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EXHIBIT 10.1
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FIFTH AMENDED AND RESTATED
LOAN AGREEMENT
Dated as of July 6, 1998
between
▇▇▇▇▇▇▇ HOMES,
as the Borrower,
THE LENDERS NAMED HEREIN,
and
FOOTHILL CAPITAL CORPORATION,
as the Agent.
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS..............................................1
1.1 Defined Terms............................................1
1.2 Use of Defined Terms....................................23
1.3 Accounting Terms........................................23
1.4 Exhibits and Schedules..................................24
1.5 Miscellaneous Terms.....................................24
ARTICLE 2
CLOSING......................................................................24
2.1 Conditions to Closing...................................24
2.2 Effect of Fulfillment of Conditions.....................26
ARTICLE 3
[DELETED]....................................................................27
ARTICLE 4
REVOLVING ADVANCES AND LETTERS OF CREDIT.....................................27
4.1 Revolving Advances......................................27
4.2 Making the Revolving Advances...........................27
4.3 Reference Rate Loans....................................29
4.4 Offshore Rate Loans.....................................29
4.5 Redesignation of Loans..................................29
4.6 Letters of Credit and Set-Aside Letters.................31
4.7 Reduction of the Revolving Commitments..................37
4.8 Determination, Adjustment and Modification of the
Borrowing Base..........................................37
4.9 [Deleted................................................43
4.10 [Deleted]...............................................43
4.11 Defaulting Lenders......................................43
ARTICLE 5
PAYMENTS AND FEES............................................................46
5.1 Principal and Interest..................................46
5.2 Prepayments.............................................47
(a) Optional.................................47
(b) Mandatory................................48
5.3 Unused Line Fee and Special Commitment Costs............48
5.4 Administrative Fee......................................49
5.5 Offshore Rate Loan Fees and Costs.......................49
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5.6 Letter of Credit and Set-Aside Letter Fees and Costs....53
5.7 Late Payments and Default Interest......................56
5.8 Computation of Interest and Fees........................56
5.9 Non-Banking Days........................................56
5.10 Manner and Treatment of Payments........................56
5.11 Funding Sources.........................................58
5.12 Failure to Charge Not Subsequent Waiver.................58
5.13 Agent's Right to Assume Payments Will be Made
by Borrower.............................................58
5.14 Survivability...........................................59
5.15 Payment of Penalty or Fee Upon Acceleration.............59
ARTICLE 6
REPRESENTATIONS AND WARRANTIES...............................................59
6.1 Existence and Qualification; Power; Compliance
With Laws...............................................59
6.2 Authority; Compliance With Other Agreements and
Instruments and Government Regulations..................61
6.3 No Governmental Approvals Required......................62
6.4 Financial Statements....................................62
6.5 No Other Liabilities; No Material Adverse Changes.......63
6.6 Title to and Location of Property.......................63
6.7 Intangible Assets.......................................63
6.8 Public Utility Holding Company Act......................63
6.9 Litigation..............................................63
6.10 Binding Obligations.....................................64
6.11 No Default..............................................64
6.12 ERISA...................................................64
6.13 Regulations T, U and X; Investment Company Act..........65
6.14 Disclosure..............................................65
6.15 Tax Liability...........................................66
6.16 [Deleted]...............................................66
6.17 Fiscal Year.............................................66
6.18 Employee Matters........................................66
6.19 Environmental Matters...................................66
6.20 Partnerships, Joint Ventures and Limited Liability
Companies...............................................68
6.21 Outstanding Advances and Letters of Credit..............68
ARTICLE 7
AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)......................................................68
7.1 Payment of Taxes and Other Potential Liens..............68
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7.2 Preservation of Existence...............................69
7.3 Maintenance of Properties...............................69
7.4 Maintenance of Insurance................................69
7.5 Compliance With Laws....................................70
7.6 Inspection Rights.......................................71
7.7 Keeping of Records and Books of Account.................71
7.8 Compliance With Agreements, Duties and Obligations......71
7.9 Additional Guaranties, Collateral and Collateral
Documents...............................................71
7.10 Priority of Liens.......................................72
7.11 Deposit Accounts........................................72
7.12 Environmental Laws......................................73
7.13 Environmental Notices...................................74
7.14 Forward Commitment Protection...........................74
7.15 Appraisals..............................................74
7.16 Legal Fees..............................................75
ARTICLE 8
NEGATIVE COVENANTS...........................................................75
8.1 Transactions with Affiliates............................75
8.2 Mergers.................................................75
8.3 [Deleted]...............................................75
8.4 Sales and Leasebacks; Sales, Etc., of Assets............75
8.5 Redemption, Dividends and Distributions.................76
8.6 ERISA...................................................76
8.7 Change in Nature of Business............................77
8.8 Indebtedness, Guarantees and Liens......................77
8.9 Change in Fiscal Year...................................80
8.10 [Deleted]...............................................80
8.11 [Deleted]...............................................80
8.12 [Deleted]...............................................80
8.13 [Deleted]...............................................80
8.14 ▇▇▇▇▇▇▇ Delaware's Ownership of Borrower................80
8.15 New Land Purchases......................................80
8.16 Cash Flow...............................................82
8.17 Consolidated Fixed Charge Coverage Ratio................82
ARTICLE 9
INFORMATION AND REPORTING REQUIREMENTS.......................................82
9.1 Financial and Business Information......................82
9.2 Compliance Certificates.................................86
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ARTICLE 10
CONDITIONS TO ADVANCES.......................................................86
10.1 Any Increasing Advance or Issuance of Letter of Credit..86
10.2 Any Advance.............................................87
ARTICLE 11
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT.........................88
11.1 Events of Default.......................................88
11.2 Remedies Upon Event of Default..........................91
ARTICLE 12
THE AGENT....................................................................94
12.1 Appointment and Authorization...........................94
12.2 Delegation of Duties....................................94
12.3 Liability of Agent......................................94
12.4 Reliance by Agent.......................................95
12.5 Notice of Default.......................................95
12.6 Credit Decision.........................................96
12.7 Indemnification.........................................96
12.8 Agent and Other Lenders in Individual Capacity..........97
12.9 Successor Agent.........................................98
12.10 Collateral Matters......................................98
ARTICLE 13
MISCELLANEOUS...............................................................101
13.1 Cumulative Remedies; No Waiver.........................101
13.2 Amendments; Consents...................................101
13.3 Costs, Expenses and Taxes..............................102
13.4 Survival of Representations and Warranties.............103
13.5 Notices................................................103
13.6 Execution of Loan Documents............................104
13.7 Binding Effect; Assignment.............................104
13.8 Lien on Deposits and Property in Possession of any
Lender.................................................107
13.9 Indemnity by Borrower..................................108
13.10 Nonliability of Lenders................................109
13.11 No Third Parties Benefitted............................110
13.12 Confidentiality........................................110
13.13 Further Assurances.....................................110
13.14 Integration............................................110
13.15 Governing Law..........................................111
13.16 Severability of Provisions.............................111
13.17 Headings...............................................111
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13.18 Time of the Essence....................................111
13.19 Sharing of Setoffs.....................................111
13.20 Nature of the Lenders' Obligations.....................112
13.21 Waiver of Jury Trial...................................112
13.22 Jurisdiction...........................................112
13.23 Exercise of Discretion.................................113
SCHEDULES
1.1(a) Description of Class A Stock
1.1(b) Description of Class B Stock
1.1(g) Initial Commitments
6.2 Necessary Consents
6.3 Necessary Governmental Authorizations
6.5 Liabilities and Contingent Liabilities
6.9 Pending Litigation
6.12 Pension Plans and Multiemployer Plans
6.19 Environmental Matters
6.20 Partnerships, Joint Ventures and Limited Liability
Companies
EXHIBITS
A -- Form of Assignment and Acceptance
B -- Form of Borrowing Base Certificate
C -- Form of Borrowing Certificate
D -- Form of Request for Letter of Credit
E -- Form of Request for Loan
F -- Form of Request for Redesignation of Loan
G -- Form of Revolving Note
H -- [Deleted]
I -- [Deleted]
J -- Form of Amended and Restated Guaranty
K -- Form of Amended and Restated Security Agreement
L -- Form of Indemnity Agreement
M -- Form of Pledge Agreement (Borrower)
N -- Form of Amended and Restated Pledge Agreement
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FIFTH AMENDED AND RESTATED
LOAN AGREEMENT
Dated as of July 6, 1998
This FIFTH AMENDED AND RESTATED LOAN AGREEMENT ("Agreement") is
entered into by and among (i) ▇▇▇▇▇▇▇ HOMES (f/k/a The ▇▇▇▇▇▇▇ Companies), a
California corporation, as the borrower (the "Borrower"), (ii) the lenders
listed on Schedule 1.1(g) hereto (collectively, the "Lenders"), as the lenders,
and (iii) Foothill, as the Agent (in such capacity, the "Agent") for the
Lenders, the Issuing Banks (other than any Third Party Issuer) and the LC
Guarantor under the Loan Documents (such terms and all other capitalized terms
used in the Preliminary Statements having the respective meanings set forth
below).
PRELIMINARY STATEMENTS
(1) The Borrower, the Initial Lenders and the Agent are parties
to a Fourth Amended and Restated Loan Agreement dated as of March 25, 1994 (as
amended to the Closing Date, the "Existing Loan Agreement").
(2) The parties hereto desire to amend and restate the Existing
Loan Agreement on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto hereby agree that, effective on
and as of the Closing Date, the Existing Loan Agreement is amended and restated
in its entirety as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth respectively after each:
"Affiliate" means, as to any Person, any other Person
which directly or indirectly controls, or is under common control with,
or is controlled by, such Person. As used in this definition, "control"
(and its correlative meanings, "controlled by" and "under common control
with") shall mean possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise), provided that, in any event, any Person that
owns, directly or indirectly, 50% or more of the securities having
ordinary voting power for the election of directors or other governing
body of a corporation (other
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than securities having such power only by reason of the happening of a
contingency), or 50% or more of the partnership or other ownership
interests of any other Person (other than as a limited partner of such
other Person), will be deemed to control such corporation or other
Person.
"Agent" means Foothill, when acting in its capacity as the
Agent under any of the Loan Documents, and any successor Agent.
"Agent-Related Persons" means Foothill and any successor
agent arising under Section 12.9, together with their respective
Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Agent's Account" means account no. [323266193] maintained
by the Agent with [The Chase Manhattan Bank, ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇], or such other account as the Agent may specify from
time to time by written notice to the Borrower and the Lenders.
"Agent's Office" means the Agent's address as set forth on
the signature pages of this Agreement, or such other address in the
United States of America as the Agent hereafter may designate by written
notice to the Borrower and the Lenders.
"Aggregate Cost Components" has the meaning specified in
Section 4.8(a).
"Agreement" means this Fifth Amended and Restated Loan
Agreement, either as originally executed or as it may from time to time
be supplemented, modified, amended, restated or extended.
"Amended and Restated Guaranty" means the Amended and
Restated Guaranty, dated as of the Original Closing Date, made by
▇▇▇▇▇▇▇ Delaware in favor of the Lenders, the Issuing Banks (other than
any Third Party Issuer), the LC Guarantor and the Agent, in the form of
Exhibit J hereto, either as originally executed or as it may from time
to time be supplemented, modified, amended, restated or extended.
"Amended and Restated Pledge Agreement" means the Amended
and Restated Pledge Agreement, dated as of the Original Closing Date,
made by ▇▇▇▇▇▇▇ Delaware in favor of the Agent for the benefit of the
Lenders, the Issuing Banks (other than any Third Party Issuer) and the
LC Guarantor in the form of Exhibit N hereto, either as originally
executed or as it may from time to time be supplemented, modified,
amended, restated or extended.
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"Amended and Restated Security Agreement" means the
Amended and Restated Security Agreement, dated as of the Original
Closing Date, made by the Borrower in favor of the Agent, the Lenders,
the Issuing Banks (other than any Third Party Issuer) and the LC
Guarantor in the form of Exhibit K hereto, either as originally executed
or as it may from time to time be supplemented, modified, amended,
restated or extended.
"Assignee" means an assignee of any rights and obligations
of any Lender hereunder which assignee, in the case of any such rights
and obligations with respect to any Revolving Commitment or Revolving
Advance, is an Eligible Assignee.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Assignee, and accepted by the
Agent, in accordance with Section 13.7 and in substantially the form of
Exhibit A hereto.
"Attorney Costs" means and includes all reasonable fees
and disbursements of any law firm or other external counsel.
"Banking Day" means any day other than Saturday, Sunday or
other day on which banks are required or authorized by law to close in
the City of New York, the City of Los Angeles, the City of San Francisco
or the City of Chicago and, if the applicable Banking Day relates to any
Offshore Rate Loan, means such a day on which dealings are carried on in
the applicable offshore dollar interbank market.
"Borrower" means ▇▇▇▇▇▇▇ Homes, formerly known as The
▇▇▇▇▇▇▇ Companies, a California corporation, and its successors and
permitted assigns.
"Borrower Partnership" means a partnership, joint venture
or limited liability company of which the Borrower is a general partner,
joint venturer or member.
"Borrowing Base" has the meaning specified in Section
4.8(a).
"Borrowing Base Certificate" means the certificate,
substantially in the form of Exhibit B, signed by the Chief Financial
Officer, the Vice President/Controller or the President of the Borrower,
delivered to the Agent and the Lenders in connection with each
determination of the Borrowing Base pursuant to Section 4.8.
"Borrowing Certificate" means the certificate,
substantially in the form of Exhibit C, signed by the Chief Financial
Officer, the Vice
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President/Corporate Controller, the Vice President/Finance, Vice
President/Financial Operations or the President of the Borrower,
delivered to the Agent and the Lenders in connection with each Request
for Loan pursuant to Section 4.2(a).
"Cash" means, when used in connection with any Person, all
monetary and non-monetary items belonging to such Person that are
treated as cash in accordance with GAAP, consistently applied.
"Cash Equivalents" means, when used in connection with any
Person, such Person's Investments in:
(a) Government Securities due within one year after the
date of the making of the Investment;
(b) certificates of deposit issued by, bank deposits in,
bankers' acceptances of, and repurchase agreements covering Government
Securities executed by, any bank doing business in and incorporated
under the Laws of the United States of America or any state thereof and
having on the date of such Investment combined capital, surplus and
undivided profits of at least $500,000,000, in each case due within one
year after the date of the making of the Investment; and/or
(c) readily marketable commercial paper of corporations
doing business in and incorporated under the Laws of the United States
of America or any state thereof given on the date of such Investment the
highest credit rating by NCO/Moody's Commercial Paper Division of
▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Corporation, in
each case due within six months after the date of the making of the
Investment.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections
9601 et seq.
"Certificate of a Responsible Official" means a
certificate signed by a Responsible Official of the Person providing the
certificate.
"Change of Control" means, and shall be deemed to have
occurred if either, (a) ▇▇▇▇▇▇▇ Delaware shall cease to own 100% of the
Borrower's outstanding capital stock free and clear of any Liens (other
than the Liens created by the Amended and Restated Pledge Agreement), or
(b) after the Closing Date (i) any Person acquires, or two or more
Persons acting in concert acquire, beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934), directly or indirectly, of
securities of ▇▇▇▇▇▇▇ Delaware (or other securities convertible into
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such securities) representing 50% or more of the combined voting power
of all securities of ▇▇▇▇▇▇▇ Delaware entitled to vote in the election
of Series A Directors, unless such ownership results from the
convertibility or conversion of Series B Stock to Series A Stock; or
(ii) during any period of up to 24 consecutive months, commencing with
the Original Closing Date, individuals who at the beginning of such
24-month period were directors of ▇▇▇▇▇▇▇ Delaware cease for any reason
to constitute a majority of the Board of Directors of ▇▇▇▇▇▇▇ Delaware
unless the Persons replacing such individuals were nominated by the
Board of Directors of ▇▇▇▇▇▇▇ Delaware; provided, however, that, for the
purposes of clause (i) above, any acquisition of such voting securities
of ▇▇▇▇▇▇▇ Delaware by an employee stock ownership plan or related
trust, within the meaning of Section 4975 of ERISA, sponsored or
contributed to by ▇▇▇▇▇▇▇ Delaware or its Subsidiaries (an "ESOP") shall
not, so long as such ESOP is not acting in concert with any other Person
(whether before or after such acquisition by such ESOP), be deemed a
Change of Control within the meaning of clause (i) above unless the
number of voting securities acquired, controlled or held by such ESOP
exceeds 50% of the combined voting power of all securities of ▇▇▇▇▇▇▇
Delaware entitled to vote in the election of directors, other than
securities having such power only by reason of the happening of a
contingency.
"Closing" has the meaning specified in Section 2.1.
"Closing Date" has the meaning specified in Section 2.1.
"CMR" means Carmel Mountain Ranch, a California general
partnership.
"Collateral" means, collectively, all Property on or in
which the Agent or any Lender or Issuing Bank (other than any Third
Party Issuer) or LC Guarantor now or hereafter obtains or may obtain a
Lien pursuant to this Agreement or any other Loan Document.
"Collateral Documents" means any and all security
agreements (including the Amended and Restated Security Agreement),
deeds of trust, mortgages, assignments, pledge agreements (including the
Amended and Restated Pledge Agreement and the Pledge Agreement
(Borrower)), financing statements, landlord waivers, consents and other
documents now or hereafter granting Liens to the Agent and/or the
Lenders and/or the Issuing Banks (other than any Third Party Issuer)
and/or the LC Guarantor to secure any Obligations owing to the Agent or
any of the Lenders, the Issuing Banks (other than any Third Party
Issuer) or the LC Guarantor under the Loan Documents, or perfecting,
effecting, facilitating, consenting to, providing notice of or otherwise
evidencing such Liens.
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"Consolidated Cash Flow Available for Fixed Charges" of
the Borrower means for any period the sum of the amounts for such period
of (i) consolidated net income, plus (ii) consolidated income tax
expense, plus (iii) consolidated interest expense, plus (iv)
amortization of non-cash costs to cost of sales of real Property, plus
(v) other non-cash items reducing consolidated net income minus
consolidated interest income, all as determined on a consolidated basis
for ▇▇▇▇▇▇▇ Delaware in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" of the Borrower
means, with respect to any determination date, the ratio of (i)
Consolidated Cash Flow Available for Fixed Charges of ▇▇▇▇▇▇▇ Delaware
for the prior four full fiscal quarters for which financial results have
been reported immediately preceding the determination date, to (ii) the
aggregate consolidated interest incurred of ▇▇▇▇▇▇▇ Delaware reasonably
anticipated in good faith by ▇▇▇▇▇▇▇ Delaware to become due at any time
during the fiscal quarter in which the determination date occurs and the
three fiscal quarters immediately subsequent to such fiscal quarter;
provided, however, that in any calculation of the Borrower's
Consolidated Fixed Charge Coverage Ratio (a) the interest on any
indebtedness (whether existing or being incurred) bearing a floating
interest rate shall be computed as if the rate in effect on the
determination date had been the applicable rate for the entire period,
(b) no adjustment shall be made with respect to the intended use of
proceeds of any asset sale if such asset sale has not taken place prior
to the determination date, and (c) no adjustment shall be made with
respect to any intended repayment or refinancing of indebtedness (other
than (i) a repayment or refinancing of indebtedness out of the proceeds
of the incurrence of indebtedness giving rise to the determination date,
or (ii) anticipated repayments of indebtedness in the ordinary course of
business provided that the aggregate amount of indebtedness assumed to
be outstanding during the period for which consolidated interest
incurred is to be determined shall not be less than the aggregate amount
of indebtedness outstanding at the determination date) that has not
taken place prior to the determination date.
"Default" means any Event of Default or any event that,
with the giving of notice or passage of time or both, would be an Event
of Default.
"Defaulted Advance" means, with respect to any Lender at
any time, the amount of any Revolving Advance required to be made by
such Lender to the Borrower pursuant to Section 4.1 at or prior to such
time which has not been so made as of such time; provided, however, any
Revolving Advance made by the Agent for the account of such Lender
pursuant to Section 4.2(f) shall not be considered a Defaulted Advance
even if, at such time, such Lender shall not have reimbursed the Agent
therefor as provided in Section 4.2(f), except to the extent the
Borrower shall have paid to the Agent the amount required by the Agent
pursuant to the third sentence of Section 4.2(f). In the event that a
portion
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of a Defaulted Advance shall be deemed made pursuant to Section 4.11(a),
the remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section 4.1
on the same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender at
any time, any amount required to be paid by such Lender to the Agent,
any Issuing Bank, the LC Guarantor or any other Lender hereunder or
under any other Loan Document at or prior to such time which has not
been so paid as of such time, including, without limitation, any amount
required to be paid by such Lender to (a) any Issuing Bank or the LC
Guarantor pursuant to Section 4.6(c) or (e) to reimburse such Issuing
Bank or the LC Guarantor for such Lender's pro rata share of any payment
made by such Issuing Bank or the LC Guarantor under any Letter of
Credit, Set-Aside Letter or LC Guaranty which has not been reimbursed by
the Borrower, (b) the Agent pursuant to Section 4.2(f) to reimburse the
Agent for the amount of any Revolving Advance made by the Agent for the
account of such Lender, (c) any other Lender pursuant to Section 13.19
to purchase any participation in Advances owing to such other Lender,
and (d) the Agent pursuant to Section 12.7 to reimburse the Agent for
such Lender's ratable share of any amount required to be paid by the
Lenders to the Agent as provided therein. In the event that a portion of
a Defaulted Amount shall be deemed paid pursuant to Section 4.11(b), the
remaining portion of such Defaulted Amount shall be considered a
Defaulted Amount originally required to be paid hereunder or under any
other Loan Document on the same date as the Defaulted Amount so deemed
paid in part.
"Defaulting Lender" means, at any time, any Lender that,
at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b)
shall take or be the subject of any action or proceeding of a type
described in Section 11.1(h).
"Disposition" means the sale, transfer or other
disposition of the Borrower or of any asset of the Borrower with a value
or for consideration in excess of $1,000,000.
"Dollars" or "$" means United States dollars.
"Eligible Assignee" means (a) a commercial bank organized
under the laws of the United States of America, or any state thereof,
and having a net worth in excess of $100,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United
States of America, or any state thereof, and having a net worth in
excess of $100,000,000; (c) a commercial bank organized under the laws
of any other country that is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such
country, and having a net worth in excess of
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$100,000,000, so long as such bank is acting through a branch or agency
located in the United States of America; (d) the central bank of any
country that is a member of the Organization for Economic Cooperation
and Development; (e) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership, trust
or other entity) that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and
having a net worth in excess of $100,000,000; and (f) any Affiliate of
any Lender which Affiliate (other than in the case of any assignment by
such Lender of any obligations from which such Lender will not be
released) has a net worth in excess of $100,000,000; provided in each
case of clauses (a) through (f) that such entity (i) is an "accredited
investor" as defined in Rule 501(a) of Regulation D under the Securities
Act of 1933, as amended; (ii) is entitled to receive all payments and
distributions to be made to it hereunder and under the other Loan
Documents without the withholding of any tax; (iii) is not (and by
virtue of its becoming a Lender no Loan will be) subject to Title 11
(including but not limited to any appraisal requirements contained
therein or in the regulations issued pursuant thereto) of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as amended;
and (iv) in the case of any assignment of all or part of any Revolving
Commitment to such entity, has a net worth at least five times greater
than the amount of such Revolving Commitment being so assigned;
provided, further, however, that an Affiliate of the Borrower shall not
qualify as an Eligible Assignee under this definition.
"Environmental Indemnity" means the Indemnity Agreement,
dated as of the Original Closing Date, made by the Borrower in favor of
the Agent, the Lenders, the Issuing Banks (other than any Third Party
Issuer) and the LC Guarantor in the form of Exhibit L hereto, either as
originally executed or as it may from time to time be supplemented,
modified, amended, restated or extended.
"Environmental Laws" means any and all laws, statutes,
ordinances, rules, regulations, orders, or determinations of any
Governmental Agency pertaining to health or the environment in effect in
any and all jurisdictions in which the Borrower or any of its
Subsidiaries or any Borrower Partnership is or at any time may be doing
business, or where the real Property of the Borrower or any of its
Subsidiaries or any Borrower Partnership is located, including, without
limitation, the Clean Air Act, 42 U.S.C. Sections 7401 et seq., as
amended, the Clean Water Act, 33 U.S.C. Sections 1251 et seq., as
amended, CERCLA, RCRA, the Hazardous Materials Transportation Act, 49
U.S.C. Sections 1801 et seq., as amended, the Federal Water
Pollution Control Act Amendments, the Occupational Safety and Health Act
of 1970, as amended, the Safe Drinking Water Act, as amended, California
Health and Safety Code Sections 25100 et seq., California Water
Code Sections 313000 et seq., and the Toxic Substances Control
Act, as amended.
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"ERISA" means the Employee Retirement Income Security Act
of 1974, and any regulations issued pursuant thereto, as amended or
replaced and as in effect from time to time.
"ERISA Affiliate" of any Person means any other Person
that for purposes of Title IV of ERISA is a member of such Person's
controlled group, or under common control with such Person, within the
meaning of Section 414 of the Internal Revenue Code.
"ERISA Event" with respect to any Person means (a) the
occurrence of a reportable event, within the meaning of Section 4043 of
ERISA, with respect to any Plan of such Person or any of its ERISA
Affiliates, unless the 30-day notice requirement with respect to such
event has been waived by the PBGC; (b) the provision by the
administrator of any Plan of such Person or any of its ERISA Affiliates
of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (c) the cessation of
operations at a facility of such Person or any of its ERISA Affiliates
in the circumstances described in Section 4062(e) of ERISA; (d) the
withdrawal by such Person or any of its ERISA Affiliates from a Multiple
Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (e) the failure by
such Person or any of its ERISA Affiliates to make a payment to a Plan
required under Section 302(f)(1) of ERISA; (f) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates
requiring the provision of security to such Plan, pursuant to Section
307 of ERISA; or (g) the institution by the PBGC of proceedings to
terminate a Plan of such Person or any of its ERISA Affiliates, pursuant
to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that could constitute grounds for the
termination of, or the appointment of a trustee to administer, such
Plan.
"ESOP" has the meaning specified in the definition of
Change of Control set forth in this Section 1.1.
"Event of Default" shall have the meaning provided in
Section 11.1.
"Existing LC Guaranties" has the meaning specified in
Section 4.6(e).
"Existing Letters of Credit" has the meaning specified in
Section 2.2(b) hereof.
"Existing Loan Agreement" has the meaning specified in
Preliminary Statement (1).
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"Existing Loans" means all "Outstanding Loans" under the
Existing Loan Agreement as of the Closing Date.
"Existing Set-Aside Letters" has the meaning specified in
Section 2.2(c) hereof.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or
in such other statements by such other entity as may be in general use
by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Good faith" means subjective honesty in fact.
"Government Securities" means readily marketable direct
obligations of the United States of America or obligations fully
guaranteed by the United States of America.
"Governmental Agency" means (a) any international,
foreign, federal, state, county or municipal government, or political
subdivision thereof, (b) any governmental or quasi-governmental agency,
assessment district, authority, board, bureau, commission, department,
instrumentality or public body, or (c) any court, administrative
tribunal or public utility.
"Guaranteed Letter of Credit" means a Letter of Credit
issued by a Third Party Issuer which is covered by an LC Guaranty
provided by the LC Guarantor.
"High Yield Securities" means ▇▇▇▇▇▇▇ Delaware's 12 1/2%
Senior Notes due 2001.
"Housing" means real Property of the Borrower that is held
for investment, development and/or sale that has reached sufficient
stage of development that it has ceased to be Improved Land. In general,
Improved Land shall be deemed to have reached the stage of development
that it ceases to be Improved Land and becomes Housing when trenching
for the foundation of a house or other residential unit to be built on
such real Property has begun. Notwithstanding anything to the contrary
herein, if there is any dispute or uncertainty as to whether any Real
Estate Inventory of the Borrower constitutes Improved Land or Housing
within the meaning of the definition referred to above,
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the Agent's determination of such question shall be binding and
conclusive upon the parties hereto, unless determined otherwise by the
Majority Lenders.
"Housing Cost Component" shall have the meaning provided
in Section 4.8(f).
"Improved Land" means real Property of the Borrower that
is held for investment, development and/or sale, that either (i) has
reached a sufficient stage of development that it has ceased to be Raw
Land but has yet to reach a sufficient stage of development to be
Housing, or (ii) has been included in the Borrowing Base as Improved
Land at the sole discretion of the Agent, or (iii) has been acquired by
the Borrower pursuant to Section 8.15. In general, Raw Land shall be
deemed to have reached the stage of development that it ceases to be Raw
Land and becomes Improved Land when each of the following (to the extent
applicable) has occurred: (a) to the extent that earth-moving and/or
rough grading is required, such earth-moving and/or rough grading shall
have been substantially completed; (b) to the extent that any surveys,
maps or governmental approvals are required to be filed, recorded or
approved in order legally to subdivide the Property for its intended
use, all of the same shall have been completed and the Property shall
have been legally subdivided as required for its intended use; and (c)
to the extent that any governmental authorizations, approvals, permits,
entitlements or the like are required to be obtained from any
Governmental Agency to permit earth-moving and/or rough grading to
begin, all of the same shall have been obtained. Notwithstanding
anything to the contrary herein, if there is any dispute or uncertainty
as to whether any Real Estate Inventory of the Borrower constitutes Raw
Land or Improved Land within the meaning of the above definition, the
Agent's determination of such question shall be binding and conclusive
upon the parties hereto, unless otherwise determined by the Majority
Lenders.
"Improved Land Cost Component" shall have the meaning
provided in Section 4.8(e).
"Increased Letter of Credit Costs" means, with respect to
any Letter of Credit, the additional or incremental costs (including,
without limitation, capital maintenance costs, reserve maintenance costs
and other similar costs), if any, incurred by the Issuing Bank of such
Letter of Credit or by the LC Guarantor as a consequence of the issuance
of a Letter of Credit in the full amount requested by the Borrower, in
which (or in the LC Guaranty of which in which) the other Lenders are
deemed to purchase pro rata participations, over and above the costs
that would have been incurred by such Issuing Bank or the LC Guarantor
if each of the Lenders (including such Issuing Bank or the LC Guarantor)
had issued their own letters of credit in face amounts limited to their
respective percentages of the full amount of the requested Letter of
Credit, in the manner of
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a syndicated facility rather than a participated facility, to the extent
that such additional costs, if any, are not recovered from the Borrower
pursuant to Section 5.6(b), and as reasonably determined by the Issuing
Bank or the LC Guarantor using reasonable averaging and attribution
methods. Increased Letter of Credit Costs shall include any costs or
fees incurred by the LC Guarantor in causing a Third Party Issuer to
issue a Guaranteed Letter of Credit.
"Indemnitees" shall have the meaning set forth in Section
13.9 of this Agreement.
"Initial Lenders" means the lenders which were "Lenders"
under and as defined in the Existing Loan Agreement prior to the Closing
Date pursuant to Section 13.7 thereof.
"Insufficiency" means, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities, as defined in
Section 4001(a)(18) of ERISA.
"Intangible Assets" means assets that are considered
intangible assets under GAAP, consistently applied, including, without
limitation, goodwill, organization expense, patents, trademarks, trade
names, copyrights and other intangible Property.
"Interest Differential" means, with respect to any
prepayment, redesignation or conversion of an Offshore Rate Advance on a
day other than the last day of the applicable Interest Period, (a) the
applicable Offshore Rate payable with respect to the Offshore Rate
Advance as of the date of the prepayment, redesignation or conversion,
minus (b) the average per annum yield to maturity, based upon the bid
prices, on the day of prepayment, redesignation or conversion, of
Government Securities maturing on the last day of the applicable
Interest Period, in an amount approximately equal to such Offshore Rate
Advance. The determination of the Interest Differential by the Agent
shall be conclusive in the absence of manifest error.
"Interest Period" means, with respect to any Offshore Rate
Loan, the period commencing on the Banking Day the Loan is disbursed or
continued or on the date on which the Loan is converted to an Offshore
Rate Loan pursuant to Section 4.5(a) and ending on the date one, two or
three months thereafter, as selected by the Borrower in its Request for
Loan or Request for Redesignation of Loan, provided that:
(i) each Interest Period shall begin on the first
day of a calendar month and shall end on the first day of the
next succeeding calendar month, or of the second next succeeding
calendar month or the
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third next succeeding calendar month, as applicable to such
Interest Period; and
(ii) no Interest Period shall extend beyond the
Termination Date.
