable Margin from and including the 46th day after the end of such Fiscal
Quarter or the 91st day after the end of such Fiscal Year, as the case may be,
to but not including the date the Borrower delivers to the Administrative Agent
such Compliance Certificate shall equal the highest possible Applicable Margin
set forth above.
"Applicable Unused Commitment Fee Rate" means from and after
the Closing Date, a per annum rate equal to the rate set forth below opposite
the then applicable Total Liabilities to Consolidated Tangible Net Worth Ratio
(determined for the twelve-month period ending on the last day of the most
recent Fiscal Quarter or Fiscal Year, as applicable, for which a Compliance
Certificate has been delivered pursuant to Section 6.1 (Financial Statements))
set forth below:
TOTAL LIABILITIES TO CONSOLIDATED APPLICABLE UNUSED
TANGIBLE NET WORTH RATIO COMMITMENT FEE RATE
--------------------------------- -------------------
Greater than or equal to 2.25 to 1 0.50%
Less than 2.25 to 1 and greater than or equal to 2.00 to 1 0.45%
Less than 2.00 to 1 and equal to or greater than 1.75 to 1 0.40%
Less than 1.75 to 1 and equal to or greater than 1.50 to 1 0.375%
Less than 1.50 to 1 0.35%
Subsequent changes in the Applicable Unused Commitment Fee Rate resulting from a
change in the Total Liabilities to Consolidated Tangible Net Worth Ratio shall
become effective upon the delivery by the Borrower to the Administrative Agent
of a new Compliance Certificate required to be delivered pursuant to Section
6.1(c) (Compliance Certificate) as of the last day such Compliance Certificate
was required to be delivered pursuant to Section 6.1(c) (Compliance
Certificate). Notwithstanding anything to the contrary set forth in this
Agreement (including the then effective Total Liabilities to Consolidated
Tangible Net Worth Ratio), if the Borrower shall fail to deliver such Compliance
Certificate within any of the time periods specified in Section 6.1(c)
(Compliance Certificate), the Applicable Unused Commitment Fee from and
including the 46th day after the end of such Fiscal Quarter or the 91st day
after the end of such Fiscal Year, as the case may be, to but not including the
date the Borrower delivers to the Administrative Agent such Compliance
Certificate shall equal the highest possible Applicable Unused Commitment Fee
Rate set forth above. Notwithstanding the foregoing, the Applicable Unused
Commitment Fee shall be increased by 25 basis points in the event that the
average daily amount by which the Revolving Credit Commitments exceed the amount
of the Revolving Credit Outstandings less the amount of any outstanding Swing
Loans for the immediately preceding two calendar quarters, calculated on a
quarterly basis, is greater than 75% of the Revolving Credit Commitments. The
Unused Commitment Fee shall continue to be equal to the sum of the Applicable
Unused Commitment Fee Rate plus 25 basis points until the average daily amount
by which the Revolving Credit Commitments exceed the amount of the Revolving
Credit Outstandings less the amount of any outstanding Swing Loans for the
immediately preceding calendar quarter is less than 75% of the Revolving Credit
Commitments for the immediately preceding calendar quarter.
3
"Approved Fund" means, with respect to any Fund that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or Affiliate of an entity that administers or manages a Lender.
"Arranger" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., in its capacity as
sole arranger and sole book manager.
"Asset Sale" has the meaning specified in Section 8.4 (Sale of
Assets).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit A.
"Assumption Agreement" means an assumption agreement entered
into by a Lender or an Eligible Assignee, and accepted by the Administrative
Agent, substantially in the form of Exhibit B.
"Available Credit" means, at any time, an amount equal to (a)
the Maximum Credit, minus (b) the aggregate Revolving Credit Outstandings at
such time.
"Bankruptcy Code" means title 11, United States Code, as
amended from time to time.
"Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of the following:
(a) the rate of interest announced publicly by
Citibank in
New York,
New York, from time to time, as
Citibank's base rate;
(b) the sum (adjusted to the nearest 0.25% or, if
there is no nearest 0.25%, to the next higher 0.25%) of:
(i) 0.5% per annum,
(ii) the rate per annum obtained by dividing
(A) the latest three-week moving
average of secondary market morning offering
rates in the United States for three-month
certificates of deposit of major United
States money market banks, such three-week
moving average being determined weekly on
each Monday (or, if any such day is not a
Business Day, on the next succeeding
Business Day) for the three-week period
ending on the previous Friday by Citibank on
the basis of such rates reported by
certificate of deposit dealers to and
published by the Federal Reserve Bank of
New
York or, if such publication shall be
suspended or terminated, on the basis of
quotations for such rates received by
Citibank from three New
4
York certificate of deposit dealers of
recognized standing selected by Citibank, by
(B) a percentage equal to 100% minus
the average of the daily percentages
specified during such three-week period by
the Federal Reserve Board for determining
the maximum reserve requirement (including
any emergency, supplemental or other
marginal reserve requirement) for Citibank
in respect of liabilities consisting of or
including (among other liabilities)
three-month U.S. dollar nonpersonal time
deposits in the United States, and
(iii) the average during such three-week
period of the maximum annual assessment rates
estimated by Citibank for determining the then
current annual assessment payable by Citibank to the
Federal Deposit Insurance Corporation (or any
successor) for insuring Dollar deposits in the United
States; and
(c) 0.5% per annum plus the Federal Funds Rate.
"Base Rate Loan" means any Loan during any period in which it
bears interest based on the Base Rate.
"Borrowing" means a borrowing consisting of Loans made on the
same day by the Lenders ratably according to their respective Revolving Credit
Commitments.
"Borrowing Base" means, at any time, the sum of:
(a) the product of the Advance Rate then in effect
for Unimproved Land and the GAAP Value of all Unimproved Land
owned by the Borrower or any Guarantor;
(b) the product of the Advance Rate then in effect
for Land/Lots Under Development and the GAAP Value of all
Land/Lots Under Development owned by the Borrower or any
Guarantor;
(c) the product of the Advance Rate then in effect
for Finished Lots and the GAAP Value of all Finished Lots
owned by the Borrower or any Guarantor;
(d) the product of the Advance Rate then in effect
for Unsold Homes Under Construction and the GAAP Value of all
Unsold Homes Under Construction owned by the Borrower or any
Guarantor;
(e) the product of the Advance Rate then in effect
for Completed Unsold Homes Less Than 180 Days Since Completion
and the GAAP Value of all Completed Unsold Homes Less Than 180
Days Since Completion owned by the Borrower or any Guarantor;
(f) the product of the Advance Rate then in effect
for Completed Unsold Homes Over 180 Days Since Completion and
the GAAP Value of all Completed
5
Unsold Homes Over 180 Days Since Completion owned by the
Borrower or any Guarantor;
(g) the product at the Advance Rate then in effect
for Sold Homes and the GAAP Value of all Sold Homes owned by
the Borrower and any Guarantor; and
(h) the product of the Advance Rate then in effect
for Escrow Proceeds Receivables and the Dollar amount of
Escrow Proceeds Receivables held in escrow for the benefit of
the Borrower or any Guarantor;
provided, however, that (i) at no time shall more than 10% of the Borrowing Base
be comprised of Unimproved Land, (ii) at no time shall more than 5% of the
Borrowing Base be comprised of Completed Unsold Homes Over 180 Days Since
Completion, (iii) all assets of the Borrower and the Guarantors included in the
Borrowing Base shall not be subject to any Lien (other than Customary Permitted
Liens) and shall be owned 100% by the Borrower or a Guarantor, and (iv) (x)
during the period beginning on the Closing Date and ending on the first
anniversary of the Closing Date, no more than 60% of the Borrowing Base shall be
comprised of Land/Lots Under Development and Finished Lots, (y) during the
period beginning on the day after the first anniversary of the Closing Date and
ending on the second anniversary of the Closing Date, no more than 55% of the
Borrowing Base shall be comprised of Land/Lots Under Development and Finished
Lots, and (z) thereafter no more than 50% of the Borrowing Base shall be
comprised of Land/Lots Under Development and Finished Lots.
"Borrowing Base Assets" means the Unimproved Land, Land/Lots
Under Development, Finished Lots, Unsold Homes Under Construction, Completed
Unsold Homes Less Than 180 Days Since Completion, Completed Unsold Homes Over
180 Days Since Completion, Sold Homes and Escrow Proceeds Receivables included
in the calculation of the Borrowing Base.
"Borrowing Base Certificate" means a certificate of the
Borrower substantially in the form of Exhibit F.
"Business Day" means a day of the year on which banks are not
required or authorized to close in
New York City and, if the applicable Business
Day relates to notices, determinations, fundings and payments in connection with
the Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in
Dollar deposits are also carried on in the London interbank market.
"Capital Expenditures" means, with respect to any Person for
any period, the aggregate of amounts that would be reflected as additions to
property, plant or equipment on a Consolidated balance sheet of such Person and
its Subsidiaries prepared in conformity with GAAP, excluding interest
capitalized during construction.
"Capital Lease" means, with respect to any Person, any lease
of, or other arrangement conveying the right to use, property by such Person as
lessee that would be accounted for as a capital lease on a balance sheet of such
Person prepared in conformity with GAAP.
6
"Capital Lease Obligations" means, with respect to any Person,
the capitalized amount of all obligations of such Person or any of its
Subsidiaries under Capital Leases, as determined on a Consolidated basis in
conformity with GAAP.
"Cash Collateral Account" has the meaning specified in the
Pledge Agreement.
"Cash Equivalents" means (a) securities issued or fully
guaranteed or insured by the United States government or any agency thereof, (b)
certificates of deposit, eurodollar time deposits, overnight bank deposits and
bankers' acceptances of any commercial bank organized under the laws of the
United States, any state thereof, the District of Columbia, any foreign bank, or
its branches or agencies (fully protected against currency fluctuations) which,
at the time of acquisition, are rated at least "A-1" by Standard & Poor's Rating
Services ("S&P") or "P-1" by ▇▇▇▇▇'▇ Investors Services, Inc. ("Moody's"), (c)
commercial paper of an issuer rated at least "A-1" by S&P or "P-1" by Moody's,
and (d) shares of any money market fund that (i) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (a),
(b) and (c) above, (ii) has net assets of not less than $500,000,000 and (iii)
is rated at least "A-1" by S&P or "P-1" by Moody's; provided, however, that the
maturities of all obligations of the type specified in clauses (a), (b) and (c)
above shall not exceed 180 days.
"Change of Control" means the occurrence of any of the
following events: (a) if any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act or any successor provisions to
either of the preceding), including any group acting for the purpose of
acquiring, holding, voting or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act, other than any one or more of the Permitted
Holders, becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, except that a person will be deemed to have "beneficial ownership"
of all shares that any such person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of 40% or more of the total voting power of the Voting Stock of the
Borrower; (for purposes of this clause (a), such person or group shall be deemed
to beneficially own any Voting Stock of a corporation held by any other
corporation (the "parent corporation") so long as such person or group
beneficially owns, directly or indirectly, in the aggregate a majority of the
total voting power of the Voting Stock of such parent corporation); or (b)
during any period of two consecutive years, individuals who at the beginning of
such period constituted the board of directors of TOI (together with any new
directors whose election or appointment by such board of directors or whose
nomination for election by the shareholders of TOI was approved by a vote of not
less than two-thirds of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the board of directors of TOI then in office; or (c) the
shareholders of the Borrower shall have approved any plan of liquidation or
dissolution of the Borrower; or (d) ▇▇▇▇▇▇▇ ▇. Mon (or a successor approved by
the Requisite Lenders) shall no longer be the chief executive officer of the
Borrower, and a successor chief executive officer satisfactory to the Requisite
Lenders shall not have (i) been appointed to such office within 120 days of the
date on which ▇▇▇▇▇▇▇ ▇. Mon (or his approved successor) ceased to be the chief
executive officer of the Borrower and (ii) assumed such office within 180 days
of such date; or (e) any "change of control" as defined in the Senior Note
Indenture or Subordinated Note Indenture has occurred.
7
"Citibank" means Citibank, N.A., a national banking
association.
"Closing Date" means the first date on which any Loan is made
or any Letter of Credit is issued.
"CNAI" has the meaning specified in the preamble to this
Agreement.
"Code" means the Internal Revenue Code of 1986 (or any
successor legislation thereto), as amended from time to time.
"Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Loan Party in or upon
which a Lien is granted under any of the Collateral Documents.
"Collateral Documents" means the Pledge Agreement, and any
other document executed and delivered by a Loan Party granting a Lien on any of
its property to secure payment of the Secured Obligations.
"Completed Unsold Homes Less Than 180 Days Since Completion"
means, as of any date, all Units (including all Model Homes), for which
construction has been "completed" less than 180 days before such date, but for
which there is in existence no written Contract for Sale. Construction will be
considered "completed" when the temporary certificate of occupancy or the
certificate of occupancy has been issued. Notwithstanding the foregoing, Model
Homes will continue to be considered Completed Unsold Homes Less Than 180 Days
Since Completion until the date which is 180 days after the last production unit
in the particular real estate project (for which such Model Home is used as a
model) has been closed.
"Completed Unsold Homes Over 180 Days Since Completion" means,
as of any date, all Units (including all Model Homes), for which construction
has been "completed" over 180 days before such date but less than 360 days
before such date, and for which there is in existence no written Contract for
Sale. Construction will be considered "completed" when the temporary certificate
of occupancy or the certificate of occupancy has been issued.
"Compliance Certificate" has the meaning specified in Section
6.1(c) (Compliance Certificate).
"Consolidated" means, with respect to any Person, the
consolidation of accounts of such Person and its Subsidiaries in accordance with
GAAP.
"Consolidated Net Income" means, for any Person for any
period, the net income (or loss) of such Person and its Subsidiaries for such
period, determined on a Consolidated basis in conformity with GAAP provided,
however, that (a) the net income of any other Person in which such Person or one
of its Subsidiaries has a joint interest with a third party (which interest does
not cause the net income of such other Person to be Consolidated into the net
income of such Person in accordance with GAAP) shall be included only to the
extent of the amount of dividends or distributions paid to such Person or
Subsidiary, (b) the net income of any Subsidiary of such Person that is subject
to any restriction or limitation on the payment of dividends or the making of
other distributions shall be excluded to the extent of such restriction or
limitation, (c) the net income (or loss) of any Person acquired in a pooling of
interest transaction for any period prior to the date of such acquisition shall
be excluded and (d) extraordinary gains and losses and any one-
8
time increase or decrease to net income that is required to be recorded because
of the adoption of new accounting policies, practices or standards required by
GAAP shall be excluded.
"Consolidated Tangible Net Worth" means for the Borrower, at
any date, the Net Worth of the Borrower and its Subsidiaries at such date
determined on a Consolidated basis in conformity with GAAP, excluding, however,
from the determination of the Total Assets of such Person at such date, (a) all
unamortized goodwill, organizational expenses, research and development
expenses, trademarks, trade names, copyrights, patents, patent applications,
licenses and rights in any thereof, and other similar intangibles, (b)
Securities which are not readily marketable, (c) cash held in a sinking or other
analogous fund established for the purpose of redemption, retirement or
prepayment of any Stock or Indebtedness, (d) any write-up in the book value of
any asset resulting from a revaluation thereof, (e) any amounts that pertain to
or are attributable to the Borrower's or any of its Subsidiaries' equity
interest in any Subsidiary of the Borrower that is in default with respect to
the payment of monetary obligations owing under any land loan, acquisition and
development loan, construction loan, secured or unsecured credit facility, or
any other loan or indebtedness for borrower money, net of any income tax
benefits to be realized upon write-off of such amounts and (f) any items not
included in clauses (a) through (e) above which are treated as intangibles in
conformity with GAAP.
"Constituent Documents" means, with respect to any Person, (a)
the articles of incorporation, certificate of incorporation or certificate of
formation (or the equivalent organizational documents) of such Person, (b) the
by-laws or operating agreement (or the equivalent governing documents) of such
Person and (c) any document setting forth the manner of election and duties of
the directors or managing members of such Person (if any) and the designation,
amount or relative rights, limitations and preferences of any class or series of
such Person's Stock.
"Contaminant" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.
"Contract For Sale" means a sale and purchase agreement
between the Borrower or one of its Subsidiaries and an unrelated third party
purchaser, who has made an ▇▇▇▇▇▇▇ money deposit of not less than $250 and who
has been pre-qualified by the Borrower, one of its Subsidiaries or an
institutional lender; provided, however, that such agreement shall not contain
any contingency clause other than a clause conditioning such purchaser's
obligation upon the sale of such purchaser's property.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any
of its property is subject.
"Customary Permitted Liens" means, with respect to any Person,
any of the following Liens:
(a) Liens with respect to the payment of taxes,
assessments or governmental charges in each case that are not
yet due or that are being contested
9
in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are
being maintained to the extent required by GAAP;
(b) Liens of landlords arising by statute and liens
of suppliers, mechanics, carriers, materialmen, warehousemen
or workmen and other liens imposed by law created in the
ordinary course of business for amounts not yet due or that
are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent
required by GAAP;
(c) deposits made in the ordinary course of business
in connection with workers' compensation, unemployment
insurance or other types of social security benefits or to
secure the performance of bids, tenders, sales, options,
contracts (other than for the repayment of borrowed money) and
surety, appeal, customs, payment or performance bonds;
(d) encumbrances arising by reason of zoning
restrictions, easements, licenses, reservations, covenants,
rights-of-way, utility easements, building restrictions and
other similar encumbrances on the use of real property which
do not materially detract from the value of such real property
or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property;
(e) encumbrances arising under leases or subleases of
real property which do not in the aggregate materially detract
from the value of such real property or interfere with the
ordinary conduct of the business conducted and proposed to be
conducted at such real property; and
(f) financing statements with respect to a lessor's
rights in and to personal property leased to such Person in
the ordinary course of such Person's business.
"Debt Issuance" means the incurrence of Indebtedness of the
type specified in clause (a) or (b) of the definition of "Indebtedness" by the
Borrower or any of its Subsidiaries.
"Default" means any event that with the passing of time or the
giving of notice or both would become an Event of Default.
"Disclosure Documents" means, collectively, (a) the
Information Statement, filed by Newmark with the Securities and Exchange
Commission on April 9, 2002, as amended from time to time through June 3, 2002,
and (b) the Preliminary Offering Memorandum dated June 4, 2002, as amended from
time to time through the date of the issuance of the Notes.
"Disqualified Stock" means with respect to any Person, any
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Indebtedness of such Person, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the Scheduled Termination Date.
10
"Documentary Letter of Credit" means any Letter of Credit that
is drawable upon presentation of documents evidencing the sale or shipment of
goods purchased by the Borrower or any of its Subsidiaries in the ordinary
course of its business.
"Dollars" and the sign "$" each mean the lawful money of the
United States of America.
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule II or on the Assignment and Acceptance by which it became a
Lender or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
"Domestic Subsidiary" means any Subsidiary of the Borrower
organized under the laws of any state of the United States of America or the
District of Columbia.
"Eligible Assignee" means (a) a Lender or any Affiliate or
Approved Fund of such Lender; (b) a commercial bank having total assets in
excess of $5,000,000,000; (c) a finance company, insurance company, or any other
financial institution or fund, in each case reasonably acceptable to the
Administrative Agent and regularly engaged in making, purchasing or investing in
loans, and having a net worth, determined in accordance with GAAP, in excess of
$250,000,000 (or, to the extent net worth is less than such amount, a finance
company, insurance company, other financial institution or fund, reasonably
acceptable to the Administrative Agent and, so long as there is no Event of
Default continuing, the Borrower) or (d) a savings and loan association or
savings bank organized under the laws of the United States or any State thereof
having a net worth, determined in accordance with GAAP, in excess of
$250,000,000.
"▇▇▇▇▇" means ▇▇▇▇▇ Holdings Corp., a Delaware corporation.
"Entitled Land" means all land, owned by the Borrower or its
Subsidiaries as part of their respective real estate development business, that
has all requisite residential zoning for the construction of Units.
"Environmental Laws" means all applicable Requirements of Law
now or hereafter in effect, as amended or supplemented from time to time,
relating to pollution or the regulation and protection of human health, safety,
the environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C.
Section 1801 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended (7 U.S.C. Section 136 et seq.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Section 6901 et seq.); the Toxic Substance
Control Act, as amended (42 U.S.C. Section 7401 et seq.); the Clean Air Act, as
amended (42 U.S.C. Section 740 et seq.); the Federal Water Pollution Control
Act, as amended (33 U.S.C. Section 1251 et seq.); the Occupational Safety and
Health Act, as amended (29 U.S.C. Section 651 et seq.); the Safe Drinking Water
Act, as amended (42 U.S.C. Section 300f et seq.); and each of their state and
local counterparts or equivalents and any transfer of ownership notification or
approval statute, including the New Jersey Industrial Site Recovery Act (N.J.
Stat. ▇▇▇. Section 13:1K-6 et seq.).
"Environmental Liabilities and Costs" means, with respect to
any Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and
11
expenses of counsel, experts and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest incurred as a
result of any claim or demand by any other Person, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
including any thereof arising under any Environmental Law, Permit, order or
agreement with any Governmental Authority or other Person, which relate to any
environmental, health or safety condition or a Release or threatened Release,
and result from the past, present or future operations of, or ownership of
property by, such Person or any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"Equity Issuance" means the issue or sale of any Stock of the
Borrower or any of the Subsidiaries of the Borrower by TOI, the Borrower or any
of the Subsidiaries of the Borrower to any Person other than the Borrower or any
of such Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of
1974 (or any successor legislation thereto), as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414 (b), (c),
(m) or (o) of the Code.
"ERISA Event" means (a) a reportable event described in
Section 4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with
respect to a Title IV Plan with respect to which the notice requirement has not
been waived pursuant to applicable regulations; (b) the withdrawal of the
Borrower, any of its Subsidiaries or any ERISA Affiliate from a Title IV 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; (c) the
complete or partial withdrawal of the Borrower, any of its Subsidiaries or any
ERISA Affiliate from any Multiemployer Plan; (d) notice of reorganization or
insolvency of a Multiemployer Plan; (e) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (f) the institution of proceedings to terminate a
Title IV Plan by the PBGC; (g) the failure of the Borrower, any of its
Subsidiaries or any ERISA Affiliate to make any required contribution to a Title
IV Plan or Multiemployer Plan; (h) the imposition of a lien under Section 412 of
the Code or Section 302 of ERISA on the Borrower or any of its Subsidiaries or
any ERISA Affiliate; or (i) any other event or condition which might reasonably
be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Title IV Plan
or the imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA.
"Escrow Proceeds Receivables" means, with respect to the
Borrower and any of its Subsidiaries that is a Loan Party at a particular date,
the aggregate amount of funds held in escrow by a title company or other
acceptable escrow agent which are payable (without any requirement of the
satisfaction or waiver of any further condition) to the Borrower or such
Subsidiary and which constitute proceeds of sales of Units.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Federal Reserve Board, as in effect from time to
time.
12
"Eurodollar Base Rate" means, with respect to any Interest
Period for any Eurodollar Rate Loan, the rate determined by the Administrative
Agent to be the offered rate for deposits in Dollars for the applicable Interest
Period appearing on the Dow ▇▇▇▇▇ Markets Telerate Page 3750 as of 11:00 a.m.,
London time, two Business Days prior to the first day of each Interest Period.
In the event that such rate does not appear on the Dow ▇▇▇▇▇ Markets Telerate
Page 3750 (or otherwise on the Dow ▇▇▇▇▇ Markets screen), the Eurodollar Base
Rate for the purposes of this definition shall be determined by reference to
such other comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule II or on the Assignment and Acceptance by which it became a
Lender (or, if no such office is specified, its Domestic Lending Office) or such
other office of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period
for any Eurodollar Rate Loan, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the Eurodollar Base Rate by (b) a percentage
equal to 100% minus the reserve percentage applicable two Business Days before
the first day of such Interest Period under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in
New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the Eurodollar Rate is determined) having a term equal to
such Interest Period.
"Eurodollar Rate Loan" means any Loan that, for an Interest
Period, bears interest based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1
(Events of Default).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Extending Lender" has the meaning specified in Section
2.18(c).
"Extension Assuming Lender" has the meaning specified in
Section 2.18(c).
"Facility" means the Revolving Credit Commitments and the
provisions herein related to the Revolving Loans, Swing Loans and Letters of
Credit.
"Facility Extension" has the meaning specified in Section 2.18
(Facility Extension).
"Facility Increase" has the meaning specified in Section 2.19
(Facility Increase).
"Facility Increase Effective Date" has the meaning specified
in Section 2.19 (Facility Increase).
"Fair Market Value" means (a) with respect to any asset or
group of assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such
13
asset at such date assuming a sale by a willing seller to a willing purchaser
dealing at arm's length and arranged in an orderly manner over a reasonable
period of time having regard to the nature and characteristics of such asset, as
reasonably determined by the Board of Directors of the Borrower, or, if such
asset shall have been the subject of a relatively contemporaneous appraisal by
an independent third party appraiser, the basic assumptions underlying which
have not materially changed since its date, the value set forth in such
appraisal, and (b) with respect to any marketable Security at any date, the
closing sale price of such Security on the Business Day next preceding such
date, as appearing in any published list of any national securities exchange or
the Nasdaq Stock Market or, if there is no such closing sale price of such
Security, the final price for the purchase of such Security at face value quoted
on such business day by a financial institution of recognized standing which
regularly deals in securities of such type selected by the Administrative Agent.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of
New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any successor thereto.
"Fee Letter" shall mean the letter dated as of March 22, 2002,
addressed to the Borrower from CNAI and the Arranger and accepted by the
Borrower on March 22, 2002, with respect to certain fees to be paid from time to
time to CNAI and the Arranger.
"Financial Statements" means the financial statements of the
Borrower and its Subsidiaries delivered in accordance with Section 4.4
(Financial Statements) and 6.1 (Financial Statements).
"Finished Lots" means lots of Entitled Land as to which
offsite construction has been substantially completed, utilities and all major
infrastructure have been completed and stubbed to the site, and building permits
for Units may be promptly pulled and construction commenced by the Borrower
without the satisfaction of any further conditions.
"Fiscal Quarter" means each of the three month periods ending
on March 31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December
31.
"Fixed Charge Coverage Ratio" means, with respect to the
Borrower for any period, the ratio of (a) Adjusted EBITDA of the Borrower for
such period minus Capital Expenditures of the Borrower for such period to (b)
the Fixed Charges of the Borrower for such period.
"Fixed Charges" means, with respect to the Borrower for any
period, the sum of (a) the Interest Incurred of the Borrower for such period
determined on a Consolidated basis,
14
(b) the principal amount of Indebtedness (other than surety bonds, performance
bonds and undrawn letters of credit incurred, in each case, in the ordinary
course of business) of the Borrower and each of its Subsidiaries determined on a
Consolidated basis having a scheduled due date during such period and (c) all
cash dividends payable by the Borrower and its Subsidiaries on Stock in respect
of such period to Persons other than the Borrower and its Subsidiaries.
"Fund" means any Person (other than a natural Person) that is
or will be engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"GAAP Value" means, with respect to each Borrowing Base Asset,
the GAAP basis asset value for such property or asset (but in no event greater
than cost minus accumulated depreciation). In determining GAAP Value, costs for
Land/Lots Under Development and Unimproved Land shall include land costs and
costs associated with obtaining requisite zoning requirements and governmental
approvals, capitalized expenses associated with pulling permits and the
commencement of physical site improvement and soft and hard costs incurred, and
costs for Finished Lots, Unsold Units and Sold Homes shall include the
proportional costs of (a) the land per lot/unit, and (b) the site improvements
and soft and hard costs incurred; and the cost of any land which is subject to a
purchase option shall be excluded until the Borrower has acquired title.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantor" means each Subsidiary of the Borrower party to the
Guaranty.
"Guaranty" means the guaranty, in substantially the form of
Exhibit I, executed by each Subsidiary of the Borrower named therein or that has
executed a Guaranty Supplement pursuant to Section 7.13 (Additional Collateral
and Guaranties).
"Guaranty Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person with
respect to any Indebtedness of another Person, if the purpose or intent of such
Person in incurring the Guaranty Obligation is to provide assurance to the
obligee of such Indebtedness that such Indebtedness will be paid or discharged,
or that any agreement relating thereto will be complied with, or that any holder
of such Indebtedness will be protected (in whole or in part) against loss in
respect thereof including, (a) the direct or indirect guaranty, endorsement
(other than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of
Indebtedness of another Person and (b) any liability of such Person for
Indebtedness of another Person through any agreement (contingent or otherwise)
(i) to purchase, repurchase or otherwise acquire such Indebtedness or any
security therefor, or to provide funds for the payment or discharge of such
Indebtedness (whether in the form of a loan, advance, stock purchase, capital
15
contribution or otherwise), (ii) to maintain the solvency or any balance sheet
item, level of income or financial condition of another Person, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance by
any other party or parties to an agreement, (iv) to purchase, sell or lease (as
lessor or lessee) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Indebtedness or to assure
the holder of such Indebtedness against loss, or (v) to supply funds to or in
any other manner invest in such other Person (including to pay for property or
services irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of clause (b) of this sentence the primary purpose or intent
thereof is to provide assurance that Indebtedness of another Person will be paid
or discharged, that any agreement relating thereto will be complied with or that
any holder of such Indebtedness will be protected (in whole or in part) against
loss in respect thereof. The amount of any Guaranty Obligation shall be equal to
the guaranteed amount of the Indebtedness which is guaranteed or otherwise
supported by such Guaranty Obligation.
"Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements, and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments that bear
interest, (c) all reimbursement and all obligations with respect to letters of
credit, bankers' acceptances, surety bonds and performance bonds incurred other
than in the ordinary course, whether or not matured, (d) all indebtedness for
the deferred purchase price of property or services, other than trade payables
incurred in the ordinary course of business that are not overdue, (e) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (f) all Capital Lease Obligations of such Person and the present
value of future rental payments under all synthetic leases, (g) all Guaranty
Obligations of such Person, (h) all obligations of such Person to purchase,
redeem, retire, defease or otherwise acquire for value any Stock or Stock
Equivalents of such Person, valued, in the case of redeemable preferred stock,
at the greater of its voluntary liquidation preference and its involuntary
liquidation preference plus accrued and unpaid dividends, (i) all payments that
such Person would have to make in the event of an early termination on the date
Indebtedness of such Person is being determined in respect of Hedging Contracts
of such Person and (j) all Indebtedness of the type referred to above secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in property (including Accounts
and general intangibles) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness but only to the
extent of the lesser of (x) the amount of such Indebtedness and (y) the Fair
Market Value of the property securing such Indebtedness.
"Indemnified Matter" has the meaning specified in Section 11.4
(Indemnities).
"Indemnitees" has the meaning specified in Section 11.4
(Indemnities).
16
"Interest Expense" means, for any Person for any period, (a)
total interest expense of such Person and its Subsidiaries for such period
determined on a Consolidated basis in conformity with GAAP and including, in any
event, interest expensed through cost of goods sold in such period and net costs
under Interest Rate Contracts for such period minus (b) net gains of such Person
and its Subsidiaries under Interest Rate Contracts for such period determined on
a Consolidated basis in conformity with GAAP.
"Interest Incurred" means for any period, without duplication,
the aggregate amount of interest that, in conformity with GAAP, would be set
forth opposite the caption "interest expense" or any like caption on a
Consolidated income statement of the Borrower and its Subsidiaries or allocated
to joint ventures, or otherwise (including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, the net costs associated with Interest Rate
Contracts, and the interest portion of any deferred payment obligation) and,
without duplication, all capitalized interest for such period, all interest
attributable to discontinued operations for such period, and all interest
actually paid by the Borrower and its Subsidiaries on a consolidated basis, in
each case, to the extent not set forth opposite the caption "interest expense"
or any like caption on a Consolidated income statement for the Borrower and its
Subsidiaries, minus any interest income of the Borrower and its Subsidiaries for
such period determined on a Consolidated basis in conformity with GAAP, plus the
product of (a) cash dividends paid on any preferred stock of the Borrower,
multiplied by (b) a fraction, the numerator of which is one, and the denominator
of which is one minus the then current aggregate federal, state and local tax
rate of the Borrower expressed as a decimal.
