Exhibit 10.1
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
dated as of December 16, 2005
by and among
▇▇▇▇▇▇ ▇▇▇▇▇ USA L.L.C.,
as Borrower
and
the Lenders Party Hereto
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
and
BANK OF AMERICA, N.A.,
as Syndication Agent
and
CITIBANK TEXAS, N.A.,
as Documentation Agent
with
WACHOVIA CAPITAL MARKETS, LLC,
as Lead Arranger and Sole Bookrunner
TABLE OF CONTENTS
ARTICLE 1: DEFINITIONS..................................................... 1
1.1 Defined Terms.................................................. 1
1.2 Other Definitional Provisions.................................. 23
ARTICLE 2: AMOUNT AND TERMS OF COMMITMENTS, REVOLVING CREDIT LOANS,
SWINGLINE LOANS AND FACILITY L/CS............................... 24
2.1 Commitments.................................................... 24
2.2 Notes.......................................................... 25
2.3 Procedure for Borrowing........................................ 25
2.4 Unused Fee..................................................... 26
2.5 Interest; Default Interest..................................... 26
2.6 Termination, Reduction or Increase of Aggregate Commitment..... 28
2.7 Maturity Date of Commitment; Extension......................... 31
2.8 Computation of Interest and Fees............................... 32
2.9 Increased Costs................................................ 33
2.10 Use of Proceeds................................................ 34
2.11 Payments; Pro Rata Treatment................................... 34
2.12 Swingline Loans................................................ 35
2.13 The Facility L/Cs.............................................. 37
2.14 Designation or Resignation of LC Issuer........................ 37
2.15 Issuance of Facility L/Cs...................................... 37
2.16 Facility L/C Participations.................................... 39
2.17 Payments....................................................... 40
2.18 Facility L/C Fee............................................... 40
2.19 Further Assurances............................................. 41
2.20 Obligations Absolute........................................... 41
2.21 LC Issuer Reporting Requirements............................... 42
2.22 Indemnification; Nature of LC Issuer's Duties.................. 42
ARTICLE 3: GENERAL PROVISIONS APPLICABLE TO LOANS.......................... 43
3.1 Conversion/Continuation Options................................ 43
3.2 Inability to Determine Interest Rate........................... 44
3.3 Availability of LIBOR Rate Loans............................... 44
3.4 Designation of a Different Lending Office...................... 44
3.5 Indemnity...................................................... 44
3.6 Taxes.......................................................... 45
3.7 Survival of Indemnity.......................................... 47
3.8 Telephonic Notices............................................. 47
3.9 Funding by Lenders; Presumption by Agent....................... 47
3.10 Replacement of Lenders......................................... 48
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ARTICLE 4: REPRESENTATIONS AND WARRANTIES.................................. 48
4.1 Financial Statements........................................... 49
4.2 Existence; Compliance with Law................................. 49
4.3 Power; Authorization; Enforceable Obligations.................. 49
4.4 No Legal Bar................................................... 50
4.5 No Material Litigation......................................... 50
4.6 Regulation U................................................... 50
4.7 Investment Company Act......................................... 50
4.8 ERISA.......................................................... 50
4.9 Disclosure..................................................... 50
4.10 Subsidiary Information......................................... 51
4.11 Schedules...................................................... 51
4.12 Environment.................................................... 51
4.13 Force Majeure Events........................................... 52
4.14 Other Agreements............................................... 52
4.15 No Defaults on Outstanding Judgments or Orders................. 52
4.16 Ownership and Liens............................................ 52
4.17 Operation of Business.......................................... 53
4.18 Taxes.......................................................... 53
4.19 OFAC........................................................... 53
ARTICLE 5: CONDITIONS PRECEDENT............................................ 53
5.1 Conditions to Initial Loan(s).................................. 53
5.2 Conditions to All Loans........................................ 56
ARTICLE 6: AFFIRMATIVE COVENANTS........................................... 57
6.1 Financial Statements........................................... 57
6.2 Certificates; Other Information................................ 58
6.3 Borrowing Base Certificate..................................... 59
6.4 Compliance with Borrowing Base Requirements.................... 59
6.5 Payment of Obligations......................................... 59
6.6 Maintenance of Existence....................................... 59
6.7 Maintenance of Property, Insurance............................. 60
6.8 Inspection of Property; Books and Records; Discussions......... 60
6.9 Notices........................................................ 60
6.10 Maintenance of Tangible Net Worth.............................. 61
6.11 Maintenance of Leverage Ratio.................................. 61
6.12 Maintenance of Interest Coverage Ratio......................... 61
6.13 Additional Guarantors.......................................... 61
6.14 Interest Rate Contracts........................................ 62
ARTICLE 7: NEGATIVE COVENANTS.............................................. 62
7.1 Limitation on Secured Indebtedness............................. 62
7.2 Easements Encumbrances, Liens and Restrictive Covenants........ 62
7.3 Mergers, etc................................................... 62
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7.4 Limitation on Unimproved Entitled Land......................... 63
7.5 Land Components................................................ 63
7.6 Investments, Loans and Advances................................ 63
7.7 Transactions With Affiliates................................... 63
7.8 Limitation on Payment of Subordinated Indebtedness............. 63
7.9 Indebtedness................................................... 64
7.10 Limitation on Distributions.................................... 65
7.11 Ownership and Management....................................... 66
7.12 Housing Inventory.............................................. 66
7.13 Nature of Business............................................. 66
7.14 Sale or Discount of Receivables................................ 66
7.15 Increase in Capital............................................ 66
7.16 Capital Assets................................................. 66
7.17 Environmental Responsibilities................................. 67
ARTICLE 8: CASH COLLATERAL................................................. 67
8.1 Facility L/C Collateral Account................................ 67
8.2 Event of Default under Paragraph (5) of Article 9.............. 67
8.3 Other Events of Default........................................ 67
8.4 Cure; Termination.............................................. 68
ARTICLE 9: DEFAULTS, EVENTS OF DEFAULT; DISTRIBUTION OF PROCEEDS AFTER
EVENT OF DEFAULT................................................ 68
ARTICLE 10: THE AGENT...................................................... 71
10.1 Appointment and Authority...................................... 71
10.2 Rights as a Lender............................................. 71
10.3 Exculpatory Provisions......................................... 71
10.4 Reliance by Agent.............................................. 72
10.5 Delegation of Duties........................................... 73
10.6 Resignation of Agent........................................... 73
10.7 Non-Reliance on Agent and Other Lenders........................ 73
10.8 No Other Duties, etc........................................... 74
ARTICLE 11: MISCELLANEOUS.................................................. 74
11.1 Amendments and Waivers......................................... 74
11.2 Notices........................................................ 74
11.3 No Waiver; Cumulative Remedies................................. 76
11.4 Governmental Regulation........................................ 76
11.5 Survival of Representations and Warranties..................... 76
11.6 Costs and Expenses; Indemnification; Reimbursement; Waiver of
Damages........................................................ 76
11.7 Successors and Assigns Generally; Assignments.................. 78
11.8 Setoff......................................................... 81
11.9 Waiver Of Jury Trial........................................... 82
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11.10 Treatment of Certain Information; Confidentiality.............. 82
11.11 Counterparts; Integration; Effectiveness....................... 83
11.12 Governing Law.................................................. 83
11.13 Severability of Provisions..................................... 83
11.14 Submission to Jurisdiction; Waiver of Venue; Service of
Process........................................................ 83
11.15 Headings....................................................... 84
11.16 FIN 46......................................................... 84
11.17 USA Patriot Act................................................ 84
11.18 Interrelationship with the Existing Credit Agreement........... 84
SCHEDULES
1 -- Commitments of Lenders
2 -- Principal Places of Business, etc. of All Subsidiaries
3 -- Owner Guarantors
4 -- Existing Shareholder Notes
5 -- Existing Joint Ventures
4.14 -- Other Agreements
7.6 -- Investments, Loans and Advances
7.9 -- Indebtedness
EXHIBITS
A -- Form of Borrowing Base Certificate
B-1 -- Form of Subsidiary Guaranty Agreement
B-2 -- Form of Owner Guaranty Agreement
C -- Form of Note
D -- Form of Commitment and Acceptance
E -- Form of Opinion of Counsel to Borrower
F -- Form of Chief Financial Officer's Certificate
G -- Form of Assignment and Assumption
H -- Form of Notice of Borrowing
I -- Form of Conversion/Continuation
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FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"),
dated as of December 16, 2005, by and among ▇▇▇▇▇▇ ▇▇▇▇▇ USA L.L.C., a Nevada
limited liability company ("Borrower"), the Lenders party hereto from time to
time (the "Lenders") and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association having its main office in Charlotte, North Carolina, as agent for
Lenders ("Agent").
WHEREAS, the Borrower, the lenders party thereto, and Wachovia Bank,
National Association, as agent, are parties to that certain Credit Agreement
dated as of January 20, 2005 (as amended and modified and in effect on the date
hereof, the "Existing Credit Agreement"); and
WHEREAS, the Borrower, the Lenders and the Agent have agreed to amend
and restate the Existing Credit Agreement in its entirety as, and in accordance
with and subject to the terms and conditions, set forth herein; and
NOW, THEREFORE, for valuable consideration, the receipt of which is
hereby acknowledged, Borrower, Lenders and Agent, each intending to be legally
bound, hereby agree to amend and restate in its entirety the Existing Credit
Agreement as follows:
ARTICLE 1: DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms have
the following respective meanings:
"ABR Loan" shall mean any Loan when and to the extent that the
interest rate thereon is determined by reference to the Alternate Base Rate.
"Actual Costs" shall mean, with respect to the acquisition of
Unimproved Entitled Land, the acquisition and development of Lots Under
Development, the acquisition of a Finished Lot or the construction of a Housing
Unit on a Lot for a Model Housing Unit, Speculative Housing Unit or Presold
Housing Unit, as applicable, the amount that Borrower or any Subsidiary
Guarantor has actually expended (to the extent such expenditures shall
ultimately constitute costs of sales in accordance with GAAP) as of the most
recent Inventory Valuation Date for:
(i) the acquisition of such Unimproved Entitled Land;
(ii) the acquisition and development of such Lots Under Development;
(iii) the acquisition of such Finished Lot; or
(iv) the construction of such Housing Unit on a Lot for a Model
Housing Unit, Speculative Housing Unit or Presold Housing Unit.
"Additional Lender" shall have the meaning set forth in Section
2.6(b)(i) hereof.
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"Adjusted Tangible Net Worth" shall mean, at any date, the sum of (a)
Tangible Net Worth plus (b) the lesser of (i) an amount equal to fifty percent
(50%) of the outstanding principal amount of Subordinated Notes or (ii) an
amount equal to thirty-five percent (35%) of Tangible Net Worth, all determined
as of such date.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by Agent.
"Affiliate" shall mean (a) any Person (other than a Subsidiary of
Borrower) which, directly or indirectly, controls, is controlled by or is under
common control with Borrower or (b) any Person who is a director, officer or key
employee of Borrower, any Subsidiary of Borrower or any Person described in
clause (a) of this definition. For purposes of this definition, "control" of a
Person means the power, direct or indirect, to vote five percent (5%) or more of
the securities having voting power for the election of directors or similar
governing body of such Person or otherwise to direct or cause the direction of
the management and policies of such Person, whether by contract or otherwise.
"Agent" shall have the meaning set forth in the preamble hereof and
shall include any successor agent appointed pursuant to Section 10.6 hereof.
"Agent's Fee Letter" shall mean that certain fee letter from the Agent
and Arranger to Borrower dated and accepted by Borrower on October 31, 2005.
"Aggregate Commitment" shall mean the aggregate Commitments of all the
Lenders, as reduced or increased from time to time pursuant to the terms of this
Agreement. As of the date of this Agreement, the Aggregate Commitment is
$300,000,000.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding Credit Exposure of all Lenders.
"Agreement" shall mean this Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Alternate Base Rate" means, for any day with respect to an ABR Loan,
the applicable British Bankers' Association LIBOR rate for deposits in Dollars
having a maturity of one month as reported by any comparable generally
recognized financial information service as of 11:00 a.m. (London time) on such
day, or if such day is not a Business Day, then on the immediately preceding
Business Day, provided that, if no such British Bankers' Association LIBOR rate
is available to Agent, the applicable Alternate Base Rate shall instead be the
rate determined by Agent from another comparable generally recognized source or
interbank quotation; provided, further, that if on any day Agent is unable to
determine the Alternate Base Rate from another source or quotation, the
Alternate Base Rate for such day shall be the rate per annum equal to the higher
of (i) the Federal Funds Rate for such day, plus 0.50%, and (ii) the Prime Rate
for such day.
"Applicable ABR Margin" shall mean, as at any date of determination,
the margin indicated in Section 2.5(b) hereof as then applicable to ABR Loans
(under Section 2.5(a) hereof).
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"Applicable LIBOR Margin" shall mean, as at any date of determination,
the margin indicated in Section 2.5(b) hereof as then applicable to LIBOR Rate
Loans (under Section 2.5(a) hereof). The Applicable LIBOR Margin is also the
Applicable Facility L/C Rate.
"Applicable Facility L/C Rate" shall mean, as at any date of
determination, the rate per annum indicated in Section 2.5(b) hereof as then
applicable in the determination of the Facility L/C Fee (under Section 2.18
hereof). The Applicable Facility L/C Rate is also the Applicable LIBOR Margin.
"Applicable Margin(s)" shall mean the Applicable ABR Margin and/or the
Applicable LIBOR Margin, as the case may be.
"Applicable Unused Fee Rate" shall mean, as at any date of
determination, the rate per annum indicated in Section 2.5(b) hereof as then
applicable in the determination of the Unused Fee (under Section 2.4 hereof).
"Approved Fund" means any Fund that is administered or managed by (a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" shall mean Wachovia Capital Markets, LLC, as Lead Arranger
and Sole Bookrunner.
"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 11.7 hereof), and accepted by Agent, in substantially the
form of Exhibit G or any other form approved by Agent.
"Assumed Borrower Taxes" shall mean forty percent (40%) of the
quarterly consolidated net income of Borrower until the effective date of any
material change in the aggregate federal, state and local income tax rate
applicable to the owners of Borrower with respect to the net income of Borrower.
In the event that there is a material change in the aggregate federal, state and
local income tax rate applicable to the owners of Borrower, Borrower shall so
notify Agent prior to the effective date of such change and Agent shall
determine, in good faith, the aggregate income tax rate that will become
applicable to the owners of Borrower on the effective date of such change (such
determination shall be conclusive and binding on Lenders and Borrower, absent
manifest error) and on such date the percentage used to calculate "Assumed
Borrower Taxes" will be reset to approximate the newly determined applicable
aggregate income tax rate.
"Bankruptcy Code" shall mean Title 11, U.S.C. as amended from time to
time.
"Borrower" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇ USA L.L.C., a Nevada limited
liability company.
"Borrowing Base" shall mean, as at any date of determination, an
amount equal to the sum of the following assets of Borrower and each Subsidiary
Guarantor (but only to the
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extent such assets (x) are not subject to any Liens other than Permitted Liens
and (y) are located within the continental United States):
(i) fifty percent (50%) of the Actual Costs for Unimproved Entitled
Land; provided, however, that any Unimproved Entitled Land not
sold or converted to Lots Under Development within twenty-four
(24) months following the date that such Unimproved Entitled Land
was first included in the Borrowing Base as "Unimproved Entitled
Land" shall be excluded from the Borrowing Base, plus
(ii) seventy percent (70%) of the Actual Costs for Lots Under
Development; provided, however, that any Lots Under Development
not sold or converted to Finished Lots within twenty-four (24)
months following the date that such Lots Under Development were
first included in the Borrowing Base as "Lots Under Development"
shall be excluded from the Borrowing Base, plus
(iii) seventy-five percent (75%) of the Actual Costs for Finished
Lots; provided, however, that such percentage with respect to any
Finished Lot not sold or converted to a Speculative Housing Unit,
a Model Housing Unit or a Presold Housing Unit within twenty-four
(24) months following the date that such Finished Lot was first
included in the Borrowing Base as a "Finished Lot" shall be
reduced to fifty percent (50%); provided, further, however, that
any Finished Lot not sold or converted to a Speculative Housing
Unit, a Model Housing Unit or a Presold Housing Unit within
thirty-six (36) months following the date that such Finished Lot
was first included in the Borrowing Base as a "Finished Lot"
shall be excluded from the Borrowing Base, plus
(iv) ninety-five percent (95%) of the Actual Costs for Presold Housing
Units; provided, however, that any Presold Housing Unit not sold
within twelve (12) months following the date that such Presold
Housing Unit was first included in the Borrowing Base as a
"Presold Housing Unit" shall be thereafter considered to be a
Speculative Housing Unit for purposes of the Borrowing Base and,
in such event, the date that such Presold Housing Unit was first
included in the Borrowing Base as a "Presold Housing Unit" shall
continue to determine when it is excluded from the Borrowing Base
pursuant to clause (v) of this definition, plus
(v) eighty-five percent (85%) of the Actual Costs for Speculative
Housing Units; provided, however, that such percentage with
respect to any Speculative Housing Unit not sold within twelve
(12) months following the date that such Speculative Housing Unit
was first included in the Borrowing Base as a "Speculative
Housing Unit" shall be reduced to seventy percent (70%);
provided, further, however, that any Speculative Housing Unit not
sold within twenty-four (24) months following the date that such
Speculative Housing Unit was first included in the Borrowing
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Base as a "Speculative Housing Unit" or, if applicable under
clause (iv) above, a "Presold Housing Unit" shall be excluded
from the Borrowing Base, plus
(vi) eighty-five percent (85%) of the Actual Costs for Model Housing
Units; provided, however, that such percentage with respect to
any Model Housing Unit not sold within twenty-four (24) months
following the date that such Model Housing Unit was first
included in the Borrowing Base as a "Model Housing Unit" shall be
reduced to seventy percent (70%); provided, further, however,
that any Model Housing Unit not sold within sixty (60) months
following the date that such Model Housing Unit was first
included in the Borrowing Base as a "Model Housing Unit" shall be
excluded from the Borrowing Base.
Notwithstanding the foregoing, (a) the amount calculated pursuant to
clause (i) of this definition shall not exceed at any time twenty percent (20%)
of the Borrowing Base, (b) the aggregate of amounts calculated pursuant to
clauses (i), (ii) and (iii) of this definition shall not exceed at any time
fifty percent (50%) of the Borrowing Base, (c) the aggregate of amounts
calculated pursuant to clauses (v) and (vi) of this definition shall not exceed
at any time forty percent (40%) of the aggregate of the amounts calculated
pursuant to clauses (iv), (v) and (vi) of this definition, and (d) the amount
calculated under this definition with respect to Condo Units shall not exceed at
any time thirty percent (30%) of the Borrowing Base.
"Borrowing Base Certificate" shall mean a certificate in the form of
Exhibit A hereto, certified by the Chief Financial Officer of Borrower.
"Borrowing Base Indebtedness" shall mean at any date (i) Consolidated
Indebtedness, less (ii) the sum of (a) Secured Indebtedness, and (b)
Subordinated Indebtedness not due within one (1) year of such date, all as of
such date.
"Borrowing Date" shall mean any Business Day specified pursuant to (a)
Section 2.3 hereof as a date on which Lenders make a disbursement of the
Revolving Credit Loans hereunder, (b) Section 2.12 hereof as a date on which
Swingline Lender makes, at Borrower's request, a disbursement of the Swingline
Loans hereunder, or (c) Section 2.13 hereof as a date on which an LC Issuer
issues, at Borrower's request, a Facility L/C hereunder.
"Business Day" shall mean (a) with respect to any borrowing, payment
or rate selection of LIBOR Rate Loans or ABR Loans, a day (other than a Saturday
or Sunday) on which banks generally are open in Charlotte, North Carolina for
the conduct of substantially all of their commercial lending activities and on
which dealings in Dollars are carried on in the London interbank market and (b)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Charlotte, North Carolina for the conduct of substantially
all of their commercial lending activities.
"Capital Leases" shall mean all leases which have been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Cash Equivalents" means:
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(a) marketable obligations with a maturity of 360 days or less issued
or directly and fully guaranteed or insured by the United States
of America or any agency or instrumentality thereof (provided
that the full faith and credit of the United States of America is
pledged in support thereof);
(b) demand and time deposits and certificates of deposit or
acceptances with a maturity of 180 days or less of any financial
institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits not less that
$500 million and is assigned at least a "B" rating by Thomson
Financial BankWatch;
(c) commercial paper maturing no more than 180 days from the date of
creation thereof issued by a corporation that is not the Borrower
or an Affiliate of the Borrower, and is organized under the laws
of any State of United States of America or the District of
Columbia and rated at least A-1 by S&P or at lease P-1 by
▇▇▇▇▇'▇;
(d) repurchase obligations with a term of not more than ten days for
underlying securities of the types described in clause (a) above
entered into with any commercial bank meeting the specifications
of clause (b) above; and
(e) investments in money market or other mutual funds substantially
all of whose assets comprise securities of the types described in
clauses (a) through (d) above.
"Change in Law" means the occurrence, after the date of this
Agreement, of any of the following: (a) the adoption or taking effect of any
law, rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, guideline
or directive (whether or not having the force of law) by any Governmental
Authority.
"Code" shall mean the Internal Revenue Code of 1986, as amended or
superseded from time to time. Any reference to a specific provision of the Code
shall be construed to include any comparable provision of the Code as hereafter
amended or superseded.
"Collateral Shortfall Amount" shall have the meaning set forth in
Section 8.2 hereof.
"Commitment" shall have the meaning set forth in Section 2.1(a)
hereof.
"Commitment and Acceptance" shall have the meaning set forth in
Section 2.6(b)(i) hereof.
"Commitment Period" shall mean the period from and including the date
of this Agreement to the Maturity Date, or such earlier or later date as the
Aggregate Commitment shall terminate as provided herein.
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"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with Borrower within the meaning of
Section 414(b) or (c) of the Code.
"Condo Units" shall mean the Housing Units related to the purchase and
development of condominiums.
"Consolidated Earnings" shall mean, for any period, the amount which
would be set forth opposite the caption "net income" (or any like caption) in a
consolidated statement of income or operations of Borrower and its Subsidiaries
for such period prepared in accordance with GAAP, minus franchise taxes payable
in Texas and minus Assumed Borrower Taxes with respect to such period.
"Consolidated Indebtedness" shall mean, at any date, the Indebtedness
of Borrower and its Subsidiaries determined on a consolidated basis as at such
date.
"Construction Bonds" shall mean bonds issued by surety bond companies
for the benefit of, and as required by, municipalities or other political
subdivisions to secure the performance by Borrower or any Subsidiary of its
obligations relating to lot improvements and subdivision development and
completion.
"Contingent Obligation" shall mean, as to any Person, any
reimbursement obligations (including, in the case of Borrower, the Reimbursement
Obligations) of such Person in respect of drafts that may be drawn under Letters
of Credit, any reimbursement obligations of such Person in respect of surety
bonds (including reimbursement obligations in respect of Construction Bonds),
and any obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations primarily to pay money
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including without limitation any
obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation, or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the obligee under any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, or
(d) otherwise to assure or hold harmless the obligee under such primary
obligation against loss in respect thereof; provided, however, that the term
"Contingent Obligation" shall not include (A) endorsements of instruments for
deposit or collection in the ordinary course of business, and (B) obligations
(including indemnity obligations) under purchase contracts or sale contracts
entered into in the ordinary course of business.
"Contractual Obligation" shall mean, as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default" shall mean any of the events specified in Article 9 hereof,
whether or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
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"Distribution" means any dividend or other distribution (whether in
cash or other tangible property) with respect to any capital stock or other
equity interest of any Person or any Subsidiary, or any payment (whether in cash
or other tangible property) to any Person or Persons other than the Borrower,
including any redemption, retirement, acquisition, cancellation or termination
of any such capital stock or other equity interest or of any option, warrant or
other right to acquire any such capital stock or other equity interest.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"EBITDA" means, for any period, the sum of (a) net income for such
period, less (b) franchise taxes payable in Texas, plus (c) the following, to
the extent deducted in calculating net income for such period, (i) depreciation
expense and amortization expense for such period, (ii) interest expense in cost
of goods sold for such period, and (iii) interest expense from operations for
such period, all as determined for Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.
"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a Lender,
(c) an Approved Fund, and (d) any other Person (other than a natural person)
approved by (i) Agent, (ii) in the case of any assignment of a Commitment or
portion thereof, the LC Issuers and the Swingline Lender, and (iii) unless an
Event of Default has occurred and is continuing, Borrower (each such approval
not to be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, "Eligible Assignee" shall not include Borrower or any of Borrower's
Affiliates or Subsidiaries.
"Eligible Investor" means a commercial bank, savings bank, savings and
loan association or other similar financial institution, insurance company or
mutual fund having total assets of $3,000,000,000 or more, generally engaged in
lending of the type contemplated by this Agreement and in full compliance with
all FDIC Control Act requirements or other regulatory requirements.
"Environmental Laws" means: (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. 9601 et seq. ("CERCLA"),
(ii) the Resource Conservation and Recovery Act, as amended by the Hazardous and
Solid Waste Amendment of 1984, 42 U.S.C. 6901 et seq. ("RCRA"), (iii) the Clean
Air Act, 42 U.S.C. 7401 et seq., (iv) the Clean Water Act of 1977, 33 U.S.C.