"Interest Type" refers to the distinction between the
Reference Rate Loans and Offshore Rate Loans.
"Investment" means, when used in connection with any
Person, any investment by or of that Person, whether by means of
purchase or other acquisition of stock or other securities or by means
of loan, advance, capital contribution, guaranty or other debt or equity
participation or interest in any other Person, or otherwise, and
includes, without limitation, any partnership and joint venture
interests of such Person.
"Issuing Bank" means, (a) with respect to any Letter of
Credit, (i) Foothill, as the issuer of such Letter of Credit, (ii) any
other Lender designated by the Borrower (with the consent of that Lender
and with prior written notice to the Agent) as the issuer of such Letter
of Credit, and (iii) any other bank designated by the Borrower (with the
consent of that bank and with prior written notice to the Agent) as the
issuer of such Letter of Credit, provided in each case of this clause
(iii) that the obligations of the Borrower to such bank under or in
connection with such Letter of Credit have been guaranteed by the LC
Guarantor in its sole discretion pursuant to an LC Guaranty (any such
bank being a "Third Party Issuer"); and (b) with respect to any
Set-Aside Letter, the Agent.
"Laws" means, collectively, all international, foreign,
federal, state and local statutes, treaties, rules, regulations,
ordinances, codes and administrative or judicial precedents.
"LC Guarantor" means Foothill, in its capacity as
guarantor of the obligations of the Borrower under or in connection with
any Letter of Credit issued for the account of the Borrower by a Third
Party Issuer.
"LC Guaranty" means a guaranty by Foothill of the
obligations of the Borrower to any Third Party Issuer under or in
connection with any Letter of Credit.
"Lenders" means the lenders listed on Schedule 1.1(g)
hereto and each Eligible Assignee that becomes a party hereto pursuant
to Section 13.7.
"Letter of Credit" means any letter of credit, whether
standby or commercial, issued by an Issuing Bank pursuant to Section 4.6
or which are
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Existing Letters of Credit, in the standard form for letters of credit
of such Issuing Bank, either as originally issued or as the same may
from time to time be supplemented, modified, amended, renewed or
extended.
"Letter of Credit Reserve" means, as of any date of
determination in connection with the determination of the Borrowing
Base, an amount equal to the sum of (a) ten percent (10%) of the
aggregate face amount of all Letters of Credit issued hereunder to
support any bond issued by any bonding company of the Borrower
acceptable to the Majority Lenders or issued for the benefit of any
Governmental Agency in lieu of such a bond in connection with any
project of the Borrower that constitutes Collateral hereunder, to the
extent that the purpose of such bond and/or Letter of Credit is to
ensure the performance or completion of improvements relating to or
benefitting such Collateral, plus (b) one hundred percent (100%) of the
aggregate face amount of all other Letters of Credit issued hereunder
for the account of the Borrower.
"LIBOR" means the rate of interest per annum determined by
the Agent as the rate at which dollar deposits in the approximate amount
of the applicable Offshore Rate Loan and having a maturity comparable to
such Interest Period are offered by major banks in the London interbank
market at approximately 11:00 a.m. (New York City time) two Banking Days
prior to the commencement of such Interest Period, as determined by the
Agent by reference at such time to the display designated on page "3750"
on the Telerate Service (or such other page as may replace the 3750 page
on that service or such service or services as may be nominated by the
British Bankers' Association for the purpose of displaying London
interbank offered rates for dollar deposits).
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, security interest, encumbrance, lien or charge of any
kind, whether voluntarily incurred or arising by operation of Law or
otherwise, affecting any Property, including any agreement to give any
of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and/or the filing of or
agreement to give any financing statement under the Uniform Commercial
Code or comparable Law of any jurisdiction with respect to any Property.
"Loan Documents" means, collectively, this Agreement, the
Revolving Notes, the Letters of Credit, any applications or
reimbursement agreements executed in connection with any Letters of
Credit other than Guaranteed Letters of Credit, the Collateral
Documents, the Amended and Restated Guaranty, the Environmental
Indemnity, the LC Guaranty, and any other certificates, instruments,
documents or agreements of any type or nature heretofore or hereafter
executed or delivered by the Borrower and/or any Affiliate of the
Borrower to the Agent, any Lender, any Issuing Bank (other than any
Third
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Party Issuer) or the LC Guarantor in any way relating to or in
furtherance of this Agreement, in each case either as originally
executed or as the same may from time to time be supplemented, modified,
amended, restated or extended, excluding, however, the High Yield
Securities held by any Lender or assignee of a Lender.
"Majority Lenders" means, at any time, Lenders holding at
least 66 2/3% of the sum of the aggregate amount of the Revolving
Commitments; provided, however, if any Lender shall be a Defaulting
Lender at such time, there shall be excluded from the determination of
Majority Lenders at such time, the amount of the Revolving Commitment of
such Lender at such time.
"Maximum Advance Rate" means (a) in the case of the Raw
Land Cost Component, 50%, (b) in the case of the Improved Land Cost
Component, 75%, (c) in the case of the Housing Cost Component, 85%, and
(d) in the case of the Notes Receivable Component, 70%.
"Maximum Letter of Credit Amount" means $10,000,000, which
may be increased to $15,000,000 with the written approval of the
Majority Lenders.
"Maximum Revolving Loan Amount" means, as of any date of
determination, the lesser of (a) the Borrowing Base, and (b) the
aggregate Revolving Commitments minus Outstanding Letters of Credit.
"Multiemployer Plan" of any Person means a multiemployer
plan, as defined in Section 4001(a)(3) of ERISA to which such Person or
any of its ERISA Affiliates is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made
or accrued an obligation to make contributions.
"Multiple Employer Plan" of any Person means a single
employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of such Person or any of its ERISA Affiliates
and at least one Person other than such Person and its ERISA Affiliates
or (b) was so maintained and in respect of which such Person or any of
its ERISA Affiliates could have liability under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.
"Non-Recourse" means, with respect to any indebtedness of
any Person, any such indebtedness which may not, pursuant to the express
terms of the instrument evidencing or otherwise governing such
indebtedness or by law, be enforced personally against such Person or
any other Person but only against
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specified assets or property acquired in connection with the financing
or refinancing giving rise to such indebtedness.
"Notes Receivable" means promissory notes payable to the
order of the Borrower, or endorsed to the order of the Borrower,
received by the Borrower or a predecessor of the Borrower in connection
with the sale of real Property by the Borrower or a predecessor of the
Borrower, and secured by a perfected first priority Lien in favor of the
Borrower or a predecessor of the Borrower on the real Property so sold.
"Notes Receivable Component" shall have the meaning
provided in Section 4.8(g).
"Obligations" means all present and future obligations of
every kind or nature of the Borrower or any Party at any time and from
time to time owed to the Lenders, the Issuing Banks (other than any
Third Party Issuer), the LC Guarantor and the Agent, or any one or more
of them under any one or more of the Loan Documents, whether due or to
become due, matured or unmatured, liquidated or unliquidated, or
contingent or noncontingent, including obligations of performance as
well as obligations of payment, and including interest that accrues
after the commencement of any bankruptcy or insolvency proceeding by or
against the Borrower or any Affiliate of the Borrower.
"Offshore Rate" means, for each Interest Period in respect
of Offshore Rate Advances comprising part of the same Loan, an interest
rate per annum (rounded upward to the nearest 1/16th of 1%) equal to
LIBOR.
"Offshore Rate Advance" means a Revolving Advance made
hereunder and designated or redesignated as an Offshore Rate Advance in
accordance with Article 4.
"Offshore Rate Lending Office" means, as to each Lender,
its office or branch so designated by written notice to Borrower and the
Agent as its Offshore Rate Lending Office. If no Offshore Rate Lending
Office separately is designated by a Lender, its Offshore Rate Lending
Office shall be its office designated as its address for purposes of
notices hereunder.
"Offshore Rate Loan" means a Revolving Loan made hereunder
and designated or redesignated as an Offshore Rate Loan in accordance
with Article 4.
"144A Securities" means notes or debentures of the
Borrower which may be resold by the holders thereof to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of
1933, as amended, without
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compliance with the registration requirements of Section 5 of the
Securities Act of 1933, as amended, which notes or debentures shall be
secured by the Collateral and shall contain such terms, conditions and
covenants as are required by said Rule 144A, and such other terms,
conditions and covenants as shall be required by the Majority Lenders.
"Operating Account" means a deposit account to be
maintained by the Borrower, and approved by the Agent, in which the
Agent shall have a perfected security interest for the ratable benefit
of the Lenders, the Issuing Banks (other than any Third Party Issuer)
and the LC Guarantor.
"Opinion of Counsel" means the favorable written legal
opinion of Irell & ▇▇▇▇▇▇▇ LLP, counsel to the Borrower and ▇▇▇▇▇▇▇
Delaware, in form and substance satisfactory to the Majority Lenders,
together with copies of all factual certificates and legal opinions upon
which such counsel has relied.
"Original Closing Date" means May 20, 1994.
"Outstanding Advances" means, as of any date of
determination, all outstanding Revolving Advances on that date.
"Outstanding Letters of Credit" means, as of any date of
determination, the aggregate face amount of all Letters of Credit and
Set-Aside Letters issued hereunder and outstanding on that date minus
the aggregate amount, if any, paid in Cash by the Issuing Bank(s) under
such Letters of Credit and Set-Aside Letters that has been reimbursed by
the Borrower.
"Outstanding Loans" means, as of any date of
determination, all outstanding Revolving Loans on that date.
"Party" means the Borrower and/or any Affiliate of the
Borrower that is a party to any Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation or
any successor thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan"
(as such term is defined in ERISA) which is subject to ERISA.
"Permitted Sales" means a sale of assets by the Borrower
to a partnership, limited liability company or joint venture in which
the Borrower is a partner (general or limited) or member which satisfies
the following conditions:
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(i) such sale occurs within 30 days of the
acquisition by the Borrower of the assets to be sold;
(ii) the purchase price is to be paid in cash and
is in an amount not less than the fair market value of the
assets to be sold; and
(iii) no Default or Event of Default shall exist or
shall result from such sale.
"Person" means any entity, whether an individual, trustee,
corporation, general partnership, limited partnership, joint stock
company, limited liability company, trust, unincorporated organization,
bank, business association, firm, joint venture, Governmental Agency, or
otherwise.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Pledge Agreement (Borrower)" means the Pledge Agreement
(Borrower), dated as of the Closing Date, made by the Borrower in favor
of the Agent for the benefit of the Lenders, the Issuing Banks (other
than any Third Party Issuer) and the LC Guarantor in the form of Exhibit
M hereto, either as originally executed or as it may from time to time
be supplemented, modified, amended, restated, or extended.
"Pledged Shares" means all outstanding shares of capital
stock of the Borrower.
"▇▇▇▇▇▇▇ Delaware" means The ▇▇▇▇▇▇▇ Companies, a Delaware
corporation.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Raw Land" means real Property of the Borrower that is
held for investment, development and/or sale, and that has not yet
reached the stage of development to become Improved Land. Reference is
made to the definition of "Improved Land" for a description of the
general conditions that govern when Raw Land ceases to be Raw Land and
becomes Improved Land. Notwithstanding anything to the contrary herein,
if there is any dispute or uncertainty as to whether any Real Estate
Inventory of the Borrower constitutes Raw Land or Improved Land within
the meaning of the definition referred to above, the Agent's
determination of such question shall be binding and conclusive upon the
parties hereto, unless determined otherwise by the Majority Lenders.
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"Raw Land Cost Component" shall have the meaning provided
in Section 4.8(d).
"RCRA" means the Resource Conservation and Recovery Act of
1970, as amended, 42 U.S.C. Sections 6901 et seq. and the regulations
thereto, 40 CFR Part 261.
"Real Estate Inventory" shall mean the Raw Land, the
Improved Land and the Housing of the Borrower.
"Reference Rate" means the floating commercial loan rate
of The Chase Manhattan Bank, announced from time to time as its
"reference rate" (or, if at the time of determination The Chase
Manhattan Bank does not so announce its, or does not have a, "reference
rate", the floating commercial loan rate so announced by any other bank
as shall have been selected by the Agent as notified to the Borrower).
Each change in the Reference Rate shall be effective as of 12:01 a.m. on
the Banking Day on which the change in the Reference Rate is announced,
unless otherwise specified in such announcement, in which case the
change shall be effective as so specified.
"Reference Rate Advance" means a Revolving Advance
designated or redesignated as a Reference Rate Advance in accordance
with Article 4, or converted or redesignated to a Reference Rate Advance
in accordance with Section 4.5.
"Reference Rate Loan" means a Revolving Loan made
hereunder and designated or redesignated as a Reference Rate Loan in
accordance with Article 4, or converted or redesignated to a Reference
Rate Loan in accordance with Section 4.5.
"Register" has the meaning specified in Section 13.7(c).
"Regulation D" means Regulation D, as at any time amended,
of the Board of Governors of the Federal Reserve System, or any other
regulation in substance substituted therefor.
"Request for Letter of Credit" means a written request for
the issuance of a Letter of Credit substantially in the form of Exhibit
D, signed by a Responsible Official of the Borrower and properly
completed to provide all information required by the Agent or the
Issuing Bank of such Letter of Credit (or, in the case of a Guaranteed
Letter of Credit, the LC Guarantor thereof) to be included therein.
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"Request for Loan" means a written request for a Revolving
Loan substantially in the form of Exhibit E, signed by a Responsible
Official of the Borrower and properly completed to provide all
information required by the Agent to be included therein.
"Request for Redesignation of Loan" means a written
request for redesignation of Revolving Loans substantially in the form
of Exhibit F, signed by a Responsible Official of the Borrower and
properly completed to provide all information required by the Agent to
be included therein.
"Responsible Official" means: (a) when used with reference
to a Person other than an individual, any corporate officer of such
Person, general partner of such Person, corporate officer of a corporate
general partner of such Person, or corporate officer of a corporate
general partner of a partnership that is a general partner of such
Person, or any other responsible official thereof duly acting on behalf
thereof, and (b) when used with reference to a Person who is an
individual, such Person. Any document or certificate hereunder that is
signed or executed by a Responsible Official of another Person shall be
conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such other
Person.
"Revolving Advances" means advances made pursuant to the
Revolving Commitments of the Lenders (which shall include the principal
of the Existing Loans to the extent converted to Revolving Loans
pursuant to Section 2.2(a)).
"Revolving Commitment" means, with respect to any Lender
at any time, the amount set forth opposite such Lender's name on
Schedule 1.1(g) hereto under the heading "Revolving Commitments" or, if
such Lender has entered into one or more Assignments and Acceptances,
set forth for such Lender in the Register maintained by the Agent
pursuant to Section 13.7(c) as such Lender's "Revolving Commitment," as
such amount may be reduced at or prior to such time pursuant to Section
4.7.
"Revolving Facility" means the aggregate of the Revolving
Commitments.
"Revolving Loans" means the aggregate Revolving Advances
made or to be made by the Lenders to the Borrower pursuant to this
Agreement (which shall include the principal of the Existing Loans to
the extent converted to Revolving Loans pursuant to Section 2.2(a)).
Each Revolving Loan made on or after the Closing Date shall consist of
the group of Revolving Advances made at any one time by the Lenders in
accordance with Article 4, including groups of Revolving Advances made
as new advances, and also including groups of
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Revolving Advances made by converting or redesignating existing
Revolving Advances in accordance with Article 4. In connection with each
Revolving Loan, the amount of each Revolving Advance by each Lender
shall be determined according to that Lender's percentage share of the
aggregate amount of the Revolving Commitments.
"Revolving Note" means a promissory note, substantially in
the form of Exhibit G hereto, executed by the Borrower in favor of a
Lender to evidence the Revolving Advances made by such Lender, in each
case as amended from time to time.
"Right of Others" means, as to any Property in which a
Person has an interest, any legal or equitable claim, right, title or
other interest (other than a Lien) in or with respect to that Property
held by any other Person, and any option or right held by any other
Person to acquire any such claim, right, title or other interest,
including any option or right to acquire a Lien.
"Series A Directors" are the members of the Board of
Directors of ▇▇▇▇▇▇▇ Delaware elected by the Series A Stock.
"Series A Stock" means the common stock of ▇▇▇▇▇▇▇
Delaware described in Schedule 1.1(a) hereof.
"Series B Stock" means the restricted voting convertible
common stock of ▇▇▇▇▇▇▇ Delaware described in Schedule 1.1(b) hereof.
"Set-Aside Letter" means (a) a letter from the Issuing
Bank to a surety setting forth the Issuing Bank's undertaking to fund
specified project costs for construction of improvements to be bonded by
the surety in connection with the Borrower's development of a project
included in the Borrowing Base, or (b) a letter from the Issuing Bank to
a Governmental Agency setting forth the Issuing Bank's undertaking to
fund specified project costs for construction of improvements in
connection with the Borrower's development of a project included in the
Borrowing Base.
"Set-Aside Letter Request" means a written request for a
Set Aside Letter in the form approved by the Issuing Bank.
"Single Employer Plan" of any Person means a single
employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of such Person or any of its ERISA Affiliates
and no Person other than such Person and its ERISA Affiliates or (b) was
so maintained and in respect of which such Person or any of its ERISA
Affiliates could have liability
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under Section 4069 of ERISA in the event such plan has been or were to
be terminated.
"Special Letter of Credit Circumstance" means the
application or adoption of any Law or interpretation, or any change
therein or thereof, or any change in the interpretation or
administration thereof by any Governmental Agency, central bank or
comparable authority, or the existence or occurrence of circumstances
affecting letters of credit (including, without limitation, any Law or
interpretation regarding capital maintenance or capital adequacy)
generally that are beyond the reasonable control of the Lenders, any
Issuing Bank or the Agent.
"Special Offshore Rate Circumstance" means the application
or adoption of any Law or interpretation, or any change therein or
thereof, or any change in the interpretation or administration thereof
by any Governmental Agency, central bank or comparable authority charged
with the interpretation or administration thereof, or compliance by the
Agent or any Lender or its Offshore Rate Lending Office (if applicable)
with any request or directive (whether or not having the force of Law)
of any such Governmental Agency, central bank or comparable authority,
or the existence or occurrence of circumstances affecting the applicable
offshore dollar interbank market for the determination of the Offshore
Rate, generally that are beyond the reasonable control of the Agent or
the Lenders.
"Subsidiary" means, as of any date of determination and
with respect to any Person, any corporation, partnership, joint venture
or limited liability company, whether now existing or hereafter
organized or acquired: (a) in the case of a corporation, of which a
majority of the securities having ordinary voting power for the election
of directors or other governing body (other than securities having such
power only by reason of the happening of a contingency) are at the time
beneficially owned by such Person and/or one or more Subsidiaries of
such Person, or (b) in the case of a partnership, joint venture or
limited liability company, the assets and liabilities of which would, in
accordance with GAAP consistently applied, be consolidated with the
assets and liabilities of such Person in the preparation of consolidated
financial statements of such Person and its Subsidiaries.
"Tangible Effective Net Worth" means, as of any date of
determination thereof and with respect to any Person, the total assets
of such Person as of such date determined in accordance with GAAP,
consistently applied, minus Intangible Assets of such Person as of such
date and minus Total Liabilities of such Person as of such date.
"Termination Date" means May 20, 2001.
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"Third Party Issuer" has the meaning specified in the
definition of Issuing Bank in this Section 1.1.
"to the best knowledge of" means, when modifying a
representation, warranty or other statement of any Person, that the fact
or situation described therein is known by the Person (or, in the case
of a Person other than a natural Person, known by a Responsible Official
of that Person) making the representation, warranty or other statement,
or with the exercise of reasonable due diligence under the circumstances
(in accordance with the standard of what a reasonable Person in similar
circumstances would have done) should have been known by the Person (or,
in the case of a Person other than a natural Person, should have been
known by a Responsible Official of that Person).
"Total Liabilities" means, as of any date of determination
and with respect to any Person, each item that should be reflected as a
liability on a balance sheet of such Person on such date prepared in
accordance with GAAP, consistently applied, and, to the extent not
already included above, liabilities with respect to capitalized leases;
provided, however, that for the purposes of the Loan Documents,
Non-Recourse indebtedness shall not be considered as an indebtedness or
other liability of such Person or of any partner of such Person.
"Total Outstandings" means, as of any date of
determination, the sum of (a) Outstanding Loans and (b) Outstanding
Letters of Credit.
"Unused Line Fee" has the meaning specified in Section
5.3(a).
"Withdrawal Liability" has the meaning specified in Part I
of Subtitle E of Title IV of ERISA.
1.2 Use of Defined Terms. Any defined term used in the plural
shall refer to all members of the relevant class, and any defined term used in
the singular shall refer to any one or more of the members of the relevant
class.
1.3 Accounting Terms. All accounting terms not specifically
defined in this Agreement shall be construed in conformity with, and all
financial statements required to be submitted by this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, except as
otherwise specifically prescribed herein. In the event that GAAP shall change
during the term of this Agreement such that the financial covenants contained in
Article 8 would then be calculated in a different manner or with different
components, the Borrower and Lenders agree to amend this Agreement in such
respects as are necessary to conform those covenants, as criteria for evaluating
the Borrower's financial condition, to substantially the same criteria as were
effective prior to such change in GAAP.
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1.4 Exhibits and Schedules. All Exhibits and Schedules to this
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference.
1.5 Miscellaneous Terms. The term "or" is disjunctive; the term
"and" is conjunctive. The term "shall" is mandatory; the term "may" is
permissive. Masculine terms also apply to females; feminine terms also apply to
males. The term "including" is by way of example and not limitation.
ARTICLE 2
CLOSING
2.1 Conditions to Closing. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place on the date (the
"Closing Date") on which each of the following conditions is satisfied:
(a) The Agent shall have received all of the following,
each of which shall be an original unless otherwise specified, each
properly executed by a Responsible Official of each party thereto, and,
where appropriate, acknowledged, each dated as of the Closing Date and
each in form and substance satisfactory to the Agent and its legal
counsel (unless otherwise specified or, in the case of the date of any
of the following, unless the Agent otherwise agrees or directs):
(1) seven counterparts of this Agreement executed
by the Borrower and the Lenders;
(2) a Revolving Note to be payable to the order of
each Lender, each in a principal amount equal to such Lender's
Revolving Commitment (each such Revolving Note to be distributed
by the Agent to the appropriate Lender; such Revolving Note to
replace the "Revolving Note" issued to such Lender in connection
with the Existing Loan Agreement, such replaced note to be
returned to the Borrower by the Lender holding same marked
"canceled" promptly after the Closing Date);
(3) with respect to each of the Borrower and
▇▇▇▇▇▇▇ Delaware, such documentation as the Agent may require to
establish the due organization, valid existence and good standing
of the Borrower or ▇▇▇▇▇▇▇ Delaware, its qualification to engage
in business in each jurisdiction in which it is engaged in
business or required to be so qualified and where the failure to
be so qualified would be materially adverse to the Borrower or
▇▇▇▇▇▇▇ Delaware; its authority to execute, deliver and perform
each of the Loan Documents to which it is a Party and the
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identity, authority and capacity of each Responsible Official
thereof authorized to act on its behalf, including, without
limitation, certified copies of articles of incorporation and
amendments thereto, bylaws and amendments thereto, certificates
of good standing and/or qualification to engage in business, tax
clearance certificates, certificates of corporate and shareholder
resolutions and approvals, incumbency certificates, Certificates
of Responsible Officials, and the like;
(4) (x) such amendments or confirmations (as the
Agent or the Majority Lenders may require) of the Collateral
Documents existing as of the Closing Date, (y) such other
Collateral Documents as the Agent or the Majority Lenders may
require granting Liens on the Property of the Borrower which is
to be Collateral, together with such related financing statements
or other documents as the Agent may request to perfect, effect,
facilitate, consent to, give notice of or otherwise evidence such
Liens and (z) an amendment and restatement of the Amended and
Restated Guaranty in form and substance satisfactory to the
Agent;
(5) the Opinion of Counsel;
(6) a Certificate of a Responsible Official of the
Borrower certifying to the best of such Official's knowledge that
the conditions specified in this Section 2.1 have been satisfied;
(7) evidence of personal Property Lien searches
showing the absence of Liens and Rights of Others on or in the
personal Property of the Borrower (other than such Liens and
Rights of Others as are permitted by Section 8.8), and other
evidence that all Liens or Rights of Others on or in the Property
of the Borrower (other than such Liens and Rights of Others as
are permitted by Section 8.8) have been terminated or discharged;
and
(8) such other assurances, certificates, documents,
consents or opinions as are required under this Agreement or as
the Agent reasonably may require.
(b) The representations and warranties of the Borrower
contained in Article 6 shall be true and correct in all material
respects.
(c) The Borrower and any other Parties shall be in
compliance in all material respects with all the terms and provisions of
the Loan Documents, and no Default shall have occurred and be
continuing.
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(d) No material adverse change has occurred in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or ▇▇▇▇▇▇▇ Delaware since the
date of the most recent financial statements delivered to the Agent and
the Lenders prior to the Closing Date.
(e) Duly executed amendments to financing statements and
deeds of trust with respect to the Collateral shall have been delivered
for filing and/or recordation with such Governmental Agencies, and in
such jurisdictions and locales, as the Agent may specify, and duly
executed agreements with depository institutions relating to the Liens
on the Borrower's deposit accounts contemplated by Section 13.8, in form
and substance satisfactory to the Agent and the Majority Lenders.
(f) The issuer of each title policy currently insuring any
Lien in favor of the Lenders against any real Property (or interest
therein) of the Borrower shall have committed to issue such amendments,
modifications or endorsements to such title policy as the Majority
Lenders may require to insure the continued validity and priority of
each such Lien, or, if required by the Agent, new policies of title
insurance shall have been obtained with respect to such of the real
Property (or interests therein) of the Borrower as the Agent may
require, in each instance with such insurers and with such coverages and
endorsements, and subject to only such exceptions, as the Majority
Lenders may require to insure the continued validity and priority of
each such Lien.
(g) The Borrower shall have paid interest accrued on the
Existing Loans to the Closing Date.
If any of the conditions specified in this Section 2.1 is not fulfilled on or
before July 6, 1998, this Agreement shall terminate and be of no further force
or effect.
2.2 Effect of Fulfillment of Conditions. Subject to the
fulfillment of the conditions specified in Section 2.1 on or before July 6 ,
1998, effective as of the Closing Date:
(a) the balance of the principal of the Existing Loans of
the Initial Lenders shall be deemed to have been converted (ratably in
accordance with the amount of such Lenders' respective Revolving
Commitments) to Revolving Loans, and shall be evidenced by the Revolving
Notes;
(b) all "Letters of Credit" (as defined in the Existing
Loan Agreement, and referred to herein as "Existing Letters of Credit")
outstanding on the Closing Date shall be deemed to be Letters of Credit
issued hereunder; and
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(c) all "Set-Aside Letters" (as defined in the Existing
Loan Agreement, and referred to herein as "Existing Set-Aside Letters")
outstanding on the Closing Date shall be deemed to be Set-Aside Letters
issued hereunder.
.
ARTICLE 3
[DELETED]
ARTICLE 4
REVOLVING ADVANCES AND LETTERS OF CREDIT
4.1 Revolving Advances. Each Lender severally agrees, subject to
and on the terms and conditions hereinafter set forth, to make Revolving
Advances to the Borrower at any time and from time to time from the Closing Date
through the Banking Day immediately preceding the Termination Date, in an
aggregate amount not to exceed at any time outstanding such Lender's Revolving
Commitment less such Revolving Lender's pro rata share of the aggregate
Outstanding Letters of Credit; provided that no Lender shall be obligated to
make a Revolving Advance under this Section 4.1 if, after giving effect to all
Revolving Advances to be made by the Lenders, Outstanding Advances would exceed
the Maximum Revolving Loan Amount. Unless the Majority Lenders otherwise
consent, each Revolving Loan under this Section 4.1 shall be in the aggregate
amount of not less than $1,000,000, and shall consist of Revolving Advances of
the same Interest Type made on the same day by the Lenders ratably according to
their respective Revolving Commitments. Within the limits of each Lender's
Revolving Commitments and the Borrowing Base, the Borrower may borrow under this
Section 4.1, prepay pursuant to Section 5.2 and reborrow under this Section 4.1.
4.2 Making the Revolving Advances.
(a) Each Revolving Loan made after the Closing Date shall
consist of Revolving Advances of the same Interest Type and shall be
made pursuant to a written Request for Loan received by the Agent at the
Agent's Office (i) not later than 9:00 a.m., Los Angeles time, at least
two Banking Days prior to the date that a proposed Revolving Loan is to
be made in the case of Reference Rate Loans and (ii) not later than 9:00
a.m., Los Angeles time, at least three Banking Days prior to the date
that a proposed Revolving Loan is to be made in the case of Offshore
Rate Loans. Each Request for Loan shall be accompanied by the Borrowing
Certificate relating to such Request for Loan and shall specify therein
the requested (1) date and Interest Type of such Revolving Loan, (2)
aggregate amount of such Revolving Loan, and (3) in the case of an
Offshore Rate Loan, initial Interest Period for such Revolving Loan.
Unless the
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Majority Lenders otherwise consent, no more than two Requests for Loan
may be delivered by the Borrower in any calendar month.
(b) Promptly following receipt of a Request for Loan, the
Agent shall notify each Lender by telephone, telecopier or telex of the
date of the Revolving Loan, the applicable Interest Period (in the case
of an Offshore Rate Loan) and that Lender's pro rata portion of the
Revolving Loan. Not later than 11:00 a.m., Los Angeles time, on the date
specified for any Revolving Loan, each Lender shall make its ratable
portion of the Revolving Loan in immediately available funds available
to the Agent by deposit of such amount in the Agent's Account. Upon
fulfillment of the applicable conditions set forth in Article 10, the
proceeds of each Revolving Loan shall be credited in immediately
available funds to the Operating Account.
(c) The amount of each Revolving Loan made after the
Closing Date may not be more than the then applicable Maximum Revolving
Loan Amount less the Outstanding Loans.
(d) [Deleted]
(e) Each Request for Loan shall be irrevocable and binding
on the Borrower upon receipt by the Agent. In the case of any Revolving
Loan which the related Request for Loan specifies is to be comprised of
Offshore Rate Advances, the Borrower shall indemnify each Lender against
any reasonable loss, cost or expense incurred by such Lender as a result
of any failure to fulfill on or before the date specified in such
Request for Loan, the applicable conditions set forth in Article 10
hereof, 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 the Revolving Advance to be
made by such Lender as part of such Loan when such Loan, as a result of
such failure, is not made on such date.
(f) Unless the Agent shall have been notified by telephone
(confirmed immediately by telecopier) by any Lender at least twenty-four
hours prior to the funding by the Agent of any Revolving Loan that such
Lender will not make available to the Agent such Lender's ratable
portion of the total amount of such Revolving Loan, the Agent may assume
that such Lender has made such portion available to the Agent on the
date of the Revolving Loan in accordance with Section 4.2(b) and the
Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent that
such Lender shall not have so made such ratable portion available to the
Agent, the Agent shall be entitled to recover such corresponding amount
on demand from such Lender, which demand shall be made in a reasonably
prompt manner. If such Lender does not pay such corresponding amount
forthwith upon
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the Agent's demand therefor, the Agent promptly shall notify the
Borrower and the Borrower shall pay such corresponding amount to the
Agent within three Banking Days. The Agent also shall be entitled to
recover from such Lender or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to
the date such corresponding amount is recovered by the Agent, at a rate
per annum equal to the rate of interest charged to the Borrower on the
Revolving Loan composed in part of the corresponding amount. Nothing
herein shall be deemed to relieve any Lender from its obligation, if
any, hereunder to make its Revolving Advance on the date of such
Revolving Loan or to prejudice any right which the Agent or the Borrower
may have against any Lender as a result of any such default (whether or
not the Borrower has paid the corresponding amount to the Agent), but no
Lender shall be responsible for the failure of any other Lender to make
the Revolving Advance to be made by such other Lender on the date of any
Revolving Loan.
(g) The Revolving Advances of each Lender shall be
evidenced by that Lender's Revolving Note.
4.3 Reference Rate Loans. All Revolving Loans shall constitute
Reference Rate Loans unless properly designated or redesignated as Offshore Rate
Loans pursuant to Sections 4.2, 4.4 or 4.5.