"Interest Period" means, in the case of any Eurodollar Rate
Loan, (a) initially, the period commencing on the date such Eurodollar Rate Loan
is made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one, two, three or six months thereafter as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion or Continuation
given to the Administrative Agent pursuant to Section 2.2 (Borrowing Procedures)
or 2.11 (Conversion/Continuation Option), and (b) thereafter, if such Loan is
continued, in whole or in part, as a Eurodollar Rate Loan pursuant to Section
2.11 (Conversion/Continuation Option), a period commencing on the last day of
the immediately preceding Interest Period therefor and ending one, two, three or
six months thereafter as selected by the Borrower in its Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.11
(Conversion/Continuation Option); provided, however, that all of the foregoing
provisions relating to Interest Periods in respect of Eurodollar Rate Loans are
subject to the following:
(i) if any Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day, unless the result of such extension would
be to extend such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
17
(iii) the Borrower may not select any Interest Period in
respect of Loans having an aggregate principal amount of less than
$5,000,000; and
(iv) there shall be outstanding at any one time no more than
six Interest Periods in the aggregate.
"Interest Rate Contracts" means all interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements and
interest rate insurance.
"Investment" means, with respect to any Person, (a) any
purchase or other acquisition by such Person of (i) any Security issued by, (ii)
a beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by such Person of all
or a significant part of the assets of a business conducted by another Person or
all or substantially all of the assets constituting the business of a division,
branch or other unit operation of any other Person, and (c) any loan, advance
(other than deposits with financial institutions available for withdrawal on
demand, prepaid expenses, accounts receivable and similar items made or incurred
in the ordinary course of business as presently conducted), or capital
contribution by such Person to any other Person, including all Indebtedness of
any other Person to such Person arising from a sale of property by such Person
other than in the ordinary course of its business and (d) any Guaranty
Obligation incurred by such Person in respect of Indebtedness of any other
Person.
"IRS" means the Internal Revenue Service of the United States
or any successor thereto.
"Issue" means, with respect to any Letter of Credit, to issue,
extend the expiry of, renew or increase the maximum stated amount (including by
deleting or reducing any scheduled decrease in such maximum stated amount) of,
such Letter of Credit. The terms "Issued" and "Issuance" shall have a
corresponding meaning.
"Issuer" means each Lender or Affiliate of a Lender that (a)
is listed on the signature pages hereof as an "Issuer" or (b) hereafter becomes
an Issuer with the approval of the Administrative Agent and the Borrower by
agreeing pursuant to an agreement with and in form and substance satisfactory to
the Administrative Agent and the Borrower to be bound by the terms hereof
applicable to Issuers.
"Landholding Interest" means any land-holding joint venture
(or the proceeds thereof) of any (i) Wholly-Owned Subsidiary of the Borrower
that purchases and jointly develops a fractional undivided interest in land, or
(ii) Subsidiary of the Borrower that is not a Wholly-Owned Subsidiary but is
formed for the purpose of entering into a specific project which purchases a
whole and undivided interest in land.
"Land/Lots Under Development" means Entitled Land on which
grading or construction of on-site infrastructure improvements has begun, and
for which all necessary zoning approvals have been obtained and are in full
force and effect, and which does not qualify as a Sold Home or an Unsold Home
Under Construction.
"Leases" means, with respect to any Person, all of those
leasehold estates in real property of such Person, as lessee, as such may be
amended, supplemented or otherwise modified from time to time.
18
"Lender" means each financial institution or other entity that
(a) is listed on the signature pages hereof as a "Lender" or (b) from time to
time becomes a party hereto by execution of an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued or deemed
issued pursuant to Section 2.4 (Letters of Credit).
"Letter of Credit Obligations" means, at any time, the
aggregate of all liabilities at such time of the Borrower to all Issuers with
respect to Letters of Credit, whether or not any such liability is contingent,
and includes the sum of (a) the Reimbursement Obligations at such time and (b)
the Letter of Credit Undrawn Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning
specified in Section 2.4(e).
"Letter of Credit Request" has the meaning specified in
Section 2.4(c).
"Letter of Credit Undrawn Amounts" means, at any time, the
aggregate undrawn face amount of all Letters of Credit outstanding at such time.
"Lien" means any pledge, hypothecation, assignment, charge,
deposit arrangement, encumbrance, lien (statutory or other), security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever intended to assure payment of any Indebtedness
or the performance of any other obligation, including any conditional sale or
other title retention agreement, the interest of a lessor under a Capital Lease,
mortgage, deed of trust, lease, option, right of first refusal, easement,
servitude, right-of-way, license, securities purchase option, call or similar
right, restrictions under any shareholder agreement or any other Contractual
Obligation, encumbrance or any other restriction or limitation whatsoever on any
right incident to the ownership of property (including rights to transfer, use
or possess property) whether contingent or non-contingent, matured or unmatured,
known or unknown, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the UCC or comparable law of any jurisdiction naming the owner of the asset to
which such financing statement relates as debtor.
"Loan" means any loan made by any Lender pursuant to this
Agreement.
"Loan Documents" means, collectively, this Agreement, the
Revolving Credit Notes (if any), the Guaranty, the Fee Letter, each Letter of
Credit Reimbursement Agreement, each Hedging Contract to which a Loan Party and
a Lender or an Affiliate of a Lender is a party entered into in connection
herewith, each agreement pursuant to which a Lender or an Affiliate of a Lender
provides cash management services to a Loan Party, the Collateral Documents and
each certificate, agreement or document executed by a Loan Party and delivered
to the Administrative Agent or any Lender in connection with or pursuant to any
of the foregoing.
"Loan Party" means each of the Borrower, each Guarantor and
each other Subsidiary of the Borrower that executes and delivers a Loan
Document.
"Management Services Agreement" means the Management Services
Agreement, dated as of June 1, 2000 between the Borrower and TOI.
19
"Material Adverse Change" means a material adverse change in
any of (a) the business, condition (financial or otherwise), performance,
properties or prospects, operations or properties of any Loan Party or the
Borrower and its Subsidiaries, taken as a whole, (b) the legality, validity or
enforceability of any Loan Document or any Related Document, (c) the perfection
or priority of the Liens granted pursuant to the Collateral Documents, (d) the
ability of the Borrower or of the other Loan Parties to perform their respective
obligations under the Loan Documents, or (e) the rights and remedies of the
Administrative Agent, the Lenders or Issuers under any of the Loan Documents.
"Material Adverse Effect" means an effect that results in or
causes, or could reasonably be expected to result in or cause, a Material
Adverse Change.
"Maximum Credit" means, at any time, the lesser of (a) the
Revolving Credit Commitments in effect at such time and (b) the amount by which
Borrowing Base at such time exceeds the amount of the Other Indebtedness
outstanding at such time.
"Merger" shall mean the merger of ▇▇▇▇▇ with and into Newmark,
with Newmark being the surviving entity pursuant to, and in consummation of the
transaction contemplated by, the Merger Agreement.
"Merger Agreement" means the Merger Agreement, dated as of
April 6, 2002, between ▇▇▇▇▇ and Newmark, pursuant to which subject to certain
terms and conditions ▇▇▇▇▇ will merge with and into Newmark and Newmark shall be
the surviving corporation.
"Model Homes" means all Units which are used as models or
sales offices to market a particular real estate development project.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or
any ERISA Affiliate has any obligation or liability, contingent or otherwise.
"Net Cash Proceeds" means proceeds received by the Borrower or
any of its Subsidiaries after the Closing Date in cash or Cash Equivalents from
any (a) Asset Sale, other than an Asset Sale permitted under clauses (a), (b)
and (d) of Section 8.4 (Sale of Assets), net of (i) the reasonable cash costs of
sale, assignment or other disposition, (ii) taxes paid or reasonably estimated
to be payable as a result thereof and (iii) any amount required to be paid or
prepaid on Indebtedness (other than the Obligations) secured by the assets
subject to such Asset Sale; provided, however, that evidence of each of (i),
(ii) and (iii) above is provided to the Administrative Agent in form and
substance satisfactory to it, (b) Property Loss Event or (c) any Debt Issuance
(other than any Debt Issuance permitted under clause (a) through (j) of Section
8.1) (Indebtedness), in each case net of brokers' and advisors' fees and other
costs incurred in connection with such transaction; provided, however, that in
the case of this clause (c), evidence of such costs is provided to the
Administrative Agent in form and substance satisfactory to it.
"Net Worth" of any Person means, at any date, the lesser of
(a) the stockholders' equity that would be reflected on a Consolidated balance
sheet of such Person and its Subsidiaries at such date prepared in conformity
with GAAP and (b) (i) the Total Assets of such Person at such date (other than
investments in and moneys due from Affiliates) minus (ii) Total Liabilities of
such Person at such date.
20
"Newmark" means Newmark Homes Corp., a Delaware corporation.
"Non-Consenting Lender" has the meaning specified in Section
11.1(c).
"Non-Extending Lender" has the meaning specified in Section
2.18(c).
"Non-Funding Lender" has the meaning specified in Section
2.2(d).
"Non-U.S. Lender" means each Lender or Administrative Agent
that is not a United States person as defined in Section 7701(a)(30) of the
Code.
"Notes" means, collectively, the Senior Notes and the
Subordinated Notes.
"Notice of Borrowing" has the meaning specified in Section
2.2(a).
"Notice of Conversion or Continuation" has the meaning
specified in Section 2.11 (Conversion/Continuation Option).
"Obligations" means, without duplication, the Loans, the
Letter of Credit Obligations and all other amounts, obligations, covenants and
duties owing by the Borrower to the Administrative Agent, any Lender, any
Issuer, any Affiliate of any of them or any Indemnitee, of every type and
description (whether by reason of an extension of credit, opening or amendment
of a letter of credit or payment of any draft drawn thereunder, loan, guaranty,
indemnification, foreign exchange or currency swap transaction, interest rate
hedging transaction or otherwise), present or future, arising under this
Agreement, any other Loan Document, any Hedging Contract, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired and
whether or not evidenced by any note, guaranty or other instrument or for the
payment of money, including all letter of credit and other fees, interest,
charges, expenses, attorneys' fees and disbursements and other sums chargeable
to the Borrower under this Agreement, any other Loan Document, any Hedging
Contract or any agreement for cash management services entered into in
connection with this Agreement or any other Loan Document and all obligations of
the Borrower to provide cash collateral for Letter of Credit Obligations.
"Other Indebtedness" means, at any time, the Indebtedness of
the Borrower and its Subsidiaries comprised of (a) the outstanding principal
amount of the Senior Notes at such time, (b) the outstanding principal amount of
Indebtedness (including the Subordinated Notes) that is subordinated to the
Obligations and that is due within one year of such time, (c) the outstanding
principal amount of all other Indebtedness which is pari passu to the
Obligations, other than trade payables that are not more than 90 days past the
original invoice date thereof; provided, however, "Other Indebtedness" shall not
include (i) the Indebtedness under the Warehouse Line of Credit to the extent
permitted hereunder, and (ii) Indebtedness attributable to the Landholding
Interests permitted pursuant to clause (k) of Section 8.1 (Indebtedness).
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
21
"Permitted Acquisition" means the acquisition by the Borrower
or any of its Subsidiaries of all or substantially all of the assets or Stock of
any Person or of any operating division thereof (the "Target"), or the merger of
the Target with or into the Borrower or any Subsidiary of the Borrower (with the
Borrower, in the case of a merger with the Borrower, being the surviving
corporation) (each an "Acquisition") subject to the satisfaction of each of the
following conditions:
(a) for any Acquisition for which the aggregate
consideration paid (including all cash, the value of all Stock, Stock
Equivalents and asset consideration, the amount of all Indebtedness
assumed and the value of all other consideration) equals or exceeds 5%
of Consolidated Tangible Net Worth,
(i) the Administrative Agent shall receive
at least 10 Business Days' prior written notice of such
proposed acquisition, which notice .shall include a reasonably
detailed description of such proposed acquisition;
(ii) concurrently with delivery of the
notice referred to in clause (i) above, the Borrower shall
have delivered to the Administrative Agent such other
financial information, financial analysis, documentation or
other information relating to such Acquisition as the
Administrative Agent or any Lender shall reasonably request;
(iii) on or prior to the date of such
Acquisition, the Administrative Agent shall have received
copies of the acquisition agreement and related agreements and
instruments, and all opinions, certificates, lien search
results and other documents reasonably requested by the
Administrative Agent;
(b) such Acquisition shall only involve assets
located in the Permitted Markets and for use in the lines of business
of the Borrower or its Subsidiaries existing on the Closing Date;
(c) such Acquisition shall be consensual (including,
where applicable, approved by the Target's board of directors, or
analogous governing body, or approved by the Target's trustee or
receiver, or such analogous fiduciary, in the case of Target in
bankruptcy or receivership) and duly authorized by the Borrower or the
applicable Subsidiary of the Borrower;
(d) no additional Indebtedness or other liabilities
shall be incurred, assumed or otherwise be reflected on a consolidated
balance sheet of the Borrower and Target after giving effect to such
Acquisition, except (i) Loans made hereunder, (ii) ordinary course
trade payables and accrued expenses and (iii) Indebtedness of the
Target permitted under Section 8.1 (Indebtedness);
(e) at or prior to the closing of any Acquisition,
the Borrower (or the Subsidiary making the Acquisition) and the Target
shall have executed such documents and taken such actions as are
described in Section 7.13 (Additional Collateral and Guaranties)
irrespective of the financial tests set forth therein; and
(f) a Responsible Officer of the Borrower shall have
delivered a certificate to the Administrative Agent to the effect that
at the time of such Acquisition
22
and after giving effect thereto, (i) no Default or Event of Default
shall have occurred and be continuing, (ii) all representations and
warranties contained in Article IV and in the other Loan Documents
shall be true and correct in all material respects, (iii) the Borrower
and its Subsidiaries shall be in pro forma compliance on a historical
basis for the preceding four Fiscal Quarters with the covenants set
forth in Article V, and (iv) the Revolving Credit Outstandings shall
not exceed the Maximum Credit.
"Permitted Holders" means TOI and Technical Olympic SA or any
Person of which either of the preceding companies "beneficially owns" (as
defined in Rule 13d-3 under the Exchange Act), individually or collectively with
the other company, at least a majority of the total voting power of the Voting
Stock of such Person.
"Permitted Markets" means housing markets located in the
continental United States of America.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, estate, trust, limited
liability company, unincorporated association, joint venture or other entity, or
a Governmental Authority.
"Pledge Agreement" means a pledge agreement, in substantially
the form of Exhibit J, executed by the Borrower, and each Guarantor.
"Pledged Stock" has the meaning specified in the Pledge
Agreement.
"Preferred Home Mortgage Company" means Preferred Home
Mortgage Company, a Florida corporation.
"Pro Forma Balance Sheet" has the meaning specified in Section
4.4(d).
"Projections" means those financial projections dated April 9,
2002 covering each fiscal quarter ending in 2002 through 2005 inclusive, to be
delivered to the Lenders by the Borrower.
"Property Loss Event" means any loss of or damage to property
of the Borrower or any of its Subsidiaries that results in the receipt by such
Person of proceeds of insurance in excess of $2,500,000 (individually or in the
aggregate) or any taking of property of the Borrower or any of its Subsidiaries
by condemnation, eminent domain or any similar proceeding that results in the
receipt by such Person of a compensation payment in respect thereof in excess of
$2,500,000 (individually or in the aggregate).
"Proposed Change" has the meaning specified in Section
11.1(c).
"Ratable Portion" or "ratably" means, with respect to any
Lender, the percentage obtained by dividing (a) the Revolving Credit Commitment
of such Lender by (b) the aggregate Revolving Credit Commitments of all Lenders
(or, at any time after the Revolving Credit Termination Date, the percentage
obtained by dividing the aggregate outstanding principal balance of the
Revolving Credit Outstandings owing to such Lender by the aggregate outstanding
principal balance of the Revolving Credit Outstandings owing to all Lenders).
23
"Real Property" means all of those plots, pieces or parcels of
land now owned, leased or hereafter acquired or leased by the Borrower or any of
its Subsidiaries (the "Land"), together with the right, title and interest of
the Borrower or any of its Subsidiaries, if any, in and to the streets, the land
lying in the bed of any streets, roads or avenues, opened or proposed, in front
of, the air space and development rights pertaining to the Land and the right to
use such air space and development rights, all rights of way, privileges,
liberties, tenements, hereditaments and appurtenances belonging or in any way
appertaining thereto, all fixtures, all easements now or hereafter benefiting
the Land and all royalties and rights appertaining to the use and enjoyment of
the Land necessary for the residential development of such Land, together with
all of the buildings and other improvements now or hereafter erected on the
Land, and any fixtures appurtenant thereto.
"Refinanced Indebtedness" means the Indebtedness of the
Borrower described in Schedule 1.1.
"Register" has the meaning specified in Section 11.8 (Notices,
Etc.).
"Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Borrower to any Issuer with respect to amounts
drawn under Letters of Credit.
"Reimbursement Date" has the meaning specified in Section
2.4(b).
"Reinvestment Deferred Amount" means, with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower or
any of its Subsidiaries in connection therewith which are not initially applied
to prepay the Loans pursuant to Section 2.9 (Mandatory Prepayments) as a result
of the delivery of a Reinvestment Notice.
"Reinvestment Event" means any Asset Sale (other than an Asset
Sale in the ordinary course) or Property Loss Event in respect of which the
Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice" means a written notice executed by a
Responsible Officer of the Borrower stating that no Default or Event of Default
has occurred and is continuing and that the Borrower (directly or indirectly
through one of its Subsidiaries) intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale (other than an Asset Sale in
the ordinary course) or Property Loss Event (or to borrow an equivalent amount
under the Facility) to acquire replacement assets useful in its or one of its
Subsidiaries' businesses or, in the case of a Property Loss Event not requiring
the acquisition of replacement assets, to effect repairs.
"Reinvestment Prepayment Amount" means, with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended or required to be expended pursuant to a Contractual Obligation
entered into prior to the relevant Reinvestment Prepayment Date to acquire
replacement assets useful in the Borrower's business or effect repairs in the
case of a Property Loss Event.
"Reinvestment Prepayment Date" means, with respect to any
Reinvestment Event, the earlier of (i) the date occurring 270 days after such
Reinvestment Event and (ii) the date five Business Days after the date on which
the Borrower shall have notified the Administrative Agent of the Borrower's
determination not to acquire replacement assets useful in
24
the Borrower's or a Subsidiary's business (or not to effect repairs in the case
of a Property Loss Event) with all or any portion of the relevant Reinvestment
Deferred Amount.
"Related Documents" means the Merger Agreement, Senior Note
Indenture, the Subordinated Note Indenture, and the Notes, the Tax Allocation
Agreement and each other document and instrument executed with respect to any of
them.
"Release" means, with respect to any Person, any release,
spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration, in each case, of any Contaminant into the
indoor or outdoor environment or into or out of any property owned or operated
by such Person, including the movement of Contaminants through or in the air,
soil, surface water, ground water or property.
"Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way address any Contaminant in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release so that a Contaminant does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment or (c) perform pursuant to Environmental Laws pre-remedial studies
and investigations and post-remedial monitoring and care.
"Requirement of Law" means, with respect to any Person, the
common law and all federal, state, local and foreign laws, rules and
regulations, orders, judgments, decrees and other determinations of any
Governmental Authority or arbitrator, applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Requisite Lenders" means, collectively, Lenders having 51% or
more of the aggregate outstanding amount of the Revolving Credit Commitments or,
after the Revolving Credit Termination Date, 51% or more of the aggregate
Revolving Credit Outstandings. A Non-Funding Lender shall not be included in the
calculation of "Requisite Lenders."
"Responsible Officer" means, with respect to any Person, any
of the principal executive officers, managing members or general partners of
such Person, but in any event, with respect to financial matters, the chief
financial officer, chief accounting officer, treasurer, vice president of
finance or controller of such Person.
"Restricted Payment" means (a) any dividend, distribution or
any other payment whether direct or indirect, on account of any Stock or Stock
Equivalents of the Borrower or any of its Subsidiaries now or hereafter
outstanding, and (b) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Stock or Stock Equivalents of the Borrower or any of its Subsidiaries now or
hereafter outstanding.
"Revolving Credit Commitment" means, with respect to each
Lender, the commitment of such Lender to make Revolving Loans and acquire
interests in other Revolving Credit Outstandings in the aggregate principal
amount outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule I under the caption "Revolving Credit Commitment," as amended
to reflect each Assignment and Acceptance or Assumption Agreement executed by
such Lender and as such amount may be increased or reduced pursuant to this
Agreement.
25
"Revolving Credit Note" means a promissory note of the
Borrower payable to the order of any Lender in a principal amount equal to the
amount of such Lender's Revolving Credit Commitment evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from the Revolving Loans
owing to such Lender.
"Revolving Credit Outstandings" means, at any particular time,
the sum of (a) the principal amount of the Revolving Loans outstanding at such
time plus (b) the Letter of Credit Obligations outstanding at such time plus (c)
the principal amount of the Swing Loans outstanding at such time.
"Revolving Credit Termination Date" shall mean the earliest of
(a) the Scheduled Termination Date, (b) the date of termination of the Revolving
Credit Commitments pursuant to Section 2.5 (Reduction and Termination of the
Revolving Credit Commitments) and (c) the date on which the Obligations become
due and payable pursuant to Section 9.2 (Remedies).
"Revolving Loan" has the meaning specified in Section 2.1 (The
Revolving Credit Commitments).
"Scheduled Termination Date" means the third anniversary of
the Closing Date subject to the provisions for the extension of the Scheduled
Termination Date set forth in Section 2.18 (Facility Extension).
"Secured Obligations" means, in the case of the Borrower, the
Obligations, and, in the case of any other Loan Party, the obligations of such
Loan Party under the Guaranty and the other Loan Documents to which it is a
party.
"Secured Parties" means the Lenders, the Issuers, the
Administrative Agent and any other holder of any of the Obligations.
"Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, but shall not include any evidence of the Obligations.
"Selling Lender" has the meaning specified in Section 11.7
(Sharing of Payments, Etc.).
"Senior Note Indenture" means the Indenture dated as of June
25, 2002, between the Borrower and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as trustee.
"Senior Notes" means the 9% senior notes issued by the
Borrower pursuant to the Senior Note Indenture.
"Sold Homes" means all Units (including Model Homes) on which
a building permit has been issued and construction has begun or has been
completed, and for which the Borrower or its Subsidiaries has entered into a
written Contract for Sale.
"Solvent" means, with respect to any Person, that the value of
the assets of such Person (both at fair value and present fair saleable value)
is, on the date of determination, greater
26
than the total amount of liabilities (including contingent and unliquidated
liabilities) of such Person as of such date and that, as of such date, such
Person is able to pay all liabilities of such Person as such liabilities mature
and does not have unreasonably small capital. In computing the amount of
contingent or unliquidated liabilities at any time, such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Standby Letter of Credit" means any letter of credit issued
pursuant to Section 2.4 (Letters of Credit) which is not a Documentary Letter of
Credit.
"Stock" means shares of capital stock (whether denominated as
common stock or preferred stock), beneficial, partnership or membership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation, partnership, limited liability company or equivalent
entity, whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subordinated Note Indenture" means the Indenture dated as of
June 25, 2002, between the Borrower and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as trustee.
"Subordinated Notes" means the 10 3/8% Senior subordinated
notes issued by the Borrower pursuant to the Subordinated Note Indenture.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, limited liability company or other business entity of
which an aggregate of 50% or more of the outstanding Voting Stock is, at the
time, directly or indirectly, owned or controlled by such Person and/or one or
more Subsidiaries of such Person.
"Swing Loan" has the meaning specified in Section 2.3(a).
"Swing Loan Borrowing" means a borrowing consisting of a Swing
Loan.
"Swing Loan Lender" means CNAI or any other Lender that
becomes the Administrative Agent or that agrees with the approval of the
Administrative Agent and the Borrower to act as the Swing Loan Lender hereunder.
"Swing Loan Request" has the meaning specified in Section
2.3(b).
"Tax Affiliate" means, with respect to any Person, (a) any
Subsidiary of such Person, and (b) any Affiliate of such Person with which such
Person files or is eligible to file consolidated, combined or unitary tax
returns.
"Tax Allocation Agreement" means the Tax Allocation Agreement
dated as of March 15, 2000 between TOI and the Borrower.
"Tax Return" has the meaning specified in Section 4.8(a).
"Taxes" has the meaning specified in Section 2.16(a).
27
"Title IV Plan" means a pension plan, other than a
Multiemployer Plan, covered by Title IV of ERISA and to which the Borrower, any
of its Subsidiaries or any ERISA Affiliate has any obligation or liability
(contingent or otherwise).
"TOI" means Technical Olympic, Inc., a Delaware corporation.
"Total Assets" of any Person means, at any date, (a) the total
assets of such Person and its Subsidiaries at such date determined on a
Consolidated basis in conformity with GAAP minus (b) any Securities issued by
such Person held as treasury securities.
"Total Liabilities" of any Person means, at any date, all
obligations which in conformity with GAAP would be included in determining total
liabilities as shown on the liabilities side of a Consolidated balance sheet of
such Person and its Subsidiaries at such date, and in any event includes all
Indebtedness (of such Person or any of its Subsidiaries at such date (other than
intercompany Indebtedness and surety and performance bonds incurred in the
ordinary course of business), whether or not the same would be so shown, and
exclusive of the greater of the liquidation preference or the redemption price
of any outstanding Disqualified Stock of such Person at such date.
"Total Liabilities to Consolidated Tangible Net Worth Ratio"
means, with respect to the Borrower at any date of determination, the ratio of
(a) Total Liabilities of the Borrower at such date less Unrestricted Cash in
excess of $20,000,000 at such date to (b) Consolidated Tangible Net Worth of the
Borrower at such date.
"UCC" means the Uniform Commercial Code then in effect for the
State of
new York, or such other jurisdiction as the context may require.
"Unentitled Land" means all land which is not Entitled Land.
"Unimproved Land" means all Entitled Land on which no
construction of on-site infrastructure improvements has begun.
"Unit" means a single family residential unit, including a
condominium and townhouse unit and a one-to-four family detached residence.
"Units Closed" means a Unit for which the purchase price
therefor has been paid and the title therefor has been delivered to a purchaser
in accordance with a contract of sale for such Unit.
"Unrestricted Cash" means all cash and Cash Equivalents of the
Borrower and the Guarantors that is not subject to a Lien (other than a Lien
securing the Obligations) or other restriction (including, without limitation,
any escrow in connection with Contract for Sale).
"Unsold Homes Under Construction" means all Units for which
building permits have been issued and construction has commenced, but not
completed, and for which there is no written binding contract of sale with an
unrelated third party purchaser. Construction will be considered to have
"commenced" when the slab or foundation for the condominium building or
one-to-four family residence has been completed.
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"Unsold Land" means Unimproved Land, Land/Lot Under
Development and Finished Lots.
"Unsold Units" means Unsold Homes Under Construction,
Completed Unsold Homes Less Than 180 Days Since Completion, and Completed Unsold
Homes Over 180 Days Since Completion.
"Unused Commitment Fee" has the meaning specified in Section
2.12(a).
"Voting Stock" means Stock of any Person having ordinary power
to vote in the election of members of the board of directors, managers, trustees
or other controlling Persons, of such Person (irrespective of whether, at the
time, Stock of any other class or classes of such entity shall have or might
have voting power by reason of the happening of any contingency).
"Warehouse Line of Credit" means the
Credit Agreement and
Mortgage Loan Purchase Sale Agreement, each dated as of July 5, 2001 between
Preferred Home Mortgage Company and Guaranty Bank, as amended, supplemented or
modified from time to time.
"Wholly-Owned Subsidiary" means, in respect of any Person, any
Subsidiary of such Person, all of the Stock of which (other than director's
qualifying shares as may be required by law) is owned by such Person either
directly or indirectly through one or more Wholly-Owned Subsidiaries of Such
Person.
"Withdrawal Liability" means, with respect to the Borrower or
any of its Subsidiaries at any time, the aggregate liability incurred (whether
or not assessed) with respect to all Multiemployer Plans pursuant to Section
4201 of ERISA or for increases in contributions required to be made pursuant to
Section 4243 of ERISA.
SECTION 1.2 COMPUTATION OF TIME PERIODS
In this Agreement, in the computation of periods of time from
a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding" and the
word "through" means "to and including."
SECTION 1.3 ACCOUNTING TERMS AND PRINCIPLES
(a) Except as set forth below, all accounting terms not
specifically defined herein shall be construed in conformity with GAAP and all
accounting determinations required to be made pursuant hereto shall, unless
expressly otherwise provided herein, be made in conformity with GAAP.
(b) If any change in the accounting principles used in the
preparation of the most recent Financial Statements referred to in Section 6.1
(Financial Statements) is hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or any
successors thereto) and such change is adopted by the Borrower with the
agreement of its independent public accountants and results in a change in any
of the calculations required by Article V or Article VIII had such accounting
change not occurred, the parties hereto agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such change with the
desired result that the criteria for evaluating compliance with such covenants
by the
29
Borrower shall be the same after such change as if such change had not been
made; provided, however, that no change in GAAP that would affect a calculation
that measures compliance with any covenant contained in Article V or Article
VIII shall be given effect until such provisions are amended to reflect such
changes in GAAP.
SECTION 1.4 CERTAIN TERMS
(a) The words "herein," "hereof" and "hereunder" and similar
words refer to this Agreement as a whole, and not to any particular Article,
Section, subsection or clause in, this Agreement.
(b) Unless otherwise expressly indicated herein, references in
this Agreement to an Exhibit, Schedule, Article, Section, subsection or clause
refer to the appropriate Exhibit or Schedule to, or Article, Section, subsection
or clause in this Agreement.
(c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. Unless the prior written consent of
the Requisite Lenders is required hereunder for an amendment, restatement,
supplement or other modification to any such agreement and such consent is not
obtained, references in this Agreement to such agreement shall be to such
agreement as so amended, restated, supplemented or modified.
(d) References in this Agreement to any statute shall be to
such statute as amended or modified and in effect at the time any such reference
is operative.
(e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.
(f) The terms "Lender," "Issuer" and "Administrative Agent"
include their respective successors.
(g) Upon the appointment of any successor Administrative Agent
pursuant to Section 10.6 (Successor Administrative Agent), references to CNAI in
Section 10.3 (The Administrative Agent Individually) and to Citibank in the
definitions of Base Rate, Eurodollar Rate shall be deemed to refer to the
financial institution then acting as the Administrative Agent or one of its
Affiliates if it so designates.
ARTICLE II
THE FACILITY
SECTION 2.1 THE REVOLVING CREDIT COMMITMENTS
On the terms and subject to the conditions contained in this
Agreement, each Lender severally agrees to make loans (each a "Revolving Loan")
in Dollars to the Borrower from time to time on any Business Day during the
period from the date hereof until the Revolving Credit Termination Date in an
aggregate amount not to exceed at any time outstanding for all such loans by
such Lender such Lender's Revolving Credit Commitment; provided, however, that
at no time shall any Lender be obligated to make a Revolving Loan in excess of
such Lender's Ratable Portion of the Available Credit. Within the limits of each
Lender's Revolving Credit Commitment, amounts of Revolving Loans repaid may be
reborrowed under this Section 2.1.
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SECTION 2.2 BORROWING PROCEDURES
(a) Each Borrowing shall be made on written notice (or verbal
notice followed by written notice within six hours of such verbal notice) given
by the Borrower to the Administrative Agent not later than 1:00 p.m. (
New York
City time) (i) one Business Day, in the case of a Borrowing of Base Rate Loans
and (ii) three Business Days, in the case of a Borrowing of Eurodollar Rate
Loans, prior to the date of the proposed Borrowing. Each written notice shall be
in substantially the form of Exhibit D (a "Notice of Borrowing"), specifying (A)
the date of such proposed Borrowing, (B) the aggregate amount of such proposed
Borrowing, (C) whether any portion of the proposed Borrowing will be of Base
Rate Loans or Eurodollar Rate Loans, (D) the initial Interest Period or Periods
for any such Eurodollar Rate Loans, and (E) the Available Credit (after giving
effect to the proposed Borrowing). The Revolving Loans shall be made as Base
Rate Loans unless, subject to Section 2.14 (Special Provisions Governing
Eurodollar Rate Loans), the Notice of Borrowing specifies that all or a portion
thereof shall be Eurodollar Rate Loans. Notwithstanding anything to the contrary
contained in Section 2.3(a), if any Notice of Borrowing requests a Borrowing of
Base Rate Loans, the Administrative Agent may, in its sole discretion, make a
Swing Loan available to the Borrower in an aggregate amount not to exceed such
proposed Borrowing, and the aggregate amount of the corresponding proposed
Borrowing shall be reduced accordingly by the principal amount of such Swing
Loan. Each Borrowing shall be in an aggregate amount of not less than $5,000,000
or an integral multiple of $1,000,000 in excess thereof, or the remaining
Available Credit, if less.