1251 et seq., (v) the Toxic Substances Control Act, 15 U.S.C. 2601 et seq., (vi)
the Safe Drinking Water Act, 42 U.S.C. 300(E) et seq., (vii) the Refuse Act, 33
U.S.C. 407 et seq., (viii) the Texas Solid Waste Disposal Act, Tex. Health and
Safety Code, Section 361.001 et seq., (ix) the Texas Clean Air Act, Tex. Health
and Safety Code, Section 382.001 et seq., (x) the regulations promulgated
pursuant to the aforesaid laws, or any of them, and (xi) all other federal,
state or local laws, ordinances, orders, rules or regulations, now or hereafter
existing, that directly and/or indirectly relate to air pollution, water
pollution, noise control and/or the presence, storage, escape, seepage, leakage,
emission, release, use, spillage, generation, transportation, handling,
discharge, disposal or recovery of on-site or off-site hazardous or toxic
substances, wastes or materials and/or underground storage tanks, and as each
8
and any of the foregoing laws, ordinances, orders, rules or regulations may be
amended or enacted from time to time.
"Environmental Liability" means any claim, demand, obligation, cause
of action, accusation, allegation, order, violation, damage, injury, judgment,
injunction, penalty or fine, cost of enforcement, cost of cleanup, removal,
encapsulation or other remedial action, or any other cost or expense whatsoever,
including, without limitation, reasonable attorneys' fees and reimbursements,
resulting from the violation of any Environmental Law or the existence of
Hazardous Material in violation of any Environmental Law, or the imposition of
any Environmental Lien.
"Environmental Lien" means a Lien in favor of any Person arising as a
result of or securing (i) any liability under an Environmental Law or (ii)
damages arising from or costs incurred by any Person in response to any actual
or threatened Hazardous Discharge.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurocurrency Reserve Requirements" shall mean, for any day as applied
to a LIBOR Rate Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal Reserve
System or other Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board of
Governors of the Federal Reserve System) maintained by a member bank of the
Federal Reserve System.
"Event of Default" shall mean any of the events specified in Article 9
hereof, provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excluded Taxes" means, with respect to Agent, any Lender, any LC
Issuer or any other recipient of any payment to be made by or on account of any
obligation of Borrower hereunder, (a) taxes imposed on or measured by its
overall net income (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes) by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by Borrower under Section
3.10 hereof), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party hereto (or
designates a new Lending Office) or is attributable to such Foreign Lender's
failure or inability (other than as a result of a Change in Law) to comply with
Section 3.6(e) hereof, except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new Lending
Office (or assignment), to receive additional amounts from Borrower with respect
to such withholding tax pursuant to Section 3.6(a) hereof.
9
"Existing Credit Agreement" shall have the meaning set forth in the
introductory paragraphs of this Agreement.
"Extension Request" shall have the meaning set forth in Section 2.7(b)
hereof.
"Facility Increase Request" shall have the meaning set forth in
Section 2.6(b)(i) hereof.
"Facility L/C" shall mean an irrevocable standby Letter of Credit,
including any extensions or renewals, (a) issued by an LC Issuer pursuant to
this Agreement or (b) issued by an LC Issuer pursuant to the Existing Credit
Agreement and which will remain in place as of the date of this Agreement, in
which each Lender agrees to purchase a participation equal to its Ratable Share
and the LC Issuer agrees to make payments in Dollars for the account of
Borrower, on behalf of Borrower or any Subsidiary thereof in respect of
obligations of Borrower or such Subsidiary incurred pursuant to contracts made
or performances undertaken or to be undertaken or like matters relating to
contracts to which Borrower or such Subsidiary is or proposes to become a party
in the ordinary course of Borrower's or such Subsidiary's real estate operations
in the United States. The term "Facility L/C" shall not include any Letters of
Credit issued by any Lender other than pursuant to this Agreement or as provided
in clause (b) of this definition.
"Facility L/C Application" shall have the meaning set forth in Section
2.15(a) hereof.
"Facility L/C Collateral Account" shall have the meaning set forth in
Section 8.1 hereof.
"Facility L/C Fee" shall mean a fee, payable with respect to each
Facility L/C issued by an LC Issuer, in an amount per annum equal to the product
of the face amount of such Facility L/C and the Applicable Facility L/C Rate, in
each case as such Applicable Facility L/C Rate is determined on a daily basis
during the period in respect of which such fee is payable hereunder.
"Facility L/C Obligations" shall mean, at any date, the sum of (i) the
aggregate undrawn face amount of all outstanding Facility L/Cs on such date,
plus (ii) the aggregate unpaid amount of all Reimbursement Obligations on such
date.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided, however, that (a) if the day for which such
rate is to be determined is not a Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Business Day
as so published on the next succeeding Business Day, and (b) if such rate is not
so published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average rate charged to Agent on such Business Day on such
transactions as determined by Agent.
10
"Finished Lot" means a fully developed single-family residential lot
owned by Borrower or any Subsidiary Guarantor with respect to which all
development and construction work has been completed (including completion of
all public or private roadways necessary to provide sufficient access to such
lot and completion of all water, sanitary and storm sewer facilities in
capacities sufficient for single-family residential use) so that such lot is
ready and of sufficient size for a residence or condominium project to be
constructed thereon. The term "Finished Lot" shall not include any land upon
which the construction of a residential unit has commenced or lots that fall
under the definition of a Presold Housing Unit and have all permitting necessary
to commence construction in place.
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than that in which Borrower is resident for tax purposes.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"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" shall mean generally accepted accounting principles in the
United States of America as in effect at the time any determination is made or
financial statement is required hereunder as promulgated by the American
Institute of Certified Public Accountants, the Accounting Principles Board, the
Financial Accounting Standards Board or any other body existing from time to
time which is authorized to establish or interpret such principles, applied on a
consistent basis throughout any applicable period, subject to any change
required by a change in GAAP; provided, however, that if any change in generally
accepted accounting principles from those applied in preparing the financial
statements referred to in Section 4.1 hereof affects the calculation of any
financial covenant contained herein, Borrower, Lenders and Agent hereby agree to
amend the Agreement to the effect that each such financial covenant is not more
or less restrictive than such covenant as in effect on the date hereof using
generally accepted accounting principles consistent with those reflected in such
financial statements.
"Governmental Authority" means the government of the United States of
America or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).
"Guarantors" means, collectively, the Owner Guarantors and the
Subsidiary Guarantors.
"Guaranty Agreements" means, collectively, the Owner Guaranty
Agreement and the Subsidiary Guaranty Agreement.
"Hazardous Discharge" means the happening of any event involving the
presence, disposal, escape, seepage, leakage, emission, release, use, storage,
spillage, discharge,
11
investigation, cleanup, removal or remediation of any Hazardous Material which
violates any Environmental Law.
"Hazardous Material" shall mean one or more of the following
substances:
(a) those substances included within the definitions of
"hazardous substances," "hazardous materials," "toxic substances" or "solid
waste" in any one or more of the Environmental Laws or the Hazardous Material
Transportation Act (49 U.S.C.) or in the regulations promulgated pursuant to
said laws;
(b) those substances listed in the United States Department of
Transportation Table (49 CFR 172.101 and amendments thereto) or by the
Environmental Protection Agency (or any successor agency) as hazardous
substances (40 CFR Part 302 and amendments thereto);
(c) such other substances, materials and wastes which are or
become regulated under applicable local, state or federal law, or the United
States government, or which are classified as hazardous or toxic under federal,
state or local laws, orders, ordinances, rules or regulations; and
(d) any material, waste or substances which are: (i) asbestos,
(ii) polychlorinated biphenyls, (iii) explosives, (iv) radioactive materials,
(v) gasoline, (vi) petroleum, (vii) petroleum products or (viii) related or
similar materials or substances.
"Housing Unit" means a single-family attached or detached dwelling
(including a condominium), including the Lot on which such dwelling is located,
that is or will be available for sale by Borrower or any Subsidiary Guarantor
that is proposed to be in the Borrowing Base. Each "Housing Unit" is a Presold
Housing Unit, a Speculative Housing Unit or a Model Housing Unit.
"Housing Unit Closing" shall mean a closing of the sale of a Housing
Unit by Borrower or a Subsidiary Guarantor to a bona fide purchaser for value
that is not a Subsidiary or Affiliate of the Borrower.
"Improvements" shall mean all Housing Units and any other
improvements, buildings, structures, equipment and amenities located on the Lots
owned by Borrower or any Subsidiary Guarantor.
"Increase Date" shall have the meaning set forth in Section 2.6(b)(ii)
hereof.
"Indebtedness" shall mean, without duplication, with respect to any
Person (a) indebtedness or liability for borrowed money, including, without
limitation, subordinated indebtedness (other than trade accounts payable and
accruals incurred in the ordinary course of business); (b) obligations evidenced
by debentures, notes, bonds, or other similar instruments; (c) obligations for
the deferred purchase price of property (including, without limitation, seller
financing of any inventory) or services; (d) obligations as lessee under Capital
Leases to the extent that the same would, in accordance with GAAP, appear as
liabilities in such Person's consolidated balance sheet; (e) current liabilities
in respect of unfunded vested benefits under
12
Plans and incurred withdrawal liability under any Multiemployer Plan; (f)
obligations under acceptance facilities; (g) all Contingent Obligations,
provided, however, that "Indebtedness" shall not include reimbursement
obligations in respect of Performance Letters of Credit or guaranties of
performance obligations (such as bid or performance surety bonds) except to the
extent that any such reimbursement obligations or guaranties of performance
obligations have been drawn or called upon; (h) obligations secured by any Liens
on any property of such Person, whether or not the obligations have been assumed
(provided that if such Person has not assumed such obligation, such Indebtedness
shall be deemed to be in an amount equal to the lesser of the aggregate amount
of such Indebtedness and the fair market value of the property to which such
Lien relates as determined in good faith by such Person); and (i) net
liabilities under Interest Rate Contracts, exchange or cap agreements (valued as
the termination value thereof, computed in accordance with a method approved by
the International Swaps and Derivatives Association and agreed to by such Person
in the applicable agreement).
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" shall have the meaning set forth in Section 11.6(b)
hereof.
"Indenture" shall mean that certain Indenture dated as of September
21, 2005 among Borrower, ▇▇▇▇▇▇ ▇▇▇▇▇ Finance Co., the guarantors party thereto
and U.S. Bank National Association, as trustee, as modified from time to time.
"Intangible Assets" shall mean, at any time, the amount (to the extent
reflected in determining consolidated stockholders or members equity of
Borrower) of all unamortized debt discount and expense, unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade names, copyrights
and all other items which would be treated as intangibles on a consolidated
balance sheet of Borrower prepared in accordance with GAAP.
"Interest Coverage Ratio" shall mean, for any period, the ratio of (a)
EBITDA for such period to (b) Interest Expense for such period.
"Interest Expense" means, for any period of four (4) consecutive
fiscal quarters of Borrower, all interest incurred (whether expensed or
capitalized and including interest on Subordinated Indebtedness) of Borrower on
a consolidated basis for such period, as determined in accordance with GAAP.
"Interest Payment Date" shall mean, (a) with respect to any ABR Loan
(whether a Revolving Credit Loan or a Swingline Loan), the first day of each
calendar month, commencing on the first of such days to occur after the first
Borrowing Date, and (b) with respect to any LIBOR Rate Loan, the last day of the
Interest Period applicable thereto.
"Interest Period" shall mean with respect to any LIBOR Rate Loan:
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate Loan
and ending one month thereafter; and
13
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such LIBOR Rate Loan and ending one
month thereafter;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period would otherwise end on a day that 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 carry such Interest
Period into another calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(2) 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; and
(3) no Interest Period shall be for less than one month, and Borrower
shall not select an Interest Period for a LIBOR Rate Loan as a Revolving Credit
Loan if the last day of such Interest Period would be after the last day of the
Commitment Period.
"Interest Rate Contract" shall mean any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
insurance arrangement, or any other agreement or arrangement designed to provide
protection against fluctuation in interest rates.
"Inventory Valuation Date" shall mean (a) the second (2nd) to last
Tuesday of the most recent calendar month with respect to which the Borrower is
required to have delivered a Borrowing Base Certificate pursuant to Section 6.3
hereof or (b) if Borrower elects, pursuant to Section 6.4 hereof, to deliver a
Borrowing Base Certificate as of a later date, such later date.
"Joint Venture" shall mean any Person in which the Borrower or a
Subsidiary holds any stock, partnership interest, joint venture interest,
limited liability company interest or other equity interest and that is either
(i) identified on Schedule 5 hereto or (ii) identified by Borrower as a "Joint
Venture" in a notice delivered to Agent from time to time after the Closing
Date.
"Land" shall mean land owned by Borrower or a Subsidiary Guarantor,
which land is being developed or is held for future development or sale.
"Land Value" means, at any time, the sum of the net book value of (a)
Unimproved Entitled Land, (b) Lots Under Development, and (c) Finished Lots.
"LC Issuer" shall mean Wachovia Bank in its capacity as issuer of
Facility L/Cs hereunder, and any other Lender that may from time to time be
designated as an LC Issuer in accordance with the provisions of Section 2.14
hereof.
"Lenders" shall have the meaning set forth in the preamble hereof.
14
"Lending Office" shall mean with respect to a Lender, the office,
branch, subsidiary or affiliate of such Lender identified in the Administrative
Questionnaire delivered by such Lender to Agent or otherwise selected by such
Lender pursuant to Section 2.3(c) hereof.
"Letter of Credit" of a Person shall mean a letter of credit or
similar instrument which is issued by a financial institution upon the
application of such Person or upon which such Person is an account party or for
which such Person is in any way liable.
"Level" shall mean the level of the Applicable Margin or Applicable
Unused Fee Rate (as applicable) as designated in the table set forth in Section
2.5(b) hereof. The three Levels in such table are identified as Levels I through
III, and Level I shall constitute the highest Level and Level III shall
constitute the lowest Level.
"Leverage Ratio" means, for any fiscal quarter of Borrower, the ratio
of (a) Total Liabilities on the last day of such fiscal quarter to (b) Adjusted
Tangible Net Worth on the last day of such fiscal quarter.
"LIBOR Base Rate" shall mean, with respect to each LIBOR Rate Loan for
the relevant Interest Period, the applicable British Bankers' Association London
interbank offered rate for deposits in Dollars as reported by any generally
recognized financial information service selected by the Agent as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
and having a maturity equal to such Interest Period.
"LIBOR Rate" shall mean, with respect to each day during each Interest
Period pertaining to a LIBOR Rate Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
LIBOR Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"LIBOR Rate Loans" shall mean any Revolving Credit Loan when and to
the extent that the interest rate thereon is determined by reference to the
LIBOR Rate.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, charge, encumbrance, lien (statutory or other),
preference, priority or other security agreement or similar preferential
arrangement of any kind or nature whatsoever (including without limitation any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the
authorized filing by or against a Person of any financing statement as debtor
under the Uniform Commercial Code or comparable law of any jurisdiction).
"Little Shots" shall mean Little Shots Nevada L.L.C., a Nevada limited
liability company.
"Loan Documents" shall mean this Agreement, the Notes, the Guaranty
Agreements and the Facility L/C Applications and all other documents (if any)
from time to time executed and delivered by Borrower or a Guarantor that
evidence, secure or guarantee any of the Obligations.
15
"Loans" shall mean the Revolving Credit Loans and the Swingline Loans.
"Lot" shall mean a Finished Lot or a lot that is part of Lots Under
Development that Borrower or any Subsidiary Guarantor intends to make into a
Finished Lot.
"Lots Under Development" means all Unimproved Entitled Land with
respect to which Borrower or any Subsidiary Guarantor has obtained all necessary
approvals for its subdivision for residential housing units (including
condominium units), and which Borrower or any Subsidiary Guarantor is actively
developing into Finished Lots, or which Borrower or any Subsidiary Guarantor
reasonably expects to begin development activity within a nine (9) month period;
provided, however, that the term "Lots Under Development" shall not include any
land upon which the construction of a residential housing unit has commenced.
"Mandatory Borrowing" shall have the meaning set forth in Section
2.12(d) hereof.
"Maturity Date" shall mean January 19, 2010 or such later date as
determined in accordance with Section 2.7(b).
"Maximum Swingline Amount" shall mean Ten Million Dollars
($10,000,000).
"Model Housing Unit" shall mean a Housing Unit constructed in an
ongoing active project initially for inspection by prospective purchasers that
is not intended to be sold until all or substantially all other Housing Units in
the applicable subdivision are sold.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., and any
successor thereto.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement as described in Section 3(37) of
ERISA to which Borrower or any Commonly Controlled Entity is a party to which
more than one employer is obligated to make contributions.
"New Lender" shall have the meaning set forth in Section 2.6(b)(i)
hereof.
"Non-Recourse Indebtedness" means, with respect to any Person, any
Indebtedness of such Person for which the owner of such Indebtedness has no
recourse, directly or indirectly, to such Person for the principal of, premium,
if any, and interest on such Indebtedness, and for which such Person is not
directly or indirectly obligated or otherwise liable for the principal of,
premium, if any, and interest on such Indebtedness, except with respect to
Property of such Person pursuant to mortgages, deeds of trust or other security
interests to which such Indebtedness relates, provided that recourse obligations
or liabilities solely for fraud, environmental matters and other customary
"non-recourse carve-outs" in respect of any Indebtedness will not prevent
Indebtedness from being classified as Non-Recourse Indebtedness.
"Note" or "Notes" shall mean a promissory note or notes substantially
in the form of Exhibit C hereto, executed and delivered by Borrower payable to
the order of a Lender, and
16
delivered pursuant to Section 2.2, Section 2.6(b) or any other provision hereof,
as the same may be modified, amended, supplemented or replaced from time to
time.
"Notice of Borrowing" shall have the meaning set forth in Section
2.3(a) hereof and shall be in the form of Exhibit H hereto.
"Notice of Conversion/Continuation" shall have the meaning set forth
in Section 3.1 hereof and shall be in the form of Exhibit I hereto.
"Obligations" shall mean all unpaid principal of and accrued and
unpaid interest on the Loans, all Reimbursement Obligations, all accrued and
unpaid fees and all expenses, reimbursements, indemnities and other obligations
of Borrower and any Guarantor to the Lenders or to any Lender, Agent, LC Issuer
or any Indemnitee arising under the Loan Documents and including interest and
fees that accrue after the commencement by or against Borrower or any Guarantor
or any Affiliate thereof of any bankruptcy or similar proceeding naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.
"OFAC" shall mean the U.S. Department of the Treasury's Office of
Foreign Assets Control.
"Other Taxes" means all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or under any other Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document.
"Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate outstanding principal amount of its Loans (other than
Swingline Loans) outstanding at such time, plus (ii) an amount equal to its
Ratable Share of the Facility L/C Obligations at such time, plus (iii) an amount
equal to its Ratable Share of the Swingline Loans at such time.
"Owner Guarantor" means each Person that is a party to the Owner
Guaranty Agreement from time to time, which, as of the date of this Agreement,
is each Person listed on Schedule 3 hereto.
"Owner Guaranty Agreement" shall mean the First Amended and Restated
Guaranty Agreement substantially in the form of Exhibit B-2 attached to this
Agreement, executed by one or more Owner Guarantors in favor of Agent (for the
benefit of the Lenders), as the same may be modified and supplemented and in
effect from time to time.
"Participant" has the meaning set forth in Section 11.7 (d) hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Performance Letter of Credit" shall mean any Letter of Credit of
Borrower or a Subsidiary that is issued for the benefit of a municipality, other
governmental authority, utility,
17
water or sewer authority, or other similar entity for the purpose of assuring
such beneficiary of the Letter of Credit of the proper and timely completion of
construction work.
"Permitted Liens" shall mean the following: (i) Liens for taxes,
assessments or other governmental charges or levies not yet due or which are
being contested in good faith by appropriate action; (ii) Liens in connection
with worker's compensation, unemployment insurance or other social security, old
age pension or public liability obligations (other than any Lien imposed by
ERISA); (iii) Liens in favor of property owners' associations securing payment
of assessments or other charges; (iv) easements, rights-of-way, restrictions,
plats, declarations of covenants, conditions and restrictions, condominium
declarations, or similar encumbrances on the use of real property which do not
interfere with the ordinary conduct of business of Borrower or any Subsidiary
Guarantor or materially detract from the value of such real property; (v) Liens
in favor of a seller of Unimproved Entitled Land, Lots Under Development or
Finished Lots requiring Borrower or any Subsidiary Guarantor to make a payment
upon the future sale of such Unimproved Entitled Land, Lots Under Development or
Finished Lots in an amount not to exceed five percent (5%) of the gross sales
price or in the case of profit sharing agreements an amount that is reasonable
and customary in the industry and market; and (vi) any Liens of mechanics,
materialmen or material suppliers incurred in the ordinary course of business
if, with respect to any such Liens securing Indebtedness that is past due, (A)
such Liens are being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been established
and as to which the property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof or (B) a corresponding deduction is
made to the Borrowing Base Availability so as to deduct from the Borrowing Base
Availability the amount secured by any such Lien on any asset included in the
current Borrowing Base calculation.
"Person" shall mean an individual, a partnership, a limited liability
company, a corporation, a business trust, a joint stock company, a trust, an
unincorporated association, a Governmental Authority or any other entity of
whatever nature (including without limitation a joint venture).
"Plan" shall mean any pension plan which is covered by Title IV of
ERISA and in respect of which Borrower or a Commonly Controlled Entity is an
"employer" as defined in Section 3(5) of ERISA.
"Premises" shall mean Unimproved Entitled Land, Lots Under
Development, Finished Lots, Housing Units, the improvements thereon, all
fixtures, equipment, leases, rentals and personal property of any kind or
character now or hereafter related to, situated on or used in connection with
Unimproved Entitled Land, Lots Under Development, Finished Lots or Housing Units
owned by Borrower or any Subsidiary Guarantor or in any improvements now or
hereafter constructed thereon, and all related parts, accessions and accessories
thereto and all replacements or substitutions therefor, as well as all other
improvements, benefits and appurtenances now or hereafter placed thereon or
accruing thereto.
"Presold Housing Unit" means a Housing Unit which is subject to a
valid, bona-fide agreement of sale that (a) is with an unrelated third-party
purchaser, for fair market value, (b) provides for a cash deposit of an amount
comparable with market standards for a percentage
18
of the purchase price (if required by state law, deposits will be held either
(i) by an independent third party (i.e. a real estate broker) or (ii) in an
escrow account of Borrower placed with a Lender), (c) is not subject to, or
conditioned upon, the sale or lease by the purchaser of any existing real
property owned by the purchaser, and (d) contains no contingency other than for
a mortgage commitment which is not to exceed ninety-five percent (95%) of the
gross sales price of the Housing Unit (or, if permitted by Agent in its
reasonable discretion, any mortgage contingency for a loan in excess of
ninety-five percent (95%) of the sales price so long as certification of
pre-approval from a mortgage lender reasonably acceptable to Agent has been
obtained), and which is not contingent upon the sale or lease of any other real
estate (although if the financing commitment does include such sale or lease
contingency, such contingency must be specifically excluded in the agreement of
sale relating to such Housing Unit).
"Prime Rate" means that interest rate so denominated and set by
Wachovia Bank from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia Bank.
Wachovia Bank lends at interest rates above and below the Prime Rate.
"Proceeds after Default" shall have the meaning set forth in Article 9
hereof.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, which is owned by
Borrower or any Subsidiary.
"Public Indebtedness" means Indebtedness of Borrower or any Subsidiary
evidenced by notes, debentures, or other similar instruments issued after the
date of this Agreement pursuant to either (i) a registered public offering or
(ii) a private placement of such instruments in accordance with an exemption
from registration under the Securities Act of 1933 and/or the Securities
Exchange Act of 1934 or similar law.
"Quarterly Payment Date" shall have the meaning set forth in Section
2.18 hereof.
"Ratable Share" shall mean, with respect to any Lender on any date,
the ratio of (a) the amount of the Commitment of such Lender to (b) the
Aggregate Commitment.
"Rate Hedging Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances
or extends any Indebtedness (or that refunds, refinances or extends any
refunding, refinancing or extension of such Indebtedness), but only to the
extent that:
19
(i) the Refinancing Indebtedness is subordinated to or pari passu with
the Obligations to the same extent as the Indebtedness being refunded,
refinanced or extended,
(ii) the Refinancing Indebtedness is scheduled to mature no earlier
than the then current maturity date of such Indebtedness,
(iii) such Refinancing Indebtedness is in an aggregate amount that is
equal to or less than the sum of the aggregate amount then outstanding plus
all amounts committed but undisbursed under the Indebtedness being
refunded, refinanced or extended,
(iv) the Person or Persons liable for the payment of such Refinancing
Indebtedness are the same Person or Persons (or successor(s) thereto) that
were liable for the Indebtedness being refunded, refinanced or extended
when such Indebtedness was initially incurred, and
(v) such Refinancing Indebtedness is incurred within one hundred
twenty (120) days after the Indebtedness being refunded, refinanced or
extended is so refunded, refinanced or extended.
"Register" has the meaning set forth in Section 11.7(c) hereof.
"Reimbursement Obligations" shall mean Borrower's obligations to
reimburse an LC Issuer as a result of draws on one or more Facility L/Cs.
"Rejecting Lender" shall have the meaning set forth in Section 2.7(b)
hereof.
"Rejecting Lender's Facility Termination Date" shall have the meaning
set forth in Section 2.7(b) hereof.
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"Required Lenders" shall mean, at any particular time, Lenders having
at least 66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has
been terminated, Lenders having at least 66-2/3% of the aggregate amount of the
Revolving Credit Loans then outstanding.
"Requirement of Law" shall mean as to any Person, the Certificate (or
Articles) of Incorporation, By-Laws (or Code of Regulations), or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation, or determination, including without limitation all environmental
laws, rules, regulations and determinations, of an arbitrator
20
or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such Person or any
of its properly is subject.
"Responsible Officer" shall mean as to Borrower or any of its
Subsidiaries, ▇▇▇ ▇▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇▇▇ or any person or persons succeeding them
and assuming their responsibilities with respect to Borrower or such Subsidiary
and, with respect to financial matters and matters described in Section 3.8
hereof, ▇▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇▇▇ or any person or persons succeeding them
and assuming their responsibilities with respect to Borrower or such Subsidiary.
"Revolving Credit Loans" shall mean the revolving credit loans made
pursuant to this Agreement that are more particularly described in Section 2.1
hereof.