4.4 Offshore Rate Loans.
(a) At or about 8:00 a.m., Los Angeles time, two Banking
Days prior to the commencement of the applicable Interest Period for any
Offshore Rate Loan, the Agent shall determine the applicable Offshore
Rate (which determination shall be conclusive in the absence of manifest
error) and promptly shall give notice of the same to the Borrower and
the Lenders by telephone, telecopier or telex.
(b) Upon fulfillment of the applicable conditions set
forth in Article 10, an Offshore Rate Loan shall become effective on the
first day of the applicable Interest Period.
(c) Unless the Majority Lenders otherwise consent, no more
than eight Offshore Rate Loans shall be outstanding at any one time.
(d) Nothing contained in this Agreement shall require any
Lender to fund any Offshore Rate Advance in the applicable offshore
dollar interbank market.
4.5 Redesignation of Loans.
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(a) Subject to Section 10.2, if any Offshore Rate Loan is
not repaid on, or redesignated as an Offshore Rate Loan prior to, the
last day of the applicable Interest Period, such Loan automatically
shall be redesignated as a Reference Rate Loan on such date. Any
Offshore Rate Loan that is not repaid, redesignated or automatically
redesignated on the last day of the applicable Interest Period shall
bear interest at the rate specified in clause (i) of Section 5.7.
(b) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date until
the thirtieth day preceding the Termination Date, the Borrower may
request that all or a portion of outstanding Reference Rate Loans be
redesignated as an Offshore Rate Loan.
(c) Each redesignation of all or a portion of outstanding
Reference Rate Loans or Offshore Rate Loans as an Offshore Rate Loan
shall be made pursuant to a written Request for Redesignation of Loans.
Not later than 9:00 a.m., Los Angeles time, three Banking Days prior to
the first Banking Day of the applicable requested Interest Period, the
Agent shall have received, at the Agent's Office, a properly completed
Request for Redesignation of Loans specifying the requested (i) date of
redesignation, (ii) amount of Reference Rate Loans or Offshore Rate
Loans to be redesignated as an Offshore Rate Loan, and (iii) applicable
Interest Period. The Agent may, in its sole and absolute discretion,
permit a Request for Redesignation of Loans to be made by telephone
(confirmed immediately by telecopier), telecopier or telex by a
Responsible Official of the Borrower, in which case the Borrower shall
confirm same by mailing a written Request for Redesignation of Loans to
the Agent within 48 hours following the date of redesignation.
(d) Unless the Majority Lenders otherwise consent, the
amount of Reference Rate Loans to be redesignated as an Offshore Rate
Loan shall be at least $1,000,000 and an integral multiple of $100,000
for amounts in excess thereof.
(e) With respect to any redesignation of Reference Rate
Loans as an Offshore Rate Loan, at or about 8:00 a.m., Los Angeles time,
two Banking Days prior to the commencement of the applicable Interest
Period, the Agent shall determine the applicable Offshore Rate (which
determination shall be conclusive in the absence of manifest error) and
promptly shall give notice of the same to Borrower and the Lenders by
telephone, telecopier or telex.
(f) Upon fulfillment of the applicable conditions set
forth in Article 10, the redesignation of all or a portion of
outstanding Reference Rate
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Loans as an Offshore Rate Loan shall become effective on the first day
of the applicable Interest Period.
(g) Nothing contained herein shall require any Lender to
fund any Offshore Rate Advance resulting from redesignation of all or a
portion of any of its Reference Rate Advances in the applicable offshore
dollar interbank market.
(h) A Request for Redesignation of Loans shall be
irrevocable upon receipt by the Agent.
4.6 Letters of Credit and Set-Aside Letters.
(a) Subject to the written approval of the Agent (which
shall be in the Agent's sole discretion) and the other terms and
conditions hereof, at any time and from time to time from the Closing
Date through the Banking Day immediately preceding the Termination Date,
the Borrower and the Lenders agree that any Issuing Bank may issue such
Letters of Credit or Set-Aside Letters under the Revolving Facility as
the Borrower may request by a Request for Letter of Credit, provided
that (i) the specific wording of each Letter of Credit and Set-Aside
Letter shall be subject to the approval of the Issuing Bank thereof and,
if such Letter of Credit is a Guaranteed Letter of Credit, the LC
Guarantor, (ii) no Letter of Credit or Set-Aside Letter shall be issued
for a project unless such project is included in the Borrowing Base, and
(iii) upon giving effect to any Letter of Credit or Set-Aside Letter to
be issued hereunder, (A) Total Outstandings shall not exceed the
aggregate Revolving Commitments, (B) Outstanding Letters of Credit shall
not exceed the Maximum Letter of Credit Amount, (C) Outstanding Loans
shall not exceed the Maximum Revolving Loan Amount (as adjusted to
reflect the issuance of such Letter of Credit or Set-Aside Letter), and
(D) Outstanding Letters of Credit issued by Third Party Issuers, the
Borrower's obligations in connection with which are secured by Cash
and/or Cash Equivalents, shall not exceed $5,000,000; provided, however,
that any Issuing Bank may issue Letters of Credit or Set-Aside Letters
that would cause the Outstanding Letters of Credit to exceed the Maximum
Letter of Credit Amount, but that would not cause Total Outstandings to
exceed the aggregate Revolving Commitments, with the written approval of
the Majority Lenders. Other than in the case of any Letter of Credit
issued for the benefit of a governmental authority, the term of any
Letter of Credit shall not exceed twelve months and no Letter of Credit
shall provide for any automatic extensions thereof. The Issuing Bank
shall not issue any Set-Aside Letter that extends beyond the Termination
Date or without a fixed expiration date without the written approval of
the Majority Lenders. Not later than five Banking Days before the
Termination Date, the Borrower shall (x) provide to the Agent an
irrevocable, unconditional standby letter of credit issued by a bank
satisfactory to the Agent
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and the Majority Lenders in form and substance satisfactory to the
Majority Lenders in favor of the Lenders in a face amount equal to
Outstanding Letters of Credit on that date, or (y) if such standby
letter of credit is not available, make other provisions satisfactory to
the Agent, the Issuing Banks (and, in the case of any Guaranteed Letters
of Credit, the LC Guarantor thereof) and the Majority Lenders for the
settlement of such Outstanding Letters of Credit.
(b) Each Request for Letter of Credit shall specify the
type of Letter of Credit requested (i.e., standby or commercial), shall
contain all other information required to be provided thereby, and shall
be submitted to the Issuing Bank thereof and, if such Letter of Credit
is to be a Guaranteed Letter of Credit, the LC Guarantor, with a copy to
the Agent, not later than 11:00 a.m., Los Angeles time, at least five
Banking Days prior to the date upon which the requested Letter of Credit
is to be issued. Each request for the issuance of a Set-Aside Letter
shall contain such information as may be required by the Issuing Bank
and shall be submitted to the Issuing Bank, with a copy to the Agent,
not later than 11:00 a.m., Los Angeles time, ten Banking Days prior to
the date on which the requested Set-Aside Letter is to be issued. Upon
issuance of a Letter of Credit or Set-Aside Letter, the Issuing Bank
thereof (or, if such Letter of Credit is a Guaranteed Letter of Credit,
the LC Guarantor) promptly shall notify the Agent and the Lenders of the
amount and terms thereof and deliver a copy of the Letter of Credit or
Set-Aside Letter, as applicable, to the Agent and each Lender. Such
Issuing Bank (or, if such Letter of Credit is a Guaranteed Letter of
Credit, the LC Guarantor) shall notify the Agent promptly and upon such
notification, the Agent shall promptly notify the Lenders of payments,
reimbursements, expirations, negotiations, transfers and other activity
during that month with respect to outstanding Letters of Credit and
Set-Aside Letters.
(c) Upon the issuance of a Letter of Credit (unless issued
by a Third Party Issuer) or Set-Aside Letter, each Lender shall be
deemed to have purchased a pro rata risk participation therein from the
Issuing Bank thereof in an amount equal to that Lender's share,
according to its percentage of the aggregate Revolving Commitments, of
the face amount of such Letter of Credit or Set-Aside Letter. Without
limiting the scope and nature of each Lender's participation in any such
Letter of Credit or Set-Aside Letter, to the extent that the Issuing
Bank thereof has not been reimbursed by the Borrower, through the Agent,
for any payment required to be made by such Issuing Bank under any such
Letter of Credit or Set-Aside Letter, such Issuing Bank shall give
notice thereof to the Agent and, upon notice from the Agent to each
Lender, each such Lender shall, pro rata according to its participation
and through the Agent, reimburse such Issuing Bank promptly upon demand
for the amount of such payment, together with interest on such amount in
respect of each day from the date of payment by such Issuing Bank to the
date such amount is recovered by such Issuing Bank, at a rate per annum
equal to the actual cost to such Issuing
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Bank of making such payment as notified by such Issuing Bank to such
Lenders. The obligation of each Lender to so reimburse the Agent for the
benefit of such Issuing Bank shall be absolute and unconditional and
shall not be affected by the occurrence of any Default or any other
occurrence or event (other than the issuance by such Issuing Bank of a
Letter of Credit or Set-Aside Letter in violation of the terms hereof).
Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse such Issuing Bank for the amount
of any payment made by such Issuing Bank under any Letter of Credit or
Set-Aside Letter together with interest as hereinafter provided. For
purposes of this Section 4.6(c), the Existing Letters of Credit and the
Existing Set-Aside Letters shall be deemed to have been issued on and as
of the Closing Date.
(d) In the event that any Issuing Bank (other than a Third
Party Issuer) makes any payment under any Letter of Credit or Set-Aside
Letter, such Issuing Bank shall promptly notify the Agent thereof and
the Agent shall notify the Lenders and the Borrower of the making of
such payment and the relevant facts related thereto, and shall demand
reimbursement from the Borrower, in each case within one Banking Day
following the making of such payment. The Borrower promises to pay to
each such Issuing Bank, at its office designated as its address for
notices pursuant to this Agreement, or at such other payment location as
such Issuing Bank shall have specified in writing to the Agent and the
Borrower, with respect to each such Letter of Credit or Set-Aside
Letter, within three Banking Days after demand therefor (or such earlier
time as the Borrower may have agreed with such Issuing Bank), a
principal amount equal to any payment made by such Issuing Bank under
that Letter of Credit or Set-Aside Letter, together with interest on
such amount from the date of any payment made by such Issuing Bank to
and, in the case of any such payment made after 10:00 a.m. (Los Angeles
time), including the date of payment by the Borrower at the rate
applicable to Reference Rate Advances (or, in the case of any Guaranteed
Letter of Credit, at the rate agreed with the Third Party Issuer
thereof). Should the Borrower fail to reimburse such Issuing Bank,
through the Agent (or, in the case of any Guaranteed Letter of Credit,
as directed by the Third Party Issuer thereof), for any amount due under
this Section 4.6(d) within three Banking Days after demand therefor, the
Agent may disburse such amount to such Issuing Bank as a Reference Rate
Loan to the extent of availability under the aggregate Revolving
Commitments, provided, however, that the Agent shall not disburse such a
Reference Rate Loan, if, after giving effect to such Reference Rate
Loan, such disbursements would cause Total Outstandings to exceed the
amount of such Revolving Commitments. Should the Borrower fail to
reimburse such Issuing Bank for any amount under this Section 4.6(d)
within three Banking Days after demand therefor, and should the Agent
elect not to disburse such amount as a Reference Rate Loan (or be
precluded by the terms of this Agreement from so doing), such amount (if
payable to the Agent any
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Lender) shall thereafter bear interest at the rate set forth in clause
(ii)(B)of Section 5.7 to the fullest extent permitted by applicable Law.
The principal amount of any payment made by the Borrower to the Agent,
for the benefit of such Issuing Bank (or any payment made to such
Issuing Bank by means of a Reference Rate Loan) pursuant to this Section
4.6(d) shall be used to reimburse such Issuing Bank for the payment made
by it under the Letter of Credit or Set-Aside Letter. Each Lender that
has made an advance for purposes of reimbursing such Issuing Bank
pursuant to Section 4.6(c) for its pro rata share of any payment made by
such Issuing Bank under a Letter of Credit or Set-Aside Letter thereupon
shall acquire a pro rata participation, to the extent of such
reimbursement, in the claim of such Issuing Bank against the Borrower
under this Section 4.6(d).
(e) The Borrower and the Lenders acknowledge that the LC
Guarantor has previously executed one or more LC Guaranties (the
"Existing LC Guaranties") with respect to Letters of Credit that
constitute Guaranteed Letters of Credit hereunder, and agree that the LC
Guarantor may hereafter in its sole and absolute discretion execute and
deliver to one or more Third Party Issuers one or more additional LC
Guaranties with respect to any Letters of Credit that are to be
Guaranteed Letters of Credit and may be issued or outstanding hereunder.
Upon the effectiveness of any LC Guaranty executed by the LC Guarantor
with respect to any such Letter of Credit issued or to be issued
hereunder, each Lender shall be deemed to have purchased a pro rata risk
participation therein from the LC Guarantor in an amount equal to that
Lender's share, according to its percentage of the aggregate Revolving
Commitments, of the obligation of the LC Guarantor under the LC Guaranty
with respect to such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any LC Guaranty with respect to
any Guaranteed Letter of Credit, to the extent that the LC Guarantor has
not been reimbursed by the Borrower, through the Agent, for any payment
required to be made by the LC Guarantor under the LC Guaranty with
respect to any Guaranteed Letter of Credit, the LC Guarantor shall give
notice thereof to the Agent and, upon notice from the Agent to each
Lender, each Lender shall, pro rata according to its participation and
through the Agent, reimburse the LC Guarantor promptly upon demand for
the amount of such payment, together with interest on such amount in
respect of each day from the date of payment by the LC Guarantor to the
date such amount is recovered by the LC Guarantor, at a rate per annum
equal to the actual cost to the LC Guarantor of making such payment as
notified by the LC Guarantor to the Lenders. The obligation of each
Lender to so reimburse the Agent for the benefit of the LC Guarantor
shall be absolute and unconditional and shall not be affected by the
occurrence of any Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of
the Borrower to reimburse the LC Guarantor for the amount of any payment
made by the LC Guarantor under the LC Guaranty together with interest as
hereinafter
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provided. For purposes of this Section 4.6(e), the Existing LC
Guaranties shall be deemed to have been executed and delivered by the LC
Guarantor (and shall be deemed to have become effective with respect to
the Existing Letters of Credit covered thereby) on and as of the Closing
Date.
(f) In the event that the LC Guarantor makes any payment
under any LC Guaranty, the LC Guarantor shall promptly notify the Agent
thereof and the Agent shall notify the Lenders and the Borrower of the
making of such payment and the relevant facts related thereto, and shall
demand reimbursement from the Borrower within one Banking Day following
the making of such payment. The Borrower promises to pay to the LC
Guarantor, at its office designated as its address for notices pursuant
to this Agreement, or at such other payment location as the LC Guarantor
shall have specified in writing to the Agent and the Borrower, with
respect to any LC Guaranty, within three Banking Days after demand
therefor, a principal amount equal to any payment made by the LC
Guarantor under such LC Guaranty, together with interest on such amount
from the date of any payment made by the LC Guarantor to and, in the
case of any such payment made after 10:00 a.m. (Los Angeles time),
including the date of payment by the Borrower at the rate applicable to
Reference Rate Advances. Should the Borrower fail to reimburse the LC
Guarantor, through the Agent, for any amount due under this Section
4.6(f) with respect to any Guaranteed Letter of Credit issued hereunder
within three Banking Days after demand therefor, the Agent may disburse
such amount to the LC Guarantor as a Reference Rate Loan to the extent
of availability under the aggregate Revolving Commitments, provided,
however, that the Agent shall not disburse such a Reference Rate Loan,
if, after giving effect to such Reference Rate Loan, such disbursements
would cause Total Outstandings to exceed the aggregate Revolving
Commitments. Should the Borrower fail to reimburse the LC Guarantor for
any amount under this Section 4.6(f) within three Banking Days after
demand therefor, and should the Agent elect not to disburse such amount
as a Reference Rate Loan (or be precluded by the terms of this Agreement
from so doing), such amount shall thereafter bear interest at the rate
set forth in clause (ii)(B) of Section 5.7 below to the fullest extent
permitted by applicable Law. The principal amount of any payment made by
the Borrower to the Agent, for the benefit of the LC Guarantor (or any
payment made to the LC Guarantor by means of a Reference Rate Loan)
pursuant to this Section 4.6(f) shall be used to reimburse the LC
Guarantor for any payment made by it under the LC Guaranty. Each Lender
that has made an advance for purposes of reimbursing the LC Guarantor
pursuant to Section 4.6(e) for its pro rata share of any payment made by
the LC Guarantor under the LC Guaranty thereupon shall acquire a pro
rata participation, to the extent of such reimbursement, in the claim of
the LC Guarantor against the Borrower under this Section 4.6(f).
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(g) The obligation of the Borrower to pay to the LC
Guarantor the amount of any payment made by the LC Guarantor under any
LC Guaranty shall be absolute, unconditional and irrevocable, and shall
be an Obligation of the Borrower under the Loan Documents secured by the
Collateral Documents.
(h) The issuance of any supplement, modification,
amendment, renewal or extension to or of any Letter of Credit or
Set-Aside Letter shall be treated in all respects the same as the
issuance of a new Letter of Credit or Set-Aside Letter.
(i) The obligation of the Borrower to pay to (A) each
Issuing Bank (other than any Third Party Issuer) the amount of any
payment made by such Issuing Bank under any Letter of Credit or
Set-Aside Letter, and (B) the LC Guarantor the amount of any payment
made by the LC Guarantor under any LC Guaranty, shall be absolute,
unconditional and irrevocable. Without limiting the foregoing, such
obligation of the Borrower shall not be affected by any of the following
circumstances:
(i) any lack of validity or enforceability of any Letter
of Credit or Set-Aside Letter, any Loan Document, or any other
agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to
departure from any Letter of Credit or Set-Aside Letter, any Loan
Document, or any other agreement or instrument relating thereto;
(iii) the existence of any claim, setoff, defense or other
rights which the Borrower may have at any time against the Agent,
any Issuing Bank, the LC Guarantor or any Lender, any beneficiary
of any Letter of Credit or Set-Aside Letter (or any Persons or
entities for whom any such beneficiary may be acting) or any
other Person, whether in connection with any Letter of Credit or
Set-Aside Letter, this Agreement, any other Loan Documents or any
other agreement or instrument relating thereto, or any unrelated
transactions;
(iv) any demand, statement or any other document presented
under any Letter of Credit or Set-Aside Letter proving to be
forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect
whatsoever;
(v) payment by any Issuing Bank under any Letter of Credit
against presentation of a draft or any accompanying document
which does not strictly comply with the terms of such Letter of
Credit;
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(vi) the existence, character, quality, quantity,
condition, packing, value or delivery of any Property purported
to be represented by documents presented in connection with any
Letter of Credit or any difference between any such Property and
the character, quality, quantity, condition or value of such
Property as described in such documents;
(vii) the time, place, manner, order or contents of
shipments or deliveries of property as described in documents
presented in connection with any Letter of Credit or the
existence, nature and extent of any insurance relating thereto;
(viii) the solvency (or insolvency) or financial
responsibility (or lack thereof) of any party issuing any
documents in connection with any Letter of Credit;
(ix) any failure or delay in notice of shipment or arrival
of any Property;
(x) any error in the transmission of any message relating
to any Letter of Credit not caused by the Issuing Bank thereof,
or any delay or interruption in any such message; and/or
(xi) any error, neglect or default of any correspondent of
any Issuing Bank in connection with any Letter of Credit.
4.7 Reduction of the Revolving Commitments. The Borrower shall
have the right, at any time and from time to time prior to the Termination Date,
without penalty or charge, upon at least five Banking Days prior written notice
to the Agent, to voluntarily terminate in whole or reduce ratably in part,
permanently and irrevocably, the then undisbursed portion of the Revolving
Commitments of the Lenders, provided that any such partial reduction shall be in
a positive integral multiple of $1,000,000, and provided further that any such
reduction or termination shall be accompanied by all accrued and unpaid fees
with respect to the portion of the Revolving Commitments being reduced or
terminated, and provided further that the aggregate Revolving Commitments shall
not be reduced to an amount less than the amount of Total Outstandings.
4.8 Determination, Adjustment and Modification of the Borrowing
Base.
(a) Subject to adjustment and modification as set forth
below, and except as otherwise provided below, the Borrowing Base, as of
any date of determination, shall consist of the Aggregate Cost
Components minus the Letter of Credit Reserve, in each case as of such
date of determination (the "Borrowing Base"). The Aggregate Cost
Components shall consist of the sum of the
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following four components, as the same may be determined by the Agent
from time to time: (i) the Raw Land Cost Component; (ii) the Improved
Land Cost Component; (iii) the Housing Cost Component; and (iv) the
Notes Receivable Component (the "Aggregate Cost Components"). On or
before February 15, March 8 and the last day of each month (other than
January and February of each calendar year), the Borrower shall provide
the Agent with (1) the Borrower's calculations of the components and
reserves identified in the foregoing sentences, in each case as of the
last day of the immediately preceding month (except that the Borrower's
calculations delivered on or before February 15 shall be as of the
immediately preceding December 31 and the Borrower's calculations
delivered on or before March 8 shall be as of the immediately preceding
January 31), and (2) such data supporting such calculations as the Agent
or the Majority Lenders may require, together with a duly completed and
executed Borrowing Base Certificate. Based upon such calculations and
supporting data, and with the Borrower's assistance and cooperation, the
Agent shall determine the components and reserves of the Borrowing Base
as of the last day of the applicable month, and more often if the Agent
or the Majority Lenders reasonably so require.
(b) Promptly upon determining the Borrowing Base on any
occasion, and at least once a month, the Agent shall notify in writing
the Borrower and the Lenders of the amount of the Borrowing Base as
determined by the Agent, and the effective date thereof (which shall be
the last day of the applicable month), and such amount shall thereupon
and thereafter constitute the Borrowing Base which shall remain in
effect until such time as the Agent redetermines a new Borrowing Base
and gives notice of same in like fashion. Upon each determination of the
Borrowing Base, the Agent shall deliver a copy of the applicable
Borrowing Base Certificate and supporting documentation and data to each
Lender.
(c) Each determination of any Borrowing Base by the Agent
shall be binding and conclusive upon the parties hereto, and the Agent
is not bound to rely on information and figures provided by the Borrower
if the Agent determines in good faith that it would be inappropriate to
do so. Without limiting the generality of the foregoing, the Agent may
reduce (but without any obligation to do so) the carrying value or the
percentage rate of advance with respect to any particular item or items
included in the Borrowing Base if the Agent in good ▇▇▇▇▇ ▇▇▇▇▇ it
appropriate to do so based on a material environmental problem or
noncompliance with any Environmental Law.
(d) Except as otherwise provided herein, the Raw Land Cost
Component of the Borrowing Base (the "Raw Land Cost Component") shall
consist of the dollar amount equal to the product of (i) the value of
the Raw Land of the Borrower which is in the Borrowing Base, as such
value is reflected by the
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books and records of the Borrower, based upon the costs incurred by the
Borrower with respect to such Raw Land, and (ii) the then applicable
Maximum Advance Rate. Eligible Raw Land of the Borrower shall consist of
Raw Land of the Borrower which meets each of the following conditions:
(A) such Raw Land is located within the continental United States; (B)
such Raw Land is owned in fee simple absolute by the Borrower; (C) such
Raw Land is subject to a perfected first priority Lien in favor of the
Agent, the Lenders, the Issuing Banks (other than any Third Party
Issuer) and the LC Guarantor and is subject to no other Liens or Rights
of Others except such as may be permitted by the Loan Documents; (D) no
Event of Default shall have occurred and be continuing with respect to
any representations, warranties or covenants contained in the Loan
Documents with respect to or which concern such Raw Land, including,
without limitation, on the generality of the foregoing, any
representations, warranties or covenants that relate to environmental
matters or compliance with Environmental Laws; (E) the Lenders or the
Agent (or their respective predecessors with respect to the Revolving
Loans and the Revolving Commitments) shall have received a hazardous
waste report with respect to such Raw Land, in form and content
acceptable to the Lenders; and (F) such Raw Land is permitted to be
acquired by the Borrower in accordance with this Agreement.
(e) Except as otherwise provided herein, the Improved Land
Cost Component of the Borrowing Base (the "Improved Land Cost
Component") shall consist of the dollar amount equal to the product of
(i) the value of the Improved Land of the Borrower which is in the
Borrowing Base, as reflected by the books and records of the Borrower,
based upon the costs incurred by the Borrower with respect to such
Improved Land (including costs incurred during prior periods when such
Improved Land consisted of Raw Land), and (ii) the then applicable
Maximum Advance Rate. In determining the Improved Land Cost Component as
it relates to projects of the Borrower where units have been completed
and sold, or other dispositions have been made, appropriate deductions
(calculated on the basis of costs incurred in acquiring and constructing
the sold or disposed units) shall be made to subtract the value
attributable to the units or other property that has been sold or
disposed of. Eligible Improved Land of the Borrower shall consist of
Improved Land of the Borrower which meets each of the following
conditions: (A) such Improved Land is located within the continental
United States; (B) such Improved Land is owned in fee simple absolute by
the Borrower; (C) such Improved Land is subject to a perfected first
priority Lien in favor of the Agent, the Lenders, the Issuing Banks
(other than any Third Party Issuer) and the LC Guarantor and is subject
to no other Liens or Rights of Others except such as may be permitted by
the Loan Documents; (D) no Event of Default shall have occurred and be
continuing with respect to any representations, warranties or covenants
contained in the Loan Documents with respect to or which concern such
Improved Land, including, without limitation, on the generality of the
foregoing, any representations,
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warranties or covenants that relate to environmental matters or
compliance with Environmental Laws; and (E) the Lenders (or their
respective predecessors with respect to the Revolving Loans and the
Revolving Commitments) shall have received a hazardous waste report with
respect to such Improved Land (either in its present state or, to the
extent previously taken into account in computing the Borrowing Base, at
such time as such Improved Land was included as a part of the Raw Land
Cost Component of the Borrowing Base), in form and content acceptable to
the Lenders.
(f) Except as otherwise provided herein, the Housing Cost
Component of the Borrowing Base (the "Housing Cost Component") shall
consist of the dollar amount equal to the product of (i) the value of
Housing of the Borrower which is in the Borrowing Base, reflected by the
books and records of the Borrower, based upon the costs incurred by the
Borrower with respect to such Housing (including costs incurred during
prior periods when such Housing consisted of Raw Land or Improved Land),
and (ii) the then applicable Maximum Advance Rate. In determining the
Housing Cost Component as it relates to projects of the Borrower where
units have been completed and sold, or other dispositions have been
made, appropriate deductions (calculated on the basis of the costs
incurred in acquiring and constructing the sold or disposed units) shall
be made to subtract the value attributable to the units or other
property that has been sold or disposed of. Eligible Housing of the
Borrower shall consist of Housing of the Borrower which meets each of
the following conditions: (A) such Housing is located within the
continental United States; (B) such Housing is owned in fee simple
absolute by the Borrower; (C) such Housing is subject to a perfected
first priority Lien in favor of the Agent, the Lenders, the Issuing
Banks (other than any Third Party Issuer) and the LC Guarantor and is
subject to no other Liens or Rights of Others except such as may be
permitted by the Loan Documents; (D) no Event of Default shall have
occurred and be continuing with respect to any representations,
warranties or covenants contained in the Loan Documents with respect to
or which concern such Housing, including, without limitation, on the
generality of the foregoing, any representations, warranties or
covenants that relate to environmental matters or compliance with
Environmental Laws; and (E) the Lenders or the Agent (or their
respective predecessors with respect to the Revolving Loans and the
Revolving Commitments) shall have received a hazardous waste report with
respect to such Housing (either in its present state or, to the extent
previously taken into account in computing the Borrowing Base, at such
time as such Housing was included as a part of the Raw Land Cost
Component or the Improved Land Cost Component of the Borrowing Base), in
form and content acceptable to the Lenders. In addition to the
foregoing, subject to the Agent's receipt and approval of a full budget
for a new phase which is included in the Borrowing Base as Improved Land
but which the Borrower desires to have included in the Borrowing Base as
Housing, such new phase may be included in the Borrowing Base as Housing
at the Agent's
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discretion provided that the following conditions are met: (1) the
aggregate unsold units of Housing under construction or completed in the
project in which such phase is included do not exceed an amount to be
absorbed within nine months on a per product basis; and (2) if requested
by the Majority Lenders, completion of cost reviews by the Agent's
construction services group (or other Person designated by the Agent)
for each new product and new plan, including new models for existing
projects.
(g) Except as otherwise provided herein, the Notes
Receivable Component of the Borrowing Base (the "Notes Receivable
Component") shall consist of the dollar amount equal to the lower of (i)
the product of (A) the applicable Maximum Advance Rate and (B) the
outstanding principal due under all eligible Notes Receivable of the
Borrower, as reflected by the books and records of the Borrower and (ii)
the amount at which the asset securing such Note Receivable was included
in the Borrowing Base at the time of sale. In no event may the Notes
Receivable Component exceed $50,000,000. Eligible Notes Receivable of
the Borrower shall consist of those Notes Receivable of the Borrower
which meet each of the following conditions: (i) such Note Receivable is
a bona fide note acquired by the Borrower (or a predecessor in interest
of the Borrower) in connection with an arms'-length sale of real
Property located within the continental United States by the Borrower
(or a predecessor in interest of the Borrower) to a purchaser that is
not an Affiliate of the Borrower, which sale involved the making of a
down payment (in Cash or Cash Equivalents) by the purchaser of at least
twenty percent of the purchase price; (ii) such Note Receivable is
secured by a perfected first priority Lien on the real Property to which
it relates; (iii) if requested by the Majority Lenders in the case of
any Note Receivable the principal due under which exceeds $1,000,000,
the Agent shall have obtained, at the expense of the Borrower, an
appraisal of the real property encumbered to secure such Note
Receivable, which appraisal is in form and content acceptable to the
Agent; (iv) the original maturity (including permitted extensions) of
such Note Receivable does not exceed five years, the rate of interest
payable on such Note Receivable as of the time of origination (whether
fixed or floating) was not less than the Reference Rate plus 1% per
annum as of such date, and such Note Receivable does not contain
provisions permitting or requiring reduction of the rate of interest
payable thereon following the date of origination (except as the direct
result of fluctuations in the chosen index if such Note Receivable is a
floating rate note); (v) such Note Receivable shall provide for the
payment of accrued interest at least once each calendar quarter; (vi)
such Note Receivable shall not be more than sixty days delinquent, and
the obligor on such Note Receivable shall not have disputed his or her
liability thereon, or raised defenses, offsets or counterclaims with
respect to the payment thereof; and (vii) such Note Receivable and the
underlying security therefor (including any mortgage or deed of trust
securing same) shall be subject to a perfected first priority pledge in
favor of the Agent, the Lenders, the Issuing Banks (other than
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any Third Party Issuer) and the LC Guarantor documented in form and
substance satisfactory to the Agent. Notwithstanding the foregoing: (1)
the Agent agrees to consider in good faith requests by the Borrower to
permit specified ineligible Notes Receivable nevertheless to be included
in the Borrowing Base at the specified rate or at such lower rates of
advance as may be approved by the Majority Lenders in their sole
discretion; and (2) in the case of any Note Receivable the principal due
under which exceeds $1,000,000, at any time, and from time to time, in
its discretion or upon the request of the Majority Lenders, the Agent
may, at the expense of the Borrower, cause a new appraisal to be made of
the real Property that secures such Note Receivable and, if the
appraised value of such real Property (as determined by the Agent on the
basis of such appraisal) is less than the outstanding principal amount
due under such Note Receivable, then the portion of the Borrowing Base
attributable to such Note Receivable shall equal the lesser of (x) the
principal outstanding under such Note Receivable, or (y) the applicable
Maximum Advance Rate times such new appraised value. The Borrower may
request that the Agent, at the Borrower's expense, obtain a new
appraisal of the real Property encumbered to secure any such Note
Receivable, which new appraisal (after any adjustments required by the
Agent or the Majority Lenders) shall replace the appraisal referenced in
clause (iii) of the second sentence of this subparagraph (g).
