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CREDIT AGREEMENT
AMONG
TECHNICAL OLYMPIC USA, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
BANC OF AMERICA MORTGAGE CAPITAL CORPORATION,
AS ADMINISTRATIVE AGENT
WITH
BANC OF AMERICA SECURITIES LLC,
AS SOLE LEAD ARRANGER AND SOLE BOOK MANAGER
DATED AS OF NOVEMBER __, 2000
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.....................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Other Definitional Provisions..................................................................16
SECTION 2. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS......................................................16
2.1 Term Loan Commitments..........................................................................16
2.2 Term Notes.....................................................................................16
2.3 Procedure for Term Loan Borrowing..............................................................17
SECTION 3. GENERAL PROVISIONS APPLICABLE TO LOANS.........................................................17
3.1 Interest Rates and Payment Dates...............................................................17
3.2 Conversion and Continuation Options............................................................18
3.3 Minimum Amounts and Maximum Number of Tranches.................................................18
3.4 Optional Prepayments...........................................................................18
3.5 Mandatory Prepayments..........................................................................19
3.6 Payments and Computation of Interest and Fees..................................................20
3.7 Inability to Determine Interest Rate...........................................................22
3.8 Sharing of Payments, Etc.......................................................................22
3.9 Illegality.....................................................................................23
3.10 Requirements of Law............................................................................23
3.11 Taxes..........................................................................................24
3.12 Indemnity......................................................................................25
3.13 Lending Offices; Change of Lending Office......................................................26
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................................................26
4.1 Financial Condition............................................................................26
4.2 No Change......................................................................................27
4.3 Existence; Compliance with Law.................................................................27
4.4 Power; Authorization; Enforceable Obligations..................................................27
4.5 No Legal Bar...................................................................................28
4.6 No Material Litigation.........................................................................28
4.7 No Default.....................................................................................28
4.8 Ownership of Property; Liens...................................................................28
4.9 Intellectual Property..........................................................................28
4.10 No Burdensome Restrictions.....................................................................28
4.11 Taxes..........................................................................................28
4.12 Federal Regulations............................................................................29
4.13 ERISA..........................................................................................29
4.14 Investment Company Act; Other Regulations......................................................29
4.15 Subsidiaries...................................................................................29
4.16 Accuracy and Completeness of Information.......................................................29
4.17 Labor Relations................................................................................30
4.18 Insurance......................................................................................30
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4.19 Solvency.......................................................................................30
4.20 Limited Assets.................................................................................30
4.21 Purpose of Loans...............................................................................31
4.22 Environmental Matters..........................................................................31
4.23 Organizational Structure.......................................................................31
4.24 Hedging Strategies.............................................................................32
SECTION 5. CONDITIONS PRECEDENT...........................................................................32
5.1 Conditions to Initial Loans....................................................................32
5.2 Conditions to Each Loan........................................................................35
5.3 Determinations Under Sections 5.1 and 5.2......................................................35
SECTION 6. AFFIRMATIVE COVENANTS..........................................................................35
6.1 Financial Statements...........................................................................36
6.2 Certificates; Other Information................................................................36
6.3 Compliance with Laws, Etc......................................................................38
6.4 Payment of Taxes Etc...........................................................................39
6.5 Maintenance of Insurance.......................................................................39
6.6 Preservation of Corporate Existence, Etc.......................................................39
6.7 Visitation Rights..............................................................................39
6.8 Keeping of Books...............................................................................40
6.9 Maintenance of Properties, Etc.................................................................40
6.10 Notices........................................................................................40
6.11 Intentionally Deleted..........................................................................41
6.12 Employment Agreement...........................................................................41
6.13 Capital Raises.................................................................................42
6.14 Indemnification................................................................................42
SECTION 7. NEGATIVE COVENANTS.............................................................................42
7.1 Limitation on Indebtedness.....................................................................42
7.2 Limitation on Liens............................................................................43
7.3 Limitation on Contingent Obligations...........................................................43
7.4 Limitation on Fundamental Changes..............................................................43
7.5 Limitation on Sale of Assets...................................................................43
7.6 Limitation on Dividends........................................................................44
7.7 Limitation on Investments, Loans and Advances..................................................44
7.8 Limitation on Optional Payments and Modifications of Debt Instruments..........................44
7.9 Limitation on Transactions with Affiliates.....................................................44
7.10 Limitation on Sales and Leasebacks.............................................................44
7.11 Limitation on Changes in Fiscal Year...........................................................44
7.12 Limitation on Negative Pledge Clauses..........................................................44
7.13 Limitation on Lines of Business................................................................45
7.14 Governing Documents............................................................................45
7.15 Limitation on Subsidiary Formation.............................................................45
7.16 Equity Interests...............................................................................45
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SECTION 8. EVENTS OF DEFAULT..............................................................................45
SECTION 9. THE ADMINISTRATIVE AGENT.......................................................................49
9.1 Appointment....................................................................................49
9.2 Delegation of Duties...........................................................................49
9.3 Exculpatory Provisions.........................................................................49
9.4 Reliance by Administrative Agent...............................................................49
9.5 Notice of Default..............................................................................50
9.6 Non-Reliance on Administrative Agent and Other Lenders.........................................50
9.7 Indemnification................................................................................50
9.8 Administrative Agent in Its Individual Capacity................................................50
9.9 Successor Administrative Agent.................................................................51
SECTION 10. MISCELLANEOUS..................................................................................51
10.1 Amendments and Waivers.........................................................................51
10.2 Notices........................................................................................52
10.3 No Waiver; Cumulative Remedies.................................................................53
10.4 Survival of Representations and Warranties.....................................................53
10.5 Payment of Expenses and Taxes..................................................................53
10.6 Successors and Assigns; Participations and Assignments.........................................54
10.7 Set-off........................................................................................56
10.8 Counterparts...................................................................................56
10.9 Severability...................................................................................56
10.10 Integration....................................................................................56
10.11 GOVERNING LAW..................................................................................56
10.12 Submission To Jurisdiction; Waivers............................................................56
10.13 Acknowledgements...............................................................................57
10.14 WAIVERS OF JURY TRIAL..........................................................................57
10.15 Confidentiality................................................................................57
10.16 Transaction Modification.......................................................................57
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SCHEDULES AND EXHIBITS
Schedule 1 Lenders, Commitments and Applicable Lending Offices
Schedule 4.15 Subsidiaries
Schedule 4.18 Insurance
Schedule 4.22 Exceptions to Environmental Representations and Warranties in
Section 4.22
Schedule 4.23 Organizational Structure
Exhibit A ▇▇▇▇▇ Credit Agreement
Exhibit B ▇▇▇▇▇▇▇ ▇.▇. Credit vAgreement
Exhibit C Form of Term Note
Exhibit D Form of Non-Bank Status Certificate
Exhibit E Form of Secretary's Certificate
Exhibit F Form of Legal Opinion
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Subordinated Promissory Note
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of November __, 2000, among
TECHNICAL OLYMPIC USA, INC., a Delaware corporation (the "Borrower"), the
lenders from time to time parties to this Agreement (the "Lenders"), BANC OF
AMERICA MORTGAGE CAPITAL CORPORATION, as administrative agent for the Lenders
hereunder, with BANC OF AMERICA SECURITIES LLC, as sole lead arranger and sole
book manager (in such capacity, the "Arranger").
RECITALS
▇▇▇▇▇ Holdings Corp., a Delaware corporation (the "Holdings
Corp."), a wholly-owned subsidiary of Borrower, was formed to acquire all
outstanding capital stock of the ▇▇▇▇▇ Homes, Inc., a Florida corporation
("▇▇▇▇▇") (the "▇▇▇▇▇ Acquisition"), through a tender offer by Helios
Acquisition Corp., a Florida corporation ("Acquisition Corp."), which is a
wholly-owned subsidiary of Holdings Corp. followed by a merger of Acquisition
Corp. with and into ▇▇▇▇▇.
The Borrower has requested that each of the Lenders make a
term loan to the Borrower in the aggregate principal amount of $135,000,000, the
proceeds of which would be contributed to Holdings Corp. to purchase, through
Acquisition Corp., issued and outstanding capital stock of ▇▇▇▇▇ and to pay
approved fees and expenses incurred in connection herewith. The Lenders are
willing to make such credit available to the Borrower, but only on these terms,
and subject to the conditions, set forth in this Agreement.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Acquisition Corp.": as defined in the recitals hereto.
"Actual Costs": the total actual direct costs incurred by a
Loan Party (excluding interest expense, overhead, closing, carrying and other
indirect costs), calculated in accordance with GAAP.
"▇▇▇▇▇": The ▇▇▇▇▇ Companies, Inc., together with any and all
Subsidiaries of the ▇▇▇▇▇ Companies, Inc.
"Administrative Agent": Banc of America Mortgage Capital
Corporation, together with its affiliates, successors and assigns, as the
arranger of the Commitments and as the Administrative Agent for the Lenders
under this Agreement and the other Loan Documents.
"Advance Deadline": means (i) in the event Acquisition Corp.
has purchased more than eighty percent (80%) of the issued and outstanding
Capital Stock of ▇▇▇▇▇ in the initial acquisition of such Capital Stock of
▇▇▇▇▇, the date that is thirty (30) days from the initial Loan hereunder or (ii)
in the event Acquisition Corp. has purchased more than fifty percent but less
than eighty percent (80%) of the issued and outstanding Capital Stock of ▇▇▇▇▇
in the initial acquisition of such Capital Stock, the date that is ninety (90)
days from the initial Loan hereunder.
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"Advance Formula": an amount with respect to each share of
Capital Stock of ▇▇▇▇▇ acquired by Acquisition Corp. equal to the lesser of (i)
the tender price of any acquired Capital Stock of ▇▇▇▇▇ or (ii) $19.10 per share
(and $7.40 per option) of acquired Capital Stock of ▇▇▇▇▇.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person (including, with its correlative meanings, "controlled by"
and "under common control with") means the power, directly or indirectly, either
to (a) vote 10% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Agreement": means this Credit Agreement by and among
Technical Olympic USA, Inc., Administrative Agent, and the Lenders, with Banc of
America Securities LLC as Sole Lead Arranger and Sole Book Manager.
"Alternative Funds": funds made available to Borrower from
equity contributions or Permitted Subordinate Debt or sources other than
dividends from Subsidiaries.
"Applicable Lending Office": for each Lender and for each Type
of Loan, the lending office of such Lender designated for such Type of Loan on
Schedule 1 hereto (or any other lending office from time to time notified to the
Administrative Agent by such Lender) as the office at which its Loans of such
Type are to be made and maintained.
"Applicable Margin": for any Loan of any Type, at any time
from time to time, a rate per annum equal to the percentage set forth below for
such Type of Loan for the relevant time period:
Time Period Base Rate Loans Eurodollar Loans
----------- --------------- ----------------
Closing Date - May 31, 2001 3.25% 4.00%
June 1, 2001 - August 31, 2001 4.75% 5.50%
September 1, 2001 - November 30, 2001 6.00% 7.00%
December 1, 2001 - November 30, 2002 8.00% 9.00%
provided, that if the Borrower has not delivered to the Administrative Agent and
the Lenders all of the financial statements and other information required to be
delivered under Sections 6.1(a), 6.1(b) and Sections 6.2(a) through (n), as
applicable, within two (2) Business Days of the date on which such information
is due, the applicable margin shall be the highest rate per annum for such Type
of Loan set forth above for so long as such information has not been delivered.
The Applicable Margin with respect to the period subsequent to May 31, 2001
shall only be relevant to the extent that the Term Loan Maturity Date shall have
been extended pursuant to the terms of this Agreement.
"Arranger": as defined in the Heading hereto.
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": as defined in Section 10.6(c).
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"Assignment of Management Fees": that certain Assignment of
Management Fees, dated as of the date hereof, by and between Borrower and the
Administrative Agent.
"Assignment of Tax Allocation Agreement": collectively, that
certain Assignment of Tax Allocation Agreement, dated as of the date hereof, by
and among Borrower, Holdings Corp., Parent, and the Administrative Agent, and
that certain Assignment of Tax Allocation Agreement dated as of the date hereof,
by and among Borrower, Newmark Corp., Parent, and Administrative Agent.
"Base Rate": for any day, the rate per annum (rounded upward,
if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%.
"Base Rate Loans": Loans, the rate of interest applicable to
which is based upon the Base Rate.
"Borrower": as defined in the Heading to this Agreement.
"Borrowing Date": any Business Day specified in a notice
pursuant to Section 2.3 as a date on which the Borrower requests the Lenders to
make Loans hereunder.
"Business": as defined in Section 4.21(b).
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Charlotte, North Carolina are
authorized or required by law to close, and, if such day relates to a borrowing
of, a payment or prepayment of principal of or interest on, or a Conversion of
or into, or an Interest Period for, a Eurodollar Loan or a notice by the
Borrower with respect to any such borrowing, payment, prepayment, Conversion or
Interest Period, which is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all similar ownership interests in a Person (other than a corporation) and
any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of deposit
and eurodollar time deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of any Lender or of any commercial bank
having capital and surplus in excess of $500,000,000, (c) repurchase obligations
of any Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than seven days with respect
to securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-1 or the
equivalent thereof by Standard and Poor's Ratings Group ("S&P") or P-1 or the
equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") and in either
case maturing within 90 days after the day of acquisition, (e) securities with
maturities of 90 days or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody's, (f)
securities with maturities of 90 days or less from the date of acquisition
backed by standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition or (g) shares of
money market mutual or similar
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funds which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition.
"Change of Control": at any time:
(a) the Parent shall cease to own or control, legally and
beneficially, 100% of the issued and outstanding Capital Stock of the Borrower;
(b) TO Greece shall cease to directly or indirectly own or
control, legally and beneficially, Voting Interests in the Parent representing
at least 51% of combined voting power of all Voting Interests in the Parent (on
a fully diluted basis);
(c) any "person" or "group" (each as used in Sections 13(d)(3)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than TO
Greece and/or one or more of its wholly-owned Subsidiaries, shall become the
"beneficial owner" (as defined in Rule 13d-3 of the Securities Exchange Act of
1934, as amended), directly or indirectly, of Voting Interests in TO USA
(including through securities convertible into or exchangeable for Voting
Interest) representing greater than 40% of combined voting power of all Voting
Interests in TO USA (on a fully diluted basis);
(d) any lien or other encumbrance (other than Permitted Liens
of the type described in clauses (a) or (f) of the definition thereof set forth
in this Section 1.1) shall be created, incurred, assumed or otherwise suffered
to exist on any Capital Stock of Holding Corp. or any of its Subsidiaries, other
than the lien on the Capital Stock of Holding Corp. granted pursuant to the
Holding Corp. Pledge;
(e) any lien or other encumbrance (other than Permitted Liens
of the type described in clauses (a) or (f) of the definition thereof set forth
in this Section 1.1) shall be created, incurred, assumed or otherwise suffered
to exist on any Capital Stock of Newmark Corp. or any of its Subsidiaries, other
than the lien on the Capital Stock of Newmark Corp. granted pursuant to the
Newmark Corp. Pledge;
(f) with respect to any pledge or other security agreement
covering all or any portion of the Capital Stock of Borrower or Holding Corp.
that are owned beneficially and of record by TO Greece or any of its Affiliates
or their nominees, any secured party or pledgee thereunder shall become the
holder of record of any such shares (except in the case of a registration of the
pledge of such Capital Stock to such secured party or pledgee solely in its
capacity as a pledgee), or shall proceed to exercise voting or other consensual
rights in respect thereof (whether by proxy, voting or other similar arrangement
or otherwise), or shall otherwise commence to realize upon such shares; or
(g) TO Greece shall cease to have the ability, whether by
voting power, contract or otherwise, to cause the election a majority of the
board of directors of TO USA or Holding Corp. at any time.
"Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commitments": the reference to the Term Loan Commitments.