"S&P" shall mean Standard & Poor's Rating Services, and any successor
thereto.
"Sanctioned Entity" shall mean (i) an agency of the government of,
(ii) an organization directly or indirectly controlled by, or (iii) a person
resident in a country that is subject to a sanctions program identified on the
list maintained by OFAC and available at
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇/▇▇▇▇▇▇▇▇▇/▇▇▇▇▇.▇▇▇▇, or as otherwise
published from time to time as such program may be applicable to such agency,
organization or person.
"Secured Indebtedness" shall mean all Indebtedness of Borrower or any
of its Subsidiaries (excluding Indebtedness owing to Borrower or any of its
Subsidiaries) that is (a) secured by a Lien on assets of Borrower or any of its
Subsidiaries or (b) supported by a guarantee of Borrower or any Subsidiary
(including without limitation purchase money Indebtedness, Non-Recourse
Indebtedness, obligations under sale/leaseback transactions and obligations
under Capital Leases) and in either case is Indebtedness permitted under Section
7.9 hereof; provided, however, that Indebtedness under the Subordinated Notes
shall not be Secured Indebtedness solely by reason of clause (b) of this
definition.
"Shareholder Notes" means (i) those notes identified on Schedule 4
hereto, and (ii) any other notes like those notes referenced in clause (i) of
this definition that are unsecured, subordinated to the Obligations pursuant to
provisions satisfactory to Agent, contain repayment and other provisions
satisfactory to Agent in its sole discretion and in the aggregate (together with
the notes referred to in clause (i) of this definition) do not exceed
$15,000,000 at any time outstanding.
"Single Employer Plan" shall mean any Plan which is not a
Multiemployer Plan (as defined in ERISA).
"Speculative Housing Unit" shall mean any Housing Unit owned by
Borrower or any Subsidiary Guarantor that is not a Presold Housing Unit or a
Model Housing Unit.
"Subordinated Indebtedness" shall mean, at any date, (i) the unsecured
Indebtedness of Borrower or any Subsidiary under the Subordinated Notes
outstanding at such date, (ii) Indebtedness evidenced by the Shareholder Notes
and outstanding at such date, and (iii) all other future unsecured subordinated
Indebtedness of Borrower, the terms and manner (including without limitation the
terms and manner with respect to subordination) of which are
21
satisfactory to Agent in its sole discretion and approved in writing by Agent
and which is subordinate to the Obligations.
"Subordinated Notes" means the 9.5% Senior Subordinated Notes due 2015
issued pursuant to the Indenture and any other notes, debentures or other
similar instruments issued by the Borrower or any Subsidiary after the date of
this Agreement pursuant to either (i) a registered public offering or (ii) a
private placement of such instruments in accordance with an exemption from
registration under the Securities Act of 1933 and/or the Securities Exchange Act
of 1934 or similar law, and which meet the following requirements:
(a) the maturity date of, and any amortization pursuant to, such
instruments must be a date at least twelve (12) months after the Maturity
Date;
(b) such instruments must contain subordination and other
provisions satisfactory to the Agent in its sole discretion (including
without limitation standstill provisions and provisions requiring blockage
of all payments thereunder for a period of at least 179 days upon the
occurrence of an Event of Default); and
(c) any covenants, terms, provisions and events of default
contained in such instruments (or in any agreement or indenture under which
such instruments are issued) must be less restrictive, taken as a whole,
than the covenants, terms, provisions and events of default in this
Agreement, as determined by Agent in its sole discretion.
"Subsidiary" shall mean, as to any Person, a corporation, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, limited liability company or other entity are at the time owned, or
the management of which is otherwise controlled, directly, or indirectly through
one or more intermediaries, or both, by such Person, and with respect to
Borrower shall include all Subsidiaries of Subsidiaries of Borrower, provided
that no Joint Venture will be a Subsidiary. Unless otherwise specified,
"Subsidiary" means a Subsidiary of Borrower (including Subsidiaries of
Subsidiaries).
"Subsidiary Guarantor" shall mean each of Borrower's Subsidiaries
listed on Schedule 2 hereto and each Subsidiary of Borrower which becomes a
"Subsidiary Guarantor" pursuant to a Supplemental Subsidiary Guaranty as
provided in Section 6.13 (a) hereof.
"Subsidiary Guaranty Agreement" shall mean the First Amended and
Restated Guaranty Agreement substantially in the form of Exhibit B-1 attached to
this Agreement, executed by one or more Subsidiary Guarantors in favor of Agent
(for the benefit of the Lenders), as the same shall be modified and supplemented
and in effect from time to time.
"Subsidiary Owner Guaranty" shall have the meaning set forth in the
Owner Guaranty Agreement.
22
"Supplemental Subsidiary Guaranty" shall have the meaning set forth in
the Subsidiary Guaranty Agreement.
"Swingline Expiry Date" shall mean the date which is five (5) Business
Days prior to the Maturity Date.
"Swingline Lender" means Wachovia Bank in its capacity as lender of
Swingline Loans.
"Swingline Loan" shall have the meaning set forth in Section 2.12
hereof.
"Tangible Net Worth" shall mean, at any date, (a) the sum of (i) the
consolidated stockholders or members equity of Borrower determined in accordance
with GAAP plus (ii) the outstanding principal amount of Shareholder Notes, less
(b) Intangible Assets, all determined as of such date.
"Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Total Liabilities" means (a) all liabilities as shown on Borrower's
consolidated balance sheet in accordance with GAAP (including any Subordinated
Notes) excluding trade payables in the normal course of business, bonus accruals
outstanding less than sixty (60) days, and excluding Shareholder Notes payable,
(b) all outstanding loan balances associated with recourse obligations of
Borrower or any Subsidiary not shown on Borrower's consolidated balance sheet
including guarantees, (c) the principal amount of all surety bonds, letters of
credit and/or tri-party agreements whether presented for payment or not but
excluding performance related liabilities for which payment has not been
demanded, by the beneficiary and for which reimbursement by Borrower or any
Subsidiary has not been made, and (d) net liabilities of Borrower or any of its
Subsidiaries under Interest Rate Contracts.
"Uniform Customs" shall mean the Uniform Customs and Practice for
Documentary Credits, 1993 revision, ICC Publication No. 500, or amendment
thereof or successor thereto referenced in any LC Issuer's issued letters of
credit.
"Unimproved Entitled Land" means land owned by Borrower or any
Subsidiary Guarantor which is zoned to permit single-family residential
development (attached or detached) as a use by right (or comparable
classification under local law).
"Unused Fee" shall have the meaning set forth in Section 2.4 hereof.
"Wachovia Bank" means Wachovia Bank, National Association, a national
banking association.
1.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any other Loan Document unless otherwise defined therein.
23
(b) As used herein or in any other Loan Document, accounting
terms relating to Borrower and its Subsidiaries not defined in Section 1.1
hereof, to the extent not defined, shall have the respective meanings given to
them under GAAP.
(c) Any reference to "value" of property shall mean the lower of
cost or market value of such property, determined in accordance with GAAP.
(d) The definition of any document or instrument includes all
schedules, attachments and exhibits thereto and all renewals, extensions,
supplements and amendments thereof; terms otherwise defined herein have the same
meanings throughout this Agreement.
(e) "Hereunder," "herein," "hereto," "this Agreement" and words
of similar import refer to this entire document; "including" is used by way of
illustration and not by way of limitation, unless the context clearly indicates
the contrary; and the singular includes the plural and conversely.
ARTICLE 2: AMOUNT AND TERMS OF COMMITMENTS, REVOLVING CREDIT
LOANS, SWINGLINE LOANS AND FACILITY L/CS
2.1 Commitments.
(a) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make Revolving Credit Loans to Borrower from time to
time during the Commitment Period, and to purchase undivided interests and
participations in Facility L/Cs in accordance with Section 2.16 hereof, in an
aggregate principal amount of Revolving Credit Loans made by such Lender and of
such Lender's Ratable Share of the Facility L/C Obligations not to exceed at any
time outstanding the amount set forth in Schedule 1 hereto (such Lender's
obligations to make Revolving Credit Loans and to purchase undivided interests
and participations in Facility L/Cs in accordance with Section 2.16 hereof in
such amounts, as reduced, increased or otherwise modified from time to time
pursuant to the terms of this Agreement, being herein referred to as such
Lender's "Commitment"), subject to the limitations set forth in Section 2.1(b)
hereof.
(b) No Revolving Credit Loan or Swingline Loan shall be made, nor
shall any Facility L/C be issued, that would have the effect of increasing the
then outstanding amount of the Borrowing Base Indebtedness to an amount
exceeding the Borrowing Base as of the most recent Inventory Valuation Date,
provided that a Revolving Credit Loan shall not be deemed to have increased the
amount of the Borrowing Base Indebtedness if, and only to the extent that, the
proceeds of such Revolving Credit Loan are immediately used to repay a Swingline
Loan.
(c) No Revolving Credit Loans shall be made at any time that any
Swingline Loan is outstanding, except for Revolving Credit Loans that are used,
in whole or in part, on the day on which made, to repay in full the outstanding
principal balance of the Swingline Loans. During the Commitment Period and as
long as no Default or Event of Default exists, Borrower may borrow, prepay in
whole or in part and reborrow Revolving Credit Loans, all in accordance with the
terms and conditions hereof.
24
(d) Subject to the terms and conditions of this Agreement
(including the limitations on the availability of LIBOR Rate Loans and including
the termination of the Aggregate Commitment as set forth in Article 9 hereof),
the Revolving Credit Loans may from time to time be (i) LIBOR Rate Loans, (ii)
ABR Loans, or (iii) a combination thereof, as determined by Borrower and
notified to Agent in accordance with Section 2.3 hereof, provided that no
Revolving Credit Loan shall be made as a LIBOR Rate Loan after the day that is
one month prior to the last day of the Commitment Period.
2.2 Notes. The Revolving Credit Loans made by Lenders pursuant hereto
shall be evidenced by Notes, payable to the order of each Lender in the amount
of its Commitment and evidencing the obligation of Borrower to pay the aggregate
unpaid principal amount of the Revolving Credit Loans made by such Lender, with
interest thereon as prescribed in Section 2.5 hereof. Each Lender is hereby
authorized to record electronically or otherwise the date and amount of each
Revolving Credit Loan disbursement made by such Lender, and the date and amount
of each payment or prepayment of principal thereof, and any such recordation
shall be conclusive absent manifest error as to the accuracy of the information
so recorded; provided, however, the failure of such Lender to make, or any error
in making, any such recordation(s) shall not affect the obligation of Borrower
to repay outstanding principal, interest, or any other Obligation due hereunder
or under the Notes in accordance with the terms hereof and thereof. Each Note
shall (a) be dated as of the date hereof, (b) be stated to mature on the
Maturity Date, which Maturity Date may be extended as provided in Section 2.7
hereof, and (c) bear interest for the period from and including the date thereof
on the unpaid principal amount thereof from time to time outstanding at the
applicable interest rate per annum determined as provided in Section 2.5 hereof.
Interest on each Revolving Credit Loan shall be payable as specified in Section
2.5 hereof.
2.3 Procedure for Borrowing.
(a) Borrower may borrow under the Commitments (subject to the
limitations on the availability of LIBOR Rate Loans), during the Commitment
Period, provided Borrower shall give Agent written notice (the "Notice of
Borrowing"), which Notice of Borrowing must be received (i) prior to 11:00 a.m.,
Charlotte, North Carolina time, at least three (3) Business Days prior to the
requested Borrowing Date for any borrowing of LIBOR Rate Loans, or (ii) prior to
10:00 a.m., Charlotte, North Carolina time on or before the requested Borrowing
Date for any borrowing of ABR Loans, which Notice of Borrowing shall be
irrevocable. Each Notice of Borrowing shall specify (A) the Borrowing Date
(which shall be a Business Day), (B) the amount of the requested borrowing
and(C) whether the borrowing is to be of LIBOR Rate Loans or ABR Loans. Each
borrowing pursuant to the Commitments shall be in the principal amount (1) in
the case of ABR Loans, of $1,000,000 or any larger amount which is an even
multiple of $100,000, and (2) in the case of LIBOR Rate Loans, of $10,000,000 or
any larger amount which is an even multiple of $1,000,000.
(b) Subject to satisfaction of the terms and conditions of this
Agreement, each Lender shall deposit funds with Agent for the account of
Borrower by 2:00 p.m. Charlotte, North Carolina time on the Borrowing Date by
wire transfer or other immediately available funds equal to its Ratable Share of
the Revolving Credit Loans to be made on the Borrowing Date. The Loan(s) will
then promptly be made available to Borrower by Agent crediting the
25
account of Borrower on the books of Agent with the aggregate amounts made
available to Agent by Lenders, and in like funds as received by Agent.
(c) Each Lender may book its Loans and its participations in
Facility L/Cs at any Lending Office selected by such Lender and may change its
Lending Office from time to time. All terms of this Agreement shall apply to any
such Lending Office and the Loans and the Notes issued hereunder shall be deemed
held by each Lender for the benefit of any such Lending Office. Each Lender and
LC Issuer may, by written notice to the Agent and Borrower in accordance with
Section 11.2 hereof, designate replacement or additional Lending Offices through
which Loans will be made by it or Facility L/Cs will be issued by it and for
whose account Loan payments or a payment with respect to Facility L/Cs are to be
made.
(d) Each ABR Loan shall continue as an ABR Loan unless and until
such ABR Loan is converted into a LIBOR Rate Loan pursuant to Section 3.1 hereof
or is repaid in accordance with Section 2.11 hereof. Each LIBOR Rate Loan shall
continue as a LIBOR Rate Loan until the end of the then applicable Interest
Period therefor, at which time such LIBOR Rate Loan shall be automatically
converted into an ABR Loan unless (x) such LIBOR Loan is or was repaid in
accordance with Section 2.11 hereof or (y) such LIBOR Rate Loan is continued as
a LIBOR Rate Loan in accordance with Section 3.1 hereof.
(e) Notwithstanding anything to the contrary in this Agreement,
Borrower may submit no more than two (2) Notices of Borrowing in any calendar
month.
2.4 Unused Fee. Borrower agrees to pay to Agent for the benefit of
each Lender an unused fee (the "Unused Fee") for the Commitment Period, computed
at the Applicable Unused Fee Rate per annum on the average daily unused amount
of each Lender's Commitment during the Commitment Period, payable quarterly in
arrears and due on each Quarterly Payment Date and on the last day of the
Commitment Period, commencing on the first of such dates to occur after the date
of this Agreement. For purposes of determining the unused portion of the
Aggregate Commitment and the unused portion of a Lender's Commitment hereunder,
the Aggregate Commitment shall be deemed used to the extent of the aggregate
face amount of the outstanding Facility L/Cs and Revolving Credit Loans and such
Lender's Commitment shall be deemed used to the extent of such Lender's Ratable
Share of the aggregate face amount of the outstanding Facility L/Cs and
Revolving Credit Loans made by such Lender. For purposes of determining the
Unused Fee payable to a Swingline Lender, its Swingline Loans shall be treated
as usage of its Commitment.
2.5 Interest; Default Interest.
(a) Except as provided in Section 2.5(d) hereof, (i) the
Revolving Credit Loans shall bear interest on the unpaid principal amount
thereof at a rate per annum equal to (y) in the case of ABR Loans, the Alternate
Base Rate in effect from time to time, plus the Applicable ABR Margin in effect
for such day (provided that, notwithstanding the table below, on any day that
the Alternate Base Rate is determined pursuant to the second proviso of the
definition of "Alternate Base Rate" in Section 1.1 hereof, the Applicable ABR
Margin for such day shall be 0%), and (z) in the case of LIBOR Rate Loans, the
LIBOR Rate determined for the Interest Period applicable thereto, plus the
Applicable LIBOR Margin in effect on the first day of
26
such Interest Period, and (ii) the Swingline Loans shall bear interest on the
unpaid principal amount thereof at a rate per annum equal to the Alternate Base
Rate in effect from time to time, plus the Applicable ABR Margin in effect for
such day, plus 0.25%.
(b) The Applicable Margins and the Applicable Unused Fee Rate
shall be determined by reference to the Leverage Ratio in accordance with the
following table and the provisions of this Section 2.5(b):
LEVEL I LEVEL II LEVEL III
------- -------- ---------
Leverage Ratio Less than or equal to Greater than 1.00 to Greater than 1.50 to 1.00
1.00 to 1.00 1.00 but less than or
equal to 1.50 to 1.00
Applicable LIBOR Margin 1.25% 1.50% 1.75%
and Applicable Facility
L/C Rate
Applicable ABR Margin 1.25% 1.50% 1.75%
Applicable Unused Fee Rate 0.20% 0.20% 0.25%
(c) The Applicable Unused Fee Rate, the Applicable Facility L/C
Rate and the Applicable ABR Margin shall be adjusted from time to time,
effective on the fifth (5th) Business Day following delivery by Borrower,
pursuant to Section 6.1(a) or (b) hereof, of annual or quarterly financial
statements evidencing a change in the Leverage Ratio. The Applicable LIBOR
Margin in respect of any LIBOR Rate Loan shall be adjusted from time to time
effective on the first day of the Interest Period for any LIBOR Rate Loan after
the fifth (5th) Business Day following the delivery by Borrower, pursuant to
Section 6.1(a) or (b) hereof, of annual or quarterly financial statement
evidencing a change in the Leverage Ratio.
(d) As of the date of this Agreement, the Applicable Margins and
Applicable Unused Fee Rate are at Level II.
(e) If all or a portion of the principal amount of any of the
Revolving Credit Loans made hereunder (whether as ABR Loans or LIBOR Rate Loans
or a combination thereof) or the Swingline Loans or any installment of interest
on any Revolving Credit Loan or Swingline Loan or any Unused Fee or Facility L/C
Fee shall not be paid when due (whether at the stated maturity, by acceleration
or otherwise and after any applicable opportunity to cure), any such overdue
principal amount and, to the extent permitted by applicable law, any overdue
installment of interest on any Revolving Credit Loan or Swingline Loan or any
overdue payment of Unused Fee or Facility L/C Fee hereunder shall, without
limiting any other rights of Lenders, bear interest at a rate per annum which is
the sum of the Alternate Base Rate in effect from time to time, plus the
Applicable ABR Margin, plus four percent (4%), from the date of such non-
27
payment until paid in full (before, as well as after, judgment); provided,
however, if all or any portion of any principal on any Revolving Credit Loan
made as a LIBOR Rate Loan hereunder shall not be paid when due and the then
current Interest Period for such LIBOR Rate Loan has not yet expired, the entire
principal amount of such LIBOR Rate Loan and, to the extent permitted by
applicable law, any overdue installment of interest on such LIBOR Rate Loan
shall, without limiting any other rights of Lenders, bear interest at a rate per
annum which is the sum of four percent (4%) plus the applicable non-default
interest rate (which is the sum of the applicable LIBOR Rate and the Applicable
LIBOR Margin) on such LIBOR Rate Loan then in effect from the date of such
non-payment until the expiration of the then current Interest Period with
respect to such LIBOR Rate Loan (before, as well as after, judgment);
thereafter, the entire principal amount of such LIBOR Rate Loan and, to the
extent permitted by applicable law, any overdue installment of interest on such
LIBOR Rate Loan shall, without limiting any other rights of Lenders, bear
interest at a rate per annum which is the sum of the Alternate Base Rate in
effect from time to time, plus the Applicable ABR Margin, plus four percent
(4%), until paid in full (before, as well as after, judgment).
(f) Interest shall be payable in arrears and shall be due on each
Interest Payment Date and on the last day of the Commitment Period.
2.6 Termination, Reduction or Increase of Aggregate Commitment.
(a) (i) Borrower shall have the right to terminate the Aggregate
Commitment or, from time to time (and so long as no Event of Default exists),
reduce the amount of the Aggregate Commitment, upon not less than five (5)
Business Days' written notice to each Lender specifying either a reduction (and
the amount of such reduction) or termination.
(ii) Any such reduction of the Aggregate Commitment shall be in
the amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof and
shall reduce permanently the amount of the Aggregate Commitment then in effect.
Any such reduction shall be accompanied by (A) prepayment of the Revolving
Credit Loans made hereunder to the extent, if any, that the sum of the amount of
such Revolving Credit Loans, Swingline Loans and the Facility L/C Obligations
then outstanding exceeds the amount of the Aggregate Commitment, as then
reduced, together with accrued interest on the amount so prepaid to the date of
such prepayment (provided that (i) no more than two (2) prepayments may be made
in any calendar month, (ii) prepayments shall be applied, first, to Base Rate
Loans and any excess to LIBOR Loans, and (iii) each prepayment must be in an
amount equal to at least $250,000), and (B) if a Revolving Credit Loan is a
LIBOR Rate Loan that is prepaid other than at the end of the Interest Period
applicable thereto, by any amounts payable pursuant to Section 3.5 hereof. If
after giving effect to any reduction of the Aggregate Commitment, the Maximum
Swingline Amount or the aggregate principal amount of the Facility L/C
Obligations permitted pursuant to Section 2.15(c)(ii) hereof exceeds the
Aggregate Commitment, the Maximum Swingline Amount or the aggregate principal
amount of Facility L/C Obligations permitted pursuant to Section 2.15(c)(ii)
hereof shall be reduced (or, in the case of Facility L/C Obligations, reduced or
cash collateralized) by such excess.
(iii) Any such termination of the Commitment shall be accompanied
(A) by prepayment in full of the Loans then outstanding hereunder, together with
accrued
28
interest thereon to the date of such prepayment, and the payment of any unpaid
Unused Fee then accrued hereunder; (B) with respect to Facility L/Cs, by
Borrower's compliance with the terms of Section 2.15 hereof; and (C) if a
Revolving Credit Loan is a LIBOR Rate Loan that is prepaid other than at the end
of the Interest Period applicable thereto, by any amounts payable pursuant to
Section 3.5 hereof.
(iv) Any such reduction or termination of the Aggregate
Commitment shall be allocated to each Lender's Commitment ratably in accordance
with its Ratable Share.
(b) (i) Subject to the provisions of this Section 2.6(b),
Borrower may, at any time and from time to time, request ("Facility Increase
Request"), by notice to Agent, an increase of the Aggregate Commitment within
the limitations hereinafter set forth, which Facility Increase Request shall set
forth the amount of such requested increase. Within twenty (20) days of such
Facility Increase Request, the Aggregate Commitment may be so increased either
by having one or more Eligible Assignees (other than Lenders then holding a
Commitment hereunder) approved by Borrower and Agent (which consents will not be
unreasonably withheld) (each a "New Lender") become Lenders hereunder and/or by
having any one or more Lenders then holding a Commitment hereunder (at their
respective election in their sole discretion) that have been approved by
Borrower and Agent (which consents will not be unreasonably withheld) increase
the amount of their Commitments (any such Lender that elects to increase its
Commitment and any New Lender being hereinafter referred to as an "Additional
Lender"), provided that (A) unless otherwise agreed by Borrower and Agent, the
Commitment of any New Lender shall not be less than $10,000,000 and (B) unless
otherwise agreed by Borrower and Agent, the increase in the Commitment of any
Lender shall be not less than $5,000,000; (C) the Aggregate Commitment shall not
exceed $400,000,000; (D) Borrower and each Additional Lender shall have executed
and delivered a commitment and acceptance (the "Commitment and Acceptance")
substantially in the form of Exhibit D hereto and Agent shall have accepted and
executed the same (which acceptance shall not be unreasonably withheld); (E)
Borrower shall have executed and delivered to Agent a Note or Notes payable to
the order of each Additional Lender, each such Note to be in the amount of such
Additional Lender's Commitment or increased Commitment (as applicable); (F)
Borrower shall have delivered to Agent an opinion of counsel (substantially
similar to the form of opinion attached hereto as Exhibit E, modified to apply
to the increase in the Aggregate Commitment and each Note and Commitment and
Acceptance executed and delivered in connection therewith); (G) the Guarantors
shall have delivered to Agent a written instrument confirming their consent to
the new Commitments or increases in Commitments (as applicable) and that their
Guaranty Agreements continue in full force and effect; (H) Borrower and each
Additional Lender shall otherwise have executed and delivered such other
instruments and documents as Agent shall have reasonably requested in connection
with such new Commitment or increase in a Commitment (as applicable); (I)
Borrower shall pay (i) to the Agent for the account of the Additional Lenders an
upfront fee related to the increased Commitments and (ii) to the Agent or its
affiliate an arrangement fee related to the Facility Increase Request, and such
fees shall be in an amount to be determined by Borrower and Agent, and payable
on the Increase Date; and (J) no Default or Event of Default shall exist on the
Increase Date after giving effect to the increase in the Aggregate Commitment.
The form and substance of the documents required under clauses (D) through (H)
above shall be fully acceptable to Agent in its reasonable discretion. Agent
shall provide written notice to
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Lenders following any such increase in the Aggregate Commitment hereunder and
shall furnish to Lenders, upon request, copies of the Commitment and Acceptance.