(h) Notwithstanding anything to the contrary set forth
above, the Agent acting on its own or upon the instructions of the
Majority Lenders (i) need not rely solely upon the information and
figures provided by the Borrower, and may cause whatever inspections,
appraisals (subject to the provisions of Section 7.15 hereof), surveys,
evaluations or reviews of accounting records that it reasonably deems
appropriate to be made of any of the items included in the Borrowing
Base, and (ii) may cause the Borrower to calculate the components and
reserves of the Borrowing Base at any time the Agent reasonably deems
appropriate, in each case at any time and from time to time, in each
case at the Borrower's sole cost and expense. If, based on any of the
foregoing, the Majority Lenders in good faith determine that an
adjustment should be made to the Borrowing Base, then the Majority
Lenders may adjust the Borrowing Base in the manner that the Majority
Lenders deem appropriate.
(i) The Borrowing Base shall not include any Property
subject to outside seller financing, unless the Majority Lenders
otherwise agree in their sole discretion on a case-by-case basis. In
addition, except as set forth in Section 4.8(f) with respect to the
inclusion of new phases in the Housing Cost Component, and other than in
the case of any Real Estate Inventory acquired by the Borrower pursuant
to Section 8.15, the Borrowing Base shall not include any Real Estate
Inventory that did not previously constitute part of a component of the
Borrowing Base (whether as part of the Raw Land Cost Component, the
Improved Land Cost Components or the Housing Cost Component) unless the
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Majority Lenders (taking into account the other provisions of this
Section 4.8) shall have directed the Agent to include such Real Estate
Inventory as part of a component of the Borrowing Base.
(j) within five Banking Days following each and any
Disposition, the Borrower shall deliver to the Agent a Certificate of a
Responsible Official of the Borrower which sets forth a recalculation of
the Borrowing Base, as adjusted to delete any assets disposed of by the
Disposition.
(k) The Agent shall confer and consult, as practicable,
with the other Lenders in making the various discretionary judgments,
determinations and computations related to any Borrowing Base that the
Agent may from time to time be called upon to make. If at any time the
Majority Lenders disagree with any such judgment, determination or
computation made by the Agent, the Agent shall, on a prospective basis,
use its best efforts to make appropriate adjustments to the Borrowing
Base as directed by the Majority Lenders, so long as the Agent may do so
without incurring any liability or breaching any binding agreement with
the Borrower.
(l) Anything contained in this Section 4.8 to the contrary
notwithstanding, the costs that are taken into account in determining
the Raw Land Cost Component, the Improved Land Cost Component, and the
Housing Cost Component shall be determined in accordance with GAAP.
4.9 [Deleted]
4.10 [Deleted]
4.11 Defaulting Lenders.
(a) In the event that, at any one time, (i) any Lender
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Advance to the Borrower and (iii) the Borrower shall be
required to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender, then the Borrower may,
so long as no Default shall occur or be continuing at such time and to
the fullest extent permitted by applicable law, set off and otherwise
apply the obligation of the Borrower to make such payment to or for the
account of such Defaulting Lender against the obligation of such
Defaulting Lender to make such Defaulted Advance. In the event that the
Borrower shall so set off and otherwise apply the obligation of the
Borrower to make any such payment against the obligation of such
Defaulting Lender to make any such Defaulted Advance on any date, the
amount so set off and otherwise applied by the Borrower shall constitute
for all purposes of this Agreement and the other Loan Documents a
Revolving Advance by such
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Defaulting Lender made on such date was originally required to have been
made pursuant to Section 4.1. Such Revolving Advance shall be a
Reference Rate Advance and shall be considered, for all purposes of this
Agreement, to comprise part of the Revolving Loan in connection with
which such Defaulted Advance was originally required to have been made
pursuant to Section 4.1, even if the other Revolving Advances comprising
such Revolving Loan shall be Offshore Rate Advances on the date such
Revolving Advance is deemed to be made pursuant to this subsection (a).
The Borrower shall notify the Agent at any time the Borrower reduces the
amount of the obligation of the Borrower to make any payment otherwise
required to be made by it hereunder or under any other Loan Document as
a result of the exercise by the Borrower of its right set forth in this
subsection (a) and shall set forth in such notice (A) the name of the
Defaulting Lender and the Defaulted Advance required to be made by such
Defaulting Lender and (B) the amount set off and otherwise applied in
respect of such Defaulted Advance pursuant to this subsection (a). Any
portion of such payment otherwise required to be made by the Borrower to
or for the account of such Defaulting Lender which is paid by the
Borrower, after giving effect to the amount set off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be
applied by the Agent as specified in subsection (b) or (c) of this
Section 4.11.
(b) In the event that, at any one time, (i) any Lender
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount to the Agent or any of the other Lenders and (iii) the
Borrower shall make any payment hereunder or under any other Loan
Document to the Agent for the account of such Defaulting Lender, then
the Agent may, on its behalf or on behalf of such other Lenders and to
the fullest extent permitted by applicable law, apply at such time the
amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent
required to pay such Defaulted Amount. In the event that the Agent shall
so apply any such amount to the payment of any such Defaulted Amount on
any date, the amount so applied by the Agent shall constitute for all
purposes of this Agreement and the other Loan Documents payment, to such
extent, of such Defaulted Amount on such date. Any such amount so
applied by the Agent shall be retained by the Agent or distributed by
the Agent to such other Lenders, ratably in accordance with the
respective portions of such Defaulted Amounts payable at such time to
the Agent and such other Lenders and, if the amount of such payment made
by the Borrower shall at such time be insufficient to pay all Defaulted
Amounts owing at such time to the Agent and the other Lenders, in the
following order of priority:
(i) first, to the Agent for any Defaulted Amount then
owing to the Agent; and
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(ii) second, to any other Lenders for any Defaulted
Amounts then owing to such other Lenders, ratably in accordance
with such respective Defaulted Amounts then owing to such other
Lenders.
Any portion of such amount paid by the Borrower for the account
of such Defaulting Lender remaining, after giving effect to the
amount applied by the Agent pursuant to this subsection (b),
shall be applied by the Agent as specified in subsection (c) of
this Section 4.11.
(c) In the event that, at any one time, (i) any Lender
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe
a Defaulted Advance or a Defaulted Amount and (iii) the Borrower, the
Agent or any other Lender shall be required to pay or distribute any
amount hereunder or under any other Loan Document to or for the account
of such Defaulting Lender, then the Borrower or such other Lender shall
pay such amount to the Agent to be held by the Agent, to the fullest
extent permitted by applicable law, in escrow or the Agent shall, to the
fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Agent in escrow under this
subsection (c) shall be deposited by the Agent in an account with The
Chase Manhattan Bank or such other bank as shall have been selected by
the Agent and notified to the Borrower, in the name and under the
control of the Agent, but subject to the provisions of this subsection
(c). The terms applicable to such account, including the rate of
interest payable with respect to the credit balance of such account from
time to time, shall be The Chase Manhattan Bank's (or such other bank's)
standard terms applicable to escrow accounts maintained with it. Any
interest credited to such account from time to time shall be held by the
Agent in escrow under, and applied by the Agent from time to time in
accordance with the provisions of, this subsection (c). The Agent shall,
to the fullest extent permitted by applicable law, apply all funds so
held in escrow from time to time to the extent necessary to make any
Revolving Advances required to be made by such Defaulting Lender and to
pay any amount payable by such Defaulting Lender hereunder and under the
other Loan Documents to the Agent or any other Lender, as and when such
Revolving Advances or amounts are required to be made or paid and, if
the amount so held in escrow shall at any time be insufficient to make
and pay all such Revolving Advances and amounts required to be made or
paid at such time, in the following order of priority:
(i) first, to the Agent for any amount then due and
payable by such Defaulting Lender to the Agent hereunder;
(ii) second, to any other Lenders for any amount then due
and payable by such Defaulting Lender to such other Lenders
hereunder, ratably in accordance with such respective amounts
then due and payable to such other Lenders; and
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(iii) third, to the Borrower for any Revolving Advance
then required to be made by such Defaulting Lender.
In the event that such Defaulting Lender shall, at any time,
cease to be a Defaulting Lender, any funds held by the Agent in
escrow at such time with respect to such Defaulting Lender shall
be distributed by the Agent to such Defaulting Lender and applied
by such Defaulting Lender to the obligations owing to such Lender
at such time under this Agreement and the other Loan Documents
ratably in accordance with the respective amounts of such
obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender
under this Section 4.11 are in addition to other rights and remedies
which the Borrower may have against such Defaulting Lender with respect
to any Defaulted Advance and which the Agent or any Lender may have
against such Defaulting Lender with respect to any Defaulted Amount.
ARTICLE 5
PAYMENTS AND FEES
5.1 Principal and Interest.
(a) Except as otherwise provided in Section 5.7, the
unpaid principal amount of any (i) Reference Rate Loan shall bear
interest at a fluctuating rate per annum equal to the Reference Rate
plus 2% per annum, and (ii) Offshore Rate Loan shall bear interest at a
rate per annum equal to the greater of (A) 8% per annum and (B) the
Offshore Rate applicable to such Offshore Rate Loan plus 4.44% per
annum.
(b) Interest shall be payable by the Borrower on the
outstanding daily unpaid principal amount of each Revolving Loan and
shall accrue and be payable at the rates set forth herein both before
and after default and before and after maturity and judgment, with
interest on overdue interest and principal to bear interest at the rate
set forth in Section 5.7 to the fullest extent permitted by applicable
Law.
(c) Except as provided in Section 5.1(b), interest accrued
on each Revolving Loan through the end of each calendar month shall be
due and payable by the Borrower on the second Banking Day of the next
succeeding calendar month, commencing the second Banking Day of the
first calendar month following the Closing Date. The Agent shall attempt
to notify the Borrower of the amount of interest payable on each
Offshore Rate Loan prior to each interest payment date, but failure of
the Agent to do so shall not excuse payment
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of such interest when payable. If and so long as any Reference Rate Loan
is outstanding, the Agent shall notify the Borrower of any change in the
Reference Rate from time to time no later than two Business Days
following the Agent's obtaining knowledge of such change, but failure of
the Agent to do so shall not excuse payment of such interest when
payable.
(d) The Agent shall, when any interest payment on any
Outstanding Loan is due, disburse such amount to the Lenders as a
Reference Rate Loan, in each case to the extent of availability under
the aggregate Revolving Commitments; provided, however, that the Agent
shall not disburse such a Revolving Loan if, after giving effect to such
Loan, such disbursement would cause Outstanding Advances to exceed the
Maximum Revolving Loan Amount. Alternatively, if the Agent is unable to
disburse an interest payment to the Lenders as provided in the
immediately preceding sentence, the Borrower hereby authorizes the Agent
to cause such interest payable on the Outstanding Loans to be deducted
automatically from the Operating Account on or after the first Banking
Day of each such calendar month, and the Borrower shall maintain
sufficient funds on deposit in the Operating Account to cover such
interest payments. The Agent shall notify the Borrower of the amount of
interest payable hereunder on the Outstanding Loans as soon as
practicable on or following each interest payment date.
(e) If not sooner paid, the outstanding principal
indebtedness evidenced by the Revolving Notes shall be payable as
follows:
(i) the amount, if any, by which the outstanding principal
indebtedness evidenced by the Revolving Notes at any time exceeds
the Maximum Revolving Loan Amount shall be payable immediately
upon demand by the Agent;
(ii) the outstanding principal amount of each Reference
Rate Loan shall be payable on the Termination Date; and
(iii) subject to the applicable provisions of this
Agreement providing for redesignation or automatic redesignation
of Offshore Rate Loans upon compliance with Section 10.2, the
outstanding principal amount of each Offshore Rate Loan shall be
payable on the last day of the Interest Period for such Revolving
Loan, or if earlier, the Termination Date.
5.2 Prepayments.
(a) Optional. The Revolving Loans, or any of them, may, at
any time and from time to time, be paid or prepaid in whole or in part
without
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premium or penalty, except that (i) any partial prepayment shall be a
positive integral multiple of $100,000, (ii) unless greater notice is
required below, the Agent shall have received written notice of any
prepayment at least one Banking Day before the date of prepayment, which
notice shall identify the date and amount of the prepayment and Interest
Type of Revolving Loan(s) being prepaid, and (iii) except as required by
Section 5.1(e)(i) above, no Offshore Rate Loan may be paid or prepaid in
whole or in part prior to the last day of the applicable Interest Period
without the prior consent of the Majority Lenders, and, notwithstanding
such required prepayment or such consent, any payment or prepayment of
all or any part of any Offshore Rate Loan on a day other than the last
day of the applicable Interest Period shall be made on a Banking Day and
shall be preceded by at least three Banking Days' written notice to the
Agent of the date and amount of such payment or prepayment, and shall be
subject to Section 5.5(d).
(b) Mandatory. The Borrower shall prepay an aggregate
principal amount of the Revolving Advances in an amount equal to and to
the extent of: (i) the amount by which the sum of the Outstanding
Advances and Outstanding Letters of Credit exceeds the then-existing
Revolving Commitments; (ii) the amount by which Outstanding Advances
exceed the Borrowing Base, if required by the Agent; (iii) all funds in
the Operating Account in excess of $20,000,000 whenever the book balance
of the Operating Account exceeds $20,100,000; and (iv) the amount of
cash proceeds received from any Permitted Sale to the extent such sale
results in Outstanding Advances exceeding the Borrowing Base. Any
prepayment of any Revolving Advances shall be applied first to those
Revolving Advances that are Reference Rate Advances, and then to those
that are Offshore Rate Advances.
5.3 Unused Line Fee and Special Commitment Costs.
(a) The Borrower shall pay each Lender, through the Agent,
(i) on the second Banking Day of each month commencing August 4, 1998,
(ii) on the date of any reduction of the Revolving Facility pursuant to
this Agreement and (iii) on the Termination Date, in immediately
available funds, an unused line fee (the "Unused Line Fee") equal to
0.25% on the average daily unused (treating Outstanding Letters of
Credit as usage) amount of the Revolving Commitment of such Lender,
during the month (or shorter period commencing with the date hereof or
ending with the Termination Date) ending on such date. The Unused Line
Fee due to each Lender under this Section 5.3(a) shall commence to
accrue on the Closing Date and cease to accrue on the earlier of (i) the
Termination Date and (ii) the termination of the Revolving Commitment of
such Lender pursuant to this Agreement.
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(b) Upon notice from any Lender (with a copy to the
Agent), the Borrower forthwith shall reimburse such Lender for any
increase in the costs of such Lender relating to any fees, charges,
capital maintenance, capital adequacy and/or reserve requirements
imposed by any Governmental Agency against credit commitments of such
Lender that is attributed by such Lender, using any reasonable
attribution method, from time to time, to its pro rata share of the
undisbursed portion of the Revolving Commitments hereunder.
5.4 Administrative Fee. The Borrower shall pay to the Agent, for
the account of the Agent, a non-refundable administrative fee in the amount of
$100,000 on the Closing Date and on each anniversary thereof, which fee shall be
deemed to be fully earned when paid. All administrative fees shall be deemed to
be fully earned by the Agent as of their respective due dates, and the Borrower
shall not be entitled to any refund or reduction of any administrative fee for
any reason whatsoever; provided, however, that if any successor Agent is
appointed pursuant to Section 12.9, such successor Agent shall be entitled to
receive from the retiring Agent the portion of any administrative fee allocable
to the remaining portion of the applicable calendar quarter. All administrative
fees shall be for the sole benefit of the Agent, and the Agent shall not be
required to share such administrative fees with any other Lender.
5.5 Offshore Rate Loan Fees and Costs.
(a) If, after the date hereof, the existence or occurrence
of any Special Offshore Rate Circumstance:
(i) shall subject any Lender or its Offshore Rate Lending
Office to any tax, duty or other charge or cost with respect to
any Offshore Rate Advance, its Revolving Notes or its obligation
to make Offshore Rate Advances, or shall change the basis of
taxation of payments to any Lender of the principal of or
interest on any Offshore Rate Advance or any other amounts due
under this Agreement in respect of any Offshore Rate Advance, its
Revolving Notes or its obligation to make Offshore Rate Advances
(except for changes in the rate of tax on the overall net income,
net worth, gross income or gross receipts of such Lender or its
Offshore Rate Lending Office, or taxes in lieu of such enumerated
taxes, imposed by the jurisdiction in which such Lender's
principal executive office or Offshore Rate Lending Office is
located);
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board
of Governors of the Federal Reserve System and any reserve
required under regulations of the Federal Reserve Board with
respect to liabilities or assets consisting of or including
Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities")), special deposit, capital
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maintenance, capital adequacy or similar requirements not already
fully taken into account by the Offshore Rate against assets of,
deposits with or for the account of, or credit extended by, any
Lender or its Offshore Rate Lending Office; or
(iii) shall impose on any Lender or its Offshore Rate
Lending Office or the applicable offshore dollar interbank market
any other condition affecting any Offshore Rate Advance, its
Revolving Notes, its obligation to make Offshore Rate Advances or
this Agreement, or shall otherwise affect any of the same;
and the result of any of the foregoing, as determined by such Lender,
increases the cost to such Lender or its Offshore Rate Lending Office of
making or maintaining any Offshore Rate Advance or in respect of any
Offshore Rate Advance, its Revolving Notes or its obligation to make
Offshore Rate Advances or reduces the amount of any sum received or
receivable by such Lender or its Offshore Rate Lending Office with
respect to any Offshore Rate Advance, its Revolving Notes or its
obligation to make Offshore Rate Advances (assuming such Lender's
Offshore Rate Lending Office or such Lender had funded 100% of its
Offshore Rate Advance in the applicable offshore dollar interbank
market) then, upon demand by such Lender (with a copy to the Agent), the
Borrower shall pay to such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction
(determined as though such Lender's Offshore Rate Lending Office or such
Lender had funded 100% of its Offshore Rate Advance in the applicable
offshore dollar interbank market). The Borrower hereby indemnifies each
Lender against, and agrees to hold each Lender harmless from and
reimburse each Lender on demand for, all costs, expenses, claims,
penalties, liabilities, losses, legal fees and damages incurred or
sustained by such Lender in connection with this Agreement, or any of
the rights, obligations or transactions provided for or contemplated
herein, as a result of the existence or occurrence of any Special
Offshore Rate Circumstance. A statement of any Lender claiming
compensation under this Section and setting forth the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. Each Lender agrees to endeavor promptly to notify the
Borrower of any event of which it has actual knowledge, occurring after
the Closing Date, which will entitle such Lender to compensation
pursuant to this Section 5.5(a) (and, if applicable, agrees to designate
a different Offshore Rate Lending Office if such designation will avoid
the need for or reduce the amount of such compensation and will not, in
the judgment of such Lender, otherwise be disadvantageous to such
Lender). If any Lender claims compensation under this Section 5.5(a),
the Borrower may at any time, upon at least four Banking Days' prior
notice to the Agent and such Lender and upon payment in full of the
amounts provided for in this Section 5.5(a) plus any
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prepayment fee required by Section 5.5(d), request that such Offshore
Rate Advances be converted to Reference Rate Advances.
(b) If, after the date hereof, the existence or occurrence
of any Special Offshore Rate Circumstance shall, in the opinion of any
Lender, make it unlawful, impossible or impracticable for such Lender or
its Offshore Rate Lending Office to make, maintain or fund its portion
of any Offshore Rate Loan, or materially restrict the authority of such
Lender to purchase or sell, or to take deposits of, dollars in the
applicable offshore dollar interbank market, or to determine or charge
interest rates based upon the applicable Offshore Rate, and such Lender
shall so notify the Agent, then such Lender's obligation to make
Offshore Rate Advances shall be suspended for the duration of such
illegality, impossibility or impracticability and the Agent forthwith
shall give notice thereof to the other Lenders and the Borrower. Upon
receipt of such notice, the outstanding principal amount of such
Lender's Offshore Rate Advances, together with accrued interest thereon,
automatically shall be converted to Reference Rate Advances on either
(i) the last day of the Interest Period(s) applicable to such Offshore
Rate Advances if such Lender may lawfully continue to maintain and fund
such Offshore Rate Advances to such day(s) or (ii) immediately if such
Lender may not lawfully continue to fund and maintain such Offshore Rate
Advances to such day(s), provided that in such event the conversion
shall not be subject to payment of a prepayment fee under Section
5.5(d). In the event that any Lender is unable, for the reasons set
forth above, to make, maintain or fund its portion of any Offshore Rate
Loan, such Lender shall fund such amount as a Reference Rate Advance,
and such amount shall be treated in all respects as a Reference Rate
Advance.
(c) If, with respect to any proposed Offshore Rate Loan:
(i) the Agent reasonably determines that, by reason of
circumstances affecting the applicable offshore dollar interbank
market, generally that are beyond the reasonable control of the
Agent, deposits in dollars are not being offered to the Agent in
the applicable offshore dollar interbank market, for the
applicable Interest Period; or
(ii) the Majority Lenders advise the Agent that the
Offshore Rate as determined by the Agent (A) does not represent
the effective pricing to such Lenders for deposits in dollars in
the applicable offshore dollar interbank market for the
applicable Interest Period, or (B) will not adequately and fairly
reflect the cost to such Lenders of making the applicable
Offshore Rate Advances;
then the Agent forthwith shall give notice thereof to the Borrower and
the Lenders, whereupon until the Agent notifies the Borrower that the
circumstances
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giving rise to such suspension no longer exist, the obligation of the
Lenders to make any future Offshore Rate Advances shall be suspended.
(d) The Borrower agrees to reimburse each Lender and the
Agent and to hold each Lender and the Agent harmless, upon demand of
such Lender or the Agent, from any loss or expense which the Lender or
the Agent may sustain or incur as a consequence of:
(i) the failure of the Borrower to make any payment or
prepayment of principal of any Offshore Rate Loan (including
payments made after any acceleration thereof);
(ii) the failure of the Borrower to borrow, continue or
redesignate a Revolving Loan after the Borrower has given (or is
deemed to have given) a Request for Loan or Request for
Redesignation of Loans;
(iii) the failure of the Borrower to make any prepayment
after the Borrower has given a notice thereof in accordance with
Section 5.2(a);
(iv) the payment or prepayment (including pursuant to
Section 5.2(b)) of an Offshore Rate Loan on a day which is not
the last day of the Interest Period with respect thereto (whether
voluntary, involuntary, by reason of acceleration or otherwise);
or
(v) the redesignation or conversion pursuant to Section
4.5 of any Offshore Rate Loan to a Reference Rate Loan on a day
that is not the last day of the respective Interest Period;
including (A) any such loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain its Offshore Rate Loans
hereunder or from fees payable to terminate the deposits from which such
funds were obtained and (B) all out-of-pocket costs and expenses
incurred by any Lender or the Agent that are reasonably attributable to
any of the events described in subparagraphs (i) through (v) above;
provided that the amount payable by the Borrower pursuant to clause (iv)
or (v) above shall be payable by the Borrower on the second Banking Day
of the first calendar month following such prepayment, redesignation or
conversion (or, if such prepayment, redesignation or conversion occurred
on the first Banking Day of any calendar month, such amount shall be
payable on the second Banking Day of such calendar month), and shall be
equal to (1) the principal amount of such Offshore Rate Loan times
number of days between the date of prepayment, redesignation or
conversion and the last day in the applicable Interest Period, divided
by 360, times the applicable Interest Differential; plus (2) all
out-of-pocket expenses incurred by such Lender and reasonably
attributable to such prepayment,
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redesignation or conversion; provided, further that no prepayment fee
shall be payable (and no credit or rebate shall be required) if the
product of the foregoing formula is not positive. Solely for purposes of
calculating amounts payable by the Borrower to the Lenders under this
Section 5.5(d), each Offshore Rate Loan made by a Lender (and each
related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the LIBOR used in determining
the Offshore Rate for such Offshore Rate Loan by a matching deposit or
other borrowing in the applicable interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such
Offshore Rate Loan is in fact so funded. Each Lender's and the Agent's
determination of any amount payable under this Section 5.5(d) shall be
conclusive absent manifest error.
(e) The Borrower shall pay to each Lender, as long as such
Lender shall be required under regulations of the Federal Reserve Board
to maintain reserves with respect to liabilities or assets consisting of
or including Eurocurrency funds or deposits (currently known as
"Eurocurrency Liabilities"), additional costs on the unpaid principal
amount of each Offshore Rate Loan equal to actual costs of such reserves
allocated to such Loan by the Lender (as determined by the Lender in
good faith, which determination shall be conclusive absent manifest
error), payable on each date on which interest is payable on such Loan,
provided the Borrower shall have received at least fifteen days' prior
written notice (with a copy to the Agent) of such additional interest
from the Lender. If a Lender fails to give notice fifteen days prior to
the relevant interest payment date, such additional interest shall be
payable fifteen days from receipt of such notice. This covenant shall
survive payment of all other obligations. Each Lender's and the Agent's
determination of amounts payable under this Section 5.5(e) shall be
conclusive absent manifest error.
(f) Any Lender requesting any payment from the Borrower
under this Section 5.5 shall, at the request of the Borrower, provide
reasonable detail to the Borrower regarding the manner in which the
amount of any such payment has been determined.
5.6 Letter of Credit and Set-Aside Letter Fees and Costs.
(a) In connection with the issuance of each and any Letter
of Credit or Set-Aside Letter, the Borrower shall pay or cause to be
paid to the Agent, for the account of the Issuing Bank (other than any
Third Party Issuer) thereof and, in the case of any Guaranteed Letter of
Credit, the LC Guarantor, (i) such Issuing Bank's (or LC Guarantor's)
normal and customary letter of credit issuance or processing fee, and
any fee or cost directly or indirectly incurred by the LC Guarantor in
causing a Third Party Issuer to issue a Guaranteed Letter of Credit, and
(ii) in the case of a Letter of Credit, a letter of credit fee equal to
the
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face amount of the Letter of Credit being issued times (A) 2.0% in the
case of any Letter of Credit other than Letters of Credit issued in
connection with performance bonds or (B) 1.5% in the case of Letters of
Credit issued in connection with performance bonds times that fraction
the numerator of which is equal to the number of days from the date of
issuance of the Letter of Credit to and including the expiry date of
such Letter of Credit, and the denominator of which is 360. The fee
payable in connection with each Set-Aside Letter shall be as agreed
among the Borrower, the Agent and the Majority Lenders at the time of
such issuance. The letter of credit issuance fee with respect to each
Letter of Credit shall be due on the date the Letter of Credit is issued
and shall be for the sole account of the Issuing Bank thereof (or, in
the case of any Guaranteed Letter of Credit, the LC Guarantor), which
shall not be required to share such letter of credit issuance fee with
any other Lender. The letter of credit fee with respect to each Letter
of Credit shall be due in advance on the date the Letter of Credit is
issued, and shall be paid to the Agent and divided among the Lenders and
the Issuing Bank thereof as follows: To the extent that such Issuing
Bank or the LC Guarantor incurs any Increased Letter of Credit Costs
with respect to such Letter of Credit, such Increased Letter of Credit
Costs, if any, shall be first deducted from the letter of credit fee and
retained by such Issuing Bank or the LC Guarantor, as the case may be,
for its sole account; and the balance, if positive, of such letter of
credit fee shall be divided pro rata among the Lenders in such fashion
that the percentage of such balance received by each Lender equals such
Lender's percentage of the aggregate Revolving Commitments. The letter
of credit issuance fee and letter of credit fee paid in respect of any
Letter of Credit shall each be non-refundable. The Borrower shall pay
the letter of credit issuance and processing fees and other letter of
credit fees, if any, owed to Third Party Issuers directly to such Third
Party Issuers.
(b) If, after the date hereof, the existence or occurrence
of any Special Letter of Credit Circumstance:
(i) shall subject any Issuing Bank, the LC Guarantor or
any Lender to any tax, duty or other charge with respect to this
Agreement or any Letter of Credit, or its obligation to maintain,
guarantee or confirm any Letter of Credit, or shall change the
basis of taxation of payments to any Issuing Bank, the LC
Guarantor or any Lender of any amounts due under this Agreement
or with respect to any Letter of Credit or such obligation
(except for changes in the rate of tax on the overall net income,
net worth, gross income or gross receipts of such Issuing Bank,
LC Guarantor or such Lender, or taxes in lieu of such enumerated
taxes, imposed by the jurisdiction in which such Issuing Bank's,
the LC Guarantor's or such Lender's principal executive office is
located); or
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(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System), special deposit,
capital maintenance, capital adequacy or similar requirement
against assets of, deposits with or for the account of, credit
extended by, or letters of credit issued or maintained,
guaranteed or confirmed by, any Issuing Bank, the LC Guarantor or
any Lender; or
(iii) shall impose on any Issuing Bank, such LC Guarantor
or any Lender any other condition affecting any Letter of Credit
or LC Guaranty, its obligation to issue or make payments with
respect to any Letter of Credit or LC Guaranty or this Agreement,
or shall otherwise affect any of the same;
and the result of any of the foregoing, as determined by such Issuing
Bank, the LC Guarantor or such Lender, increases the cost to or imposes
a cost on such Issuing Bank, the LC Guarantor or such Lender of
confirming or maintaining any Letter of Credit or LC Guaranty or of
being a party to this Agreement, or reduces the amount of any sum
received or receivable by such Issuing Bank, the LC Guarantor or such
Lender with respect to any Letter of Credit or (in the case of any such
capital adequacy requirement) reduces the rate of return on such Issuing
Bank's, the LC Guarantor's or such Lender's capital as a consequence of
its obligations under this Agreement or any Letter of Credit or LC
Guaranty to a level below that which such Issuing Bank, the LC Guarantor
or such Lender could have received but for the imposition of such
requirement (taking into consideration such Issuing Bank's, the LC
Guarantor's or such Lender's capital adequacy policies), then, upon
demand by such Issuing Bank, the LC Guarantor or such Lender, the
Borrower shall pay to such Issuing Bank, the LC Guarantor or such Lender
such additional amount or amounts as will compensate such Issuing Bank,
the LC Guarantor or such Lender for such increased cost or reduction.
The Borrower hereby indemnifies each Issuing Bank, the LC Guarantor and
each Lender against, and agrees to hold each Issuing Bank, the LC
Guarantor and each Lender harmless from and reimburse such Issuing Bank,
the LC Guarantor and such Lender on demand for, all reasonable costs,
expenses, claims, penalties, liabilities, losses, reasonable legal fees
and damages incurred or sustained by such Issuing Bank, the LC Guarantor
and such Lender in connection with this Agreement, or any of the rights,
obligations or transactions provided for or contemplated herein, as a
result of the existence or occurrence of any Special Letter of Credit
Circumstance. A statement of any Issuing Bank, the LC Guarantor or any
Lender claiming compensation under this Section 5.6(b) and setting forth
the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount,
such Issuing Bank, the LC Guarantor or such Lender may use any
reasonable averaging and attribution methods. Each Issuing Bank, the LC
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Guarantor and each Lender agrees to endeavor promptly to notify the
Borrower of any event of which it has knowledge, occurring after the
Closing Date, which will entitle such Issuing Bank, the LC Guarantor or
such Lender to compensation pursuant to this Section 5.6(b).
(c) Any Lender, the LC Guarantor or any Issuing Bank
requesting payment from the Borrower under Section 5.6(b) shall, at the
request of the Borrower, provide reasonable detail to the Borrower
regarding the manner in which the amount of any such payment has been
determined.
5.7 Late Payments and Default Interest. Upon the occurrence and
during the continuance of an Event of Default, and as contemplated by Section
4.5(a), the Borrower shall pay interest at a rate per annum equal at all times
to the sum of the Reference Rate in effect from time to time plus 3% per annum
(to the fullest extent permitted by applicable Law) on (i) the unpaid principal
amount of each Advance owing to each Lender, payable in arrears on the dates
referred to in Sections 5.1(b) and (c), and (ii) the amount of any interest, fee
or other amount (other than any amount of a Revolving Advance) payable hereunder
which is not paid when due, from the date such amount shall be due until such
amount shall be paid in full, payable in arrears on demand and on the date such
amount shall be paid in full. Accrued and unpaid interest on past due amounts
(including, without limitation, interest on past due interest) shall be
compounded monthly, on the last day of each calendar month, to the fullest
extent permitted by applicable Law.
5.8 Computation of Interest and Fees. All computations of
interest and fees under any Loan Document shall be calculated on the basis of a
year of 360 days and the actual number of days elapsed. The Borrower
acknowledges that such calculation method will result in a higher yield to the
Lenders than a method based on a year of 365 or 366 days.