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"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"Consolidated Net Income": for any period, the consolidated
net income (or deficit) of the Borrower and its Subsidiaries for such period
(taken as a cumulative whole), determined in accordance with GAAP; provided,
that there shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with
the Borrower or any Subsidiary, (b) the income (or deficit) of any Person (other
than a Subsidiary) in which the Borrower or any Subsidiary has an ownership
interest, except to the extent that any such income has been actually received
by the Borrower or such Subsidiary in the form of dividends or similar
distributions, (c) the undistributed earnings of any Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any Obligation,
Governing Document or Requirement of Law applicable to such Subsidiary, (d) any
restoration to income of any contingency reserve, except to the extent that
provision for such reserve was made out of income accrued during such period,
(e) any write-up of any asset, (f) any net gain from the collection of the
proceeds of life insurance policies, (g) any gain arising from the acquisition
of any securities, or the extinguishment, under GAAP, of any Indebtedness, of
the Borrower or any Subsidiary, (h) in the case of a successor to the Borrower
by consolidation or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer of assets,
and (i) any deferred credit representing the excess of equity in any Subsidiary
at the date of acquisition over the cost of the investment in such Subsidiary.
"Contingent Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The terms "Guarantee"
and "Guaranteed" used as a verb shall have a correlative meaning. The amount of
any Contingent Obligation of any guaranteeing person shall be deemed to be the
lower of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Contingent Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Contingent Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.
"Continue", "Continuation" and "Continued" shall refer to the
continuation of a Eurodollar Loan from one Interest Period to the next Interest
Period.
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"Convert", "Conversion" and "Converted" shall refer to a
conversion of Base Rate Loans into Eurodollar Loans or of Eurodollar Loans into
Base Rate Loans, which may be accompanied by the transfer by a Lender (at its
sole discretion) of a Loan from one Applicable Lending Office to another.
"Costs": as defined in Section 6.15 of this Agreement.
"Credit Exposure": as to any Lender at any time, the unpaid
principal amount of its Term Loan.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"▇▇▇▇▇": as defined in the recitals hereto.
"▇▇▇▇▇ Acquisition": as defined in the recitals hereto.
"▇▇▇▇▇ Acquisition Documents": the collective reference to the
Agreement and Plan of Merger, dated as of October 12, 2000, between Borrower,
Acquisition Corp. and ▇▇▇▇▇ Homes, Inc., together with all other documents
executed in connection therewith, as amended, supplemented or otherwise modified
from time to time.
"▇▇▇▇▇ Revolving Credit Facility Documents": means the
collective reference to (i) to the Credit Agreement, dated as of November 22,
2000, among ▇▇▇▇▇ Homes Inc., the lenders party thereto and Bank of America,
N.A., as administrative agent, with Banc of America Securities, LLC, as Sole
Lead Arranger and Sole Book Manager, a copy of which is attached hereto as
Exhibit A (the "▇▇▇▇▇ Credit Agreement"), and (ii) each of the documents
executed in connection therewith, as each may be amended, supplemented or
otherwise modified from time to time.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"Environmental Permit": any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equity Contribution": the contribution by Borrower of a cash
equity investment in Holdings Corp. of not less than $80,000,000, such Equity
Contribution to be utilized for the acquisition of Capital Stock of ▇▇▇▇▇.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar 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 such Board) maintained by a
member bank of such System.
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"Eurodollar Base Rate": with respect to each day during each
Interest Period, the rate per annum equal to the corresponding rate appearing at
page 3750 of the Dow ▇▇▇▇▇ Telerate Service as the London interbank offered rate
for deposits in Dollars at or about 11:00 a.m., London time, two Business Days
prior to the beginning of such Interest Period, for a term comparable to such
Interest Period, or if such rate no longer so appears, the rate per annum
(rounded upwards, if necessary to the nearest 1/100th of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at or about 11:00 a.m., London time, two Business Days prior to the
beginning of such Interest Period, for a term comparable to such Interest
Period; provided, however, that if more than one rate is specified on Reuters
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates
(rounded upwards, if necessary to the nearest 1/100th of 1%).
"Eurodollar Loans": Loans, the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
Eurodollar Base Rate
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1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 8;
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Extraordinary Receipt": any cash received by or paid to or
for the account of any Person not in the ordinary course of business, including,
without limitation, tax refunds (but only to the extent such refunds are not
required to be repaid to any Subsidiary under any tax sharing agreement),
pension plan reversions, proceeds of insurance (other than proceeds of business
interruption insurance to the extent that such proceeds constitute compensation
for lost earnings), condemnation awards (and payments in lieu thereof),
indemnity payments and any purchase price adjustments; provided, however, that
an Extraordinary Receipt shall not include cash receipts received from proceeds
of insurance, condemnation awards (or payments in lieu thereof) or indemnity
payments to the extent that such proceeds, awards or payments (a) in respect of
loss or damage to equipment, fixed assets or real property are applied (or in
respect of which expenditures were previously incurred) to replace or repair the
equipment, fixed assets or real property in respect of which such proceeds were
received in accordance with the terms of the Loan Documents, so long as such
application is made within 180 days after the occurrence of such damage or loss
or (b) are received by any Person in respect of any third party claim against
such Person and applied to pay (or to reimburse such Person for its prior
payment of) such claim and the costs and expenses of such Person with respect
thereto; or (c) are the subject of a bona fide dispute and the Person entitled
to such awards, proceeds, or payments is contesting such disputed proceeds,
awards, or payments and is diligently and in good faith pursuing receipt of such
proceeds, awards, or payments.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
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13
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"Governing Documents": as to any Person, its articles or
certificate of incorporation and by-laws, its partnership agreement, its
certificate of formation and operating agreement, and/or the other
organizational or governing documents of such Person.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Hedge Agreement": as to any Person, any swap, cap, collar or
similar arrangement entered into by such Person providing for protection against
fluctuation in interest rates or currency exchange rates or the exchange of
nominal interest obligations, either generally or under specific contingencies.
"Holdings Corp.": as defined in the recitals hereto.
"Holdings Corp. Cash Collateral Account": that certain account
established pursuant to the Holdings Corp. Cash Collateral Agreement.
"Holdings Corp. Cash Collateral Agreement": that certain Cash
Collateral Account, Security, Pledge and Assignment Agreement, dated as of the
date hereof, by and among Borrower, Holdings Corp., and the Administrative
Agent.
"Holdings Corp. Pledge": that certain Pledge Agreement, dated
as of the date hereof, by and between Borrower and Administrative Agent.
"Indebtedness": with respect to any Person (without
duplication) (a) all indebtedness of such Person for borrowed money, (b) all
Obligations of such Person for the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of such
Person's business and not past due for more than 90 days), (c) all Obligations
of such Person evidenced by notes (whether subordinated or otherwise), bonds,
debentures or other similar instruments, or upon which interest payments are
customarily made, (d) all Obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Obligations of such Person as lessee under
Financing Leases, (f) all Obligations, contingent or otherwise, of such Person
under acceptance, letter of credit or similar facilities, (g) all Obligations of
such Person to purchase, redeem, retire, defease or otherwise make any payment
in respect of any Capital Stock in such Person or any other Person, valued, in
the case of any Capital Stock which are redeemable preferred interests, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends, (h) all Obligations of such Person in respect of Hedge
Agreements, take-or-pay agreements or other similar arrangements, valued, in the
case of Hedge Agreements, at the principal or notional amount thereof, (i) all
Obligations of such Person under any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing if the
transaction giving rise to such Obligation is considered indebtedness for
borrowed money for tax purposes but is classified as an operating lease in
accordance with GAAP; (j) all Contingent
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Obligations and (k) all indebtedness and other payment Obligations referred to
in clauses (a) through (j) above of another Person secured by (or for which the
holder of such indebtedness or other payment Obligations has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness or other payment Obligations, valued in the case of any such
Indebtedness as to which recourse for the payment thereof is expressly limited
to the property or assets on which such Lien is granted, at the lesser of (A)
the stated or determinable amount of the Indebtedness that is so secured or, if
not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) and (B)
the greater of fair market value or book value of such property or assets.
"Indemnity": that certain Indemnity Agreement, dated as of the
date hereof, from Technical Olympic S.A. ("TO Greece") and Parent (collectively,
the "Indemnitors") to the Administrative Agent, for the ratable benefit of the
Lenders.
"Information Memorandum": the information memorandum, dated as
of November __, 2000, used by the Arranger in connection with the syndication of
the Commitments.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in Section 4.9 of this
Credit Agreement.
"Interest Payment Date": the first day of each calendar month.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing
or Conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one or two months thereafter, as
selected by the Borrower in its notice of borrowing or notice
of Conversion, as the case may be, given with respect thereto;
and
(ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one or two months thereafter, as
selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior
to the last day of the then current Interest Period with
respect thereto;
provided, that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period pertaining to a Eurodollar
Loan 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) the Borrower shall not select any Interest Period
that would otherwise extend beyond the date final payment is due on the
Term Loans shall end on the Term Loan Maturity Date or such date of
final payment, as the case may be;
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(3) any Interest Period pertaining to a Eurodollar
Loan 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
(4) the Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Lenders": as defined in the heading hereto.
"Letter Agreement": that certain letter agreement, dated as of
the date hereof, between Borrower and Administrative Agent relating to certain
post-closing matters in connection with the Term Loan.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Financing Lease having substantially the same economic effect as any of the
foregoing), and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction in respect of any of the
foregoing.
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Notes, the Indemnity,
the Holdings Corp. Pledge, the Letter Agreement, the Newmark Pledge, the TO USA
Pledge, the Assignment of Management Fees, the Assignment of Tax Allocation
Agreement, the Holdings Corp. Cash Collateral Agreement, the Newmark Corp. Cash
Collateral Agreement, and the Permitted Subordinated Debt Intercreditor
Agreement.
"Loan Parties": the Borrower, the Indemnitors and each
Subsidiary of the Borrower which is a party to a Loan Document.
"Majority Lenders": at any time, Lenders, the Credit Exposure
Percentages of which aggregate more than 50%.
"Material Adverse Effect": a material adverse effect on (a)
the business assets, liabilities (actual or contingent), operations, financial
condition or prospects of the Borrower, any Indemnitor and/or any of their
respective Subsidiaries, taken as a whole, (b) the rights and remedies of the
Administrative Agent or any Lender under any Loan Document, or (c) the ability
of any Loan Party to perform its Obligations under any Loan Document or any
▇▇▇▇▇ Acquisition Document to which it is or is to be a party.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
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"Net Proceeds": (i) the aggregate cash consideration received
by the Borrower or a Subsidiary in connection with any transaction referred to
in Section 3.5(a) less (ii) (1) the expenses (including out-of-pocket expenses)
incurred by the Borrower or such Subsidiary in connection with such transaction
(including, in the case of any issuance of debt or equity securities,
underwriters' commissions and fees) and the amount of any federal and state
taxes incurred in connection with such transaction, in each case as certified by
a Responsible Officer to the Administrative Agent at the time of such
transaction, and (2) in the case of Newmark Corp. or any of its Subsidiaries, a
percentage of such cash consideration (less the expenses incurred by Newmark
Corp. or its Subsidiaries) equal to the percentage of outstanding common stock
of Newmark Corp. held by Persons other than the Borrower.
"Newmark Corp. Cash Collateral Account": that certain account
established pursuant to the Newmark Corp. Cash Collateral Agreement.
"Newmark Corp.": Newmark Homes Corporation, a Nevada
corporation.
"Newmark Corp. Cash Collateral Agreement": that certain Cash
Collateral Account, Security, Pledge and Assignment Agreement, dated as of the
date hereof, by and between Borrower and the Administrative Agent.
"▇▇▇▇▇▇▇ ▇.▇. Revolving Credit Agreement Documents": means to
(i) the collective reference to the Credit Agreement, dated as of June 27, 2000,
among Newmark Homes, L.P., ("▇▇▇▇▇▇▇ ▇.▇.") the financial institutions thereto,
Bank of America, N.A., as administrative agent, swing line lender and letter of
credit issuing lender and Banc of America Securities LLC, as sole lead arranger
and sole book manager, a copy of which is attached hereto as Exhibit B (the
"▇▇▇▇▇▇▇ ▇.▇. Credit Agreement") and (ii) each of the documents executed in
connection therewith, as each may be amended, supplemented or otherwise modified
from time to time.
"Newmark Corp. Pledge": that certain Pledge Agreement, dated
as of the date hereof, by and between Borrower and Administrative Agent.
"Non-Bank Status Certificate": as defined in Section
3.11(b)(i)(B).
"Non-Excluded Taxes": as defined in Section 3.11(a).
"Notes": the collective reference to the Term Notes.
"Obligations": with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 8(f). Without limiting the generality of the foregoing, the Obligations
of the Loan Parties under the Loan Documents include (a) the obligation to pay
principal, interest, letter of credit commissions, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts payable by any
Loan Party under any Loan Document and (b) the obligation of any Loan Party to
reimburse any amount in respect of any of the foregoing that the Administrative
Agent or any Lender, in its sole discretion, may elect to pay or advance on
behalf of such Loan Party.
"Parent": Technical Olympic (UK) PLC, a United Kingdom
corporation.
"Participant": as defined in Section 10.6(b).
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"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Liens": the following types of Liens (excluding any
such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Code or by
ERISA or any such Lien relating to or imposed in connection with any
environmental action), in each case as to which no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced:
(a) Liens for taxes, assessments and governmental charges or
levies to the extent not otherwise required to be paid under Section
6.4;
(b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's, storage and repairmen's Liens and other similar
Liens arising in the ordinary course of business and securing
obligations (other than Indebtedness for borrowed money) (i) that are
not overdue for a period of more than 60 days or (ii) the amount,
applicability or validity of which is being contested in good faith and
by appropriate proceedings diligently conducted and with respect to
which the Borrower or its applicable Subsidiary, as the case may be,
has established reserves in accordance with GAAP;
(c) pledges or deposits to secure obligations incurred in the
ordinary course of business under workers' compensation laws,
unemployment insurance or other similar social security legislation
(other than in respect of employee benefit plans subject to ERISA) or
to secure public or statutory obligations;
(d) Liens securing the performance of, or payment in respect
of, bids, tenders, government or utility contracts (other than for the
repayment of borrowed money), surety and appeal bonds and other
obligations of a similar nature incurred in the ordinary course of
business;
(e) any interest or title of a lessor or sublessor or a
licensor and any restriction or encumbrance to which the interest or
title of such lessor, sublessor or licensor may be subject that is
incurred in the ordinary course of business and, either individually or
when aggregated with all other Permitted Liens in effect on any date of
determination, could not reasonably be expected, whether individually
or in the aggregate, to have a Material Adverse Effect;
(f) Liens arising out of judgments or awards that do not
constitute an Event of Default under Sections 8(h), 8(i) or 8(j) and in
respect of which the Borrower or any of its Subsidiaries subject
thereto shall be prosecuting an appeal or proceeding for review in good
faith and, pending such appeal or proceeding, shall have secured within
ten days after the entry thereof a subsisting stay of execution and
shall be maintaining reserves, in accordance with GAAP, with respect to
any such judgment or award; and
(g) easements, rights-of-way, zoning restrictions and other
encumbrances and survey exceptions, minor defects or irregularities in
title and other similar restrictions on title to, or the use of, real
property (including, without limitation, restrictive covenants of
general application created and reserved in the ordinary course of
business by a declarant of a planned residential development that
require payment of marketing, development or other fees or that reserve
rights of first refusal or repurchase options to the declarant to
ensure compliance with restrictive covenants requiring construction of
a dwelling to commence or be completed within a stated period of time
or Liens imposed by law or contract on specific lots of real property
in favor of third-party developers which enable such developer to
participate in premiums generated upon the sale of such specific lots)
that do not, either individually or in the aggregate, (i) materially
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detract from the value of such real property or (ii) materially and
adversely affect the use of such real property for its intended
purposes or the conduct of the business of the Borrower and its
Subsidiaries in the ordinary course and, in any case, that were not
incurred in connection with and do not secure Indebtedness or other
extensions of credit.