(b) The Administrative Agent shall give to each Lender prompt
notice of the Administrative Agent's receipt of a Notice of Borrowing and, if
Eurodollar Rate Loans are properly requested in such Notice of Borrowing, the
applicable interest rate determined pursuant to Section 2.14(a). Each Lender
shall, before 11:00 a.m. (
New York City time) on the date of the proposed
Borrowing, make available to the Administrative Agent at its address referred to
in Section 11.8 (Notices, Etc.), in immediately available funds, such Lender's
Ratable Portion of such proposed Borrowing. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Section 3.1 (Conditions Precedent to Initial Loans and Letters of
Credit) and Section 3.2 (Conditions Precedent to Each Loan and Letter of
Credit), the Administrative Agent will make such funds available to the
Borrower.
(c) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any proposed Borrowing that such Lender will
not make available to the Administrative Agent such Lender's Ratable Portion of
such Borrowing, the Administrative Agent may assume that such Lender has made
such Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.2 (Borrowing Procedures) and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such Ratable Portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to the Loans comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate for the first Business Day and thereafter at the interest
rate applicable at the time to the Loans comprising such Borrowing. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
corresponding amount so repaid shall constitute such Lender's Loan
31
as part of such Borrowing for purposes of this Agreement. If the Borrower shall
repay to the Administrative Agent such corresponding amount, such payment shall
not relieve such Lender of any obligation it may have hereunder to the Borrower.
(d) The failure of any Lender to make the Loan or any payment
required by it on the date specified (a "Non-Funding Lender"), including any
payment in respect of its participation in Swing Loans and Letter of Credit
Obligations, shall not relieve any other Lender of its obligations to make such
Loan or payment on such date but no such other Lender shall be responsible for
the failure of any Non-Funding Lender to make a Loan or payment required under
this Agreement.
SECTION 2.3 SWING LOANS
(a) On the terms and subject to the conditions contained in
this Agreement, the Swing Loan Lender may in its sole discretion make loans
(each a "Swing Loan") otherwise available to the Borrower under the Facility
from time to time on any Business Day during the period from the date hereof
until the Revolving Credit Termination Date in an aggregate amount at any time
outstanding (together with the aggregate principal amount of any other loans
made by the Swing Loan Lender hereunder in its capacity as a Lender or the Swing
Loan Lender) at any time not to exceed the lesser of $20,000,000 and the Swing
Loan Lender's Ratable Portion of the Available Credit at such time; provided,
however, that the Swing Loan Lender shall not make any Swing Loan to the extent
that, after giving effect to such Swing Loan, the aggregate Revolving Credit
Outstandings would exceed the Maximum Credit. The Swing Loan Lender shall be
entitled to rely on the most recent Borrowing Base Certificate delivered to the
Administrative Agent. Each Swing Loan shall be a Base Rate Loan and must be
repaid in full within seven days of its making or, if sooner, upon any Borrowing
hereunder and shall in any event mature no later than the Revolving Credit
Termination Date. Within the limits set forth in the first sentence of this
Section 2.3(a) amounts of Swing Loans repaid may be reborrowed under this
Section 2.3(a).
(b) In order to request a Swing Loan, the Borrower shall
telecopy to the Administrative Agent a duly completed request setting forth the
date, the requested amount and date of the Swing Loan (a "Swing Loan Request"),
to be received by the Administrative Agent not later than 12:00 p.m. (
New York
City time) on the day of the proposed borrowing. The Administrative Agent shall
promptly notify the Swing Loan Lender of the details of the requested Swing
Loan. Subject to the terms of this Agreement, the Swing Loan Lender shall make a
Swing Loan available to the Administrative Agent which will make such amounts
available to the Borrower on the date of the relevant Swing Loan Request. The
Swing Loan Lender shall not make any Swing Loan in the period commencing on the
first Business Day after it receives written notice from any Lender or the
Administrative Agent (if a Person other than the Swing Loan Lender) that one or
more of the conditions precedent contained in Section 3.2 (Conditions Precedent
to Each Loan and Letter of Credit) shall not on such date be satisfied, and
ending when such conditions are satisfied or waived. The Swing Loan Lender shall
not otherwise be required to determine that, or take notice whether, the
conditions precedent set forth in Section 3.2 (Conditions Precedent to Each Loan
and Letter of Credit) hereof have been satisfied in connection with the making
of any Swing Loan.
(c) The Swing Loan Lender shall notify the Administrative
Agent in writing (which may be by telecopy) weekly, by no later than 10:00 a.m.
(New York City time) on the first Business Day of each week, of the aggregate
principal amount of its Swing Loans then outstanding.
32
(d) The Swing Loan Lender may demand at any time during the
continuance of an Event of Default that each Lender pay to the Administrative
Agent, for the account of the Swing Loan Lender, in the manner provided in
subsection (e) below, such Lender's Ratable Portion of all or a portion of the
outstanding Swing Loans, which demand shall be made through the Administrative
Agent, shall be in writing and shall specify the outstanding principal amount of
Swing Loans demanded to be paid.
(e) The Administrative Agent shall forward each notice
referred to in clause (c) above and each demand referred to in clause (d) above
to each Lender on the day such notice or such demand is received by the
Administrative Agent (except that any such notice or demand received by the
Administrative Agent after 2:00 p.m. (New York City time) on any Business Day or
any such demand received on a day that is not a Business Day shall not be
required to be forwarded to the Lenders by the Administrative Agent until the
next succeeding Business Day), together with a statement prepared by the
Administrative Agent specifying the amount of each Lender's Ratable Portion of
the aggregate principal amount of the Swing Loans stated to be outstanding in
such notice or demanded to be paid pursuant to such demand, and, notwithstanding
whether or not the conditions precedent set forth in Section 3.2 (Conditions
Precedent to Each Loan and Letter of Credit) shall have been satisfied (which
conditions precedent the Lenders hereby irrevocably waive) provided that the
Swing Loan Lender has not received the notice referred to in the penultimate
sentence of clause (b) above prior to any such Swing Loan (and the condition
referred to in such notice has not been waived in accordance with this
Agreement), each Lender shall, before 11:00 a.m. (New York City time) on the
Business Day next succeeding the date of such Lender's receipt of such written
demand, make available to the Administrative Agent, in immediately available
funds, for the account of the Swing Loan Lender, the amount specified in such
demand. Upon such payment by a Lender, such Lender shall, except as provided in
clause (f) below, be deemed to have made a Revolving Loan to the Borrower. The
Administrative Agent shall use such funds to repay the Swing Loans to the Swing
Loan Lender. To the extent that any Lender fails to make such payment available
to the Administrative Agent for the account of the Swing Loan Lender, the
Borrower shall repay such Swing Loan on demand.
(f) Upon the occurrence of a Default under Section 9.1(f),
each Lender shall acquire, without recourse or warranty, an undivided
participation in each Swing Loan otherwise required to be repaid by such Lender
pursuant to clause (e) above, which participation shall be in a principal amount
equal to such Lender's Ratable Portion of such Swing Loan, by paying to the
Swing Loan Lender on the date on which such Lender would otherwise have been
required to make a payment in respect of such Swing Loan pursuant to clause (e)
above, in immediately available funds, an amount equal to such Lender's Ratable
Portion of such Swing Loan. If all or part of such amount is not in fact made
available by such Lender to the Swing Loan Lender on such date, the Swing Loan
Lender shall be entitled to recover any such unpaid amount on demand from such
Lender together with interest accrued from such date at the Federal Funds Rate
for the first Business Day after such payment was due and thereafter at the rate
of interest then applicable to Base Rate Loans.
(g) From and after the date on which any Lender is deemed to
have made a Revolving Loan pursuant to clause (e) above with respect to any
Swing Loan or purchases an undivided participation interest in a Swing Loan
pursuant to clause (f) above, the Swing Loan Lender shall promptly distribute to
such Lender such Lender's Ratable Portion of all payments of principal of and
interest received by the Swing Loan Lender on account of such Swing Loan other
than those received from a Lender pursuant to clause (e) or (f) above.
33
SECTION 2.4 LETTERS OF CREDIT
(a) On the terms and subject to the conditions contained in
this Agreement, each Issuer agrees to Issue one or more Letters of Credit at the
request of the Borrower for the account of the Borrower from time to time on any
Business Day during the period commencing on the Closing Date and ending on the
earlier of the Revolving Credit Termination Date and 30 days prior to the
Scheduled Termination Date; provided, however, that no Issuer shall be under any
obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin or
restrain such Issuer from Issuing such Letter of Credit or any
Requirement of Law applicable to such Issuer or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over such Issuer shall
prohibit, or request that such Issuer refrain from, the Issuance of
letters of credit generally or such Letter of Credit in particular or
shall impose upon such Issuer with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuer is
not otherwise compensated) not in effect on the date of this Agreement
or result in any unreimbursed loss, cost or expense (for which such
Issuer is not otherwise compensated) that was not applicable, in effect
or known to such Issuer as of the date of this Agreement and that such
Issuer in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) such Issuer shall have received written notice
from the Administrative Agent, any Lender or the Borrower, on or prior
to the requested date of Issuance of such Letter of Credit, that one or
more of the applicable conditions contained in Section 3.2 (Conditions
Precedent to Each Loan and Letter of Credit) and Section 2.4 (Letters
of Credit) is not then satisfied;
(iii) after giving effect to the Issuance of such
Letter of Credit, the aggregate Revolving Credit Outstandings would
exceed the Maximum Credit at such time;
(iv) after giving effect to the Issuance of such
Letter of Credit, the Letter of Credit Obligations at such time exceed
$60,000,000;
(v) any fees due in connection with a requested
Issuance have not been paid; or
(vi) such Letter of Credit is requested to be Issued
in a form that is not acceptable to such Issuer.
None of the Lenders (other than the Issuers in their capacity as such) shall
have any obligation to Issue any Letter of Credit.
(b) In no event shall the expiration date of any Letter of
Credit (i) be more than one year after the date of Issuance thereof, or (ii) be
less than five days prior to the Scheduled Termination Date; provided, however,
that any Letter of Credit with a one-year term may provide for the renewal
thereof for additional one-year periods (which shall in no event extend beyond
the expiry date referred to in clause (ii) above).
34
(c) In connection with the Issuance of each Letter of Credit,
the Borrower shall give the relevant Issuer and the Administrative Agent at
least two Business Days' prior written notice, in substantially the form of
Exhibit E (or in such other written or electronic form as is acceptable to the
Issuer), of the requested Issuance of such Letter of Credit (a "Letter of Credit
Request"). Such notice shall be irrevocable and shall specify the Issuer of such
Letter of Credit, the stated amount of the Letter of Credit requested, which
stated amount shall not be less than $10,000, the date of Issuance of such
requested Letter of Credit (which day shall be a Business Day), the date on
which such Letter of Credit is to expire (which date shall be a Business Day),
and the Person for whose benefit the requested Letter of Credit is to be Issued.
Such notice, to be effective, must be received by the relevant Issuer and the
Administrative Agent not later than 11:00 a.m. (New York City time) on the
second Business Day prior to the requested Issuance of such Letter of Credit.
(d) Subject to the satisfaction of the conditions set forth in
this Section 2.4 (Letters of Credit), the relevant Issuer shall, on the
requested date, Issue a Letter of Credit on behalf of the Borrower and, if
applicable, one of its Subsidiaries in accordance with such Issuer's usual and
customary business practices. No Issuer shall Issue any Letter of Credit in the
period commencing on the first Business Day after it receives written notice
from any Lender or the Administrative Agent that one or more of the conditions
precedent contained in Section 3.2 (Conditions Precedent to Each Loan and Letter
of Credit) shall not on such date be satisfied, and ending when such conditions
are satisfied. The relevant Issuer shall not otherwise be required to determine
that, or take notice whether, the conditions precedent set forth in Section 3.2
(Conditions Precedent to Each Loan and Letter of Credit) have been satisfied in
connection with the Issuance of any Letter of Credit.
(e) If requested by the relevant Issuer, prior to the Issuance
of each Letter of Credit by such Issuer, and as a condition of such Issuance and
of the participation of each Lender in the Letter of Credit Obligations arising
with respect thereto, the Borrower shall have delivered to such Issuer a letter
of credit reimbursement agreement, in such form as the Issuer may employ in its
ordinary course of business for its own account (a "Letter of Credit
Reimbursement Agreement"), signed by the Borrower, and such other documents or
items as may be required pursuant to the terms thereof. In the event of any
conflict between the terms of any Letter of Credit Reimbursement Agreement and
this Agreement, the terms of this Agreement shall govern.
(f) Each Issuer shall comply with the following:
(i) give the Administrative Agent written notice (or
telephonic notice confirmed promptly thereafter in writing, which
writing may be by telecopier) of the Issuance of a Letter of Credit
Issued by it, of all drawings under a Letter of Credit Issued by it,
the payment (or the failure to pay when due) by the Borrower of any
Reimbursement Obligation when due (which notice the Administrative
Agent shall promptly transmit by telecopy or similar transmission to
each Lender);
(ii) upon the request of any Lender, furnish to such
Lender copies of any Letter of Credit Reimbursement Agreement to which
such Issuer is a party and such other documentation as may reasonably
be requested by such Lender; and
(iii) no later than 10 Business Days following the
last day of each calendar month, provide to the Administrative Agent
(and the Administrative Agent shall provide a copy to each Lender
requesting the same) and the Borrower separate schedules
35
for Documentary and Standby Letters of Credit issued by it, in form and
substance reasonably satisfactory to the Administrative Agent, setting
forth the aggregate Letter of Credit Obligations outstanding at the end
of each month and any information requested by the Borrower or the
Administrative Agent relating thereto.
(g) Immediately upon the Issuance by an Issuer of a Letter of
Credit in accordance with the terms and conditions of this Agreement, such
Issuer shall be deemed to have sold and transferred to each Lender, and each
Lender shall be deemed irrevocably and unconditionally to have purchased and
received from such Issuer, without recourse or warranty, an undivided interest
and participation, to the extent of such Lender's Ratable Portion, in such
Letter of Credit and the obligations of the Borrower with respect thereto
(including all Letter of Credit Obligations with respect thereto) and any
security therefor and guaranty pertaining thereto.
(h) The Borrower agrees to pay to the Issuer of any Letter of
Credit the amount of all Reimbursement Obligations owing to such Issuer under
any Letter of Credit Issued for its account no later than the date that is the
next succeeding Business Day after the Borrower receives written notice from
such Issuer that payment has been made under such Letter of Credit (the
"Reimbursement Date"), irrespective of any claim, set-off, defense or other
right that the Borrower may have at any time against such Issuer or any other
Person. In the event that any Issuer makes any payment under any Letter of
Credit and the Borrower shall not have repaid such amount to such Issuer
pursuant to this clause (h) on or before 11:00 a.m. (New York City time) on the
next Business Day following the Borrower's receipt of the aforesaid notice, then
(i) the relevant Issuer shall notify the Administrative Agent of such failure to
repay, (ii) such Reimbursement Obligation shall be payable on demand with
interest thereon computed from the date on which such Reimbursement Obligation
arose to the date of repayment in full at the rate of interest applicable to
past due Revolving Loans bearing interest at a rate based on the Base Rate
during such period, (iii) the Borrower shall be deemed to have elected (if a
formal notice of Borrowing has not been received by the Administrative Agent in
respect of such Reimbursement Obligation) to have the Reimbursement Obligation
satisfied by the Borrowing of a Base Rate Loan in an amount equal to such
Reimbursement Obligation and (iv) each Lender shall, except during the
continuance of a Default or Event of Default under Section 9.1(f) and
notwithstanding whether or not the conditions precedent set forth in Section 3.2
(Conditions Precedent to Each Loan and Letter of Credit) shall have been
satisfied (which conditions precedent the Lenders hereby irrevocably waive)
provided that such Issuer has not received the notice referred to in the
penultimate sentence of clause (d) above (and the condition referred to in such
notice has not been waived in accordance with this Agreement), pay to the
Administrative Agent for the account of such Issuer the amount of such Lender's
Ratable Portion of such Reimbursement Obligations and be deemed to have made a
Revolving Loan to the Borrower in the principal amount of such payment. Prior to
the funding of such Revolving Loan, if the Administrative Agent so notifies such
Lender prior to 11:00 a.m. (New York City time) on any Business Day, such Lender
shall make available to the Administrative Agent for the account of such Issuer
its Ratable Portion of the amount of such payment on such Business Day in
immediately available funds. Whenever any Issuer receives from the Borrower a
payment of a Reimbursement Obligation as to which the Administrative Agent has
received for the account of such Issuer any payment from a Lender pursuant to
this clause (h), such Issuer shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each Lender, in immediately available
funds, an amount equal to such Lender's Ratable Portion of the amount of such
payment adjusted, if necessary, to reflect the respective amounts the Lenders
have paid in respect of such Reimbursement Obligation.
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(i) The Borrower's obligation to pay each Reimbursement
Obligation and the obligations of the Lenders to make payments to the
Administrative Agent for the account of the Issuers with respect to Letters of
Credit shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement, under any and all
circumstances whatsoever, including the occurrence of any Default or Event of
Default, and irrespective of:
(i) any lack of validity or enforceability of any
Letter of Credit or any Loan Document, or any term or provision
therein;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any Letter of Credit or
any Loan Document;
(iii) the existence of any claim, set off, defense or
other right that the Borrower, any other party guaranteeing, or
otherwise obligated with, the Borrower, any Subsidiary or other
Affiliate thereof or any other Person may at any time have against the
beneficiary under any Letter of Credit, any Issuer, the Administrative
Agent or any Lender or any other Person, whether in connection with
this Agreement, any other Loan Document or any other related or
unrelated agreement or transaction;
(iv) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment by the Issuer under a Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any
kind of any Issuer, the Lenders, the Administrative Agent or any other
Person or any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section 2.4 (Letters of Credit), constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
Any action taken or omitted to be taken by the relevant Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not put such Issuer under any
resulting liability to the Borrower or any Lender. In determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof, the Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit, the Issuer may rely exclusively on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and any noncompliance in any immaterial respect of the
documents presented under such Letter
37
of Credit with the terms thereof shall, in each case, be deemed not to
constitute willful misconduct or gross negligence of the Issuer.
(j) If and to the extent such Lender shall not have so made
its Ratable Portion of the amount of the payment required by clause (h) above
available to the Administrative Agent for the account of such Issuer, such
Lender agrees to pay to the Administrative Agent for the account of such Issuer
forthwith on demand any such unpaid amount together with interest thereon, for
the first Business Day after payment was first due at the Federal Funds Rate,
and thereafter until such amount is repaid to the Administrative Agent for the
account of such Issuer, at the rate per annum applicable to Base Rate Loans
under the Facility. The failure of any Lender to make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of any
such payment shall not relieve any other Lender of its obligation hereunder to
make available to the Administrative Agent for the account of such Issuer its
Ratable Portion of any payment on the date such payment is to be made, but no
Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent for the account of the Issuer such other
Lender's Ratable Portion of any such payment.
SECTION 2.5 REDUCTION AND TERMINATION OF THE REVOLVING CREDIT
COMMITMENTS
(a) The Borrower may, upon same Business Day's notice to the
Administrative Agent, terminate in whole or reduce in part ratably the unused
portions of the respective Revolving Credit Commitments of the Lenders;
provided, however, that each partial reduction shall be in an aggregate amount
of not less than $10,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(b) The then current Revolving Credit Commitments shall be
reduced on each date on which a prepayment of Revolving Loans or Swing Loans is
made pursuant to Section 2.9(a) or would be required to be made had the
outstanding Revolving Loans and Swing Loans equaled the Revolving Credit
Commitments then in effect, in each case in the amount of such prepayment (or
deemed prepayment) (and the Revolving Credit Commitment of each Lender shall be
reduced by its Ratable Portion of such amount); provided, however, that in the
case of any prepayment of Revolving Loans or Swing Loans that is made pursuant
to Section 2.9(a) in connection with a Reinvestment Event, the Revolving Credit
Commitments shall not be permanently reduced by the amount of such prepayment
until the occurrence of the Reinvestment Prepayment Date with respect to such
Reinvestment Event, and then the Revolving Credit Commitments shall be
permanently reduced only to the extent that the amount of such Net Cash Proceeds
exceeds the amount of proceeds of Revolving Loans or Swing Loans identified in a
Reinvestment Notice relating to such Reinvestment Event as being used or to be
used to acquire replacement assets useful in the Borrower's or one or more of
its Subsidiaries' business and, in the case of Reinvestment Events relating to a
Property Loss Event, to effect repairs.
SECTION 2.6 REPAYMENT OF LOANS
The Borrower promises to repay the entire unpaid principal
amount of the Revolving Loans, the Swing Loans and any Reimbursement Obligations
(unless required to be paid sooner hereunder) on the Revolving Credit
Termination Date.
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SECTION 2.7 EVIDENCE OF DEBT
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing Indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(b) The Administrative Agent shall maintain accounts in
accordance with its usual practice in which it shall record (i) the amount of
each Loan made and, if a Eurodollar Rate Loan, the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable by the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder from the Borrower, whether such sum
constitutes principal or interest, fees, expenses or other amounts due under the
Loan Documents and each Lender's Ratable Portion thereof, if applicable.
(c) The entries made in the accounts maintained pursuant to
clauses (a) and (b) of this Section 2.7 (Evidence of Debt) shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided, however, that the failure
of any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrower to repay
the Loans in accordance with their terms.
(d) Notwithstanding any other provision of the Agreement, in
the event that any Lender requests that the Borrower execute and deliver a
promissory note or notes payable to such Lender in order to evidence the
Indebtedness owing to such Lender by the Borrower hereunder, the Borrower will
promptly execute and deliver a Revolving Credit Note or Revolving Credit Notes
to such Lender evidencing any Revolving Loans of such Lender, substantially in
the form of Exhibit C.
SECTION 2.8 OPTIONAL PREPAYMENTS
(a) The Borrower may, upon at least three Business Days' prior
notice to the Administrative Agent, stating the proposed date and aggregate
principal amount of the prepayment, prepay the outstanding principal amount of
the Revolving Loans in whole or in part; provided, however, that (i) if any
prepayment of any Eurodollar Rate Loan is made by the Borrower other than on the
last day of an Interest Period for such Loan, the Borrower shall also pay any
amounts owing pursuant to Section 2.14(e), (ii) each partial prepayment shall be
in an aggregate principal amount not less than $5,000,000 or integral multiples
of $1,000,000 in excess thereof (or the remaining balance of the Loans, if less)
and (iii) the Borrower may prepay the outstanding principal amount of any Swing
Loan in whole or in part, with no minimum partial prepayment requirement. Upon
the giving of such notice of prepayment, the principal amount of Revolving Loans
specified to be prepaid shall become due and payable on the date specified for
such prepayment.
(b) The Borrower shall have no right to prepay the principal
amount of any Loan other than as provided in this Section 2.8 (Optional
Prepayments).
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SECTION 2.9 MANDATORY PREPAYMENTS
(a) Upon receipt by the Borrower or any of its Subsidiaries of
Net Cash Proceeds arising from an Asset Sale, Property Loss Event or Debt
Issuance, the Borrower shall immediately prepay the Loans (or provide cash
collateral in respect of Letters of Credit) in an amount equal to 100% of such
Net Cash Proceeds. Any such mandatory prepayments shall be applied in accordance
with clause (b) below; provided, however, that in the case of any Net Cash
Proceeds arising from a Reinvestment Event, any proceeds in excess of the
amounts required to repay the Loans and to fully cash collateralize Letter of
Credit Obligations as provided in clause (b) below shall be paid to the
Administrative Agent to be held in a Cash Collateral Account pending application
of such proceeds as specified in the Reinvestment Notice relating to such
Reinvestment Event.
(b) Any prepayments made by the Borrower required to be
applied in accordance with this clause (b) shall be applied as follows: first,
to repay the outstanding principal balance of the Swing Loans until such Swing
Loans shall have been repaid in full; second, to repay the outstanding principal
balance of the Revolving Loans until such Revolving Loans shall have been paid
in full; and then, to provide cash collateral for any Letter of Credit
Obligations in the manner set forth in Section 9.3 (Actions in Respect of
Letters of Credit) until all such Letter of Credit Obligations have been fully
cash collateralized in the manner set forth therein. All prepayments of
Revolving Loans and Swing Loans required to be made pursuant to this Section
2.9(b) shall result in a permanent reduction of the Revolving Credit Commitments
to the extent provided in Section 2.5 (Reduction and Termination of the
Revolving Credit Commitments); provided, however, that in the case of any
prepayment of Revolving Loans and Swing Loans made in connection with the
receipt by the Borrower or any of its Subsidiaries of Net Cash Proceeds arising
from a Reinvestment Event, the Revolving Credit Commitments shall not be
permanently reduced by the amount of such prepayment until the occurrence of the
Reinvestment Prepayment Date with respect to such Reinvestment Event, and then
the Revolving Credit Commitments shall be permanently reduced only to the extent
that the amount of such Net Cash Proceeds exceeds the amount of proceeds of
Revolving Loans or Swing Loans identified in a Reinvestment Notice relating to
such Reinvestment Event as being used or to be used to acquire replacement
assets useful in the Borrower's or one or more of its Subsidiaries' business
and, in the case of Reinvestment Events relating to a Property Loss Event, to
effect repairs.
(c) If at any time, the aggregate principal amount of
Revolving Credit Outstandings exceeds the Maximum Credit at such time, the
Borrower shall forthwith prepay the Swing Loans first and then the Revolving
Loans then outstanding in an amount equal to such excess. If any such excess
remains after repayment in full of the aggregate outstanding Swing Loans and
Revolving Loans, the Borrower shall provide cash collateral for the Letter of
Credit Obligations in the manner set forth in Section 9.3 (Actions in Respect of
Letters of Credit) to the extent required to eliminate such excess.
SECTION 2.10 INTEREST
(a) Rate of Interest.
All Loans and the outstanding amount of all other Obligations
shall bear interest, in the case of Loans, on the unpaid principal amount
thereof from the date such Loans are made and, in the case of such other
Obligations, from the date such other Obligations are due and
40
payable until, in all cases, paid in full, except as otherwise provided in
Section 2.10(c) Default Interest), as follows:
(i) if a Base Rate Loan or such other Obligation, at
a rate per annum equal to the sum of (A) the Base Rate as in effect
from time to time, plus (B) the Applicable Margin; and
(ii) if a Eurodollar Rate Loan, at a rate per annum
equal to the sum of (A) the Eurodollar Rate determined for the
applicable Interest Period, plus (B) the Applicable Margin in effect
from time to time during such Interest Period.
(b) Interest Payments.
(i) Interest accrued on each Base Rate Loan (other than Swing
Loans) shall be payable in arrears (A) on the last day of each calendar quarter,
commencing on the first such day following the making of such Base Rate Loan and
(B) if not previously paid in full, at maturity (whether by acceleration or
otherwise) of such Base Rate Loan; (ii) interest accrued on Swing Loans shall be
payable in arrears on the last day of each calendar quarter; (iii) interest
accrued on each Eurodollar Rate Loan shall be payable in arrears (A) on the last
day of each Interest Period applicable to such Loan and if such Interest Period
has a duration of more than three months, on each day during such Interest
Period occurring every three months from the first day of such Interest Period,
(B) upon the payment or prepayment thereof in full or in part and (C) if not
previously paid in full, at maturity (whether by acceleration or otherwise) of
such Eurodollar Rate Loan; and (iv) interest accrued on the amount of all other
Obligations shall be payable on demand from and after the time such Obligation
becomes due and payable (whether by acceleration or otherwise).
(c) Default Interest.
Notwithstanding the rates of interest specified in Section
2.10(a) (Rate of Interest) or elsewhere herein, effective immediately upon the
occurrence of an Event of Default, and for as long thereafter as such Event of
Default shall be continuing, the principal balance of all Loans and the amount
of all other Obligations then due and payable shall bear interest at a rate that
is two percent per annum in excess of the rate of interest applicable to such
Obligations from time to time.
SECTION 2.11 CONVERSION/CONTINUATION OPTION
(a) The Borrower may elect (i) at any time on any Business Day
to convert Base Rate Loans (other than Swing Loans) or any portion thereof to
Eurodollar Rate Loans, and (ii) at the end of any applicable Interest Period, to
convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate amount of the Eurodollar
Loans for each Interest Period must be in the amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof. Each conversion or
continuation shall be allocated among the Loans of each Lender in accordance
with its Ratable Portion. Each such election shall be in substantially the form
of Exhibit G (a "Notice of Conversion or Continuation") and shall be made by
giving the Administrative Agent at least three Business Days' prior written
notice specifying (A) the amount and type of Loan being converted or continued,
(B) in the case of a conversion to
41
or a continuation of Eurodollar Rate Loans, the applicable Interest Period, and
(C) in the case of a conversion, the date of conversion.
(b) The Administrative Agent shall promptly notify each Lender
of its receipt of a Notice of Conversion or Continuation and of the options
selected therein. Notwithstanding the foregoing, no conversion in whole or in
part of Base Rate Loans to Eurodollar Rate Loans, and no continuation in whole
or in part of Eurodollar Rate Loans upon the expiration of any applicable
Interest Period, shall be permitted at any time at which (i) a Default or an
Event of Default shall have occurred and be continuing or (ii) the continuation
of, or conversion into, would violate or otherwise not be permitted under any of
the provisions of Section 2.14 (Special Provisions Governing Eurodollar Rate
Loans). If, within the time period required under the terms of this Section 2.11
(Conversion/Continuation Option), the Administrative Agent does not receive a
Notice of Conversion or Continuation from the Borrower containing a permitted
election to continue any Eurodollar Rate Loans for an additional Interest Period
or to convert any such Loans, then, upon the expiration of the applicable
Interest Period, such Loans shall be automatically converted to Base Rate Loans.
Each Notice of Conversion or Continuation shall be irrevocable.
SECTION 2.12 FEES
(a) Unused Commitment Fee.
The Borrower agrees to pay to each Lender a commitment fee on
the daily average amount by which the Revolving Credit Commitment of such Lender
exceeds such Lender's Ratable Portion of the Revolving Credit Outstandings less
the amount of any outstanding Swing Loans (the "Unused Commitment Fee") from the
date hereof until the Revolving Credit Termination Date at the Applicable Unused
Commitment Fee Rate, payable in arrears (i) on the last day of each calendar
quarter, commencing on the first such day following the Closing Date and (ii) on
the Revolving Credit Termination Date.
(b) Letter of Credit Fees.
The Borrower agrees to pay the following amounts with respect
to Letters of Credit issued by any Issuer:
(i) to the Administrative Agent for the account of
each Issuer of a Letter of Credit, with respect to each Letter of
Credit issued by such Issuer, an issuance fee equal to 0.125% per annum
of the maximum amount available from time to time to be drawn under
such Letter of Credit, payable in arrears (A) on the last day of each
calendar quarter, commencing on the first such day following the
issuance of such Letter of Credit and (B) on the Revolving Credit
Termination Date;
(ii) to the Administrative Agent for the ratable
benefit of the Lenders, with respect to each Letter of Credit, a fee
accruing at a rate per annum equal to the Applicable Margin for
Revolving Loans that are Eurodollar Rate Loans of the maximum amount
available from time to time to be drawn under such Letter of Credit,
payable in arrears (A) on the last day of each calendar quarter,
commencing on the first such day following the issuance of such Letter
of Credit and (B) on the Revolving Credit Termination Date; provided,
however that during the continuance of an Event of Default,
42
such fee shall be increased by two percent per annum and shall be
payable on demand; and
(iii) to the Issuer of any Letter of Credit, with
respect to the issuance, amendment or transfer of each Letter of Credit
and each drawing made thereunder, documentary and processing charges in
accordance with such Issuer's standard schedule for such charges in
effect at the time of issuance, amendment, transfer or drawing, as the
case may be.