5.9 Non-Banking Days. If any payment to be made by the Borrower
or any other Party under any Loan Document shall come due on a day other than a
Banking Day, such payment shall be due on the next succeeding Banking Day, and,
except for regular monthly payments of interest, the extension of time shall be
reflected in computing interest.
5.10 Manner and Treatment of Payments.
(a) Except as specifically provided in Section 4.6, each
payment hereunder or on the Revolving Notes or under any other Loan
Document shall be made to the Agent, at the Agent's Office, for the
account of each of the Lenders or each of the Issuing Banks (other than
any Third Party Issuer) or the LC Guarantor or the Agent, as the case
may be, in immediately available funds, not later than 10:00 a.m., Los
Angeles time, on the day such payment is required to
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be made (which must be a Banking Day). All payments received after 10:00
a.m., Los Angeles time, on any Banking Day, shall be deemed received on
the next succeeding Banking Day. The amount of all payments received by
the Agent for the account of each Lender, such Issuing Bank or the LC
Guarantor shall be promptly paid by the Agent to the applicable Lender,
such Issuing Bank or the LC Guarantor in immediately available funds.
All payments shall be made in lawful money of the United States of
America. Upon the Agent's acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant
to Section 13.7(d), from and after the effective date of such Assignment
and Acceptance, the Agent shall make all payments hereunder and on the
Revolving Notes and under any other Loan Documents in respect of the
interest assigned thereby to the 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) Each payment or prepayment shall be made and applied
pro rata according to the outstanding Advances held by each Lender. If
the Agent receives funds for application to the Obligations under the
Loan Documents under circumstances for which the Loan Documents do not
specify, or the manner in which, such funds are to be applied, the Agent
shall first, apply such funds as payments against the principal of the
Revolving Advances, and then ratably to all other Obligations; provided
that following the occurrence of any Event of Default and during any
time that the maturity of the Obligations has been accelerated, all
proceeds of any Collateral shall be applied first to the payment of
costs and expenses of the Agent and the Lenders as provided in Section
11.2(d).
(c) Each Lender and the Agent shall use its best efforts
to keep a record of Revolving Advances made by it and payments received
by it with respect to each Revolving Note and, absent manifest error,
such record shall be presumptive evidence of the amounts owing.
Notwithstanding the foregoing sentence, neither the Agent nor any Lender
shall be liable to any Party for any failure to keep such a record.
(d) Each payment of any amount payable by the Borrower
and/or any other Party under this Agreement and/or any other Loan
Document shall be made free and clear of, and without reduction by
reason of, any taxes, assessments or other charges imposed by any
Governmental Agency, central bank or comparable authority (other than
taxes on income, gross receipts or net worth, or taxes imposed in lieu
of such income, gross receipts or net worth taxes) applicable to the
Lenders, the Issuing Banks or the LC Guarantor or any participant of the
Lenders.
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(e) The Register maintained by the Agent pursuant to
Section 13.7(c) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be
recorded (i) the date and amount of each Revolving Loan made and Letter
of Credit issued hereunder, and Interest Type of Revolving Advances
comprising such Revolving Loan and any Interest Period applicable
thereto, (ii) the terms of each Assignment and Acceptance delivered to
and accepted by it, (iii) the amount of any principal or interest due
and payable or to become due and payable from the Borrower to each
Lender hereunder, and (iv) the amount of any sum received by the Agent
from the Borrower hereunder and each Lender's share thereof. The entries
made in the Register shall be conclusive and binding for all purposes,
absent manifest error.
5.11 Funding Sources. Nothing in this Agreement shall be deemed
to obligate the Lenders to obtain the funds for any Revolving Loan or Revolving
Advance in any particular place or manner or to constitute a representation by
the Agent or any Lender that it has obtained or will obtain the funds for any
Revolving Loan or Revolving Advance in any particular place or manner.
5.12 Failure to Charge Not Subsequent Waiver. Any decision by the
Agent or any Lender or Issuing Bank or the LC Guarantor not to require payment
of any interest (including interest arising under Section 5.7), fee, cost or
other amount payable under any Loan Document, or to calculate any amount payable
by a particular method, on any occasion shall in no way limit or be deemed a
waiver of the Agent's or such Lender's or Issuing Bank's or the LC Guarantor's
right to require full payment of any interest (including interest arising under
Section 5.7), fee, cost or other amount payable under any Loan Document, or to
calculate an amount payable by another method, on any other or subsequent
occasion.
5.13 Agent's Right to Assume Payments Will be Made by Borrower.
Unless the Agent shall have been notified by the Borrower prior to the date on
which any payment to be made by the Borrower hereunder is due that the Borrower
does not intend to remit such payment, the Agent may, in its discretion, assume
that the Borrower has remitted such payment when so due and the Agent may, in
its discretion and in reliance upon such assumption, make available to each
Lender or Issuing Bank or the LC Guarantor, as the case may be, on such payment
date an amount equal to such Lender's or Issuing Bank's or the LC Guarantor's
share of such assumed payment. If the Borrower has not in fact remitted such
payment to the Agent, each Lender or Issuing Bank or the LC Guarantor, as the
case may be, shall forthwith on demand repay to the Agent the amount of such
assumed payment made available to such Lender or Issuing Bank or the LC
Guarantor, together with interest thereon in respect of each day from and
including the date such amount was made available by the Agent to such Lender or
Issuing Bank or the LC Guarantor, as the case may be, to the date such amount is
repaid to the Agent at a rate per annum equal to the actual
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cost to the Agent of funding such amount as notified by the Agent to such Lender
or Issuing Bank or the LC Guarantor, as the case may be.
5.14 Survivability. All of the Borrower's obligations under this
Article 5 shall survive for one year following the date on which all Revolving
Loans hereunder were fully paid, provided that, following such payment in full,
such surviving obligations shall not constitute "Obligations" as defined herein.
5.15 Payment of Penalty or Fee Upon Acceleration. The Borrower
expressly agrees that, in the event the Agent or the Lenders, the Issuing Banks
or the LC Guarantor exercise any right they may have to accelerate the
Obligations following the conveyance of any right, title or interest in any
Property, the Borrower shall pay any penalty or fee payable under the terms of
the Loan Documents (if any) as a result of such acceleration, and the Borrower
hereby expressly waives any protection or defense to such payment afforded by
California Civil Code Section 2954.10. The Borrower affirms its agreement to
make any such payment by placing its initials in the margin to the right of this
Section. The Borrower acknowledges that its concurrence with this Section is a
material inducement to the Lenders in making the Revolving Loans and issuing the
Letters of Credit contemplated to be made and issued hereunder. The Borrower and
the Lenders acknowledge and agree that, of the consideration given by the
Lenders with respect to the Loan Documents, a specific portion thereof supports
the enforcement of this Section 5.15.
-----------
initials
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent, the Issuing
Banks, the LC Guarantor and the Lenders, and each of them, as follows:
6.1 Existence and Qualification; Power; Compliance With Laws.
(a) The Borrower is a corporation duly formed, validly
existing and in good standing under the Laws of California. The chief
executive offices of the Borrower are in Orange County, California. The
Borrower is duly qualified or registered to transact business and is in
good standing in California and each other jurisdiction in which the
conduct of its business or the ownership or leasing of its Properties
makes such qualification or registration necessary, except where the
failure so to qualify or register and to be in good standing would not
have a material adverse effect on the business, operations or condition
(financial or otherwise) of the Borrower. The Borrower has all requisite
corporate power and
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authority to conduct its business, to own and lease its Properties and
to execute, deliver and perform all of its Obligations, under the Loan
Documents. The authorized capital stock of the Borrower consists of
1,000,000 shares of common stock, no par value, 115,875 of which have
been issued and are owned beneficially and of record by ▇▇▇▇▇▇▇
Delaware. The Borrower has no authority to issue any other capital stock
or equity security other than common stock. All outstanding shares of
common stock of the Borrower are duly authorized, validly issued, fully
paid, non-assessable and issued in compliance with all applicable state
and federal securities and other Laws. The Borrower is in compliance
with all Laws and other legal requirements applicable to its business,
has obtained all authorizations, consents, approvals, orders, licenses
and permits from, and has accomplished all filings, registrations and
qualifications with, or obtained exemptions from any of the foregoing
from, any Governmental Agency that are necessary for the transaction of
its business, except where the failure so to comply, or to obtain
authorizations, consents, approvals, orders, licenses or permits, or
file, register, qualify or obtain exemptions would not have a material
adverse effect on the business, operations or condition (financial or
otherwise) of the Borrower.
(b) ▇▇▇▇▇▇▇ Delaware is a corporation duly formed, validly
existing and in good standing under the Laws of Delaware. ▇▇▇▇▇▇▇
Delaware is duly qualified or registered to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or the ownership or leasing of its Properties makes such qualification
or registration necessary, except where the failure so to qualify or
register and to be in good standing would not have a material adverse
effect on the business, operations or condition (financial or otherwise)
of ▇▇▇▇▇▇▇ Delaware. ▇▇▇▇▇▇▇ Delaware has all requisite corporate power
and authority to conduct its business, to own and lease its Properties
and to execute, deliver and perform all of its Obligations, under the
Loan Documents.
(c) At the Closing Date, the authorized capital stock of
▇▇▇▇▇▇▇ Delaware will consist of 100,000,000 shares of Series A Stock,
par value $.01 per share, 50,000,000 shares of Series B Stock, par value
$.01 per share, and 25,000,000 shares of preferred stock, par value $.01
per share. As of the Closing Date, ▇▇▇▇▇▇▇ Delaware will have no
outstanding subscriptions, options, warrants, calls, contracts, demands,
commitments, convertible securities or other instruments, agreements or
arrangements of any character or nature whatsoever under which ▇▇▇▇▇▇▇
Delaware is or may be obligated to issue common stock, preferred stock,
or other securities of any kind which would constitute or otherwise
cause the occurrence of a Default hereunder or under any other Loan
Document. ▇▇▇▇▇▇▇ Delaware has no other authorized capital stock. As of
the Closing Date, 34,792,732 shares of Series A Stock and 17,402,946
shares of Series B Stock will have been issued by ▇▇▇▇▇▇▇ Delaware, and
no shares of preferred stock will have been issued. All outstanding
shares of common stock
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of ▇▇▇▇▇▇▇ Delaware are duly authorized, validly issued, fully paid,
non-assessable and issued in compliance with all applicable state and
federal securities and other Laws. ▇▇▇▇▇▇▇ Delaware meets each of the
requirements listed in Section 25117(a)(2)(A) of the California
Corporations Code.
(d) ▇▇▇▇▇▇▇ Delaware is in compliance with all Laws and
other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits from,
and has accomplished all filings, registrations and qualifications with,
or obtained exemptions from any of the foregoing from, any Governmental
Agency that are necessary for the transaction of its business, except
where the failure so to comply, or to obtain authorizations, consents,
approvals, orders, licenses or permits, or file, register, qualify or
obtain exemptions would not have a material adverse effect on the
business, operations or condition (financial or otherwise) of ▇▇▇▇▇▇▇
Delaware.
(e) ▇▇▇▇▇▇▇ Delaware has no Subsidiary or Subsidiaries
other than the Borrower, ▇▇▇▇▇▇▇ Mortgage Company, a California
corporation, PH Ventures - San ▇▇▇▇, a California corporation, PH-LP
Ventures, a California corporation, PH Institutional Ventures, a
California corporation, HSP, Inc., a California corporation, ▇▇▇▇▇▇▇
Southwest, Inc., an Arizona corporation, The ▇▇▇▇▇▇▇ Companies, a
California corporation, ▇▇▇▇▇▇▇ CMR, Inc., and CMR, and the Borrower has
no Subsidiary or Subsidiaries other than PH Ventures - San ▇▇▇▇, a
California corporation, PH-LP Ventures, a California corporation, PH
Institutional Ventures, a California corporation, HSP, Inc., a
California corporation, ▇▇▇▇▇▇▇ Southwest, Inc., an Arizona corporation,
▇▇▇▇▇▇▇ CMR, Inc., The ▇▇▇▇▇▇▇ Companies, a California corporation and
CMR.
6.2 Authority; Compliance With Other Agreements and Instruments
and Government Regulations. Except as set forth in Schedule 6.2, the execution,
delivery and performance of each Loan Document by each Party, to the extent such
Party is a party thereto, have been duly authorized by all necessary action, and
do not and will not:
(a) Require any consent or approval not heretofore
obtained of any partner, director, stockholder, security holder or
creditor;
(b) Violate or conflict with any provision of such Party's
partnership agreement, certificate of limited partnership, charter,
articles of incorporation or bylaws, or amendments thereto, as
applicable;
(c) Result in or require the creation or imposition of any
Lien or Right of Others (other than as permitted under the Loan
Documents) upon or with respect to any Property now owned or leased or
hereafter acquired by such Party;
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(d) Constitute a "transfer of an interest" or an
"obligation incurred" that is avoidable by a trustee under Section 548
of the Bankruptcy Code of 1978, as amended, or constitutes a "fraudulent
transfer" or "fraudulent obligation" within the meaning of the Uniform
Fraudulent Transfer Act as enacted in any jurisdiction or any analogous
Law;
(e) Violate any provision of any Law (including, without
limitation, Regulations T, U and/or X of the Board of Governors of the
Federal Reserve System or the usury laws of any jurisdiction), order,
writ, judgment, injunction, decree, determination or award presently in
effect and having applicability to such Party; or
(f) Result in a breach of or constitute a default under,
or cause or permit the acceleration of any obligation owed under, any
indenture or loan or credit agreement or any other material agreement,
lease or instrument to which such Party is a party or by which such
Party or any of its Property is bound or affected; and neither the
Borrower nor ▇▇▇▇▇▇▇ Delaware is in default under any Law, order, writ,
judgment, injunction, decree, determination or award, or any indenture,
agreement, lease or instrument described in Schedule 6.2 as contemplated
above in this subsection (f), in any respect that is materially adverse
to the interests of the Agent, the Issuing Banks, the LC Guarantor or
the Lenders or that would have any material adverse effect on the
business, operations or condition (financial or otherwise) of the
Borrower or ▇▇▇▇▇▇▇ Delaware.
6.3 No Governmental Approvals Required. Except as set forth in
Schedule 6.3, no authorization, consent, approval, order, license or permit
from, or filing, registration or qualification with, or exemption from any of
the foregoing from, any Governmental Agency is or will be required to authorize
or permit under applicable Law the execution, delivery and performance by any
Party of the Loan Documents. As to those matters set forth in Schedule 6.3, the
Borrower has obtained such authorizations, consents, approvals, orders, licenses
and permits required to authorize or permit under any applicable Law the
execution, delivery and performance by any Party of the Loan Documents, except
as otherwise indicated on said Schedule.
6.4 Financial Statements. The Borrower has furnished to the Agent
and the Lenders (i) the audited consolidated balance sheet of ▇▇▇▇▇▇▇ Delaware
as at December 31, 1997, and the related audited consolidated statement of
operations of ▇▇▇▇▇▇▇ Delaware for the period then ended and (ii) the unaudited
interim consolidated balance sheet of ▇▇▇▇▇▇▇ Delaware as of April 30, 1998 and
the related unaudited interim consolidated statement of operations for the four
months ended April 30, 1998. Such financial statements fairly present the
financial condition and results of operations of ▇▇▇▇▇▇▇ Delaware as at such
dates and for such periods, in conformity with GAAP,
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consistently applied, except that the unaudited interim financial statements do
not include all of the information and footnotes required by GAAP for complete
financial statements.
6.5 No Other Liabilities; No Material Adverse Changes. Except as
disclosed in Schedule 6.5 and Schedule 6.9, and except for changes in amounts
outstanding under this Agreement prior to the date hereof, the Borrower does not
have any material liability or material contingent liability not reflected or
disclosed in the audited or unaudited balance sheets or notes thereto described
in Section 6.4. There has been no material adverse change in the business,
prospects, operations or condition (financial or otherwise) of ▇▇▇▇▇▇▇ Delaware
and the Borrower since April 30, 1998.
6.6 Title to and Location of Property. The Borrower has good and
valid title to all the Property reflected in the balance sheets described in
Section 6.4, other than Property subsequently sold or disposed of in the
ordinary course of business or as permitted under Section 8.4, free and clear of
all Liens and Rights of Others other than Liens or Rights of Others permitted
pursuant to Section 8.8. All tangible personal Property owned or held by the
Borrower is located within the States of California, Arizona, New Mexico, Nevada
and/or Illinois.
6.7 Intangible Assets. The Borrower owns, or possesses the right
to use to the extent necessary in its business, all trademarks, trade names,
copyrights, patents, patent rights, licenses and other Intangible Assets that
are used in any material respect in the conduct of its business as now operated,
and no such Intangible Asset, to the best knowledge of the Borrower, conflicts
with the valid trademark, trade name, copyright, patent, patent right or
Intangible Asset of any other Person to the extent that such conflict would have
a material adverse effect on the business, operations or condition (financial or
otherwise) of the Borrower.
6.8 Public Utility Holding Company Act. The Borrower is not a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
6.9 Litigation. Except as set forth in Schedule 6.9, there are no
actions, suits or proceedings pending or, to the best knowledge of the Borrower,
threatened against or affecting the Borrower, any of its Subsidiaries, ▇▇▇▇▇▇▇
Delaware or any Property of the Borrower or any such Subsidiary or ▇▇▇▇▇▇▇
Delaware in any court of Law or before any Governmental Agency (i) where the
amount in controversy is $1,000,000 or more, (ii) which involve claims under the
Racketeer Influenced and Corrupt Organization Act of 1970, 18 U.S.C.
Sections 1961-1968, or any other federal or state law for which the
forfeiture of assets is a potential penalty, or (iii) which, if determined
adversely to the Borrower or such Subsidiary or ▇▇▇▇▇▇▇ Delaware, as applicable,
would
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have a material adverse effect on the condition or operations of the Borrower or
▇▇▇▇▇▇▇ Delaware, financial or otherwise, or which material adverse effect may
affect the legality, validity or enforceability of the Loan Documents.
6.10 Binding Obligations. Subject to the exceptions set forth in
the Opinion of Counsel addressed to the Agent and the Lenders and dated as of
the Closing Date, each of the Loan Documents will, when executed and delivered
by the Borrower or ▇▇▇▇▇▇▇ Delaware, constitute the legal, valid and binding
obligation of the Borrower or ▇▇▇▇▇▇▇ Delaware, as applicable, enforceable
against the Borrower or ▇▇▇▇▇▇▇ Delaware, as applicable, in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar Laws relating to or
affecting creditors' rights generally or equitable principles relating to the
granting of specific performance and other equitable remedies as a matter of
judicial discretion.
6.11 No Default. No event has occurred and is continuing that is
a Default.
6.12 ERISA.
(a) Except, in the case of the Borrower, as disclosed in
Schedule 6.12, neither the Borrower or ▇▇▇▇▇▇▇ Delaware maintains or
contributes, nor is the Borrower or ▇▇▇▇▇▇▇ Delaware required to
contribute, to any Pension Plan.
(b) With respect to each Pension Plan disclosed in
Schedule 6.12:
(i) the Borrower is in compliance in all material respects
with any applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to all Pension
Plans and Multiemployer Plans. With respect to each of the
Borrower's Pension Plans, the Borrower (A) has fulfilled in all
material respects its obligations under the minimum funding
standards of ERISA, (B) has not incurred any material and past
due liability to the PBGC, and (C) has not had asserted against
it any penalty for failure to meet its minimum funding
requirements under ERISA, and each Pension Plan is able to pay
benefits thereunder when due;
(ii) vested liabilities under all Pension Plans (with
assets less than vested liabilities) administered by the Borrower
or any administrator designated by the Borrower do not exceed the
assets thereunder by more than the greater of: (a) Five Hundred
Thousand Dollars ($500,000); or (b) five percent (5%) of the
Borrower's Tangible Effective Net Worth;
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(iii) no "reportable event" (as defined in Section 4043 of
ERISA) has occurred that could reasonably be expected to result
in the termination or disqualification of such Pension Plan;
(iv) the Borrower has not engaged in any non-exempt
"prohibited transaction" (as defined in Section 4975 of the
Internal Revenue Code of 1986);
(v) the Borrower has not incurred or reasonably expects to
incur any withdrawal liability under ERISA to any Multiemployer
Plan; and
(vi) to the extent that any such Pension Plan (which is a
"welfare plan" under Section 3(l) of ERISA) is insured, the
Borrower has paid all premiums required to be paid for all
periods through and including the Closing Date. To the extent
that any such Pension Plan (which is a "welfare plan" as defined
above) is not or has not been funded with insurance, the Borrower
has made all contributions required to be paid for all periods
through and including the Closing Date and that all such Pension
Plans, to the extent that their funding is based on actuarial
principles, are actuarially sound as at the Closing Date.
(c) To the best knowledge of the Borrower, except as
disclosed in Schedule 6.12, the Borrower is not and has never been a
party to or has or has had any employees who are covered by any
Multiemployer Plan to which the Borrower is required to make
contributions.
(d) the Borrower is in compliance with each covenant
contained in Section 8.6.
6.13 Regulations T, U and X; Investment Company Act. The Borrower
is not engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" or "margin security" within the meanings of Regulations T, U or
X, respectively, of the Board of Governors of the Federal Reserve System. No
part of the proceeds of any Revolving Loan hereunder will be used to purchase or
carry any such "margin security" or "margin stock" or to extend credit to others
for the purpose of purchasing or carrying any such "margin security" or "margin
stock" in violation of Regulations T, U or X of said Board of Governors. The
Borrower is not required to be registered under the Investment Company Act of
1940.
6.14 Disclosure. No written statement made by or on behalf of the
Borrower or ▇▇▇▇▇▇▇ Delaware to the Agent or any Lender in connection with this
Agreement, or in connection with any Revolving Loan, when taken in context with
all
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other such statements, contains any untrue statement of a material fact or omits
a material fact necessary to make the statement made not misleading in light of
all of the circumstances existing at the time the statement was made, including,
without limitation, matters disclosed to the Agent and the Lenders in any
Schedules to this Agreement or in any other written statement previously
delivered to the Agent and the Lenders pursuant to this Agreement. To the best
knowledge of the Borrower, there is no fact (except for general economic
conditions) which the Borrower has not disclosed to the Agent and the Lenders in
writing which materially and adversely affects nor, so far as the Borrower can
now reasonably foresee, can reasonably be expected to affect materially and
adversely the business, operations, Properties, prospects, profits or condition
(financial or otherwise) of the Borrower or ▇▇▇▇▇▇▇ Delaware, or the ability of
either the Borrower or ▇▇▇▇▇▇▇ Delaware to perform its Obligations under the
Loan Documents.
6.15 Tax Liability. The Borrower, each of its Subsidiaries and
▇▇▇▇▇▇▇ Delaware have filed all federal and state income tax returns, and all
material tax returns other than federal and state income tax returns, that are
required (subject to any extensions obtained pursuant to applicable Law) to be
filed, and have paid, or made provision for the payment of, all taxes payable by
the Borrower or such Subsidiary or ▇▇▇▇▇▇▇ Delaware with respect to the periods,
Property or transactions covered by said returns, or pursuant to any assessment
received by the Borrower or such Subsidiary or ▇▇▇▇▇▇▇ Delaware, except such
taxes, if any, as are being contested in good faith by appropriate proceedings
and as to which adequate reserves have been established and maintained.
6.16 [Deleted]
6.17 Fiscal Year. The Borrower operates on a fiscal year ending
on December 31, with four fiscal quarters of thirteen weeks ending on or about
March 31, June 30, September 30 and December 31.
6.18 Employee Matters. There is no strike, work stoppage or labor
dispute with any union or group of employees pending or overtly threatened
involving the Borrower which could have a material adverse effect on the
business, operations or condition (financial or otherwise) of the Borrower.
6.19 Environmental Matters. Except as disclosed on Schedule 6.19,
(a) the real Property of the Borrower, each of its Subsidiaries and each
Borrower Partnership and the operations conducted thereon do not violate any
applicable Law, statute, ordinance, rule, regulation, order or determination of
any governmental authority or any restrictive covenant or deed restriction
(recorded or otherwise), including, without limitation, all applicable zoning
ordinances and building codes, flood disaster Laws and Environmental Laws and
regulations, in any respect which could have a material adverse effect on the
business, operations or condition (financial or
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otherwise) of the Borrower; (b) without limitation of clause (a) above, the
Borrower's and each of its Subsidiaries' and each Borrower Partnership's real
Property and the operations conducted by the Borrower or any current owner or
operator of such real Property or operation, are not in violation of or subject
to any existing, pending or threatened action, suit, investigation, inquiry or
proceeding by any governmental authority or to any remedial obligations under
any Environmental Laws which, if determined adversely to the Borrower or such
Subsidiary or such Borrower Partnership, could have a material adverse effect on
the business, operations or condition (financial or otherwise) of the Borrower;
(c) all notices, permits, licenses or similar authorizations, if any, required
to be obtained or filed in connection with the operation or use of the real
Property of the Borrower, each of its Subsidiaries and each Borrower
Partnership, including, without limitation, past or present treatment, storage,
disposal or release of a hazardous substance or solid waste into the
environment, have been duly obtained or filed, except where the failure to
obtain or file same would not have a material adverse effect on the business,
operations or condition (financial or otherwise) of the Borrower; (d) all
significant amounts of hazardous substances or solid waste generated at the real
Property of the Borrower, each of its Subsidiaries and each Borrower Partnership
have in the past been and shall continue to be transported, treated and disposed
of only by carriers maintaining valid permits under RCRA and any other
Environmental Laws and only at treatment, storage and disposal facilities
maintaining valid permits under RCRA and any other Environmental Law, which
carriers and facilities have been and are, to the best of the Borrower's
knowledge, operating in compliance with such permits; (e) the Borrower has no
actual or constructive knowledge of the disposal or other release of any
hazardous substance or solid waste, or the threatened release of hazardous
substances, on or to the real Property of the Borrower, any of its Subsidiaries
or any Borrower Partnership except in compliance in all material respects with
Environmental Laws, and that it has not been notified of same by any
Governmental Agency; (f) the Borrower has no material contingent liability in
connection with any release or threatened release of any hazardous substance or
solid waste into the environment; and (g) the use which the Borrower, each of
its Subsidiaries and each Borrower Partnership makes or intends to make of the
Borrower's, each of its Subsidiaries' and each Borrower Partnership's real
Property will not result in the unlawful or unauthorized disposal or other
release of any hazardous substance or solid waste on or to the real Property of
the Borrower, any of its Subsidiaries or any Borrower Partnership in any
material respect. The terms "hazardous substance," "release" and "threatened
release" have the meanings specified in CERCLA, and the terms "solid waste" and
"disposal" (or "disposed") have the meanings specified in RCRA; provided,
however, in the event either CERCLA or RCRA is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall apply subsequent
to the effective date of such amendment, and provided further that, to the
extent the laws of any state in which any of the real Property of the Borrower,
any of its Subsidiaries or any Borrower Partnership is located establish a
meaning for "hazardous substance," "release," "solid waste" or "disposal" which
is broader than that specified in either CERCLA or RCRA, such broader meaning
shall apply with regard to the real Property of the Borrower, each
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of its Subsidiaries and any Borrower Partnership located in such state. The
Borrower acknowledges that this Agreement constitutes a "written request for
information" by the Agent and the Lenders, and it is the Borrower's intention
that the matters disclosed in Schedule 6.19 constitute "written disclosure",
required pursuant to California Code of Civil Procedure Section 726.5(d)(2).
6.20 Partnerships, Joint Ventures and Limited Liability
Companies. Schedule 6.20 is a complete and accurate description of all
partnerships, joint ventures and limited liability companies of which the
Borrower or a Subsidiary of the Borrower is a partner, a joint venturer or a
member and the jurisdiction of formation of each such partnership, joint venture
and limited liability company. Except as disclosed on Schedule 6.20, neither the
Borrower or any Subsidiary of the Borrower is a partner, joint venturer or
member of any other partnership, joint venture or limited liability company.
Each partnership, joint venture and limited liability company listed on Schedule
6.20 is validly existing and in good standing under the laws of its jurisdiction
of formation and in each jurisdiction in which it conducts its business.
6.21 Outstanding Advances and Letters of Credit. As of the date
hereof, "Outstanding Advances" under the Existing Loan Agreement are
$56,000,000, and "Outstanding Letters of Credit" under the Existing Loan
Agreement were $1,500,000, and such Outstanding Advances and the Borrower's
reimbursement obligations in respect of such Outstanding Letters of Credit
constitute legal, valid and binding obligations of the Borrower for which the
Borrower has no valid defenses.
ARTICLE 7
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)
So long as any Revolving Loan remains unpaid or Letter of Credit
or Set-Aside Letter remains outstanding, or any other Obligation remains unpaid
or unperformed (other than any contingent indemnity obligations under any of the
Loan Documents), or any portion of the Revolving Commitments remains
outstanding, the Borrower shall, unless the Majority Lenders otherwise consent
in writing:
7.1 Payment of Taxes and Other Potential Liens. Pay and discharge
promptly, and cause each of its Subsidiaries to pay and discharge promptly, all
taxes, assessments and governmental charges or levies imposed upon the Borrower
or such Subsidiary or its Property or any part thereof, upon the Borrower's or
such Subsidiary's income or profits or any part thereof or, subject to the
provisions of Section 13.7 of this Agreement, upon any right or interest of the
Agent, any Issuing Bank, the LC Guarantor or any Lender under any Loan Document,
except that neither the Borrower nor any such Subsidiary shall be required to
pay or cause to be paid (a) any income, net worth or gross receipts tax, or any
tax imposed in lieu of such income, gross receipts or net
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worth taxes, applicable to any Lender or any participant of any Lender, or (b)
any tax, assessment, charge or levy that is not yet delinquent, or is being
contested in good faith by appropriate proceedings, so long as the Borrower or
such Subsidiary has established and maintains adequate reserves for the payment
of the same and by reason of such nonpayment and contest no material item or
portion of Property of the Borrower or such Subsidiary is in jeopardy of being
seized, levied upon or forfeited.
7.2 Preservation of Existence. Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its existence, and all
material licenses, rights, franchises and privileges in the jurisdiction of its
formation and all authorizations, consents, approvals, orders, licenses,
permits, or exemptions from, or registrations with, any Governmental Agency that
are necessary for the transaction of its business, including, without
limitation, all notices, permits or licenses, if any, filed or obtained with
regard to compliance with Environmental Laws, and qualify and remain qualified,
and cause each such Subsidiary to qualify and remain qualified, to transact
business in each jurisdiction in which such qualification is necessary in view
of its business or the ownership or leasing of its Properties.
7.3 Maintenance of Properties. Maintain, preserve and protect,
and cause each of its Subsidiaries to maintain, preserve and protect, all of its
depreciable Properties and equipment in good order and condition, subject to
wear and tear in the ordinary course of business, and not permit any waste
(other than developmental waste) of its Properties, except that the failure to
maintain, preserve and protect a particular item of depreciable Property or
equipment that is not of significant value, either intrinsically or to the
operations of the Borrower or such Subsidiary, shall not constitute a violation
of this covenant.
7.4 Maintenance of Insurance.
(a) Maintain, and cause each of its Subsidiaries to
maintain, liability and casualty insurance with responsible insurance
companies in such amounts and against such risks as is usually carried
by responsible companies engaged in similar businesses and owning
similar Properties in the general areas in which the Borrower or such
Subsidiary operates, including, without limitation, not less than
$10,000,000 of general liability coverage or such greater amount as is
prudent.
(b) All policies of insurance required hereunder,
including endorsements thereto, must be reasonably satisfactory to the
Agent as to amounts, forms, risk coverages, deductibles, expiration
dates, and loss payable and cancellation provisions; provided, however,
that neither the Borrower nor any such Subsidiary shall be required to
obtain policies of insurance in amounts and containing provisions that
are not typically obtained by responsible companies engaged in similar
businesses and owning similar Properties in the
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general area in which the Borrower or such Subsidiary operates. Without
limiting the foregoing, each required property insurance policy shall
contain a Lender's Loss Payable Endorsement (Form 438 BFU) in favor of
the Agent, as agent for the Lenders, the Issuing Banks (other than a
Third Party Issuer) and the LC Guarantor, as their respective interests
may appear, and shall provide that all proceeds in respect of any
casualty loss in excess of $250,000 be payable to the Agent, who shall
in turn distribute them to the Lenders, such Issuing Banks and the LC
Guarantor to the extent of their respective interests. An approval by
the Agent or the Majority Lenders is not, and shall not be deemed to be,
a representation of the solvency of any insurer or the sufficiency of
any amount of insurance.