"Permitted Subordinated Debt": any indebtedness of Borrower to
Parent or an affiliate of Parent (other than a Subsidiary of Borrower) that is
evidenced by a promissory note substantially in the form of the Subordinated
Promissory Note attached hereto as Exhibit H, including, without limitation,
that certain Subordinated Promissory Note from Borrower to Parent, dated
________, 2000 in the original, principal amount of $85,000,000, which
Subordinated Promissory Note is pledged to Administrative Agent pursuant to the
TO USA Pledge or any permitted amendment or supplement thereto.
"Permitted Subordinated Debt Intercreditor Agreement": means
the Intercreditor and Subordination Agreement dated as of November 22, 2000, by
and among Borrower, Administrative Agent, and Parent.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Prime Rate": for the purpose of this Agreement means the rate
of interest publicly announced from time to time by Bank of America, N.A. at its
principal office in Charlotte, North Carolina as its prime rate or prime lending
rate. This rate of interest is determined from time to time by Bank of America,
N.A. as a means of pricing some loans to its customers and is neither tied to
any external rate of interest or index nor does it necessarily reflect the
lowest rate of interest actually charged by Bank of America, N.A. to any
particular class or category of customers of Bank of America, N.A.
"Pro Forma Balance Sheet": as defined in Section 4.1(b) of
this Agreement.
"Properties": as defined in Section 4.22.
"Pro Rata Share": as to any amount, the product of, as to any
Lender at any time, the percentage which such Lender's Commitment then
constitutes of the aggregate Commitments (or, at any time after the Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender's Term Loans then outstanding constitutes of the aggregate
principal amount of all of the Term Loans then outstanding).
"PUDC": Pacific United Development Corporation, together with
any and all Subsidiaries of Pacific United Development Corporation.
"PUDC Loan Documents": any and all documents and/or
instruments now or hereafter entered into by PUDC in connection with any loans,
financings or other credit facilities being or having been extended to PUDC.
"Register": as defined in Section 10.6(d).
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"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under Sections .21, .22, .23, .26, .27 or .28 of PBGC
Reg. Section 4043.
"Required Lenders": at any time, Lenders, the aggregate Credit
Exposures of which constitute at least 66-2/3% of the aggregate Credit Exposure
of all Lenders at such time.
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or Governing Documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator 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 property is subject.
"Responsible Officer": the chief executive officer, the
president, and the executive vice president of the Borrower or, with respect to
financial matters, the chief financial officer of the Borrower.
"Restricted Payment": as defined in Section 7.6.
"Senior/Acquisition Loan Intercreditor Agreement": the
Senior/Acquisition Loan Intercreditor Agreement, dated as of November 22, 2000,
among the Administrative Agent, the Lenders, Bank of America, N.A., as
administrative agent under the ▇▇▇▇▇ Revolving Credit Facility Documents, and
the lenders under the ▇▇▇▇▇ Revolving Credit Facility Documents, as amended,
supplemented and otherwise modified from time to time.
"Senior Notes": the 9.25% Senior Notes due 2008 of ▇▇▇▇▇
issued pursuant to the Senior Notes Documents.
"Senior Notes Documents": the collective reference to (i) the
Indenture, dated as of February 2, 1998, between ▇▇▇▇▇, the guarantors party
thereto and American Stock Transfer & Trust Company, as trustee, (ii) the
Indenture dated June 12, 1998, between the Borrower, the guarantors party
thereto, and American Stock Transfer & Trust Company, as Trustee, and (iii) each
other document executed in connection therewith, as each may be amended,
supplemented or otherwise modified from time to time.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Subsidiary": as to any Person, a corporation, partnership 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), either directly or
indirectly through another Subsidiary, to elect a majority of the board of
directors or other managers of such corporation, partnership 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.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower and any and all Subsidiaries of such Subsidiaries of
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Borrower. Without limiting the foregoing, the term "Borrower and its
Subsidiaries" shall be deemed in all cases to include Newmark Corp.
"Term Loan": as defined in Section 2.1.
"Term Loans": any advances of the Term Loan made by any Lender
under this Agreement.
"Term Loan Closing Date": the date on which the conditions
precedent set forth in Section 5.1 shall be satisfied.
"Term Loan Commitment": as to any Lender, its obligation to
make a Term Loan to the Borrower pursuant to Section 2.1 in the amount set forth
opposite such Lender's name on Schedule 1 under the caption "Term Loan".
"Term Loan Commitment Percentage": as to any Lender, the
percentage equal to the quotient of such Lender's Term Loan Commitment divided
by the aggregate Term Loan Commitments.
"Term Loan Maturity Date": the date which is six (6) months
following the Term Loan Closing Date; provided, that the Term Loan Maturity Date
may be extended for up to two additional periods of six (6) months and twelve
(12) months, respectively from the then current Term Loan Maturity Date at the
request of the Borrower made at least 30 days, but in no event earlier than 60
days, prior to the then current Term Loan Maturity Date so long as a Responsible
Officer has delivered to Administrative Agent an updated Pro Forma Balance Sheet
certified as true and correct by a Responsible Officer and containing
projections for the period ending on the proposed extended Term Loan Maturity
Date, and so long as a Responsible Officer has certified to the Administrative
Agent on behalf of Borrower, in form, content and substance acceptable to the
Administrative Agent, that (i) no event or circumstance which has had or could
reasonably be expected to have a Material Adverse Effect has occurred, and (ii)
no Default or Event of Default shall have occurred and be continuing, and the
Borrower shall have paid to the Administrative Agent, for the ratable benefit of
each Lender holding a Term Loan, an amortization payment agreed upon by the
Administrative Agent and the Borrower at the time of any such extension.
"Term Note": a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit C attached hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender resulting
from the Term Loans made by such Lender.
"TO USA Pledge": that certain Note Pledge Agreement, dated as
of the date hereof, by and between Parent and Administrative Agent.
"Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"Transferee": as defined in Section 10.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Voting Interests": any and all shares of Capital Stock, the
holders of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar functions) of
such Person, even if the right to so vote has been suspended by the happening of
such a contingency.
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"Westbrooke": Westbrooke Communities, Inc., together with any
and all Subsidiaries of Westbrooke Communities, Inc.
"Westbrooke Loan Documents": any and all documents and/or
instruments now or hereafter entered into by Westbrooke in connection with any
loans, financings or other credit facilities being or having been extended to
Westbrooke.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in any Notes or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Borrower and its Subsidiaries not defined in Section 1.1 and accounting
terms partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) All references herein to currency amounts shall be
references to United States dollars.
(d) All reports, documentation, filings, financial statements
and other materials to be provided hereunder by the Borrower, the Indemnitors
and/or any of Borrower's subsidiaries shall be in English.
(e) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(f) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions
hereof, each Lender severally agrees to make a term loan (a "Term Loan") to the
Borrower in one or more advances solely in connection with the purchase of the
capital stock of ▇▇▇▇▇ in an amount not to exceed the amount of the Term Loan
Commitment of such Lender then in effect; provided, that the Term Loan
Commitments shall terminate at 3:00 p.m., New York City time, on the Advance
Deadline, if the Term Loan has not been made prior to that time. The Term Loans
may from time to time be (a) Eurodollar Loans, (b) Base Rate Loans or (c) a
combination thereof, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.3 and 3.2.
2.2 Term Notes. Advances of the Term Loan of each Lender shall
be evidenced by Term Notes of the Borrower, payable to the order of such Lender
and representing the obligation of the Borrower to pay the amount of the Term
Loan advanced by such Lender. Each Lender is hereby authorized to record the
date, Type and amount of Term Loans made by it and the date and amount of each
payment or prepayment of principal thereof and each Conversion of all or a
portion thereof to another Type and, in the case of Eurodollar Loans, the
Interest Period with respect thereto, on the schedule annexed to and
constituting a part of its Term Notes, and any such recordation shall constitute
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prima facie evidence of the accuracy of the information so recorded; provided,
that the failure of such Lender to make any such recordation shall not impair or
otherwise affect the validity or enforceability of its Term Notes. Each Term
Note shall (a) be dated the Closing Date or the effective date of each Term Loan
advance made after the Closing Date, as applicable, (b) be stated to mature on
the Term Loan Maturity Date, and (c) bear interest for the period from the date
thereof on the unpaid principal amount thereof at the applicable interest rates
per annum specified in Section 3.1. Interest on the Term Notes shall be payable
on the dates specified in Section 3.1(d). All outstanding principal of the Term
Notes shall be due and payable on the Term Loan Maturity Date.
2.3 Procedure for Term Loan Borrowing. The Borrower shall give
the Administrative Agent irrevocable notice (which notice shall be in the form
of Exhibit H attached hereto and must be received by the Administrative Agent
prior to 10:00 a.m., New York City time, (a) three (3) Business Days prior to
the (1) Term Loan Closing Date or the date of the requested advance of the Term
Loan, as applicable, if all or any part of the Term Loans are to be initially
Eurodollar Loans or (b) one Business Day prior to the Term Loan Closing Date or
the date of the requested Term Loan advance, as applicable, otherwise)
requesting that the Lenders make the Term Loans on the Term Loan Closing Date
and specifying (i) the Term Loan Closing Date or the effective date of the Term
Loan advance, as applicable, (ii) the amount to be borrowed, (iii) whether the
Term Loans are to be initially Eurodollar Loans, Base Rate Loans or a
combination thereof, and (iv) if the Term Loans are to be entirely or partly
Eurodollar Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Periods therefor. Upon receipt of
such notice the Administrative Agent shall promptly notify each Lender thereof.
Not later than 11:00 a.m. on the Term Loan Closing Date each Lender shall make
available to the Administrative Agent at its office specified in Section 10.2
the amount of such Lender's Pro Rata Share of such borrowing in immediately
available funds. The Administrative Agent shall on such date credit the account
of the Borrower on the books of such office of the Administrative Agent with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.
SECTION 3. GENERAL PROVISIONS APPLICABLE TO LOANS
3.1 Interest Rates and Payment Dates.
(a) Each Eurodollar Loan shall bear interest for each day
during each Interest Period with respect thereto at a rate per annum
equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan, (ii)
any interest payable thereon, (iii) any commitment fee or (iv) any
other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), the principal of
the Loans and any such overdue interest, commitment fee or other amount
shall bear interest at a rate per annum which is (x) in the case of
principal, the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this Section plus 5% or (y) in the case
of any such overdue interest, commitment fee or other amount, the rate
described in paragraph (b) of this Section plus 5%, in each case from
the date of such non-payment until such overdue principal, interest,
commitment fee or other amount is paid in full (as well after as before
judgment).
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(d) Interest shall be payable in arrears on each Interest
Payment Date; provided, that interest accruing pursuant to paragraph
(c) of this Section shall be payable from time to time on demand.
3.2 Conversion and Continuation Options.
(a) The Borrower may elect from time to time to Convert
Eurodollar Loans to Base Rate Loans by giving the Administrative Agent at least
two Business Days' prior irrevocable notice of such election; provided, that any
such Conversion of Eurodollar Loans may only be made on the last day of an
Interest Period with respect thereto. The Borrower may elect from time to time
to Convert Base Rate Loans to Eurodollar Loans by giving the Administrative
Agent at least three Business Days' prior irrevocable notice of such election.
Any such notice of Conversion to Eurodollar Loans shall specify the length of
the initial Interest Period or Interest Periods therefor. Upon receipt of any
such notice the Administrative Agent shall promptly notify each Lender thereof.
All or any part of outstanding Eurodollar Loans and Base Rate Loans may be
Converted as provided herein; provided, that (i) no Loan may be Converted into a
Eurodollar Loan when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have determined that such a
Conversion is not appropriate, (ii) any such Conversion may only be made if,
after giving effect thereto, Section 3.3 shall not have been contravened, and
(iii) no Loan may be converted into a Eurodollar Loan after the date that is one
(1) month prior to the date of the final installment of principal in the case of
Conversions of Term Loans.
(b) Any Eurodollar Loans may be Continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans; provided,
that no Eurodollar Loan may be Continued as such (i) when any Event of Default
has occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined that such a Continuation is not appropriate, (ii) if,
after giving effect thereto, Section 3.3 would be contravened or (iii) after the
date that is one month prior to the date of the final installment of principal
(in the case of Continuations of Term Loans) and provided, further, that if the
Borrower shall fail to give such notice or if such Continuation is not permitted
such Loans shall be automatically converted to Base Rate Loans on the last day
of such then expiring Interest Period.
3.3 Minimum Amounts and Maximum Number of Tranches. All
borrowings, Conversions and continuations of Loans hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate principal
amount of the Loans comprising each Eurodollar Loan shall be equal to $1,000,000
or a whole multiple of $100,000 in excess thereof and in no event shall there be
more than six Eurodollar Loans outstanding at any time.
3.4 Optional Prepayments.
The Borrower may, on the last day of any Interest Period with
respect thereto, in the case of Eurodollar Loans, or at any time and
from time to time, in the case of Base Rate Loans, prepay the Loans, in
whole or in part, without premium or penalty, upon at least ten days'
irrevocable notice to the Administrative Agent, specifying the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans,
Base Rate Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each. Upon receipt of any such notice
the Administrative Agent shall promptly notify each Lender thereof. If
any such notice is given, the amount specified in such notice shall be
due and payable on the date specified therein, together
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with any amounts payable pursuant to Section 3.12 and accrued interest
to such date on the amount prepaid. Amounts prepaid on account of the
Term Loans may not be reborrowed. Partial prepayments pursuant to this
Section shall be in an aggregate principal amount of $1,000,000 or a
whole multiple of $100,000 in excess thereof.
3.5 Mandatory Prepayments.
(a) The Borrower shall, on the date that is 90 days from the
date of receipt of the Net Proceeds by the Borrower, Newmark Corp. or Holdings
Corp. from (i) the sale, lease, transfer or other disposition of any property or
assets of the Borrower or any of its Subsidiaries other than in the ordinary
course of its business, (ii) the incurrence or issuance by the Borrower or any
of its Subsidiaries of any Indebtedness, (iii) the issuance or sale by the
Borrower, the Indemnitors, or any of their respective Subsidiaries of any
Capital Stock therein or any capital raises of Borrower, the Indemnitors, or any
of their respective Subsidiaries, whether in the form of debt, equity or
off-balance sheet transactions that result in capital raising, and (iv) any
Extraordinary Receipt received by or paid to or for the account of the Borrower
or any of its Subsidiaries and not otherwise included in subclause (i), (ii) or
(iii) of this Section 3.5, prepay an aggregate principal amount of the Loans in
an amount equal to 100% of the amount of such Net Proceeds; provided that such
prepayment shall not be required in respect of Net Proceeds that are invested or
reinvested in assets used in the business of Borrower or any Subsidiaries,
expended in the ordinary course of business, or paid to the administrative agent
under the ▇▇▇▇▇ Credit Agreement for application to the outstanding balance
under the ▇▇▇▇▇ Revolving Credit Facility Documents within 90 days of receipt of
such Net Proceeds. Notwithstanding any provision herein to the contrary, to the
extent an Event of Default has occurred or is continuing, all loan proceeds or
advances of Permitted Subordinate Indebtedness received by Borrower, Newmark
Corp. or Holdings Corp. shall be immediately paid to Administrative Agent to be
applied to the outstanding balance of the Term Loan. Each prepayment of Loans
pursuant to this Section 3.5 shall be applied to outstanding principal of the
Term Loans until paid in full. Prepayments of Term Loans may not be reborrowed.
(b) In addition to any other principal curtailment payments
required to be made by Borrower pursuant to this Section 3.5, the Borrower shall
make a principal curtailment payment on the Loans in the amount of $15,800,000
upon the earlier to occur of (i) sixty (60) days after the acquisition by
Holdings Corp. (through Acquisition Corp.) of more than 50% of the Capital Stock
of ▇▇▇▇▇, or ninety (90) days after the Closing Date, such principal curtailment
payment to be funded from either funds drawn under, and pursuant to, the ▇▇▇▇▇
Revolving Credit Facility Documents or dividends derived from Holdings Corp.