(c) Facility Fees.
The Borrower shall pay:
(i) upon the occurrence of a Facility Extension
pursuant to Section 2.18 (Facility Extension), a fee to each Extending
Lender and each Extension Assuming Lender in an amount equal to 0.25%
of such Lender's Revolving Credit Commitment outstanding on the
Extension Date applicable to such Facility Extension, which fee shall
be payable on such Extension Date; and
(ii) upon the occurrence of a Facility Increase
pursuant to Section 2.19 (Facility Increase), a fee to each Lender that
participates in such Facility Increase (including any Eligible Assignee
that executes an Assumption Agreement in connection with such Facility
Increase) and each new Lender to be determined by the Arranger based on
market conditions at the time of such Facility Increase, which fee
shall be payable in the Facility Increase Effective Date.
(d) Additional Fees.
The Borrower has agreed to pay to CNAI, the Administrative
Agent and the Arranger additional fees, the amount and dates of payment of which
are embodied in the Fee Letter.
SECTION 2.13 PAYMENTS AND COMPUTATIONS
(a) The Borrower shall make each payment hereunder (including
fees and expenses) not later than 1:00 p.m. (New York City time) on the day when
due, in Dollars, to the Administrative Agent at its address referred to in
Section 11.8 (Notices, Etc.) in immediately available funds without deduction,
set-off or counterclaim. The Administrative Agent will promptly thereafter cause
to be distributed immediately available funds relating to the payment of
principal or interest or fees to the Lenders, in accordance with the application
of payments set forth in clauses (e) and (f) of this Section 2.13 (Payments and
Computations), as applicable, for the account of their respective Applicable
Lending Offices; provided, however, that amounts payable pursuant to Section
2.14(c) (Increased Costs), Section 2.14(e) (Breakage Costs), Section 2.15
(Capital Adequacy) or Section 2.16 (Taxes) shall be paid only to the affected
Lender or Lenders and amounts payable with respect to Swing Loans shall be paid
only to the Swing Loan Lender. Payments received by the Administrative Agent
after 1:00 p.m. (New York City time) shall be deemed to be received on the next
Business Day.
(b) All computations of interest and of fees based on the Base
Rate shall be made by the Administrative Agent on the basis of a year of 365/366
days, as the case may be and
43
all computations of all other interest and all fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest and fees are payable. Each
determination by the Administrative Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder shall be stated to be due
on a day other than a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of payment of interest or fees, as
the case may be; provided, however, that if such extension would cause payment
of interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the immediately preceding Business
Day. All repayments of any Revolving Loans shall be applied as follows: first,
to repay such Loans outstanding as Base Rate Loans and then to repay such Loans
outstanding as Eurodollar Rate Loans with those Eurodollar Rate Loans having
earlier expiring Interest Periods being repaid prior to those having later
expiring Interest Periods.
(d) Unless the Administrative Agent shall have received notice
from the Borrower to the Lenders prior to the date on which any payment is due
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon at the Federal Funds Rate, for the first Business Day, and,
thereafter, at the rate applicable to Base Rate Loans, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent.
(e) Subject to the provisions of clause (f) of this Section
2.13 (Payments and Computations) (and except as otherwise provided in Section
2.9 (Mandatory Prepayments), all payments and any other amounts received by the
Administrative Agent from or for the benefit of the Borrower shall be applied as
follows: first, to pay principal of and interest on any portion of the Loans
that the Administrative Agent may have advanced pursuant to the express
provisions of this Agreement on behalf of any Lender, for which the
Administrative Agent has not then been reimbursed by such Lender or the
Borrower, second, to pay all other Obligations then due and payable, and third,
as the Borrower so designates. Payments in respect of Swing Loans received by
the Administrative Agent shall be distributed to the Swing Loan Lender; payments
in respect of Revolving Loans received by the Administrative Agent shall be
distributed to each Lender in accordance with such Lender's Ratable Portion; and
all payments of fees and all other payments in respect of any other Obligation
shall be allocated among such of the Lenders and Issuers as are entitled
thereto, and, for such payments allocated to the Lenders, in proportion to their
respective Ratable Portions.
(f) During the continuance of an Event of Default, the
Borrower hereby irrevocably waives the right to direct the application of any
and all payments in respect of the Obligations and any proceeds of Collateral,
and agrees that, notwithstanding the provisions of Section 2.9 (Mandatory
Prepayments) and clause (e) above, the Administrative Agent may, and shall upon
either (A) the written direction of the Requisite Lenders or (B) the
acceleration of the
44
Obligations pursuant to Section 9.2 (Remedies), apply all payments (subject in
any event to the restrictions set forth in Section 9.3 (Actions in Respect of
Letters of Credit) in respect of the application of amounts funded to a Cash
Collateral Account in respect of outstanding Letter of Credit Obligations) in
respect of any Obligations and all funds on deposit in any Cash Collateral
Account (including all proceeds arising from a Reinvestment Event that are held
in the Cash Collateral Account pending application of such proceeds as specified
in a Reinvestment Notice) and all other proceeds of Collateral in the following
order:
(i) first, to pay interest on and then principal of
any portion of the Revolving Loans which the Administrative Agent may
have advanced on behalf of any Lender for which the Administrative
Agent has not then been reimbursed by such Lender or the Borrower;
(ii) second, to pay interest on and then principal of
any Swing Loan;
(iii) third, to pay Obligations in respect of any
expense reimbursements or indemnities then due the Administrative
Agent;
(iv) fourth, to pay Obligations in respect of any
expense reimbursements or indemnities then due to the Lenders and the
Issuers;
(v) fifth, to pay Obligations in respect of any fees
then due to the Administrative Agent, the Lenders and the Issuers;
(vi) sixth, to pay interest then due and payable in
respect of the Loans and Reimbursement Obligations;
(vii) seventh, to pay or prepay principal payments on
the Loans and Reimbursement Obligations and to provide cash collateral
for outstanding Letter of Credit Undrawn Amounts in the manner
described in Section 9.3 (Actions in Respect of Letters of Credit),
ratably to the aggregate principal amount of such Loans, Reimbursement
Obligations and Letter of Credit Undrawn Amounts, and Obligations owing
with respect to Hedging Contracts; and
(viii) eighth, to the ratable payment of all other
Obligations;
provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any Obligation described in any of clauses
first through eighth, the available funds being applied with respect to any such
Obligation (unless otherwise specified in such clause) shall be allocated to the
payment of such Obligations ratably, based on the proportion of the
Administrative Agent's and each Lender's or Issuer's interest in the aggregate
outstanding Obligations described in such clauses. The order of priority set
forth in clauses first through eighth of this clause (f) may at any time and
from time to time be changed by the agreement of all Lenders without necessity
of notice to or consent of or approval by the Borrower, any Secured Party that
is not a Lender or Issuer, or any other Person. The order of priority set forth
in clauses first through fifth of this clause (f) may be changed only with the
prior written consent of the Administrative Agent in addition to all Lenders.
The order of priority in clause second above may be changed only with the prior
written consent of all Lenders and the Administrative Agent.
45
(g) At the option of the Administrative Agent, principal on
the Swing Loans, Reimbursement Obligations, interest, fees, expenses and other
sums due and payable in respect of the Revolving Loans may be paid from the
proceeds of Swing Loans or Revolving Loans. The Borrower hereby authorizes the
Swing Loan Lender to make Swing Loans pursuant to Section 2.3(a), and the
Lenders to make Revolving Loans pursuant to Section 2.2(a), from time to time in
the Swing Loan Lender's, or such Lender's discretion, that are in the amounts of
any and all principal payable with respect to the Swing Loans and interest,
fees, expenses and other sums payable in respect of the Revolving Loans, and
further authorizes the Administrative Agent to give the Lenders notice of any
Borrowing with respect to such Swing Loans and Revolving Loans and to distribute
the proceeds of such Swing Loans and Revolving Loans to pay such amounts. The
Borrower agrees that all such Swing Loans and Revolving Loans so made shall be
deemed to have been requested by it (irrespective of the satisfaction of the
conditions in Section 3.2 (Conditions Precedent to Each Loan and Letter of
Credit), which conditions the Lenders irrevocably waive) and directs that all
proceeds thereof shall be used to pay such amounts.
SECTION 2.14 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE
LOANS
(a) Determination of Interest Rate.
The Eurodollar Rate for each Interest Period for Eurodollar
Rate Loans shall be determined by the Administrative Agent pursuant to the
procedures set forth in the definition of "Eurodollar Rate." The Administrative
Agent's determination shall be presumed to be correct, absent manifest error,
and shall be binding on the Borrower.
(b) Interest Rate Unascertainable, Inadequate or Unfair.
In the event that: (i) the Administrative Agent determines
that adequate and fair means do not exist for ascertaining the applicable
interest rates by reference to which the Eurodollar Rate then being determined
is to be fixed; or (ii) the Requisite Lenders notify the Administrative Agent
that the Eurodollar Rate for any Interest Period will not adequately reflect the
cost to such Lenders of making or maintaining such Loans for such Interest
Period, the Administrative Agent shall forthwith so notify the Borrower and the
Lenders, whereupon each Eurodollar Loan shall automatically, on the last day of
the current Interest Period for such Loan, convert into a Base Rate Loan and the
obligations of the Lenders to make Eurodollar Rate Loans or to convert Base Rate
Loans into Eurodollar Rate Loans shall be suspended until the Administrative
Agent shall notify the Borrower that the Requisite Lenders have determined that
the circumstances causing such suspension no longer exist.
(c) Increased Costs.
If at any time any Lender determines that the introduction of
or any change in or in the interpretation of any law, treaty or governmental
rule, regulation or order (other than any change by way of imposition or
increase of reserve requirements included in determining the Eurodollar Rate) or
the compliance by such Lender with any guideline, request or directive from any
central bank or other Governmental Authority (whether or not having the force of
law), shall have the effect of increasing the cost to such Lender of agreeing to
make or making, funding or maintaining any Eurodollar Rate Loans, then the
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such increased
cost,
46
submitted to the Borrower and the Administrative Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(d) Illegality.
Notwithstanding any other provision of this Agreement, if any
Lender determines that the introduction of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement shall make it unlawful, or any central bank or
other Governmental Authority shall assert that it is unlawful, for any Lender or
its Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to
fund or maintain Eurodollar Rate Loans, then, on notice thereof and demand
therefor by such Lender to the Borrower through the Administrative Agent, (i)
the obligation of such Lender to make or to continue Eurodollar Rate Loans and
to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended, and
each such Lender shall make a Base Rate Loan as part of any requested Borrowing
of Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loans are then
outstanding, the Borrower shall immediately convert each such Loan into a Base
Rate Loan. If at any time after a Lender gives notice under this Section 2.14(d)
(Illegality) such Lender determines that it may lawfully make Eurodollar Rate
Loans, such Lender shall promptly give notice of that determination to the
Borrower and the Administrative Agent, and the Administrative Agent shall
promptly transmit the notice to each other Lender. The Borrower's right to
request, and such Lender's obligation, if any, to make Eurodollar Rate Loans
shall thereupon be restored.
(e) Breakage Costs.
In addition to all amounts required to be paid by the Borrower
pursuant to Section 2.10 (Interest), the Borrower shall compensate each Lender,
upon demand, for all losses, expenses and liabilities (including any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain such Lender's Eurodollar
Rate Loans to the Borrower but excluding any loss of the Applicable Margin on
the relevant Loans) which that Lender may sustain (i) if for any reason a
proposed Borrowing, conversion into or continuation of Eurodollar Rate Loans
does not occur on a date specified therefor in a Notice of Borrowing or a Notice
of Conversion or Continuation given by a Borrower or in a telephonic request by
it for borrowing or conversion or continuation or a successive Interest Period
does not commence after notice therefor is given pursuant to Section 2.11
(Conversion/Continuation Option), (ii) if for any reason any Eurodollar Rate
Loan is prepaid (including (x) as a result of any conversion into a Base Rate
Loan or (y) mandatorily pursuant to Section 2.9 (Mandatory Prepayments) on a
date which is not the last day of the applicable Interest Period, (iii) as a
consequence of a required conversion of a Eurodollar Rate Loan to a Base Rate
Loan as a result of any of the events indicated in Section 2.14(d) (Illegality),
or (iv) as a consequence of any failure by a Borrower to repay Eurodollar Rate
Loans when required by the terms hereof. The Lender making demand for such
compensation shall deliver to the Borrower concurrently with such demand a
written statement as to such losses, expenses and liabilities, and this
statement shall be conclusive as to the amount of compensation due to such
Lender, absent manifest error.
SECTION 2.15 CAPITAL ADEQUACY
If at any time any Lender determines that (a) the adoption of
or any change in or in the interpretation of any law, treaty or governmental
rule, regulation or order after the date of
47
this Agreement regarding capital adequacy, (b) compliance with any such law,
treaty, rule, regulation, or order, or (c) compliance with any guideline or
request or directive from any central bank or other Governmental Authority
(whether or not having the force of law) shall have the effect of reducing the
rate of return on such Lender's (or any corporation controlling such Lender's)
capital as a consequence of its obligations hereunder or under or in respect of
any Letter of Credit to a level below that which such Lender or such corporation
could have achieved but for such adoption, change, compliance or interpretation,
then, upon demand from time to time by such Lender (with a copy of such demand
to the Administrative Agent), the Borrower shall pay to the Administrative Agent
for the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender for such reduction. A
certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes absent
manifest error.
SECTION 2.16 TAXES
(a) Any and all payments by any Loan Party under each Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding (i) in the case of each
Lender and the Administrative Agent (A) taxes measured by its net income, and
franchise taxes imposed on it, by the jurisdiction (or any political subdivision
thereof) under the laws of which such Lender or the Administrative Agent (as the
case may be) is organized and (B) any United States withholding taxes payable
with respect to payments under the Loan Documents under laws (including any
statute, treaty or regulation) in effect on the Closing Date (or, in the case of
an Eligible Assignee, the date of the Assignment and Acceptance) applicable to
such Lender or the Administrative Agent, as the case may be, but not excluding
any United States withholding taxes payable as a result of any change in such
laws occurring after the Closing Date (or the date of such Assignment and
Acceptance) and (ii) in the case of each Lender, taxes measured by its net
income, and franchise taxes imposed on it as a result of a present or former
connection (but not any such connection arising solely from the Administrative
Agent or such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Loan
Document) between such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any taxing authority thereof or therein (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Taxes shall be
required by law to be deducted from or in respect of any sum payable under any
Loan Document to any Lender or the Administrative Agent (w) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.16 (Taxes) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (x) the relevant Loan Party shall make such deductions,
(y) the relevant Loan Party shall pay the full amount deducted to the relevant
taxing authority or other authority in accordance with applicable law, and (z)
the relevant Loan Party shall deliver to the Administrative Agent evidence of
such payment.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political subdivision thereof or
any applicable foreign jurisdiction, and all liabilities with respect thereto,
which arise from any payment made under any Loan Document or from the
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execution, delivery or registration of, or otherwise with respect to, any Loan
Document (collectively, "Other Taxes").
(c) Except for amounts due as a result of a breach of a
Lender's obligations under clause (f) of Section 2.16 (Taxes), the Borrower will
indemnify each Lender and the Administrative Agent for the full amount of Taxes
and Other Taxes (including any Taxes and Other Taxes imposed by any jurisdiction
on amounts payable under this Section 2.16 (Taxes) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including for
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within 30 days from the date such Lender or
the Administrative Agent (as the case may be) makes written demand therefor. (d)
Within 30 days after the date of any payment of Taxes or Other Taxes by any Loan
Party, the Borrower shall furnish to the Administrative Agent, at its address
referred to in Section 11.8 (Notices, Etc.), the original or a certified copy of
a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.16 (Taxes) shall survive the payment in full of the
Obligations.
(f) On or prior to the Closing Date in the case of each
Non-U.S. Lender that is a signatory hereto, and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Non-U.S. Lender and from time to time thereafter if requested by the Borrower or
the Administrative Agent, each Non-U.S. Lender that is entitled at such time to
an exemption from United States withholding tax, or that is subject to such tax
at a reduced rate under an applicable tax treaty, shall provide the
Administrative Agent and the Borrower with two completed originals of the
following: (i) Form W-8ECI (claiming exemption from withholding because the
income is effectively connected with a U.S. trade or business) (or any successor
form); (ii) Form W-8BEN (claiming exemption from, or a reduction of, withholding
tax under an income tax treaty) (or any successor form); (iii) in the case of a
Non-U.S. Lender claiming exemption under Sections 871(h) or 881(c) of the Code,
a Form W-8BEN (claiming exemption from withholding under the portfolio interest
exemption) or any successor form; or (iv) any other applicable form, certificate
or document prescribed by the IRS certifying as to such Non-U.S. Lender's
entitlement to such exemption from United States withholding tax or reduced rate
with respect to all payments to be made to such Non-U.S. Lender under the Loan
Documents. Unless the Borrower and the Administrative Agent have received forms
or other documents satisfactory to them indicating that payments under any Loan
Document to or for a Non-U.S. Lender are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Borrower or the Administrative Agent shall withhold amounts
required to be withheld by applicable Requirements of Law from such payments at
the applicable statutory rate.
(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.16 shall use its reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that would be payable or may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender.
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SECTION 2.17 SUBSTITUTION OF LENDERS
In the event that (a) (i) any Lender makes a claim under
Section 2.14(c) (Increased Costs) or Section 2.15 (Capital Adequacy), or (ii) it
becomes illegal for any Lender to continue to fund or make any Eurodollar Rate
Loan and such Lender notifies the Borrower pursuant to Section 2.14(d)
(Illegality), or (iii) the Borrower is required to make any payment pursuant to
Section 2.16 (Taxes) that is attributable to any Lender, or (iv) any Lender is a
Non-Funding Lender, (b) in the case of clause (a)(i) above, as a consequence of
increased costs in respect of which such claim is made, the effective rate of
interest payable to such Lender under this Agreement with respect to its Loans
materially exceeds the effective average annual rate of interest payable to the
Requisite Lenders under this Agreement and (c) Lenders holding at least 75% of
the Revolving Credit Commitments are not subject to such increased costs or
illegality, payment or proceedings (any such Lender, an "Affected Lender"), the
Borrower may substitute another financial institution for such Affected Lender
hereunder, upon reasonable prior written notice (which written notice must be
given within 90 days following the occurrence of any of the events described in
clauses (a)(i), (ii), (iii) or (iv)) by the Borrower to the Administrative Agent
and the Affected Lender that the Borrower intends to make such substitution,
which substitute financial institution must be an Eligible Assignee and, if not
a Lender, reasonably acceptable to the Administrative Agent; provided, however,
that if more than one Lender claims increased costs, illegality or right to
payment arising from the same act or condition and such claims are received by
the Borrower within 30 days of each other then the Borrower may substitute all,
but not (except to the extent the Borrower has already substituted one of such
Affected Lenders before the Borrower's receipt of the other Affected Lenders'
claim) less than all, Lenders making such claims. In the event that the proposed
substitute financial institution or other entity is reasonably acceptable to the
Administrative Agent and the written notice was properly issued under this
Section 2.17, the Affected Lender shall sell and the substitute financial
institution or other entity shall purchase at par, pursuant to an Assignment and
Acceptance, all rights and claims of such Affected Lender under the Loan
Documents and the substitute financial institution or other entity shall assume
and the Affected Lender shall be relieved of its Revolving Credit Commitments
and all other prior unperformed obligations of the Affected Lender under the
Loan Documents (other than in respect of any damages (other than exemplary or
punitive damages, to the extent permitted by applicable law) in respect of any
such unperformed obligations). Upon the effectiveness of such sale, purchase and
assumption (which, in any event shall be conditioned upon the payment in full by
the Borrower to the Affected Lender in cash of all fees, unreimbursed costs and
expenses and indemnities accrued and unpaid through such effective date), the
substitute financial institution or other entity shall become a "Lender"
hereunder for all purposes of this Agreement having a Revolving Credit
Commitment in the amount of such Affected Lender's Revolving Credit Commitment
assumed by it and such Revolving Credit Commitment of the Affected Lender shall
be terminated, provided that all indemnities under the Loan Documents shall
continue in favor of such Affected Lender.
SECTION 2.18 FACILITY EXTENSION
(a) At any time at least 60 days but not more than 90 days
prior to the date which is one year prior to the then existing Scheduled
Termination Date, the Borrower, by written notice to the Administrative Agent,
may request an extension of the Scheduled Termination Date then in effect for an
additional one-year period; provided, that the Borrower may request no more than
two extensions of the Scheduled Termination Date pursuant to this Section 2.18
(Facility Extension).
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(b) The Administrative Agent shall promptly (and in any event
within five Business Days) notify each Lender of any extension request made by
the Borrower pursuant to Section 2.18(a), and each Lender shall in turn, in its
sole discretion, after receipt of such extension request not earlier than 30
days prior to the Scheduled Termination Date and not later than 20 days prior to
the Scheduled Termination Date, notify the Administrative Agent in writing as to
whether such Lender will consent to such extension. If any Lender shall fail to
notify the Administrative Agent in writing of its consent (or refusal to
consent) to any such extension of the Scheduled Termination Date by the end of
such 10 day period, such Lender shall be deemed to be a Non-Extending Lender (as
defined below) with respect to such request. The Administrative Agent shall
promptly notify the Borrower in writing of the decision of the Lenders regarding
the Borrower's request for an extension of such Scheduled Termination Date. It
is understood and agreed that no Lender shall have any obligation to agree to
any request made by the Borrower for an extension of the Scheduled Termination
Date.
(c) If Lenders holding at least 75% of the Revolving Credit
Commitments at such time (after giving effect to any assumptions of the
Revolving Credit Commitments of Non-Extending Lenders (as defined below) in
accordance with subsection (d) of this Section 2.18 (Facility Extension))
consent in writing to any such request in accordance with subsection (b) of this
Section 2.18 (Facility Extension), the Scheduled Termination Date in effect at
such time shall, upon payment by the Borrower to the Administrative Agent for
the ratable benefit of the Extending Lenders of the fee set forth in Section
2.12(c)(i), effective as of the then current Scheduled Termination Date (the
"Extension Date"), be extended for a period of one year as to those Extending
Lenders that so consented (each an "Extending Lender") but shall not be extended
as to any other Lender (each a "Non-Extending Lender"). The Administrative Agent
shall notify the Borrower, in writing, of the Lenders' decision no later than 15
days prior to the Scheduled Termination Date. To the extent that the Scheduled
Termination Date is not extended as to any Lender pursuant to this Section 2.18
(Facility Extension) and the Revolving Credit Commitment or Loans of such Lender
are not assumed in accordance with subsection (d) of this Section 2.18 (Facility
Extension) on or prior to the applicable Extension Date, the Revolving Credit
Commitment and Obligations of such Non-Extending Lender shall automatically
terminate and become due and payable, in whole on such unextended Scheduled
Termination Date, without any further notice or other action by the Borrower,
such Extending Lender or any other Person and the failure of the Borrower to pay
the same shall constitute an Event of Default pursuant to clauses (a) and (b) of
Section 9.1 (Events of Default).
(d) If less than all of the Lenders consent to any such
request pursuant to subsection (b) of this Section 2.18 (Facility Extension),
the Borrower shall first offer to the Extending Lenders (and, to the extent such
offer is not promptly accepted, to other Eligible Assignees) to assume,
effective as of the Extension Date, any Non-Extending Lender's Revolving Credit
Commitment and Loans, and all of the rights and obligations of such
Non-Extending Lender under this Agreement thereafter arising in respect of such
Revolving Credit Commitment or Loans, as applicable (each Eligible Assignee
assuming the Revolving Credit Commitment and Loans, of one of more Non-Extending
Lenders pursuant to this Section 2.18 (Facility Extension) being an "Extension
Assuming Lender"), without recourse to or warranty by, or expense to, such
Non-Extending Lender; provided, however, that the additional Revolving Credit
Commitment of any such Extension Assuming Lender, when aggregated with other
existing Revolving Credit Commitment of such Person, shall in no event be less
than $5,000,000 unless the Revolving Credit Commitment, as applicable, of such
Non-Extending Lender hereunder at such time is less
51
than $5,000,000, in which case such Extension Assuming Lender shall assume all
of such lesser amount; and provided, further, that:
(i) the Extending Lenders and Extension Assuming
Lenders shall collectively have paid to the Non-Extending Lenders the
aggregate principal amount of, and any interest accrued and unpaid to
the effective date of such assumption on, the outstanding Loans, if
any, of such Non-Extending Lenders;
(ii) any accrued and unpaid fees owing to such
Non-Extending Lenders as of the effective date of such assumption, and
all additional cost and expense reimbursements and indemnification
payments payable to such Non-Extending Lenders, and all other accrued
and unpaid amounts owing to such Non-Extending Lenders under this
Agreement and the Revolving Credit Notes, as applicable, as of the
effective date of such assumption, shall have been paid to such
Non-Extending Lenders by the Borrower or such Extending Lenders and
Extension Assuming Lenders; and
(iii) with respect to any Extending Lender or any
such Extension Assuming Lender, the applicable fee required under
Section 2.12 (Fees) shall have been paid.
(e) At least three Business Days prior to each Extension Date,
(A) each such Extension Assuming Lender, if any, shall have delivered to the
Borrower and the Administrative Agent an Assignment and Acceptance duly executed
by such Extension Assuming Lender, such Non-Extending Lender, the Borrower and
the Administrative Agent, (B) each such Extending Lender, if any, shall have
delivered written confirmation satisfactory to the Borrower and the
Administrative Agent as to any increase in the amount of its Revolving Credit
Commitment resulting from its assumption of one or more Revolving Credit
Commitments of the Non-Extending Lenders and (C) each Non-Extending Lender being
replaced pursuant to this Section 2.18 (Facility Extension) shall have delivered
to the Administrative Agent, to be held in escrow on behalf of such
Non-Extending Lender until the payment in full of all amounts owing to such
Non-Extending Lender under clauses (i) through (iii) of Section 2.18(d), any
Revolving Credit Note, as applicable, held by such Non-Extending Lender. Upon
the payment or prepayment of all amounts referred to in clauses (i), (ii) and
(iii) of Section 2.18(d), each such Extending Lender or Extension Assuming
Lender, as of the Extension Date, will be substituted for the applicable
Non-Extending Lenders under this Agreement and shall be a Lender for all
purposes of this Agreement in proportion to the actual amount of the Revolving
Credit Commitment assumed, without any further acknowledgment by or the consent
of any of the other Lenders, and the obligations of each such Non-Extending
Lender hereunder shall, by the provisions hereof, be released and discharged.
(f) All references in this Agreement and in the Notes to the
"Scheduled Termination Date" shall, with respect to each Extending Lender and
each Extension Assuming Lender for each Extension Date, refer to the Scheduled
Termination Date. Promptly following the effectiveness of any extension
contemplated by this Section 2.18 (Facility Extension), the Administrative Agent
shall notify the Lenders (including, without limitation, each Extension Assuming
Lender) of such extension and shall thereupon record in the Register the
relevant information with respect to each such Extending Lender and each such
Extension Assuming Lender.
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SECTION 2.19 FACILITY INCREASE
The Borrower may request, in writing, an increase in the
aggregate Revolving Credit Commitments by up to $5,000,000 (the "Facility
Increase"); provided, however, that such increase will only become effective if
(i) the Borrower shall have given the Administrative Agent at least 10 Business
Days' notice of its intention to effect a Facility Increase and the desired
amount of such Facility Increase, (ii) at the time of and after giving effect to
such increase, the Borrower is in pro forma compliance with the financial
covenants set forth in Article V (Financial Covenants) hereof, (iii) no Default
or Event of Default has occurred and is continuing, (iv) at least one Lender
agrees to participate in such Facility Increase (or an Eligible Assignee or
Eligible Assignees acceptable to the Arranger in its sole and absolute
discretion agrees to accept the offer of such increase as provided below), (v)
the conditions precedent to a Borrowing set forth in Section 3.2 are satisfied
as of such date, and (vi) an opinion of counsel to the Loan Parties in form and
substance and from counsel satisfactory to the Administrative Agent and
addressed to the Administrative Agent, the Issuers and the Lenders and
addressing such matters as any Lender through the Administrative Agent may
reasonably request shall be delivered to the Administrative Agent. The Borrower
shall have the right to offer such increase to (x) the existing Lenders, and
each existing Lender will have the right, but not the obligation, to commit to
all or a portion of the proposed increase or (y) other Eligible Assignees
acceptable to the Arranger in its sole and absolute discretion; provided,
however, that the minimum Revolving Credit Commitment of each such new Eligible
Assignee accepting a Revolving Credit Commitment as part of such Facility
Increase equals or exceeds $5,000,000, and such Lender or Eligible Assignee
executes an Assumption Agreement pursuant to which such Lender agrees to commit
to all or a portion of such Facility Increase and, in the case of an Eligible
Assignee, to be bound by the terms of this Agreement as a Lender. On the
effective date provided for in the Assumption Agreement providing for a Facility
Increase (each a "Facility Increase Effective Date"), the Revolving Credit
Commitments will be increased by the amount committed to by each Lender or
Eligible Assignee on the Facility Increase Effective Date. In the event there
are Lenders and Eligible Assignees that have committed to a Facility Increase in
excess of the maximum amount requested (or permitted), then the Administrative
Agent shall have the right to allocate such commitments, first to Lenders and
then to Eligible Assignees, on whatever basis the Administrative Agent
determines is appropriate in consultation with the Borrower.
ARTICLE III
CONDITIONS TO LOANS AND LETTERS OF CREDIT
SECTION 3.1 CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTERS
OF CREDIT
The obligation of each Lender to make the Loans requested to
be made by it on the Closing Date and the obligation of each Issuer to issue
Letters of Credit on the Closing Date is subject to the satisfaction or due
waiver in accordance with Section 11.1 (Amendments, Waivers, Etc.) of each of
the following conditions precedent:
(a) Certain Documents.