(c) Each policy of insurance required hereunder shall
provide that it may not be modified or canceled without at least thirty
days' prior written notice (except that cancellation for non-payment of
premiums may be on ten days' prior written notice) to the Agent. The
Borrower shall use its best efforts to furnish the Agent no later than
ten days prior to the expiration of any required insurance, and in any
event within one day prior to the expiration of any required insurance,
with proof satisfactory to the Agent that such new policy has been
issued, continuing in force the insurance covered by the policy which
expired. At the same time, the Borrower shall also furnish the Agent
with evidence satisfactory to the Agent that all premiums for any such
new policy have been or will be paid in accordance with the terms of
such policy. If the Borrower shall not be able to provide the Agent with
such proof or evidence ten days prior to the expiration of any required
insurance, the Borrower shall promptly notify the Agent of such fact and
when the Borrower expects to be able to furnish the Agent with such
proof or evidence. If, on the date a required policy expires, the
Borrower has not complied with this Section 7.4(c), the Agent, acting at
the direction of the Majority Lenders in their sole discretion, may
procure a new policy, and the Majority Lenders may advance funds to pay
the premiums for it. The Borrower shall pay the Agent, for the account
of the Lenders, the Issuing Banks (other than any Third Party Issuer)
and the LC Guarantor, immediately on demand for any advance for such
premiums, which shall be considered to be an additional Loan to the
Borrower.
7.5 Compliance With Laws. Comply, and cause each of its
Subsidiaries to comply, in all material respects with the requirements of all
applicable Laws and orders of any Governmental Agency, including all applicable
provisions of ERISA, except that neither the Borrower nor such Subsidiary need
comply with a requirement then being contested by it in good faith by
appropriate proceedings so long as no interest of the Agent or any Lender or
Issuing Bank or the LC Guarantor would be materially impaired thereby.
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7.6 Inspection Rights. At any time during regular business hours
and as often as requested, permit, and cause each of its Subsidiaries to permit,
the Agent or any other Lender, or any employee, agent or representative thereof,
(a) to examine, audit and make copies and abstracts from the records and books
of account of, and to visit and inspect the Properties of, the Borrower, such
Subsidiary and ▇▇▇▇▇▇▇ Delaware and to discuss the affairs, finances and
accounts of the Borrower, such Subsidiary and ▇▇▇▇▇▇▇ Delaware with any of its
officers and key employees, customers or vendors, and/or (b) to inspect the real
Property of the Borrower and such Subsidiary, and any books, records, journals,
orders, receipts, correspondence, notices, permits or licenses of the Borrower,
such Subsidiary and ▇▇▇▇▇▇▇ Delaware, with regard to compliance with
Environmental Laws, and, upon request, furnish promptly to the Agent or any
other Lender true copies of all financial information and all information
pertaining to the Borrower's and such Subsidiary's compliance with Environmental
Laws made available to the senior management of the Borrower or such Subsidiary.
7.7 Keeping of Records and Books of Account. Keep, and cause each
of its Subsidiaries to keep, adequate records and books of account reflecting
all financial transactions in conformity with GAAP, consistently applied, and in
material conformity with all applicable requirements of any Governmental Agency
having regulatory jurisdiction over the Borrower or such Subsidiary.
7.8 Compliance With Agreements, Duties and Obligations. Promptly
and fully comply, and cause each of its Subsidiaries to promptly and fully
comply, with all of its agreements, duties and obligations under the Loan
Documents, and under any other material agreements, indentures, leases and/or
instruments to which it is a party, whether such other agreements, indentures,
leases or instruments are with the Agent, any Lender or any other Person, except
that neither the Borrower nor such Subsidiary need comply with any such other
agreements, indentures, leases or instruments then being contested by it in good
faith by appropriate proceedings or if the failure to comply with such other
agreements, indentures, leases or instruments would not have a material adverse
effect on the Borrower, in either case so long as no material interest of the
Agent or any Lender or Issuing Bank or the LC Guarantor would be materially
impaired thereby.
7.9 Additional Guaranties, Collateral and Collateral Documents.
At any time and from time to time upon the request of the Agent or the Majority
Lenders, forthwith, and in any event within five Banking Days after such
request, (a) cause any Subsidiaries (other than CMR and CMR, Inc.) of the
Borrower designated by the Agent or the Majority Lenders to execute and deliver
to the Agent guaranties of the Obligations of the Borrower, in form and
substance satisfactory to the Agent and the Majority Lenders, and (b) execute
and deliver or cause to be executed and delivered to the Agent such Collateral
Documents as may be requested by the Agent or the Majority Lenders, in the form
furnished to the Borrower by the Agent in connection with such request, covering
any or all of the Property of the Borrower or any of its Subsidiaries
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(other than Property of CMR and CMR, Inc.) as requested, to secure payment and
performance of the Obligations of such Person, or such portion thereof as may be
specified by the Agent or the Majority Lenders. In addition, at any time and
from time to time, the Borrower forthwith shall deliver or cause to be delivered
to the Agent at the Borrower's sole expense such surveys, and policies of title
insurance and endorsements thereto relating to any or all of the Property of the
Borrower or any of its Subsidiaries as the Agent or the Majority Lenders may
request. Further, the Borrower shall pledge, pursuant to the applicable
Collateral Documents, all equity and debt interests held by the Borrower in
partnerships, joint ventures and limited liability companies except for CMR.
Anything contained herein to the contrary notwithstanding, (i) the Borrower
shall not be required to execute Collateral Documents, or to cause any of its
Subsidiaries to execute any guaranties or Collateral Documents, with respect to
real Property, and personal Property related to such real Property, which
secures or will secure other indebtedness of the Borrower or such Subsidiary to
the extent such indebtedness of the Borrower or such Subsidiary is permitted by
this Agreement and the terms of such indebtedness prohibit the execution of such
guaranties or Collateral Documents, (ii) the Borrower shall not be required to
cause any of its Subsidiaries to execute any such Guaranties or any Collateral
Documents with respect to any Property to the extent prohibited by other equity
holders in such Subsidiaries, and (iii) the Borrower shall not be required to
cause any partnerships or joint venturers or limited liability companies in
which it is a partner (general or limited) or member, as the case may be, to
execute any such Guaranties or any Collateral Documents with respect to any
Property owned by such Person.
7.10 Priority of Liens. Use its best efforts to provide the Agent
with any and all releases, consents, certificates, policies of title insurance,
endorsements thereto, assignments, subordination agreements, landlord or
mortgagee consents to removal of personal property, waivers and other documents
as the Agent may request to ensure that the Lenders' Liens upon the Property of
the Borrower and any of its Subsidiaries are fully perfected and of first
priority, except as otherwise expressly permitted by the Loan Documents. To the
extent that the Borrower fails to obtain any such release, consent, certificate,
policy, endorsement, assignment, subordination agreement, or comparable document
as requested, the Agent may, in its sole and absolute discretion, exclude any
affected asset or category of assets from the determination of the Borrowing
Base or appropriately reduce the carrying value of or percentage rate of advance
against any asset or category of assets included in the Borrowing Base, unless
the Majority Lenders, in their sole and absolute discretion, determine
otherwise.
7.11 Deposit Accounts. Maintain the Operating Account with a bank
acceptable to the Agent, which shall be subject to a perfected security interest
in favor of the Agent, the Lenders, the Issuing Banks (other than any Third
Party Issuer) and the LC Guarantor, and cause all of the Cash and Cash
Equivalents of the Borrower, its Subsidiaries (other than CMR) and ▇▇▇▇▇▇▇
Delaware to be deposited into the Operating
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Account, unless otherwise agreed by the Majority Lenders, other than (i) up to
$200,000 held in operating accounts maintained with banks acceptable to the
Agent for the Borrower's Arizona, Nevada and New Mexico homebuilding divisions,
(ii) up to $250,000 in the aggregate held in divisional operating accounts
maintained with banks acceptable to the Agent for the Borrower's California
homebuilding operations, (iii) up to $300,000 in the aggregate held in accounts
maintained by the Borrower with banks acceptable to the Agent in connection with
the Borrower's project amenities, (iv) up to $200,000 in the aggregate held in
accounts maintained by the Borrower with banks acceptable to the Agent in
connection with the Borrower's design center operations, (v) up to $200,000 in
the aggregate held in accounts maintained by the Borrower with banks acceptable
to the Agent in connection with ▇▇▇▇▇▇▇ Mortgage Company and (vi) up to
$5,000,000, or such greater amount as shall be required under CMR's loan
agreements (provided that any amount in excess of $5,000,000 in the aggregate
shall have been generated from the operations of such partnership), held in
accounts maintained by the Borrower or CMR in connection with CMR, provided
that, in the case of all such permitted operating accounts, the Agent, the
Lenders, such Issuing Banks and the LC Guarantor shall have a perfected security
interest in such operating accounts other than of the type referred to in
clauses (i), to the extent such accounts are subject to Liens in favor of
lenders providing secured financing to such divisions, and (vi) above and
provided that perfection of such security interest does not involve Agent
obtaining domain and control of any such deposit account.
7.12 Environmental Laws. The Borrower shall, and shall use its
best efforts to cause each of its Subsidiaries and each Borrower Partnership and
any and all lessees, contractors, subcontractors, employees, agents or other
operators of the real Property of the Borrower or any such Subsidiary or any
Borrower Partnership to, conduct its or their business so as to comply in all
material respects with all Environmental Laws; provided, however, that nothing
contained in this Section 7.12 shall prevent the Borrower or any such Subsidiary
or any Borrower Partnership from contesting, in good faith and by appropriate
legal proceedings, any such Law, regulation or interpretation or application
thereof; provided, further, that the Borrower and each such Subsidiary and each
Borrower Partnership shall comply with the order of any court or other
governmental body of applicable jurisdiction relating to such Environmental Laws
unless the Borrower or such Subsidiary or Borrower Partnership shall currently
be prosecuting an appeal or proceedings for review and shall have secured a stay
of enforcement or execution or other arrangement postponing enforcement or
execution pending such appeal or proceedings for review. The Borrower shall and
shall use its best efforts to cause each such Subsidiary and each Borrower
Partnership and all lessees or other operators of the real Property of the
Borrower or any such Subsidiary or any Borrower Partnership to dispose of any
and all hazardous substances or solid waste generated at such real Property only
at facilities and by carriers maintaining, and, to the best of the Borrower's
knowledge, operating in compliance with valid permits under RCRA and any other
Environmental Law, and shall
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use its best efforts to obtain certificates of disposal from all contractors
employed in connection with the transport or disposal of such hazardous
substances or solid waste.
7.13 Environmental Notices. If the Borrower or any of its
Subsidiaries or any Borrower Partnership shall receive:
(i) notice that any violation of any Environmental Law may
have been committed or is about to be committed by the Borrower
or any such Subsidiary or any Borrower Partnership,
(ii) notice that any administrative or judicial complaint
or order has been filed or is about to be filed against the
Borrower or any such Subsidiary or any Borrower Partnership
alleging violations of any Environmental Law or requiring the
Borrower or any such Subsidiary or any Borrower Partnership to
take any action in connection with the release or threatened
release of hazardous substances or solid waste into the
environment, or
(iii) any notice from a federal, state, or local
governmental agency or private party alleging that the Borrower
or any such Subsidiary or any Borrower Partnership may be liable
or responsible for costs associated with a response to or cleanup
of a release or disposal of a hazardous substance or solid waste
into the environment or any damages caused thereby, including,
without limitation, any notice that the Borrower or any such
Subsidiary or any Borrower Partnership is a "potentially
responsible party" as defined by CERCLA,
the Borrower shall provide the Agent and each Lender with a copy of such notice
within ten (10) days of the Borrower's or any such Subsidiary's or any Borrower
Partnership's receipt thereof. The Borrower shall provide each Lender with
notice of the enactment or promulgation of any Environmental Law which may
result in a material adverse change in the business, financial condition, or
operations of the Borrower or any such Subsidiary or any Borrower Partnership
within fifteen days after the Borrower obtains knowledge thereof.
7.14 Forward Commitment Protection. The Borrower will acquire,
within 60 days of the Agent's request therefor, forward commitment protection
for its home buyers consistent with the policies of the Borrower in existence as
of the Original Closing Date.
7.15 Appraisals. From time to time the Agent may request, and the
Borrower shall deliver, appraisals with respect to real Property for which
appraisals had not been delivered to the Agent during the 12 months prior to
such request.
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7.16 Legal Fees. The Borrower shall pay all outstanding invoices
of ▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler, LLP, as counsel for the Agent, for
services rendered in connection with the preparation and delivery of this
Agreement within 10 Banking Days of the delivery of such invoices to the
Borrower.
ARTICLE 8
NEGATIVE COVENANTS
So long as any Revolving Loan remains unpaid or any Letter of
Credit or Set-Aside Letter remains outstanding, or any other Obligation remains
unpaid or unperformed (other than any contingent indemnity obligations under any
of the Loan Documents), or any portion of the Revolving Commitments remains
outstanding, the Borrower shall not, unless the Majority Lenders (or, if
otherwise indicated below, all of the Lenders (other than any Lender which is,
at such time, a Defaulting Lender)) otherwise consent in writing:
8.1 Transactions with Affiliates. Enter, or permit any of its
Subsidiaries to enter, into any transaction of any kind with any Affiliate of
the Borrower other than arms'-length transactions with Affiliates that are
permitted with non-Affiliates pursuant to Sections 8.8 and/or 8.15; provided,
however, that (a) the Borrower may enter, and permit each of its Subsidiaries to
enter, into arms'-length transactions with Affiliates that (i) are permitted
with non-Affiliates pursuant to Section 8.4(ii)(B) and are approved by the Board
of Directors of the Borrower or such Subsidiary, as applicable, or (ii) consist
of purchases of Property for not more than fair market value, which purchases
shall have been approved by the Board of Directors of the Borrower or such
Subsidiary, as applicable and (b) the Borrower may enter into Permitted Sales.
8.2 Mergers. Without the approval of the Majority Lenders, merge,
consolidate or amalgamate with or into, or permit any of its Subsidiaries to
merge, consolidate or amalgamate with or into, any Person, except that any of
such Subsidiaries may merge, consolidate or amalgamate with or into any other
such Subsidiary.
8.3 [Deleted]
8.4 Sales and Leasebacks; Sales, Etc., of Assets. (i) Engage, or
permit any of its Subsidiaries to engage, in any sale and leaseback transactions
with any member of the Board of Directors of the Borrower or Affiliates of such
members or Affiliate of the Borrower or any such Subsidiary or ▇▇▇▇▇▇▇ Delaware
or (ii) sell, lease, transfer or otherwise dispose of any of its Properties,
whether now owned or hereafter acquired, or grant any option or other right to
purchase, lease or otherwise acquire any of such Properties, or permit the same
of any of its Subsidiaries, (A) to any member of the Board of Directors of the
Borrower or Affiliates of such members or Affiliate of the Borrower or any such
Subsidiary or ▇▇▇▇▇▇▇ Delaware, or (B) to any Person other than
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any member of the Board of Directors of the Borrower or Affiliates of such
members or Affiliate of the Borrower or any such Subsidiary or ▇▇▇▇▇▇▇ Delaware
if the fair market value of such Property is greater than $5,000,000 unless in
any event the purchase price paid to the Borrower for such Property is at least
100% of such fair market value and the Borrower shall have notified the Agent
and the Lenders in writing of such sale prior to such sale; provided, however,
that the Borrower may (A) enter into Permitted Sales and (B) engage in any of
the activities described herein with members of the Board of Directors of the
Borrower and Affiliates of such members and Affiliates of the Borrower provided
that such sale is approved by the Borrower's Board of Directors, the purchase
price paid to the Borrower is at least 100% of the fair market value of the
Property to be sold and the purchase price is to be paid in cash.
8.5 Redemption, Dividends and Distributions. Directly or
indirectly redeem or repurchase capital stock or partnership interests, declare
or pay any dividends or make any other distribution, whether of capital, income
or otherwise, and whether in Cash or other Property, with respect to capital
stock, or permit any of its Subsidiaries to-do so, except that (i) so long as no
Default has occurred and is continuing, the Borrower or such Subsidiary may make
distributions to ▇▇▇▇▇▇▇ Delaware to the limited extent necessary to cover the
federal and individual state taxes payable by the Borrower or such Subsidiary
and ▇▇▇▇▇▇▇ Delaware with respect to their consolidated federal and individual
state tax returns; and (ii) so long as no Default has occurred and is
continuing, the Borrower or such Subsidiary may make distributions to ▇▇▇▇▇▇▇
Delaware to fund (A) corporate expenses payable by ▇▇▇▇▇▇▇ Delaware, provided
that such distributions do not exceed $100,000 in the aggregate during any
fiscal year, or, to the extent that any such distribution would cause such
distributions to exceed $100,000 in the aggregate for any fiscal year, the
Borrower or such Subsidiary has first obtained the Majority Lenders' prior
written consent to the making of such distribution, which consent the Majority
Lenders shall not unreasonably withhold, and (B) payments required to be made by
▇▇▇▇▇▇▇ Delaware pursuant to the High Yield Securities and the indenture issued
in respect of the same and any refinancing thereof; and (iii) so long as no
Default has occurred and is continuing, the Borrower may declare and pay cash
dividends from time to time to the extent that such dividends would not result
in a breach by Borrower of the covenants set forth in this Agreement.
8.6 ERISA.
(a) At any time, maintain, or be or become obligated to
contribute on behalf of its employees to, any Pension Plan, or permit
any of its Subsidiaries to do so, other than those Pension Plans
disclosed in Schedule 6.12.
(b) At any time, permit, or permit any of its Subsidiaries
to permit, any Pension Plan disclosed in Schedule 6.12 to:
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(i) engage in any non-exempt "prohibited transaction", as
such term is defined in Section 4975 of the Internal Revenue Code
of 1986, as amended;
(ii) incur any material "accumulated funding deficiency",
as that term is defined in Section 302 of ERISA; or
(iii) terminate in a manner which could result in
liability of the Borrower or such Subsidiary to the Pension Plan
or to the PBGC which, when added to any such liability
theretofore incurred with respect to all such terminations, would
exceed $100,000 or result in the imposition of a Lien securing an
obligation in excess of $100,000 on the property of the Borrower
or such Subsidiary pursuant to Section 4068 of ERISA.
(c) At any time, assume any obligation to contribute to
any Multiemployer Plan not disclosed in Schedule 6.12, nor shall the
Borrower or any such Subsidiary acquire any Person or assets of any
Person which has, or has had at any time from and after January 2, 1974,
an obligation to contribute to any Multiemployer Plan.
(d) Fail immediately to notify the Agent of the occurrence
of any "reportable event" (as defined in Section 4043 of ERISA) or of
any non-exempt "prohibited transaction" (as defined in Section 4975 of
the Internal Revenue Code of 1986) with respect to any Pension Plan or
any trust created thereunder. Upon request by the Agent or any Lender,
the Borrower promptly shall furnish to the Agent or such Lender copies
of any reports or other documents filed by the Borrower or any such
Subsidiary with the United States Secretary of Labor, the PBGC and/or
the Internal Revenue Service, with respect to any Pension Plan.
(e) At any time, permit an Pension Plan to fail to comply
with ERISA or other applicable Law in any material respect.
8.7 Change in Nature of Business. Make any material change in the
nature of the business of the Borrower, as conducted and presently proposed to
be conducted.
8.8 Indebtedness, Guarantees and Liens. Create, incur, assume or
suffer to exist any Lien of any nature upon or with respect to any of its
Properties, whether now owned or hereafter acquired; create, incur or assume any
indebtedness for borrowed money or in connection with the purchase of Property
or any liability to the issuer of any letter of credit; guaranty the
indebtedness or obligations of any other Person or provide to a creditor of any
other Person any agreement to maintain net worth of liquidity of the Person or
any other analogous agreement designed to provide
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credit assurance to such creditor; or incur any lease obligation that is
required to be capitalized under GAAP; or, in each case, permit any Subsidiary
to do so, except:
(a) Liens securing taxes, assessments or governmental
charges or levies (including those related to ▇▇▇▇▇ ▇▇▇▇ assessment
districts and 1911, 1913 and 1915 assessment districts), or in
connection with workers' compensation, unemployment insurance or social
security obligations, or the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons not
yet delinquent or which are being contested in good faith by appropriate
proceedings with adequate reserves set aside;
(b) Attachment, judgment or other similar Liens arising in
connection with court proceedings that do not, in the aggregate,
materially detract from the value of the Borrower's or such Subsidiary's
property or materially impair the use thereof in the operation of the
Borrower's or such Subsidiary's business (unless in the case of such
Subsidiary such detraction or impairment does not materially adversely
affect the Borrower), or materially impair the Borrower's or such
Subsidiary's ability to perform its Obligations, and (i) that are
discharged or stayed within thirty days of attachment or levy, or (ii)
payment of which is covered in full (subject to customary and reasonable
deductibles) by insurance, surety bond or reserves;
(c) Easements, rights of ways, restrictions and other
similar charges or encumbrances on real Property that do not interfere
with the orderly development and/or sale of the affected real Property;
(d) Minor defects and irregularities in the title of real
Properties that do not materially detract from the value or impair the
use of such Properties for the purposes for which they are held;
(e) Liens existing or arising by virtue of the leasing or
rental of Property to the extent leases and rentals are permitted by
this Agreement, whether the same are capital leases or operating leases
or rentals;
(f) Indebtedness, liabilities, guarantees or Liens in
favor of the Agent or the Lenders, the Issuing Banks or the LC Guarantor
under this Agreement, the Revolving Notes and the other Loan Documents;
(g) Unsecured indebtedness incurred to vendors in the
ordinary course of business;
(h) [Deleted];
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(i) Indebtedness incurred in connection with land
development loans, infrastructure loans, construction loans (and, in the
case of clause (ii) of this paragraph (i), land acquisition loans) made
(i) CMR for the Carmel Mountain Ranch project (for which the Borrower is
indirectly liable in its capacity as a partner or joint venturer) and
(ii) in connection with any of the Borrower's projects located in New
Mexico or Arizona, and Liens on the Properties of such partnerships and
on the Borrower's New Mexico or Arizona projects; provided that the
aggregate amount of indebtedness with respect to the New Mexico and
Arizona projects does not exceed an aggregate of $5,000,000;
(j) Indebtedness evidenced by 144A Securities issued by
the Borrower and outstanding on the Closing Date and the Liens securing
such indebtedness;
(k) Unsecured debt which is subordinated to the
Obligations, and to the other obligations referred to in subsection (b)
above constituting indebtedness, if any, on terms acceptable to the
Majority Lenders in their sole discretion;
(l) Guarantees arising from endorsement, in the ordinary
course of collection, of negotiable instruments;
(m) Indebtedness to bonding companies incurred in
connection with the bonding of the Borrower's or such Subsidiary's real
estate projects in accordance with the Borrower's or such Subsidiary's
past practice, and Liens granted to secure such indebtedness;
(n) Unsecured liabilities, and liabilities secured by Cash
and/or Cash Equivalents, to reimburse issuing banks in connection with
letters of credit (other than Letters of Credit issued hereunder) issued
by banks other than the Lenders to support the bonding of the Borrower's
real estate projects, the face amount of which shall not exceed, in the
aggregate at any one time outstanding, $2,000,000;
(o) Rights of Others in favor of third party purchasers of
units of Housing or real property (to the extent such sales are
permitted by the terms of this Agreement) arising in connection with the
execution and delivery of purchase contracts for such Housing units or
real property by the Borrower in the ordinary course of business;
(p) Indebtedness that is Non-Recourse to the Borrower, and
Liens securing the same; and
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(q) Unsecured guarantees of the High Yield Securities,
such unsecured guarantees to be on the same terms and conditions as the
unsecured guarantees in effect on the Closing Date or otherwise in form
and substance satisfactory to the Majority Lenders, and to the extent
that the High Yield Securities are refinanced, unsecured guarantees
provided by Borrower and/or Subsidiaries of the Borrower of such
refinanced indebtedness (such unsecured guarantees to be on the same
terms and conditions as the unsecured guarantees in effect on the
Closing Date or otherwise in form and substance satisfactory to the
Majority Lenders);
provided, however, that notwithstanding anything to the contrary contained in
this Section 8.8, each of the Borrower's Subsidiaries may create, incur and
assume indebtedness in connection with its acquisition, development or
improvement of real Property, provided that the recourse to the Borrower for
such indebtedness shall be limited to the Borrower's liability as a partner or
joint venturer or member of any such Subsidiary which is a partnership or joint
venture or limited liability company and, in the case of any such indebtedness
with such recourse to the Borrower, the Borrower's Board of Directors shall have
approved such indebtedness and recourse.
8.9 Change in Fiscal Year. Change its fiscal year, or the
fiscal thereof.
8.10 [Deleted]
8.11 [Deleted]
8.12 [Deleted]
8.13 [Deleted]
8.14 ▇▇▇▇▇▇▇ Delaware's Ownership of Borrower. Permit ▇▇▇▇▇▇▇
Delaware to own less than 100% of the issued and outstanding common stock of the
Borrower.
8.15 New Land Purchases. Purchase, or permit any of its
Subsidiaries to purchase, any new Raw Land or Improved Land or Housing, provided
that (i) the Borrower or any Subsidiary may acquire any such Raw Land or
Improved Land or Housing with the prior written approval of the Majority
Lenders, (ii) the Borrower or any Subsidiary may enter into fee basis
development contracts so long as the Borrower or such Subsidiary does not incur
any indebtedness whatsoever in connection with any such transaction, (iii) the
Borrower or any Subsidiary may acquire new Improved Land without any approval
from the Majority Lenders or the Agent if (A) a tentative subdivision map has
been approved by all appropriate Governmental Agencies or a final subdivision
map for such new Improved Land has been recorded or a vesting
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tentative map for such new Improved Land has been approved by all required
Governmental Agencies or such new Improved Land shall be subject to a
development agreement which provides substantially the same entitlement benefits
as a vesting tentative map, (B) the Borrower or such Subsidiary has received an
environmental toxic report indicating that there are no material environmental
toxic problems associated with such new Improved Land, (C) such new Improved
Land will not be subject to any Liens (other than Liens permitted pursuant to
Section 8.8 or required pursuant to clause (D) below) after the acquisition of
such new Improved Land by the Borrower or such Subsidiary, (D) upon the
Borrower's or such Subsidiary's acquisition of such new Improved Land, such land
will be subject to a first priority Lien in favor of the Agent (except for Liens
permitted under paragraphs (a), (c), (d), (j), (m), (o) and (p) of Section 8.8)
to secure the Obligations, and the Agent shall have received a title insurance
policy in form satisfactory to the Agent and the Majority Lenders insuring the
validity and priority of such Lien, (E) the purchase price shall not be greater
than that set forth in an appraisal of such Improved Land from an appraiser
acceptable to the Agent, or the acquisition is otherwise approved by the
Majority Lenders, or the Borrower commits to Agent to obtain an appraisal within
sixty (60) days after such property is purchased (in which case (i) such
Improved Land shall not be included in the Borrowing Base until such appraisal
is delivered to the Agent, and (ii) notwithstanding any provision of Section 4.8
to the contrary, the value of such Improved Property for purposes of determining
its Improved Land Cost Component shall not exceed the amount set forth as the
appraised value for such Improved Land in the appraisal (it being understood
that costs incurred thereafter by Borrower or such Subsidiary in developing and
improving such Improved Land will be included in determining its value for the
purposes of the relevant provisions of Section 4.8 hereof), (F) such Improved
Land is located within the continental United States, and (G) no more than 300
lots of such new Improved Land shall be in any one location, and (iv) the
Borrower or any Subsidiary may acquire any such Raw Land or Improved Land or
Housing in New Mexico and Arizona provided that the aggregate book value of such
Raw Land, Improved Land and Housing does not exceed $6,500,000 and the
indebtedness incurred by the Borrower or such Subsidiary in connection therewith
is permitted under Section 8.8(i); provided, however, each of the Borrower's
Subsidiaries may acquire any Raw Land or Improved Land or Housing provided that
such acquisition complies with the requirements set forth in clause (iii) above
(other than clauses (C) and (D), if the Lien contemplated by clause (D) is
prohibited by any other lenders of such Subsidiary in respect of other
indebtedness permitted hereunder or by any equity partners of such Subsidiary,
and (G)) and is approved by the Board of Directors of the Borrower; and
provided, further, however, that in any such case of this Section 8.15, the
Borrower shall not acquire, or permit any of its Subsidiaries or any Borrower
Partnership to acquire, any real Property unless the Borrower has received an
environmental toxic report indicating that there are no material environmental
toxic problems associated with such Property.
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8.16 Cash Flow. The cash flow of the Borrower, calculated as of
the last day of each quarter for the four-quarter period ending on such last
day, commencing June 30, 1998, shall be positive, before land acquisition costs,
land improvement and land development costs, interest, and all loan fees and
other costs payable by the Borrower hereunder.
8.17 Consolidated Fixed Charge Coverage Ratio. The Consolidated
Fixed Charge Coverage Ratio of the Borrower, calculated as of the last day of
each quarter for the four-quarter period ending on such last day, commencing
June 30, 1998, will be at least 1.5:1.
ARTICLE 9
INFORMATION AND REPORTING REQUIREMENTS
9.1 Financial and Business Information. So long as any Revolving
Loan remains unpaid or Letter of Credit or Set-Aside Letter remains outstanding,
or any other Obligation remains unpaid or unperformed (other than any contingent
indemnity obligations under any of the Loan Documents) or any portion of the
Revolving Commitments remains outstanding, the Borrower shall, unless the
Majority Lenders otherwise consent in writing, deliver to the Agent and each
Lender, at the Borrower's sole expense:
(a) As soon as practicable, and in any event within 30
days after the end of each fiscal month of the Borrower other than
December and January, within 45 days after the end of each December, and
within 36-days after the end of each January, (i) a consolidated balance
sheet of ▇▇▇▇▇▇▇ Delaware as at the end of such month, setting forth in
comparative form the corresponding figures as at the end of the
preceding month and (ii) a consolidated statement of operations of
▇▇▇▇▇▇▇ Delaware for such month and for the portion of its fiscal year
ended with such month, setting forth in comparative form the
corresponding figures for the preceding month, all in reasonable detail.