Such principal curtailment payment shall be accompanied by a written
certification signed by a Responsible Officer and in form, content and substance
reasonably acceptable to the Administrative Agent stating that the funds for
such principal curtailment payment was funded solely from Alternative Funds,
funds made available pursuant to the ▇▇▇▇▇ Revolving Credit Facility Documents
or dividends derived from Holdings Corp.
(c) In addition to any other principal curtailment payments on
the Loans required to be made by Borrower pursuant to this Section 3.5, the
Borrower shall make a principal curtailment payment on the Loans in the amount
of $10,000,000 on May 1, 2001.
(d) In addition to any of the other principal curtailment
payments on the Loans required to be made by Borrower pursuant to this Section
3.5, the Borrower shall make monthly principal curtailment payments on each
Interest Payment Date in an amount equal to the difference between (i) the
amount of interest due and owing with respect to the Loans for such month (to
the extent paid, as required pursuant to this Agreement), and (ii) 50% of
▇▇▇▇▇'▇ Consolidated Net Income for the immediately preceding calendar month.
Each such principal curtailment payment shall be accompanied by a written
certification signed by a Responsible Officer and in form, content and substance
reasonably acceptable to
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the Administrative Agent stating that the amount of such principal curtailment
payment represents the difference between (i) the amount of interest due and
owing with respect to the Loans for such month, and (ii) 50% of ▇▇▇▇▇'▇
Consolidated Net Income for the immediately preceding month.
(e) In addition to any of the other principal curtailment
payments on the Loans required to be made by Borrower pursuant to this Section
3.5, from and after (i) June 1, 2001 the Borrower shall make quarterly principal
curtailment payments on the first day of each March, June, September and
December in an amount equal to the sum of (i) $35,000,000, and (ii) (a) from and
after December 31, 2000 and continuing until December 31, 2001, 50% of the
amount that is 60% of Newmark Corp.'s Consolidated Net Income for the
immediately preceding calendar quarter, and (b) from and after December 31, 2001
and continuing until such time as the Loan has been repaid in its entirety, 70%
of the amount that is 60% of Newmark Corp.'s Consolidated Net Income for the
immediately preceding calendar quarter. Each such principal curtailment payment
shall be accompanied by a written certification signed by a Responsible Officer
and in form, content and substance reasonably acceptable to the Administrative
Agent stating that the amount of such principal curtailment payment represents
the sum of (i) $35,000,000 and (ii)(a) from and after December 31, 2000 and
continuing until December 31, 2001, 50% of that amount that is 60% of Newmark
Corp.'s Consolidated Net Income for the immediately preceding calendar quarter,
and (b) from and after December 31, 2001 and continuing until such time as the
Loan has been repaid in its entirety, 70% of the amount that is 60% of Newmark
Corp.'s Consolidated Net Income for the immediately preceding calendar quarter.
3.6 Payments and Computation of Interest and Fees.
(a) The Borrower shall make each payment hereunder and under
the Term Notes, irrespective of any right of counterclaim, deduction or set-off,
not later than 11:00 A.M. (Charlotte, North Carolina time) on the day when due
in U.S. dollars to the Administrative Agent at the account designated by the
Administrative Agent in immediately available funds, with payments received by
the Administrative Agent after such time being deemed to have been received on
the next succeeding Business Day. The Administrative Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Term Notes to more than one
Lender, to such Lenders for the accounts of their respective Applicable Lending
Offices in accordance with their respective Pro Rata Share of the amounts of
such respective Obligations payable to such Lenders at such time and (ii) if
such payment by the Borrower is in respect of any Obligation then payable
hereunder solely to one Lender, to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 10.6, from
and after the effective date of such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder and under the Term Notes
in respect of the interest assigned thereby to the Lender assignee thereunder,
and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or, in the
case of a Lender, under the Term Note held by such Lender, to charge from time
to time against any or all of the Borrower's accounts with such Lender any
amount so due.
(c) All computations of interest, and fees shall be made by
the Administrative Agent on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, fees or commissions are
payable.
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Each determination by the Administrative Agent of an interest rate, fee or
commission hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder or under the Term Notes
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest; provided,
however, that, if such extension would cause payment of interest on or principal
of Eurodollar Loans to be made in the next succeeding calendar month, such
payment shall be made on the immediately preceding Business Day.
(e) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to any Lender
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender on
such date an amount equal to the amount due such Lender on such date. If and to
the extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender, together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Effective Rate.
(f) Whenever any payment received by the Administrative Agent
under this Agreement or any of the other Loan Documents is insufficient to pay
in full all amounts due and payable to the Administrative Agent and the Lenders
under or in respect of this Agreement and the other Loan Documents on any date,
such payment shall be distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the following order of priority:
(i) first, to the payment of all of the fees,
indemnification payments, costs and expenses that are due and
payable to the Administrative Agent (solely in its capacity as
Administrative Agent) under or in respect of this Agreement
and the other Loan Documents on such date;
(ii) second, to the payment of all of the
indemnification payments, costs and expenses that are due and
payable to the Lenders under Section 10.5 hereof and any
similar section of any of the other Loan Documents on such
date, ratably based upon the respective aggregate amounts of
all such indemnification payments, costs and expenses owing to
the Lenders on such date;
(iii) third, to the payment of all of the amounts
that are due and payable to the Administrative Agent and the
Lenders under Sections 3.10, 3.11 and 3.12 hereof on such
date, ratably based upon the respective aggregate amounts
thereof owing to the Administrative Agent and the Lenders on
such date;
(iv) fourth, to the payment of all of the accrued and
unpaid interest on the Obligations of the Borrower under or in
respect of the Loan Documents that is due and payable to the
Administrative Agent and the Lenders on such date, ratably
based upon the respective aggregate amounts of all such
interest owing to the Administrative Agent and the Lenders on
such date;
(v) fifth, to the payment of all of the accrued and
unpaid interest on the Loans that is due and payable to the
Administrative Agent and the Lenders on such date,
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ratably based upon the respective aggregate amounts of all
such interest owing to the Administrative Agent and the
Lenders on such date;
(vi) sixth, to the payment of the principal amount of
all of the outstanding Loans that is due and payable to the
Administrative Agent and the Lenders on such date, ratably
based upon the respective aggregate amounts of all such
principal owing to the Administrative Agent and the Lenders on
such date; and
(vii) seventh, to the payment of all other
Obligations of the Loan Parties owing under or in respect of
the Loan Documents that are due and payable to the
Administrative Agent and the other Lenders on such date,
ratably based upon the respective aggregate amounts of all
such Obligations owing to the Administrative Agent and the
other Lenders on such date.
If the Administrative Agent receives funds for application to the
Obligations of the Loan Parties under or in respect of the Loan
Documents under circumstances for which the Loan Documents do not
specify the Loans to which, or the manner in which, such funds are to
be applied, the Administrative Agent may, but shall not be obligated
to, elect to distribute such funds to each of the Lenders in accordance
with such Lenders Pro Rata Share of the sum of the aggregate principal
amount of all Loans outstanding at such time in repayment or prepayment
of such of the outstanding Loans or other Obligations then owing to
such Lenders.
3.7 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (y) any Loans that were to
have been Converted on the first day of such Interest Period to Eurodollar Loans
shall be Converted to or Continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans shall be Converted, on the first day of such Interest Period,
to Base Rate Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans shall be made or Continued as such, nor shall
the Borrower have the right to Convert Loans to Eurodollar Loans.
3.8 Sharing of Payments, Etc. If any Lender shall obtain at
any time any payment (whether voluntary, involuntary, through the exercise of
any right of setoff, or otherwise) (a) on account of Obligations due and payable
to such Lender under or in respect of this Agreement or any of the other Loan
Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to such Lender
at such time to (ii) the aggregate amount of the Obligations due and payable to
all Lenders at such time) of payments on account of the Obligations due and
payable to all Lenders under or in respect of this Agreement and the other Loan
Documents at such
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time obtained by all the Lenders at such time or (b) on account of Obligations
owing (but not due and payable) to such Lender under or in respect of this
Agreement or any of the other Loan Documents at such time in excess of its
ratable share (according to the proportion of (i) the amount of such Obligations
owing to such Lender at such time to (ii) the aggregate amount of the
Obligations owing (but not due and payable) to all Lenders under or in respect
of this Agreement and the other Loan Documents at such time) of payments on
account of the Obligations owing (but not due and payable) to all Lenders under
or in respect of this Agreement and the other Loan Documents at such time
obtained by all of the Lenders at such time, such Lender shall forthwith
purchase from the other Lenders such interests or participating interests in the
obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each other Lender shall be rescinded and such other Lender shall repay to the
purchasing Lender the purchase price to the extent of such Lender's ratable
share (according to the proportion of (A) the purchase price paid to such Lender
Party to (B) the aggregate purchase price paid to all Lenders) of such recovery,
together with an amount equal to such Lender's ratable share (according to the
proportion of (1) the amount of such other Lender's required repayment to (2)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered; provided, further, that, so long as the Obligations under
the Loan Documents shall not have been accelerated, any excess payment received
by any Lender in respect of any particular class of Loan shall be shared on a
pro rata basis only with other Lenders holding such class of Loan. The Borrower
hereby agrees that any Lender so purchasing an interest or participating
interest from another Lender pursuant to this Section 3.8 may, to the fullest
extent permitted under applicable law, exercise all its rights of payment
(including the right of setoff) with respect to such an interest or
participating interest, as the case may be, as fully as if such Lender were the
direct creditor of the Borrower in the amount of such an interest or
participating interest.
3.9 Illegality. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, Continue Eurodollar Loans as such and
Convert Domestic Dollar Loans to Eurodollar Loans shall forthwith be cancelled
and (b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall
be Converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such Conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 3.12.
3.10 Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law
or in the interpretation or application thereof or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Term Note or
any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except
for Non-Excluded Taxes covered by Section 3.11 and changes in
the rate of tax on the overall net income of such Lender);
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(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of such Lender which is not otherwise included in
the determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, Converting into,
Continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, the Borrower shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this Section, it shall promptly notify the Borrower (with a
copy to the Administrative Agent) of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.
3.11 Taxes.
(a) All payments made by the Borrower under this Agreement and
any Term Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Term Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under any Note,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America
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or a state thereof if such Lender fails to comply with the requirements of
clause (b) of this Section. Whenever any Non-Excluded Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received by
the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) (A) if such Lender is a "bank" within the meaning
of Section 881(c)(3)(A) of the Code, deliver to the Borrower
and the Administrative Agent (x) two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI,
or successor applicable form, as the case may be, and (y) an
Internal Revenue Service Form W-8 or W-9, or successor
applicable form, as the case may be, or (B) if such Lender is
not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form
W-8BEN or W-8ECI, deliver (x) a certificate substantially in
the form of Exhibit B (a "Non-Bank Status Certificate") and
(y) two completed and signed copies of Internal Revenue
Service Form W-8 or successor applicable form;
(ii) deliver to the Borrower and the Administrative
Agent two further copies of any such form or certification on
or before the date that any such form or certification expires
or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously
delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form W-8BEN
or W-8ECI, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, (ii) in the
case of a Non-Bank Status Certificate, that it is not a "bank" as such term is
defined in Section 881(c)(3)(A) of the Code, and (iii) in the case of a Form W-8
or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to Section 10.6 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms and statements required pursuant to this
Section; provided, that in the case of a Participant such Participant shall
furnish all such required forms and statements to the Lender from which the
related participation shall have been purchased.
3.12 Indemnity. If any payment of principal of, or Conversion
of, any Eurodollar Loan is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Eurodollar
Loan for any reason, or if the Borrower fails to make any payment or
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prepayment of a Eurodollar Loan for which a notice of prepayment has been given
or that is otherwise required to be made for any reason, the Borrower shall,
upon demand by such Lender (with a copy to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or Conversion or such failure to
pay or prepay, as the case may be, including, without limitation, any loss, cost
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Loan and any
anticipated lost profits in connection with the reallocation of funds, as
reasonably determined by such Lender in its sole discretion. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
3.13 Lending Offices; Change of Lending Office.
(a) Loans of each Type made by any Lender shall be made and
maintained at such Lender's Applicable Lending Office for Loans of such Type.
(b) Each Lender agrees that if it makes any demand for payment
under Section 3.10 or 3.11(a), or if any adoption or change of the type
described in Section 3.9 shall occur with respect to it, it will use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, as
determined in its sole discretion) to designate a different lending office if
the making of such a designation would reduce or obviate the need for the
Borrower to make payments under Section 3.10 or 3.11(a), or would eliminate or
reduce the effect of any adoption or change described in Section 3.9.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans, the Borrower hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 Financial Condition.
(a) The unaudited consolidated balance sheet of the Borrower,
and its consolidated Subsidiaries as of December 31, 1999 and the related
consolidated statements of income and of cash flows for the fiscal year ended on
such date, copies of which have heretofore been furnished to each Lender, are
complete and correct, have been prepared in accordance with GAAP (except as to
the requirement of preparation of, and disclosure in, notes to financial
statements), and present fairly the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as of such date, and the consolidated
results of its operations and its consolidated cash flows for the fiscal year
then ended. The unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as of [September 30, 2000] and the related unaudited
consolidated statements of income and of cash flows for the period commencing on
January 1, 2000 and ended on such date, certified by a Responsible Officer,
copies of which have heretofore been furnished to each Lender, are complete and
correct and present fairly the consolidated financial condition of the Borrower
and its consolidated Subsidiaries as of such date, and the consolidated results
of its operations and its consolidated cash flows for the period commencing on
January 1, 2000 (subject to normal year-end audit adjustments). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as to the requirement of preparation of, and disclosure
in, notes to financial statements). Neither the Borrower nor any of its
consolidated Subsidiaries had, as of the date of the most recent balance sheet
referred to above, any material Contingent Obligation or liability for taxes, or
any long-term lease or unusual forward or long-term
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commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction or other financial derivative, which is not
reflected in the foregoing statements or in the notes thereto. During the period
from December 31, 1999 to and including the date hereof there has been no sale,
transfer or other disposition by the Borrower or any of its consolidated
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any Capital Stock of
any other Person) material in relation to the consolidated financial condition
of the Borrower and its consolidated Subsidiaries at the Closing Date.
(b) The pro forma consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as of [September 30, 2000], certified by a
Responsible Officer of the Borrower (the "Pro Forma Balance Sheet"), a copy of
which has been provided to the Administrative Agent and each Lender, is the
unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries adjusted to give effect (as if such events had occurred on such
date) to (i) the making of the Term Loans, (ii) the application of the proceeds
of the foregoing in accordance with the terms of the Loan Documents, and (iii)
the payment of all fees and expenses related to the foregoing transactions, as
estimated in good faith as of the date of the Pro Forma Balance Sheet. The Pro
Forma Balance Sheet presents fairly, on a pro forma basis, the consolidated
financial position of the Borrower and its Subsidiaries as of the Term Loan
Closing Date, assuming that the events specified in the preceding sentence had
actually occurred on such date, based upon the reasonable estimates of
Borrower's senior management, provided that neither Borrower nor its senior
management is aware of or has any knowledge of any information, event,
development or change that would make it unreasonable or inappropriate for
Administrative Agent to rely on such Pro Forma Balance Sheet.
(c) The operating forecast and cash flow projections of the
Borrower and its consolidated Subsidiaries, copies of which have heretofore been
furnished to the Lenders, have been prepared in good faith on the basis of
assumptions stated therein, which assumptions were fair in light of the
conditions existing at the time of delivery of such forecasts, and represented,
at the time of delivery, the Borrower's and its consolidated Subsidiaries' best
estimate of its future financial performance.
4.2 No Change. Since December 31, 1999, there has been no
development or event which has had or could reasonably be expected, whether
individually or in the aggregate, to have a Material Adverse Effect.