The Administrative Agent shall have received on the Closing
Date each of the following, each dated the Closing Date unless otherwise
indicated or agreed to by the Administrative Agent, in form and substance
satisfactory to the Administrative Agent and in sufficient copies for each
Lender:
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(i) this Agreement, duly executed and delivered by
the Borrower and, for the account of each Lender requesting the same, a
Revolving Credit Note or Revolving Credit Notes of the Borrower
conforming to the requirements set forth herein;
(ii) the Guaranty, duly executed by each Guarantor;
(iii) the Pledge Agreement, duly executed by the
Borrower and each Guarantor, together with:
(A) evidence satisfactory to the
Administrative Agent that the Administrative Agent (for the
benefit of the Secured Parties) has a valid and perfected
first priority security interest in the Collateral, including
(x) such documents duly executed by each Loan Party as the
Administrative Agent may request with respect to the
perfection of its security interests (on behalf of the Secured
Parties) in the Collateral and (y) copies of UCC search
reports as of a recent date listing all effective financing
statements that name any Loan Party as debtor, together with
copies of such financing statements, none of which shall cover
the Collateral except for those which shall be terminated, and
for which termination statements have been provided, on the
Closing Date); and
(B) share certificates representing all of
certificated Pledged Stock being pledged pursuant to such
Pledge Agreement and undated stock powers for such share
certificates executed in blank;
(iv) a favorable opinion of (A) ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., counsel to the Loan Parties, in substantially the form of
Exhibit H and (B) counsel to the Administrative Agent as to the
enforceability of this Agreement and the other Loan Documents to be
executed on the Closing Date;
(v) a copy of each Related Document (other than the
Senior Note Indenture and the Subordinated Note Indenture) certified as
being complete and correct by a Responsible Officer of the Borrower;
(vi) copies of the Senior Note Indenture and the
Subordinated Note Indenture certified as being complete and correct by
a Responsible Officer of the Borrower;
(vii) a copy of the articles or certificate of
incorporation (or equivalent Constituent Document) of each Loan Party,
certified as of a recent date by the Secretary of State of the state of
organization or formation of such Loan Party, together with
certificates of such official attesting to the good standing of each
such Loan Party;
(viii) a certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying (A) the names and true
signatures of each officer of such Loan Party who has been authorized
to execute and deliver any Loan Document or other document required
hereunder to be executed and delivered by or on behalf of such Loan
Party, (B) the by-laws (or equivalent Constituent Document) of such
Loan Party as in effect on the date of such certification, (C) the
resolutions of such Loan Party's Board of Directors (or equivalent
governing body) approving and authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents to which it
is
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a party and (D) that there have been no changes in the certificate of
incorporation (or equivalent Constituent Document) of such Loan Party
from the certificate of incorporation (or equivalent Constituent
Document) delivered pursuant to the immediately preceding clause;
(ix) a certificate of a Responsible Officer of the
Borrower, stating that the Borrower and each Guarantor is Solvent after
giving effect to the Merger, the issuance of the Notes, the initial
Loans and Letters of Credit, the application of the proceeds thereof in
accordance with Section 7.11 (Application of Proceeds) and the payment
of all estimated legal, accounting and other fees related hereto and
thereto;
(x) a certificate of a Responsible Officer to the
effect that (A) the condition set forth in Section 3.2(b)
(Representations and Warranties; No Defaults) has been satisfied and
(B) no litigation not listed on Schedule 4.7 shall have been commenced
against any Loan Party or any of its Subsidiaries that, if adversely
determined, would have a Material Adverse Effect;
(xi) evidence reasonably satisfactory to the
Administrative Agent that the insurance policies required by Section
7.5 (Maintenance of Insurance) and any Collateral Document are in full
force and effect;
(xii) (a) a pro forma estimated balance sheet of the
Borrower and its Subsidiaries at the Closing Date giving effect to the
Merger and the transactions contemplated thereby and the issuance of
the Notes, (b) audited annual financial statements of ▇▇▇▇▇ and its
Subsidiaries and Newmark and its Subsidiaries through the Fiscal Year
ended December 31, 2001 and (iii) the Borrower's business plan which
shall include a financial forecast on a quarterly basis after the
Closing Date through the year of the Scheduled Termination Date
prepared by the Borrower's management; and
(xiii) such other certificates, documents, agreements
and information respecting any Loan Party as any Lender through the
Administrative Agent may reasonably request.
(b) Refinanced Indebtedness.
All Refinanced Indebtedness and all liens granted thereunder
shall have been, or shall contemporaneously be, terminated pursuant to pay-off
documentation in form and substance satisfactory to the Administrative Agent.
(c) Proceeds from Notes.
The Borrower shall have received gross proceeds of at least
(i) $200,000,000 from the issuance of the Senior Notes, and (ii) $150,000,000
from the issuance of the Subordinated Notes.
(d) Minimum Consolidated Tangible Net Worth.
A Responsible Officer of the Borrower shall have certified to
the Administrative Agent with supporting documentation in reasonable detail that
Consolidated Tangible Net Worth
55
equals or exceeds $270,000,000 on the Closing Date, and the Administrative Agent
in its sole discretion shall be satisfied with the accuracy of such
certification.
(e) Fee and Expenses Paid.
There shall have been paid to the Administrative Agent, for
the account of the Administrative Agent and the Lenders, as applicable, all fees
due and payable on or before the Closing Date (including all such fees described
in the Fee Letter and all reasonable fees and expenses of counsel for which
invoices in reasonable detail have been presented), and all expenses due and
payable on or before the Closing Date.
(f) Material Adverse Change.
No material adverse change to the business, condition
(financial or otherwise), performance, properties or prospects, operations or
properties of (x) ▇▇▇▇▇ and its Subsidiaries, taken as a whole, since December
31, 2001 or (y) Newmark and its Subsidiaries, taken as a whole, since December
31, 2001, shall have occurred.
(g) Litigation.
There shall exist no action, suit, investigation, litigation
or proceeding pending or threatened in any court or before any arbitrator or
governmental instrumentality that (i) could reasonably be expected to result in
a Material Adverse Change or, except as disclosed herein, if adversely
determined, could reasonably be expected to result in a Material Adverse Change
or (ii) restrains, prevents or imposes or can reasonably be expected to impose
materially adverse conditions upon the issuance of the Notes, the funding of the
Facility or other transactions contemplated hereby.
(h) Officers of the Borrower.
The senior officer positions of Chief Executive Officer and
Chief Financial Officer of the Borrower shall be held by ▇▇▇▇▇▇▇ ▇. Mon and
▇▇▇▇▇ ▇▇▇▇▇▇, respectively, in each case pursuant to employment contracts (or
otherwise on terms) satisfactory to the Administrative Agent in its sole
discretion, and the other senior officers and management of TOI and the Borrower
shall be the senior officers and management disclosed to the Administrative
Agent in organizational charts delivered to the Administrative Agent as of the
date hereof.
(i) Related Documents.
The Administrative Agent shall be satisfied that: (i) the
terms and conditions of the Merger Agreement shall not have been amended, waived
or modified without the approval of the Administrative Agent (other than
non-material amendments, waivers and modifications to such terms that do not in
the aggregate materially adversely affect the interests of the Administrative
Agent and the Lenders), (ii) the Merger Agreement and the other Related
Documents shall have been approved by all corporate action of the Borrower and
each of the other parties thereto, shall be in full force and effect and there
shall not have occurred and be continuing any material breach or any default
thereunder, (iii) all conditions precedent to the consummation of the Merger
shall have been satisfied or waived with the consent of the Administrative
Agent, (v) the Merger shall have been consummated in accordance with the Merger
Agreement and all applicable Requirements of Law and all representations and
warranties
56
contained in the Merger Agreement and the other Related Documents shall be true
and correct in all material respects on the Closing Date.
(j) Consents, Etc.
Each of the Borrower and its Subsidiaries shall have received
all material consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all
material consents and authorizations of, and effected all notices to and filings
with, any Governmental Authority, in each case, as may be necessary to allow
each of the Borrower and its Subsidiaries lawfully (A) to execute, deliver and
perform, in all material respects, their respective obligations hereunder, and
under the Loan Documents, the Senior Note Indenture, the Subordinated Note
Indenture, the Notes, and the other Related Documents to which each of them,
respectively, is, or shall be, a party and each other agreement or instrument to
be executed and delivered by each of them, respectively, pursuant thereto or in
connection therewith, and (B) to create and perfect the Liens on the Collateral
owned and to be owned by each of them in the manner and for the purpose
contemplated by the Loan Documents.
SECTION 3.2 CONDITIONS PRECEDENT TO EACH LOAN AND LETTER OF
CREDIT
The obligation of each Lender on any date (including the
Closing Date) to make any Loan and of each Issuer on any date (including the
Closing Date) to Issue any Letter of Credit is subject to the satisfaction of
each of the following conditions precedent:
(a) Request for Borrowing or Issuance of Letter of Credit.
With respect to any Loan, the Administrative Agent shall have
received a duly executed Notice of Borrowing (or, in the case of Swing Loan, a
duly executed Swing Loan Request) and with respect to any Letter of Credit, the
Administrative Agent and the Issuer shall have received a duly executed Letter
of Credit Request.
(b) Representations and Warranties; No Defaults.
The following statements shall be true on and as of the date
of such Loan or Issuance, both before and after giving effect thereto and, in
the case of any Loan, to the application of the proceeds therefrom:
(i) the representations and warranties set forth in
Article IV and in the other Loan Documents shall be true and correct on
and as of the Closing Date and shall be true and correct in all
material respects on and as of any such date after the Closing Date
with the same effect as though made on and as of such date, except to
the extent such representations and warranties expressly relate to an
earlier date, in which case such representation and warranties shall
have been true and correct on and as of such earlier date;
(ii) no Default or Event of Default has occurred and
is continuing.
57
(c) No Legal Impediments.
The making of the Loans or the Issuance of such Letter of
Credit on such date does not violate any Requirement of Law on the date of or
immediately following such Loan or Issuance of such Letter of Credit and is not
enjoined, temporarily, preliminarily or permanently.
(d) Additional Matters.
The Administrative Agent shall have received such additional
documents, information and materials as any Lender, through the Administrative
Agent, may reasonably request.
Each submission by the Borrower to the Administrative Agent of a Notice of
Borrowing or a Swing Loan Request and the acceptance by the Borrower of the
proceeds of each Loan requested therein, and each submission by the Borrower to
an Issuer of a Letter of Credit Request and the Issuance of each Letter of
Credit requested therein, shall be deemed to constitute a representation and
warranty by the Borrower as to the matters specified in Section 3.2(b)
(Representations and Warranties; No Defaults) on the date of the making of such
Loan or the Issuance of such Letter of Credit.
SECTION 3.3 DETERMINATIONS OF INITIAL BORROWING CONDITIONS
For purposes of determining compliance with the conditions
specified in Section 3.1 (Conditions Precedent to Initial Loans and Letters of
Credit), each Lender shall be deemed to have consented to, approved, accepted or
be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders unless
an officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
prior to the initial Borrowing or Issuance hereunder specifying its objection
thereto and such Lender shall not have made available to the Administrative
Agent such Lender's Ratable Portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers and the Administrative
Agent to enter into this Agreement, the Borrower represents and warrants to the
Lenders, the Issuers and the Administrative Agent, on and as of the Closing
Date, after giving effect to the issuance of the Notes, the consummation of the
Merger and the making of the Loans and the other financial accommodations
(including the Issuance of Letters of Credit) on the Closing Date and on and as
of each date as required by Section 3.2(b)(i):
SECTION 4.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW
Each of the Borrower and its Subsidiaries (a) is duly
organized or incorporated, validly existing and in good standing under the laws
of the jurisdiction of its organization; (b) is duly qualified to do business as
a foreign corporation or entity and in good standing under the laws of each
jurisdiction where such qualification is necessary, except where the failure to
be so qualified or in good standing would not have a Material Adverse Effect;
(c) has all requisite power and authority and the legal right to own, pledge,
mortgage and operate its properties, to
58
lease the property it operates under lease and to conduct its business as now or
currently proposed to be conducted; (d) is in compliance with its Constituent
Documents; (e) is in compliance with all applicable Requirements of Law except
where the failure to be in compliance would not in the aggregate have a Material
Adverse Effect; and (f) has all necessary licenses, permits, consents or
approvals from or by, has made all necessary filings with, and has given all
necessary notices to, each Governmental Authority having jurisdiction, to the
extent required for such ownership, operation and conduct, except for licenses,
permits, consents, approvals or filings that can be obtained or made by the
taking of ministerial action to secure the grant or transfer thereof or the
failure to obtain or make would not, in the aggregate, have a Material Adverse
Effect.
SECTION 4.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS
(a) The execution, delivery and performance by each Loan Party
of the Loan Documents to which it is a party and the consummation of the
transactions contemplated thereby:
(i) are within such Loan Party's corporate, limited
liability company, partnership or other powers;
(ii) have been or, at the time of delivery thereof
pursuant to Article III will have been duly authorized by all necessary
corporate or other entity action, including the consent of
shareholders, partners and members where required;
(iii) do not and will not (A) contravene any Loan
Party's or any of its Subsidiaries' respective Constituent Documents,
(B) violate any other Requirement of Law applicable to any Loan Party
(including Regulations T, U and X of the Federal Reserve Board), or any
order or decree of any Governmental Authority or arbitrator applicable
to any Loan Party, (C) conflict with or result in the breach of, or
constitute a default under, or result in or permit the termination or
acceleration of, any Contractual Obligation of any Loan Party or any of
its Subsidiaries, or (D) result in the creation or imposition of any
Lien upon any of the property of any Loan Party or any of its
Subsidiaries, other than those in favor of the Secured Parties pursuant
to the Collateral Documents; and
(iv) do not require the consent of, authorization by,
approval of, notice to, or filing or registration with, any
Governmental Authority or any other Person, other than those listed on
Schedule 4.2 and which have been or will be, prior to the Closing Date,
obtained or made, copies of which have been or will be delivered to the
Administrative Agent pursuant to Section 3.1 (Conditions Precedent to
Initial Loans and Letters of Credit), and each of which on the Closing
Date will be in full force and effect and, with respect to the
Collateral, filings required to perfect the Liens created by the
Collateral Documents.
(b) This Agreement has been, and each of the other Loan
Documents will have been upon delivery thereof pursuant to the terms of this
Agreement, duly executed and delivered by each Loan Party thereto. This
Agreement is, and the other Loan Documents will be, when delivered hereunder,
the legal, valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally.
59
SECTION 4.3 OWNERSHIP OF BORROWER; SUBSIDIARIES
(a) The authorized capital stock of the Borrower consists of
67,000,000 shares of common stock, $0.01 par value per share, of which
27,878,787 shares are issued and outstanding, and 3,000,000 shares of preferred
stock, of which no shares are issued and outstanding. All of the outstanding
capital stock of the Borrower has been validly issued, is fully paid and
non-assessable and 91.75% is owned beneficially and of record by TOI, free and
clear of all Liens. Except as set forth on Schedule 4.3, no Stock of the
Borrower is subject to any option, warrant, right of conversion or purchase or
any similar right. There are no agreements or understandings to which the
Borrower is a party with respect to the voting, sale or transfer of any shares
of Stock of the Borrower or any agreement restricting the transfer or
hypothecation of any such shares.
(b) Set forth on Schedule 4.3 is a complete and accurate list
showing, as of the Closing Date, all Subsidiaries of the Borrower and, as to
each such Subsidiary, the jurisdiction of its organization, the number of shares
of each class of Stock authorized (if applicable), the number outstanding on the
Closing Date and the number and percentage of the outstanding shares of each
such class owned (directly or indirectly) by the Borrower. Except as set forth
on Schedule 4.3, no Stock of any Subsidiary of the Borrower is subject to any
outstanding option, warrant, right of conversion or purchase or any similar
right. All of the outstanding Stock of each Subsidiary of the Borrower owned
(directly or indirectly) by the Borrower has been validly issued, is fully paid
and non-assessable (to the extent applicable) and is owned by the Borrower or a
Subsidiary of the Borrower, free and clear of all Liens (other than the Lien in
favor of the Secured Parties created pursuant to the Pledge Agreement). Neither
the Borrower nor any such Subsidiary is a party to, or has knowledge of, any
agreement restricting the transfer or hypothecation of any Stock of any such
Subsidiary, other than the Loan Documents. The Borrower does not own or hold,
directly or indirectly, any Stock of any Person other than such Subsidiaries and
Investments permitted by Section 8.3 (Investments).
SECTION 4.4 FINANCIAL STATEMENTS
(a) The Consolidated balance sheets of Newmark and its
Subsidiaries as at December 31, 2001 and of ▇▇▇▇▇ and its Subsidiaries as at
December 31, 2001, and the related Consolidated statements of income, retained
earnings and cash flows of Newmark and its Subsidiaries and of ▇▇▇▇▇ and its
Subsidiaries for the fiscal year then ended, certified by Ernst & Young LLP, and
the Consolidated balance sheets of Newmark and its Subsidiaries and of ▇▇▇▇▇ and
its Subsidiaries as at March 31, 2002, and the related Consolidated statements
of income, retained earnings and cash flows of Newmark and its Subsidiaries and
of ▇▇▇▇▇ and its Subsidiaries for the three months then ended, copies of which
have been furnished to each Lender, fairly present, subject, in the case of said
balance sheets as at March 31, 2002, and said statements of income, retained
earnings and cash flows for the three months then ended, to the absence of
footnote disclosure and normal recurring year-end audit adjustments, the
Consolidated financial condition of Newmark and its Subsidiaries and of ▇▇▇▇▇
and its Subsidiaries as at such dates and the Consolidated results of the
operations of the Borrower and its Subsidiaries for the period ended on such
dates, all in conformity with GAAP.
(b) Except as set forth on Schedule 4.4, neither the Borrower
nor any of its Subsidiaries has any material obligation, material contingent
liability or material liability for taxes, material long-term leases or unusual
forward or long-term material commitment that is not
60
reflected in the Financial Statements referred to in clause (a) above or in the
notes thereto and not otherwise permitted by this Agreement.
(c) The Projections have been prepared by the Borrower in
light of the past operations of its business, and reflect projections for the
three year period beginning on January 1, 2002 on a quarterly basis. The
Projections are based upon estimates and assumptions stated therein, that the
Borrower believes in each case to be reasonable and fair in light of current
conditions and current facts known to the Borrower and, as of the Closing Date,
reflect the Borrower's good faith and reasonable estimates of the future
financial performance of the Borrower and its Subsidiaries and of the other
information projected therein for the periods set forth therein.
(d) The unaudited pro forma Consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries, a copy of which has been
delivered to each Lender pursuant to Section 3.1 (Conditions Precedent to
Initial Loans and Letters of Credit) (the "Pro Forma Balance Sheet"), has been
prepared as of March 31, 2002, reflects as of such date, on a pro forma basis
after giving effect to the Merger, the issuance of the Notes, and the Loans to
be made and the Letters of Credit to be Issued on the Closing Date and the other
financing transactions contemplated hereby, the Consolidated financial condition
of the Borrower and its Subsidiaries, and the assumptions expressed therein were
reasonable based on the information available to the Borrower at the time so
furnished and on the Closing Date.
SECTION 4.5 MATERIAL ADVERSE CHANGE
There has been no material adverse change to the business,
condition (financial or otherwise), performance, properties or prospects,
operations or properties of (x) ▇▇▇▇▇ and its Subsidiaries, taken as a whole,
since December 31, 2001, (y) Newmark and its Subsidiaries, taken as a whole,
since December 31, 2001, and (z) any Loan Party or the Borrower and its
Subsidiaries, taken as a whole, since December 31, 2001, and there have been no
events or developments that in the aggregate have had a Material Adverse Effect.
SECTION 4.6 SOLVENCY
Both before and after giving effect to (a) the Loans and
Letter of Credit Obligations to be made or extended on the Closing Date or such
other date as Loans and Letter of Credit Obligations requested hereunder are
made or extended, (b) the disbursement of the proceeds of such Loans pursuant to
the instructions of the Borrower, (c) the Merger, the issuance of the Notes, and
the Loans to be made and the Letters of Credit to be Issued on the Closing Date
and the consummation of the other financing transactions contemplated hereby and
(d) the payment and accrual of all transaction costs in connection with the
foregoing, each Loan Party is Solvent.
SECTION 4.7 LITIGATION
Except as set forth on Schedule 4.7, there are no pending or,
to the knowledge of the Borrower, threatened actions, investigations or
proceedings affecting the Borrower, or any of its Subsidiaries before any court,
Governmental Authority or arbitrator other than those that in the aggregate are
not reasonably likely to be determined adversely to any Loan Party and, if so
determined, would not have a Material Adverse Effect. The performance of any
action by any
61
Loan Party required or contemplated by any Loan Documents or any Related
Document is not restrained or enjoined (either temporarily, preliminarily or
permanently).
SECTION 4.8 TAXES
(a) All federal, state, local and foreign income and franchise
and other material tax returns, reports and statements (collectively, the "Tax
Returns") required to be filed by the Borrower or any of its Tax Affiliates have
been filed with the appropriate Governmental Authorities in all jurisdictions in
which such Tax Returns are required to be filed, all such Tax Returns are true
and correct in all material respects, and all taxes, charges and other
impositions reflected therein have been paid prior to the date on which any
fine, penalty, interest, late charge or loss may be added thereto for
non-payment thereof except where contested in good faith and by appropriate
proceedings if adequate reserves therefor have been established on the books of
the Borrower or such Tax Affiliate in conformity with GAAP. Except as set forth
on Schedule 4.8, no Tax Return is under audit or examination by any Governmental
Authority and no notice of such an audit or examination or any assertion of any
claim for Taxes has been given or made by any Governmental Authority. Proper and
accurate amounts have been withheld by the Borrower and each of its Tax
Affiliates from their respective employees for all periods in full and complete
compliance with the tax, social security and unemployment withholding provisions
of applicable Requirements of Law and such withholdings have been timely paid to
the respective Governmental Authorities.
(b) Except as set forth on Schedule 4.8, none of the Borrower
or any of its Tax Affiliates has (i) executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for the filing of any Tax Return or the
assessment or collection of any charges, (ii) incurred any obligation under any
tax sharing agreement or arrangement other than those of which the
Administrative Agent has received a copy prior to the date hereof, or (iii) been
a member of an affiliated, combined or unitary group other than the group of
which the Borrower (or its Tax Affiliate) is the common parent.
SECTION 4.9 FULL DISCLOSURE
(a) The information prepared or furnished by or on behalf of
the Borrower or any Loan Party in connection with this Agreement, the other Loan
Documents or the Related Documents or the consummation of the transactions
contemplated hereby or thereby and the Merger taken as a whole, including the
information contained in the Disclosure Documents, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein or herein not misleading.
(b) The Borrower has delivered to each Lender a true, complete
and correct copy of the Disclosure Documents. The Disclosure Documents comply as
to form in all material respects with all applicable requirements of all
applicable state and Federal securities laws.
SECTION 4.10 MARGIN REGULATIONS
The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Federal Reserve Board), and no proceeds of any
Loan or Letter of Credit will be used to purchase or carry
62
any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock in contravention of Regulation T, U
or X of the Federal Reserve Board.
SECTION 4.11 NO BURDENSOME RESTRICTIONS; NO DEFAULTS
(a) Neither the Borrower nor any of its Subsidiaries (i) is a
party to any Contractual Obligation the performance of which by any thereof,
either unconditionally or upon the happening of an event, would result in the
creation of a Lien (other than a Lien permitted under Section 8.2 (Liens, Etc.))
on the property or assets of any thereof or (ii) is subject to any charter or
corporate restrictions that would, in the aggregate, have a Material Adverse
Effect.
(b) Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any Contractual Obligation owed by it and, to
the knowledge of the Borrower, no other party is in default under or with
respect to any Contractual Obligation owed to any Loan Party or to any
Subsidiary of a Loan Party, other than, in either case, those defaults that in
the aggregate would not have a Material Adverse Effect.
(c) No Default or Event of Default has occurred and is
continuing.
(d) To the best knowledge of the Borrower, there are no
Requirements of Law applicable to any Loan Party or any Subsidiary of any Loan
Party the compliance with which by such Loan Party or such Subsidiary, as the
case may be, would, in the aggregate, have a Material Adverse Effect.
SECTION 4.12 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT
Neither the Borrower nor any of its Subsidiaries is (a) an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended or (b) a "holding company," or an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," as each such term is defined and used in the Public Utility Holding
Company Act of 1935, as amended.
SECTION 4.13 USE OF PROCEEDS
The proceeds of the Loans and the Letters of Credit are being
used by the Borrower solely (a) to repay the Refinanced Indebtedness, (b) to pay
transaction costs, fees and expenses related to the Merger, this Agreement and
the transactions contemplated hereby and thereby and (c) to provide working
capital from time to time for the Borrower and its Subsidiaries and for other
general corporate purposes.
SECTION 4.14 INSURANCE
Except as set forth on Schedule 4.14, all policies of
insurance of any kind or nature of the Borrower or any of its Subsidiaries,
including policies of life, fire, theft, product liability, public liability,
property damage, other casualty, employee fidelity, workers' compensation and
employee health and welfare insurance, are in full force and effect and are of a
nature and provide such coverage as is customarily carried by, and to the best
knowledge and belief of the Borrower is sufficient for, businesses of the size
and character of such Person.
63
Except as set forth on Schedule 4.14, none of the Borrower or any of its
Subsidiaries has in the three years preceding the Closing Date been refused
insurance for any material coverage for which it had applied or had any policy
of insurance terminated (other than at its request).
SECTION 4.15 LABOR MATTERS
(a) There are no strikes, work stoppages, slowdowns or
lockouts pending or threatened against or involving the Borrower or any of its
Subsidiaries, other than those that in the aggregate would not have a Material
Adverse Effect.
(b) There are no unfair labor practices, grievances or
complaints pending, or, to the Borrower's knowledge, threatened, against or
involving the Borrower or any of its Subsidiaries, nor are there any pending or,
to the Borrower's knowledge, threatened arbitrations or grievances involving the
Borrower or any of its Subsidiaries, other than those that, in the aggregate, if
resolved adversely to the Borrower or such Subsidiary, would not have a Material
Adverse Effect.
(c) Except as set forth on Schedule 4.15, as of the Closing
Date, there is no collective bargaining agreement covering any employee of the
Borrower or its Subsidiaries.
(d) Schedule 4.15 sets forth as of the date hereof, all
material consulting agreements, executive employment agreements, executive
compensation plans, deferred compensation agreements, employee stock purchase
and stock option plans and severance plans of the Borrower and any of its
Subsidiaries.
SECTION 4.16 ERISA
(a) Schedule 4.16 separately identifies as of the date hereof
all Title IV Plans and all of the employee benefit plans within the meaning of
Section 3(3) of ERISA to which the Borrower or any of its Subsidiaries has any
obligation or liability, contingent or otherwise.
(b) Each employee benefit plan of the Borrower or any of its
Subsidiaries which is intended to qualify under Section 401 of the Code does so
qualify, and any trust created thereunder is exempt from tax under the
provisions of Section 501 of the Code, except where such failures in the
aggregate would not have a Material Adverse Effect.
(c) Each Title IV Plan is in compliance in all material
respects with applicable provisions of ERISA, the Code and other Requirements of
Law except for non-compliances that in the aggregate would not have a Material
Adverse Effect.
(d) There has been no, nor is there reasonably expected to
occur, any ERISA Event other than those that, in the aggregate, would not have a
Material Adverse Effect.
(e) Neither the Borrower nor any ERISA Affiliate has
contributed or been obligated to contribute to, any Multiemployer Plan within
the last six years.
SECTION 4.17 ENVIRONMENTAL MATTERS
(a) The operations of the Borrower and each of its
Subsidiaries have been and are in compliance with all Environmental Laws,
including obtaining and complying with all
64
required environmental, health and safety Permits, other than non-compliances
that in the aggregate are not reasonably likely to result in the Borrower and
its Subsidiaries incurring Environmental Liabilities and Costs after the date
hereof in excess of $15,000,000.
(b) None of the Borrower or any of its Subsidiaries or any
Real Property currently or, to the knowledge of the Borrower, previously owned,
operated or leased by or for the Borrower or any of its Subsidiaries is subject
to any pending or, to the knowledge of the Borrower, threatened, claim, order,
agreement, notice of violation, notice of potential liability or is the subject
of any pending or, to the knowledge of the Borrower, threatened proceeding or
governmental investigation under or pursuant to Environmental Laws other than
those that in the aggregate are not reasonably likely to result in the Borrower
and its Subsidiaries incurring Environmental Liabilities and Costs in excess of
$15,000,000.
(c) Except as disclosed on Schedule 4.17, none of the Borrower
or any of its Subsidiaries is a treatment, storage or disposal facility
requiring a Permit under the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq., the regulations thereunder or any state analog.
(d) There are no facts, circumstances or conditions arising
out of or relating to the operations of the Borrower or any it its Subsidiaries
or ownership of Real Property owned, operated or leased by the Borrower or any
of its Subsidiaries which are not specifically included in the financial
information furnished to the Lenders other than those that in the aggregate are
not reasonably likely to result in the Borrower and its Subsidiaries incurring
Environmental Liabilities and Costs of $15,000,000 or more.
(e) As of the date hereof, no Environmental Lien has attached
to any property of the Borrower or any of its Subsidiaries and, to the knowledge
of the Borrower, no circumstances or conditions exist that could reasonably be
expected to result in any such Lien attaching to any such property.
(f) The Borrower and each of its Subsidiaries has made
available for inspection to the Lenders copies of all environmental, health or
safety audits, studies, assessments, inspections, investigations or other
environmental health and safety reports relating to the operations of the
Borrower or any of its Subsidiaries or any Real Property of any of them that are
in the possession, custody or control of the Borrower or any of its
Subsidiaries.
SECTION 4.18 INTELLECTUAL PROPERTY
The Borrower and its Subsidiaries own or license or otherwise
have the right to use all licenses, permits, patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
copyright applications, franchises, authorizations and other intellectual
property rights that are material for the operations of their respective
businesses, without infringement upon or conflict with the rights of any other
Person with respect thereto, including all trade names associated with any
private label brands of the Borrower or any of its Subsidiaries. To the
Borrower's knowledge, no slogan or other advertising device, product, process,
method, substance, part or component, or other material now employed, or now
contemplated to be employed, by the Borrower or any of its Subsidiaries
infringes upon or conflicts with any rights owned by any other Person, and no
action, proceeding, claim or litigation regarding any of the foregoing is
pending or threatened.
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SECTION 4.19 TITLE; REAL PROPERTY
(a) Each of the Borrower and its Subsidiaries has good and
marketable or indefeasible title to, or valid leasehold interests in, all Real
Property and good title to all material personal property in each case that is
purported to be owned or leased by it, including those reflected on the most
recent Financial Statements delivered by the Borrower, and none of such
properties and assets is subject to any Lien, except Liens permitted under
Section 8.2 (Liens, Etc.).
(b) Set forth on Schedule 4.19 is a complete and accurate list
of all Real Property not held for sale owned by each Loan Party and its
Subsidiaries showing as of the Closing Date the current street address
including, where applicable, county, state or other relevant jurisdiction,
state, and record owner.
(c) All Permits required to have been issued or appropriate to
enable all Real Property of the Borrower or any of its Subsidiaries to be
lawfully occupied and used for all of the purposes for which they are currently
occupied and used have been lawfully issued and are in full force and effect,
other than those that in the aggregate would not have a Material Adverse Effect.
(d) None of the Borrower or any of its Subsidiaries has
received any notice, or has any knowledge, of any pending, threatened or
contemplated condemnation proceeding affecting any Real Property of the Borrower
or any of its Subsidiaries or any part thereof, except those that, in the
aggregate, would not have a Material Adverse Effect.
SECTION 4.20 RELATED DOCUMENTS
(a) The execution, delivery and performance by each Loan Party
of the Related Documents to which it is a party and the consummation of the
transactions contemplated thereby by such Loan Party:
(i) are within such Loan Party's respective
corporate, limited liability company, partnership or other powers;
(ii) at the Closing Date will have been duly
authorized by all necessary corporate or other action, including the
consent of stockholders where required;
(iii) do not and will not (A) contravene or violate
any Loan Party's or any of its Subsidiaries' respective Constituent
Documents, (B) violate any other Requirement of Law applicable to any
Loan Party, or any order or decree of any Governmental Authority or
arbitrator, (C) conflict with or result in the breach of, or constitute
a default under, or result in or permit the termination or acceleration
of, any Contractual Obligation of any Loan Party or any of its
Subsidiaries, except for those that in the aggregate would not have a
Material Adverse Effect or (D) result in the creation or imposition of
any Lien upon any property of any Loan Party or any of its
Subsidiaries; and
(iv) do not require the consent of, authorization by,
approval of, notice to, or filing or registration with, any
Governmental Authority or any other Person, other than those that (A)
will have been obtained at the Closing Date, each of which will be in
full force and effect on the Closing Date, none of which will on the
Closing Date
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impose materially adverse conditions upon the exercise of control by
the Borrower over any of its Subsidiaries or (B) that in the aggregate,
if not obtained, would not have a Material Adverse Effect.
(b) Each of the Related Documents has been, on the Closing
Date, duly executed and delivered by each Loan Party party thereto and as of the
Closing Date will be the legal, valid and binding obligation of each Loan Party
party thereto, enforceable against such Loan Party in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally.
(c) None of the Related Documents has been amended or modified
in any respect and no provision therein has been waived, except in each case to
the extent permitted by Section 8.11 (Modification of Related Documents), and
each of the representations and warranties therein are true and correct in all
material respects and no default or event that with the giving of notice or
lapse of time or both would be a default has occurred thereunder.
(d) The Obligations and the Guaranty constitute "Senior Debt"
as defined in the Senior Note Indenture and the Subordinated Note Indenture.
SECTION 4.21 NON-GUARANTOR SUBSIDIARIES
The Subsidiaries of the Borrower that are not Guarantors do
not own, in the aggregate for all such Subsidiaries, 5% or more of the Total
Assets of the Borrower and its Subsidiaries or contribute 5% or more of the
Consolidated Net Income of the Borrower and its Subsidiaries.