The preceding financial statements shall include, on a
project-by-project basis, a breakdown of Real Estate Inventory costs. In
addition, the preceding financial statements shall be certified by a
Responsible Official of the Borrower as fairly presenting the financial
condition and results of operations of ▇▇▇▇▇▇▇ Delaware in accordance
with GAAP, consistently applied as at such date and for such periods,
subject only to normal year-end audit adjustments, provided that such
financial statements need not contain all footnotes and disclosures
required by generally accepted accounting principles;
(b) As soon as practicable, and in any event within 120
days after the close of each fiscal year of the Borrower, (i) a
consolidated balance sheet of ▇▇▇▇▇▇▇ Delaware as at the end of such
fiscal year, and (ii) a consolidated statement of operations and of
changes in financial position of
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▇▇▇▇▇▇▇ Delaware for such fiscal year, all in reasonable detail. Such
balance sheet and statements shall be prepared in accordance with GAAP,
consistently applied and shall be accompanied by a report and opinion of
Ernst & Young LLP or other independent public accountants of recognized
standing selected by the Borrower and reasonably satisfactory to the
Majority Lenders, which report and opinion shall be prepared in
accordance with generally accepted auditing standards as at such date,
and shall not be subject to any qualifications or limitations except as
approved by the Majority Lenders, which approval shall not be
unreasonably withheld. Such accountants' report and opinion shall be
accompanied by a separate report stating that, during their examination
of the financial statements of ▇▇▇▇▇▇▇ Delaware, nothing came to the
attention of such accountants that would give them knowledge of the
existence of any Default hereunder, or, if, in the opinion of such
accountants, any such Default shall exist, stating the nature and status
of such Default, and setting forth the financial calculations under
Section 8.17 as of the date of the balance sheet;
(c) As soon as practicable, and in any event within 60
days after the end of each of the Borrower's second and fourth fiscal
quarters, commencing June 30, 1998, a quarterly budget for the then
started twelve month period, including, without limiting the generality
of the foregoing, quarterly projected statements of operations of the
Borrower and quarterly projected cash flow statements of the Borrower,
all in reasonable detail;
(d) After the request of the Agent or any Lender, with
respect to any or all projects of the Borrower as specifically
requested, a detailed variance report that includes, without limitation,
original and current estimates of budget costs, line item budget
information, selling prices, gross margins, percentage of completion and
estimated completion date, and a narrative explanation of indicated
budget variances;
(e) As soon as practicable, and in any event within five
Banking Days after the end of each week, a weekly sales report of the
Borrower for the week most recently ended in form and substance
reasonably satisfactory to the Majority Lenders;
(f) As soon as practicable, and in any event within 30
days after the end of each quarter, a quarterly cash flow report of the
Borrower for the quarter most recently ended;
(g) As soon as practicable, and in any event within 30
days after the end of each fiscal month of the Borrower other than
December and January, within 45 days after the end of each December, and
within 36 days after the end of each January, a Borrowing Base
Certificate for the Borrowing Base (together with supporting
documentation and data) as of the last day of the immediately
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preceding month, duly executed by the Vice President/Controller, the
Chief Financial Officer or the President of the Borrower;
(h) As soon as practicable, and in any event within 45
days after the commencement of each fiscal quarter of the Borrower, a
Certificate of Responsible Official (i) stating that the Borrower is in
compliance with Section 7.14 (if applicable) and setting forth the
amount of forward commitments from acceptable lending institutions
maintained by the Borrower as at the beginning of such fiscal quarter of
the Borrower and (ii) setting forth computations showing, in detail
satisfactory to the Majority Lenders, whether the Borrower was in
compliance with its obligations pursuant to Sections 8.16 and 8.17;
(i) Promptly after request by the Agent, copies of any
detailed audit reports or recommendations submitted to the Borrower or
any of its Subsidiaries by independent accountants in connection with
the accounts or books of the Borrower or such Subsidiary or any audit of
any of them;
(j) Promptly after request by the Agent, copies of any
report or other document filed by the Borrower or any of its
Subsidiaries with any Governmental Agency;
(k) Promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or
communication sent to the shareholders of the Borrower, and copies of
all annual, regular, periodic and special reports and registration
statements which the Borrower may file or be required to file with the
Securities and Exchange Commission or any similar or corresponding
Governmental Agency or with any securities exchange;
(l) Promptly (but in any event within five Banking Days)
upon any of the President, the Chief Financial Officer, the Vice
President/Finance, the Vice President/Controller or the General Counsel
(or any officers holding similar positions) becoming aware of the
existence of any condition or event which constitutes a Default, a
written notice specifying the nature and period of existence thereof and
what action the Borrower is taking or proposes to take with respect
thereto;
(m) Promptly upon any corporate officer of the Borrower
becoming aware that (i) any Person commenced a legal proceeding with
respect to a claim against the Borrower or any of its Subsidiaries in
excess of $1,000,000 not arising under a contract that is not fully
covered by insurance or (ii) any creditor or lessor under a written
credit agreement or material lease has asserted a default thereunder on
the part of the Borrower or any of its Subsidiaries or (iii) any Person
commenced a legal proceeding with respect to a claim against the
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Borrower or any of its Subsidiaries under a contract that is not a
credit agreement or material lease in excess of $500,000 or which
otherwise may reasonably be expected to result in a material adverse
effect on the Borrower or such Subsidiary, a written notice describing
the pertinent facts relating thereto and what action the Borrower or
such Subsidiary is taking or proposes to take with respect thereto;
(n) Promptly (but in any event within five Banking Days)
upon becoming aware of any strike or other material labor dispute or
that work has ceased on any project of the Borrower or any of its
Subsidiaries for more than thirty consecutive days, written notice of
such strike or dispute or such cessation and of the pertinent facts
relating thereto and what action the Borrower or such Subsidiary is
taking or proposes to take with respect to the commencement of such
work; and promptly (but in any event within ten days) upon becoming
aware of the termination of employment of the President or any Senior
Vice President of the Borrower (or any future officers of the Borrower
who have substantially similar responsibilities as such officers),
written notice of such termination and what action the Borrower is
taking in response thereto;
(o) Promptly (but in any event within five Banking Days)
upon becoming aware of any casualty loss affecting any Property of the
Borrower or any of its Subsidiaries in excess of $500,000, or any other
event that may have a material adverse effect on the financial condition
or operations of the Borrower, written notice of the same and the
pertinent facts relating thereto;
(p) Not later than ten Banking Days prior to the issuance
of any Set-Aside Letter hereunder, a detailed budget for the
improvements covered by such Set-Aside Letter; not later than seven
Banking Days prior to the disbursement of any Revolving Loan the
proceeds of which are intended, in part, to fund costs incurred in
connection with the construction of such improvements, a detailed report
regarding the status of the construction of such improvements; and not
later than three Banking Days prior to the disbursement of any such
Revolving Loan, a detailed summary of the costs incurred in connection
with the construction of such improvements;
(q) [deleted];
(r) As soon as practicable, but in no event less than
thirty Banking Days' written notice to the Agent of the Borrower's or
any of its Subsidiaries' acquisition of any new Improved Land, Raw Land
or Housing;
(s) Such other reports and information, on at least a
monthly basis (or at such other intervals as the Agent may deem
appropriate), as the
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Agent may require to assist the Agent in its computation of the
Borrowing Base; and
(t) Such other data and information as from time to time
may be reasonably requested by the Agent or the Majority Lenders.
9.2 Compliance Certificates. So long as any Revolving Loan
remains unpaid or any Letter of Credit or Set-Aside Letter remains outstanding,
or any other Obligation remains unpaid or unperformed (other than any contingent
indemnity obligations under any Loan Document) or any portion of the Revolving
Commitments remains outstanding, the Borrower shall, unless the Majority Lenders
otherwise consent in writing, deliver to each Lender, at the Borrower's sole
expense, not later than the date financial statements are required to be
delivered by the Borrower pursuant to Section 9.1(a), a Certificate of a
Responsible Official of the Borrower (a) stating that a review of the activities
of the Borrower during such fiscal period has been made under supervision of the
certifying Responsible Official with a view to determining whether during such
fiscal period the Borrower performed and observed all its respective Obligations
under the Loan Documents, and either (i) stating that, to the best knowledge of
the certifying Responsible Official, during such fiscal period, the Borrower
performed and observed each covenant and condition of the Loan Documents and
that no Default has occurred and is continuing or (ii) if the Borrower has not
performed and observed such covenants and conditions or if a Default exists and
is then continuing, specifying all such Defaults and their nature and status and
the actions the Borrower is taking or proposes to take with respect thereto; and
(b) stating that to the best knowledge of such Official the Properties of the
Borrower are being maintained and are in reasonable working order and condition,
ordinary wear and tear excepted.
ARTICLE 10
CONDITIONS TO ADVANCES
10.1 Any Increasing Advance or Issuance of Letter of Credit. In
addition to any applicable conditions precedent set forth elsewhere in this
Article 10, the obligation of each Lender to make any Revolving Advance that
would increase Total Outstandings, and the agreement of each Issuing Bank to
issue any Letter of Credit or Set-Aside Letter (and of the LC Bank to issue any
LC Guaranty), are subject to the following conditions precedent:
(a) The representations and warranties contained in
Article 6, other than Sections 6.1(c), 6.1(e), 6.4 and 6.5, the last
sentence of Section 6.6, and Sections 6.9, 6.12(a) and 6.20, shall be
true and correct in all material respects, and shall be deemed made, on
and as of the date of the Revolving Advance or issuance as though made
on and as of that date; there shall be no actions, suits or proceedings
pending against or affecting the Borrower, any of its Subsidiaries or
▇▇▇▇▇▇▇ Delaware or any Property of the Borrower, any of its
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Subsidiaries or ▇▇▇▇▇▇▇ Delaware in any court of Law or before any
Governmental Agency which might reasonably be expected to materially and
adversely affect the business, operations or condition (financial or
otherwise) of the Borrower; no material adverse change shall have
occurred in the business, operations or condition (financial or
otherwise) of the Borrower, since the Closing Date which, in the
judgment of the Majority Lenders, is materially adverse to the interests
of the Agent, the Lenders, the Issuing Banks or the LC Guarantor; no
Default shall have occurred and be continuing; the Agent shall have
timely received a properly completed Request for Loan, Request for
Redesignation of Loans or Request for Letter of Credit, as the case may
be, in compliance with all applicable provisions of Article 4; and the
Agent and such Issuing Bank or the LC Guarantor, as the case may be,
shall have received, dated as of the date of the Revolving Advance or
redesignation or issuance, a Certificate of a Responsible Official of
the Borrower to the effect that, to the best knowledge of the
Responsible Official, all of the above conditions have been satisfied,
with any material changes or exceptions thereto being described in a
schedule attached to such certificate and with such changes or
exceptions being subject to the approval of the Majority Lenders;
(b) the Agent shall have received from the Borrower a duly
executed Borrowing Certificate and Request for Loan in accordance with
Section 4.2(a), or in the case of the issuance of a Letter of Credit, a
duly executed Request for Letter of Credit in accordance with Section
4.6(b); and
(c) The Agent and such Issuing Bank or the LC Guarantor,
as the case may be, shall have received, in form and substance
satisfactory to the Agent and such Issuing Bank or the LC Guarantor, as
the case may be, such other assurances, certificates, documents,
consents or opinions as the Agent and such Issuing Bank or the LC
Guarantor, as the case may be, reasonably may require.
10.2 Any Advance. In addition to any applicable conditions
precedent set forth elsewhere in this Article 10, the obligation of each Lender
to make or redesignate any Revolving Advance is subject to the conditions
precedent that:
(a) the representations and warranties contained in
Article 6, other than Sections 6.1(c), 6.1(e), 6.4 and 6.5, the last
sentence of Section 6.6, and Sections 6.9, 6.12(a), 6.19 and 6.20 shall
be true and correct in all material respects on and as of the date of
such Revolving Advance as though made on and as of that date;
(b) there shall not have occurred any Default that is then
continuing or will result from such Revolving Advance or redesignation;
and
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(c) the Agent shall have received from the Borrower a duly
executed Request for Loan in accordance with Section 4.2(a) or a Request
for Redesignation of Loan in accordance with Section 4.5(c).
ARTICLE 11
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
11.1 Events of Default. The existence or occurrence of any one or
more of the following events, whatever the reason therefor, shall constitute an
Event of Default:
(a) The Borrower (i) fails to pay any installment of
principal or interest of any indebtedness on any of the Revolving Notes
or any portion thereof, to pay the Unused Line Fee or letter of credit
fee or to reimburse any Issuing Bank for any payment under any Letter of
Credit or Set-Aside Letter (or the LC Guarantor for any payment under
any LC Guaranty), or to pay any administrative fee due the Agent
pursuant to Section 5.4, on or before the date when due or (ii) fails to
pay any other fee or other amount due to the Agent, any Issuing Bank or
any Lender under any Loan Document within thirty days after receipt of
an invoice or statement for such fee or other amount by the Borrower; or
(b) Any material failure to comply with Section 9.1(1); or
(c) The Borrower or any other Party fails to perform or
observe any other material term, covenant or agreement contained in any
Loan Document on its part to be performed or observed within 20 days
after the giving of notice by the Agent or the Majority Lenders of such
Default, unless such failure is of such a nature that it is capable of
cure and it cannot be cured within such 20-day period, and the Borrower
commences action to cure such failure within such 20-day period and
thereafter diligently and continuously prosecutes such action to
completion within a reasonable period of time; or
(d) Any representation or warranty made in any Loan
Document or in any certificate, agreement, instrument or other document
made or delivered by any Party pursuant to or in connection with any
Loan Document proves to have been incorrect when made in any respect
that is materially adverse to the interests of the Agent, the Issuing
Banks, the LC Guarantor or the Lenders; or
(e) The Borrower or any of its Subsidiaries or ▇▇▇▇▇▇▇
Delaware (i) fails to pay the principal, or any principal installment,
of any present or future indebtedness for borrowed money (other than the
Revolving Loans) of $1,000,000 (or in the case of CMR, $5,000,000.00,
provided, however, that such amount shall be the amount of indebtedness
of CMR on the date hereof until the
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earlier of July 31, 1998 or the date on which the holder of such
indebtedness demands full payment thereof) or more, or any guaranty of
present or future indebtedness for borrowed money of $1,000,000 (or in
the case of CMR, $5,000,000.00, provided, however, that such amount
shall be the amount of indebtedness of CMR on the date hereof until the
earlier of July 31, 1998 or the date on which the holder of such
indebtedness demands full payment thereof) or more, on its part to be
paid, when due (or within any stated grace period), whether at the
stated maturity, upon acceleration, by reason of required prepayment or
otherwise, or (ii) fails to perform or observe any other term, covenant
or agreement on its part to be performed or observed in connection with
any present or future indebtedness for borrowed money (other than the
Revolving Loans) of $1,000,000 (or in the case of CMR, $5,000,000.00,
provided, however, that such amount shall be the amount of indebtedness
of CMR on the date hereof until the earlier of July 31, 1998 or the date
on which the holder of such indebtedness demands full payment thereof)
or more, or of any guaranty of present or future indebtedness for
borrowed money of $1,000,000 (or in the case of CMR, $5,000,000.00,
provided, however, that such amount shall be the amount of indebtedness
of CMR on the date hereof until the earlier of July 31, 1998 or the date
on which the holder of such indebtedness demands full payment thereof)
or more, if as a result of such failure to perform any holder or holders
thereof (or an agent or trustee on its or their behalf) has declared
such indebtedness due before the date on which it otherwise would become
due; or
(f) Any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement of the Agent or the
Lenders or the Issuing Banks (other than any Third Party Issuer) or the
LC Guarantor, as applicable, or satisfaction in full of all the
Obligations, ceases to be in full force and effect or is declared by a
court of competent jurisdiction to be null and void, invalid or
unenforceable in any respect which, in the reasonable opinion of the
Majority Lenders, is materially adverse to the interests of the Lenders
or such Issuing Banks or the LC Guarantor; or any Party thereto denies
that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind same; or
(g) A final judgment against the Borrower or any of its
Subsidiaries or ▇▇▇▇▇▇▇ Delaware is entered for the payment of money in
excess of $1,000,000 and such judgment remains unsatisfied without
procurement of a stay of execution within thirty calendar days after the
date of entry of judgment, or in any event later than five days prior to
the date of any proposed sale thereunder; or any action, suit or
proceeding under the Racketeer Influenced and Corrupt Organization Act
of 1970, 18 U.S.C. Sections 1961-1968, or any other federal or
state law for which forfeiture of a material amount of assets is a
potential penalty shall be filed by any Governmental Agency against the
Borrower or any
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of its Subsidiaries or ▇▇▇▇▇▇▇ Delaware and such action, suit or
proceeding is not dismissed within 180 days after the filing thereof; or
(h) The Borrower or any of its Subsidiaries or ▇▇▇▇▇▇▇
Delaware is the subject of an order for relief in a bankruptcy case, or
is unable or admits in writing its inability to pay its debts as they
mature, or makes a general assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer for
it or for any substantial part of its Property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar
officer is appointed for any substantial part of its Property without
the application or consent of the Borrower or any such Subsidiary or
▇▇▇▇▇▇▇ Delaware, as applicable, and the appointment continues
undischarged or unstayed for forty-five calendar days; or institutes or
consents to any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, custodianship, conservatorship,
liquidation, rehabilitation or similar case or proceedings relating to
it or to all or any part of its Property under the Laws of any
jurisdiction; or any similar case or proceeding is instituted without
the consent of the Borrower or any such Subsidiary or ▇▇▇▇▇▇▇ Delaware,
as applicable, and continues undismissed or unstayed for forty-five
calendar days; or any judgment, writ, warrant of attachment or execution
or similar process is issued or levied against all or any material part
of the Property of the Borrower or any such Subsidiary or ▇▇▇▇▇▇▇
Delaware and is not released, vacated or fully bonded within forty-five
calendar days after its issue or levy; or
(i) Except as otherwise expressly permitted by any Loan
Document or agreed to by the Agent or the Majority Lenders, any Lien
created by any Collateral Document, at any time after that Collateral
Document becomes effective and for any reason other than satisfaction in
full of all Obligations, ceases or fails to constitute a valid,
perfected and subsisting Lien on the Collateral purported to be covered
thereby, unless such cessation or failure is solely the result of the
conduct, or failure to take action, of the Agent or any Lender; or
(j) The Borrower or any of its Subsidiaries or ▇▇▇▇▇▇▇
Delaware is dissolved or liquidated or all or substantially all of the
assets of the Borrower or any of its Subsidiaries or ▇▇▇▇▇▇▇ Delaware
are sold or otherwise transferred without the written consent of the
Majority Lenders other than any such dissolution or liquidation of any
such Subsidiary, or any such sale of all or substantially all of such
Subsidiary's assets, in the ordinary course of the Borrower's or such
Subsidiary's business; or
(k) The Borrower or any of its Subsidiaries fails to
perform any of its material obligations under any joint venture or
partnership agreement and
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such failure constitutes a default or an event of default under such
joint venture or partnership agreement and, in the reasonable opinion of
the Majority Lenders, will have a material adverse effect on the
financial condition or operations of the Borrower, and the cure period,
if any, under such joint venture or partnership agreement has elapsed;
or
(l) There shall be a material adverse change in the
financial condition or operations of the Borrower or ▇▇▇▇▇▇▇ Delaware of
which the Agent, at the direction of the Majority Lenders, gives ten
days' written notice to the Borrower, and which, if curable, remains
uncured thirty days after any such notice; or
(m) A Change of Control of the Borrower or ▇▇▇▇▇▇▇
Delaware shall occur; or
(n) Any ERISA Event shall have occurred with respect to a
Plan of the Borrower or any of its ERISA Affiliates and the sum
(determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other
Plans of the Borrower and its ERISA Affiliates with respect to which an
ERISA Event shall have occurred and then exist (or the liability of the
Borrower and its ERISA Affiliates related to such ERISA Event) exceeds
$1,000,000; or
(o) The Borrower or any of its ERISA Affiliates shall have
been notified by the sponsor of a Multiemployer Plan of the Borrower or
any of its ERISA Affiliates that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all
other amounts required to be paid to Multiemployer Plans by the Borrower
and its ERISA Affiliates as Withdrawal Liability (determined as of the
date of such notification), exceeds $1,000,000 or requires payments
exceeding $1,000,000 per annum; or
(p) The Borrower or any of its ERISA Affiliates shall have
been notified by the sponsor of a Multiemployer Plan of the Borrower,
the Company or any of their ERISA Affiliates that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or termination
the aggregate annual contributions of the Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $1,000,000.
11.2 Remedies Upon Event of Default. Without limiting any other
rights or remedies of the Agent, the Lenders, the Issuing Banks or the LC
Guarantor provided
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for elsewhere in this Agreement, or the Loan Documents, or by applicable Law, or
in equity, or otherwise (except to the extent that the exercise of any right or
remedy hereunder requires the action of the Majority Lenders or each of the
Lenders):
(a) Upon the occurrence and during the continuance of any
Event of Default other than an Event of Default described in Section
11.1(h):
(i) The commitments to make Revolving Advances and to
issue Letters of Credit and all other obligations of the Agent,
the Issuing Banks, the LC Guarantor or the Lenders and all rights
of the Borrower and any other Parties under the Loan Documents
shall terminate without notice to or demand upon the Borrower,
which are expressly waived by the Borrower, except that, subject
to paragraph (b) of Section 11.2, the Majority Lenders may waive
the Event of Default or, without waiving, determine, upon terms
and conditions satisfactory to the Majority Lenders, to reinstate
the commitments and make further Revolving Advances and issue
further Letters of Credit, which waiver shall apply equally to,
and shall be binding upon, all the Lenders, the Issuing Banks and
the LC Guarantor; and
(ii) The Majority Lenders may request the Agent to, and
the Agent thereupon shall, declare all or any part of the unpaid
principal of the Revolving Notes, all interest accrued and unpaid
thereon and all other amounts payable under the Loan Documents to
be forthwith due and payable, whereupon the same shall become and
be forthwith due and payable, without protest, presentment,
notice of dishonor, demand or further notice of any kind, all of
which are expressly waived by the Borrower;
(b) Upon the occurrence of any Event of Default described
in Section 11.1(h):
(i) The commitments to make Revolving Advances and to
issue Letters of Credit and all other obligations of the Agent,
the Issuing Banks, the LC Guarantor or the Lenders and all rights
of the Borrower and any other Parties under the Loan Documents
shall terminate without notice to or demand upon the Borrower,
which are expressly waived by the Borrower, except that all
Lenders may waive the Event of Default or, without waiving,
determine, upon terms and conditions satisfactory to all Lenders,
to make further Revolving Advances, which determination shall
apply equally to and binding upon, all Lenders; and
(ii) The unpaid principal of the Revolving Notes, all
interest accrued and unpaid thereon and all other amounts payable
under the
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Loan Documents shall be forthwith due and payable, without
protest, presentment, notice of dishonor, demand or further
notice of any kind, all of which are expressly waived by the
Borrower.
(c) Upon the occurrence and during the continuance of any
Event of Default, the Agent, the Lenders, the Issuing Banks (other than
any Third Party Issuer) and the LC Guarantor, or any of them, without
notice to or demand upon the Borrower, which are hereby expressly waived
by the Borrower, may proceed (but only with the consent of the Majority
Lenders) to protect, exercise and enforce their rights and remedies
under the Loan Documents against the Borrower and such other rights and
remedies as are provided by Law or equity, provided that no Lender,
Issuing Bank or LC Guarantor shall exercise remedies on an individual
basis without the prior written consent of the Majority Lenders.
(d) The order and manner in which the Lenders', the
Issuing Banks' (other than any Third Party Issuer) and the LC
Guarantor's rights and remedies are to be exercised shall be determined
by the Majority Lenders in their sole discretion, and all payments
received by the Agent and the Lenders, such Issuing Banks and the LC
Guarantor shall be applied first to the costs and expenses (including
attorneys' fees and disbursements) of the Agent, acting as Agent, and of
the Lenders, such Issuing Banks and the LC Guarantor, and thereafter
paid pro rata to the Lenders, such Issuing Banks and the LC Guarantor in
the same proportions that the aggregate Obligations owed to each Lender,
each such Issuing Bank and the LC Guarantor under the Loan Documents
bear to the aggregate Obligations owed under the Loan Documents to all
of the Lenders, such Issuing Banks and the LC Guarantor, without
priority or preference among Lenders, such Issuing Banks and the LC
Guarantor, except as otherwise provided in Section 5.10(b). Regardless
of how each Lender, each such Issuing Bank and the LC Guarantor may
treat payments for the purpose of its own accounting, for the purpose of
computing the Borrower's Obligations hereunder, under the Revolving
Notes, and under the Letters of Credit, payments shall be applied,
first, to the costs and expenses of the Agent, acting as the Agent, and
the Lenders, such Issuing Banks and the LC Guarantor, as set forth
above, second, to the payment of accrued and unpaid interest due under
any Loan Documents to and including the date of such application
(ratably, and without duplication, according to the accrued and unpaid
interest due under each of the Loan Documents), third, to the ratable
payment of all unpaid principal amounts due under any Loan Documents
(including, for the purposes hereof, principal due under the Revolving
Notes and reimbursement due for payments made under Letters of Credit),
and fourth, to the ratable payment of all other amounts (including fees)
then owing to the Agent or the Lenders, such Issuing Banks or the LC
Guarantor under the Loan Documents. No application of payments will cure
any Event of Default, or prevent acceleration, or continued
acceleration, of amounts payable under the Loan Documents, or prevent
the
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exercise, or continued exercise, of rights or remedies of the Lenders
hereunder or thereunder or at Law or in equity.
(e) Upon the occurrence of any event that would be an
Event of Default under Section 11.1(h) with the passage of time, the
Agent or the Lenders, the Issuing Banks (other than any Third Party
Issuer) or the LC Guarantor may take such action as the Majority Lenders
deem necessary to protect the interests of the Lenders, such Issuing
Banks and the LC Guarantor under the Loan Documents.
ARTICLE 12
THE AGENT
12.1 Appointment and Authorization. Each Lender, each Issuing
Bank (other than any Third Party Issuer) and the LC Guarantor each hereby
irrevocably appoints Foothill as Agent, and designates and authorizes the Agent
to take such action on its behalf under the provisions of this Agreement and
each other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Lender, any
Issuing Bank or the LC Guarantor, 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 Agent.
12.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
12.3 Liability of Agent. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document (except for its
own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Lenders, any Issuing Bank or the LC Guarantor for any
recital, statement, representation or warranty made by the Borrower or any
Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
for the value of any Collateral or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any
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failure of the Borrower or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender, any Issuing Bank or the LC Guarantor 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 or any of the
Borrower's Subsidiaries or Affiliates. The Agent may treat the payee of any
Revolving Note as the holder thereof until the Agent receives and accepts an
Assignment and Acceptance entered into by such payee, as assignor, and an
Assignee as provided in Section 13.7.
12.4 Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel to the Borrower), independent accountants and
other experts selected by the Agent, as applicable. The Agent shall be
fully justified in taking or refusing to take any action under this
Agreement or any other Loan Document if it shall first receive such
advice or concurrence of the Majority Lenders and, if it so requests, 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 Agent shall in all
cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request
or consent of the Majority Lenders, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of
the Lenders, the Issuing Banks and the LC Guarantor.
(b) For purposes of determining compliance with the
conditions specified in Sections 2.1, 10.1 and 10.2, each Lender that
has executed this Agreement or an Assignment and Acceptance pursuant to
which it became a Lender shall be deemed to have consented to, approved
or accepted or to be satisfied with each document or other matter either
sent by the Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by
or acceptable or satisfactory to such Lender, unless an officer of the
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 such objection shall
not have been withdrawn by notice to the Agent to that effect.
12.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default, except in the case of the
Agent
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with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, the Issuing Banks or the
LC Guarantor, unless the Agent shall have received written notice from a Lender,
an Issuing Bank, the LC Guarantor or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a "notice of default" or
otherwise shall have actual knowledge of such default. In the event that the
Agent receives such a notice, the Agent shall give notice thereof to the
Lenders. The Agent shall take such action with respect to such Default as shall
be requested by the Majority Lenders in accordance with Article 11; provided,
however, that unless the Agent is expressly required to act or refrain from
acting under the terms of any Loan Documents, or unless and until the Agent
shall have received any such request, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable or in the best interest of the Lenders.
12.6 Credit Decision. Without altering or waiving any of the
Agent's obligations under this Agreement, each Lender expressly acknowledges
that none of the Agent-Related Persons has made any representation or warranty
to such Lender regarding the business, prospects, operations, property,
financial or other conditions of the Borrower or ▇▇▇▇▇▇▇ Delaware and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries, shall be deemed to constitute any such
representation or warranty by the Agent to any Lender, any Issuing Bank or the
LC Guarantor. Each Lender represents to the Agent that it has, independently and
without reliance upon the Agent and based on such documents and information as
it has deemed appropriate, made its own credit analysis of and investigation
into the business, prospects, operations, property, financial and other
condition and creditworthiness of the Borrower and its Subsidiaries, and all
applicable bank regulatory laws relating to the transactions contemplated
thereby, and made its own decision to enter into this Agreement and extend
credit to the Borrower hereunder. Each Lender also represents that it will,
independently and without reliance upon the Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender, any Issuing Bank or the LC Guarantor with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of any of the Agent-Related Persons.
12.7 Indemnification. Whether or not the transactions
contemplated hereby shall be consummated, the Lenders shall indemnify upon
demand the Agent-Related Persons (to the extent not reimbursed by or on behalf
of the Borrower and
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without limiting the obligation of the Borrower to do so), ratably from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind
whatsoever which may at any time (including at any time following the repayment
of the Revolving Loans and the termination or resignation of the Agent) be
imposed on, incurred by or asserted against any such Person in any way relating
to or arising out of this Agreement or any document contemplated by or referred
to herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by any such Person under or in connection with any of
the foregoing; provided, however, that no Lender shall be liable for the payment
to the Agent-Related Persons of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, and subject to the proviso to
the immediately preceding sentence, each Lender shall reimburse the Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein to the
extent that the Agent, is not reimbursed for such expenses by or on behalf of
the Borrower. Without limiting the generality of the foregoing, if the Internal
Revenue Service or any other Governmental Agency of the United States or other
jurisdiction asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (whether as Lender or Issuing
Bank) (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify the Agent of a change in
circumstances which rendered the exception from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section 12.7,
together with all costs and expenses (including Attorney Costs). The obligation
of the Lenders in this Section 12.7 shall survive the payment of all Obligations
hereunder.
12.8 Agent and Other Lenders in Individual Capacity. The Agent
and each other Lender and their respective Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory or other business with the Borrower and its Subsidiaries and Affiliates
as though Foothill were not the Agent hereunder and without notice to or consent
of the Lenders. With respect to its Loans, Foothill shall have the same rights
and powers under this Agreement as any other Lender and may exercise the same as
though it were not the Agent, and the terms "Lender" and "Lenders" shall include
Foothill in its individual capacity.
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12.9 Successor Agent. The Agent may, and at the request of the
Majority Lenders shall, resign as Agent upon 30 days' notice to the Lenders. If
the Agent shall resign as Agent under this Agreement, the Majority Lenders shall
appoint from among the Lenders a successor agent for the Lenders, the Issuing
Banks (other than any Third Party Issuer) and the LC Guarantor. If no successor
agent is appointed prior to the effective date of the resignation of the Agent,
the Agent may appoint, after consulting with the Lenders and the Borrower, a
successor agent from among the Lenders. Upon the acceptance of its appointment
as successor agent hereunder, such successor agent shall succeed to all the
rights, powers and duties of the retiring Agent and the term "Agent" shall mean
such successor agent and the retiring Agent's appointment, powers and duties as
Agent shall be terminated. After any retiring Agent's resignation hereunder, the
provisions of this Article 12 and Sections 13.3 and 13.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Majority Lenders appoint a successor agent as provided
for above, provided that either (i) the Agent shall have delivered to each of
the Lenders an opinion of counsel to the Agent (who shall be reasonably
acceptable to the Majority Lenders) addressed to the Lenders to the effect that
a potential conflict of interest exists for the Agent which will expose the
Agent to potential liability to the Lenders or other parties if it continues to
act as Agent under this Agreement and the other Loan Documents or (ii) the Agent
in its capacity as a Lender hereunder, shall have reduced its Revolving Advances
and Revolving Commitments hereunder, through assignments consummated in
accordance with the terms of Section 13.7, to less than 10% of the aggregate
Revolving Advances and Revolving Commitments then outstanding, or shall have
sold participations in accordance with the terms of Section 13.7 in more than
90% of its Revolving Advances and Revolving Commitments hereunder.
12.10 Collateral Matters.
(a) The Agent is authorized on behalf of all the Lenders,
the Issuing Banks (other than any Third Party Issuer) and the LC
Guarantor, without the necessity of any notice to or further consent
from the Lenders, such Issuing Banks or the LC Guarantor, from time to
time to take any action with respect to any Collateral or the Collateral
Documents which may be necessary to perfect and maintain perfected the
security interest in and Liens upon the Collateral granted pursuant to
the Collateral Documents.