4.3 Existence; Compliance with Law. Each of the Borrower and
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, whether individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 Power; Authorization; Enforceable Obligations. The
Borrower has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and to borrow
hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of this Agreement and any Notes and to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents to which
the Borrower is a party. This Agreement has been, and,
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as to the Borrower, each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of the Borrower. This Agreement
constitutes, and each other Loan Document to which it is a party when executed
and delivered will constitute, a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
4.5 No Legal Bar. The execution, delivery and performance of
the Loan Documents to which the Borrower is a party, the borrowings hereunder
and the use of the proceeds thereof will not violate any Requirement of Law or
Obligation of the Borrower or of any of its Subsidiaries and will not result in,
or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Obligation, except that, pursuant to the terms of the Westbrooke Loan Documents,
the consent of Ohio Savings Bank is required for the Borrower to enter into the
Newmark Corp. Pledge, which consent has been delivered to Administrative Agent
prior to or concurrently with the execution of this Agreement.
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of its respective properties or revenues (a)
with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which could, whether individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Obligations in
any respect which could reasonably be expected, whether individually or in the
aggregate, to have a Material Adverse Effect.
4.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good record and defeasible title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property (i) of
Borrower is subject to any Lien , or (ii) of any Subsidiary is subject to any
Lien other than a Permitted Lien.
4.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected, whether individually or in the
aggregate, to have a Material Adverse Effect (the "Intellectual Property"). No
claim has been asserted and is pending by any Person challenging or questioning
the use of any such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, nor does the Borrower know of any valid basis
for any such claim. The use of such Intellectual Property by the Borrower and
its Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected, whether individually or in the aggregate, to have a Material Adverse
Effect.
4.10 No Burdensome Restrictions. No Requirement of Law or
Obligation of the Borrower or any of its Subsidiaries could reasonably be
expected, whether individually or in the aggregate, to have a Material Adverse
Effect.
4.11 Taxes. Each of the Borrower and its Subsidiaries has
filed or caused to be filed all tax returns which, to the knowledge of the
Borrower, are required to be filed and has paid all taxes
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shown to be due and payable on said returns or on any assessments made against
it or any of its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Borrower or its Subsidiaries, as the
case may be); no tax Lien has been filed, and, to the knowledge of the Borrower,
no claim is being asserted, with respect to any such tax, fee or other charge.
4.12 Federal Regulations. No part of the proceeds of any Loans
will be used for "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, 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 any Lender or the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form G-3 or FR Form U-1
referred to in said Regulation U.
4.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither the Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. The Borrower
is not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
4.15 Subsidiaries. Except as disclosed in writing to the
Administrative Agent and the Lenders from time to time after the date of this
Agreement, Schedule 4.15 sets forth (in the form of a chart) the name of each
direct or indirect Subsidiary of the Borrower, its form of organization, its
jurisdiction of organization, the total number of issued and outstanding shares
or other interests of Capital Stock thereof, the classes and number of issued
and outstanding shares or other interests of Capital Stock of each such class,
the name of each holder of Capital Stock thereof and the number of shares or
other interests of such Capital Stock held by each such holder and the
percentage of all outstanding shares or other interests of such class of Capital
Stock held by such holders.
4.16 Accuracy and Completeness of Information. Neither the
Information Memorandum nor any other information, exhibit or report furnished by
or on behalf of any Loan Party to the Administrative Agent, the Arranger or any
Lender in connection with the negotiation and syndication of the Loan Documents
or pursuant to the terms of the Loan Documents (other than any information,
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exhibit, or report generated by the Administrative Agent, the Arranger, and
Lender, the administrative agent under the ▇▇▇▇▇ Revolving Credit Facility
Documents or any lender under the ▇▇▇▇▇ Revolving Credit Facility Documents and
relating to the terms of the Loan Documents or the ▇▇▇▇▇ Revolving Credit
Facility Documents or the structure of the financings contemplated hereby or
thereby) contains any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements made therein, in light of the
circumstances in which any such statements were made, not misleading.
4.17 Labor Relations. No Loan Party is engaged in any unfair
labor practice which could reasonably be expected, whether individually or in
the aggregate, to have a Material Adverse Effect. There is (a) no unfair labor
practice compliant pending or, to the best knowledge of each Loan Party and each
of the Subsidiaries, threatened against a Loan Party before the National Labor
Relations Board which could reasonably be expected, whether individually or in
the aggregate, to have a Material Adverse Effect and no grievance or arbitration
proceeding arising out of or under a collective bargaining agreement is so
pending or threatened; (b) no strike, labor dispute, slowdown or stoppage
pending or, to the best knowledge of each Loan Party, threatened against a Loan
Party; and (c) to the best knowledge of each Loan Party, no union representation
question existing with respect to the employees of a Loan Party and no union
organizing activities are taking place with respect to any thereof.
4.18 Insurance. Each Loan Party has, with respect to its
properties and business, insurance covering the risks, in the amounts, with the
deductible or other retention amounts, and with the carriers, listed on Schedule
4.18, which insurance meets the requirements of Section 6.5 as of the date
hereof and the Closing Date.
4.19 Solvency. After giving effect to the incurrence of all
Indebtedness and obligations being incurred on or prior to such date in
connection herewith and therewith and after giving effect to the making of each
Loan, (i) the amount of the "present fair saleable value" of the assets of the
Borrower and of the Borrower and its Subsidiaries, taken as a whole, will, as of
such date, exceed the amount of all "liabilities of the Borrower and of the
Borrower and its Subsidiaries, taken as a whole, contingent or otherwise", as of
such date, as such quoted terms are determined in accordance with applicable
federal and state laws governing determinations of the insolvency of debtors,
(ii) the present fair saleable value of the assets of the Borrower and of the
Borrower and its Subsidiaries, taken as a whole, will, as of such date, be
greater than the amount that will be required to pay the liabilities of the
Borrower and of the Borrower and its Subsidiaries, taken as a whole, on their
respective debts as such debts become absolute and matured, (iii) neither the
Borrower nor the Borrower and its Subsidiaries, taken as a whole, will have, as
of such date, an unreasonably small amount of capital with which to conduct
their respective businesses, and (iv) each of the Borrower and the Borrower and
its Subsidiaries, taken as a whole, will be able to pay their respective debts
as they mature. For purposes of this Section 4.19, "debt" means "liability on a
claim", "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured, and (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
4.20 Limited Assets. As of the date hereof, Borrower owns no
assets other than eighty percent (80%) of the Capital Stock of Newmark Corp.,
one-hundred percent (100%) of the Capital Stock of Holdings Corp., one hundred
percent (100%) of the Capital Stock of Technical Olympic Nevada, Inc. (which is
the ninety-nine percent limited partner of Techolym, L.P.) and the one percent
(1%) general partner interest in Techolym, L.P., except for computer equipment
and miscellaneous de minimis office assets utilized in its day-to-day
operations.
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4.21 Purpose of Loans. The proceeds of the Term Loans shall be
used solely to purchase the outstanding Capital Stock of ▇▇▇▇▇ Homes Inc. and to
pay fees and expenses (subject to prior written approval of such fees and
expenses by the Administrative Agent) incurred in connection herewith and
therewith.
4.22 Environmental Matters. Except as set forth on Schedule
4.22 attached hereto,
(a) To the best of Borrower's knowledge, the facilities and
properties owned, leased or operated by the Borrower or any of its Subsidiaries
(the "Properties") do not contain, and have not previously contained, any
Materials of Environmental Concern in amounts or concentrations which (i)
constitute or constituted a material violation of, or (ii) could reasonably be
expected to give rise to material liability under, any Environmental Law.
(b) To the best of Borrower's knowledge, the Properties and
all operations at the Properties are in compliance, and have in the last three
years been in compliance, in all material respects with all applicable
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the Properties
or the business operated by the Borrower or any of its Subsidiaries (the
"Business") which could materially interfere with the continued operation of the
Properties or materially impair the fair saleable value thereof.
(c) Neither the Borrower nor any of its Subsidiaries has
received any written notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or compliance
with Environmental Laws with regard to any of the Properties or the Business,
nor does the Borrower have knowledge or reason to believe that any such notice
will be received or is being threatened.
(d) To the best of Borrower's knowledge, materials of
Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to material liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Properties
in violation of, or in a manner that could reasonably be expected to give rise
to liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named as
a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business.
(f) To the best of Borrower's knowledge, there has been no
release or threat of release of Materials of Environmental Concern at or from
the Properties, or arising from or related to the operations of the Borrower or
any Subsidiary in connection with the Properties or otherwise in connection with
the Business, in violation of or in amounts or in a manner that could reasonably
give rise to material liability under Environmental Laws.
4.23 Organizational Structure. Attached hereto as Schedule
4.23 is a full, complete and current description of the ownership of Borrower,
the Indemnitors and each of their respective Subsidiaries.
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4.24 Hedging Strategies. Borrower currently has no interest
rate hedging strategies or policies.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Loans. The agreement of each Lender
to make the initial Loan requested to be made by it is subject to the
satisfaction, immediately prior to or concurrently with the making of such Loan
on the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received:
(i) this Agreement and each of the other Loan
Documents, executed and delivered by a duly authorized officer
of the Borrower, with a counterpart for each Lender;
(ii) for the account of each Lender having a Term
Loan Commitment, a Term Loan Note of the Borrower conforming
to the requirements hereof and executed by a duly authorized
officer of the Borrower;
(iii) the Senior/Acquisition Loan Intercreditor
Agreement, executed and delivered by a duly authorized officer
of the Administrative Agent, the Lenders, the administrative
agent under the ▇▇▇▇▇ Revolving Credit Facility Documents and
the lenders under the ▇▇▇▇▇ Revolving Credit Facility
Documents; and
(iv) the Permitted Subordinated Debt Intercreditor
Agreement, executed and delivered by a duly authorized officer
of the Administrative Agent, Borrower, and Parent.
(b) Related Agreements. The Administrative Agent shall have
received, with a copy for each Lender, a true and correct copy (as certified by
a Responsible Officer of Borrower) of all (i) ▇▇▇▇▇ Acquisition Documents, (ii)
▇▇▇▇▇▇▇ ▇.▇. Revolving Credit Facility Documents, (iii) ▇▇▇▇▇ Revolving Credit
Facility Documents, PUDC Loan Documents, Westbrooke Loan Documents and all other
documents and instruments relating to any other Indebtedness of the Borrower
and/or its Subsidiaries and such other documents or instruments as may be
reasonably requested by the Administrative Agent, including, without limitation,
a copy of any other material contract to which the Borrower, the Indemnitors or
any of their respective Subsidiaries may be a party.
(c) Revolving Credit Loans. The ▇▇▇▇▇ Revolving Credit
Facility Documents shall have been duly executed and delivered by the parties
thereto.
(d) Financial Projections. The Administrative Agent shall have
received, with a counterpart for each Lender, Borrower's pro forma operating
forecast and cash flow projections of Borrower and its consolidated Subsidiaries
for the two-year period following the Closing Date, such pro forma projections
to be certified as true, complete and correct by a Responsible Officer of
Borrower and to be otherwise in form, content and detail reasonably acceptable
to the Administrative Agent.
(e) Secretary's Certificates. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit E, with
appropriate insertions and attachments, reasonably satisfactory in form and
substance to the Administrative Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of such Loan Party.
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(f) Corporate Proceedings of the Loan Parties. The
Administrative Agent shall have received, with a counterpart for each Lender, a
copy of the resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of each Loan Party authorizing
(i) the execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party and (ii) the borrowings contemplated hereunder,
certified by the Secretary or an Assistant Secretary of such Loan Party as of
the Closing Date, which certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded.
(g) Incumbency Certificates. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, as to the incumbency and signature of the
officers of such Loan Party executing any Loan Document reasonably satisfactory
in form and substance to the Administrative Agent, executed by the President or
any Vice President and the Secretary or any Assistant Secretary of such Loan
Party.
(h) Corporate Documents. The Administrative Agent shall have
received, with a counterpart for each Lender, true and complete copies of the
certificate of incorporation and by-laws of each Loan Party, certified as of the
Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of such Loan Party.
(i) Good Standing Certificates. The Administrative Agent shall
have received, with a copy for each Lender, certificates dated as of a recent
date from the Secretary of State or other appropriate authority, evidencing the
good standing of each Loan Party (i) in the jurisdiction of its organization and
(ii) in each other jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires it to qualify as a foreign
Person except, as to this subclause (ii), where the failure to so qualify could
not reasonably be expected, whether individually or in the aggregate, to have a
Material Adverse Effect.
(j) Consents, Licenses and Approvals. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate of a
Responsible Officer of the Borrower (i) attaching copies of all consents,
authorizations and filings referred to in Section 4.4, and (ii) stating that
such consents, licenses and filings are in full force and effect, and each such
consent, authorization and filing shall be in form and reasonably substance
satisfactory to the Administrative Agent.
(k) Fees. The Administrative Agent shall have received the
fees to be received on the Closing Date.
(l) Legal Opinions. The Administrative Agent shall have
received, with a counterpart for each Lender, the following executed legal
opinions, each of which shall be in form and substance reasonably satisfactory
to the Administrative Agent:
(i) the executed legal opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
L.L.P., counsel to the Loan Parties, substantially in the form
of Exhibit F; and
(ii) the executed legal opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
special counsel to the Loan Parties with respect to bankruptcy
matters relating to the non-consolidation of Borrower and
Holdings Corp. in the event of a bankruptcy or insolvency
proceeding (the "Insolvency Opinion");
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
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(m) Lien Searches. The Administrative Agent shall have
received the results of a recent search by a Person reasonably satisfactory to
the Administrative Agent, of the Uniform Commercial Code, judgment and tax lien
filings which may have been filed with respect to personal property of each Loan
Party, and the results of such search shall be reasonably satisfactory to the
Administrative Agent.
(n) Insurance. The Administrative Agent shall have received
evidence in form and substance reasonably satisfactory to it that all of the
requirements of Section 6.5 hereof shall have been satisfied.
(o) Management Employment Agreements. The Administrative Agent
shall have received true and complete copies of all employment agreements
relating to senior management of the Loan Parties, in each case in the form
delivered to Administrative Agent prior to the date of this Agreement or with
only such amendments, supplements, and modifications thereto as shall be
reasonably acceptable to the Administrative Agent.
(p) Tax Sharing Agreement. The Administrative Agent shall have
received and be reasonably satisfied with all tax sharing arrangements relating
to the Loan Parties, Borrower, Newmark Corp., and any other Subsidiary of
Borrower.
(q) Tender Offer. The Administrative Agent shall have received
evidence in form and substance reasonably satisfactory to it that the tender
offer of Acquisition Corp. to purchase the Capital Stock of ▇▇▇▇▇ is successful
with respect to more than fifty percent of the Capital Stock of ▇▇▇▇▇.
(r) Equity Contribution. Borrower shall have made the Equity
Contribution.
(s) Holdings Corp. Cash Collateral Account. The Borrower and
Holdings Corp. shall have established the Holdings Corp. Cash Collateral Account
with the Administrative Agent and all actions necessary or advisable in the
reasonable judgement of the Administrative Agent in order to perfect its
security interest thereon shall have been completed to the reasonable
satisfaction of the Administrative Agent.
(t) Newmark Corp. Cash Collateral Account. The Borrower and
Newmark Corp. shall have established Newmark Corp. Cash Collateral Account with
the Administrative Agent and all actions necessary or advisable in the
reasonable judgement of the Administrative Agent in order to perfect its
security interest thereon shall have been completed to the reasonable
satisfaction of the Administrative Agent.
(u) No Material Adverse Effect. Since September 30, 2000,
there has been no development or event which has had or could reasonably be
expected to have a Material Adverse Effect; provided, that, for purposes of this
condition, a Material Adverse Effect shall not be deemed to have occurred solely
as a result of (i) changes in GAAP, (ii) the proposal, passage or implementation
of any legislation adopting growth initiatives in the home building industry in
one or more jurisdictions within the United States or (iii) changes in general
economic conditions (including, without limitation, changes in interest rates).