ARTICLE V
FINANCIAL COVENANTS
As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, unless the Requisite Lenders otherwise consent
in writing, the Borrower agrees with the Lenders and the Administrative Agent
that:
SECTION 5.1 CONSOLIDATED TANGIBLE NET WORTH
The Borrower shall maintain Consolidated Tangible Net Worth at
all times during any Fiscal Quarter ending after the Closing Date (or in the
case of the first such Fiscal Quarter, during the period beginning on the
Closing Date and ending on the last day of such Fiscal Quarter) of (a)
$270,000,000 plus (b) in the case of each Fiscal Quarter ending after the
Closing Date, 50% of the Consolidated Net Income of the Borrower for the
preceding Fiscal Quarter (or, if such Fiscal Quarter is the first Fiscal Quarter
ending after the Closing Date, the period beginning on the Closing Date and
ending on the last day of such Fiscal Quarter) plus (c) 90% of the Net Cash
Proceeds of any Equity Issuance from and after the Closing Date.
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SECTION 5.2 MAXIMUM TOTAL LIABILITIES TO CONSOLIDATED TANGIBLE
NET WORTH RATIO
The Borrower shall maintain a Total Liabilities to
Consolidated Tangible Net Worth Ratio at all times of not more than (a) 2.50 to
1, during the period beginning on the Closing Date and ending on June 30, 2003
and (b) 2.25 to 1, at all times from and after June 30, 2003.
SECTION 5.3 MINIMUM FIXED CHARGE COVERAGE RATIO
The Borrower shall maintain a Fixed Charge Coverage Ratio, as
determined as of the last day of each Fiscal Quarter, for the four Fiscal
Quarter period ending on such day, of greater than or equal to 2.00 to 1.
SECTION 5.4 UNSOLD LAND TO CONSOLIDATED TANGIBLE NET WORTH
The Borrower shall maintain at all times a ratio of (a) the
GAAP Value of Unsold Land of the Borrower and its Subsidiaries to (b)
Consolidated Tangible Net Worth of not more than 1.25 to 1.
SECTION 5.5 UNSOLD UNITS TO UNITS CLOSED
The Borrower shall maintain at all times a ratio of (a) the
aggregate number of Units owned by the Borrower and its Subsidiaries that
constitute Unsold Units to (b) Units Closed by the Borrower and its
Subsidiaries, determined as of the last day of each calendar month, for the
twelve months ending on such day, of not more than 1 to 4.
SECTION 5.6 UNIMPROVED LAND TO CONSOLIDATED TANGIBLE NET WORTH
The Borrower shall maintain at all times a ratio of (a) the
GAAP Value of Unimproved Land of the Borrower and its Subsidiaries to (b)
Consolidated Tangible Net Worth of not more than 0.15 to 1.
SECTION 5.7 MODEL HOMES TO UNITS SOLD
The Borrower shall maintain a ratio of (a) the aggregate
number of Model Homes owned by the Borrower and its Subsidiaries to (b) the
aggregate number of Units Sold by the Borrower and its Subsidiaries, determined
as of the last day of each calendar month, for the twelve months ending on such
day (which compliance shall be maintained from the beginning of the first day of
such twelve month period through the end of the last day of such period), of not
more than 0.1 to 1.
ARTICLE VI
REPORTING COVENANTS
As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, unless the Requisite Lenders otherwise consent
in writing, the Borrower agrees with the Lenders and the Administrative Agent
that:
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SECTION 6.1 FINANCIAL STATEMENTS
The Borrower shall furnish to the Administrative Agent (with
sufficient copies for each of the Lenders which the Administrative Agent shall
distribute to the Lenders) each of the following:
(a) Quarterly Reports.
Within 45 days after the end of each Fiscal Quarter (other
than Fiscal Quarters ending December 31), financial information regarding the
Borrower and its Subsidiaries consisting of Consolidated and consolidating
unaudited balance sheets as of the close of such quarter and the related
statements of income and cash flow for such quarter and that portion of the
Fiscal Year ending as of the close of such quarter, setting forth in comparative
form the figures for the corresponding period in the prior year and the figures
contained in the Projections, or, if applicable the latest business plan
provided pursuant to clause (d) below, for the current Fiscal Year, in each case
certified by the Chief Financial Officer of the Borrower as fairly presenting
the Consolidated and consolidating financial position of the Borrower and its
Subsidiaries as at the dates indicated and the results of their operations and
cash flow for the periods indicated in accordance with GAAP (subject to the
absence of footnote disclosure and normal year-end audit adjustments).
(b) Annual Reports.
Within 90 days after the end of each Fiscal Year, financial
information regarding the Borrower and its Subsidiaries consisting of
Consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such year and related statements of income and
cash flows of the Borrower and its Subsidiaries for such Fiscal Year, all
prepared in conformity with GAAP and certified, in the case of such Consolidated
Financial Statements, without qualification as to the scope of the audit or as
to the Borrower being a going concern by Ernst & Young LLP or other independent
certified public accountants acceptable to the Administrative Agent, together
with the report of such accounting firm stating that (i) such Financial
Statements fairly present the Consolidated financial position of the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except for changes with which
such independent certified public accountants shall concur and which shall have
been disclosed in the notes to the Financial Statements) and (ii) the
examination by such accountants in connection with such Consolidated Financial
Statements has been made in accordance with generally accepted auditing
standards, and accompanied by a certificate stating that in the course of the
regular audit of the business of the Borrower and its Subsidiaries such
accounting firm has obtained no knowledge that a Default or Event of Default in
respect of the financial covenant contained in Section 5.2 (Maximum Total
Liabilities to Consolidated Tangible Net Worth Ratio) has occurred and is
continuing, or, if in the opinion of such accounting firm, a Default or Event of
Default has occurred and is continuing in respect of such financial covenant, a
statement as to the nature thereof.
(c) Compliance Certificate.
Together with each delivery of any financial statement
pursuant to clauses (a) and (b) of this Section 6.1 (Financial Statements), a
certificate of a Responsible Officer of the Borrower (each, a "Compliance
Certificate") (i) showing in reasonable detail the calculations
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used in determining the Total Liabilities to Consolidated Tangible Net Worth
Ratio (for purposes of determining the Applicable Margin and the Applicable
Unused Commitment Fee Rate) and demonstrating compliance with each of the
financial covenants contained in Article V as of the end of such quarter and
(ii) stating that no Default or Event of Default has occurred and is continuing
or, if a Default or an Event of Default has occurred and is continuing, stating
the nature thereof and the action that the Borrower proposes to take with
respect thereto.
(d) Projections/Business Plan.
Not later than 15 days prior to the end of each Fiscal Year,
and containing substantially the types of financial information contained in the
Projections, the annual business and financial plans of the Borrower for the
next succeeding Fiscal Year certified by the Chief Financial Officer of the
Borrower, with updates to such plans provided on July 31 of each year beginning
in 2002, or more frequently as reasonably requested by the Lenders.
(e) Management Letters, Etc.
Within five Business Days after receipt thereof by any Loan
Party, copies of each management letter, exception report or similar letter or
report received by such Loan Party from its independent certified public
accountants.
SECTION 6.2 DEFAULT NOTICES
As soon as practicable, and in any event within five Business
Days after a Responsible Officer of any Loan Party has actual knowledge of the
existence of any Default, Event of Default or other event having had a Material
Adverse Effect, the Borrower shall give the Administrative Agent notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given by telephone,
shall be promptly confirmed in writing on the next Business Day.
SECTION 6.3 LITIGATION
Promptly after the commencement thereof, the Borrower shall
give the Administrative Agent written notice of the commencement of all actions,
suits and proceedings before any domestic or foreign Governmental Authority or
arbitrator, affecting the Borrower or any of its Subsidiaries, that (a) seeks
injunctive or similar relief or (b) in the reasonable judgment of the Borrower
or such Subsidiary, expose the Borrower or such Subsidiary to liability in an
amount aggregating $15,000,000 or more or which, if adversely determined, would
have a Material Adverse Effect.
SECTION 6.4 NOTICES UNDER RELATED DOCUMENTS
Promptly after the sending or filing thereof, the Borrower
shall send the Administrative Agent copies of all material notices, certificates
or reports delivered pursuant to, or in connection with, any Related Document.
SECTION 6.5 SEC FILINGS; PRESS RELEASES
Promptly after the sending or filing thereof, the Borrower
shall send the Administrative Agent copies of (a) all reports which the Borrower
or TOI sends to its security
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holders generally, (b) all reports and registration statements which the
Borrower or TOI or any of its Subsidiaries files with the Securities and
Exchange Commission or any national or foreign securities exchange or the
National Association of Securities Dealers, Inc. and (c) all other statements
concerning material changes or developments in the business of such Loan Party
made available by any Loan Party to the public.
SECTION 6.6 LABOR RELATIONS
Promptly after becoming aware of the same, the Borrower shall
give the Administrative Agent written notice of (a) any material labor dispute
to which the Borrower or any of its Subsidiaries is or may become a party,
including any strikes, lockouts or other disputes relating to any of such
Person's plants and other facilities and (b) any Worker Adjustment and
Retraining Notification Act or related liability incurred with respect to the
closing of any plant or other facility of any of such Person.
SECTION 6.7 TAX RETURNS
Upon the request of the Administrative Agent, the Borrower
will provide copies of all federal, state, local and foreign tax returns and
reports filed by the Borrower or any of its Subsidiaries in respect of taxes
measured by income (excluding sales, use and like taxes).
SECTION 6.8 INSURANCE
As soon as is practicable and in any event within 90 days
after the end of each Fiscal Year, the Borrower shall furnish the Administrative
Agent (in sufficient copies for each of the Lenders) with (a) a report in form
and substance reasonably satisfactory to the Administrative Agent and the
Lenders outlining all material insurance coverage maintained as of the date of
such report by the Borrower and its Subsidiaries and the duration of such
coverage and (b) an insurance broker's statement that all premiums then due and
payable with respect to such coverage have been paid.
SECTION 6.9 ERISA MATTERS
The Borrower shall furnish the Administrative Agent (with
sufficient copies for each of the Lenders) each of the following:
(a) promptly and in any event within 30 days after the
Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know that any ERISA Event has occurred, written notice describing such event;
(b) promptly and in any event within 10 days after the
Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know that a request for a minimum funding waiver under Section 412 of the Code
has been filed with respect to any Title IV Plan or Multiemployer Plan, a
written statement of a Responsible Officer of the Borrower describing such ERISA
Event or waiver request and the action, if any, that the Borrower, its
Subsidiaries and ERISA Affiliates propose to take with respect thereto and a
copy of any notice filed by the Borrower, any of its Subsidiaries or any ERISA
Affiliate with the PBGC or the IRS pertaining thereto; and
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(c) simultaneously with the date that the Borrower, any of its
Subsidiaries or any ERISA Affiliate files a notice of intent to terminate any
Title IV Plan, if such termination would require material additional
contributions in order to be considered a standard termination within the
meaning of Section 4041(b) of ERISA, a copy of each notice.
SECTION 6.10 ENVIRONMENTAL MATTERS
The Borrower shall provide the Administrative Agent promptly
and in any event within 10 days after the Borrower or any Subsidiary learning of
each of the following, written notice of any of the following:
(a) that any Loan Party is or may be liable to any Person as a
result of a Release or threatened Release that could reasonably be expected to
subject such Loan Party to Environmental Liabilities and Costs of $15,000,000 or
more;
(b) the receipt by any Loan Party of notification that any
real or personal property of such Loan Party is or is reasonably likely to be
subject to any Environmental Lien;
(c) the receipt by any Loan Party of any notice of violation
of or potential liability under, or knowledge by such Loan Party that there
exists a condition that could reasonably be expected to result in a violation of
or liability under any Environmental Law, except for violations and liabilities
the consequence of which in the aggregate would not be reasonably likely to
subject the Loan Parties collectively to Environmental Liabilities and Costs of
$15,000,000 or more;
(d) the commencement of any judicial or administrative
proceeding or investigation alleging a violation of or liability under any
Environmental Law, that in the aggregate, if adversely determined, would have a
reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs of $15,000,000 or more;
(e) any proposed acquisition of stock, assets or real estate,
any proposed leasing of property, or any other action by any Loan Party or any
of its Subsidiaries other than those the consequences of which in the aggregate
have reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs of $15,000,000 or less;
(f) any proposed action by any Loan Party or any of its
Subsidiaries or any proposed change in Environmental Laws that in the aggregate
have a reasonable likelihood of requiring the Loan Parties to obtain additional
environmental, health or safety Permits or make additional capital improvements
to obtain compliance with Environmental Laws that in the aggregate would cost
$15,000,000 or more or subject the Loan Parties to additional Environmental
Liabilities and Costs of $15,000,000; and
(g) upon written request by any Lender through the
Administrative Agent, a report providing an update of the status of any
environmental, health or safety compliance, hazard or liability issue identified
in any notice or report delivered pursuant to this Agreement.
SECTION 6.11 BORROWING BASE DETERMINATION
(a) No later than 15 days after the last day of each calendar
month or more frequently as requested by the Administrative Agent, a Borrowing
Base Certificate as of the first
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day of such month executed by a Responsible Officer of the Borrower. The
Borrower agrees that each Borrowing Base Certificate delivered by the Borrower
shall be accompanied by appropriate supporting data and shall not be deemed
delivered until verified by the Administrative Agent to the Administrative
Agent's satisfaction. Upon verification by the Administrative Agent, each
Borrowing Base Certificate shall be deemed delivered for purposes of determining
the Borrowing Base as of the date of its actual delivery. The Borrower agrees
that the Administrative Agent in the process of its verification may determine,
in its reasonable discretion, the particular category to which any Borrowing
Base Asset belongs.
(b) The Administrative Agent may (prior to the occurrence of
an Event of Default, at its sole cost and expense, and, after and during the
continuance of an Event of Default, at the Borrower's sole cost and expense)
make physical verifications of the Borrowing Base Assets in any manner and
through any medium that the Administrative Agent considers advisable, and the
Borrower shall furnish all such assistance and information as the Administrative
Agent may require in connection therewith.
SECTION 6.12 CUSTOMER CONTRACTS
Promptly after becoming aware of the same, the Borrower shall
give the Administrative Agent prior to the Closing Date written notice of any
cancellation, termination or loss of any material Contractual Obligation.
SECTION 6.13 OTHER INFORMATION
The Borrower will provide the Administrative Agent or any
Lender with such other information respecting the business, properties,
condition, financial or otherwise, or operations of the Borrower or any of its
Subsidiaries as the Administrative Agent or any Lender through the
Administrative Agent may from time to time reasonably request.
ARTICLE VII
AFFIRMATIVE COVENANTS
As long as the Obligations or the Revolving Credit Commitments
remain outstanding, unless the Requisite Lenders otherwise consent in writing,
the Borrower agrees with the Lenders and the Administrative Agent that:
SECTION 7.1 PRESERVATION OF CORPORATE EXISTENCE, ETC.
The Borrower shall, and shall cause each of its Subsidiaries
to, preserve and maintain its legal existence, rights (charter and statutory)
and franchises, except as permitted by Section 8.3 (Investments), Section 8.6
(Restriction on Fundamental Changes) and Section 8.10 (Modification of
Constituent Documents).
SECTION 7.2 COMPLIANCE WITH LAWS, ETC.
The Borrower shall, and shall cause each of its Subsidiaries
to, comply with all applicable Requirements of Law, Contractual Obligations and
Permits, except where the failure so to comply would not in the aggregate have a
Material Adverse Effect.
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SECTION 7.3 CONDUCT OF BUSINESS
The Borrower shall, and shall cause each of its Subsidiaries
to, (a) conduct its business in the ordinary course and (b) use its reasonable
efforts, in the ordinary course and consistent with past practice, to preserve
its business and the goodwill and business of the customers, advertisers,
suppliers and others having business relations with the Borrower or any of its
Subsidiaries, except where the failure to comply with the covenants in each of
clauses (a) and (b) above would not in the aggregate have a Material Adverse
Effect.
SECTION 7.4 PAYMENT OF TAXES, ETC.
The Borrower shall, and shall cause each of its Subsidiaries
to, pay and discharge before the same shall become delinquent, all lawful
material governmental claims, taxes, assessments, charges and levies, except
where contested in good faith, by proper proceedings and adequate reserves
therefor have been established on the books of the Borrower or the appropriate
Subsidiary in conformity with GAAP.
SECTION 7.5 MAINTENANCE OF INSURANCE
The Borrower shall (a) maintain for, and cause to be
maintained by, each of its Subsidiaries insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
is usually carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower or such Subsidiary
operates, and such other insurance as may be reasonably requested by the
Requisite Lenders, and, in any event, all insurance required by any Collateral
Documents and (b) cause all such insurance to provide that no cancellation,
material addition in amount or material change in coverage shall be effective
until after 30 days' written notice thereof to the Administrative Agent.
SECTION 7.6 MAINTENANCE OF CONTRACTUAL OBLIGATIONS
The Borrower shall, and shall cause each of its Subsidiaries
to, perform, observe and comply with each of the covenants, conditions and
agreements set forth in the Related Documents and under each other Contractual
Obligation under which it or any of its Subsidiaries may be bound (including to
pay all rent and other charges payable under any lease and all Indebtedness and
other obligations as the same become due) and do all things necessary to
preserve and to keep unimpaired any rights the Borrower or any of its
Subsidiaries may have under any Contractual Obligation; provided, however, that
the Borrower shall not be deemed in default under this Section 7.6 (Maintenance
of Contractual Obligations) if all such failures in the aggregate would have no
Material Adverse Effect.
SECTION 7.7 TRANSACTIONS WITH AFFILIATES
The Borrower shall conduct, and cause each of its Subsidiaries
to conduct, all transactions otherwise not prohibited under this Agreement with
any of their Affiliates (including payment of management fees) on terms that are
fair and reasonable and no less favorable to the Borrower or such Subsidiary
than it would obtain in an arm's-length transaction with a Person not an
Affiliate thereof; provided, however, that (a) the Borrower may make payments to
TOI of up to $3,500,000 in any Fiscal Year under the Management Services
Agreement (or another similar agreement) and (b) the Borrower may perform its
obligations under the Tax Allocation Agreement.
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SECTION 7.8 ACCESS
The Borrower shall from time to time permit the Administrative
Agent and the Lenders, or any agents or representatives thereof, within five
Business Days after written notification of the same (except that during the
continuance of an Event of Default, no such notice shall be required) to (a)
examine and make copies of and abstracts from the records and books of account
of the Borrower and each of its Subsidiaries, (b) visit the properties of the
Borrower and each of its Subsidiaries, (c) discuss the affairs, finances and
accounts of the Borrower and each of its Subsidiaries with any of their
respective officers or directors and (d) communicate directly with any of the
Borrower's certified public accountants. The Borrower shall authorize its
independent certified public accountants to disclose to the Administrative Agent
or any Lender during the continuance of an Event of Default of the type
described in clause (a) or (b) of Section 9.1 (Events of Default) any and all
Financial Statements and other information of any kind, as the Administrative
Agent or any Lender reasonably requests from the Borrower and that such
accountants may have with respect to the business, financial condition, results
of operations or other affairs of the Borrower or any of its Subsidiaries.
SECTION 7.9 KEEPING OF BOOKS
The Borrower shall, and shall cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct entries
shall be made in conformity with GAAP (to the extent GAAP is applicable thereto)
of all financial transactions and the assets and business of the Borrower and
each such Subsidiary.
SECTION 7.10 MAINTENANCE OF PROPERTIES, ETC.
The Borrower shall, and shall cause each of its Subsidiaries
to, maintain and preserve, (a) all of its properties which are necessary in the
conduct of its business in good working order and condition, subject to ordinary
wear and tear, (b) all rights, permits, licenses, approvals and privileges
(including all Permits) used or useful or necessary in the conduct of its
business and (c) all registered patents, trademarks, trade names, copyrights,
service marks and other intellectual property with respect to its business,
except where the failure to so maintain and preserve would not in the aggregate
have a Material Adverse Effect.
SECTION 7.11 APPLICATION OF PROCEEDS
The Borrower shall use the entire amount of the proceeds of
the Loans as provided in Section 4.13 (Use of Proceeds).
SECTION 7.12 ENVIRONMENTAL
The Borrower shall, and shall cause each of its Subsidiaries
to comply in all material respects with Environmental Laws and, without limiting
the foregoing, the Borrower shall, at its sole cost and expense, upon receipt of
any notification or otherwise obtaining knowledge of any Release or other event
that has any reasonable likelihood of the Borrower and its Subsidiaries
incurring Environmental Liabilities and Costs in excess of $15,000,000 in the
aggregate, (a) conduct or pay for consultants to conduct, tests or assessments
of environmental conditions at such operations or properties, including the
investigation and testing of subsurface conditions and (b) take such Remedial
Action, and undertake such investigation or other action as required by
Environmental Laws or as any Governmental Authority requires or as is
appropriate
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and consistent with good business practice to address the Release or event and
otherwise ensure compliance with Environmental Laws.
SECTION 7.13 ADDITIONAL COLLATERAL AND GUARANTIES
To the extent not delivered to the Administrative Agent on or
before the Closing Date, the Borrower promptly shall, and shall cause each of
its Subsidiaries promptly to, (a) execute and deliver to the Administrative
Agent such amendments to the Collateral Documents and take such actions as the
Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in the Stock and Stock Equivalents of any Subsidiary
that are owned by the Borrower or any of its Subsidiaries (and in the case of
any such Subsidiary that is not a Domestic Subsidiary, requested to be pledged
by the Administrative Agent); provided, however, that in no event shall the
Borrower or any of its Subsidiaries be required to pledge in excess of 65% of
the outstanding Voting Stock of any direct Subsidiary of the Borrower that is
not a Domestic Subsidiary or any of the Stock of such Subsidiary's Subsidiaries;
and provided, further, (i) unless required to join the Guaranty as set forth
below, the Borrower and its Subsidiaries shall not be required to pledge the
Stock of any Landholding Interest which prohibits such pledge and (ii) the
Borrower and its Subsidiaries shall not be required to pledge the Stock of any
of Prestige Abstract & Title, LLC, a Florida limited liability company,
Professional Advantage Title, Ltd., a Florida limited partnership, Universal
Land Title of South Florida, Ltd., a Florida limited partnership, and Universal
Land Title of the Palm Beaches, Ltd., a Florida limited partnership, for so long
as the organizational documents of such Subsidiary prohibit such pledge (it
being understood that such Subsidiaries may be required to join the Guaranty)
(b) deliver to the Administrative Agent the certificates (if any) representing
such Stock and Stock Equivalents, together with undated stock powers endorsed in
blank, in each case executed and delivered by a Responsible Officer of the
Borrower or such Subsidiary, as the case may be, (c) in the case of any
Subsidiary that is a Domestic Subsidiary owning 5% or more of the Total Assets
of the Borrower and its Subsidiaries or contributing 5% or more of the
Consolidated Net Income of the Borrower and its Subsidiaries for the immediately
preceding four Fiscal Quarters, cause such Subsidiary (A) to become a party to
(I) the Guaranty by executing a Guaranty Supplement and (II) the applicable
Collateral Documents by the execution of a joinder agreement in form and
substance satisfactory to the Administrative Agent and (B) to take such actions
necessary or advisable to grant to the Administrative Agent for the benefit of
the Secured Parties a perfected security interest in the Collateral described in
the Collateral Documents with respect to such new Subsidiary, including the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Collateral Documents or by law or as may be reasonably
requested by the Administrative Agent and (d) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent. Notwithstanding
anything herein to the contrary, in the event that at any time the Subsidiaries
of the Borrower that are not Guarantors own, in the aggregate for all such
Subsidiaries, 5% or more of the Total Assets of the Borrower and its
Subsidiaries or contribute 5% or more of the Consolidated Net Income of the
Borrower and its Subsidiaries for the immediately preceding four Fiscal
Quarters, the Borrower shall promptly cause such number of its Subsidiaries to
become a party to (x) the Guaranty by executing a Guaranty Supplement and (y)
the applicable Collateral Documents by the execution of a joinder agreement in
form and substance satisfactory to the Administrative Agent so that the
Subsidiaries of the Borrower that are not Guarantors do not own, in the
aggregate for all such Subsidiaries, 5% or more of the Total
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Assets of the Borrower and its Subsidiaries or contribute 5% or more of the
Consolidated Net Income of the Borrower and its Subsidiaries for the immediately
preceding four Fiscal Quarters. In the event that any Subsidiary of the Borrower
incurs any Guaranty Obligation in respect of the Senior Notes or the
Subordinated Notes, the Borrower shall promptly cause such Subsidiary to become
a party to (x) the Guaranty by executing a Guaranty Supplement and (y) the
applicable Collateral Documents by the execution of a joinder agreement in form
and substance satisfactory to the Administrative Agent.
SECTION 7.14 INTEREST RATE CONTRACTS
The Borrower shall as soon as practicable and in any event not
later than 120 days after the Closing Date, adopt policies with respect to
Interest Rate Contracts and Hedging Contracts which policies shall be reasonably
satisfactory to the Administrative Agent.
SECTION 7.15 REAL PROPERTY
(a) The Borrower shall, and shall cause each of its
Subsidiaries to, (i) comply in all material respects with all of their
respective obligations under all of their respective Leases now or hereafter
held respectively by them with respect to Real Property, (ii) not modify, amend,
cancel, extend or otherwise change in any materially adverse manner any term,
covenant or condition of any such Lease, (iii) not assign or sublet any other
Lease if such assignment or sublet would have a Material Adverse Effect, (iv)
provide the Administrative Agent with a copy of each notice of default under any
material Lease received by the Borrower or any Subsidiary of the Borrower as
soon as practicable upon receipt thereof and deliver to the Administrative Agent
a copy of each notice of default sent by the Borrower or any Subsidiary of the
Borrower under any material Lease simultaneously with its delivery of such
notice under such Lease and (v) notify the Administrative Agent at least 14 days
prior to the date the Borrower or any Subsidiary takes possession of, or becomes
liable under, any new leased premises or Lease, whichever is earlier.
(b) At least 15 Business Days prior to (i) entering into any
Lease (other than a renewal of an existing Lease) for the principal place of
business and chief executive office of the Borrower or any other Guarantor or
any other Lease (including any renewal) in which the annual rental payments are
anticipated to equal or exceed $1,000,000 or (ii) acquiring of any material
owned Real Property, the Borrower shall, and shall cause such Guarantor to,
provide the Administrative Agent written notice thereof.
ARTICLE VIII
NEGATIVE COVENANTS
As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, without the written consent of the Requisite
Lenders, the Borrower agrees with the Lenders and the Administrative Agent that:
SECTION 8.1 INDEBTEDNESS
The Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to any Indebtedness
except:
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(a) the Obligations;
(b) Indebtedness existing on the date of this Agreement and
disclosed on Schedule 8.1;
(c) Guaranty Obligations incurred by the Borrower or any
Guarantor in respect of Indebtedness of the Borrower or any Guarantor otherwise
permitted by this Section 8.1 (Indebtedness);
(d) Capital Lease Obligations and purchase money Indebtedness
incurred by the Borrower or a Subsidiary of the Borrower to finance the
acquisition of fixed assets in an aggregate outstanding principal amount not to
exceed $5,000,000 at any time;
(e) Renewals, extensions, refinancings and refundings of
Indebtedness permitted by clause (b), (d) or (e) of this Section 8.1
(Indebtedness); provided, however, that any such renewal, extension, refinancing
or refunding is in an aggregate principal amount not greater than the principal
amount of, and is on terms, taken as a whole, no less favorable to the Borrower
or such Subsidiary, including as to weighted average maturity, than the
Indebtedness being renewed, extended, refinanced or refunded;
(f) Indebtedness arising from intercompany loans (i) from the
Borrower to any Guarantor or from any Guarantor to the Borrower or any other
Guarantor and (ii) from the Borrower or any Guarantor to any Subsidiary of the
Borrower that is not a Guarantor; provided, however, that the Investment in the
intercompany loan to such Subsidiary is permitted under Section 8.3
(Investments);
(g) Indebtedness arising under any performance or surety bond
entered into in the ordinary course of business;
(h) Obligations under Interest Rate Contracts pursuant to
Section 7.14 (Interest Rate Contracts);
(i) unsecured Indebtedness (other than Guaranty Obligations)
not otherwise permitted under this Section 8.1 (Indebtedness); provided, that
the incurrence of such Indebtedness does not cause a default under any other
Indebtedness of the Borrower and its Subsidiaries;
(j) Indebtedness (i) in respect of the Senior Notes in an
aggregate principal amount not in excess of $200,000,000, and (ii) in respect of
the Subordinated Notes in an aggregate principal amount not in excess of
$150,000,000;
(k) additional Indebtedness (other than Guaranty Obligations)
of any Subsidiary of the Borrower in respect of Landholding Interests not to
exceed at any time 5% of Consolidated Tangible Net Worth; and
(l) Indebtedness under the Warehouse Line of Credit owed by
Preferred Home Mortgage Company or its Wholly-Owned Subsidiaries not to exceed
in the aggregate the principal amount of $50,000,000 plus increases to the
maximum available amount under the Warehouse Line of Credit not to exceed at any
time in the aggregate for all such increases 5% of Consolidated Tangible Net
Worth.
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SECTION 8.2 LIENS, ETC.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, create or suffer to exist, any Lien upon or with respect to any
of its properties or assets, whether now owned or hereafter acquired, or assign,
or permit any of its Subsidiaries to assign, any right to receive income, except
for:
(a) Liens created pursuant to the Loan Documents;
(b) Liens existing on the date of this Agreement and disclosed
on Schedule 8.2;
(c) Customary Permitted Liens of the Borrower and its
Subsidiaries;
(d) purchase money Liens granted by the Borrower or any
Subsidiary of the Borrower (including the interest of a lessor under a Capital
Lease and Liens to which any property is subject at the time of the Borrower's
or such Subsidiary's acquisition thereof) securing Indebtedness permitted under
Section 8.1(d) and limited in each case to the property which does not
constitute Borrowing Base Assets purchased with the proceeds of such purchase
money Indebtedness or subject to such Capital Lease;
(e) any Lien securing the renewal, extension, refinancing or
refunding of any Indebtedness secured by any Lien permitted by clauses (b), (d)
or (e) of this Section 8.2 (Liens, Etc.) without any change in the assets
subject to such Lien;
(f) Liens on the assets of any Subsidiary of the Borrower
holding any Landholding Interest securing Indebtedness of such Subsidiary
permitted under clause (k) of Section 8.1 (Indebtedness);
(g) Liens on the property and assets of Preferred Home
Mortgage Company and its Wholly-Owned Subsidiaries to secure Indebtedness
permitted under clause (l) of Section 8.1 (Indebtedness);
(h) Liens pursuant to warranty deeds of trust securing profit
participations and marketing fees payable at the time of a third party house
closing not to exceed $200,000 in the aggregate at any time; and
(i) Liens on the property and assets of Subsidiaries of the
Borrower that are not Domestic Subsidiaries.
SECTION 8.3 INVESTMENTS
The Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly make or maintain any Investment except:
(a) Investments existing on the date of this Agreement and
disclosed on Schedule 8.3;
(b) Investments in cash and Cash Equivalents;
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(c) Investments in accounts, contract rights and chattel paper
(each as defined in the Uniform Commercial Code), notes receivable and similar
items arising or acquired in the ordinary course of business consistent with the
past practice of the Borrower and its Subsidiaries;
(d) Investments received in settlement of amounts due to the
Borrower or any Subsidiary of the Borrower effected in the ordinary course of
business;
(e) Investments by (i) the Borrower in any Guarantor, or by
any Guarantor in the Borrower or any other Guarantor, or (ii) a Subsidiary that
is not a Guarantor in the Borrower or any other Subsidiary; provided, however,
that Investments made in Preferred Home Mortgage Company and its Subsidiaries
shall not exceed in the aggregate at any time the greater of (x) $60,000,000 and
(y) 20% of Consolidated Tangible Net Worth;
(f) loans or advances to employees of the Borrower or any of
its Subsidiaries in the ordinary course of business, which loans and advances
shall not exceed the aggregate outstanding principal amount of $2,000,000 at any
time;
(g) Investments constituting Guaranty Obligations permitted by
clause (c) of Section 8.1 (Indebtedness);
(h) Investments in the same or a complimentary line of
business as the Borrower not otherwise permitted hereby in an aggregate
outstanding amount not to exceed $10,000,000 at any time;
(i) equity Investments in Landholding Interests the book value
of which shall not at any time exceed in the aggregate for all such Investments
5% of Consolidated Tangible Net Worth; and
(j) Investments in Permitted Acquisitions.