(ii) On the effective date of any increase in the Aggregate
Commitment pursuant to the provisions hereof ("Increase Date"), which Increase
Date shall be mutually agreed upon by Borrower, each Additional Lender and
Agent, each Additional Lender shall make a payment to Agent in an amount
sufficient, upon the application of such payments by all Additional Lenders to
the reduction of the outstanding ABR Loans (other than Swingline Loans) held by
Lenders, to cause the principal amount outstanding under such ABR Loans made by
all Lenders (including any Additional Lender) to be in the proportion of their
respective Commitments (as of such Increase Date). Borrower hereby irrevocably
authorizes each Additional Lender to fund to Agent the payment required to be
made pursuant to the immediately preceding sentence for application to the
reduction of the outstanding ABR Loans held by each Lender, and each such
payment shall constitute a ABR Loan hereunder. Such Additional Lender shall not
participate in any LIBOR Rate Loans that are outstanding on the Increase Date,
but, if Borrower shall, at any time on or after such Increase Date, convert or
continue any LIBOR Rate Loans outstanding on such Increase Date, Borrower shall
be deemed to repay such LIBOR Rate Loans on the date of the conversion or
continuation thereof and then to reborrow as a LIBOR Rate Loan a like amount on
such date (regardless of whether the conditions precedent to borrowing have been
satisfied) so that each Additional Lender shall make a LIBOR Rate Loan on such
date in its Ratable Share of such LIBOR Rate Loans. Each Additional Lender shall
also advance its Ratable Share of all Revolving Credit Loans made on or after
such Increase Date and shall otherwise have all of the rights and obligations of
a Lender hereunder on and after such Increase Date. Notwithstanding the
foregoing, upon the occurrence of an Event of Default prior to the date on which
an Additional Lender is holding Revolving Credit Loans equal to its Ratable
Share of all Revolving Credit Loans hereunder, such Additional Lender shall,
upon notice from Agent, on or after the date on which the Obligations are
accelerated or become due following such Event of Default, pay to Agent (for the
account of the other Lenders, to which the Agent shall pay their pro rata shares
upon receipt) a sum equal to such Additional Lender's Ratable Share of each
Revolving Credit Loan then outstanding with respect to which such Additional
Lender does not then hold its Ratable Share thereof.
(iii) On the Increase Date and the making of the Loans by an
Additional Lender in accordance with the provisions of the first sentence of
Section 2.6(b)(ii) hereof, such Additional Lender shall also be deemed to have
irrevocably and unconditionally purchased and received, without recourse or
warranty, from Lenders party to this Agreement immediately prior to the Increase
Date, an undivided interest and participation in any Facility L/C then
outstanding, ratably, such that all Lenders (including each Additional Lender)
hold participation interests in each such Facility L/C in the proportion of
their respective Commitments (taking into account the increase in the Aggregate
Commitment that is effective on such Increase Date).
(iv) Nothing contained herein shall constitute, or otherwise be
deemed to be, a commitment or agreement on the part of any Lender to increase
its Commitment hereunder at any time or a commitment or agreement on the part of
Borrower or Agent to give or grant any Lender the right to increase its
Commitment hereunder at any time.
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2.7 Maturity Date of Commitment; Extension.
(a) Unless earlier terminated pursuant to the terms of this
Agreement, the Aggregate Commitment shall terminate on the Maturity Date, and
the unpaid balance of the Revolving Credit Loans and Swingline Loans and all
other unpaid Obligations outstanding shall be paid on the Maturity Date
(b) Not more than once in any fiscal year of Borrower, Borrower
may request an extension of the Maturity Date to the first anniversary of the
then scheduled Maturity Date by submitting a request for an extension (the
"Extension Request") to Agent not less than 180 days prior to the then scheduled
Maturity Date. Promptly upon (but not later than five (5) Business Days after)
Agent's receipt and approval of the Extension Request, Agent shall deliver to
each Lender a copy of, and shall request each Lender to approve, the Extension
Request. Each Lender approving the Extension Request shall deliver its written
approval no later than 60 days after such Lender's receipt of the Extension
Request. If the written approval of the Extension Request by Lenders whose
Ratable Shares equal or exceed 66-2/3% in the aggregate is received by the Agent
within such 60-day period and provided no Default or Event of Default exists on
the effective date of such extension, the Maturity Date shall be extended as
specified in the Extension Request but only with respect to Lenders that have
given their written approval. Borrower shall pay to the Lenders approving the
extension an extension fee in an amount to be determined by Borrower and Agent,
payable on the effective date of such extension. Except to the extent that a
Lender that did not give its written approval to such Extension Request
("Rejecting Lender") is replaced as provided in Section 3.10 hereof, the Loans
and all interest thereon, fees and other Obligations owed to such Rejecting
Lender shall be paid in full on the Maturity Date as determined prior to such
Extension Request (the "Rejecting Lender's Facility Termination Date").
(c) If Lenders whose Ratable Shares equal or exceed 66-2/3% in
the aggregate approve the Extension Request, Borrower, upon notice to Agent and
any Rejecting Lender, may, subject to the provisions of the next to the last
sentence of Section 2.7(d) hereof, terminate the Commitment of such Rejecting
Lender (or such portion of such Commitment that is not assigned to a Replacement
Lender in accordance with Section 3.10 hereof), which termination shall occur as
of a date set forth in Borrower's notice but in no event more than thirty (30)
days following such notice. The termination of a Lender's Commitment shall be
effected in accordance with Section 2.7 (d) hereof.
(d) If Borrower elects to terminate a Commitment of a Rejecting
Lender as provided in Section 2.7(c), Borrower shall pay to the Rejecting Lender
on the effective date of such termination all Obligations due and owing to it
hereunder or under any other Loan Document, including, without limitation, the
aggregate outstanding principal amount of the Loans owed to such Rejecting
Lender, together with accrued interest thereon through the date of such
termination, amounts payable under Sections 2.9 and 3.5 hereof and the Unused
Fee and Facility LC Fee payable to such Rejecting Lender. Upon request by
Borrower or Agent, the Rejecting Lender will deliver to Borrower and Agent a
letter setting forth the amounts payable to such Rejecting Lender as set forth
above. Upon the termination of such Rejecting Lender's Commitment and payment of
the amounts provided for in the immediately preceding sentence, Borrower shall
have no further obligations to such Rejecting Lender under this Agreement and
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such Rejecting Lender shall cease to be a Lender, provided, however, that such
Rejecting Lender shall continue to be entitled to the benefits of Sections 2.9,
3.5, 3.6 and 11.6 hereof, as well as to any fees accrued for its account
hereunder not yet paid, and shall continue to be obligated under Section 11.6(c)
hereof with respect to obligations and liabilities accruing prior to the
termination of such Rejecting Lender's Commitment. If, as a result of the
termination of the Rejecting Lender's Commitment, any payment of a LIBOR Rate
Loan occurs on a day which is not the last day of the applicable Interest
Period, Borrower shall pay to Agent for the benefit of Lenders (including any
Rejecting Lender) any loss or cost incurred by Lenders (including any Rejecting
Lender) resulting therefrom in accordance with Section 3.5 hereof. Upon the
effective date of the termination of the Rejecting Lender's Commitment, the
Aggregate Commitment shall be reduced by the amount of the terminated Commitment
of the Rejecting Lender, and each other Lender shall be deemed to have
irrevocably and unconditionally purchased and received (subject to the
provisions of the next to the last sentence of this Section 2.7(d)), without
recourse or warranty, from the Rejecting Lender, an undivided interest and
participation in any Facility L/C then outstanding, ratably, such that each
Lender (excluding the Rejecting Lender but including any replacement Lender that
acquires an interest hereunder from such Rejecting Lender) holds a participation
interest in each Facility L/C in proportion to the ratio that such Lender's
Commitment (upon the effective date of such termination of the Rejecting
Lender's Commitment) bears to the Aggregate Commitment (as reduced by the
termination of such Rejecting Lender's Commitment or a part thereof).
Notwithstanding the foregoing, if, upon the termination of the Commitment of
such Rejecting Lender, the sum of the outstanding principal balance of the Loans
and the Facility L/C Obligations would exceed the Aggregate Commitment (as
reduced), Borrower may not terminate such Rejecting Lender's Commitment unless
Borrower, on or prior to the effective date of such termination, prepays, in
accordance with the provisions of this Agreement, outstanding Loans or causes to
be canceled, released and returned to the applicable LC Issuer outstanding
Facility L/Cs or deposits cash into the Facility L/C Collateral Account in
sufficient amounts in the aggregate such that, on the effective date of such
termination, the Aggregate Outstanding Credit Exposure does not exceed the sum
of the Aggregate Commitment (as reduced) and the amounts held in the Facility
L/C Collateral Account. In the event that Borrower makes such deposit into the
Facility L/C Collateral Account, such deposits shall be applied by Agent to pay
to the applicable LC Issuer amounts drawn on any Facility L/C that are not
reimbursed by Borrower and, provided no Default or Event of Default has occurred
that is continuing, shall be returned to Borrower when the Aggregate Outstanding
Credit Exposure equals or is less than the Aggregate Commitment.
2.8 Computation of Interest and Fees. Unused Fees and interest in
respect of the Loans shall be calculated on the basis of a 360-day year for the
actual days elapsed; provided, however, that interest calculated based on the
rate set forth in the second proviso of the definition of "Alternative Base
Rate" shall be calculated on the basis of a 365/366-day year for the actual days
elapsed. Any change in the interest rate on the Loans and the Notes resulting
from a change in the Alternate Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business of the day on
which such change in the Alternate Base Rate or the Eurocurrency Reserve
Requirements shall become effective, without notice to Lenders or Borrower.
However, Agent shall give Borrower and Lenders prompt notice of all changes in
the Alternate Base Rate or the Eurocurrency Reserve Requirements. Each
determination of an interest rate by Agent pursuant to any provision of this
Agreement shall be conclusive and binding on Lenders and Borrower in the absence
of manifest error.
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2.9 Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against assets
of, deposits with or for the account of, or credit extended or participated in
by, any Lender (except the Eurocurrency Reserve Requirements) or LC Issuer;
(ii) subject any Lender or LC Issuer to any tax of any kind
whatsoever with respect to this Agreement, any Facility L/C, any participation
in a Facility L/C or any LIBOR Rate Loan made by it, or change the basis of
taxation of payments to such Lender or LC Issuer in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 3.6 hereof and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender or LC Issuer); or
(iii) impose on any Lender or LC Issuer or the London interbank
market any other condition, cost or expense affecting this Agreement or LIBOR
Rate Loans made by such Lender or any Facility L/C or participation therein
(except the Eurocurrency Reserve Requirement);
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Rate Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or LC
Issuer of participating in, issuing or maintaining any Facility L/C (or of
maintaining its obligation to participate in or to issue any Facility L/C), or
to reduce the amount of any sum received or receivable by such Lender or LC
Issuer hereunder (whether of principal, interest or any other amount) then, upon
request of such Lender or the LC Issuer, Borrower will pay to such Lender or the
LC Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the LC Issuer, as the case may be, for such additional
costs incurred or reduction suffered.
(b) If any Lender or LC Issuer determines that any Change in Law
affecting such Lender or LC Issuer or any Lending Office of such Lender or such
Lender's or LC Issuer's holding company, if any, regarding capital requirements
has or would have the effect of reducing the rate of return on such Lender's or
LC Issuer's capital or on the capital of such Lender's or LC Issuer's holding
company, if any, as a consequence of this Agreement, the Commitment of such
Lender or the Loans made by, or participations in Facility L/Cs held by, such
Lender, or the Facility L/Cs issued by such LC Issuer, to a level below that
which such Lender or LC Issuer or such Lender's or such LC Issuer's holding
company could have achieved but for such Change in Law (taking into
consideration such Lender's or LC Issuer's policies and the policies of such
Lender's or LC Issuer's holding company with respect to capital adequacy), then
from time to time Borrower will pay to such Lender or LC Issuer, as the case may
be, such additional amount or amounts as will compensate such Lender or LC
Issuer or such Lender's or the LC Issuer's holding company for any such
reduction suffered.
(c) A certificate of a Lender or LC Issuer setting forth the
amount or amounts necessary to compensate such Lender or LC Issuer or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section and delivered to Borrower shall be
33
conclusive absent manifest error. Borrower shall pay such Lender or LC Issuer,
as the case may be, the amount shown as due on any such certificate within ten
(10) days after receipt thereof.
(d) Failure or delay on the part of any Lender or LC Issuer to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the LC Issuer's right to demand such compensation, provided
that Borrower shall not be required to compensate a Lender or LC Issuer pursuant
to this Section for any increased costs incurred or reductions suffered more
than nine (9) months prior to the date that such Lender or the LC Issuer, as the
case may be, notifies Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or LC Issuer's intention to
claim compensation therefor (except that, if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the nine (9) month
period referred to above shall be extended to include the period of retroactive
effect thereof).
2.10 Use of Proceeds. The proceeds of the Loans made hereunder shall
be used by Borrower to finance the acquisition and development of land and lots
and the construction of residential homes and construction projects within the
continental United States.
2.11 Payments; Pro Rata Treatment.
(a) Each borrowing by Borrower from Lenders hereunder (other than
a Swingline Loan), each payment (including each prepayment (other than a
prepayment pursuant to Section 2.7(d))) by Borrower on account of principal of
and interest on the Revolving Credit Loans, each payment by Borrower on account
of any Unused Fee hereunder and any reduction of the Commitments (in each case,
other than pursuant to Section 2.7(d)) shall be made pro rata according to the
respective Lenders' Ratable Shares. All payments (including prepayments) to be
made by Borrower hereunder and under the Notes, whether on account of principal,
interest, fees or otherwise, shall be made without set-off or counterclaim and
shall be made prior to 11:00 a.m., Charlotte, North Carolina time, on the due
date thereof to Agent, for the account of Lenders, at Agent's office at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or at such other office as
directed by Agent from time to time, in Dollars and in immediately available
funds. Agent shall promptly distribute such payments to Lenders upon receipt in
like funds as received. If any payment hereunder on an ABR Loan becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment hereunder on a LIBOR Rate Loan becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day (and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension)
unless the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day.
(b) Borrower may from time to time pay, without penalty or
premium, all outstanding ABR Loans, or, in a minimum aggregate amount of
$250,000 or any integral multiple of $500,000 in excess thereof, any portion of
the outstanding ABR Loans upon notice to Agent not later than 11:00 a.m.
Charlotte, North Carolina time on the date of payment. Borrower may from time to
time pay, subject to the payment of any indemnification amounts required by
34
Section 3.5 but without penalty or premium, all outstanding LIBOR Rate Loans,
or, in a minimum aggregate amount of $5,000,000 or any integral multiple of
$1,000,000 in excess thereof, any portion of the outstanding LIBOR Rate Loans
upon notice to Agent not later than 10:00 a.m. Charlotte, North Carolina time on
the date of payment; provided, that, notwithstanding the foregoing, other than
any prepayment of Revolving Credit Loans made by Borrower in order to comply
with Section 6.4 hereof, no more than two prepayments of Revolving Credit Loans
may be made each calendar month.
2.12 Swingline Loans.
(a) Subject to the terms and conditions of this Agreement,
Swingline Lender agrees to make at any time and from time to time after the
initial Borrowing Date and prior to the Swingline Expiry Date swingline loans to
Borrower ("Swingline Loans"), which Swingline Loans (i) shall be made and
maintained as ABR Loans, (ii) shall be denominated in Dollars, (iii) may be
repaid and reborrowed in accordance with the provisions hereof, (iv) shall not
exceed, in aggregate principal amount at any one time outstanding, the lesser of
(A) the Maximum Swingline Amount and (B) the amount by which Swingline Lender's
Commitment exceeds its share of the sum of all Revolving Credit Loans and
Facility L/C Obligations and (v) shall be subject to the limitations set forth
in Section 2.1(b) hereof; provided, however, that after giving effect to any
Swingline Loan, (A) the Aggregate Outstanding Credit Exposure shall not exceed
the Aggregate Commitment and (B) the aggregate outstanding amount of the
Revolving Credit Loans of any Lender plus such Lender's Ratable Share of the
Facility L/C Obligations and outstanding Swingline Loans shall not exceed such
Lender's Commitment. Swingline Lender will not make a Swingline Loan after it
has received written notice from Borrower or the Required Lenders stating that a
Default or an Event of Default exists until such time as Swingline Lender shall
have received a written notice of (i) rescission of such notice from the party
or parties originally delivering the same or (ii) a waiver of such Default or
Event of Default, as required by this Agreement.
(b) Borrower shall give Swingline Lender irrevocable telephonic
or written notice prior to 11:00 a.m., Charlotte, North Carolina time on the
requested Borrowing Date specifying the amount of the requested Swingline Loan
which shall be in a minimum amount of $500,000 or whole multiples of $100,000 in
excess thereof. The Swingline Loans will then be made available to Borrower by
Swingline Lender by crediting the account of Borrower on the books of Swingline
Lender.
(c) The Swingline Loans shall be evidenced by the Note held by
Swingline Lender. Swingline Lender is hereby authorized to record electronically
or otherwise the date and amount of each Swingline Loan, and the date and amount
of each payment or prepayment of principal thereof, and any such recordation
shall constitute conclusive evidence of the accuracy of the information so
recorded absent manifest error, provided, however, the failure of Swingline
Lender to make, or any error in making, any such recordation(s) shall not affect
the obligation of Borrower to repay outstanding principal, interest, or any
other amount due hereunder in accordance with the terms hereof and thereof. The
Swingline Loan shall (i) mature on the Swingline Expiry Date, and (ii) bear
interest for the period from and including the date thereof on the unpaid
principal amount thereof from time to time outstanding at the applicable
35
interest rate per annum determined as provided in Section 2.5 hereof. Interest
on each Swingline Loan shall be payable as specified in Section 2.5 hereof.
(d) Swingline Lender, at any time and in its sole and absolute
discretion, may (and, not later than four (4) Business Days after the making of
a Swing Line Loan, shall), on behalf of Borrower (which hereby irrevocably
directs Swingline Lender to act on Borrower's behalf), request each Lender,
including Swingline Lender, to make a Revolving Credit Loan (each, a "Mandatory
Borrowing") in an amount equal to such Lender's Ratable Share of the amount of
the Swingline Loans (provided that each such request shall be deemed to have
been automatically given upon the occurrence of a Default or an Event of Default
under Article 9 hereof or upon the exercise of any of the remedies provided in
the last paragraph of Article 9 hereof), in which case each Lender shall make
the proceeds of its Revolving Credit Loan available to Swingline Lender on the
immediately succeeding Business Day in its Ratable Share thereof, and the
proceeds thereof shall be applied directly to repay Swingline Lender for such
outstanding Swingline Loans. Each Lender hereby irrevocably agrees to make ABR
Loans upon one Business Day's notice pursuant to each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the date
specified by Swingline Lender notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the minimum borrowing amount otherwise
required hereunder, (ii) whether any conditions specified in Article 5 hereof
are then satisfied, (iii) whether a Default or an Event of Default has occurred
and is continuing, (iv) the date of such Mandatory Borrowing, (v) any reduction
in the Commitments after any such Swingline Loans were made, (vi) Borrower's
compliance with Borrowing Base requirements, (vii) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against Swingline
Lender, Borrower or any other Person for any reason whatsoever, or (viii) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing. In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code in respect of Borrower), each Lender (other than Swingline Lender) hereby
agrees that it shall forthwith purchase from Swingline Lender (without recourse
or warranty) a participation interest in such outstanding Swingline Loans as
shall be necessary to cause the Lenders to hold participation interests in such
Swingline Loans in the proportion of their respective Ratable Shares thereof,
provided that all interest payable on the Swingline Loans shall be for the
account of Swingline Lender until the date the Mandatory Borrowing is made, and,
to the extent attributable to the Mandatory Borrowing, shall be payable to the
Lender making such Mandatory Borrowing from and after the date such Mandatory
Borrowing is made.
(e) Whenever, at any time after Swingline Lender has received
from any Lender such Lender's assigned interest in a Swingline Loan and
Swingline Lender receives any payment on account thereof, Swingline Lender will
distribute to such Lender its assigned interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender's assigned interest was outstanding and funded); provided,
however, that in the event that such payment received by Swingline Lender is
required to be returned, such Lender will return to Swingline Lender any portion
thereof previously distributed by Swingline Lender to it.
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2.13 The Facility L/Cs. So long as no Default or Event of Default
exists, Wachovia Bank and each other Lender that is designated as an LC Issuer
in accordance with Section 2.14(a) hereof, agree to issue Facility L/Cs, on the
terms and conditions hereof, provided that (a) the aggregate of all Facility L/C
Obligations at any one time outstanding shall not exceed Fifty Million Dollars
($50,000,000), (b) the sum of the aggregate amount of all Loans and the
aggregate amount of all Facility L/C Obligations at any one time outstanding
shall not exceed the Aggregate Commitment and (c) the issuance of Facility L/Cs
is subject to the limitation set forth in Section 2.1(b) hereof. Each letter of
credit issued by Wachovia Bank under the terms of the Existing Credit Agreement
shall be treated as a Facility L/C issued hereunder.
2.14 Designation or Resignation of LC Issuer.
(a) Upon request by Borrower and approval by Agent, a Lender may
at any time agree to be designated as an LC Issuer hereunder, which designation
shall be set forth in a written instrument or instruments delivered by Borrower,
Agent and such Lender. Agent shall promptly notify the other Lenders of such
designation. From and after such designation and unless and until such Lender
resigns as an LC Issuer in accordance with Section 2.14(b) below, such Lender
shall have all of the rights and obligations of an LC Issuer hereunder.
(b) An LC Issuer shall continue to be an LC Issuer unless and
until (i) it shall have given Borrower and Agent notice that it has elected to
resign as LC Issuer and (ii) at the time of such notice, there shall be at least
one other LC Issuer or another Lender shall have agreed to be the replacement LC
Issuer and shall have been approved in writing by Agent and Borrower. A
resigning LC Issuer shall continue to have the rights and obligations of the LC
Issuer hereunder solely with respect to Facility L/Cs theretofore issued by it,
notwithstanding the designation of a replacement LC Issuer hereunder, but upon
its notice of resignation (or, if at the time of such notice, there is not at
least one other LC Issuer, then upon such designation of a replacement LC
Issuer), the resigning LC Issuer shall not thereafter issue any Facility L/C
(unless it shall again thereafter be designated as an LC Issuer in accordance
with the provisions of this Section 2.14). The assignment of, or grant of a
participation interest in, all or any part of its Commitment or Loans by a
Lender that is also an LC Issuer shall not constitute an assignment or transfer
of any of its rights or obligations as an LC Issuer.
2.15 Issuance of Facility L/Cs.
(a) Borrower may request an LC Issuer to issue a Facility L/C by
delivering to such LC Issuer (with a copy to Agent if Agent is not such LC
Issuer), no later than 11:00 a.m. (local time at such LC Issuer's office
designated herein) two (2) Business Days prior to the date on which issuance of
the Facility L/C is requested by Borrower, a standby letter of credit
application and reimbursement agreement in such LC Issuer's then customary form
(the "Facility L/C Application") completed to the satisfaction of such LC
Issuer, together with the proposed form of such letter of credit (which shall
comply with the applicable requirements of Section 2.15(b) below) and such other
certificates, documents and other papers and information as such LC Issuer may
reasonably request.
(b) Each Facility L/C issued hereunder shall, among other things,
(i) be in such form requested by Borrower as shall be acceptable to the LC
Issuer thereof in its sole
37
discretion, and (ii) have an expiry date (taking into account any automatic
renewal provisions thereof) occurring prior to the Maturity Date. If the
Aggregate Commitment is terminated (whether by acceleration, demand, or
otherwise), then, not later than simultaneously with such termination, all
outstanding Facility L/Cs shall be returned to the LC Issuer thereof or Borrower
shall cash collateralize all outstanding Facility L/Cs in accordance with
Article 8 hereof. Each Facility L/C Application and each Facility L/C shall be
subject to the Uniform Customs and, to the extent not inconsistent therewith,
the laws of the state in which is located the LC Issuer's office from which such
Facility L/C is issued.
(c) An LC Issuer shall not issue, amend or extend, at any time,
any Facility L/C:
(i) if the aggregate maximum amount then available for
drawing under Letters of Credit issued by such LC Issuer, after giving
effect to the Facility L/C or amendment or extension thereof requested
hereunder, shall exceed any limit imposed by law or regulation upon
such LC Issuer;
(ii) if, after giving effect to the issuance, amendment or
extension of the Facility L/C requested hereunder, the aggregate
principal amount of the Facility L/C Obligations would exceed Fifty
Million Dollars ($50,000,000);
(iii) if, after giving effect to the issuance, amendment or
extension of the Facility L/C requested hereunder, Borrowing Base
Indebtedness would exceed the Borrowing Base as of the most recent
Inventory Valuation Date;
(iv) if, after giving effect to the issuance, amendment or
extension of the Facility L/C requested hereunder, the sum of (A) the
outstanding and unpaid principal amount of the Loans and (B) the
Facility L/C Obligations would exceed the Aggregate Commitment;
(v) if such LC Issuer receives written notice from the Agent
at or before 11:00 a.m. Charlotte, North Carolina time on the proposed
date of issuance, amendment or extension of such Facility L/C that one
or more of the conditions precedent contained in Section 2.15(d) below
would not on such date be satisfied, unless such conditions are
thereafter satisfied or waived and written notice of such satisfaction
is given to such LC Issuer by Agent; or
(vi) that is in a currency other than Dollars.
(d) The issuance, amendment or extension of any Facility L/C is
subject to the satisfaction in full of the following conditions on the date of
such issuance, amendment or extension:
(i) the conditions of Sections 5.1 and 5.2 hereof are
satisfied; and
38
(ii) no order, judgment or decree of any court, arbitrator
or governmental authority shall enjoin or restrain the LC Issuer
thereof from issuing the Facility L/C and no law, rule or regulation
applicable to such LC Issuer and no directive from any governmental
authority with jurisdiction over such LC Issuer shall prohibit such LC
Issuer from issuing Letters of Credit generally or from issuing that
Facility L/C.
(e) Upon receipt of any Facility L/C Application from Borrower,
the LC Issuer will process such Facility L/C Application, and the other
certificates, documents and other papers delivered to such LC Issuer in
connection therewith, in accordance with its customary procedures and, upon
satisfaction of all conditions contained in this Agreement, shall promptly issue
the original of such Facility L/C and deliver it to the beneficiary thereof, or
to Borrower which shall deliver such original Facility L/C to the beneficiary,
and furnish a copy thereof to Borrower. The LC Issuer shall give Agent written
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance of a Facility L/C.
(f) No LC Issuer shall extend or amend any Facility L/C unless
the requirements of this Section 2.15 are met as though a new Facility L/C were
being requested and issued.