(v) Notice of Default under ▇▇▇▇▇▇▇ ▇.▇. Revolving Credit
Facility Documents. Borrower shall have delivered to Administrative Agent a copy
of written irrevocable direction to Bank of America, N.A. to send Administrative
Agent or its designee copies of all written notices of default sent by Bank of
America, N.A. to Newmark Homes, L.P. under the Newmark Homes L.P. Revolving
Credit Facility Documents.
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5.2 Conditions to Each Loan. The agreement of each Lender to
make any Loan requested to be made by it on any date (including, without
limitation, its initial Loan) is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrower and the other Loan Parties
in or pursuant to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or would result from the extension of
credit to be made on such date or from the application of the proceeds
therefrom.
(c) No Material Adverse Effect. No event or circumstance shall
have occurred that has had or could reasonably be expected to have a Material
Adverse Effect.
(d) Advance Deadline. The Loan is made prior to the Advance
Deadline.
(e) Fees, Expenses. Borrower has paid the total costs, fees
and expenses (which costs, fees and expenses are subject to the prior written
approval of the Administrative Agent) which Borrower has and will incur in
connection with the acquisition of all of the Capital Stock of ▇▇▇▇▇ to be
acquired after the initial Loan.
(f) Advance Formula. The amount of each Loan shall be made
based upon the number of shares of Capital Stock of ▇▇▇▇▇ purchased by Borrower
for which no previous Loan has been made and shall be calculated in accordance
with the Advance Formula; provided, however, in no event shall the aggregate
amount of all Loans at any time exceed the lesser of (i) $135,000,000, and (ii)
the amount to which the Borrower is entitled pursuant to the Advance Formula.
(g) Additional Matters. The Administrative Agent shall have
received such other approvals, opinions, documents and information as the
Administrative Agent may reasonably request.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained in
this Section 5.2 have been satisfied.
5.3 Determinations Under Sections 5.1 and 5.2. For purposes of
determining compliance with the conditions specified in Sections 5.1 and 5.2,
each Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the Closing
Date, specifying its objection thereto and, if the extensions of credit to be
made on each such date consists of making Loans, such Lender shall not have made
available to the Administrative Agent such Lender's Pro Rata Share of such
Loans.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any of the
Commitments remain in effect or any amount is owing to any Lender or the
Administrative Agent hereunder or under any other Loan Document, the Borrower
shall and (except in the case of delivery of financial information, reports and
notices) shall cause each of its Subsidiaries to:
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6.1 Financial Statements. Furnish to the Administrative Agent
and each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the unaudited
consolidated balance sheet of the Borrower and each of its consolidated
Subsidiaries (except ▇▇▇▇▇ and ▇▇▇▇▇▇▇ Corp.), certified by a Responsible
Officer as being true, correct and complete as of the end of such year and the
related consolidated statements of income and retained earnings and of cash
flows for such year, setting forth in each case in comparative form the figures
for the previous year and noting any discrepancies between such unaudited
balance sheets and the audited balance sheets of ▇▇▇▇▇ and/or Newmark Corp. to
be provided pursuant to Section 6.1(b) below;
(b) as soon as available, but in any event within 90 days
after the end of each fiscal year of ▇▇▇▇▇, a copy of the audited consolidated
balance sheet of ▇▇▇▇▇ and its consolidated Subsidiaries as of the end of such
year and the related consolidated statements of income and retained earnings and
of cash flows for such year, setting forth in each case in comparative form the
figures for the previous year;
(c) as soon as available, but in any event within 90 days
after the end of each fiscal year of Newmark Corp., a copy of the audited
consolidated balance sheet of Newmark Corp. and its consolidated Subsidiaries as
of the end of each such year and the related consolidated statements of income
and retained earnings and of cash flows for such year, setting forth in each
case in comparative form the figures for the previous year;
(d) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the Borrower
and each of its consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of income and retained earnings and of
cash flows of the Borrower and its consolidated Subsidiaries for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
(except as to the requirement of preparation of, and disclosure in, notes to
financial statements) applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
6.2 Certificates; Other Information. Furnish to the
Administrative Agent and each Lender,
(a) concurrently with the delivery of the financial statements
referred to in Sections 6.1(a), (b), (c) and (d), a certificate of a Responsible
Officer (i) stating that during such period the Borrower has observed or
performed all of its covenants and other agreements, and satisfied every
condition, contained in this Agreement and the other Loan Documents to be
observed, performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any Default or Event of Default except as specified in
such certificate, and (ii) comparing actual financial results to projected
performance for such period, with a detailed discussion of any variances;
(b) not later than thirty days prior to August 1 and February
1 of each year, a copy of the projections by the Borrower of the operating
budget and cash flow budget of the Borrower and its Subsidiaries for each
quarter of the immediately succeeding fiscal year, such projections to be
accompanied by a certificate of a Responsible Officer to the effect that such
projections have been
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prepared on the basis of sound financial planning practice and that such
Responsible Officer has no reason to believe they are incorrect or misleading in
any material respect;
(c) not later than thirty days prior to August 1 and February
1 of each year, a land inventory analysis report, in form and substance
satisfactory to the Administrative Agent showing as to the Borrower and each of
its Subsidiaries, inventory of sold but unclosed housing units together with a
schedule indicating (1) project name, (2) location, (3) number of lots/units,
(4) closed lots/units, (5) remaining lots/units, (6) lots/units completed or
under construction (segregated by sold, spec, leased and model lots/units), (7)
lots/units sold but not started, (8) lots/units under contract and (9)
lots/units not sold and not under construction and (iii) a report of monthly
sales, on a per project basis, in form and substance reasonably satisfactory to
the Administrative Agent;
(d) within five days after the same are sent, copies of all
financial statements and reports which the Borrower and/or its consolidated
Subsidiaries sends to their respective stockholders, and within five days after
the same are filed, copies of all financial statements and reports which the
Borrower may make to, or file with, the Securities and Exchange Commission or
any successor or analogous Governmental Authority;
(e) during the month of November in each calendar year, a
report of a reputable insurance broker with respect to the insurance maintained
by the Borrower and its Subsidiaries in accordance with Section 6.5 of this
Agreement, and such supplemental reports as the Administrative Agent may from
time to time request;
(f) concurrently with the delivery thereof by ▇▇▇▇▇ to the
administrative agent under the ▇▇▇▇▇ Revolving Credit Facility Documents, all
financial statements and related information with respect to ▇▇▇▇▇ and its
Subsidiaries including, without limitation, all certificates, reports,
projections and schedules of computations used by ▇▇▇▇▇ in determining its
compliance with the financial covenants set forth in the ▇▇▇▇▇ Credit Agreement
and Borrowing Base Certificates (as that term is defined in the ▇▇▇▇▇ Credit
Agreement);
(g) concurrently with the delivery to the Administrative Agent
and the Lenders of each of the schedules of computations as referenced in
subparagraph (f) above, separate schedules of the computations used by the
Borrower in determining that there has not occurred an Event of Default
hereunder pursuant to Section 8(q) below; and
(h) concurrently with the delivery thereof by ▇▇▇▇▇▇▇ ▇.▇. to
the administrative agent under the ▇▇▇▇▇▇▇ ▇.▇. Revolving Credit Facility
Documents, all financial statements and related information with respect to
▇▇▇▇▇▇▇ ▇.▇. and its Subsidiaries including, without limitation, all
certificates, reports, projections and schedules of computations used by Newmark
Corp. in determining its compliance with the financial covenants set forth in
the ▇▇▇▇▇▇▇ ▇.▇. Credit Agreement and Compliance Certificates (as that term is
defined in the ▇▇▇▇▇▇▇ ▇.▇. Credit Agreement), but only to the extent such
information is required under the ▇▇▇▇▇▇▇ ▇.▇. Revolving Credit Facility
Documents;
(i) concurrently with the delivery to the Administrative Agent
and the Lenders of each of the Compliance Certificates as referenced in
subparagraph (i) above, separate schedules of the computations used by the
Borrower in determining that there has not occurred an Event of Default
hereunder pursuant to Section 8(r) below; and
(j) concurrently with the delivery thereof by PUDC to the
administrative agent or lender under the PUDC Loan Documents, all financial
statements and related information with respect to PUDC and its Subsidiaries
including, without limitation, all certificates, reports, projections and
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schedules of computations used by PUDC in determining its compliance with the
financial covenants set forth in the PUDC Loan Documents, but only to the extent
such information is required by the PUDC Loan Documents;
(k) concurrently with the delivery thereof by Westbrooke to
the administrative agent or lender under the Westbrooke Loan Documents, all
financial statements and related information with respect to Westbrooke and its
Subsidiaries including, without limitation, all certificates, reports,
projections and schedules of computations used by Westbrooke in determining its
compliance with the financial covenants set forth in the Westbrooke Loan
Documents, but only to the extent such information is required by the Westbrooke
Loan Documents;
(l) not later than 30 days after the first day of each
calendar quarter, a written certificate of a Responsible Officer stating that
during such period (i) ▇▇▇▇▇ has not violated any of the financial covenants set
forth in Sections 10.1 through 10.17, inclusive, of the ▇▇▇▇▇ Credit Agreement;
and (ii) Newmark, L.P. is not within ten percent (10%) of violating any of the
financial covenants set forth in Section 1.1 through 1.6, inclusive (pages 81
and 82) of the Newmark, L.P. Credit Agreement;
(m) not later than one Business Day after the acquisition by
Holdings Corp. (through Acquisition Corp.) of more than 50% of the Capital Stock
of ▇▇▇▇▇, Borrower shall deliver to Administrative Agent a written certification
from a Responsible Officer, in form and substance satisfactory to Administrative
Agent, stating that such acquisition has occurred, and specifying the amount of
Capital Stock of ▇▇▇▇▇ acquired by Holdings Corp. (through Acquisition Corp.) on
such date; and
(n) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Compliance with Laws, Etc.
(a) Comply, in all material respects, with all applicable
Requirements of Law, such compliance to include, without limitation, compliance
with ERISA, except where failure to so comply could not reasonably be expected
to result in or have a Material Adverse Effect.
(b) Without limitation of clause (a) of this Section 6.3, (i)
comply (and require all lessees and other Persons operating or occupying any of
its properties to comply, in all material respects, with all of the applicable
Environmental Laws and the Environmental Permits applicable to such Person or
its operations or properties; (ii) obtain and renew all of the Environmental
Permits necessary for the ownership or operation of their respective properties
or the conduct of their respective businesses as now conducted and as proposed
to be conducted; and (iii) conduct any investigation, study, sampling or
testing, and undertake any cleanup, removal, remedial or other action, necessary
to remove and clean up all of the Materials of Environmental Concern from any of
its properties in accordance with the requirements of all applicable
Environmental Laws, except, in the case of clause (ii) or (iii) of this Section
6.3(b), where the failure to obtain or renew any such Environmental Permit, to
conduct any such investigation, study, sampling or testing or to undertake any
such cleanup, removal, remedial or other action, either individually or in the
aggregate, could not reasonably be expected (A) whether individually or in the
aggregate, to have a Material Adverse Effect or (B) to subject the Borrower or
any of its Subsidiaries to any criminal penalty or liability or to subject the
Administrative Agent or any of the Lenders to any criminal penalty or liability
or (except for nonmaterial fines for which the Administrative Agent or such
Lender is fully indemnified under Section 10.5) any civil penalty or liability;
provided, however, that neither the Borrower nor any of its Subsidiaries shall
be required to undertake any such cleanup, removal, remedial or other action
otherwise required under this Section 6.3(b) to the extent that
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the amount, applicability or validity thereof is being contested in good faith
and by proper proceedings diligently conducted and appropriate and adequate
reserves are being maintained by the Borrower or its applicable Subsidiary with
respect to such circumstances in accordance with GAAP.
6.4 Payment of Taxes Etc. Pay and discharge to the extent due
and payable and before the same shall become delinquent, (i) all federal, state
and other material taxes, assessments, reassessments, levies and other
governmental charges imposed upon it or upon its property, assets, income or
franchises and (ii) all lawful claims that, if unpaid, might by law become a
Lien upon its property and assets or any part thereof, provided, however, that
neither the Borrower nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, reassessment, levy, charge or claim the
amount, applicability or validity of which is being contested in good faith and
by proper proceedings diligently conducted and as to which appropriate and
adequate reserves are being maintained by the Borrower or its applicable
Subsidiary in accordance with GAAP, unless and until any Lien resulting
therefrom attaches to its property and assets and becomes enforceable against
its other creditors.
6.5 Maintenance of Insurance. Maintain insurance for their
respective properties, assets and businesses (i) with insurance companies or
associations that have, or that have directly reinsured such insurance with
insurance companies or associations that have, an A.M. Best Company claims
paying ability rating of at least "A-" (or the then equivalent rating) and (ii)
of such types (including, without limitation, insurance against theft and fraud
and against loss or damage by fire, explosion or hazard of or to property and
general public liability insurance), in such amounts and with such deductibles,
covering such casualties and contingencies and otherwise on such terms as are at
least as favorable as those usually carried by companies of established
reputations engaged in similar businesses and owning similar properties and
assets in the same general areas in which the Borrower or its applicable
Subsidiary operates or as may otherwise be required by applicable Requirements
of Law, all of which insurance shall name the Administrative Agent as lender
loss payee, in the case of property or casualty insurance, and as an additional
insured, in the case of liability insurance.
6.6 Preservation of Corporate Existence, Etc. Preserve and
maintain its existence, legal structure, organization, rights (statutory and
pursuant to its Governing Documents), permits, licenses, approvals, privileges
and franchises; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to preserve any permit, license, approval,
privilege or franchise if the board of directors (or the persons performing
similar functions) of the Borrower or such Subsidiary shall determine in good
faith that the preservation thereof is no longer desirable in the conduct of the
business of the Borrower or such Subsidiary, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to the Borrower,
such Subsidiary or the Lenders or, solely in the case of any such permit,
license or qualification to do business as a foreign corporation, limited
partnership or limited liability company in any jurisdiction, that the loss
thereof, either individually or in the aggregate, could not reasonably be
expected, whether individually or in the aggregate, to have a Material Adverse
Effect.
6.7 Visitation Rights. At any reasonable time during normal
business hours and with not less than two Business Days' prior notice, permit
the Administrative Agent or any of the Lenders, or any agents or representatives
thereof (so long as such agents or representatives are or agree to be bound by
the provisions of Section 10.15, to examine and make copies of and abstracts
from the records and books of account of, and to visit the properties of, the
Borrower and its Subsidiaries and to discuss the affairs, finances and accounts
of the Borrower and/or any of its Subsidiaries with any of their officers or
directors and with their independent public accountants (and, in furtherance
thereof, the Borrower shall deliver to any independent public accountants
engaged by the Borrower or any of its Subsidiaries alter the date of this
Agreement a letter from the Borrower, on behalf of itself and its Subsidiaries,
advising such accountants that the Administrative Agent, on behalf of the
Lenders, has been authorized to exercise all rights of the Borrower to require
such accountants to disclose any and all financial statements and any
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other information relating to the financial condition, operations or performance
of the Borrower or any of its Subsidiaries that they may have and directing such
accountants to comply with any reasonable request of the Administrative Agent
for such information).
6.8 Keeping of Books. Keep proper books of record and account
in which accurate entries shall be made of all of the financial transactions and
the property, assets and businesses of the Borrower and each of its Subsidiaries
(including, without limitation, the establishment and maintenance of adequate
and appropriate reserves) in accordance with GAAP and all applicable
Requirements of Law.
6.9 Maintenance of Properties, Etc. (i) Maintain and preserve
all of its material properties that, either individually or in the aggregate,
are necessary in the conduct of its business in good working order and
condition, ordinary wear and tear and casualty and condemnation excepted, and
(ii) make, from time to time, all repairs, renewals, additions, replacements,
betterments and improvements of such properties that are reasonably necessary in
order to permit the business and activities carried on in connection therewith
to be properly conducted at all times.