SECTION 8.4 SALE OF ASSETS
The Borrower will not, and will not permit any of its
Subsidiaries to, sell, convey, transfer, lease or otherwise dispose of, any of
its assets or any interest therein (including the sale or factoring at maturity
or collection of any accounts) to any Person, or permit or suffer any other
Person to acquire any interest in any of its assets or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Stock or Stock
Equivalent (any such disposition being an "Asset Sale"), except for the
following:
(a) the sale or disposition of assets held for sale in the
ordinary course of business (including Asset Sales made in the ordinary course
of business pursuant to the Warehouse Line of Credit);
(b) the sale or disposition of equipment that has become
obsolete or is replaced in the ordinary course of business;
(c) assignments and licenses of intellectual property of the
Borrower and its Subsidiaries in the ordinary course of business; and
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(d) any Asset Sale to the Borrower or any Guarantor.
SECTION 8.5 RESTRICTED PAYMENTS
The Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Payment except for the following:
(a) Restricted Payments by any Subsidiary of the Borrower to
the Borrower or any Guarantor; and
(b) cash dividends in any period of four consecutive Fiscal
Quarters not to exceed:
(i) 3% of the aggregate amount of Consolidated Net
Income for such four Fiscal Quarter period, if the Total Liabilities to
Consolidated Tangible Net Worth Ratio of the Borrower for such four
Fiscal Quarter period is greater than or equal to 1.5 to 1; and
(ii) 10% of the aggregate amount of Consolidated Net
Income for such four Fiscal Quarter period, if the Total Liabilities to
Consolidated Tangible Net Worth Ratio of the Borrower for such four
Fiscal Quarter period is less than the 1.5 to 1;
provided, however, that in the event that as a result of the application of the
formulae in clause (b) above the Borrower declares or pays a cash dividend or
dividends in an amount which is permitted under clause (b) above in one or more
Fiscal Quarters and the result of such permitted cash dividend or dividends is
that, as a consequence of changes in the Consolidated Net Income of the Borrower
and its Subsidiaries, in a subsequent Fiscal Quarter the Borrower has exceeded
the amount permitted under clause (b) above such cash dividend shall not be
required to be refunded to the Borrower and the same shall not constitute a
Default or Event of Default hereunder, but the Borrower shall not be permitted
to declare or pay any cash dividend in such Fiscal Quarter; provided, further,
that the Restricted Payments described in clause (b) above shall not be
permitted if either (A) an Event of Default or Default shall have occurred and
be continuing at the date of declaration or payment thereof or would result
therefrom or (B) such Restricted Payment is prohibited under the terms of any
Indebtedness (other than the Obligations) of the Borrower or any of its
Subsidiaries; provided, further, that (i) the Restricted Payments described in
clause (b) above shall not be permitted unless before and after giving effect to
such Restricted Payments, the Borrower shall be in compliance with the financial
covenants contained in Article IV on a pro forma basis, and (ii) for purposes of
calculating Total Liabilities to Consolidated Tangible Net Worth Ratio in clause
(b) above, the Net Worth of the Borrower for the immediately preceding Fiscal
Quarter shall be calculated as if any Equity Issuance that occurs in the current
Fiscal Quarter prior to such cash dividend had occurred in the previous Fiscal
Quarter.
SECTION 8.6 RESTRICTION ON FUNDAMENTAL CHANGES
Except for Permitted Acquisitions, the Borrower shall not, and
shall not permit any of its Subsidiaries to (a) merge (other than the Merger)
with any Person other than any Subsidiary into the Borrower or any Guarantor, as
long as the surviving entity of such merger is the Borrower or a Guarantor, (b)
consolidate with any Person other than any Subsidiary into the
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Borrower or any Guarantor, as long as the surviving entity of such consolidation
is the Borrower or a Guarantor, (c) acquire all or substantially all of the
Stock or Stock Equivalents of any Person, (d) acquire all or substantially all
of the assets of any Person or all or substantially all of the assets
constituting the business of a division, branch or other unit operation of any
Person, (e) enter into any joint venture or partnership with any Person, other
than pursuant to an Investment made pursuant to clause (h) of Section 8.3
(Investments) or (f) create any Subsidiary unless, after giving effect to such
creation or acquisition, the Borrower is in compliance with Section 7.13
(Additional Collateral and Guaranties), and such Subsidiary is either (i) a
Wholly-Owned Subsidiary, or (ii) created in connection with an Investment
permitted pursuant to clauses (h) and (i) of Section 8.3 (Investments).
SECTION 8.7 CHANGE IN NATURE OF BUSINESS
The Borrower shall not, and shall not permit any of its
Subsidiaries to, make any material change in the nature or conduct of its
business as carried on at the date hereof.
SECTION 8.8 TRANSACTIONS WITH AFFILIATES
The Borrower shall not, and shall not permit any of its
Subsidiaries to, except as otherwise expressly permitted herein, do any of the
following: (a) make any Investment in an Affiliate of the Borrower that is not a
Subsidiary of the Borrower; (b) transfer, sell, lease, assign or otherwise
dispose of any asset to any Affiliate of the Borrower that is not a Subsidiary
of the Borrower; (c) merge (other than the Merger) into or consolidate with or
purchase or acquire assets from any Affiliate of the Borrower that is not a
Subsidiary of the Borrower; (d) repay any Indebtedness to any Affiliate of the
Borrower that is not a Subsidiary of the Borrower; or (e) enter into any other
transaction directly or indirectly with or for the benefit of any Affiliate of
the Borrower that is not a Guarantor (including guaranties and assumptions of
obligations of any such Affiliate), except for (i) transactions in the ordinary
course of business on a basis no less favorable to the Borrower or such
Guarantor as would be obtained in an arm's length transaction with a Person not
an Affiliate, (ii) salaries and other director or employee compensation or
benefits to officers or directors of the Borrower or any of its Subsidiaries
commensurate with current compensation and benefits levels, and (iii)
indemnities of officers, directors and employees of the Borrower and its
Subsidiaries permitted by their respective organizational documents and by
applicable law; provided, however, that the Borrower shall not be prohibited
under this Section 8.8 from (x) making payments of up to $3,500,000 per Fiscal
Year to TOI under the Management Services Agreement (or another similar
agreement) or (y) performing its obligations under the Tax Allocation Agreement.
SECTION 8.9 RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS; NO NEW
NEGATIVE PLEDGE
Other than pursuant to the Loan Documents and any agreements
governing any purchase money Indebtedness or Capital Lease Obligations permitted
by clause (b), (d), (e), (k) or (l) of Section 8.1 (Indebtedness) (in which
latter case, any prohibition or limitation shall only be effective against the
assets financed thereby), the Borrower shall not, and shall not permit any of
its Subsidiaries to, (a) except as set forth on Schedule 8.9, agree to enter
into or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of such Subsidiary to pay dividends or
make any other distribution or transfer of funds or assets or make loans or
advances to or other Investments in, or pay any Indebtedness owed to, the
Borrower or any other Subsidiary of the Borrower or (b) enter into or suffer to
exist or become effective any
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agreement prohibiting or limiting the ability of the Borrower or any Subsidiary
of the Borrower to create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, to
secure the Obligations, including any agreement requiring any other Indebtedness
or Contractual Obligation to be equally and ratably secured with the
Obligations.
SECTION 8.10 MODIFICATION OF CONSTITUENT DOCUMENTS
The Borrower shall not, and shall not permit any of its
Subsidiaries to, change its capital structure (including in the terms of its
outstanding Stock) or otherwise amend its Constituent Documents, except for
changes and amendments which do not materially affect the rights and privileges
of the Borrower or any of its Subsidiaries, or the interests of the
Administrative Agent, the Lenders and the Issuers under the Loan Documents or in
the Collateral; provided, however, that the capital Stock of the Borrower may be
reorganized to create a dual class structure as more fully described on Schedule
8.10.
SECTION 8.11 MODIFICATION OF RELATED DOCUMENTS
The Borrower shall not, and shall not permit any of its
Subsidiaries to, (a) alter, rescind, terminate, amend, supplement, waive or
otherwise modify any provision of any Related Document other than the Notes and
the Senior Note Indenture and the Subordinated Note Indenture (except for
modifications that do not materially affect the rights and privileges of the
Borrower or any of its Subsidiaries under such Related Document, and that do
not, when taken as a whole, materially affect the interests of the Secured
Parties under the Loan Documents or in the Collateral) or (b) permit any breach
or default to exist under any Related Document or take or fail to take any
action thereunder, if to do so could reasonably be expected to have a Material
Adverse Effect.
SECTION 8.12 MODIFICATION OF OTHER INDEBTEDNESS AGREEMENTS
The Borrower shall not, and shall not permit any of its
Subsidiaries to, change or amend the terms of any Other Indebtedness or the
Subordinated Note Indenture (or any indenture or agreement in connection
therewith) if such change or amendment would materially increase the obligations
of the obligor or confer additional material rights to the holder of such Other
Indebtedness or the Subordinated Notes in a manner materially adverse to the
Borrower, any of its Subsidiaries, the Administrative Agent or any Lender,
including, without limitation, any amendment the effect of which is to (a)
materially increase the interest rate on such Other Indebtedness or the
Subordinated Note Indenture, (b) materially accelerate the dates upon which
payments of principal interest, fees or other annuity are due on such Other
Indebtedness or the Subordinated Note Indenture, (c) materially change any
material default or event of default other than to delete or make less
restrictive any default provision therein, or add any covenant with respect to
such Other Indebtedness or the Subordinated Note Indenture, or (d) materially
change the redemption or prepayment provisions of such Other Indebtedness or the
Subordinated Note Indenture other than to extend the dates therefor or to reduce
the premiums payable in connection therewith; provided; however with respect to
the Notes, any change or acceleration described in (a) though (d) above shall
automatically be deemed to be material; and provided, further, that nothing
herein shall be deemed to restrict or limit the ability of the Borrower to incur
Indebtedness pursuant to clauses (j) or (l) of Section 8.1 (Indebtedness).
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SECTION 8.13 ACCOUNTING CHANGES; FISCAL YEAR
The Borrower shall not, and shall not permit any of its
Subsidiaries to, change its (a) accounting treatment and reporting practices or
tax reporting treatment, except as required by GAAP or any Requirement of Law
and disclosed to the Lenders and the Administrative Agent or (b) Fiscal Year.
SECTION 8.14 MARGIN REGULATIONS
The Borrower shall not, and shall not permit any of its
Subsidiaries to, use all or any portion of the proceeds of any credit extended
hereunder to purchase or carry Margin Stock.
SECTION 8.15 OPERATING LEASES; SALE/LEASEBACKS
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, become or remain liable as lessee or guarantor or other surety
with respect to any operating lease, unless that aggregate amount of all rents
paid or accrued under all such operating leases shall not exceed $10,000,000 in
any Fiscal Year.
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any sale and leaseback transaction covering any
property with an aggregate Fair Market Value in excess of $10,000,000.
SECTION 8.16 CANCELLATION, PREPAYMENT OF INDEBTEDNESS
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, cancel any claim or Indebtedness owed to it except in the
ordinary course of business consistent with past practice.
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, (i) prepay, redeem, purchase, repurchase or exchange, defease
or otherwise satisfy prior to the scheduled maturity thereof in any manner, or
make any payment in violation of any subordination terms of, any Indebtedness;
provided, however, that the Borrower may (A) prepay the Obligations in
accordance with the terms of this Agreement, (B) make regularly scheduled or
otherwise required repayments or redemptions of Indebtedness permitted pursuant
to Section 8.1 (Indebtedness), (C) prepay any other Indebtedness in order to
incur Indebtedness permitted under Section 8.1(e) (Indebtedness), (D) prepay any
Indebtedness payable to the Borrower by any of its Subsidiaries and (E) so long
as no Event of Default has occurred and is continuing, prepay Indebtedness in an
aggregate amount not to exceed $10,000,000 together with all such prepayments
pursuant to this clause (E), or (ii) amend, modify or change in any manner that
is material in the aggregate with all other such amendments, modifications and
changes any terms or conditions of any Indebtedness other than as (x) permitted
under Section 8.1(e) (Indebtedness) and (y) not prohibited under Section 8.12
(Modification of Other Indebtedness Agreements).
SECTION 8.17 NO SPECULATIVE TRANSACTIONS
The Borrower shall not, and shall not permit any of its
Subsidiaries to, engage in any speculative transaction or in any transaction
involving Hedging Contracts except as required by Section 7.14 (Interest Rate
Contracts) or for the sole purpose of hedging in the normal course of business
and consistent with industry practices.
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SECTION 8.18 COMPLIANCE WITH ERISA
The Borrower shall not cause or permit to occur, and shall not
permit any of its Subsidiaries to cause or permit to occur, or cause or permit
any ERISA Affiliate to cause or permit to occur (a) an event which could result
in the imposition of a Lien under Section 412 of the IRC or Section 302 or 4068
of ERISA or (b) an ERISA Event that would have a Material Adverse Effect.
SECTION 8.19 ENVIRONMENTAL
The Borrower shall not, and shall not permit any of its
Subsidiaries to, allow a Release of any Contaminant in violation of any
Environmental Law; provided, however, that the Borrower shall not be deemed in
violation of this Section 8.19 (Environmental) if, as the consequence of all
such Releases, such Loan Party would not incur Environmental Liabilities and
Costs in excess of $15,000,000 in the aggregate.
SECTION 8.20 ACQUISITIONS OF UNENTITLED LAND PROHIBITED
The Borrower shall not, and shall not permit any of its
Subsidiaries to, acquire or purchase any Unentitled Land.
SECTION 8.21 HIGH-RISE CONSTRUCTION PROHIBITED
The Borrower shall not, and shall not permit any of its
Subsidiaries to, engage in any development of a residential building having more
than six (6) stories.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1 EVENTS OF DEFAULT
Each of the following events shall be an Event of Default:
(a) the Borrower shall fail to pay any principal of any Loan
or any Reimbursement Obligation when the same becomes due and payable; or
(b) the Borrower shall fail to pay any interest on any Loan,
any fee under any of the Loan Documents or any other Obligation (other than one
referred to in clause (a) above) and such non-payment continues for a period of
three Business Days after the due date therefor;
(c) any representation or warranty made or deemed made by any
Loan Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(d) any Loan Party shall fail to perform or observe (i) any
term, covenant or agreement contained in Article V, Section 6.1 (Financial
Statements), Section 6.2 (Default Notices), Section 7.1 (Preservation of
Corporate Existence, Etc.), Section 7.6 (Maintenance of
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Contractual Obligations), Section 7.11 (Application of Proceeds), Section 7.12
(Environmental), Section 7.13 (Additional Collateral and Guaranties), or Section
7.15 (Real Property), Article VIII, or (ii) any other term, covenant or
agreement contained in this Agreement or in any other Loan Document if such
failure under this clause (ii) shall remain unremedied for 30 days after the
earlier of (A) the date on which a Responsible Officer of the Borrower becomes
aware of such failure and (B) the date on which written notice thereof shall
have been given to the Borrower by the Administrative Agent or any Lender; or
(e) (i) the Borrower or any of the Guarantors shall fail to
make any payment on any Indebtedness (other than the Obligations) of the
Borrower or any such Guarantor or any Guaranty Obligation in respect of
Indebtedness of any other Person, and in each such case, such failure relates to
Indebtedness having a principal amount of $2,500,000 or more, when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise); or (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to any
Indebtedness of the Borrower or any of the Guarantors having a principal amount
of $2,500,000 or more, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or (iii) any Indebtedness of the Borrower and any of the Guarantors having a
principal amount of $2,500,000 or more shall become or be declared to be due and
payable, or required to be prepaid or repurchased (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof; or
(f) (i) the Borrower or any of its Subsidiaries shall
generally not pay its debts as such debts become due, shall admit in writing its
inability to pay its debts generally or shall make a general assignment for the
benefit of creditors, (ii) any proceeding shall be instituted by or against the
Borrower or any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any
Requirement of Law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a custodian, receiver, trustee or other similar official for it
or for any substantial part of its property; provided, however, in the case of
any such proceedings instituted against the Borrower or any of its Subsidiaries
(but not instituted by the Borrower or any of its Subsidiaries), either such
proceedings shall remain undismissed or unstayed for a period of 30 days or any
of the actions sought in such proceedings shall occur, or (iii) the Borrower or
any of its Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in clauses (i) and (ii) of this subsection (f); or
(g) one or more judgments or orders (or other similar process)
involving, in any single case or in the aggregate, an amount in excess of
$2,500,000 in the case of a money judgment, to the extent not covered by
insurance, or that could reasonably be expected to have a Material Adverse
Effect, in the case of a non-monetary judgment, shall be rendered against one or
more of the Borrower and its Subsidiaries and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or (ii)
there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(h) an ERISA Event shall occur and the amount of all
liabilities and deficiencies resulting therefrom that are or are reasonably
likely to be imposed on the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate, whether or not assessed, exceeds $1,000,000 in the aggregate;
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(i) any material provision of any Collateral Document or any
Guaranty after delivery thereof pursuant to this Agreement or any other Loan
Document shall for any reason cease to be valid and binding, or enforceable
against, on any Loan Party thereto, or any Loan Party shall so state in writing;
or
(j) any Collateral Document shall for any reason cease to
create a valid Lien on any of the Collateral purported to be covered thereby or
except as permitted by the Loan Documents, such Lien shall cease to be a
perfected and first priority Lien or any Loan Party shall so state in writing;
or
(k) there shall occur any Change of Control; or
(l) there shall occur a Material Adverse Change or any event
or circumstances which would have a Material Adverse Effect; or
(m) one or more of the Borrower and its Subsidiaries shall
have entered into one or more consent or settlement decrees or agreements or
similar arrangements with a Governmental Authority or one or more judgments,
orders, decrees or similar actions shall have been entered against one or more
of the Borrower and its Subsidiaries based on or arising from the violation of
or pursuant to any Environmental Law, or the generation, storage,
transportation, treatment, disposal or Release of any Contaminant and, in
connection with all the foregoing, the Borrower and its Subsidiaries are likely
to incur Environmental Liabilities and Costs in excess of $15,000,000 in the
aggregate; or
(n) TOI shall engage in any business or activity other than
holding (i) the capital stock of the Borrower and Technical Olympic Nevada,
Inc., a Nevada corporation, and (ii) a 1% general partnership interest in
Techolym, L.P., a Texas limited partnership.
SECTION 9.2 REMEDIES
During the continuance of any Event of Default, the
Administrative Agent (a) may, and shall at the request of the Requisite Lenders
shall, by notice to the Borrower declare that all or any portion of the
Revolving Credit Commitments be terminated, whereupon the obligation of each
Lender to make any Loan and each Issuer to Issue any Letter of Credit shall
immediately terminate, and/or (b) may and shall at the request of the Requisite
Lenders shall, by notice to the Borrower, declare the Loans, all interest
thereon and all other amounts and Obligations payable under this Agreement to be
forthwith due and payable, whereupon the Loans, all such interest and all such
amounts and Obligations shall immediately become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided, however, that
upon the occurrence of the Events of Default specified in Section 9.1(f) (Events
of Default), the Revolving Credit Commitments of each Lender to make Loans and
the commitments of each Lender and Issuer to Issue or participate in Letters of
Credit shall each automatically be terminated and the Loans, all such interest
and all such amounts and Obligations shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower. In addition to the remedies
set forth above, the Administrative Agent may exercise any remedies provided for
by the Collateral Documents in accordance with the terms thereof or any other
remedies provided by applicable law.
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SECTION 9.3 ACTIONS IN RESPECT OF LETTERS OF CREDIT
At any time after the Revolving Credit Termination Date when
the funds in a Cash Collateral Account shall be less than the Letter of Credit
Obligations, the Borrower shall pay to the Administrative Agent in immediately
available funds at the Administrative Agent's office referred to in Section 11.8
(Notices, Etc.), for deposit in a Cash Collateral Account, an amount equal to
105% of the sum of all outstanding Letter of Credit Obligations. Amounts held in
such Cash Collateral Account shall be applied by the Administrative Agent to the
payment of Reimbursement Obligations, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied in accordance with clause (f) of Section 2.13 (Payments and
Computations). The Administrative Agent shall promptly give notice of any such
application; provided, however, that the failure to give such written notice
shall not invalidate any such application.
SECTION 9.4 RESCISSION
If at any time after termination of the Revolving Credit
Commitments and/or acceleration of the maturity of the Loans, the Borrower shall
pay all arrears of interest and all payments on account of principal of the
Loans and Reimbursement Obligations that shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified herein) and all Events of Default and
Defaults (other than non-payment of principal of and accrued interest on the
Loans due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to Section 11.1 (Amendments, Waivers, Etc.), then upon the
written consent of the Requisite Lenders and written notice to the Borrower, the
termination of the Revolving Credit Commitments and/or the acceleration and
their consequences may be rescinded and annulled; but provided, however, that
such action shall not affect any subsequent Event of Default or Default or
impair any right or remedy consequent thereon. The provisions of the preceding
sentence are intended merely to bind the Lenders and the Issuers to a decision
that may be made at the election of the Requisite Lenders; and such provisions
are not intended to benefit the Borrower and do not give the Borrower the right
to require the Lenders to rescind or annul any acceleration hereunder, even if
the conditions set forth herein are met.
ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.1 AUTHORIZATION AND ACTION
(a) Each Lender and each Issuer hereby appoints CNAI as the
Administrative Agent hereunder and each Lender and each Issuer authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Administrative Agent under such agreements and to exercise such powers as
are reasonably incidental thereto. Without limiting the foregoing, each Lender
and each Issuer hereby authorizes the Administrative Agent to execute and
deliver, and to perform its obligations under, each of the Loan Documents to
which the Administrative Agent is a party and to exercise all rights, powers and
remedies that the Administrative Agent may have under such Loan Documents
pursuant to which the Administrative Agent is acting as agent for the Lenders,
Issuers and the other Secured Parties.
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(b) As to any matters not expressly provided for by this
Agreement and the other Loan Documents (including enforcement or collection),
the Administrative Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Requisite Lenders, and such instructions shall be binding
upon all Lenders and each Issuer; provided, however, that the Administrative
Agent shall not be required to take any action that (i) the Administrative Agent
in good faith believes exposes it to personal liability unless the
Administrative Agent receives an indemnification satisfactory to it from the
Lenders and the Issuers with respect to such action or (ii) is contrary to this
Agreement or applicable law. The Administrative Agent agrees to give to each
Lender and each Issuer prompt notice of each notice given to it by any Loan
Party pursuant to the terms of this Agreement or the other Loan Documents.
(c) In performing its functions and duties hereunder and under
the other Loan Documents, the Administrative Agent is acting solely on behalf of
the Lenders and the Issuers and its duties are entirely administrative in
nature. The Administrative Agent does not assume and shall not be deemed to have
assumed any obligation other than as expressly set forth herein and in the other
Loan Documents or any other relationship as the agent, fiduciary or trustee of
or for any Lender, Issuer or holder of any other Obligation. The Administrative
Agent may perform any of its duties under any Loan Document by or through its
agents or employees.
SECTION 10.2 ADMINISTRATIVE AGENT'S RELIANCE, ETC.
None of the Administrative Agent, any of its Affiliates or any
of their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it, him, her or them under or in
connection with this Agreement or the other Loan Documents, except for its, his,
her or their own gross negligence or willful misconduct. Without limiting the
foregoing, the Administrative Agent (a) may treat the payee of any Revolving
Credit Note as its holder until such Revolving Credit Note has been assigned in
accordance with Section 11.2 (Assignments and Participations), (b) may rely on
the Register to the extent set forth in Section 11.2(c), (c) may consult with
legal counsel (including counsel to the Borrower or any other Loan Party),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts, (d) makes no
warranty or representation to any Lender or Issuer and shall not be responsible
to any Lender or Issuer for any statements, warranties or representations made
by or on behalf of the Borrower or any of its Subsidiaries in or in connection
with this Agreement or any other Loan Document, (e) shall not have any duty to
ascertain or to inquire either as to the performance or observance of any terms,
covenant or condition of this Agreement or any other Loan Document, as to the
financial condition of any Loan Party or as to the existence or possible
existence of any Default or Event of Default; (f) shall not be responsible to
any Lender or Issuer for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the attachment, perfection or priority
of any Lien created or purported to be created under or in connection with, this
Agreement, any other Loan Document or any other instrument or document furnished
pursuant hereto or thereto; and (g) shall incur no liability under or in respect
of this Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be a telecopy or
electronic mail) or any telephone message believed by it to be genuine and
signed or sent by the proper party or parties.
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SECTION 10.3 THE ADMINISTRATIVE AGENT INDIVIDUALLY
With respect to its Ratable Portion, CNAI shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders" or "Requisite Lenders", "Lenders", and any similar
terms shall, unless the context clearly otherwise indicates, include, without
limitation, the Administrative Agent in its individual capacity as a Lender or
as one of the Requisite Lenders. CNAI and its Affiliates may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or other
business with any Loan Party as if CNAI were not acting as the Administrative
Agent.
SECTION 10.4 LENDER CREDIT DECISION
Each Lender and each Issuer acknowledges that it shall,
independently and without reliance upon the Administrative Agent or any other
Lender conduct its own independent investigation of the financial condition and
affairs of the Borrower and each other Loan Party in connection with the making
and continuance of the Loans and with the issuance of the Letters of Credit.
Each Lender and each Issuer also acknowledges that it shall, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and other Loan Documents.
SECTION 10.5 INDEMNIFICATION
Each Lender agrees to indemnify the Administrative Agent and
each of its Affiliates, and each of their respective directors, officers,
employees, agents and advisors (to the extent not reimbursed by the Borrower),
from and against such Lender's aggregate Ratable Portion of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements (including reasonable fees, expenses and
disbursements of financial and legal advisors) of any kind or nature whatsoever
that may be imposed on, incurred by, or asserted against, the Administrative
Agent or any of its Affiliates, directors, officers, employees, agents and
advisors in any way relating to or arising out of this Agreement or the other
Loan Documents or any action taken or omitted by the Administrative Agent under
this Agreement or the other Loan Documents; provided, however, that no Lender
shall be liable to the Administrative Agent and any of its Affiliates, and any
of their respective directors, officers, employees, agents and advisors for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such
Administrative Agent's, Affiliates', directors', officers', employees', agents'
or advisors' gross negligence or willful misconduct. Without limiting the
foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
reasonable fees, expenses and disbursements of financial and legal advisors)
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 its rights or responsibilities under, this Agreement or the
other Loan Documents, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower or another Loan Party. The
indemnification provided for above shall apply, mutatis mutandis, to any Lender
in its capacity as a sub-agent of the Administrative Agent pursuant to Section
10.7 (Concerning the Collateral and the Collateral Documents).
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SECTION 10.6 SUCCESSOR ADMINISTRATIVE AGENT
The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Requisite Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Requisite Lenders, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, selected from among the
Lenders. In either case, such appointment shall be subject to the prior written
approval of the Borrower (which approval may not be unreasonably withheld and
shall not be required upon the occurrence and during the continuance of an Event
of Default). Upon the acceptance of any appointment as Administrative Agent by a
successor Administrative Agent, such successor Administrative Agent shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents. Prior to any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the retiring Administrative Agent shall take
such action as may be reasonably necessary to assign to the successor
Administrative Agent its rights as Administrative Agent under the Loan
Documents. After such resignation, the retiring Administrative Agent shall
continue to have the benefit of this Article X as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this Agreement
and the other Loan Documents. Anything herein to the contrary notwithstanding,
the Administrative Agent shall resign if at any time the Administrative Agent is
not a Lender having a Revolving Credit Commitment of at least $10,000,000 (or
such ratably lesser amount if the Revolving Credit Commitments have been reduced
in accordance with this Agreement).
SECTION 10.7 CONCERNING THE COLLATERAL AND THE COLLATERAL
DOCUMENTS
(a) Each Lender and each Issuer agrees that any action taken
by the Administrative Agent or the Requisite Lenders (or, where required by the
express terms of this Agreement, a greater proportion of the Lenders) in
accordance with the provisions of this Agreement or of the other Loan Documents,
and the exercise by the Administrative Agent or the Requisite Lenders (or, where
so required, such greater proportion of the Lenders) of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders, Issuers and
other Secured Parties. Without limiting the generality of the foregoing, the
Administrative Agent shall have the sole and exclusive right and authority to
(i) act as the disbursing and collecting agent for the Lenders and the Issuers
with respect to all payments and collections arising in connection herewith and
with the Collateral Documents; (ii) execute and deliver each Collateral Document
and accept delivery of each such agreement delivered by the Borrower or any of
its Subsidiaries; (iii) act as collateral agent for the Lenders, the Issuers and
the other Secured Parties for purposes of the perfection of all security
interests and Liens created by such agreements and all other purposes stated
therein; provided, however, that the Administrative Agent hereby appoints,
authorizes and directs each Lender and Issuer to act as collateral sub-agent for
the Administrative Agent, the Lenders and the Issuers for purposes of the
perfection of all security interests and Liens with respect to the Borrower's
and its Subsidiaries' respective Deposit Accounts maintained with, and cash and
Cash Equivalents held by, such Lender or such Issuer; (iv) manage, supervise and
otherwise deal with the Collateral; (v) take such action as is necessary or
desirable to maintain the perfection and priority of the security interests and
Liens created or purported to be created by the Collateral
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Documents; and (vi) except as may be otherwise specifically restricted by the
terms hereof or of any other Loan Document, exercise all remedies given to the
Administrative Agent, the Lenders, the Issuers and the other Secured Parties
with respect to the Collateral under the Loan Documents relating thereto,
applicable law or otherwise.
(b) Each of the Lenders and the Issuers hereby directs, in
accordance with the terms hereof, the Administrative Agent to release (or, in
the case of clause (ii) below, release or subordinate) any Lien held by the
Administrative Agent for the benefit of the Lenders and the Issuers against any
of the following:
(i) all of the Collateral, upon termination of the
Revolving Credit Commitments and payment and satisfaction in full of
all Loans, Reimbursement Obligations and all other Obligations that the
Administrative Agent has been notified in writing are then due and
payable (and, in respect of contingent Letter of Credit Obligations,
with respect to which cash collateral has been deposited or a back-up
letter of credit has been issued, in either case on terms satisfactory
to the Administrative Agent and the applicable Issuers); and
(ii) any part of the Collateral sold or disposed of
by a Loan Party if such sale or disposition is permitted by this
Agreement (or permitted pursuant to a waiver or consent of a
transaction otherwise prohibited by this Agreement) or, if not pursuant
to such sale or disposition, if such release is consented to by all the
Lenders required to consent thereto pursuant to clause (a)(viii) of
Section 11.1 (Amendments, Waivers, Etc.).
Each of the Lenders and the Issuers hereby directs the Administrative Agent to
execute and deliver or file such termination and partial release statements and
do such other things as are necessary to release Liens to be released pursuant
to this Section 10.7 (Concerning the Collateral and the Collateral Documents)
promptly upon the effectiveness of any such release.