2.16 Facility L/C Participations.
(a) Each LC Issuer irrevocably agrees to grant and hereby grants
to each Lender, and, to induce the LC Issuers to issue Facility L/Cs hereunder,
each Lender irrevocably agrees to accept and purchase and hereby accepts and
purchases from the applicable LC Issuer, on the terms and conditions hereinafter
stated, for such Lender's own account and risk, an undivided interest equal to
such Lender's Ratable Share in such LC Issuer's obligations and rights under
each Facility L/C and the amount of each draft paid by such LC Issuer.
(b) Upon receipt from the beneficiary of any Facility L/C of any
demand for payment under such Facility L/C, the LC Issuer shall notify Agent and
Agent shall promptly notify Borrower and each other Lender as to the amount to
be paid by such LC Issuer as a result of such demand and the proposed payment
date. The responsibility of such LC Issuer to Borrower and each Lender shall be
only to determine that the documents (including each demand for payment)
delivered under each Facility L/C in connection with such presentment shall be
in conformity in all material respects with such Facility L/C. Each LC Issuer
shall exercise the same care in the issuance and administration of the Facility
L/Cs issued by it as it does with respect to Letters of Credit in which no
participations are granted, it being understood that, in the absence of any
gross negligence or willful misconduct by such LC Issuer, each Lender shall be
unconditionally and irrevocably liable without regard to the occurrence of any
Default or Event of Default or any condition precedent whatsoever, to reimburse
such LC Issuer on demand for such Lender's Ratable Share of the amount of each
payment made by such LC Issuer on each Facility L/C issued by it to the extent
such amount is not reimbursed by Borrower pursuant to Section 2.17 hereof, plus
interest thereon to the extent provided in Section 2.16(c) below.
(c) If any amount required to be paid by any Lender to an LC
Issuer in respect of any unreimbursed portion of any payment made by such LC
Issuer under any Facility
39
L/C is not paid to such LC Issuer on the date such payment is due but is paid
within three (3) Business Days after such payment is due, such Lender shall pay
to such LC Issuer on demand an amount equal to the product of (i) such amount,
multiplied by (ii) the daily average Federal Funds Rate during the period from
and including the date such payment is required to the date on which such
payment is immediately available to such LC Issuer, multiplied by (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any Lender pursuant to this Section 2.16 is not paid to such LC Issuer
by such Lender within three (3) Business Days after the date such payment is
due, such LC Issuer shall be entitled to recover from such Lender, on demand,
such amount with interest thereon calculated from the fourth Business Day after
such due date until paid in full at the rate per annum applicable to Revolving
Credit Loans made as ABR Loans hereunder. A certificate of such LC Issuer
submitted to any Lender with respect to any amounts owing under this Section
2.16 shall be conclusive in the absence of manifest error.
(d) Whenever, at any time after any LC Issuer has made payment
under any Facility L/C issued by it and has received from any Lender its Ratable
Share of such payment, such LC Issuer receives any payment related to such
Facility L/C (whether directly from Borrower or otherwise, including proceeds of
collateral applied thereto by such LC Issuer), or any payment of interest on
account thereof, such LC Issuer will distribute to such Lender its Ratable Share
thereof; provided, however, that in the event that any such payment received by
such LC Issuer shall be required to be returned by such LC Issuer, such Lender
shall return to such LC Issuer the portion thereof previously distributed by
such LC Issuer to it.
2.17 Payments. Borrower agrees (a) to reimburse each LC Issuer, for
the pro rata benefit of the Lenders in accordance with each Lender's respective
Ratable Share, forthwith upon its or Agent's demand and otherwise in accordance
with the terms of the L/C Application relating thereto, for any expenditure or
payment made by such LC Issuer under any Facility L/C, and (b) to pay interest
on any unreimbursed portion of any such payments from the date of such payment
until reimbursement in full thereof at a rate per annum equal to (i) prior to
the date which is (A) one (1) Business Day after the day on which such LC Issuer
demands reimbursement from Borrower for such payment if such demand is made
prior to 11:00 a.m., Charlotte, North Carolina time or (B) two (2) Business Days
after the day on which such LC Issuer or Agent demands reimbursement if such
demand is made at or after 11:00 a.m. Charlotte, North Carolina time, the rate
which would then be payable on any outstanding ABR Loan which is not in default,
and (ii) thereafter, the rate which would then be payable on any outstanding ABR
Loan which is in default.
2.18 Facility L/C Fee. In lieu of any letter of credit commissions and
fees provided for in any Facility L/C Application (other than standard issuance,
amendment, negotiation and administration fees and expenses), Borrower agrees to
pay Agent, in the case of each Facility L/C, for the account of the Lenders and
the LC Issuer thereof (as hereinafter provided), the Facility L/C Fee therefor,
on the average daily undrawn stated amount under such Facility L/C. The Facility
L/C Fees shall be due and payable quarterly in arrears not later than the day
("Quarterly Payment Date") that is five (5) Business Days following Agent's
delivery to Borrower of the quarterly statement of Facility L/C Fees and, to the
extent any such fees are then accrued and unpaid, on the last day of the
Commitment Period. Facility L/C Fees shall be calculated, for the period to
which such payment applies, for actual days on which such Facility
40
L/C was outstanding during such period, on the basis of a 360-day year. Agent
shall promptly remit such Facility L/C Fees, when paid, as follows: (i) to each
LC Issuer, solely for its own account, with respect to each Facility L/C issued
by such LC Issuer, an amount per annum equal to the product of (A) 0.125% per
annum and (B) the face amount of such Facility L/C and (ii) to all Lenders,
their Ratable Shares of the balance of such Facility L/C Fees. In addition, an
LC Issuer may charge and retain for its own account, and Borrower agrees to pay,
such LC Issuer's usual and customary charges with respect to the issuance,
amendment, negotiation and administration of the Facility L/C.
2.19 Further Assurances. Borrower hereby agrees to do and perform any
and all acts and to execute any and all further instruments reasonably requested
by Agent or an LC Issuer more fully to effect the purposes of this Agreement and
the issuance of Facility L/Cs hereunder.
2.20 Obligations Absolute.
(a) The obligations of the other Lenders to an LC Issuer with
respect to Facility L/Cs issued by such LC Issuer, and the Reimbursement
Obligations of Borrower with respect to Facility L/Cs, under this Agreement
shall be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including without
limitation the following:
(i) the existence of any claim, set-off, defense or other
right which Borrower may have at any time against any beneficiary, or any
transferee, of any Facility L/C (or any Persons for whom any such
beneficiary or any such transferee may be acting), any LC Issuer or any
other Person, whether in connection with this Agreement, the transaction
contemplated herein, or any unrelated transaction (including any underlying
transaction between Borrower or any Subsidiary and the beneficiary of such
Facility L/C);
(ii) any draft, certificate, statement or any other document
presented under any Facility L/C proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iii) payment by an LC Issuer under any Facility L/C against
presentation of a draft or certificate which does not comply with the terms
of such Facility L/C, provided that such LC Issuer has made such payment to
the beneficiary set forth on the face of such Facility L/C;
(iv) the occurrence or any Default or Event of Default; or
(v) any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing.
(b) Each LC Issuer shall be entitled to rely, and shall be fully
protected in relying, upon any Facility L/C, draft, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the
41
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by such LC Issuer. Each LC
Issuer shall be fully justified in failing or refusing to take any action under
this Agreement unless it shall first have received such advice or concurrence of
the Required Lenders as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take such action. Notwithstanding any other provision of this
Section 2.20, each LC Issuer shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement in accordance with a request of
the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Lenders and any future holders of a
participation in any Facility L/Cs.
2.21 LC Issuer Reporting Requirements. Each LC Issuer shall, no later
than the third (3rd) Business Day following the last day of each month, provide
to Agent a schedule of the Facility L/Cs issued by it showing the issuance date,
account party, original face amount, amount (if any) paid thereunder, expiration
date and the reference number of each Facility L/C outstanding at any time
during such month and the aggregate amount (if any) payable by Borrower to such
LC Issuer during the month pursuant to Section 2.9 hereof. Copies of such
reports shall be provided promptly to each Lender by Agent. Agent shall, with
reasonable promptness following receipt from all LC Issuers of the reports
provided for in this Section 2.21 for the months of March, June, September and
December, respectively, deliver to Borrower a quarterly statement of the
Facility L/C Fees and Unused Fees then due and payable.
2.22 Indemnification; Nature of LC Issuer's Duties.
(a) In addition to amounts payable as elsewhere provided in this
Agreement, Borrower hereby agrees to protect, indemnify, pay and save Agent,
each LC Issuer and each Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) arising from the claims of third parties against
Agent, any LC Issuer or any Lender as a consequence, direct or indirect, of (i)
the issuance of any Facility L/C other than, in the case of an LC Issuer, as a
result of its willful misconduct or gross negligence, or (ii) the failure of an
LC Issuer to honor a drawing under a Facility L/C Credit as a result of any act
or omission, whether rightful or wrongful, of any court or other Governmental
Authority.
(b) As among Borrower, Lenders, Agent and each LC Issuer,
Borrower assumes all risks of the acts and omissions of, or misuse of Facility
L/Cs by, the respective beneficiaries of such Facility L/Cs. In furtherance and
not in limitation of the foregoing, neither an LC Issuer nor Agent nor any
Lender shall be responsible (other than, in the case of an LC Issuer, as a
result of its gross negligence or willful misconduct): (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
the Facility L/Cs, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity
or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Facility L/C or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) for failure of the beneficiary of a Facility
L/C to comply fully with conditions required in order to draw upon such Facility
L/C;
42
(iv) for errors, omissions, interruptions or delays in transmission or delivery
of any messages, by mail, cable, telegraph, telex, facsimile transmission or
otherwise; (v) for errors in interpretation of technical terms; (vi) for any
loss or delay in the transmission or otherwise of any document required in order
to make a drawing under any Facility L/C or of the proceeds thereof; (vii) for
the misapplication by the beneficiary of a Facility L/C of the proceeds of any
drawing under such Facility L/C; or (viii) for any consequences arising from
causes beyond the control of Agent, such LC Issuer and the Lenders including,
without limitation, any act or omission, whether rightful or wrongful, of any
government, court or other governmental agency or authority. None of the above
shall affect, impair, or prevent the vesting of any of such LC Issuer's rights
or powers under this Section 2.22.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by an LC
Issuer under or in connection with the Facility L/Cs issued by it or any related
certificates, if taken or omitted in good faith and does not constitute gross
negligence or willful misconduct, shall not put such LC Issuer, Agent or any
Lender under any resulting liability to Borrower or relieve Borrower of any of
its Obligations hereunder to any such Person.
(d) Notwithstanding anything to the contrary contained in this
Section 2.22, Borrower shall have no obligation to indemnify an LC Issuer under
this Section 2.22 in respect of any liability incurred by an LC Issuer arising
out of the wrongful dishonor by such LC Issuer of a proper demand for payment
made under any Facility L/C issued by such LC Issuer, unless such dishonor was
made at the request of Borrower.
ARTICLE 3: GENERAL PROVISIONS APPLICABLE TO LOANS
3.1 Conversion/Continuation Options. Subject to the limitations on the
availability of LIBOR Rate Loans, Borrower may elect from time to time to
convert outstanding Revolving Credit Loans from ABR Loans to LIBOR Rate Loans or
to continue any LIBOR Rate Loan as such upon the expiration of the then current
Interest Period thereof by giving the Agent telephonic or written notice (the
"Notice of Conversion/Continuation"), which Notice of Conversion/Continuation
must be received prior to 11:00 a.m., Charlotte, North Carolina time, at least
three (3) Business Days prior to the requested date for the conversion or
continuation, which notice shall specify (i) the date for the conversion or
continuation (which shall be a Business Day); and (ii) the aggregate amount of
ABR Loans to be converted or LIBOR Rate Loans to be continued. Each conversion
from ABR Loans to LIBOR Rate Loans and each continuation of LIBOR Rate Loans
shall be in the principal amount of $10,000,000 or any larger amount which is an
even multiple of $1,000,000. Agent shall give prompt telephonic or written
notice to each Lender of Borrower's request for conversion or continuation,
specifying (i) the date for the conversion or continuation; (ii) the aggregate
amount of ABR Loans to be converted or LIBOR Rate Loan to be continued; and
(iii) for each such ABR Loan to be converted to a LIBOR Rate Loan and each
continuation of any LIBOR Rate Loan, the respective LIBOR Rate applicable
thereto. All or any part of outstanding ABR Loans may be converted or LIBOR Rate
Loans continued as provided herein, provided that (i) (unless the Required
Lenders otherwise consent) no ABR Loan may be converted into a LIBOR Rate Loan
nor any LIBOR Rate Loan continued as a LIBOR Rate Loan upon the expiration of
the current Interest Period therefor when any Default or Event of Default has
occurred and is continuing and (ii) no ABR Loan may be
43
converted into a LIBOR Rate Loan nor any LIBOR Rate Loan continued as a LIBOR
Rate Loan upon the expiration of the current Interest Period therefor after the
date that is one (1) month prior to the last day of the Commitment Period.
3.2 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period, the Agent or the Required Lenders shall have reasonably
determined (which determination shall be conclusive and binding upon Borrower)
that, by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the LIBOR Rate for such Interest
Period, the Agent shall give telecopy, telephonic or written notice thereof to
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any LIBOR Rate Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans and (y) any Loans that were to have
been converted on the first day of such Interest Period to or continued as LIBOR
Rate Loans shall be converted to or continued as ABR Loans. Until such notice
has been withdrawn by the Agent, no further LIBOR Rate Loans shall be made or
continued as such, nor shall Borrower have the right to convert ABR Loans to
LIBOR Rate Loans.
3.3 Availability of LIBOR Rate Loans. If any Lender reasonably
determines that maintenance of its LIBOR Rate Loans at a Lending Office would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law and such Lending Office is not changed pursuant to
Section 3.4, or if the Required Lenders determine that deposits of a type and
maturity appropriate to match fund LIBOR Rate Loans are not available, then the
Agent shall suspend the availability of LIBOR Rate Loans and require any
affected LIBOR Rate Loans to be repaid or converted to ABR Loans at the end of
the applicable Interest Period
3.4 Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.9 hereof, or requires Borrower to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.6 hereof or determines that maintaining LIBOR
Rate Loans at any particular Lending Office would violate any applicable law,
rule, relation or directive, then such Lender, unless directed by Borrower not
to do so, shall use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.9 or 3.6 hereof or eliminate the
issues referred to in Section 3.3 above, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.
3.5 Indemnity. Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender sustains or
incurs (other than through such Lender's gross negligence or willful misconduct)
as a consequence of (a) default by Borrower in making a borrowing of, conversion
into or continuation of LIBOR Rate Loans after Borrower has given Agent notice
that Borrower selects such LIBOR Rate Loans in accordance with Section 2.3 or
Section 3.1, as appropriate, of this Agreement, (b) default by Borrower in
making any prepayment or conversion of a LIBOR Rate Loan after Borrower has
given a notice
44
thereof in accordance with the provisions of this Agreement or (c) the making of
a prepayment of LIBOR Rate Loans on a day which is not the last day of an
Interest Period with respect thereto (whether by acceleration, demand, required
assignment or otherwise). Such indemnification may include, without limitation,
an amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid, or converted, or not so borrowed,
converted or continued, for the period from the date of such prepayment or
conversion or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such LIBOR Rate
Loans provided for herein over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank LIBOR market.
3.6 Taxes.
(a) Any and all payments by or on account of any obligation of
Borrower hereunder or under any other Loan Document shall be made free and clear
of and without reduction or withholding for any Indemnified Taxes or Other
Taxes, provided that if Borrower shall be required by applicable law to deduct
any Indemnified Taxes (including any Other Taxes) from such payments, then (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Agent, Lender or LC Issuer, as the case may be, receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) Borrower shall make such deductions and (iii) Borrower shall timely
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) Without limiting the provisions of paragraph (a) above,
Borrower shall timely pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.
(c) Borrower shall indemnify Agent, each Lender and LC Issuer,
within ten (10) days after demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by Agent, such Lender or LC Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to Borrower by a Lender or LC
Issuer (with a copy to Agent), or by Agent on its own behalf or on behalf of a
Lender or LC Issuer, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by Borrower to a Governmental Authority, Borrower shall deliver
to Agent the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to Agent.
45
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which Borrower
is resident for tax purposes, or any treaty to which such jurisdiction is a
party, with respect to payments hereunder or under any other Loan Document shall
deliver to Borrower (with a copy to Agent), at the time or times prescribed by
applicable law or reasonably requested by Borrower or Agent, such properly
completed and executed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if requested by Borrower or Agent, shall
deliver such other documentation prescribed by applicable law or reasonably
requested by Borrower or Agent as will enable Borrower or Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements.
Without limiting the generality of the foregoing, in the event that
Borrower is resident for tax purposes in the United States of America, any
Foreign Lender shall deliver to Borrower and Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of Borrower or Agent, but only if such Foreign
Lender is legally entitled to do so), whichever of the following is applicable:
(i) duly completed copies of Internal Revenue Service Form
W-8BEN claiming eligibility for benefits of an income tax treaty to which
the United States of America is a party,
(ii) duly completed copies of Internal Revenue Service Form
W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits
of the exemption for portfolio interest under section 881(c) of the Code,
(x) a certificate to the effect that such Foreign Lender is not (A) a
"bank" within the meaning of section 881(c)(3)(A) of the Code, (B) a "10
percent shareholder" of Borrower within the meaning of section 881(c)(3)(B)
of the Code, or (C) a "controlled foreign corporation" described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue
Service Form W-8BEN, or
(iv) any other form prescribed by applicable law as a basis
for claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable law to permit Borrower to
determine the withholding or deduction required to be made.
(f) Treatment of Certain Refunds. If Agent, a Lender or LC Issuer
determines, in its sole discretion, that it has received a refund or credit of
any Taxes or Other Taxes as to which it has been indemnified by Borrower or with
respect to which Borrower has paid additional amounts pursuant to this Section,
it shall pay to Borrower an amount equal to such refund or credit (but only to
the extent of indemnity payments made, or additional amounts paid, by Borrower
under this Section with respect to the Taxes or Other Taxes giving rise to such
refund or credit), net of all reasonable out-of-pocket expenses of Agent, such
Lender or LC
46
Issuer, as the case may be, and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund), provided
that Borrower, upon the request of Agent, such Lender or LC Issuer, agrees to
repay the amount paid over to Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to Agent, such Lender or
LC Issuer in the event Agent, such Lender or LC Issuer is required to repay such
refund or credit to such Governmental Authority. This paragraph shall not be
construed to require Agent, any Lender or LC Issuer to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to Borrower or any other Person.
3.7 Survival of Indemnity. Determination of amounts payable under
Sections 2.9 and 3.5 hereof in connection with a LIBOR Rate Loan shall be
calculated as though each Lender funded its LIBOR Rate Loan through the purchase
of a deposit of the type and maturity corresponding to the deposit used as a
reference in determining the LIBOR Rate applicable to such Loan, whether in fact
that is the case or not. The obligations of Borrower under Sections 2.9, 3.5 and
3.6 hereof shall survive payment of the Obligations and termination of this
Agreement.
3.8 Telephonic Notices. Borrower hereby authorizes Lenders and Agent
to extend, convert or continue Loans, to effect selections of LIBOR Rate Loans
and each Interest Period thereof and ABR Loans and to transfer funds, in each
case based on telephonic notices made by any Person or Persons who Agent or any
Lender in good faith believes to be acting on behalf of Borrower, it being
understood that the foregoing authorization is specifically intended to allow
Notices of Borrowing and Notices of Conversion/Continuation to be given
telephonically. Borrower agrees to deliver promptly to Agent a written
confirmation, if such confirmation is requested by Agent or any Lender, of each
telephonic notice signed by a Responsible Officer. If the written confirmation
differs in any material respect from the action taken by Agent and Lenders, the
records of Agent and Lenders shall govern, absent manifest error.
3.9 Funding by Lenders; Presumption by Agent. (a) Unless Agent shall
have received notice from a Lender prior to the proposed date of any borrowing
of Loans that such Lender will not make available to Agent such Lender's Ratable
Share of such Loans, Agent may assume that such Lender has made such Ratable
Share available on such date in accordance with Section 2.3 hereof and may, in
reliance upon such assumption, make available to Borrower a corresponding
amount. In such event, if a Lender has not in fact made its Ratable Share of the
Loans available to Agent, then the applicable Lender and Borrower severally
agree to pay to Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to Borrower to but excluding the date of payment to Agent, at (i) in
the case of a payment to be made by such Lender, the Federal Funds Rate and (ii)
in the case of a payment to be made by Borrower, the interest rate otherwise
applicable to such Loans. If Borrower and such Lender shall pay such interest to
Agent for the same or an overlapping period, Agent shall promptly remit to
Borrower the amount of such interest paid by Borrower for such period. If such
Lender pays its Ratable Share of Loans to Agent, then the amount so paid shall
constitute such Lender's Loan. Any payment by Borrower shall be without
prejudice to any claim Borrower may have against a Lender that shall have failed
to make such payment to Agent.
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(b) Unless Agent shall have received notice from Borrower prior to the date
on which any payment is due to Agent for the account of the Lenders or any LC
Issuer hereunder that Borrower will not make such payment, Agent may assume that
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to Lenders or LC Issuer, as the case
may be, the amount due. In such event, if Borrower has not in fact made such
payment, then each of the Lenders or such LC Issuer, as the case may be,
severally agrees to repay to Agent forthwith on demand the amount so distributed
to such Lender or LC Issuer, with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to Agent, at the Federal Funds Rate.
3.10 Replacement of Lenders. If any Lender is a Rejecting Lender under
Section 2.7(b) hereof, or any Lender requests compensation under Section 2.9
hereof, or if Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 3.6
hereof, or if any Lender defaults in its obligation to fund Loans hereunder,
then Borrower may, at its sole expense and effort, upon notice to such Lender
and Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 11.7 hereof), all of its interests, rights and obligations
under this Agreement and the related Loan Documents to an Eligible Assignee that
shall assume such obligations (which Eligible Assignee may be another Lender, if
a Lender accepts such assignment), provided that:
(a) Borrower shall have paid to Agent the assignment fee
specified in Section 11.7 hereof;
(b) such Lender shall have received payment of an amount equal to
the outstanding principal of its Loans and participations in Reimbursement
Obligations, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder and under the other Loan Documents (including any
amounts under Section 3.5 hereof) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or Borrower (in the case of
all other amounts);
(c) in the case of any such assignment resulting from a claim for
compensation under Section 2.9 hereof or payments required to be made pursuant
to Section 3.6 hereof, such assignment will result in a reduction in such
compensation or payments thereafter; and
(d) such assignment does not conflict with applicable law.
A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling Borrower to require such assignment and delegation cease
to apply.
ARTICLE 4: REPRESENTATIONS AND WARRANTIES
In order to induce Lenders, LC Issuers and Agent to enter into this
Agreement and to make the Revolving Credit Loans and Swingline Loans and to
issue the Facility L/Cs herein
48
provided for, Borrower hereby, represents and warrants to each Lender, LC Issuer
and Agent that on the date hereof:
4.1 Financial Statements. Borrower has heretofore furnished to each
Lender (a) the consolidated balance sheet of Borrower and its Subsidiaries as of
May 31, 2005, and the related consolidated statements of income, of
stockholders' equity and of cash flows for the fiscal year of Borrower then
ended, certified by an independent public accountant of recognized national
standing and (b) the consolidated unaudited balance sheet and income statement
of Borrower and its Subsidiaries as of August 31, 2005. Each of the foregoing
financial statements fairly presents, in all material respects, the financial
condition of Borrower and its Subsidiaries as of the date thereof and the
results of the operations of Borrower and its Subsidiaries for the period then
ended (subject, in the case of the August 31, 2005 statements, to year-end audit
adjustments) and, from the respective dates of the foregoing financial
statements to the date hereof, there has been no material adverse change in such
condition.
4.2 Existence; Compliance with Law. Each of Borrower and Borrower's
Subsidiaries (a) is duly organized or formed, as appropriate, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
formation or organization, as appropriate, (b) has the requisite corporate,
partnership or limited liability company power and authority to conduct the
business in which it is currently engaged, (c) is qualified as a foreign entity
to do business under the laws of any jurisdiction where the failure to so
qualify would have a material adverse effect on the business of Borrower and
Borrower's Subsidiaries taken as a whole, and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
would not, in the aggregate, have a material adverse effect on the business,
operations, property or financial or other condition of Borrower and Borrower's
Subsidiaries taken as a whole or would not materially adversely affect the
ability of Borrower or the Subsidiary Guarantors to perform their respective
obligations under the Loan Documents.
4.3 Power; Authorization; Enforceable Obligations. Borrower and each
Subsidiary Guarantor has the corporate, partnership or limited liability company
(as applicable) power and authority to make, deliver and perform the Loan
Documents to which it is a party and (in the case of Borrower) to borrow
hereunder, and has taken all corporate or other action necessary to be taken by
it to authorize (a) (in the case of Borrower) the borrowings on the terms and
conditions of this Agreement and the Notes, and (b) the execution, delivery and
performance of the Loan Documents to which it is a party. No consent, waiver or
authorization of, or filing with any Person (including without limitation any
Governmental Authority) is required to be made or obtained by Borrower in
connection with the borrowings hereunder or by Borrower or any Guarantor in
connection with the execution, delivery, performance, validity or enforceability
of the Loan Documents to which it is a party. This Agreement has been, and each
Note and the Subsidiary Guaranty Agreement will be, duly executed and delivered
on behalf of Borrower or each Subsidiary Guarantor (as the case may be), and
this Agreement constitutes, and each Note and Subsidiary Guaranty Agreement when
executed and delivered hereunder will constitute, a legal, valid and binding
obligation of Borrower or the Subsidiary Guarantors (as the case may be),
enforceable against Borrower or the Subsidiary Guarantors (as the case may be),
in accordance with its terms, subject to the effect, if any, of bankruptcy,
insolvency, reorganization, arrangement or other similar laws relating to or
affecting the rights of creditors generally and the limitations, if any, imposed
by the general principles of equity and public policy.