6.10 Notices. Deliver to the Administrative Agent and each
Lender:
(a) as soon as possible and in any event within three Business
Days after the occurrence of each Default or any event, development or
occurrence that, either individually or in the aggregate, could reasonably be
expected, whether individually or in the aggregate, to have a Material Adverse
Effect continuing on the date of such statement;
(b) promptly and in any event within five Business Days after
receipt thereof, notice of any actual, pending or threatened suspension.
termination or revocation of any of the Governmental Authorizations of the
Borrower or any of its Subsidiaries that is necessary to own or lease and
operate their respective property and assets and to conduct their respective
businesses as now conducted and as proposed to be conducted, or any enjoinment,
barring or suspension of the ability of the Borrower or any such Subsidiary to
conduct any of its businesses in the ordinary course;
(c) promptly and in any event within five Business Days after
knowledge of the commencement thereof, notice of all actions, suits,
investigations, litigation, arbitrations and proceedings against or affecting
the Borrower or any of its Subsidiaries or any of the property or assets thereof
in any court or before any arbitrator or by or before any Governmental Authority
of any kind (i) that. either individually or in the aggregate, could reasonably
be expected, whether individually or in the aggregate, to have a Material
Adverse Effect or (ii) that could reasonably be expected to adversely affect the
legality, validity, binding effect or enforceability of any aspect of the
Transaction, any of the Loan Documents or any of the other transactions
contemplated thereby (and, in each case, upon the reasonable request of the
Administrative Agent, any other information available to the Borrower or any of
its Subsidiaries with respect to any of the foregoing that would enable the
Administrative Agent and the Lender Parties to more fully evaluate such action,
suit, investigation. litigation, arbitration or proceeding, unless the
applicable Loan Party or Subsidiary of a Loan Party is precluded from disclosing
any such report or statement pursuant to a confidentiality agreement with the
applicable Governmental Authority);
(d) as soon as possible and in any event within thirty days
after the Borrower knows or has reason to know thereof, notice of (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of, any Plan;
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(e) within ten Business Days after receipt thereof, copies of
all Revenue Agent Reports (Internal Revenue Service form 886) or other written
proposals of the Internal Revenue Service that propose, determine or otherwise
set forth adjustments (whether positive or negative) to the United States
federal income tax liability of the affiliated group (within the meaning of
Section 1504(a)(l) of the Code) of which the Borrower is a member aggregating
$500,000 or more; (ii) promptly and in any event within five Business Days after
the due date (after giving effect to all applicable extensions) for filing the
final federal income tax return in respect of each taxable year of the Borrower,
a certificate of the Borrower, duly executed by a Responsible Officer thereof,
stating that the common parent of the affiliated group (within the meaning of
Section 1504(a)(l) of the Code) of which the Borrower is a member has paid to
the Internal Revenue Service or other relevant taxation authority the full
amount that such affiliated group is required to pay in respect of United States
federal income taxes for such taxable year (other than any portion of such
amount which is being contested in good faith and by proper proceedings
diligently conducted and as to which appropriate and adequate reserves are being
maintained in accordance with GAAP) and that the Borrower and each of its
Subsidiaries have received any amount payable to them, and have not paid amounts
in respect of taxes (federal, state, local or foreign) in excess of the amount
the Borrower or such Subsidiary is required to pay, under the established tax
sharing arrangements of the Borrower and its Affiliates in respect of such
taxable year; and (iii) promptly and in any event within ten Business Days after
receipt thereof, copies of the determination of any request for a ruling or
determination letter from the Internal Revenue Service or any other taxation
authority or Governmental Authority regarding the actual or asserted tax
liability or deficiency of the Borrower or any of its Subsidiaries.
(f) promptly and in any event within five Business Days after
the assertion or occurrence thereof:
(i) notice of any condition or occurrence on or
arising from any property owned or operated by the Borrower or
any of its Subsidiaries that resulted or is alleged to have
resulted in noncompliance in any material respect by the
Borrower or such Subsidiary with any applicable Environmental
Law or Environmental Permit;
(ii) any condition or occurrence on any property
owned or operated by the Borrower or any of its Subsidiaries
that could reasonably be expected to cause such property to be
subject to any material restrictions on the ownership,
occupancy or use thereof or on the transferability of such
property by the Borrower or its applicable Subsidiary under
any Environmental Law; and
(iii) the taking of any removal or remedial action
involving material costs or liabilities in response to the
actual or alleged presence of any Hazardous Material on any
property owned or operated by the Borrower or any of its
Subsidiaries as required by any Environmental Law, any
Environmental Permit or any Governmental Authority.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto.
6.11 Intentionally Deleted.
6.12 Employment Agreement. The Administrative Agent shall have
the right to approve any material terms and conditions all compensation and
employment agreements for senior management personnel of the Borrower and its
Subsidiaries, and any material amendments or
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modifications to such compensation and employment agreements, which approval
shall not be unreasonably withheld or delayed.
6.13 Capital Raises. Any capital raises of Borrower, the
Indemnitors and/or any of their respective Subsidiaries, whether in the form of
debt, equity, preferred equity, or off-balance sheet transactions that result in
cash or capital raising, shall by applied to repayment of the Loans.
Notwithstanding the foregoing, the revaluing of an existing asset shall not be
deemed to be a capital raise hereunder.
6.14 Indemnification. The Borrower hereby agrees to pay,
protect, defend and save the Administrative Agent and the Lenders harmless from
and against, and hereby indemnifies the Administrative Agent and the Lenders
from and against, any and all liabilities, obligations, losses, damages, costs
and expenses (including, without limitation, attorneys' fees), causes of action,
suits, claims, demands and judgments of any nature of description whatsoever
(collectively, "Costs") which may at any time be imposed upon, incurred by or
awarded against the Administrative Agent and the Lenders as a result of (i) the
failure of the Borrower to perform and comply with, or cause the Indemnitors or
any of the Borrower's or Indemnitors' Subsidiaries to perform and comply with
any agreement, covenant or required action required pursuant to the terms of
this Agreement and/or any other Loan Document to be performed or complied with
by any of the foregoing, or (ii) any claim, action or proceeding being asserted
against the Administrative Agent or any Lender arising out of the actions taken
by the Administrative Agent or any Lender in connection with this Agreement or
any other Loan Document (other than arising out of the Administrative Agent's or
any such Lender's gross negligence or willful misconduct), including, but not
limited to, any claims filed against Administrative Agent or any Lender by
shareholders of Borrower, shareholders of Newmark Corp., shareholders of
Holdings Corp., shareholders of ▇▇▇▇▇, shareholders of Indemnitors, or
shareholders of any of Borrowers' or Indemnitors' Subsidiaries; or (iii) any
breach by Borrower of its representations and warranties contained in Section
4.22 of this Agreement.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any of the
Commitments remain in effect or any amount is owing to any Lender or the
Administrative Agent hereunder or under any other Loan Document, the Borrower
shall not, and shall not permit or allow any of its Subsidiaries to, directly or
indirectly, except to the extent expressly permitted under the ▇▇▇▇▇ Credit
Agreement, the PUDC Loan Documents, the ▇▇▇▇▇▇▇ ▇.▇. Revolving Credit Documents,
and the Westbrooke Loan Documents, as such documents may be amended, modified,
or supplemented:
7.1 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of Borrower under this Agreement and the
other Loan Documents;
(b) Indebtedness of ▇▇▇▇▇ under the ▇▇▇▇▇ Revolving Credit
Facility Documents and the Senior Notes;
(c) Indebtedness of ▇▇▇▇▇▇▇ ▇.▇. under the ▇▇▇▇▇▇▇ ▇.▇.
Revolving Credit Facility Documents;
(d) Indebtedness of PUDC under the PUDC Loan Documents;
(e) Indebtedness of Westbrooke under the Westbrooke Loan
Documents; and
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(f) Permitted Subordinated Indebtedness; provided, however,
that Borrower shall not be permitted to create, incur, or suffer to exist any
Permitted Subordinate Indebtedness if an Event of Default has occurred or is
continuing.
7.2 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings; provided, that adequate reserves with
respect thereto are maintained on the books of the Borrower and/or its
Subsidiaries, as applicable, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of Borrower or any such Subsidiary, as
the case may be; and
(f) Liens in effect as of the date of this Credit Agreement
and which are permitted under the Westbrooke Loan Documents, the PUDC Loan
Documents or the ▇▇▇▇▇▇▇ ▇.▇. Credit Agreement;
7.3 Limitation on Contingent Obligations. Create, incur,
assume or suffer to exist any Contingent Obligation.
7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business.
7.5 Limitation on Sale of Assets. Convey, sell, lease, assign,
pledge, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, Capital Stock, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person other than the Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business; provided, that the Net Proceeds of
each such transaction are applied to the prepayment of the Loans as provided in
Section 3.5(a);
(b) the sale of inventory or property in the ordinary course
of business; and
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(c) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection with the
compromise or collection thereof.
7.6 Limitation on Dividends. Except as otherwise specifically
provided for in this Agreement, declare or pay any dividend on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of the Borrower or any Subsidiary or
any warrants or options to purchase any such Capital Stock, or issue or grant
any warrants, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary (such
declarations, payments, setting apart, purchases, redemptions, defeasances,
retirements, acquisitions and distributions being herein called "Restricted
Payments").
7.7 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents; and
(c) investments by the Borrower in Newmark Corp. or Holdings
Corp.;
7.8 Limitation on Optional Payments and Modifications of Debt
Instruments. (a) Make any optional payment or prepayment on or redemption or
purchase of any Indebtedness (other than the Loans) or (b) amend, modify or
change, or consent or agree to any amendment, modification or change to any of
the terms of any Indebtedness (other than any such amendment, modification or
change which would extend the maturity or reduce the amount of any payment of
principal thereof or which would reduce the interest rate or extend the date for
payment of interest thereon).
7.9 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Borrower's or such Subsidiary's business, and (c) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate.
7.10 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary.
7.11 Limitation on Changes in Fiscal Year. Permit the fiscal
year of the Borrower or any Subsidiary to end on a day other than December 31.
7.12 Limitation on Negative Pledge Clauses. Enter into with
any Person any agreement, other than this Agreement, which prohibits or limits
the ability of the Borrower or any of its Subsidiaries to create, incur, assume
or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired.
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7.13 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement or
which are directly related thereto or expand the existing businesses of the
Borrower or any of its Subsidiaries into geographic locations which are not core
markets that are acceptable to the Administrative Agent.
7.14 Governing Documents. Amend its certificate of
incorporation, partnership agreement or other Governing Documents, without the
prior written consent of the Required Lenders, which shall not be unreasonably
withheld or delayed.
7.15 Limitation on Subsidiary Formation. Form any Subsidiary
unless (i) such Subsidiary becomes a co-borrower under all of the Loan
Documents, (ii) such Subsidiary incurs no Indebtedness and at no times owns any
property or assets other than property or assets owned as of the Closing Date by
Borrower, and (iii) the creation of such Subsidiary will not have a Material
Adverse Effect; provided, however, that the foregoing limitation shall not
prohibit (i) Newmark Corp. from forming any Subsidiary or any Newmark Corp.
Subsidiary from forming any Subsidiary or (ii) to the extent permitted under the
▇▇▇▇▇ Revolving Credit Facility Documents, ▇▇▇▇▇ from forming any Subsidiary or
any ▇▇▇▇▇ Subsidiary forming any Subsidiary.
7.16 Equity Interests. Create any equity interests (including,
without limitation preferred equity) unless, upon the creation of such
interests, sufficient capital is raised repay the Loans in full and the Loans
are in fact repaid in full.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) (i) The Borrower shall fail to pay any principal of any
Loan when due in accordance with the terms thereof or hereof; or (ii) the
Borrower shall fail to pay any interest on any Loan or any other amount payable
hereunder or under the other Loan Documents, when due in accordance with the
terms thereof or hereof, and in each case under this clause (ii) such failure
shall remain unremedied for at least two (2) Business Days after the same
becomes due; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document or which
is contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) The Borrower shall default in the observance or
performance of any agreement contained in Section 7; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this Agreement or
any other Loan Document (other than as provided in paragraphs (a) through (c) of
this Section), and such default shall continue unremedied for a period of 30
days; or
(e) (i) Any Loan Party or any of its Subsidiaries shall fail
to pay any principal of, premium or interest on, or any other amount payable in
respect of, one or more items of Indebtedness of the Loan Parties and their
Subsidiaries (excluding Indebtedness outstanding hereunder) that is outstanding
in an aggregate principal or notional amount of at least $1,000,000 when the
same becomes due and
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payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreements or instruments relating to all such
Indebtedness; or (ii) any other event shall occur or condition shall exist under
the agreements or instruments relating to one or more items of Indebtedness of
the Loan Parties and their Subsidiaries (excluding Indebtedness outstanding
hereunder) that is outstanding (or under which one or more Persons have a
commitment to extend credit) in an aggregate principal or notional amount of at
least $1,000,000, and such other event or condition shall continue after the
applicable grace period, if any, specified in all such agreements or
instruments, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness or otherwise to
cause, or to permit the holder thereof to cause, such Indebtedness to mature; or
(iii) one or more items of Indebtedness of the Loan Parties and their
Subsidiaries (excluding Indebtedness outstanding hereunder) that is outstanding
(or under which one or more Persons have a commitment to extend credit) in an
aggregate principal or notional amount (or, in the case of any Hedge Agreement,
that has an Agreement Value) of at least $1,000,000 shall be declared to be due
and payable or required to be prepaid or redeemed (other than by a regularly
scheduled or required prepayment or redemption), purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Indebtedness shall be required
to be made, in each case prior to the stated maturity thereof; or
(f) (i) Borrower or any Loan Party shall commence any case,
proceeding or other action (A) 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 (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or
Borrower or any Loan Party shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against Borrower or any Loan
Party any case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or unbonded
for a period of 60 days; or (iii) there shall be commenced against Borrower or
any Loan Party 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 (iv) Borrower or
any Loan Party shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) Borrower or any Loan Party shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) 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 commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
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together with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or
(h) One or more judgments or order for the payment of money
shall be rendered against Borrower or any of its Subsidiaries and shall remain
unsatisfied and either (i) enforcement proceedings shall have been commenced by
any creditor upon any such judgment or order or (ii) there shall be any period
of at least ten days during which a stay of enforcement of any such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
provided, however, that any such judgment or order shall not give rise to an
Event of Default under this Section 8(h) if and for so long as (A) the amount of
such judgment or order is covered by a valid and binding policy of insurance
between the defendant and the insurer, which shall be rated at least "A" by A.M.