SECTION 10.8 COLLATERAL MATTERS RELATING TO RELATED
OBLIGATIONS
The benefit of the Loan Documents and of the provisions of
this Agreement relating to the Collateral shall extend to and be available in
respect of any Secured Obligation arising under any Hedging Contract relating to
a Loan Document or that is otherwise owed to Persons other than the
Administrative Agent, the Lenders and the Issuers (collectively, "Related
Obligations") solely on the condition and understanding, as among the
Administrative Agent and all Secured Parties, that (a) the Related Obligations
shall be entitled to the benefit of the Loan Documents and the Collateral to the
extent expressly set forth in this Agreement and the other Loan Documents and to
such extent the Administrative Agent shall hold, and have the right and power to
act with respect to, the Guaranty and the Collateral on behalf of and as agent
for the holders of the Related Obligations, but the Administrative Agent is
otherwise acting solely as agent for the Lenders and the Issuers and shall have
no fiduciary duty, duty of loyalty, duty of care, duty of disclosure or other
obligation whatsoever to any holder of Related Obligations, (b) all matters,
acts and omissions relating in any manner to the Guaranty, the Collateral, or
the omission, creation, perfection, priority, abandonment or release of any
Lien, shall be governed solely by the provisions of this Agreement and the other
Loan Documents and no separate Lien, right, power or remedy shall arise or exist
in favor of any Secured Party under any separate instrument or agreement or in
respect of any Related Obligation, (c) each Secured Party shall be bound by all
actions taken or omitted, in accordance with the provisions of this Agreement
and the other Loan Documents, by the Administrative Agent and the Requisite
Lenders, each of
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whom shall be entitled to act at its sole discretion and exclusively in its own
interest given its own Revolving Credit Commitments and its own interest in the
Loans, Letter of Credit Obligations and other Obligations to it arising under
this Agreement or the other Loan Documents, without any duty or liability to any
other Secured Party or as to any Related Obligation and without regard to
whether any Related Obligation remains outstanding or is deprived of the benefit
of the Collateral or becomes unsecured or is otherwise affected or put in
jeopardy thereby, (d) no holder of Related Obligations and no other Secured
Party (except the Administrative Agent, the Lenders and the Issuers, to the
extent set forth in this Agreement) shall have any right to be notified of, or
to direct, require or be heard with respect to, any action taken or omitted in
respect of the Collateral or under this Agreement or the Loan Documents and (e)
no holder of any Related Obligation shall exercise any right of setoff, banker's
lien or similar right except as expressly provided in Section 11.6 (Right of
Set-off).
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 AMENDMENTS, WAIVERS, ETC.
(a) No amendment or waiver of any provision of this Agreement
or any other Loan Document nor consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Requisite Lenders (or by the Administrative Agent with the
consent of the Requisite Lenders) and, in the case of any amendment, by the
Borrower, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by each Lender affected thereby, in addition to the Requisite Lenders, do
any of the following:
(i) waive any condition specified in Section 3.1
(Conditions Precedent to Initial Loans and Letters of Credit) or
Section 3.2(b) or (c) (Conditions Precedent to Each Loan and Letter of
Credit) (it being understood that the making of any Loan during the
continuance of an Event of Default under Section 9.1(a) or (b) (Events
of Default) affects each Lender), except with respect to a condition
based upon another provision hereof, the waiver of which requires only
the concurrence of the Requisite Lenders;
(ii) increase the Revolving Credit Commitment of such
Lender or subject such Lender to any additional obligation; provided,
however, that, except as provided in Section 2.19 (Facility Increase),
any such increase in the Revolving Credit Commitment shall require the
consent of all Lenders;
(iii) extend the scheduled final maturity of any Loan
owing to such Lender, or waive (including any waiver of the maturity of
the Loans held by any Non-Extending Lender), reduce or postpone any
scheduled date fixed for the payment or reduction of principal of any
such Loan (it being understood that Section 2.9 (Mandatory
Prepayments)) does not provide for scheduled dates fixed for payment)
or for the reduction of such Lender's Revolving Credit Commitment;
(iv) reduce the principal amount of any Loan or
Reimbursement Obligation owing to such Lender (other than by the
payment or prepayment thereof);
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(v) reduce the rate of interest on any Loan or
Reimbursement Obligations outstanding to such Lender or any fee payable
hereunder to such Lender;
(vi) postpone any scheduled date fixed for payment of
such interest or fees owing to such Lender;
(vii) change the aggregate Ratable Portions of
Lenders required for any or all Lenders to take any action hereunder;
(viii) increase the Advance Rate in respect of any
Borrowing Base Asset or add any new category of Borrowing Base Asset to
the Borrowing Base or change or modify the definition of any category
of Borrowing Base Assets (other than to make any change the effect of
which is to make a ministerial clarification of such definition);
(ix) release a material amount of the Collateral
except as provided in Section 10.7(b) or release the Borrower from its
payment obligation to such Lender under this Agreement or the Revolving
Credit Notes owing to such Lender (if any) or release any Guarantor
from its obligations under the Guaranty except in connection with sale
or other disposition of a Guarantor (or all or substantially all of the
assets thereof) permitted by this Agreement (or permitted pursuant to a
waiver or consent of a transaction otherwise prohibited by this
Agreement); or
(x) amend Section 10.7(b), this Section 11.1
(Amendments, Waivers, Etc.) or either definition of the terms
"Requisite Lenders" or "Ratable Portion";
and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or the other Loan Documents.
(b) The Administrative Agent may, but shall have no obligation
to, with the written concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of such Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.
(c) If, in connection with any proposed amendment,
modification, waiver or termination (a "Proposed Change") requiring the consent
of all affected Lenders, the consent of Requisite Lenders is obtained, but the
consent of other Lenders whose consent is required is not obtained (any such
Lender whose consent is not obtained as described in this Section 11.1
(Amendments, Waivers, Etc.) being referred to as a "Non-Consenting Lender"),
then, so long as the Lender that is acting as the Administrative Agent is not a
Non-Consenting Lender, at the Borrower's request, each other Lender shall have a
right to purchase its pro rata share of such Non-Consenting Lender's Revolving
Credit Commitment and Revolving Credit Outstandings, and if such Lenders do not
purchase all of such Non-Consenting Lender's Revolving Credit Commitment or
Revolving Credit Outstandings, an Eligible Assignee acceptable to the
Administrative Agent shall have the right with the Administrative Agent's
consent and in the Administrative Agent's sole discretion (but shall have no
obligation) to purchase from such Non-
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Consenting Lender, and such Non-Consenting Lender agrees that it shall, upon the
Administrative Agent's request, sell and assign to the Lender acting as the
Administrative Agent or such Eligible Assignee, all of the Revolving Credit
Commitments, and Revolving Credit Outstandings of such Non-Consenting Lender for
an amount equal to the principal balance of all Loans held by the Non-Consenting
Lender and all accrued interest and fees with respect thereto and all other
amounts through the date of sale, provided, however, that such purchase and sale
shall not be effective until the Administrative Agent shall have received from
such Eligible Assignee an agreement in form and substance satisfactory to the
Administrative Agent and the Borrower whereby such Eligible Assignee shall agree
to be bound by the terms hereof. Each Lender agrees that, if it becomes a
Non-Consenting Lender, it shall execute and deliver to the Administrative Agent
an Assignment an Acceptance to evidence such sale and purchase and shall deliver
to the Administrative Agent any Revolving Credit Note (if the assigning Lender's
Loans are evidenced by a Revolving Credit Note) subject to such Assignment and
Acceptance; provided, however, that the failure of any Non-Consenting Lender to
execute an Assignment and Acceptance shall not render such sale and purchase
(and the corresponding assignment) invalid.
SECTION 11.2 ASSIGNMENTS AND PARTICIPATIONS
(a) Each Lender may sell, transfer, negotiate or assign to one
or more Eligible Assignees all or a portion of its rights and obligations
hereunder (including all of its rights and obligations with respect to the
Revolving Loans, the Swing Loans and the Letters of Credit); provided, however,
that (i) if any such assignment shall be of the assigning Lender's Revolving
Credit Outstandings and Revolving Credit Commitments, such assignment shall
cover the same percentage of such Lender's Revolving Credit Outstandings and
Revolving Credit Commitments, (ii) the aggregate amount being assigned pursuant
to each such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event (if less than the
Assignor's entire interest) be less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof, except, in either case, (A) with the consent of
the Borrower and the Administrative Agent or (B) if such assignment is being
made to a Lender or an Affiliate or Approved Fund of such Lender, and (iii) if
such Eligible Assignee is not, prior to the date of such assignment, a Lender or
an Affiliate or Approved Fund of a Lender, such assignment shall be subject to
the prior consent of the Administrative Agent and the Borrower (which consent
shall not be unreasonably withheld or delayed); and provided, further, that,
notwithstanding any other provision of this Section 11.2 (Assignments and
Participations), the consent of the Borrower shall not be required for any
assignment occurring when any Event of Default shall have occurred and be
continuing.
(b) The parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording, an
Assignment and Acceptance, together with any Revolving Credit Note (if the
assigning Lender's Loans are evidenced by a Revolving Credit Note) subject to
such assignment. In addition, any Lender or Eligible Assignee assuming a
Revolving Credit Commitment in connection with a Facility Increase shall execute
an Assumption Agreement in accordance with Section 2.19 (Facility Increase).
Upon such execution, delivery, acceptance and recording of any Assignment and
Acceptance or Assumption Agreement, as the case may be, and, other than in
respect of assignment made pursuant to Section 2.17 (Substitution of Lenders)
and Section 11.1(c), the receipt by the Administrative Agent from the assignee
of an assignment/assumption fee in the amount of $3,500, then from and after the
effective date specified in such Assignment and Acceptance or Assumption
Agreement, as the case may be, (i) the assignee thereunder shall become a party
hereto and, to the extent that rights
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and obligations under the Loan Documents have been assigned to such assignee
pursuant to such Assignment and Acceptance or assumed by such assuming party
pursuant to such Assumption Agreement, have the rights and obligations of a
Lender, and, in the case of an assignment, if such Lender were an Issuer, of
such Issuer hereunder and thereunder, and (ii) the assignor under an Assignment
and Acceptance shall, to the extent that rights and obligations under this
Agreement have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (except for those surviving the payment in full of the
Obligations) and be released from its obligations under the Loan Documents,
other than those relating to events or circumstances occurring prior to such
assignment (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under the Loan
Documents, such Lender shall cease to be a party hereto).
(c) The Administrative Agent shall maintain at its address
referred to in Section 11.8 (Notices, Etc.) a copy of each Assignment and
Acceptance and each Assumption Agreement delivered to and accepted by it and a
register for the recording of the names and addresses of the Lenders and the
Revolving Credit Commitments of and principal amount of the Loans and Letter of
Credit Obligations owing to each Lender from time to time (the "Register"). Any
assignment pursuant to this Section 11.2 (Assignments and Participations) shall
not be effective until such assignment is recorded in the Register. The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Loan Parties, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower, the Administrative Agent or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(d) Notwithstanding anything to the contrary contained in
clause (b) above, the Loans (including the Revolving Credit Notes evidencing
such Loans) are registered obligations and the right, title, and interest of the
Lenders and their assignees in and to such Loans shall be transferable only upon
notation of such transfer in the Register. A Revolving Credit Note shall only
evidence the Lender's or an assignee's right, title and interest in and to the
related Loan, and in no event is any such Revolving Credit Note to be considered
a bearer instrument or obligation. This Section 11.2 (Assignments and
Participations) shall be construed so that the Loans are at all times maintained
in "registered form" within the meaning of Sections 163(f), 871(h)(2) and
881(c)(2) of the Internal Revenue Code or such regulations. Solely for purposes
of this and for tax purposes only, the Administrative Agent shall act as the
Borrower's agent for purposes of maintaining such notations of transfer in the
Register.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee or an Assumption Agreement executed by
the Borrower and a Lender or an Eligible Assignee, the Administrative Agent
shall, if such Assignment and Acceptance or Assumption Agreement has been
completed, (i) accept such Assignment and Acceptance or Assumption Agreement,
(ii) record the information contained therein in the Register and (iii) in the
case of an Assignment and Acceptance, give prompt notice thereof to the
Borrower. Within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall, if requested by such assignee, execute and
deliver to the Administrative Agent, new Revolving Credit Notes to the order of
such assignee in an amount equal to the Revolving Credit Commitments assumed by
it pursuant to such Assignment and Acceptance or Assumption Agreement and, if
the assigning Lender, in the case of an Assignment and Acceptance, has
surrendered any Revolving Credit Note for exchange in connection with the
assignment and has
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retained Revolving Credit Commitments hereunder, new Revolving Credit Notes to
the order of the assigning Lender in an amount equal to the Revolving Credit
Commitments retained by it hereunder. Such new Revolving Credit Notes shall be
dated the same date as the surrendered Revolving Credit Notes and be in
substantially the form of Exhibit C (Form of Revolving Credit Note).
(f) In addition to the other assignment rights provided in
this Section 11.2 (Assignments and Participations), each Lender may assign, as
collateral or otherwise, any of its rights under this Agreement, whether now
owned or hereafter acquired (including rights to payments of principal or
interest on the Loans), to (x) any Federal Reserve Bank pursuant to Regulation A
of the Federal Reserve Board without notice to or consent of the Borrower or (y)
in the case of any Lender that is a Fund, any holders of obligations owed or
Securities issued by such Lender as security for such obligations or Securities
or any trustee for, or other representative of, such holders, and this Section
shall not apply to any such pledge or assignment of a security interest;
provided, however, that no such assignment shall release the assigning Lender
from any of its obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto.
(g) Each Lender may sell participations to one or more Persons
in or to all or a portion of its rights and obligations under the Loan Documents
(including all its rights and obligations with respect to the Revolving Loans
and Letters of Credit). The terms of such participation shall not, in any event,
require the participant's consent to any amendments, waivers or other
modifications of any provision of any Loan Documents, the consent to any
departure by any Loan Party therefrom, or to the exercising or refraining from
exercising any powers or rights such Lender may have under or in respect of the
Loan Documents (including the right to enforce the obligations of the Loan
Parties), except if any such amendment, waiver or other modification or consent
would (i) reduce the amount, or postpone any date fixed for, any amount (whether
of principal, interest or fees) payable to such participant under the Loan
Documents, to which such participant would otherwise be entitled under such
participation or (ii) result in the release of all or substantially all of the
Collateral other than in accordance with Section 10.7(b). In the event of the
sale of any participation by any Lender, (w) such Lender's obligations under the
Loan Documents shall remain unchanged, (x) such Lender shall remain solely
responsible to the other parties for the performance of such obligations, (y)
such Lender shall remain the holder of such Obligations for all purposes of this
Agreement, and (z) the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Each participant
shall be entitled to the benefits of Section 2.15 (Capital Adequacy) and Section
2.16 (Taxes) and of Section 2.14(d) (Illegality) as if it were a Lender;
provided, however, that anything herein to the contrary notwithstanding, the
Borrower shall not, at any time, be obligated to make under Section 2.15
(Capital Adequacy), or Section 2.16 (Taxes) or Section 2.14(d) (Illegality) to
the participant in the rights and obligations of any Lender (together with such
Lender) any payment in excess of the amount the Borrower would have been
obligated to pay to such Lender in respect of such interest had such
participation not been sold.
(h) Any Issuer may at any time assign its rights and
obligations hereunder to any other Lender by an instrument in form and substance
satisfactory to the Borrower, the Administrative Agent, such Issuer and such
Eligible Assignee. If any Issuer ceases to be a Lender hereunder by virtue of
any assignment made pursuant to this Section 11.2 (Assignments and
Participations), then, as of the effective date of such cessation, such Issuer's
obligations to
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Issue Letters of Credit pursuant to Section 2.4 (Letters of Credit) shall
terminate and such Issuer shall be an Issuer hereunder only with respect to
outstanding Letters of Credit issued prior to such date.
SECTION 11.3 COSTS AND EXPENSES
(a) The Borrower agrees upon demand to pay, or reimburse the
Administrative Agent for, all of the Administrative Agent's reasonable internal
and external audit, legal, appraisal, valuation, filing, document duplication
and reproduction and investigation expenses and for all other reasonable
out-of-pocket costs and expenses of every type and nature (including, without
limitation, after receipt of invoice documentation, the reasonable fees,
expenses and disbursements of the Administrative Agent's counsel, Weil, Gotshal
& ▇▇▇▇▇▇ LLP, local legal counsel, auditors, accountants, appraisers, printers,
insurance and environmental advisors, and other consultants and agents) incurred
by the Administrative Agent in connection with any of the following: (i) the
Administrative Agent's audit and investigation of the Borrower and its
Subsidiaries in connection with the preparation, negotiation or execution of any
Loan Document, (ii) the preparation, negotiation, execution or interpretation of
this Agreement (including, without limitation, the satisfaction or attempted
satisfaction of any conditions set forth in Article III) (Conditions To Loans
And Letters Of Credit)), any Loan Document or any proposal letter or commitment
letter issued in connection therewith or the making of the Loans hereunder,
(iii) the creation, perfection or protection of the Liens under any Loan
Document (including any reasonable fees, and disbursements and expenses for
local counsel in various jurisdictions), (iv) the ongoing administration of this
Agreement and the Loans, including consultation with attorneys in connection
therewith and with respect to the Administrative Agent's rights and
responsibilities hereunder and under the other Loan Documents, (v) the
protection, collection or enforcement of any Obligation or the enforcement of
any Loan Document, (vi) the commencement, defense or intervention in any court
proceeding relating in any way to the Obligations, any Loan Party, any of the
Borrower's Subsidiaries, the Related Documents, this Agreement or any other Loan
Document, (vii) the response to, and preparation for, any subpoena or request
for document production with which the Administrative Agent is served or
deposition or other proceeding in which the Administrative Agent is called to
testify, in each case, relating in any way to the Obligations, any Loan Party,
any of the Borrower's Subsidiaries, the Acquisition, the Related Documents, this
Agreement or any other Loan Documents or (viii) any amendment, consent, waiver,
assignment, restatement, or supplement to any Loan Document or the preparation,
negotiation, and execution of the same.
(b) The Borrower further agrees to pay or reimburse the
Administrative Agent and each of the Lenders and Issuers upon demand for all
out-of-pocket costs and expenses, including, without limitation, reasonable
attorneys' fees (including allocated costs of internal counsel and costs of
settlement), incurred by the Administrative Agent, such Lenders or Issuers in
connection with any of the following: (i) in enforcing any Loan Document or
Obligation or any security therefor or exercising or enforcing any other right
or remedy available by reason of an Event of Default, (ii) in connection with
any refinancing or restructuring of the credit arrangements provided hereunder
in the nature of a "work-out" or in any insolvency or bankruptcy proceeding,
(iii) in commencing, defending or intervening in any litigation or in filing a
petition, complaint, answer, motion or other pleadings in any legal proceeding
relating to the Obligations, any Loan Party, any of the Borrower's Subsidiaries
and related to or arising out of the transactions contemplated hereby or by any
other Loan Document or Related Document or
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(iv) in taking any other action in or with respect to any suit or proceeding
(bankruptcy or otherwise) described in clause (i), (ii) or (iii) above.
SECTION 11.4 INDEMNITIES
(a) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Arranger, each Lender and each of their respective
Affiliates, and each of the directors, officers, employees, agents,
representative, attorneys, consultants and advisors of or to any of the
foregoing (including those retained in connection with the satisfaction or
attempted satisfaction of any condition set forth in Article III (Conditions To
Loans And Letters Of Credit) (each such Person being an "Indemnitee") from and
against any and all claims, damages, liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, disbursements and expenses of any
kind or nature (including fees, disbursements and expenses of financial and
legal advisors to any such Indemnitee) that may be imposed on, incurred by or
asserted against any such Indemnitee in connection with or arising out of any
investigation, litigation or proceeding, whether or not any such Indemnitee is a
party thereto, whether direct, indirect, or consequential and whether based on
any federal, state or local law or other statutory regulation, securities or
commercial law or regulation, or under common law or in equity, or on contract,
tort or otherwise, in any manner relating to or arising out of this Agreement,
any other Loan Document, any Obligation, any Letter of Credit, the Disclosure
Document, any Related Documents, the Notes or any act, event or transaction
related or attendant to any thereof, or the use or intended use of the proceeds
of the Loans or Letters of Credit or in connection with any investigation of any
potential matter covered hereby (collectively, the "Indemnified Matters");
provided, however, that the Borrower shall not have any obligation under this
Section 11.4 (Indemnities) to an Indemnitee with respect to any Indemnified
Matter caused by or resulting from the gross negligence or willful misconduct of
that Indemnitee, as determined by a court of competent jurisdiction in a final
non-appealable judgment or order. Without limiting the foregoing, Indemnified
Matters include (i) all Environmental Liabilities and Costs arising from or
connected with the past, present or future operations of the Borrower or any of
its Subsidiaries involving any property subject to a Collateral Document, or
damage to real or personal property or natural resources or harm or injury
alleged to have resulted from any Release of Contaminants on, upon or into such
property or any contiguous real estate; (ii) any costs or liabilities incurred
in connection with any Remedial Action concerning any Borrower or any of its
Subsidiaries; (iii) any costs or liabilities incurred in connection with any
Environmental Lien and (iv) any costs or liabilities incurred in connection with
any other matter under any Environmental Law, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (49 U.S.C. 9601
et seq.) and applicable state property transfer laws, whether, with respect to
any of such matter, such Indemnitee is a mortgagee pursuant to any leasehold
mortgage, a mortgagee in possession, the successor in interest to the Borrower
or any of its Subsidiaries, or the owner, lessee or operator of any property of
the Borrower or any of its Subsidiaries by virtue of foreclosure, except, with
respect to those matters referred to in clauses (i), (ii), (iii) and (iv) above,
to the extent (x) incurred following foreclosure by the Administrative Agent,
any Lender or any Issuer, or the Administrative Agent, any Lender or any Issuer
having become the successor in interest to the Borrower or any of its
Subsidiaries, and (y) attributable solely to acts of the Administrative Agent,
such Lender or such Issuer or any agent on behalf of the Administrative Agent,
such lender or such Issuer. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 11.4 applies, such indemnity
shall be effective whether or not such investigation, litigation or proceeding
is brought by the Borrower, any of its directors,
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securityholders or creditors, an Indemnitee or any other person, or an
Indemnitee is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated.
(b) The Borrower shall indemnify the Administrative Agent, the
Lenders and each Issuer for, and hold the Administrative Agent, the Lenders and
each Issuer harmless from and against, any and all claims for brokerage
commissions, fees and other compensation made against the Administrative Agent,
the Lenders and the Issuers for any broker, finder or consultant with respect to
any agreement, arrangement or understanding made by or on behalf of any Loan
Party or any of its Subsidiaries in connection with the transactions
contemplated by this Agreement.
(c) The Borrower, at the request of any Indemnitee, shall have
the obligation to defend against such investigation, litigation or proceeding or
requested Remedial Action and the Borrower, in any event, may participate in the
defense thereof with legal counsel of the Borrower's choice. In the event that
such Indemnitee requests the Borrower to defend against such investigation,
litigation or proceeding or requested Remedial Action, the Borrower shall
promptly do so and such Indemnitee shall have the right to have legal counsel of
its choice participate in such defense. No action taken by legal counsel chosen
by such Indemnitee in defending against any such investigation, litigation or
proceeding or requested Remedial Action, shall vitiate or in any way impair the
Borrower's obligation and duty hereunder to indemnify and hold harmless such
Indemnitee.
(d) The Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including
pursuant to this Section 11.4 (Indemnities)) or any other Loan Document shall
(i) survive payment in full of the Obligations and (ii) inure to the benefit of
any Person that was at any time an Indemnitee under this Agreement or any other
Loan Document.
SECTION 11.5 LIMITATION OF LIABILITY
The Borrower agrees that no Indemnitee shall have any
liability (whether in contract, tort or otherwise) to any Loan Party or any of
their respective Subsidiaries or any of their respective equity holders or
creditors for or in connection with the transactions contemplated hereby and in
the other Loan Documents and Related Documents, except for direct damages (as
opposed to special, indirect, consequential or punitive damages (including,
without limitation, any loss of profits, business or anticipated savings))
determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnitee's gross negligence or willful
misconduct. The Borrower hereby waives, releases and agrees (each for itself and
on behalf of its Subsidiaries) not to ▇▇▇ upon any such claim for any special,
indirect, consequential or punitive damages, whether or not accrued and whether
or not known or suspected to exist in its favor.
SECTION 11.6 RIGHT OF SET-OFF
Upon the occurrence and during the continuance of any Event of
Default each Lender and each Affiliate of a Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender or its Affiliates to or for the credit or the account of the Borrower
against any and all of the Obligations now or hereafter existing whether or not
such Lender shall have made any
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demand under this Agreement or any other Loan Document and even though such
Obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application made by such Lender or its Affiliates;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section 11.6 (Right of Set-off) are in addition to the other rights and remedies
(including other rights of set-off) that such Lender may have.
SECTION 11.7 SHARING OF PAYMENTS, ETC.
(a) If any Lender obtains any payment (whether voluntary,
involuntary, through the exercise of any right of set-off or otherwise) of the
Loans owing to it, any interest thereon, fees in respect thereof or amounts due
pursuant to Section 11.3 (Costs and Expenses) or Section 11.4 (Indemnities)
(other than payments pursuant to Section 2.14 (Special Provisions Governing
Eurodollar Rate Loans), Section 2.15 (Capital Adequacy) or Section 2.16 (Taxes)
in excess of its Ratable Portion of all payments of such Obligations obtained by
all the Lenders, such Lender (a "Purchasing Lender") shall forthwith purchase
from the other Lenders (each, a "Selling Lender") such participations in their
Loans or other Obligations as shall be necessary to cause such Purchasing Lender
to share the excess payment ratably with each of them.
(b) If all or any portion of any payment received by a
Purchasing Lender is thereafter recovered from such Purchasing Lender, such
purchase from each Selling Lender shall be rescinded and such Selling Lender
shall repay to the Purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Selling Lender's ratable share
(according to the proportion of (i) the amount of such Selling Lender's required
repayment in relation to (ii) the total amount so recovered from the Purchasing
Lender) of any interest or other amount paid or payable by the Purchasing Lender
in respect of the total amount so recovered.
(c) The Borrower agrees that any Purchasing Lender so
purchasing a participation from a Selling Lender pursuant to this Section 11.7
(Sharing of Payments, Etc.) may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 11.8 NOTICES, ETC.
All notices, demands, requests and other communications
provided for in this Agreement shall be given in writing, or by any
telecommunication device capable of creating a written record (including
electronic mail), and addressed to the party to be notified as follows:
(a) if to the Borrower:
TECHNICAL OLYMPIC USA, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
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with a copy to:
TECHNICAL OLYMPIC USA, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
(b) if to any Lender, at its Domestic Lending Office specified
opposite its name on Schedule II (Applicable Lending Offices and Addresses for
Notices) or on the signature page of any applicable Assignment and Acceptance;
(c) if to any Issuer, at the address set forth under its name
on Schedule II (Applicable Lending Offices and Addresses for Notices); and
(d) if to the Administrative Agent or the Swing Loan Lender:
CITICORP NORTH AMERICA, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
with a copy to:
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇
or at such other address as shall be notified in writing (i) in the case of the
Borrower, the Administrative Agent and the Swing Loan Lender to the other
parties and (y) in the case of all other parties, to the Borrower and the
Administrative Agent. All such notices and communications shall be effective
upon personal delivery (if delivered by hand, including any overnight courier
service), when deposited in the mails (if sent by mail), or when properly
transmitted (if sent by a telecommunications device or through the Internet);
provided, however, that notices and communications to the Administrative Agent
pursuant to Article II (The Facility) or X (The Administrative Agent) shall not
be effective until received by the Administrative Agent.
SECTION 11.9 NO WAIVER; REMEDIES
No failure on the part of any Lender, Issuer or the
Administrative Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof
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or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 11.10 BINDING EFFECT
This Agreement shall become effective when it shall have been
executed by the Borrower and the Administrative Agent and when the
Administrative Agent shall have been notified by each Lender and Issuer that
such Lender or Issuer has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and each Lender
and Issuer and, in each case, their respective successors and assigns, provided,
however, that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lenders.
SECTION 11.11 GOVERNING LAW
This Agreement and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with,
the law of the State of New York.
SECTION 11.12 SUBMISSION TO JURISDICTION; SERVICE OF PROCESS
(a) Any legal action or proceeding with respect to this
Agreement or any other Loan Document may be brought in the courts of the State
of New York sitting in the City of New York or of the United States of America
for the Southern District of New York, and, by execution and delivery of this
Agreement, the Borrower hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The parties hereto hereby irrevocably waive any objection, including any
objection to the laying of venue or based on the grounds of forum non
conveniens, that any of them may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
(b) The Borrower irrevocably consents to the service of any
and all process in such action or proceeding arising out of or in connection
with this Agreement or any Loan Document by the mailing (by registered or
certified mail, postage prepaid) of copies of such process to the Process Agent
or the Borrower at its address specified in Section 11.8 (Notices, Etc.). The
Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
(c) Nothing contained in this Section 11.12 (Submission to
Jurisdiction; Service of Process) shall affect the right of the Administrative
Agent or any Lender to serve process in any other manner permitted by law or
commence legal proceedings or otherwise proceed against the Borrower or any
other Loan Party in any other jurisdiction.
(d) If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder in Dollars into another currency,
the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
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SECTION 11.13 WAIVER OF JURY TRIAL
EACH OF THE ADMINISTRATIVE AGENT, THE LENDERS, THE ISSUERS AND
THE BORROWER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
SECTION 11.14 MARSHALING; PAYMENTS SET ASIDE
None of the Administrative Agent, any Lender or any Issuer
shall be under any obligation to marshal any assets in favor of the Borrower or
any other party or against or in payment of any or all of the Obligations. To
the extent that the Borrower makes a payment or payments to the Administrative
Agent, the Lenders or the Issuers or any such Person receives payment from the
proceeds of the Collateral or exercise their rights of setoff, and such payment
or payments or the proceeds of such enforcement or setoff or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party, then
to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all Liens, right and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
SECTION 11.15 SECTION TITLES
The section titles contained in this Agreement are and shall
be without substantive meaning or content of any kind whatsoever and are not a
part of the agreement between the parties hereto, except when used to reference
a section. Any reference to the number of a clause, sub-clause or subsection
hereof immediately followed by a reference in parenthesis to the title of the
Section containing such clause, sub-clause or subsection is a reference to such
clause, sub-clause or subsection and not to the entire Section; provided,
however, that, in case of direct conflict between the reference to the title and
the reference to the number of such Section, the reference to the title shall
govern absent manifest error. If any reference to the number of a Section (but
not to any clause, sub-clause or subsection thereof) is followed immediately by
a reference in parenthesis to the title of a Section, the title reference shall
govern in case of direct conflict absent manifest error.
SECTION 11.16 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts
and by different parties in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are attached to the same document. Delivery of an executed
signature page of this Agreement by facsimile transmission shall be as effective
as delivery of a manually executed counterpart hereof. A set of the copies of
this Agreement signed by all parties shall be lodged with the Borrower and the
Administrative Agent.
SECTION 11.17 ENTIRE AGREEMENT
This Agreement, together with all of the other Loan Documents
and all certificates and documents delivered hereunder or thereunder, embodies
the entire agreement of
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the parties and supersedes all prior agreements and understandings relating to
the subject matter hereof.
SECTION 11.18 CONFIDENTIALITY
Each Lender and the Administrative Agent agree to keep
information obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender's or the Administrative Agent's, as
the case may be, customary practices and agrees that it shall only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any of such information other than (a) to such Lender's or the
Administrative Agent's, as the case may be, directors, officers, employees,
attorneys, advisors, representatives and agents that are or are expected to be
involved in the evaluation of such information in connection with the
transactions contemplated by this Agreement and are advised of the confidential
nature of such information, (b) to the extent such information presently is or
hereafter becomes available to such Lender or the Administrative Agent, as the
case may be, on a non-confidential basis from a source other than the Borrower,
(c) to the extent disclosure is required by law, regulation or judicial order or
other legal process or requested or required by bank regulators, governmental
agencies or auditors, (d) to current or prospective assignees and participants,
in each case to the extent such assignees, participants or grantees agree to be
bound by the provisions of this Section 11.18 (Confidentiality) or (e) in
connection with any action to enforce this Agreement or any other Loan Document.
105
CREDIT AGREEMENT
TECHNICAL OLYMPIC USA, INC.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
TECHNICAL Olympic USA, INC.
as Borrower
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President-Finance
and Administration and
Chief Financial Officer
CITICORP NORTH AMERICA, INC.
as Administrative Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
CITIBANK, N.A.
as Issuer
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
FLEET NATIONAL BANK
as Documentation Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Lenders
CITICORP USA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Technical Olympic
Credit Agreement Signature Pages
106
CREDIT AGREEMENT
TECHNICAL OLYMPIC USA, INC.
WASHINGTON MUTUAL BANK, FA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
GUARANTY BANK, A FEDERAL SAVINGS BANK
By: /s/ ▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Vice President
COMERICA BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇
Title: Senior Vice President
DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
OHIO SAVINGS BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Technical Olympic
Credit Agreement Signature Pages
107