49
4.4 No Legal Bar. The execution, delivery and performance of this
Agreement and the Notes, the borrowings hereunder and the use of the proceeds
thereof and the execution, delivery and performance by the Subsidiary Guarantors
of the Subsidiary Guaranty Agreements (a) do not violate any Requirement of Law
or Contractual Obligation of Borrower or any of Borrower's Subsidiaries, (b) do
not contravene the articles of incorporation, charter, bylaws, partnership
agreement, articles or certificate of formation, operating agreement or other
organizational documents of Borrower or any of Borrower's Subsidiaries and (c)
do not result in, or require, the creation or imposition of any Lien on any of
its properties or revenues pursuant to any Requirement of Law or Contractual
Obligation.
4.5 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of Borrower, threatened by or against Borrower or any of Borrower's
Subsidiaries or against any of their respective properties or revenues (a) with
respect to this Agreement, the Notes or the Subsidiary Guaranty Agreement or any
of the transactions contemplated hereby or thereby, or (b) which could
reasonably be expected to have a material adverse effect on the business,
operations, property or financial or other condition of Borrower and Borrower's
Subsidiaries taken as a whole.
4.6 Regulation U. None of Borrower or any of Borrower's Subsidiaries
is engaged, nor will any of them engage, principally or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect. No part of the proceeds
of any Loans will be used for "purchasing" or "carrying" "margin stock" as so
defined or for any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of such Board of Governors. If requested by
Agent, Borrower and each of Borrower's Subsidiaries will furnish to Agent a
statement in conformity with the requirements of Federal Reserve Form U-l
referred to in said Regulation U to the foregoing effect.
4.7 Investment Company Act. None of Borrower or any of Borrower's
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
4.8 ERISA. Borrower and Borrower's Subsidiaries are in compliance in
all material respects with ERISA. There has been no Reportable Event with
respect to any Plan. There has been no institution of proceedings or any other
action by PBGC or Borrower or any Commonly Controlled Entity to terminate or
withdraw or partially withdraw from any Plan under any circumstances which could
lead to material liabilities to PBGC or, with respect to a Multiemployer Plan,
the Reorganization or Insolvency (as each such term is defined in ERISA) of the
Plan.
4.9 Disclosure. No representations or warranties made by Borrower in
this Agreement or in any other document furnished from time to time in
connection herewith (as such other documents may be supplemented from time to
time) contains or will contain any untrue statement of a material fact or omits
or will omit to state any material fact necessary to make the
50
statements herein or therein, in light of the circumstances under which they
were made, not misleading.
4.10 Subsidiary Information. Schedule 2 attached hereto contains the
name, principal place of business, all other places of business and percentage
of ownership of all of the Subsidiaries of Borrower as of the Closing Date that
are Guarantors. As of the Closing Date, the following additional Persons are
Subsidiaries of the Borrower and no such Subsidiary owns assets having an
aggregate value in excess of $250,000:
▇▇▇▇▇▇ ▇▇▇▇▇ Florida L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside L.L.C.
Canyon Realty L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Development LLC
Ashton Brookstone, Inc.
Black Amber Florida, Inc.
Isleworth West Limited Partnership
Borrower has no other Subsidiaries.
4.11 Schedules. Each of the Schedules to this Agreement contains true,
complete and correct information in all material respects.
4.12 Environment. Borrower and Borrower's Subsidiaries have been
issued and will maintain all required federal, state, and local permits,
licenses, certificates and approvals relating to (a) emissions; (b) discharges
to service water or groundwater; (c) noise emissions; (d) solid or liquid waste
disposal; (e) the use, generation, storage, transportation or disposal of toxic
or hazardous substances or hazardous wastes; or (f) other environmental, health
or safety matters, except to the extent the failure to have any such permit,
license, certificate or approval would not have a material adverse effect on
Borrower's and its Subsidiaries' consolidated operations, business or financial
condition. Neither Borrower nor any of Borrower's Subsidiaries have received
notice of, or has actual knowledge of any material violations of any federal,
state or local environmental, health or safety laws, codes or ordinances or any
rules or regulations promulgated thereunder. Except in accordance with a valid
governmental permit, license, certificate or approval, there has been no
material emission, spill, release or discharge into or upon (i) the air; (ii)
soils; (iii) service water or groundwater; (iv) the sewer, septic system or
waste treatment, storage or disposal system servicing any property of Borrower
or any of its Subsidiaries of any toxic or hazardous substances or hazardous
wastes at or from such property; and accordingly no such property has been
adversely affected, in any material respect, by any toxic or hazardous
substances or wastes. There has been no complaint, order, directive, claim,
citation or notice by any Governmental Authority or any person or entity with
respect to material violations of law or damages by reason of Borrower or
Borrower's Subsidiaries (1) air emissions; (2) spills, releases or discharges to
soils or improvements located thereon, surface water, groundwater or the sewer,
septic system or waste treatment, storage or disposal system servicing the
premises; (3) noise emissions; (4) solid or liquid waste disposal; (5) use,
generation, storage, transportation or disposal of toxic or hazardous substances
or hazardous wastes; or (6) other environmental, health or safety matters
affecting Borrower or any of
51
Borrower's Subsidiaries. Neither Borrower nor any of Borrower's Subsidiaries
have any material indebtedness, obligation or liability, absolute or contingent,
matured or unmatured, with respect to the storage, treatment, cleanup or
disposal of any solid waste, hazardous wastes, or other toxic or hazardous
substances. For purposes of this Section 4.12, a violation, emission, spill,
release, discharge, damage, adverse effect, indebtedness, obligation or
liability shall be deemed material if, and only if, such violation, emission,
spill, release, discharge, damage, adverse effect, indebtedness, obligation or
liability, alone or in the aggregate, would have a material adverse effect on
Borrower's and its Subsidiaries consolidated operations, business or financial
condition.
4.13 Force Majeure Events. Neither the business nor the properties of
Borrower or any Subsidiary are affected by any fire, explosion, accident,
drought, storm, hail, earthquake, embargo, act of God or of the public enemy, or
other casualty (whether or not covered by insurance), materially and adversely
affecting the business, properties or the operation of Borrower and its
Subsidiaries taken as a whole.
4.14 Other Agreements. Other than as disclosed on Schedule 4.14
hereto, neither Borrower nor any Subsidiary is a party to any indenture, loan,
or credit agreement, or to any lease or other agreement or instrument or subject
to any charter, corporate or other restriction which could have a material
adverse effect on the business, properties, assets, operations, or condition,
financial or otherwise, of Borrower and its Subsidiaries, taken as a whole, or
the ability of Borrower or any Subsidiary to carry out its obligations under the
Loan Documents to which it is a party. Neither Borrower nor any Subsidiary is in
default in any respect in the performance, observance, or fulfillment of any of
the obligations, covenants, or conditions contained in any agreement or
instrument to which the Borrower or a Subsidiary is a party, and such default
under such agreement or instrument would reasonably be likely to result in a
material adverse effect on the business, properties, assets, operations, or
condition, financial or otherwise, of Borrower and its Subsidiaries, taken as a
whole.
4.15 No Defaults on Outstanding Judgments or Orders. Borrower and each
Subsidiary have satisfied all unstayed and unappealed judgments in excess of
$1,000,000 in the aggregate (that are not covered by insurance), and neither
Borrower nor any Subsidiary is in default with respect to any judgments in
excess of $1,000,000 in the aggregate (that are not covered by insurance), or
any material writ, injunction, decree, rule, or regulation of any court,
arbitrator, or federal, state, municipal, or other governmental authority,
commission, board, bureau, agency, or instrumentality, domestic or foreign
applicable to Borrower or any Subsidiary.
4.16 Ownership and Liens. Borrower and each Subsidiary have title to,
or valid leasehold interests in, all of their respective properties and assets,
real and personal, including the properties and assets and leasehold interests
reflected in the financial statements referred to in Section 4.1 hereof (other
than any properties or assets disposed of in the ordinary course of business),
and none of the properties and assets owned by Borrower or any Subsidiary and
none of their leasehold interests is subject to any Lien, except for (a)
Permitted Liens, (b) liens pursuant to Secured Indebtedness permitted under
Section 7.1, (c) Liens incurred or deposits made in the ordinary course of
business to secure performance of tenders, statutory obligations, surety and
appeal bonds, bid, leases, government contracts, performance and return-of-money
52
bonds and similar obligations (exclusive of obligations for the payment of
borrowed money), (d) leases and subleases (or any Liens related thereto) granted
to others that do not materially interfere with the ordinary course of business
of Borrower and its Subsidiaries, (e) Liens on assets that are not included in
the Borrowing Base incurred in connection with a sale/leaseback transaction, (f)
judgment liens not giving rise to an Event of Default, (g) any right of first
refusal, right of first offer, option, contract or other agreement to sell an
asset, (h) Liens of a lessor under any Capital Leases, and (i) banker's liens
(and rights of set off) arising in accordance with applicable law.
4.17 Operation of Business. Borrower and each Subsidiary possess all
material licenses, permits, franchises, patents, copyrights, trademarks, and
trade names, or rights thereto, required to conduct their respective businesses
substantially as now conducted and as presently proposed to be conducted and
neither Borrower nor any of its Subsidiaries is in violation of any valid rights
of others with respect to any of the foregoing where the failure to possess such
licenses, permits, franchises, patents, copyrights, trademarks, trade names or
rights thereto or the violation of the valid rights of others with respect
thereto may, in any one case or in the aggregate, adversely affect in any
material respect the financial condition, operations, properties, or business of
Borrower or any Subsidiary or the ability of Borrower and its Subsidiaries,
taken as a whole, to perform their respective obligations under the Loan
Documents to which they are a party.
4.18 Taxes. All income tax liabilities or income tax obligations of
Borrower and each Subsidiary that are due (other than those being contested in
good faith by appropriate proceedings) have been paid or have been accrued by or
reserved for by Borrower.
4.19 OFAC. None of Borrower, any Subsidiary of Borrower or any
Affiliate of Borrower or any Guarantor: (i) is a Sanctioned Person, (ii) has
more than ten percent (10%) of its assets in Sanctioned Entities, or (iii)
derives more than ten percent (10%) of its operating income from investments in,
or transactions with Sanctioned Persons or sanctioned countries by OFAC. The
proceeds of any Loan will not be used and have not been used to fund any
operations in, finance any investments or activities in or make any payments to,
a Sanctioned Person or a Sanctioned Entity.
ARTICLE 5: CONDITIONS PRECEDENT
5.1 Conditions to Initial Loan(s). The obligation of the Lenders to
make the initial Loan(s), of the Swingline Lender to make Swingline Loans and of
any LC Issuer to issue, amend or extend any Facility L/C hereunder on the first
Borrowing Date is subject to the satisfaction of the following conditions
precedent on or prior to such date:
(a) Notes. Each Lender shall have received its respective Note,
conforming to the requirements hereof and duly executed and delivered by a duly
authorized officer of Borrower.
(b) Guaranty Agreements. The Guaranty Agreements shall have been
duly executed and delivered by all Guarantors to Agent.
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(c) Borrowing Base Compliance. Borrower shall have delivered to
each Lender and Agent a Borrowing Base Certificate, certified by a Responsible
Officer of Borrower, which shows compliance with the provisions of Section
2.1(b) hereof as of November 22, 2005.
(d) Legal Opinion of Counsel to Borrower. Agent shall have
received an executed legal opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP and
other local counsel to Borrower and Guarantors, dated as of the date hereof and
addressed to Lenders and Agent, substantially in the form of Exhibit E attached
hereto, and otherwise in form and substance reasonably satisfactory to each
Lender and Agent and covering such other matters incident to the transactions
contemplated hereby as each Lender and Agent or their respective counsel may
reasonably require.
(e) Proceedings of Borrower. Agent shall have received a copy of
the resolutions (in form and substance satisfactory to Agent) of the board of
directors, members, managers or other governing body of Borrower authorizing (i)
the execution, delivery and performance, of this Agreement, (ii) the
consummation of the transactions contemplated hereby, (iii) the borrowings
herein provided for, and (iv) the execution, delivery and performance of the
Notes and the other documents provided for in this Agreement, all certified by
the secretary, manager or other appropriate representative of Borrower as of the
date hereof. Such certificate shall state that the resolutions set forth therein
have not been amended, modified, revoked or rescinded as of the date hereof.
(f) Proceedings of Guarantors. Agent shall have received a copy
of the respective resolutions (in form and substance reasonably satisfactory to
Agent) of the board of directors, management committee or other governing body
of each of the Guarantors (or of Borrower or another Subsidiary of Borrower as
the sole shareholder or sole member of the applicable Guarantor where
appropriate), each resolution authorizing the execution, delivery and
performance of the Guaranty Agreement to which such Guarantor is a party, all
certified by the Secretary or Assistant Secretary (or other person in a
comparable position) of the respective Guarantor (or Borrower or Subsidiary) as
of the date hereof. Such certificate shall state that the resolutions set forth
therein have not been amended, modified, revoked or rescinded as of the date
hereof.
(g) Incumbency Certificate of Borrower. Agent shall have received
a certificate of the secretary, manager or other appropriate representative of
Borrower, dated the date hereof, as to the incumbency and signature of the
officer(s), members or managers of each executing this Agreement, the Notes and
any certificate or other documents to be executed and delivered by Borrower
pursuant hereto or thereto.
(h) Incumbency Certificates of Guarantors. Agent shall have
received a certificate of the Secretary (or other person in a comparable
position) of each of the Guarantors, dated the date hereof, as to the incumbency
and signatures of the officer(s) (or other person(s) in a comparable position)
of each executing the Guaranty Agreement to which such Guarantor is a party.
(i) Organization Documents of Borrower. Agent shall have received
copies of (i) the organizational documents of Borrower, together with all
amendments, and a
54
certificate of good standing, all certified by the appropriate governmental
officer in its jurisdiction of organization and (ii) the operating agreement or
comparable document of Borrower certified by the secretary, manager or other
appropriate representative of Borrower.
(j) Organizational Documents of Guarantors. Agent shall have
received (i) with respect to each Guarantor that is a corporation (A) copies of
its articles or certificates of incorporation, including all amendments thereto,
and a certificate of good standing, all certified by the appropriate
governmental officer in its jurisdiction of incorporation and (B) the bylaws or
code of regulations of such Guarantor certified by the Secretary (or other
person in a comparable position) of each Guarantor, (ii) with respect to any
Guarantor that is a partnership, a true copy of its partnership agreement,
including all amendments thereto, certified by an officer of such partnership or
of its general partner, together with (in the case of any limited partnership)
copies of the certificates of limited partnerships and a certificate of good
standing, all certified by the appropriate governmental officer in its
jurisdiction of organization, and (iii) with respect to each Guarantor that is a
limited liability company, a copy of its operating agreement, including all
amendments thereto, certified by an officer of such limited liability company or
of its managing member, and a copy of its articles or certificate of formation
and a certificate of good standing, all certified by the appropriate officer of
the state of its formation.
(k) No Proceeding or Litigation; No Injunctive Relief. No action,
suit or proceeding before any arbitrator or any Governmental Authority shall
have been commenced, no investigation by any Governmental Authority shall have
been commenced and no action, suit, proceeding or investigation by any
Governmental Authority shall have been threatened, against Borrower or any
Subsidiary of Borrower or any Owner Guarantor or any of the officers, directors
or managers of Borrower or any Subsidiary of Borrower or any Owner Guarantor,
seeking to restrain, prevent or change the transactions contemplated by this
Agreement in whole or in part or questioning the validity or legality of the
transactions contemplated by this Agreement or seeking damages in connection
with such transactions.
(l) Consents, Licenses, Approvals, etc. Agent shall have received
true copies (certified to be such by Borrower or other appropriate party) of all
consents, licenses and approvals required in accordance with applicable law in
connection with the execution, delivery, performance, validity and
enforceability of the Loan Documents, if the failure to obtain such consents,
licenses or approvals, individually or in the aggregate, would have a material
adverse effect on Borrower and Borrower's Subsidiaries taken as a whole, or
would adversely affect the validity or enforceability of any of the foregoing
documents, and approvals obtained shall be in full force and effect and be
satisfactory in form and substance to Agent.
(m) Compliance with Law. Neither Borrower nor any of Borrower's
Subsidiaries nor any Owner Guarantor shall be in violation in any material
respect of any applicable statute, regulation or ordinance, including without
limitation statutes, regulations or ordinances relating to environmental
matters, of any governmental entity, or any agency thereof, in any respect
materially and adversely affecting the business, property, assets, operations or
condition, financial or otherwise, of Borrower and Borrower's Subsidiaries taken
as a whole.
55
(n) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing hereunder prior to or after giving
effect to the making of the initial Loans (including the issuance of Facility
L/Cs).
(o) No Material Adverse Change. There shall have been no material
adverse change in the consolidated financial condition or business or operations
of Borrower and Borrower's Subsidiaries from the date of Borrower's May 31, 2005
audited consolidated financial statements to the first Borrowing Date.
(p) Fees. Borrower shall have paid to Agent the fees provided for
in the Agent's Fee Letter (which fees (except for any paid for the account of
Agent or Arranger) shall be paid by the Agent to the Lenders).
(q) Financial Statements and Business Plan and Budget. Agent
shall have received the annual audited consolidated financial statements of
Borrower for the fiscal year ended May 31, 2005 and a copy of the management
prepared business plan and budget for the fiscal year ending May 31, 2006.
(r) Compliance Certificate. Borrower shall have delivered to each
Lender and Agent the certificate of the Chief Financial Officer of Borrower
required to be delivered by Borrower quarterly pursuant to Section 6.2(a)
hereof, prepared for the period ending August 31, 2005.
(s) Facility L/C Application. If the issuance of any Facility L/C
is part of the initial loan(s), Borrower shall have delivered to the applicable
LC Issuer a Facility L/C Application in accordance with Section 2.15 hereof for
each Facility L/C that Borrower has requested such LC Issuer to issue on the
first Borrowing Date.
(t) Additional Matters. All corporate and other proceedings and
all other documents and legal matters in connection with the transactions
contemplated by the Loan Documents shall be reasonably satisfactory in form and
substance to each Lender and Agent and their respective counsel.
5.2 Conditions to All Loans. In addition to the other terms and
conditions of this Agreement with respect to the making of Loans and the
issuance of Facility L/Cs, the obligation of each Lender to make any Loan and of
the LC Issuers to issue, amend or extend any Facility L/C hereunder on any date
(including without limitation the first Borrowing Date) is subject to the
satisfaction of the following conditions precedent as of such date:
(a) Representations and Warranties. The representations and
warranties made by Borrower in this Agreement and any representations and
warranties made by Borrower or any Subsidiary of Borrower which are contained in
any certificate, document or financial or other statement furnished at any time
under or in connection herewith or therewith, shall be true and correct in all
material respects on and as of the date of such Loan or issuance of such
Facility L/C as if made on and as of such date unless stated to relate to a
specific earlier date.
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(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or after giving
effect to the Loan to be made or Facility L/C to be issued, amended or extended
on such date.
(c) Facility L/C Application. In the case of the issuance,
amendment or extension of any Facility L/C, Borrower shall have delivered to the
applicable LC Issuer a Facility L/C Application in accordance with Section 2.15
hereof for each Facility L/C that Borrower has requested such LC Issuer to
issue, amend or extend.
(d) Borrowing Base. Such borrowing or the issuance, amendment or
extension of such Facility L/C shall not violate the provisions of Section
2.1(b) hereof.
Each borrowing by Borrower and each submission of a Facility L/C Application
under this Agreement shall constitute a representation and warranty by Borrower
as of the date of such borrowing or submission of such Facility L/C Application
that the conditions contained in the foregoing paragraphs (a), (b), (c) and (d)
of this Section 5.2 have been satisfied.
ARTICLE 6: AFFIRMATIVE COVENANTS
Borrower hereby agrees that, from the date hereof and so long as any
Commitment remains in effect, any portion of any Note or Reimbursement
Obligation remains outstanding and unpaid, any Facility L/C remains outstanding
that is not fully collateralized with cash in accordance with the provisions of
Article 8 hereof, or any other amount is owing to Agent or any Lender hereunder
(other than unmatured indemnification obligations), Borrower shall, and shall
cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to Agent (with sufficient copies for
each Lender):
(a) promptly after becoming available and in any event within one
hundred twenty (120) days after the close of each fiscal year of Borrower, the
audited consolidated financial statements of Borrower and the company-prepared
consolidating financial statements of Borrower and Subsidiaries of Borrower,
including a balance sheet as of the end of such year, the statement of profit
and loss for such year, and the statement of reconciliation of capital accounts
for such year, setting forth in each case in comparative form the corresponding
figures for the preceding fiscal year, accompanied by the related report of KPMG
LLP or another independent public accountant acceptable to Agent in its
reasonable discretion, which report shall be to the effect that such
consolidated statements have been prepared in accordance with GAAP consistently
followed throughout the period indicated except for such changes in such
principles with which the independent public accountants shall have concurred.
If upon a review of the audited consolidated financial statements of Borrower
and the company-prepared consolidating financial statements of Borrower and its
Subsidiaries, Agent is unable to reconcile such financial statements with one
another, then upon the request of Agent, Borrower will promptly furnish a
company-prepared reconciliation of the audited consolidated financial statements
of Borrower to the company-prepared consolidating financial statements of
Borrower;
(b) promptly after becoming available and in any event within (i)
sixty (60) days after the end of the first, second, and third quarter and (ii)
ninety (90) days after the
57
end of the fourth quarter, in each fiscal year of Borrower, the company-prepared
balance sheet of Borrower, the company-prepared consolidating financial
statements of Borrower, as of the end of such quarter, the company-prepared
statement of profit and loss of Borrower and its Subsidiaries for such quarter
and for the period from the beginning of the fiscal year to the close of such
quarter, and the company-prepared statement of reconciliation of capital
accounts of Borrower for such quarter and for the period from the beginning of
the fiscal year to the close of such quarter, setting forth in each case, in
comparative form, the corresponding figures for the corresponding period of the
preceding fiscal year, certified by the chief financial officer of Borrower to
have been prepared in accordance with GAAP consistently followed throughout the
period indicated except to the extent stated therein, subject to normal changes
resulting from year-end adjustments; and
(c) promptly after becoming available and in any event within one
hundred twenty (120) days after the close of each fiscal year of each Owner
Guarantor (other than Little Shots), the financial statements of each such Owner
Guarantor, including a balance sheet as of the end of such year, the statement
of profit and loss for such year, and the statement of reconciliation of capital
accounts for such year, setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, which statements shall have
been prepared in accordance with GAAP consistently followed throughout the
period indicated, as set forth therein.
6.2 Certificates; Other Information. Furnish to each Lender and Agent:
(a) concurrently with the delivery of each financial statement
referred to in Section 6.1(a) above and each financial statement referred to in
Section 6.1(b) above, a certificate of the Chief Financial Officer of Borrower
(in the form of Exhibit F attached hereto or such other form as shall be
reasonably acceptable to Agent) stated to have been made after due examination
by such Chief Financial Officer (i) stating that, to the best of such officer's
knowledge, Borrower and each of its Subsidiaries during such period has observed
or performed in all material respects all of its covenants and other agreements,
and satisfied every condition contained in this Agreement and the Notes to be
observed, performed or satisfied by it, and that such Chief Financial Officer
has obtained no knowledge of any Default or Event of Default except as specified
in such certificate, and (ii) showing in detail the calculations supporting such
statement in respect of Sections 6.10, 6.11, 6.12, 7.1, 7.4, 7.5, 7.6(g), 7.10
and 7.12 hereof;
(b) concurrently with the delivery of the financial statements
referred to in Section 6.1(a) above, a copy of the management prepared business
plan and budget of Borrower and its Subsidiaries for the current fiscal year;
(c) within sixty (60) days after the end of each quarterly period
of each fiscal year, a sales report identifying as to Borrower and its
Subsidiaries the inventory of real estate operations, including Land and Housing
Units as of such date, designated in such categories as are reasonably required
by Agent; such summary shall include a delineation of sold or unsold items in
each category;
(d) promptly upon receipt thereof, copies of all final reports
submitted to Borrower by independent certified public accountants in connection
with each annual, interim or
58
special audit of the books of Borrower or any of its Subsidiaries made by such
accountants, including without limitation any final comment letter submitted by
such accountants to management in connection with their annual audit;
(e) copies of all reports, notices and other information
furnished to any holder of any Subordinated Notes as and when such reports,
notices and other information are so furnished to such holder; and
(f) promptly, on notice to Borrower, such additional financial
and other information as any Lender may from time to time reasonably request.
6.3 Borrowing Base Certificate. Furnish to Agent as soon as available,
but in any event within twenty (20) days after the end of each calendar month, a
Borrowing Base Certificate, certified by the Chief Financial Officer of
Borrower, showing the calculation of the Borrowing Base as of the second (2nd)
to last Tuesday of such month.
6.4 Compliance with Borrowing Base Requirements. At any time any
Borrowing Base Certificate required to be furnished to Agent in accordance with
Section 6.3 hereof indicates that the aggregate amount of Borrowing Base
Indebtedness outstanding exceeds the Borrowing Base, within fifteen (15)
calendar days after the delivery of such Borrowing Base Certificate to Agent,
(a) reduce the principal amount of the Loans and undrawn and drawn Facility L/Cs
(or, if no Loans are outstanding, provide cash collateral for undrawn Facility
L/Cs) or other Borrowing Base Indebtedness then outstanding by an amount
sufficient to reduce the aggregate amount of Borrowing Base Indebtedness
outstanding to be equal to or less than the Borrowing Base, or (b) deliver to
Agent a more current Borrowing Base Certificate that demonstrates that the
aggregate amount of Borrowing Base Indebtedness does not exceed the Borrowing
Base.