Best Company, covering full payment thereof and (B) such insurer has been
notified, and has not disputed the claim made for payment, of the amount of such
judgment or order; or
(i) One or more judgments or order for the payment of money in
excess of $1,000,000 in the aggregate shall be rendered against one or more of
any Indemnitor or any of its Subsidiaries and shall remain unsatisfied and
either (i) enforcement proceedings shall have been commenced by any creditor
upon any such judgment or order or (ii) there shall be any period of at least
ten days during which a stay of enforcement of any such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; provided,
however, that any such judgment or order shall not give rise to an Event of
Default under this Section 8(i) if and for so long as (A) the amount of such
judgment or order is covered by a valid and binding policy of insurance between
the defendant and the insurer, which shall be rated at least "A" by A.M. Best
Company, covering full payment thereof and (B) such insurer has been notified,
and has not disputed the claim made for payment, of the amount of such judgment
or order; or
(j) One or more nonmonetary judgments or orders (including,
without limitation, writs or warrants of attachment, garnishment, execution,
distraint or similar process) shall be rendered against any Loan Party or any of
its Subsidiaries that, either individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, and there shall be any period of
at least ten days during which a stay of enforcement of any such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or
(k) Any "event of default" (however defined) shall have
occurred and be continuing under any of (i) the ▇▇▇▇▇ Revolving Credit Facility
Documents, (ii) the ▇▇▇▇▇▇▇ ▇.▇. Revolving Credit Documents, (iii) the ▇▇▇▇▇
Loan Documents, (iv) the PUDC Loan Documents, or (v) the Westbrooke Loan
Documents, in any case after the expiration of any applicable notice and/or cure
period specified in the applicable documents; or
(l) The Borrower shall cease to own 100% of the issued and
outstanding Capital Stock of Holdings Corp.; or
(m) The Borrower shall cease to own 80% of the issued and
outstanding Capital Stock of Newmark Corp.; or
(n) Borrower shall do any of the following: (i) incur
Indebtedness other than the Term Loan in violation of this Agreement, (ii) grant
any Lien on any of its property in violation of this Agreement, other than a
pledge of Capital Stock of its Subsidiaries in connection with the Term Loan,
(iii) make any Restricted Payments, (iv) enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, or make
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any material change in its present method of conducting business or (vi) make
loans, advances or investments in any Person in violation of this Agreement; or
(o) Borrower or any Subsidiary shall fail to maintain any
license required for the operation of its business, the failure of which would
have a Material Adverse Effect; or
(p) Borrower's failure to comply with Section 6.13 hereof; or
(q) ▇▇▇▇▇ shall, at any time be in default beyond any notice
and cure period (including, without limitation, any violation of any of the
financial covenants set forth in Sections ____ through ____, inclusive, of the
▇▇▇▇▇ Credit Agreement) whether or not waived by the lender under the ▇▇▇▇▇
Revolving Credit Facility Documents;
(r) ▇▇▇▇▇▇▇ ▇.▇. shall, at any time, be in default beyond any
notice and cure period under, or shall at any time, be within ten percent (10%)
of violating any of Sections ___ through ___, inclusive, of, the ▇▇▇▇▇▇▇ ▇.▇.
Revolving Credit Agreement Documents;
(s) Any action is brought for any violation by Borrower, the
Indemnitors or any of their respective Subsidiaries of 96 U.S.C.A. Section 1961
et seq. (Racketeer Influenced and Corrupt Organizations);
(t) If the ▇▇▇▇▇▇▇ ▇.▇. Revolving Credit Agreement Documents,
the PUDC Loan Documents or the Westbrooke Loan Documents are amended, modified,
or supplemented in any way without the prior written consent of Administrative
Agent, which consent may be withheld in Administrative Agent's sole and absolute
discretion;
(u) There shall occur a Change of Control;
(v) Bank of America, N.A. or its successor or any permitted
assignee of Bank of America, N.A.'s rights and obligations under the
Senior/Acquisition Loan Intercreditor Agreement defaults in the observance or
performance of any covenant or agreement by Bank of America, N.A. under the
Senior/Acquisition Loan Intercreditor Agreement; or
(w) Parent or its successor or any permitted assignee of
Parent's rights and obligations under the Permitted Subordinated Debt
Intercreditor Agreement defaults in the observance or performance of any
covenants or agreements by Parent under the Permitted Subordinated Debt
Intercreditor Agreement or if any provision of the Permitted Subordinated Debt
Intercreditor Agreement shall ever be ruled as unenforceable by a court of
competent jurisdiction.
then, and in any such event, (A) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (f) of this Section with
respect to the Borrower, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement shall immediately become due and payable, and
(B) if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
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SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the Administrative Agent of such Lender
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Administrative Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
9.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrower or any other Loan Party), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate or it shall first be indemnified to
its 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 any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents 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 all the
Lenders and all future holders of the Loans.
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9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower or any other Loan Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and the other
Loan Parties and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent hereunder or under the
other Loan Documents, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or any other Loan
Party which may come into the possession of the Administrative Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Credit Exposure Percentages in effect on
the date on which indemnification is sought, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with
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the Borrower and the other Loan Parties as though the Administrative Agent were
not the Administrative Agent hereunder and under the other Loan Documents. With
respect to the Loans made by it, the Administrative Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not the Administrative Agent,
and the terms "Lender" and "Lenders" shall include the Administrative Agent in
its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor Administrative Agent for the Lenders, whereupon such
successor Administrative Agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor Administrative Agent effective upon such appointment and approval, and
the former Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this Agreement or
any holders of the Loans. After any retiring Administrative Agent's resignation
as Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement, the Notes or any other Loan Document, nor consent
to any departure by any of the Loan Parties therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Required
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
(a) no amendment, waiver or consent shall, unless in writing and signed by all
of the Lenders (other than any Lender that is, at such time, a Defaulting
Lender), do any of the following at any time: (i) waive any of the conditions
specified in Section 5.1 or 5.2; (ii) change the number of Lenders or the
percentage of the Commitments or the aggregate outstanding principal amount of
Loans that, in each case, shall be required for the Lenders or any of them to
take any action hereunder or thereunder; (iii) amend Section 3.8 or this Section
10.1; (iv) increase the Commitments of the Lenders; (v) reduce the principal of,
or stated rate of interest on, the Notes or any fees or other amounts payable
hereunder; (vi) postpone any date scheduled for any payment of principal of, or
interest on, the Notes or any date fixed for any payment of fees hereunder or
under any other Loan Document; or (vii) change the order of application of any
reduction in the Commitments or any prepayment of Loans between the Term Loans
from the application thereof set forth in the applicable provisions of Sections
3.4 and 3.5, respectively, in any manner that materially affects the Lenders
holding Term Loans and (b) no amendment, waiver or consent shall, unless in
writing and signed by the Required Lenders and each Lender that has a Commitment
under, or is owed any amounts under or in respect of, the Term Loan Commitments
if such Lender is directly affected by such amendment, waiver or consent: (i)
increase the Commitments of such Lender; (ii) reduce the principal of, or stated
rate of interest on, the Notes held by such Lender or any fees or other amounts
payable hereunder to such Lender; (iii) postpone any date scheduled for any
payment of principal of, or interest on, the Notes or any date fixed or any
payment of fees hereunder or any other Loan Documents; or (iv) change the order
of application of any reduction in the Commitments or any prepayment of Loans
between the Term Loans from the application thereof set forth in the applicable
provisions of Section 3.4 and 3.5, respectively, in any manner that materially
affects the Lenders under such holding Term Loans; provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by the Lenders
required above to take such action, affect the rights or obligations of the
Lenders, under this Agreement; and provided, further, that no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition
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to the Lenders required above to take such action, affect the rights or duties
of the Administrative Agent under this Agreement and the other Loan Documents.
Notwithstanding any of the foregoing provisions of this Section 10.1, none of
the defined terms set forth in Section 1.1 shall be amended, supplemented or
otherwise modified in any manner that would change the meaning, purpose or
effect of this Section 10.1 or any section referred to herein unless such
amendment, supplement or modification is agreed to in writing by the number and
percentage of Lenders (and the Administrative Agent, if applicable) otherwise
required to amend such section under the terms of this Section 10.1.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been electronically confirmed,
addressed as follows in the case of the Borrower and the Administrative Agent,
and as set forth in Schedule 1 in the case of the other parties hereto, or to
such other address as may be hereafter notified by the respective parties
hereto:
The Borrower: Technical Olympic USA, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Technical Olympic USA, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: Banc of America Mortgage Capital Corporation
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mezzanine Finance
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Bank of America, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (301)
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and with a copy to: Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
provided, that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.3, 3.2 or 3.4 shall not be effective until
received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents 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 not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents 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 making of the Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Administrative Agent and the Arranger for all of their
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, subject to the limitation set forth in that certain
Commitment Letter dated October 11, 2000, executed by Borrower, Bank of America,
N.A., Banc of America Securities LLC, and Banc of America Mortgage Capital
Corporation, (b) to pay or reimburse each Lender, the Administrative Agent and
the Arranger for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including, without limitation, the fees
and disbursements of counsel to each Lender and of counsel to the Administrative
Agent, (c) to pay, indemnify, and hold each Lender, the Administrative Agent and
the Arranger harmless from, any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender, the Administrative Agent and the
Arranger harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents or the use of the proceeds of the Loans in connection with
the transactions contemplated hereby and any such other documents, including,
without limitation, any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Borrower, any of its Subsidiaries, the Parent or any of the
Properties (all the foregoing in this clause (d), collectively, the "indemnified
liabilities"), provided, that the Borrower shall have no obligation hereunder to
the
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Administrative Agent, the Arranger or any Lender with respect to indemnified
liabilities arising from (i) the gross negligence or willful misconduct of the
Administrative Agent, the Arranger or any such Lender or (ii) legal proceedings
commenced against the Administrative Agent or any such Lender by any security
holder or creditor thereof arising out of and based upon rights afforded any
such security holder or creditor solely in its capacity as such. The agreements
in this Section shall survive repayment of the Loans and all other amounts
payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("Participants") participating interests in any
Loan owing to such Lender, any Commitment of such Lender or any other interest
of such Lender hereunder and under the other Loan Documents. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the Borrower
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. The Borrower agrees that if amounts
outstanding under this Agreement are due or unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall, to the maximum extent permitted by applicable law, be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 3.10, 3.11, and 3.12 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided, that, in the case of Section 3.11, such Participant shall have
complied with the requirements of said Section and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender may, in accordance with applicable law, at any
time and from time to time assign to any Lender or any affiliate thereof or,
with the consent of the Administrative Agent (which in each case shall not be
unreasonably withheld), to any other Person (an "Assignee") all or any part of
its rights and obligations under this Agreement, the Notes, and the other Loan
Documents pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit G, with appropriate completions (an "Assignment and Acceptance"),
executed by such Assignee, such assigning Lender and by the Borrower and the
Administrative Agent and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided, that, in the case of any
such assignment to an additional bank or financial institution, the sum of the
aggregate principal amount of the Loans, and, if such assignment is of less than
all of the rights and obligations of the assigning Lender, the sum of the
aggregate principal amount of the Loans remaining with the assigning Lender are
each not less than $10,000,000 (or such lesser amount as may be agreed to by the
Borrower and the Administrative Agent); provided, however, that the limitation
set forth in the immediately preceding proviso shall not be applicable following
the
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occurrence and during the continuation of an Event of Default. Upon the
consummation of any assignment pursuant to this Section 10.6(c), the transferor
Lender, the Administrative Agent, and the Borrower shall make appropriate
arrangements so that if required, a new Note is issued to the transferor Lender
(if applicable) and the Assignee. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with Commitments as set forth therein, and
(y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto). Notwithstanding any
provision of this paragraph (c) and paragraph (e) of this Section, the consent
of the Borrower shall not be required, and, unless requested by the Assignee
and/or the assigning Lender, new Notes shall not be required to be executed and
delivered by the Borrower, for any assignment which occurs at any time when an
Event of Default shall have occurred and be continuing.
(d) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in Section 10.2
a copy of each Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amounts of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender, an Assignee, the Borrower and the Administrative Agent,
together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
subject to the provisions of Section 10.15, any and all financial information in
such Lender's possession concerning the Borrower, the Indemnitors and their
respective Subsidiaries and Affiliates (which financial information may be on a
consolidated basis) which has been delivered to such Lender by or on behalf of
the Borrower pursuant to this Agreement or which has been delivered to such
Lender by or on behalf of the Borrower, the Indemnitors and their respective
Subsidiaries and Affiliates in connection with such Lender's credit evaluation
of the Borrower, the Indemnitors and their respective Subsidiaries and
Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law.
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10.7 Set-off. In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right, without prior notice
to the Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon any amount becoming due and payable by
the Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender; provided, that the failure to give
such notice shall not affect the validity of such set-off and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission of signature pages hereto), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO ITS CONFLICT OF LAWS PROVISIONS.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail),
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postage prepaid, to the Borrower at its address set forth in Section 10.2 or at
such other address of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Borrower and the other Loan Parties, on one hand, and
Administrative Agent and Lenders, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each Lender agrees to keep confidential
any written or oral information (a) provided to it by or on behalf of the
Borrower, any of its Subsidiaries, or any of Borrower's Affiliates pursuant to
or in connection with this Agreement or (b) obtained by such Lender based on a
review of the books and records of the Borrower or any of its Subsidiaries;
provided, that nothing herein shall prevent any Lender from disclosing any such
information (i) to the Administrative Agent or any other Lender, (ii) to any
Transferee which receives such information having been made aware of the
confidential nature thereof and which agrees to comply with the provisions of
this Section 10.15, (iii) to its employees, directors, agents, attorneys,
accountants and other professional advisors, (iv) upon the request or demand of
any examiner or other Governmental Authority having jurisdiction over such
Lender, (v) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(vi) which has been publicly disclosed other than in breach of this Agreement,
or (vii) in connection with the exercise of any remedy hereunder.
10.16 Transaction Modification. Notwithstanding anything to
the contrary set forth herein, the Administrative Agent may elect in its sole
and absolute discretion at any time prior to May 31, 2001 to restructure the
transactions evidenced hereby on the following terms and conditions:
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(a) The Applicable Margin for the period beginning on June 1,
2001 and continuing to and including October 31, 2002 shall increase to (i)
7.50% per annum with respect to Eurodollar Loans, and (ii) 6.50% per annum with
respect to Base Rate Loans.
(b) The Applicable Margin for the period beginning on November
1, 2002 and ending on November 30, 2002 shall increase to 9.00% per annum with
respect to Eurodollar Loans, and (ii) 8.00% per annum with respect to Base Rate
Loans.
(c) The Loan shall not be prepayable for any reason during the
period commencing on June 1, 2001 and ending May 31, 2002. From and after June
1, 2002 the Loan shall be prepayable in accordance with the terms and conditions
of this Agreement and the other Loan Documents. The Borrower shall execute and
furnish or cause to be executed and furnished such further documentation or
information (including, without limitation, amendments, replacements,
corrections, deletions or additions to the Credit Agreement and the other Loan
Documents or any other materials furnished to Administrative Agent in connection
with the Term Loan) and take such further actions which (i) are reasonably
required to enable Administrative Agent to document and implement any such
changes to the terms of the Term Loan as contemplated in this Section 10.16, and
(ii) deemed necessary or appropriate by Administrative Agent in the exercise of
its rights under the Credit Agreement or under any of the other Loan Documents
or to grant, perfect, protect, maintain, preserve, continue and/or extend any
lien or collateral granted to the Administrative Agent under the Loan Documents
in connection with any such changes to the Term Loan. If Borrower fails to
furnish or cause to be furnished such further documentation or information or
fails to take such further actions as contemplated by this Section 10.16 within
five Business Days of Administrative Agent's written request, the outstanding
principal balance of the Term Loan, together with accrued, unpaid interest and
any other sums due under the Credit Agreement shall become immediately due and
payable in full on the sixth Business Day after Administrative Agent's written
request for such further documentation and information, without further notice
or demand by Administrative Agent.
[Signature Pages Follow]
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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.
TECHNICAL OLYMPIC USA, INC., a Delaware
corporation, as Borrower
By:
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
By:
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BANC OF AMERICA MORTGAGE CAPITAL
CORPORATION, as Administrative Agent
and as a Lender
By:
--------------------------------------
Name:
Title:
Credit Agreement: Signature Page
65
SCHEDULE 1
LENDERS, COMMITMENTS AND APPLICABLE LENDING OFFICES
Term Loan
Lender and Lending Offices Commitment
-------------------------- ----------
BANC OF AMERICA MORTGAGE CAPITAL CORPORATION $135,000,000
Applicable Lending Offices:
Base Rate Loans and Eurodollar Loans:
Banc of America Mortgage Capital Corporation
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Attention:
Fax:
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Telephone:
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Total: $135,000,000
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66
EXHIBIT D
CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of
November __, 2000, among Technical Olympic USA, Inc., the lenders parties
thereto, and Banc of America Mortgage Capital Corporation, as administrative
agent (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"). Pursuant to the provisions of Section
3.11(b)(i)(B) of the Credit Agreement, the undersigned hereby certifies that it
is not a "bank" as such term is defined in Section 881(c)(3)(A) of the Internal
Revenue Code of 1986, as amended.
[NAME OF LENDER]
By:
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Name:
Title:
Date: , 20
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