6.5 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
Indebtedness and other material obligations of whatever nature, except (a)
without prejudice to the effectiveness of Section 9 hereof, any Indebtedness or
other obligations (including any obligations for taxes), when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of Borrower or its Subsidiaries, as the case may be, and
(b) any Non-Recourse Indebtedness.
6.6 Maintenance of Existence. (a) Preserve, renew and keep in full
force and effect its corporate existence; provided, however, that any Subsidiary
may be dissolved or merged into another Subsidiary or Borrower so long as, in
the case of a merger into Borrower, Borrower is the surviving company, (b) take
all reasonable action to maintain all rights, privileges, contracts, copyrights,
patents, trademarks, trade names and franchises necessary or desirable in the
normal conduct of its business, and (c) comply with all Contractual Obligations
and Requirements of Law, except, in the case of (b) and (c) above, to the extent
that the failure to take such actions or comply with such Contractual
Obligations and Requirements of Law would not, in the aggregate, have a material
adverse effect on the business, operations, property or financial or other
condition of Borrower or of Borrower and its Subsidiaries, taken as a whole.
59
6.7 Maintenance of Property, Insurance. Keep all property useful in
and necessary to its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, general liability and business interruption
insurance) as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to Agent, upon written
request, full information as to the insurance carried.
6.8 Inspection of Property; Books and Records; Discussions. Keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities, subject in the case
of interim statements to year-end audit adjustments; and permit representatives
of each Lender and Agent, upon reasonable notice to Borrower, to visit and
inspect any of its properties, and examine and make abstracts from any of its
books and records at any reasonable time and as often as may reasonably be
requested, and to discuss the business, operations, properties and financial and
other condition of Borrower and its Subsidiaries with officers and employees of
Borrower and its Subsidiaries and, if notice thereof is given to Borrower prior
to the date of such discussions, with its independent certified public
accountants.
6.9 Notices. Promptly give notice to Agent:
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any loan or
Letter of Credit agreement binding upon Borrower or any of its Subsidiaries,
(ii) default under any other Contractual Obligation that would enable the
obligee of the Contractual Obligations to compel Borrower or any of its
Subsidiaries to immediately pay all amounts owing thereunder or otherwise
accelerate payments thereunder and would have a material adverse effect on
Borrower and its Subsidiaries taken as a whole, or (iii) litigation,
investigation or proceeding which may exist at any time between Borrower or any
Subsidiary and any Governmental Authority, which, if adversely determined, would
have a material adverse effect on the business, operations, property or
financial or other condition of Borrower and its Subsidiaries taken as a whole;
(c) of any litigation or proceeding affecting Borrower or any of
its Subsidiaries (i) (A) in which the amount involved is $1,000,000 or more and
not covered by insurance, or (B) which, in the reasonable opinion of a
Responsible Officer of Borrower, would, if adversely determined, have a material
adverse effect on Borrower and its Subsidiaries taken as a whole, or (ii) in
which injunctive or similar relief is sought and which, in the reasonable
opinion of a Responsible Officer of Borrower, would, if adversely determined,
have a material adverse effect on Borrower and its Subsidiaries taken as a
whole;
(d) of the following events, as soon as possible and in any event
within thirty (30) days after Borrower knows: (i) the occurrence of any
Reportable Event with respect to any Plan with respect to which the PBGC has not
waived the thirty (30) day reporting requirement, or (ii) the institution of
proceedings or the taking or expected taking of any other action by PBGC or
Borrower or any Commonly Controlled Entity to terminate or withdraw or partially
withdraw from any Plan under circumstances which could lead to material
liability to
60
the PBGC or, with respect to a Multiemployer Plan, the Reorganization or
Insolvency (as each such term is defined in ERISA) of the Plan and in addition
to such notice, deliver to each Lender and Agent whichever of the following may
be applicable: (A) a certificate of a Responsible Officer of Borrower setting
forth details as to such Reportable Event and the action that Borrower or
Commonly Controlled Entity proposes to take with respect thereto, together with
a copy of any notice of such Reportable Event that may be required to be filed
with PBGC, or (B) any notice delivered by PBGC evidencing its intent to
institute such proceedings or any notice to PBGC that such Plan is to be
terminated, as the case may be; and
(e) of a material adverse change in the business, operations,
property or financial condition of Borrower and its Subsidiaries taken as a
whole.
Each notice pursuant to this Section 6.9 shall be accompanied by a statement of
a Responsible Officer of Borrower setting forth details of the occurrence
referred to therein and stating what action Borrower proposes to take with
respect thereto. For all purposes of clause (d) of this Section 6.9, Borrower
shall be deemed to have all knowledge or knowledge of all facts attributable to
the administrator of such Plan if such Plan is a Single Employer Plan.
6.10 Maintenance of Tangible Net Worth. Maintain at all times Tangible
Net Worth in amounts at all times equal to or exceeding (i) $90,260,170, plus
(ii) fifty percent (50%) of the Consolidated Earnings for each quarter after
November 30, 2004 (excluding any quarter in which Consolidated Earnings are less
than zero (0)), plus (iii) fifty percent (50%) of the net proceeds or other
consideration received by Borrower for any capital stock issued or other equity
interests or sold after the date of this Agreement.
6.11 Maintenance of Leverage Ratio. Maintain a Leverage Ratio not in
excess of 2.25 to 1.0 (as determined on the last day of each fiscal quarter).
6.12 Maintenance of Interest Coverage Ratio. Maintain an Interest
Coverage Ratio of not less than 2.50 to 1.00 (as determined on the last day of
each fiscal quarter for the four fiscal quarter period ending on the last day of
such fiscal quarter).
6.13 Additional Guarantors. (a) Cause (i) each new Subsidiary (which
is not a Subsidiary of Borrower on the date of this Agreement) of Borrower, (ii)
any Subsidiary of Borrower formed or acquired after the date of this Agreement
and (iii) any Subsidiary of Borrower existing on the Closing Date but which is
not a Guarantor if such Subsidiary at any time owns assets having an aggregate
value in excess of $250,000, to become a "Subsidiary Guarantor" by execution and
delivery of a Supplemental Subsidiary Guaranty by such Subsidiary to Agent, and
to deliver such proof of corporate or other appropriate action, incumbency of
officers, opinions of counsel and other documents delivered by the Subsidiary
Guarantors pursuant to Section 5.1 hereof or as Agent shall have reasonably
requested in each case, on or before the date 10 days prior to the last day of
the fiscal quarter in which such Subsidiary is formed, acquired or first owns
assets in excess of $250,000.
(b) Cause each Person (other than any Guarantor) that obtains
after the date of this Agreement a direct ownership or equity interest in
Borrower (other than a Special Membership Interest, as such term is defined in
the Amended and Restated Regulations of the
61
Borrower dated as of September 1, 2005, as amended November 29, 2005 (the "AW
Regulations"), which interest is limited to the special allocations of the
profits and cash distributions from the Pinery Joint Venture and which, except
as expressly provided in the AW Regulations, shall not confer any rights to
participate in the management or operation of the Borrower) or Little Shots
after the date of this Agreement to become an "Owner Guarantor" by execution and
delivery of a Supplemental Owner Guaranty by such Person to Agent, and to
deliver such proof of corporate or other appropriate action, incumbency of
officers, opinions of counsel and other documents delivered by the Owner
Guarantors pursuant to Section 5.1 hereof or as Agent shall have reasonably
requested in each case, on or before the date 10 days prior to the last day of
the fiscal quarter in which such Person became a direct holder of ownership or
equity interests in Borrower or Little Shots.
6.14 Interest Rate Contracts. Borrower may enter into Interest Rate
Contracts with any Lender or other Person acceptable to Agent for the purpose of
hedging its interest rate risk.
ARTICLE 7: NEGATIVE COVENANTS
Borrower hereby agrees that, from the date hereof and so long as the
Commitment remains in effect, any portion of any Note or Reimbursement
Obligation remains outstanding and unpaid, any Facility L/C remains outstanding
that is not fully collateralized with cash in accordance with the provision of
Article 8 hereof, or any other amount is owing to Agent, any LC Issuer or any
Lender hereunder (other than unmatured indemnification obligations), Borrower
shall not, nor shall it permit any of its Subsidiaries to, directly or
indirectly:
7.1 Limitation on Secured Indebtedness. Create, incur, assume or
suffer to exist any Secured Indebtedness exceeding $50,000,000 in aggregate
principal amount at any time outstanding.
7.2 Easements Encumbrances, Liens and Restrictive Covenants. With
respect to any of the Property included in the Borrowing Base, Borrower shall
not, without the prior written consent of Agent, create, place, suffer or permit
to be created or placed or, through any act or failure to act, acquiesce in the
placing or allow to remain, any Lien, regardless of whether same is expressly
subordinate to the Obligations, or grant any easement or impose any restrictive
covenants, or execute or file any subdivision plot, other than Permitted Liens;
or contractually agree with any other Person to provide such Person a negative
pledge, or other covenant similar to this Section 7.2, except as set forth in
Section 4.11 of the Indenture, and, with respect to specific collateral pledged
(excluding in any case any assets included in the Borrowing Base), except as set
forth in documents evidencing Secured Debt.
7.3 Mergers, etc. Except as permitted under Section 6.6, merge or
consolidate with, or sell, assign, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of their
Properties (whether now owned or hereafter acquired) to any Person.
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7.4 Limitation on Unimproved Entitled Land. Permit at any time the net
book value of Unimproved Entitled Land to exceed twenty-five percent (25%) of
Adjusted Tangible Net Worth.
7.5 Land Components. Permit Land Value at any time to exceed one
hundred fifty percent (150%) of Adjusted Tangible Net Worth.
7.6 Investments, Loans and Advances. Make or permit to remain
outstanding any loans or advances to or investments in any Person, except that
the foregoing restriction shall not apply to:
(a) investments, loans or advances, the material details of which
have been set forth in the financial statements delivered to Agent pursuant to
Section 5.1(q) hereof or are disclosed to Agent and Lenders in Schedule 7.6
hereto;
(b) investments in or loans or advances to Subsidiary Guarantors;
(c) investments in or loans or advances to Subsidiaries which are
not Guarantors; provided that any such investments, loans and advances do not
exceed $250,000 in the aggregate per Subsidiary at any one time;
(d) investments in direct obligations of the United States of
America or any agency thereof;
(e) investments in certificates of deposit of maturities less
than one (1) year, issued by commercial banks in the United States of America
having capital and surplus in excess of $50,000,000;
(f) investments in commercial paper of maturities less than one
(1) year, if at the time of purchase such paper is rated in either of the two
highest rating categories of S&P, ▇▇▇▇▇'▇ or, if either the S&P or ▇▇▇▇▇'▇
rating is not available, any other rating agency selected by Agent; and
(g) investments in, loans or advances to, or, as indicated in
Section 7.9(xiv) hereof, guarantees of indebtedness of, Joint Ventures in an
aggregate amount not to exceed thirty-five percent (35%) of Adjusted Tangible
Net Worth.
7.7 Transactions With Affiliates. Engage in any transaction with any
Affiliate of Borrower or any Subsidiary on terms less favorable to Borrower or
such Subsidiary than would be obtainable at the time in comparable transactions
with Persons not Affiliates of the Borrower or any Subsidiary, provided that
nothing herein shall be deemed to restrict any capital contribution or equity
purchase by any Affiliate of the Borrower to or from the Borrower or any
Distribution made by the Borrower in accordance with Section 7.10 hereof.
7.8 Limitation on Payment of Subordinated Indebtedness. Pay, repay,
purchase or defease any Subordinated Indebtedness, directly or indirectly, in
cash or in other property, or by set-off or in any other manner, unless and
until all Obligations have been paid in full and all Commitments have been
terminated. Notwithstanding the foregoing, Borrower or
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any Subsidiary may make scheduled payments of interest on the Subordinated
Indebtedness, may redeem Subordinated Indebtedness pursuant to provisions of
such Subordinated Indebtedness allowing redemption at the option of the Borrower
with the proceeds of any equity offering or after such Subordinated Indebtedness
has been outstanding for a defined period, may purchase Subordinated
Indebtedness by issuer tender offer or open market purchase and may repay
Subordinated Indebtedness upon its scheduled maturity, so long as no Default or
Event of Default has occurred and is continuing or would occur as a result of
making such payment, redemption, purchase or repayment, as the case may be.
7.9 Indebtedness. Neither Borrower nor any Subsidiary will create,
incur or suffer to exist any Indebtedness, except, without duplication and
without duplication as to Borrower and Subsidiaries:
(i) The Obligations.
(ii) Indebtedness existing on the date hereof (and not
otherwise permitted under this Section 7.9) and described in Schedule 7.9
hereto and Refinancing Indebtedness with respect thereto.
(iii) Indebtedness owed to a seller of Unimproved Entitled
Land, Lots Under Development or Finished Lots under the terms of which
Borrower or such Subsidiary, as obligor, is required to make a payment upon
the future sale of such Unimproved Entitled Land, Lots Under Development or
Finished Lots in an amount not to exceed five percent (5%) of the gross
sales price or, in the case of profit sharing agreements between such
seller and Borrower or such Subsidiary, an amount that is reasonable and
customary in the industry and market, provided, that such Indebtedness is
subordinated to the Obligations in a manner satisfactory to Agent.
(iv) Rate Hedging Obligations entered into in respect of the
Obligations.
(v) Intercompany Indebtedness between Borrower and any
Guarantor or between any Guarantors.
(vi) Trade accounts payable and accrued expenses arising or
occurring in the ordinary course of business.
(vii) Indebtedness owing under Capital Leases.
(viii) Indebtedness with respect to Facility L/Cs.
(ix) Indebtedness consisting of taxes payable, obligations
in respect of, customer deposits and obligations under lot purchase
agreements, all to the extent incurred in the ordinary course of Borrower's
or any Subsidiary's business.
(x) Indebtedness under the Subordinated Notes.
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(xi) Non-Recourse Indebtedness secured by purchase-money
Liens on any Property hereafter acquired or the assumption of any Lien on
Property existing at the time of such acquisition (and not created in
contemplation of such acquisition), or by a Lien incurred in connection
with any conditional sale or other title retention; provided that
(A) Any Property subject to any of the foregoing is
acquired by Borrower or any Subsidiary in the ordinary course of its
respective business and the Lien on any such Property attaches to such
asset concurrently or within ninety (90) days after the acquisition
thereof; and
(B) Each Lien shall attach only to the Property so
acquired.
(xii) Performance bonds, completion bonds, guarantees of
performance, and guarantees of Indebtedness of a special district entered
into in the ordinary course of business.
(xiii) Public Indebtedness, so long as such Indebtedness is
pari passu with the Obligations.
(xiv) Indebtedness arising under a guarantee of indebtedness
of any Joint Venture (provided that such guarantee shall be deemed to be an
investment in such Joint Venture and subject to the limitation in Section
7.6(g) hereof).
(xv) Indebtedness which arises pursuant to a guarantee of
payment or collection, guaranteeing the Indebtedness of Borrower or any
Subsidiary which is permitted under clauses (i) through (x) or (xii) or
(xiii) of this Section 7.9.
7.10 Limitation on Distributions. Declare or make, directly or
indirectly, any Distribution, or incur any obligation (contingent or otherwise)
to do so, except that, so long as no Default shall have occurred and be
continuing at the time of any Distribution or would result therefrom, Borrower
may make Distributions on any date in an amount not to exceed
(i) fifty percent (50%) of Consolidated Earnings earned
between June 1, 2004 and the date of such Distribution, plus
(ii) one hundred percent (100%) of the aggregate amount of
cash or Cash Equivalents received by the Borrower either (x) as
contributions to common equity of the Borrower after June 1, 2005 or (y)
from the issuance and sale of equity interests after such date, other than
any such amounts received from a Subsidiary of the Borrower, minus
(iii) the amount of any Distributions previously made
between June 1, 2004 and the date of such Distribution.
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Further, notwithstanding the foregoing, so long as no Default shall have
occurred and be continuing at the time of any Distribution or would result
therefrom, Borrower may make Distributions in addition to Distributions made
pursuant to the foregoing limitations, to its direct parents in amounts required
to pay federal, state and local income taxes payable by such direct parent that
are solely attributable to the income of the Borrower and its Subsidiaries by
virtue of the Borrower being a pass-through entity for federal or state income
tax purposes; provided, however, that (a) the amount of Distributions paid with
respect to such tax obligations at any time will not exceed the amount of such
federal, state and local income taxes actually owing by any such direct parent
at such time for the respective period (excluding any tax liability of any such
direct parent not attributable to the Borrower or its Subsidiaries) (provided
that the Borrower may make periodic Distributions based on an estimate of such
tax liability with an annual reconciliation at the end of each tax year) and (b)
any refunds received by or on behalf of, or any overpayment based on the annual
reconciliation to, any of the Borrower's direct parents attributable to the
Borrower and its Subsidiaries shall promptly be returned by such direct parent
to the Borrower or credited against the Borrower's ability to make additional
Distributions pursuant to the foregoing provisions of this Section 7.10.
7.11 Ownership and Management. Permit the sale or transfer of more
than twenty percent (20%) of the ownership interests in Borrower or any
Subsidiary Guarantor; provided, however, that there shall be no limit on the
sale or transfer of the ownership interests in Borrower to any Owner Guarantor.
Upon any sale or transfer of all of the direct ownership interests of Borrower
and Little Shots held by any Owner Guarantor that is not prohibited by this
Agreement, such Owner Guarantor's obligations under the Owner Guaranty
automatically shall be terminated in accordance with Section 10 of the Owner
Guaranty.
7.12 Housing Inventory. Permit the number of Speculative Housing Units
and Model Housing Units, as at the end of any fiscal quarter, to exceed the
number of Housing Unit Closings occurring during the period of twelve (12)
months ending on the last day of such fiscal quarter, multiplied by thirty-five
percent (35%).
7.13 Nature of Business. Permit any material change to be made in the
character of their business as carried on at the date hereof.
7.14 Sale or Discount of Receivables. Discount, sell without recourse
or sell for less than the greater of the face or market value thereof, any of
its notes receivable or accounts receivable.
7.15 Increase in Capital. Increase the capital of Borrower or any
Guarantor by transferring assets among Borrower and Guarantors or Borrower's
Affiliates to Borrower and Guarantor, provided that nothing herein shall
prohibit the purchase of additional equity interests from, or the making of a
capital contribution to, Borrower by any parent of Borrower that is also a
Guarantor.
7.16 Capital Assets. Make expenditures for capital or fixed assets in
any fiscal year of Borrower if such expenditure would result in a violation of
the terms of this Agreement.
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7.17 Environmental Responsibilities. Do any of the following: (i)
cause or permit any Hazardous Materials to be placed, held, located, escaped,
leaked, spilled, discharged, emitted, released or disposed of on, from, under or
at the Premises in violation of any Environmental Law if such violation would
reasonably be likely to result in a material adverse effect on the business,
properties, assets, operations, or condition, financial or otherwise, of
Borrower and its Subsidiaries, taken as a whole, (ii) cause or permit the
Premises while under the control or ownership of Borrowers or any Subsidiary to
be used as a dumpsite or storage site (whether permanent or temporary) for any
Hazardous Material without first having in place adequate insurance of a
sufficient amount to totally cover (subject to deductibility clause not to
exceed $100,000) any and all potential liability of any nature or amount arising
from said events, and (iii) except if done in accordance with applicable law, in
all material respects, clean up or remove any Hazardous Materials placed, held,
located, escaped, leaked, spilled, discharged, emitted, released or disposed of
on, from, under or at the Premises.
ARTICLE 8: CASH COLLATERAL
8.1 Facility L/C Collateral Account. Except as limited by the last
sentence of Section 8.1, Borrower agrees that it will, upon the request of Agent
or the Required Lenders and until the final expiration date of any Facility L/C
and thereafter as long as any amount is payable to any LC Issuer or the Lenders
in respect of any Facility L/C, maintain a special collateral account pursuant
to arrangements satisfactory to Agent (the "Facility L/C Collateral Account") at
Agent's office in the name of Borrower but under the sole dominion and control
of Agent, for the benefit of the Lenders and LC Issuers and in which Borrower
shall have no interest other than set forth in Sections 8.2, 8.3 or 8.4 hereof.
Borrower hereby pledges, assigns and grants to Agent, on behalf of and for the
ratable benefit of the Lenders and LC Issuers, a security interest in all of
Borrower's right, title and interest in and to all funds which may from time to
time be on deposit in the Facility L/C Collateral Account to secure the prompt
and complete payment and performance of the Obligations. Agent will invest any
funds on deposit from time to time in the Facility L/C Collateral Account in
certificates of deposit of Wachovia Bank having a maturity not exceeding 30
days. Nothing in this Section 8.1 shall either require Borrower to deposit any
funds in the Facility L/C Collateral Account, obligate Agent to require Borrower
to deposit any funds in the Facility L/C Collateral Account or limit the right
of Agent to release to the Person entitled thereto any funds held in the
Facility L/C Collateral Account, in each case other than as required by Sections
8.2, 8.3 or 8.4 hereof.
8.2 Event of Default under Paragraph (5) of Article 9. Upon the
occurrence of an Event of Default specified in paragraph (5) of Article 9,
Borrower will be and become thereby unconditionally obligated, without any
further notice, act or demand, to pay to Agent an amount in immediately
available funds, which funds shall be held in the Facility L/C Collateral
Account, equal to the difference of (x) the amount of Facility L/C Obligations
at such time, less (y) the amount on deposit in the Facility L/C Collateral
Account at such time which is free and clear of all rights and claims of third
parties and has not been applied against the Obligations (such difference, the
"Collateral Shortfall Amount").
8.3 Other Events of Default. If any Event of Default (other than an
Event of Default specified in paragraph (5) of Article 9) occurs, the Required
Lenders (or Agent with the consent of the Required Lenders) may, upon notice to
Borrower and in addition to the continuing
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right to demand payment of all amounts payable under the Loan Documents, make
demand on Borrower to pay, and Borrower will, forthwith upon such demand and
without any further notice or act, pay to Agent the Collateral Shortfall Amount,
which funds shall be deposited in the Facility L/C Collateral Account.
8.4 Cure; Termination.
(a) If the Event of Default that resulted in the requirement for
deposit of funds in the Facility L/C Collateral Account is cured, and provided
no other Event of Default has occurred that is then continuing, Agent shall,
promptly upon request from Borrower, pay to or as directed by Borrower the
amount on deposit in the Facility L/C Collateral Account. Nothing contained in
this paragraph shall waive, limit or otherwise affect the rights of Agent or the
Lenders or the obligations of Borrower under this Article 8 if any other Event
of Default shall occur.
(b) If the Aggregate Commitment is terminated (whether by
acceleration, demand or otherwise), then, not later than simultaneously with
such termination, and without limitation of Agent's and Lender's right to demand
payment of all amounts payable under the Loan Documents, Borrower shall pay to
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility L/C Collateral Account; provided, however, that (i) if all Obligations
of Borrower (other than Facility L/C Obligations in respect of issued and
outstanding Facility L/Cs that have not been drawn upon) have been paid in full
(other than unmatured indemnification obligations), and (ii) Borrower shall have
provided to Agent and the LC Issuers, as security for the remaining Facility L/C
Obligations, one or more Letters of Credit, in an aggregate amount at least
equal to such remaining Facility L/C Obligations, issued by a Lender or Lenders,
and in form and substance, reasonably satisfactory to Agent and the LC Issuers,
the foregoing requirement for deposit of funds in the Facility L/C Collateral
Account shall not apply.
ARTICLE 9: DEFAULTS, EVENTS OF DEFAULT; DISTRIBUTION OF PROCEEDS
AFTER EVENT OF DEFAULT
Upon the occurrence of any of the following events:
(1) Borrower shall fail to pay any principal of any Note or make
any reimbursement (including payment of Reimbursement Obligations) in connection
with any Facility L/C when due in accordance with the terms thereof and such
failure shall continue uncured for five (5) Business Days; or
(2) Borrower shall fail to pay (a) any interest on any Note or in
connection with any Facility L/C, or (b) any fee, charge or other amount payable
hereunder, and such failure shall continue uncured for five (5) Business Days;
or
(3) any representation or warranty made or deemed made by
Borrower or any Guarantor herein, in any other Loan Document or which is
contained in any certificate, document or financial or other statement furnished
at any time under or in connection herewith or therewith, shall prove to have
been incorrect in any material respect on or as of the date made or deemed made;
or
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(4) Borrower shall default in the observance or performance of
any covenant or agreement contained in any other provision of this Agreement
which default shall remain uncured thirty (30) days after Agent or any Lender
notifies Borrower that such a default has occurred, which notice shall specify
the nature of the default; or
(5) (a) Borrower, any Owner Guarantor or any of Borrower's
Subsidiaries shall commence any case, proceeding or other action (i) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (ii) seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or any substantial part of
its assets, or Borrower, any Owner Guarantor or any of Borrower's Subsidiaries
shall make a general assignment for the benefit of its creditors; or (b) there
shall be commenced against Borrower, any Owner Guarantor or any of Borrower's
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (a) above which (i) results in the entry of an order for relief of any
such adjudication or appointment, and (ii) remains undismissed, undischarged or
unbonded for a period of 60 days; or (c) there shall be commenced against
Borrower, any Owner Guarantor or any of Borrower's Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (d) Borrower, any Owner Guarantor or
any of Borrower's Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clauses (a), (b) or (c) above; or (e) Borrower, any Owner Guarantor or
any of Borrower's Subsidiaries shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; or
(6) Borrower, any Owner Guarantor or any Subsidiary of Borrower
shall (a) default in any payment of principal of or interest on any Indebtedness
(other than the Obligations) or in the payment of any Contingent Obligation
beyond the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness or Contingent Obligation was created, and the
aggregate principal amount then outstanding of all such Indebtedness and
Contingent Obligations of Borrower, the Owner Guarantors and all Subsidiaries
exceeds $1,000,000, or (b) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Contingent
Obligation or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Contingent Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due or repurchased, prepaid, defeased or
redeemed prior to its stated maturity or such Contingent Obligation to become
payable; or
(7) (a) any party in interest (as defined in Section 3(14) of
ERISA) affiliated with Borrower or any of Borrower's Subsidiaries shall engage
in any "prohibited transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any
69
Plan, (b) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan, (c) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or institution of
proceedings is, in the opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, and, in the case of
a Reportable Event, the continuance of such Reportable Event unremedied for
thirty (30) days after notice of such Reportable Event pursuant to Section 4043
(a), (c) or (d) of ERISA is given or, in the case of institution of proceedings,
the continuance of such proceedings for thirty (30) days after commencement
thereof, (d) any Single Employer Plan shall terminate for purposes of Title IV
of ERISA, or (e) any other event or condition shall occur or exist with respect
to a Single Employer Plan, and in each case in clauses (a) through (e) above,
such event or condition, together with all other such events or conditions, if
any, could subject Borrower or any of Borrower's Subsidiaries to any tax,
penalty or other liabilities in the aggregate material in relation to the
business, operations, property or financial or other condition of Borrower or of
Borrower and Borrower's Subsidiaries taken as a whole; or
(8) one or more final judgments or decrees shall be entered
against Borrower, or any of Borrower's Subsidiaries involving in the aggregate a
liability (not covered by insurance) of $1,000,000 or more and all such
judgments or decrees in excess of $1,000,000 shall not have been vacated,
satisfied, discharged, or stayed or bonded pending appeal within 30 days from
the entry thereof; or
(9) any subordination agreement that evidences any Subordinated
Indebtedness (i) ceases to be the legal, valid and binding agreement of any
Person party or subject thereto, enforceable against such Person in accordance
with its terms or a payment is made by Borrower or any other obligor in respect
of such Subordinated Indebtedness in violation of any provision thereof, or (ii)
shall be terminated, invalidated or set aside, or be declared ineffective or
inoperative or the Indebtedness related thereto is in any way not fully
subordinate to all of (A) Borrower's Indebtedness and other liabilities to
Lenders and Agent under this Agreement and the Notes or (B) any Guarantor's
liabilities to Lenders and Agent under any Guaranty Agreement; or
(10) any event of default under or in connection with any
Subordinated Note;
then, and in any such event, (a) if such event is an Event of Default specified
in paragraph (5) above, the Commitments, if still outstanding, shall
automatically and immediately terminate and all Obligations shall immediately
become due and payable and Borrower shall immediately cash collateralize all
outstanding Facility L/Cs in accordance with Article 8 hereof, and (b) if such
event is any other Event of Default and is continuing, either or both of the
following actions may be taken: (i) with the consent of the Required Lenders,
Agent may, or upon the request of the Required Lenders, Agent shall, by notice
to Borrower, declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate and, upon demand by Agent, Borrower
shall fully cash collateralize all outstanding Facility L/Cs in accordance with
Article 8 hereof; and (ii) with the consent of the Required Lenders, Agent may,
or upon the request of the Required Lenders, Agent shall, by notice of default
to Borrower,
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declare the full amount of all outstanding Obligations to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Article 9, presentment, demand, protest and
all other notices of any kind are hereby expressly waived. Additionally, Agent
and each Lender may exercise any and all other rights and remedies available to
Agent and each Lender at law or in equity to the extent not inconsistent with
the rights specifically granted to Agent and each Lender hereunder.
Notwithstanding any provisions concerning distribution of payments to
the contrary in this Agreement, so long as any Event of Default exists that has
not been waived by all Lenders, each Lender shall share in any payments or
proceeds, including proceeds of any collateral, received by Agent or any Lender
made or received at any time from and after any Event of Default ("Proceeds
after Default") in an amount equal to such Lender's Ratable Share of the
Proceeds after Default; provided, however, if any one or more of the Lender(s)
has not made any funding when required hereunder, the distribution of Proceeds
after Default shall be adjusted so that each Lender shall receive Proceeds after
Default in an amount equal to (a) the Proceeds after Default multiplied by (b)
the percentage (rounded to five decimal places) of the total amount outstanding
funded by all Lenders that such Lender has actually funded (including the amount
of such Lender's participation in outstanding Facility L/Cs). If necessary,
Agent and each Lender shall use the adjustments procedure set forth in Section
11.8(b) hereof to make the appropriate distributions to Lenders as set forth in
this paragraph of this Article 9.
ARTICLE 10: THE AGENT
10.1 Appointment and Authority. Each of the Lenders and LC Issuers
hereby irrevocably appoints Wachovia Bank to act on its behalf as Agent
hereunder and under the other Loan Documents and authorizes Agent to take such
actions on its behalf and to exercise such powers as are delegated to Agent by
the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely for the
benefit of Agent, the Lenders and LC Issuers, and neither Borrower nor any
Guarantor shall have rights as a third party beneficiary of any of such
provisions.
10.2 Rights as a Lender. The Person serving as Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not Agent and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated or unless the context
otherwise requires, include the Person serving as Agent hereunder in its
individual capacity. Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with Borrower or any Subsidiary
or other Affiliate thereof as if such Person were not Agent hereunder and
without any duty to account therefor to the Lenders.
10.3 Exculpatory Provisions. Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, Agent:
(a) shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default or Event of Default has occurred and is
continuing;
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(b) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that Agent is
required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of Lenders as shall be expressly provided for herein
or in the other Loan Documents), provided that Agent shall not be required to
take any action that, in its opinion or the opinion of its counsel, may expose
Agent to liability or that is contrary to any Loan Document or applicable law;
and
(c) shall not, except as expressly set forth herein and in the
other Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Borrower or any of its
Affiliates that is communicated to or obtained by the Person serving as Agent or
any of its Affiliates in any capacity.
Agent shall not be liable for any action taken or not taken by it (i) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as Agent shall believe in
good faith shall be necessary, under the circumstances as provided in Sections
11.1 hereof and Article 9 hereof) or (ii) in the absence of its own gross
negligence or willful misconduct. Agent shall be deemed not to have knowledge of
any Default or Event of Default unless and until notice describing such Default
or Event of Default is given to Agent by Borrower, a Lender or LC Issuer.
Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article 5 hereof or elsewhere herein, other than
to confirm receipt of items expressly required to be delivered to Agent.
10.4 Reliance by Agent. Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan, or
the issuance of a Facility L/C, that by its terms must be fulfilled to the
satisfaction of a Lender or LC Issuer, Agent may presume that such condition is
satisfactory to such Lender or LC Issuer unless Agent shall have received notice
to the contrary from such Lender or LC Issuer prior to the making of such Loan
or the issuance of such Facility L/C. Agent may consult with legal counsel (who
may be counsel for Borrower), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.
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10.5 Delegation of Duties. Agent may perform any and all of its duties
and exercise its rights and powers hereunder or under any other Loan Document by
or through any one or more sub-agents appointed by Agent. Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory
provisions of this Article shall apply to any such sub-agent and to the Related
Parties of Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Agent.
10.6 Resignation of Agent. Agent may at any time give notice of its
resignation to Lenders, LC Issuers and Borrower. Upon receipt of any such notice
of resignation, the Required Lenders shall have the right, with the consent of
Borrower unless an Event of Default has occurred and is continuing (such consent
not to be unreasonably withheld or delayed), to appoint a successor, which shall
be a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent gives notice of its
resignation, then the retiring Agent may on behalf of the Lenders and LC
Issuers, appoint a successor Agent meeting the qualifications set forth above
provided that if Agent shall notify Borrower and the Lenders that no qualifying
Person has accepted such appointment, then such resignation shall nonetheless
become effective in accordance with such notice and (1) the retiring Agent shall
be discharged from its duties and obligations hereunder and under the other Loan
Documents and (2) all payments, communications and determinations provided to be
made by, to or through Agent shall instead be made by or to each Lender and LC
Issuers directly, until such time as the Required Lenders appoint a successor
Agent as provided for above in this Section. Upon the acceptance of a
successor's appointment as Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Agent, and the retiring Agent shall be discharged from all
of its duties and obligations hereunder or under the other Loan Documents (if
not already discharged therefrom as provided above in this paragraph). The fees
payable by Borrower to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrower and such successor. The
predecessor Agent shall pay to the successor the pro rata portion of any annual
administration fee paid in advance by Borrower for the portion of the year
between the time of the successor Agent's acceptance of its appointment as Agent
and the following anniversary date of this Agreement. After the retiring Agent's
resignation hereunder and under the other Loan Documents, the provisions of this
Article and Section 11.6 hereof shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while the retiring
Agent was acting as Agent.
10.7 Non-Reliance on Agent and Other Lenders. Each Lender and LC
Issuer acknowledges that it has, independently and without reliance upon Agent
or any other Lender or any of their Related Parties and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender and LC Issuer also
acknowledges that it will, independently and without reliance upon Agent or any
other Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not
73
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder.
10.8 No Other Duties, etc. Anything herein to the contrary
notwithstanding, none of the Syndication Agents or Documentation Agents listed
on the cover page hereof shall have any powers, duties or responsibilities under
this Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as Agent, a Lender or LC Issuer hereunder.
ARTICLE 11: MISCELLANEOUS
11.1 Amendments and Waivers. Agent and Borrower may, from time to
time, with the written consent of the Required Lenders, enter into written
amendments, supplements or modifications for the purpose of adding any
provisions to this Agreement or the Notes or changing in any manner the rights
of Lenders or Borrower hereunder or thereunder, and with the consent of the
Required Lenders, Agent on behalf of Lenders may execute and deliver to Borrower
a written instrument waiving, on such terms and conditions as Agent may specify
in such instrument, any of the requirements of this Agreement, the Notes or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall extend the
final maturity of any Note, or reduce the rate or extend the time of payment of
interest or fees thereon or hereunder, or reduce the principal amount thereof,
or change the amount or terms of any Lender's Revolving Credit Loan or Ratable
Share or the amount of any Lender's Commitment (except for (i) changes resulting
from an assignment permitted hereunder or (ii) as provided in Section 2.6(b) or
3.10 hereof), or, except as permitted hereunder, release any Guarantor from the
Guaranty Agreement to which it is a party, or amend, modify, change or waive any
provision of this Section, or reduce the percentage specified in the definition
of Required Lenders, or consent to the assignment or transfer by Borrower of any
of its rights and obligations under this Agreement, or consent to the release of
any collateral (except in connection with a sale or disposition not prohibited
hereunder), or amend, modify or change any other provision of this Agreement
that requires the consent of all Lenders, in each case without the written
consent of all Lenders; and provided, further, that no such waiver and no such
amendment, supplement or modification shall alter in any way Swingline Lender's
rights or obligations with respect to Swingline Loans without the consent of
Swingline Lender; and provided, further, that no such waiver and no such
amendment, supplement or modification shall alter in any way any LC Issuer's
rights or obligations with respect to Facility L/Cs issued by it without the
consent of such LC Issuer; and provided, further, that no such waiver and no
such amendment, supplement or modification shall amend, modify, change or waive
any provision relating to the rights or obligations of Agent without the consent
of Agent. Any such waiver and any such amendment, supplement or modification
shall be binding upon Borrower, Agent and each Lender, and all future holders of
the Notes. In the case of any waiver, Borrower, Agent and each Lender shall be
restored to their former position and rights hereunder and under the outstanding
Notes, and any Default or Event of Default waived shall be deemed to be cured
and not continuing; but no such waiver shall extend to any subsequent or other
Default or Event of Default, or impair any right consequent thereon.
11.2 Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all
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notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows:
(i) if to Borrower or any Guarantor, to it at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention of ▇▇▇ ▇▇▇▇▇▇▇
(Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇; Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Canada, Attention of ▇▇▇▇▇▇▇
▇▇▇▇▇ (Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇; Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇) and a copy
to ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, Attention of
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇; Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇).
(ii) if to Agent, to Wachovia Bank, National Association, at One
Wachovia Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇; Telephone
No. (▇▇▇) ▇▇▇-▇▇▇▇);
(iii) if to an LC Issuer, to it at its address (or telecopier number)
set forth in its Administrative Questionnaire; and
(iv) if to a Lender, to it at its address (or telecopier number) set
forth in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).
(b) Notices and other communications to Lenders and LC Issuers
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by
Agent, provided that the foregoing shall not apply to notices to any Lender or
LC Issuer pursuant to Article 2 if such Lender or LC Issuer, as applicable, has
notified Agent that it is incapable of receiving notices under such Article by
electronic communication. Agent or Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.
Unless Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail
75
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.
(c) Any party hereto may change its address or telecopier number for
notices and other communications hereunder by notice to the other parties
hereto.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of Agent or any Lender, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and, except for rights the exercise of which
require consent of the Required Lenders or all Lenders, as appropriate, under
this Agreement, not exclusive of any rights, remedies, powers and privileges
provided by law.
11.4 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
11.5 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the Notes and shall remain in full force and
effect until this Agreement is terminated, all Facility L/Cs are cancelled or
are fully collateralized with cash in accordance with Article 8 hereof and all
Obligations (including Facility L/C Obligations that are not fully
collateralized with cash, but excluding unmatured indemnity obligations) are
paid in full.
11.6 Costs and Expenses; Indemnification; Reimbursement; Waiver of
Damages. (a) Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by Agent and its Affiliates (including the reasonable fees, charges and
disbursements of counsel for Agent), in connection with the syndication of the
credit facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by any LC
Issuer in connection with the issuance, amendment, renewal or extension of any
Facility L/C or any demand for payment thereunder, (iii) all out-of-pocket
expenses incurred by Agent, any Lender or any LC Issuer (including the fees,
charges and disbursements of any counsel for Agent, any Lender or any LC
Issuer), in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with the Loans made or Facility
L/Cs issued hereunder, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans or Facility
L/Cs, and (iv) any civil penalty or fine assessed by the U.S. Department of the
Treasury's Office of Foreign Assets Control against, and all reasonable costs
and expenses (including counsel fees and disbursements) incurred in connection
with defense thereof by Agent, any Lender or any LC Issuer as a result of the
funding of Loans, the issuance of Facility L/Cs or the acceptance of payments
due under the Loan Agreement.
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(b) Borrower shall indemnify Agent (and any sub-agent thereof), each
Lender and LC Issuer, and each Related Party of any of the foregoing Persons
(each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee), incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by Borrower or any Guarantor arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Facility L/C or the use or
proposed use of the proceeds therefrom (including any refusal by any LC Issuer
to honor a demand for payment under a Facility L/C if the documents presented in
connection with such demand do not strictly comply with the terms of such
Facility L/C), (iii) any actual or alleged Hazardous Discharge on or from any
property owned or operated by Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by a third party or by Borrower or any
Guarantor, and regardless of whether any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by Borrower or any Guarantor
against an Indemnitee for breach in bad faith of such Indemnitee's obligations
hereunder or under any other Loan Document, if Borrower or such Guarantor has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.
(c) To the extent that Borrower for any reason fails to indefeasibly
pay any amount required under paragraph (a) or (b) of this Section to be paid by
it to Agent (or any sub-agent thereof), any LC Issuer or any Related Party of
any of the foregoing, each Lender severally agrees to pay to Agent (or any such
sub-agent), such LC Issuer or such Related Party, as the case may be, such
Lender's Ratable Share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against Agent (or any such sub-agent) or such LC Issuer in its capacity as such,
or against any Related Party of any of the foregoing acting for Agent (or any
such sub-agent) or such LC Issuer in connection with such capacity. The
obligations of the Lenders under this paragraph (c) are several and not joint or
joint and several.
(d) To the fullest extent permitted by applicable law, Borrower shall
not assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby,
any Loan or Facility L/C or the use of the proceeds thereof. No Indemnitee
referred to in paragraph (b) above shall be liable for any damages arising from
the use by unintended
77
recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.
(e) All amounts due under this Section shall be payable not later than
ten (10) days after demand therefor.
11.7 Successors and Assigns Generally; Assignments. (a) The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of Agent and each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of
paragraph (b) of this Section, (ii) by way of participation in accordance with
the provisions of paragraph (d) of this Section or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of paragraph (f)
of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in paragraph (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of Agent and Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more assignees all or
a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
any such assignment shall be subject to the following conditions:
(i) in the case of an assignment of the entire remaining amount
of the assigning Lender's Commitment and the Loans at the time owing to it or in
the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund, no minimum amount need be assigned;
(ii) in any case not described in paragraph (b)(i) of this
Section, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the applicable Commitment is not then in
effect, the principal outstanding balance of the Loans of the assigning and
assignee Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of
the Trade Date) shall not be less than $10,000,000, unless each of the Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consent (each such consent not to be unreasonably withheld or
delayed);
(iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement with respect to the Loan or the Commitment assigned;
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(iv) no consent shall be required for any assignment except to
the extent required by paragraph (b)(i) of this Section and, in addition:
(A) the consent of the Borrower (such consent not to be
unreasonably withheld or delayed; provided that it shall not be
unreasonable for Borrower to decline to consent to an assignment to a
Person who is not an Eligible Investor) shall be required unless (x)
an Event of Default has occurred and is continuing at the time of such
assignment or (y) such assignment is to a Lender, an Affiliate of a
Lender or an Approved Fund;
(B) the consent of the Agent (such consent not to be unreasonably
withheld or delayed) shall be required if such assignment is to a
Person that is not a Lender with a Commitment, an Affiliate of such
Lender or an Approved Fund with respect to such Lender; and
(C) the consent of the Swingline Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment
in respect of the revolving facility.
(v) the parties to each assignment shall execute and deliver to
Agent an Assignment and Assumption, together with a processing and recordation
fee of $3,500 for each assignment, and the assignee, if it is not a Lender,
shall deliver to Agent an Administrative Questionnaire;
(vi) no such assignment shall be made to the Borrower or any of
the Borrower's Affiliates or Subsidiaries; and
(vii) no such assignment shall be made to a natural person.
Subject to acceptance and recording thereof by Agent pursuant to paragraph (c)
of this Section, from and after the effective date specified in each Assignment
and Assumption, the assignee thereunder shall be a party to this Agreement and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto) but shall continue to be entitled to the benefits of Sections
2.9, 3.5, 3.6 and 11.6 hereof with respect to facts and circumstances occurring
prior to the effective date of such assignment. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (d) of this Section.
(c) Agent, acting solely for this purpose as an agent of Borrower,
shall maintain at its office in Charlotte, North Carolina, a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of Lenders, and the Commitments of, and principal
amounts of the Loans owing to, each Lender pursuant to the
79
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and Borrower, Agent and Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Any Lender may at any time, without the consent of, or notice to,
Borrower or Agent, sell participations to any Person (other than a natural
person or the Borrower or any of Borrower's Affiliates or Subsidiaries) (each, a
"Participant") in all or a portion of such Lender's rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the
Loans owing to it); provided that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) Borrower, Agent and Lenders and LC Issuers shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of Participant, agree to
any amendment, modification or waiver described in Section 11.1 hereof that
requires the consent of all Lenders, that affects such Participant. Subject to
paragraph (e) of this Section, Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.9, 3.5 and 3.6 hereof to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 11.8(a) hereof as though it
were a Lender, provided such Participant agrees to be subject to Section 11.8
(b) hereof as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Sections 2.9, 3.5 or 3.6 hereof than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.6 hereof unless
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of Borrower, to comply with Section 3.6
hereof as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release
such Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.
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11.8 Setoff. Sharing of Payments by Lenders.
(a) If an Event of Default shall have occurred and be continuing,
each Lender, each LC Issuer, and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender, LC
Issuer or any such Affiliate to or for the credit or the account of Borrower
against any and all of the obligations of Borrower now or hereafter existing
under this Agreement or any other Loan Document to such Lender or LC Issuer,
irrespective of whether or not such Lender or LC Issuer shall have made any
demand under this Agreement or any other Loan Document and although such
obligations of Borrower may be contingent or unmatured or are owed to a branch
or office of such Lender or LC Issuer different from the branch or office
holding such deposit or obligated on such indebtedness. The rights of each
Lender, LC Issuer and their respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that
such Lender, LC Issuer or their respective Affiliates may have. Each Lender and
LC Issuer agrees to notify Borrower and Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.
(b) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or other obligations hereunder resulting in such
Lender's receiving payment of a proportion of the aggregate amount of its Loans
and accrued interest thereon or other such obligations greater than its pro rata
share thereof as provided herein, then the Lender receiving such greater
proportion shall (a) notify Agent of such fact, and (b) purchase (for cash at
face value) participations in the Loans and such other obligations of other
Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by Lenders ratably in accordance
with the aggregate amount of principal of and accrued interest on their
respective Loans and other amounts owing them, provided that:
(i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest; and
(ii) the provisions of this paragraph shall not be construed to
apply to (x) any payment made by Borrower pursuant to and in accordance with the
express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in Facility L/C Obligations to any assignee or
participant, other than to Borrower or any Subsidiary thereof (as to which the
provisions of this paragraph shall apply).
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against Borrower rights of setoff and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of Borrower in the amount of such participation.
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11.9 Waiver Of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
11.10 Treatment of Certain Information; Confidentiality. Each of
Agent, Lenders and LC Issuers agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its Affiliates and to its and its Affiliates' respective partners, directors,
officers, employees, agents, advisors and other representatives who are directly
involved in the consideration of the matters contemplated by the Loan Documents
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information by accepting such
Information automatically agree to keep such Information confidential), (b) to
the extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) with the prior written consent of Borrower and
subject to an agreement containing provisions substantially the same as those of
this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to
any swap or derivative transaction relating to Borrower and its obligations, (g)
with the consent of Borrower or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or (y)
becomes available to Agent, any Lender, any LC Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than Borrower.
Notwithstanding the foregoing, Agent or any Lender may disclose Information,
without notice to Borrower, to governmental regulatory authorities in connection
with any regulatory examination of Agent or such Lender or in accordance with
Agent's or such Lender's regulatory compliance policy, if Agent or such Lender
deems necessary for the mitigation of claims by those authorities against Agent
or such Lender or any of its subsidiaries or Affiliates.
For purposes of this Section, "Information" means all information
received from Borrower or any of its Subsidiaries relating to Borrower or any of
its Subsidiaries or any of their respective businesses, other than any such
information that is available to Agent, any Lender or any LC Issuer on a
nonconfidential basis prior to disclosure by Borrower or any of its
Subsidiaries. Any Person required to maintain the confidentiality of Information
as provided in
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this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
11.11 Counterparts; Integration; Effectiveness. (a) This Agreement may
be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents, and any separate letter agreements with respect to fees payable
to Agent, constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Article 5, this Agreement shall become effective when it shall
have been executed by Agent and when Agent shall have received counterparts
hereof that, when taken together, bear the signatures of each of the other
parties hereto. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
(b) The words "execution," "signed," "signature," and words of
like import in any Assignment and Assumption shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a
manually executed signature or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar
state laws based on the Uniform Electronic Transactions Act.
11.12 Governing Law. This Agreement, the Notes and the rights and
obligations of the parties under this Agreement and the Notes shall be governed
by, and construed and in accordance with, the law of the State of North
Carolina.
11.13 Severability of Provisions. Any provision of any Loan Document
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
11.14 Submission to Jurisdiction; Waiver of Venue; Service of Process
(a) BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NORTH CAROLINA SITTING IN MECKLENBURG COUNTY AND OF THE UNITED STATES DISTRICT
COURT OF THE WESTERN DISTRICT OF NORTH CAROLINA AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN
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SUCH NORTH CAROLINA STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO 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. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT AGENT, ANY LENDER OR LC ISSUER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(b) BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
TO IN PARAGRAPH (a) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.
(c) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.2 HEREOF. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.
11.15 Headings. The headings of the Articles and Sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.
11.16 FIN 46. For purposes of determining compliance with the
financial covenants in this Agreement and for purposes of making the financial
calculations required by this Agreement, notwithstanding anything herein to the
contrary, the application of Financial Accounting Standards Board Interpretation
No. 46 shall be disregarded with respect to financial consolidation of any
entity that is not a Subsidiary of Borrower.
11.17 USA Patriot Act. Each Lender that is subject to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56) (signed into law October
26, 2001)) (the "Act") hereby notifies Borrower that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies Borrower, which information includes the name and address of
Borrower and other information that will allow such Lender to identify Borrower
in accordance with the Act.
11.18 Interrelationship with the Existing Credit Agreement. As stated
in the preamble hereof, this Agreement is intended to amend and restate the
provisions of the Existing Credit Agreement and, except as expressly modified
herein, (x) all of the terms and provisions of the Existing Credit Agreement
shall continue to apply for the period prior to the date of this
84
Agreement, including any determinations of payment dates, interest rates, Events
of Default or any amount that may be payable to Agent or the Lenders, (y) the
Obligations under the Existing Credit Agreement shall continue to be paid or
prepaid on or prior to the date hereof in accordance with the Existing Credit
Agreement, and shall from and after the date hereof continue to be owing and be
subject to the terms of this Agreement and (z) this Agreement shall not be
deemed to evidence or result in a novation or repayment of the Loans and
reborrowing hereunder, but obligations under the Existing Credit Agreement shall
in all respects be continuing as Obligations under this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
BORROWER:
▇▇▇▇▇▇ ▇▇▇▇▇ USA L.L.C.,
a Nevada limited liability company
By:
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer,
Treasurer and Secretary
AGENT:
WACHOVIA BANK, NATIONAL ASSOCIATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SYNDICATION AGENT:
BANK OF AMERICA, N.A.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
DOCUMENTATION AGENT:
CITIBANK TEXAS, N.A.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
LENDERS:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BANK OF AMERICA, N.A., as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CITIBANK TEXAS, N.A., as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
AMSOUTH BANK, as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
GUARANTY BANK, as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
COMERICA BANK, as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
KEY BANK, NATIONAL ASSOCIATION,
as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
NATIONAL CITY BANK, as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------