(b) The Lenders, such Issuing Banks and the LC Guarantor
irrevocably authorize the Agent to, and the Agent will, release any Lien
granted to or held by the Agent upon any Collateral:
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(i) upon termination of the Revolving Commitments and
payment in full of all Revolving Loans and all other Obligations
payable under this Agreement and under any other Loan Document
(other than any contingent indemnity obligations under any Loan
Document);
(ii) in connection with the sale of such Collateral by the
Borrower permitted under this Agreement, in each case subject to
the following terms and conditions:
(1) if the Agent, acting at the direction of the
Majority Lenders, so requires, the Borrower shall have delivered
to the Agent such evidence as the Agent may request to the effect
that such reconveyance, and the portions of the Property that
will remain encumbered by any Collateral Document after giving
effect to such reconveyance, comply in all material respects with
all Laws;
(2) if the Agent, acting at the direction of the
Majority Lenders, so requires, the Borrower shall have delivered
to the Agent evidence that the portions of the Property that will
remain encumbered by any Collateral Document after giving effect
to such reconveyance will be taxed as one or more separate tax
parcels, or, if the Borrower is unable to deliver such evidence,
the Borrower shall protect, defend, indemnify and hold harmless
the Agent, the Lenders, such Issuing Banks and the LC Guarantor
from and against any loss, cost, expense, damage or liability
(including, without limitation, reasonable attorneys' fees) the
Agent and/or the Lenders and/or such Issuing Banks and/or the LC
Guarantor may incur or sustain by reason of the portions of the
Property that will remain encumbered by such Collateral Documents
after giving effect to such reconveyance not being taxed as one
or more separate tax parcels;
(3) if the Agent, acting at the direction of the
Majority Lenders, so requires, the Borrower shall have delivered
to the Agent, at no expense to the Agent, the Lenders, such
Issuing Banks or the LC Guarantor, a CLTA 111 or other
satisfactory endorsement to each title insurance policy insuring
the Lien in favor of the Lenders, such Issuing Banks and the LC
Guarantor from which a portion of the Property is to be
reconveyed, insuring the Agent, for the benefit of the Lenders,
such Issuing Banks and the LC Guarantor, that (x) such
reconveyance shall not affect, impair or limit the obligations of
the issuer of such policy, and (y) such Lien shall continue to be
a first priority Lien (other than Liens permitted under
paragraphs (a), (c), (d), (j), (o) and (p) of Section 8.8) upon
the portion of the Property that will remain encumbered by such
Lien after giving effect to such reconveyance;
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(4) the Borrower shall have paid to the Agent all
expenses, including, without limitation, all reasonable
attorneys' fees, title insurance premiums, escrow fees, closing
fees and recording charges, incurred by the Agent or the Lenders
or such Issuing Banks or the LC Guarantor in connection with such
reconveyance;
(5) no Event of Default, in the case of any sale by
the Borrower of a unit of Housing in the ordinary course of its
business, or Default, in the case of any other sale, shall then
exist or shall result from such sale; and
(6) if the Agent, acting at the direction of the
Majority Lenders, so requires in the case of any such Collateral
with a fair market value in excess of $1,000,000, the Borrower
shall have delivered to the Agent a calculation of the components
and reserves of the Borrowing Base giving effect to such sale;
(iii) constituting Property in which the Borrower or any
Subsidiary of the Borrower owned no interest at the time the Lien
was granted or at any time thereafter;
(iv) constituting Property leased to the Borrower or any
Subsidiary of the Borrower under a lease which has expired or
been terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not intended
by the Borrower or such Subsidiary to be, renewed or extended;
(v) consisting of an instrument evidencing debt, if the
indebtedness evidenced thereby has been paid in full; or
(vi) if approved, authorized or ratified in writing by the
Majority Lenders or all the Lenders (other than any Defaulting
Lender), as the case may be, as provided in Section 13.2.
Upon request by the Agent at any time, the Lenders, such Issuing Banks and the
LC Guarantor will confirm in writing the Agent's authority to release particular
types of items of Collateral pursuant to this subsection 12.10(b).
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ARTICLE 13
MISCELLANEOUS
13.1 Cumulative Remedies; No Waiver. The rights, powers,
privileges and remedies of the Agent, the Issuing Banks, the LC Guarantor and
the Lenders provided herein or in any Revolving Note or other Loan Document are
cumulative and not exclusive of any right, power, privilege or remedy provided
by Law or equity. No failure or delay on the part of the Agent, any Issuing
Bank, the LC Guarantor or any Lender in exercising any right, power, privilege
or remedy may be, or may be deemed to be, a waiver thereof; nor may any single
or partial exercise of any right, power, privilege or remedy preclude any other
or further exercise of the same or any other right, power, privilege or remedy.
The terms and conditions of Article 10 hereof are inserted for the sole benefit
of the Agent, the Issuing Banks, the LC Guarantor and the Lenders and the Agent
(acting with the consent of the Majority Lenders) or the Majority Lenders,
acting pursuant to the terms of this Agreement, and subject to Section 13.2
below, may waive them in whole or in part, with or without terms or conditions,
in respect of any Revolving Loan or Letter of Credit without prejudicing the
Agent's, the Issuing Banks', the LC Guarantor's and the Lenders' rights to
assert them in whole or in part in respect of any other Revolving Loan or Letter
of Credit.
13.2 Amendments; Consents. No amendment, modification,
supplement, extension, termination or waiver of any provision of this Agreement
or any other Loan Document, no approval or consent thereunder, and no consent to
any departure by the Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Agent with the approval in writing of
the Majority Lenders (and, in the case of amendments, modifications or
supplements of or to any Loan Document to which the Borrower is a Party, the
approval in writing of the Borrower), and then only in the specific instance and
for the specific purpose given; provided, however, that (a) no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders (other than
any Lender which is, at such time, a Defaulting Lender), do any of the following
at any time: (i) change the percentage of the Revolving Commitments or of the
aggregate unpaid principal amount of the Revolving Notes, or the number of
Lenders, that shall be required for the Lenders or any of them to take any
action hereunder or under any other Loan Document, (ii) permit the creation,
incurrence, assumption or existence of any Lien on any item of Collateral to
secure any obligations other than Obligations owing to the Lenders, the Issuing
Banks (other than any Third Party Issuer), the LC Guarantor and the Agent under
the Loan Documents and other than indebtedness owing to any other Person,
provided that, in the case of any Lien on any item of Collateral to secure
indebtedness owing to any other Person, the Majority Lenders shall otherwise
permit the creation, incurrence, assumption or existence of such Lien and, to
the extent not otherwise permitted under Section 8.8, of such indebtedness, or
(iii) amend this Section 13.2, and (b) no amendment, waiver or consent shall,
unless in writing and signed by the Majority Lenders and each Lender affected by
such amendment, waiver or consent, (i) increase the Revolving
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Commitments of such Lender or subject such Lender to any additional obligations,
(ii) reduce the principal of, or interest on, the Revolving Notes held by such
Lender or any fees or other amounts payable hereunder or under any other Loan
Document to such Lender, (iii) postpone any date fixed for any payment of
principal of, or interest on, the Revolving Notes held by such Lender or any
fees or other amounts payable hereunder or under any other Loan Document to such
Lender, or (iv) change the order of application or amount of any prepayment set
forth in Section 5.2 in any manner that materially adversely affects such
Lender; provided further that no amendment, waiver or consent shall, unless in
writing and signed by each affected Issuing Bank or the LC Guarantor in addition
to the Lenders required above to take such action, affect the rights or
obligations of such Issuing Bank or the LC Guarantor, as the case may be, under
this Agreement or any other Loan Document; and provided further that no
amendment, waiver or consent shall, unless in writing and signed by the Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Agent under this Agreement or any Revolving Note or other Loan
Document. Any amendment, modification, supplement, termination, waiver or
consent pursuant to this Section 13.2 shall apply equally to, and shall be
binding upon, all of the Lenders, the Issuing Banks, the LC Guarantor and the
Agent. Nothing contained in this Section 13.2 shall prohibit or prevent the
Majority Lenders from agreeing with the Borrower to forbear in the exercise of
remedies on account of any Default.
13.3 Costs, Expenses and Taxes. The Borrower shall pay on demand
the reasonable costs and expenses of the Agent and the Lenders in connection
with the negotiation, preparation, execution, delivery and administration (to
the extent of the reasonable fees and out-of-pocket expenses of legal counsel to
the Lenders), of the Loan Documents (including, without limitation, the
Collateral Documents), and of the Agent, any Issuing Bank (other than any Third
Party Issuer), the LC Guarantor and the Lenders in connection with the
amendment, waiver, refinancing, restructuring, reorganization (including a
bankruptcy reorganization) and, in the case of a Default, enforcement or
attempted enforcement of the Loan Documents, and any matter related thereto,
including, without limitation, filing fees, recording fees, title insurance
fees, appraisal fees, search fees and other out-of-pocket expenses of the Agent,
any Issuing Bank (other than any Third Party Issuer), the LC Guarantor or any
Lender and the reasonable fees and out-of-pocket expenses of any legal counsel,
independent public accountants and other outside experts retained by the Agent,
any such Issuing Bank, the LC Guarantor or any Lender, and including, without
limitation, any costs, expenses or fees incurred or suffered by the Agent, any
such Issuing Bank, the LC Guarantor or any Lender in connection with or during
the course of any bankruptcy or insolvency proceedings of the Borrower or any
Affiliate of the Borrower; provided, however, that the Borrower shall not be
obligated to pay any legal fees and expenses in connection with the negotiation,
preparation, execution and delivery of the Loan Documents other than the fees
and expenses of ▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler, LLP, as counsel to the
Agent. The Borrower shall, subject to the limitations set forth in Section 13.7
of this Agreement, pay any and all documentary and other taxes (other
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than income, gross receipts or net worth taxes, or any tax imposed in lieu of
such income, gross receipts or net worth taxes, applicable to the Agent, any
Issuing Bank (other than any Third Party Issuer), the LC Guarantor or any Lender
or any participant of the Agent or any Lender) and all costs, expenses, fees and
charges payable or determined to be payable in connection with the filing or
recording of this Agreement, any other Loan Document or any other instrument or
writing to be delivered hereunder or thereunder, or in connection with any
transaction pursuant hereto or thereto, and shall reimburse, hold harmless and
indemnify the Agent, each such Issuing Bank, the LC Guarantor and each Lender
from and against any and all loss, liability or legal or other expense with
respect to or resulting from any delay in paying or failure to pay any tax,
cost, expense, fee or charge that the Agent, any Issuing Bank, the LC Guarantor
or any Lender may suffer or incur by reason of the failure of any Party to
perform any of its Obligations. Any amount payable to the Agent, any Issuing
Bank, the LC Guarantor or any Lender under this Section 13.3 shall bear interest
from the second Banking Day following the date of demand for payment at the rate
provided for in clause (ii) of Section 5.7. Despite the foregoing, in no event
shall the Borrower be obligated to pay any costs, fees or expenses incurred by
the Agent or any Lender solely by reason of the Agent's or such Lender's selling
a participation interest in its rights and obligations hereunder or assigning
any of its rights hereunder except to the extent set forth in Section 13.7(d).
13.4 Survival of Representations and Warranties. All
representations and warranties contained herein or in any other Loan Document,
or in any certificate or other writing delivered by or on behalf of any one or
more of the Parties to any Loan Document, will survive the making and repayment
of the Revolving Loans hereunder and the execution and delivery of the Revolving
Notes, and have been or will be relied upon by the Agent, each Issuing Bank
(other than any Third Party Issuer), the LC Guarantor and each Lender
notwithstanding any investigation made by the Agent, any such Issuing Bank, the
LC Guarantor or any Lender.
13.5 Notices. Except as otherwise expressly provided in the Loan
Documents: (a) All notices, requests, demands, directions and other
communications provided for hereunder or under any other Loan Document must be
in writing and must be mailed, telegraphed, telecopied, delivered or sent by
telex or cable to the appropriate party at the address set forth on the
signature pages of this Agreement or other applicable Loan Document or, in the
case of any Lender not a party to this Agreement on the Closing Date, the
Assignment and Acceptance pursuant to which it became a Lender or, as to any
party to any Loan Document, at any other address (other than a post office box)
as may be designated by it in a written notice sent to all other parties to such
Loan Document in accordance with this Section; and (b) Any notice, request,
demand, direction or other communication given by telegram, telecopier, telex or
cable must be confirmed within 48 hours by letter mailed or delivered to the
appropriate party at its respective address. Except as otherwise expressly
provided in any Loan Document, if any notice, request, demand, direction or
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other communication required or permitted by any Loan Document is given by mail
it will be effective on the earlier of receipt or the third Banking Day after
deposit in the United States mail with first class or airmail postage prepaid;
if given by telegraph or cable, when delivered to the telegraph company with
charges prepaid; if given by telex or telecopier, when sent; or if given by
personal delivery, when delivered.
13.6 Execution of Loan Documents. Unless the Agent otherwise
specifies with respect to any Loan Document, this Agreement and any other Loan
Document may be executed in any number of counterparts and any party hereto or
thereto may execute any counterpart, each of which when executed and delivered
will be deemed to be an original and all of which counterparts of this Agreement
or any other Loan Document, as the case may be, when taken together will be
deemed to be but one and the same instrument. The execution of this Agreement or
any other Loan Document by any party hereto or thereto will not become effective
until counterparts hereof or thereof, as the case may be, have been executed by
all the parties hereto or thereto.
13.7 Binding Effect; Assignment.
(a) This Agreement and the other Loan Documents shall be
binding upon and shall inure to the benefit of the parties hereto and
thereto and their respective successors and assigns, provided that the
Borrower may not assign its rights nor delegate its duties hereunder or
thereunder without the prior written consent of all of the Lenders. Each
Lender may assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement and the other
Loan Documents (including, without limitation, all or a portion of its
Revolving Commitments, the Revolving Advances owing to it and the
Revolving Note held by it); provided, however, that (i) each such
assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of the Revolving Facility,
(ii) except in the case of an assignment of all of the assigning
Lender's rights and obligations with respect to its Revolving
Commitments and the related Revolving Advances, the amount of the
Revolving Commitment of such Lender (and the Revolving Advances) being
assigned pursuant to each such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall be
an integral multiple of $5,000,000 and, shall in no event be less than
$10,000,000, (iii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with any Revolving Note subject
to such assignment and a processing and recordation fee of $2,000, and
the Assignee thereunder shall deliver to the Agent such forms,
certifications, statements and other documents as the Agent may
reasonably request from time to time to evidence such Assignee's
exemption from the withholding of any tax imposed by any jurisdiction or
to enable the Agent to comply with any applicable laws or regulations
relating
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thereto, and (iv) each such assignment shall be to an Eligible Assignee.
Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to
such Assignment and Acceptance, have the rights and obligations of a
Lender hereunder and under the other Loan Documents and (y) the Lender
assignor thereunder shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it
pursuant to such Assignment and Acceptance (and except as otherwise
contemplated in clause (f) of the definition of the term "Eligible
Assignee"), relinquish its rights and be released from its obligations
under this Agreement and the other Loan Documents (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
Lender shall cease to be a party hereto). In the event any Lender does
make a sale, assignment, pledge or transfer, the Borrower shall not be
responsible for any increase in taxes that may arise by reason of such
sale, assignment, pledge or transfer.
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the Assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, any other
Loan Document or any other instrument or document furnished pursuant
hereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto;
(ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Party or the performance or observance by any Party of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such Assignee
confirms that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 6.4 and such
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such Assignee will, independently and without reliance
upon the Agent, such assigning Lender or any other Lender or Issuing
Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan
Documents; (v) such assignee confirms that it is an Eligible Assignee;
(vi) such Assignee appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan
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Documents as are delegated to the Agent by the terms hereof and thereof,
respectively, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such Assignee agrees that it will perform
in accordance with their terms all of the obligations that by the terms
of this Agreement or any other Loan Document are required to be
performed by it as a Lender.
(c) The Agent shall maintain at the Agent's Office a copy
of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders
and the Revolving Commitment of, and principal amount of the Revolving
Advances owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement and the other Loan
Documents. 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.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee, together with any
Revolving Note subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the
form of Exhibit A hereto, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii)
give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense,
shall execute and deliver to the Agent in exchange for the surrendered
Revolving Note a new Revolving Note to the order of such Assignee in an
amount equal to the Revolving Commitment assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a
Revolving Commitment, hereunder, a new Revolving Note to the order of
the assigning Lender in an amount equal to the Revolving Commitment
retained by it hereunder. Such new Revolving Note or Notes shall be in
an aggregate principal amount equal to the aggregate principal amount of
such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially
the form of the applicable Revolving Notes delivered pursuant to Section
2.1 hereof.
(e) Each Lender may sell participations in or to all or a
portion of its rights and obligations under this Agreement and the other
Loan Documents (including, without limitation, all or a portion of its
Revolving Commitments, the Revolving Advances owing to it and the
Revolving Note held by it); provided, however, that (i) such Lender's
obligations under this Agreement and the other Loan Documents
(including, without limitation, its Revolving Commitment) shall
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remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii)
such Lender shall remain the holder of any such Revolving Note for all
purposes of this Agreement, (iv) the Parties, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents and (v) no participant under any
such participation shall have any right to approve any amendment,
modification, supplementation, termination or waiver of this Agreement
or any other provision of any Loan Document, or any consent to any
departure by any Party therefrom, except to the extent that such
amendment, modification, supplementation, termination, waiver or consent
is described in the first or second proviso to Section 13.2, in each
case to the extent subject to such participation.
(f) Any Lender may, in connection with any assignment
participation or proposed assignment or participation pursuant to this
Section 13.7, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Parties
furnished to such Lender by or on behalf of any Party, subject, however,
to the requirements of Section 13.12.
(g) Notwithstanding any other provision set forth in this
agreement or any other Loan Document, any Lender may at any time create
a security interest in all or any portion of its rights under this
Agreement and the other Loan Documents (including, without limitation,
the Revolving Advances owing to it and the Revolving Note held by it) in
favor of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System.
13.8 Lien on Deposits and Property in Possession of any Lender.
As security for the prompt payment and performance of all Obligations, the
Borrower hereby grants to the Agent, the Lenders, the Issuing Banks (other than
any Third Party Issuer) and the LC Guarantor a Lien on and a security interest
in all its right, title, and interest in and to any and all deposit accounts
(other than any such account that collateralizes any Letter of Credit issued by
a Third Party Issuer and operating accounts of the type referred to in clauses
(i), to the extent such accounts are subject to Liens in favor of lenders
providing secured financing to the divisions referred to therein, and (iv) of
Section 7.11) now or hereafter maintained with the Agent, any such Issuing Bank,
the LC Guarantor, any Lender, or any other Person and in and to any and all of
its Property and the proceeds thereof now or hereafter in the possession of the
Agent or any Lender, any such Issuing Bank or the LC Guarantor. If an Event of
Default has occurred and is continuing, the Agent or any Lender or Issuing Bank
(other than any Third Party Issuer) or the LC Guarantor may (but only with the
consent of the Majority Lenders) exercise its rights under Article 9 of the
Uniform Commercial Code and other applicable Laws and apply or cause the
application of any funds in any deposit account
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maintained with it or with any other Person by the Borrower and/or any Property
of the Borrower in its possession against any Obligation owed to it by the
Borrower hereunder and/or under any other Loan Document.
13.9 Indemnity by Borrower. The Borrower agrees to indemnify,
save and hold harmless the Agent, each Issuing Bank (other than any Third Party
Issuer), the LC Guarantor and each Lender and each of their directors, officers,
agents, attorneys and employees (collectively the "Indemnitees") from and
against: (a) any and all claims, demands, actions or causes of action that are
asserted against any Indemnitee by any Person (other than the Agent or a Lender)
if the claim, demand, action or cause of action directly or indirectly relates
to a claim, demand, action or cause of action that such Person asserts or may
assert against the Borrower or against any Affiliate of the Borrower or any
officer, director or shareholder of the Borrower or any Affiliate of the
Borrower, in its capacity as such Affiliate, officer, director or shareholder;
(b) any and all claims, demands, actions or causes of action if the claim,
demand, action or cause of action arises out of or relates to the Revolving
Commitments, the use of proceeds of any Revolving Loan, or the relationship of
the Borrower, or any Affiliate of the Borrower, and the Lenders under this
Agreement; (c) any and all claims, demands, actions or causes of action if the
claim, demand, action or cause of action arises out of or relates to the
Borrower's or any of its Affiliate's compliance or noncompliance with the
requirements of any Environmental Law; (d) any administrative or investigative
proceeding by any Governmental Agency arising out of or related to a claim,
demand, action or cause of action described in clauses (a), (b) or (c) above;
and (e) any and all liabilities, losses, costs or expenses (including attorneys'
fees and disbursements and other professional services) that any Indemnitee
suffers or incurs as a result of the assertion of any foregoing claim, demand,
action or cause of action; provided that no Indemnitee shall be entitled to
indemnification for any loss caused by its own gross negligence or willful
misconduct. If the Borrower does not diligently undertake and continue the good
faith defense of an Indemnitee with counsel reasonably acceptable to such
Indemnitee, such Indemnitee is authorized to employ counsel of its own choosing
in defending against any claim, demand, action or cause of action covered by
this Section 13.9; provided that each Indemnitee shall endeavor, in connection
with any matter covered by this Section 13.9 that also involves other
Indemnitees, to use reasonable efforts to avoid unnecessary duplication of
effort by counsel for all Indemnitees. Whenever practicable, upon obtaining
actual knowledge of any event that would entitle the Agent and/or any Lender,
and/or any such Issuing Bank and/or the LC Guarantor to be indemnified under
this Section 13.9, the Agent shall endeavor to provide notice to the Borrower of
such fact and the Agent and the Lenders shall cooperate with the Borrower to
endeavor to minimize the liabilities for which the Agent and/or any such Issuing
Bank and/or the LC Guarantor and/or any Lender is entitled to be indemnified.
Any obligation or liability of the Borrower to any Indemnitee under this Section
13.9 shall survive the expiration or termination of this Agreement and the
repayment of all Loans and the payment and performance of all other Obligations
owed to the Agent, such Issuing Banks, the LC Guarantor and the Lenders.
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13.10 Nonliability of Lenders. The Borrower acknowledges and
agrees that:
(a) Any inspections of any Collateral made by or through
the Agent or the Lenders, the Issuing Banks or the LC Guarantor are for
purposes of administration of the Revolving Loans only and the Borrower
is not entitled to rely upon the same;
(b) By accepting or approving anything required to be
observed, performed, fulfilled or given to the Agent or any Lender or
Issuing Bank or the LC Guarantor pursuant to the Loan Documents, none of
the Agent or any Lender or Issuing Bank or the LC Guarantor shall be
deemed to have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the same, or of any term, provision or
condition thereof, and such acceptance or approval thereof shall not
constitute a warranty or representation to anyone with respect thereto
by the Agent or any Lender or Issuing Bank or the LC Guarantor;
(c) The relationship between the Borrower and the Agent
and the Lenders, the Issuing Banks (other than any Third Party Issuers)
and the LC Guarantor is, and shall at all times remain, solely that of
borrower and lenders (or, in the case of any Letter of Credit, debtor
and creditor); none of the Agent or any Lender or Issuing Bank or the LC
Guarantor shall under any circumstance be construed to be a partner or
joint venturer of the Borrower or any of its Affiliates; none of the
Agent or any Lender or Issuing Bank or the LC Guarantor shall under any
circumstance be deemed to be in a relationship of confidence or trust or
a fiduciary relationship with the Borrower or any of its Affiliates, or
to owe any fiduciary duty to the Borrower or any of its Affiliates; none
of the Agent or any Lender or Issuing Bank or the LC Guarantor
undertakes or assumes any responsibility or duty to the Borrower or any
of its Affiliates to select, review, inspect, supervise, pass judgment
upon or inform the Borrower or any of its Affiliates of any matter in
connection with their Property or the operations of the Borrower or any
of its Affiliates; the Borrower and its Affiliates shall rely entirely
upon their own judgment with respect to such matters; and any review,
inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by the Agent or any Lender or any Issuing Bank or
the LC Guarantor in connection with such matters is solely for the
protection of the Agent and the Lenders, or such Issuing Bank or the LC
Guarantor, respectively, and neither the Borrower nor any other Person
is entitled to rely thereon; and
(d) The Agent and the Lenders, the Issuing Banks and the
LC Guarantor shall not be responsible or liable to any Person for any
loss, damage, liability or claim of any kind relating to injury or death
to Persons or damage to Property caused by the actions, inaction or
negligence of the Borrower and/or its
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Affiliates and the Borrower hereby indemnifies and holds each of the
Agent and the Lenders, the Issuing Banks and the LC Guarantor harmless
from any such loss, damage, liability or claim.
13.11 No Third Parties Benefitted. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
the Borrower, the Agent, the Issuing Banks, the LC Guarantor and the Lenders in
connection with the Revolving Loans and Letters of Credit, and is made for the
sole protection of the Borrower, the Agent, the Issuing Banks, the LC Guarantor
and the Lenders, and the Agent's, the Issuing Banks', the LC Guarantor's and the
Lenders' successors and assigns. Except as provided in Section 13.9, no other
Person shall have any rights of any nature hereunder or by reason hereof.
13.12 Confidentiality. Each Lender agrees to hold any
confidential information that it may receive from the Borrower pursuant to this
Agreement in confidence, except for disclosure: (a) to legal counsel,
accountants and other professional advisors to the Borrower or any Lender; (b)
to regulatory officials having jurisdiction over that Lender; (c) as required by
Law or legal process or in connection with any legal proceeding to which that
Lender is a party; (d) subject to Section 13.7, to any proposed Assignee or
participant in connection with a disposition or proposed disposition of all or
part of that Lender's interests hereunder, provided that such proposed assignee
or participant shall agree to be bound by the provisions of this Section; (e) to
prospective purchasers of Collateral in connection with any disposition thereof;
and (f) to other Lenders; provided that nothing in this Section shall be
construed to create or give rise to any fiduciary duty on the part of the Agent
or any Lender to the Borrower.
13.13 Further Assurances. The Borrower and its Affiliates shall,
at their expense and without expense to the Agent or the Lenders, the Issuing
Banks or the LC Guarantor do, execute and deliver such further acts and
documents as the Agent or any Lender or Issuing Bank or the LC Guarantor from
time to time reasonably requires for the assuring and confirming unto the Agent
or any Lender or Issuing Bank or the LC Guarantor of the rights hereby created
or intended now or hereafter so to be, or for carrying out the intention or
facilitating the performance of the terms of any Loan Document, or for assuring
the validity, perfection, priority or enforceability of any Lien under any Loan
Document. Any such further acts and documents shall be duly authorized by the
Borrower and all such documents, including, without limitation, any Request for
Letter of Credit, Request for Loan or Request for Redesignation of Loans, shall,
notwithstanding the form of the signature blocks on the forms thereof, be fully
executed by the Borrower in accordance with its articles of incorporation,
bylaws and applicable resolutions.
13.14 Integration. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
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subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict between the provisions
of this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
rights or remedies in favor of the Agent or the Lenders, the Issuing Banks
(other than any Third Party Issuer) or the LC Guarantor in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
13.15 Governing Law. Except to the extent otherwise provided
therein, each Loan Document shall be governed by, and construed and enforced in
accordance with, the local Laws of California; provided that the local Laws of
California shall not apply with respect to any foreclosure of real Property
Collateral located outside California.
13.16 Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable or invalid as to any
party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions
or the operation, enforceability or validity of that provision as to any other
party or in any other jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
13.17 Headings. Article and Section headings in this Agreement
and the other Loan Documents are included for convenience of reference only and
are not part of this Agreement or the other Loan Documents for any other
purpose.
13.18 Time of the Essence. Time is of the essence of the Loan
Documents.
13.19 Sharing of Setoffs. Each Lender severally agrees that if it
(whether as Lender or Issuing Bank or LC Guarantor), through the exercise of any
right of setoff, banker's lien or counterclaim against the Borrower or any of
its Affiliates, or otherwise (for example, pursuant to Section 13.8), receives
payment of the Obligations held by it that is ratably more than any other Lender
(whether as Lender, Issuing Bank or LC Guarantor), through any means, receives
in payment of the Obligations held by that Lender, then: (a) The Lender
exercising the right of setoff, banker's lien or counterclaim or otherwise
receiving such payment shall purchase, and shall be deemed to have
simultaneously purchased, from such other Lender a participation in the
Obligations held by such other Lender and shall pay to such other Lender a
purchase price in Cash in an amount so that the share of the Obligations held by
each Lender after the exercise of the right of setoff, banker's lien or
counterclaim or receipt of payment shall be in the same proportion that existed
prior to the exercise of the right of setoff, banker's lien or counterclaim or
receipt of payment; and (b) Such other
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adjustments and purchases of participations shall be made from time to time as
shall be equitable to ensure that all Lenders (whether as Lenders, Issuing Banks
or LC Guarantor) share any payment obtained in respect of the Obligations
ratably in accordance with each Lender's share of the Obligations immediately
prior to, and without taking into account, the payment; provided that, if all or
any portion of a disproportionate payment obtained as a result of the exercise
of the right of setoff, banker's lien, counterclaim or otherwise is thereafter
recovered from the purchasing Lender by the Borrower or such Affiliate or any
Person claiming through or succeeding to the rights of the Borrower, the
purchase of a participation shall be rescinded and the purchase price thereof
shall be restored to the extent of the recovery, but without interest. Each
Lender that purchases a participation in the Obligations pursuant to this
Section 13.19 shall from and after the purchase have the right to give all
notices, requests, demands, directions and other communications under this
Agreement with respect to the portion of the Obligations purchased to the same
extent as though the purchasing Lender were the original owner of the
Obligations purchased. The Borrower expressly consents to the foregoing
arrangements and agrees that any Lender holding a participation in an Obligation
so purchased may exercise any and all rights of setoff, banker's lien or
counterclaim with respect to the participation as fully as if the Lender were
the original owner of the Obligation purchased; provided, however, that each
Lender agrees that it shall not exercise against any Party any right of setoff,
banker's lien or counterclaim without first obtaining the written consent of all
of the Lenders.
13.20 Nature of the Lenders' Obligations. The obligations of the
Lenders, the Issuing Banks and the LC Guarantor hereunder are several and not
joint or joint and several. Nothing contained in this Agreement or any other
Loan Document and no action taken by the Agent, any Issuing Banks, the LC
Guarantor or the Lenders or any of them pursuant hereto or thereto may, or may
be deemed to, make the Lenders or Issuing Banks or the LC Guarantor a
partnership, an association, a joint venture or other entity, either among
themselves or with the Borrower or any Affiliate of the Borrower. Each Lender's
obligation to make any Advance pursuant hereto is several and not joint or joint
and several. A default by any Lender will not increase the percentage of the
Revolving Commitment attributable to any other Lender. Any Lender not in default
may, if it desires, assume in such proportion as the nondefaulting Lenders agree
the obligations of any Lender in default, but is not obligated to do so.
13.21 Waiver of Jury Trial. The Borrower, the Agent, each Issuing
Bank (other than any Third Party Issuer), the LC Guarantor and each Lender each
hereby waives any right to a trial by jury in any action or proceeding to
enforce or defend any rights under this Agreement or any other Loan Documents or
relating thereto or arising from the lending relationship which is the subject
of this Agreement and agrees that any such action or proceeding shall be tried
before a court and not before a jury.
13.22 Jurisdiction. Each party hereto agrees that any action to
enforce any of the Loan Documents shall be brought in a state court located in
Orange County,
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California or in the United States District Court for the Central District of
California or in any other court and/or in any other jurisdiction if required by
the nature of such action.
13.23 Exercise of Discretion. Whenever any provision of any Loan
Document provides any party to such Loan Document with discretion as to any
action that such party may or may not take, such party shall act reasonably and
in good faith in exercising such discretion.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
▇▇▇▇▇▇▇ HOMES (f/k/a The ▇▇▇▇▇▇▇ Companies),
a California corporation
By \s\ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President -
Chief Financial Officer
By \s\ W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
Name: W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President-Corporate Controller
Address:
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice
President - Chief Financial
Officer,
W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President-
Corporate Controller, and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice
President and General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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FOOTHILL CAPITAL CORPORATION,
individually and as Agent
By \s\ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------------
Title:
Address:
Foothill Capital Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT A
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Fifth Amended and Restated Loan
Agreement dated as of June __, 1998 (as the same may be amended, restated,
supplemented or modified from time to time, the "Loan Agreement") among ▇▇▇▇▇▇▇
Homes (f/k/a The ▇▇▇▇▇▇▇ Companies), a California corporation (the "Borrower"),
the Lenders (as defined in the Loan Agreement), and Foothill Capital
Corporation, as agent (the "Agent") for the Lenders, the Issuing Banks (other
than any Third Party Issuer) and the LC Guarantor (in each case as defined in
the Loan Agreement). Terms defined in the Loan Agreement are used herein with
the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Loan Agreement as of the date
hereof equal to the percentage interest specified on Schedule 1 of all
outstanding rights and obligations under the Revolving Facility. After giving
effect to such sale and assignment, the Assignee's Revolving Commitment and the
amount of the Revolving Advances owing to the Assignee will be as set forth on
Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim created by it; (ii) makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or any other instrument or document furnished pursuant thereto or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Documents or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Party or the performance or
observance by any Party of any of its obligations under the Loan Documents or
any other instrument or document furnished pursuant thereto; and (iv) attaches
the Revolving Note held by the Assignor and requests that the Agent exchange
such Revolving Note for a new Revolving Note payable to the order of the
Assignee in an amount equal to the Revolving Commitment assumed by the Assignee
pursuant hereto, or a new Revolving Note payable to the order of the Assignee in
an amount equal to the Revolving Commitment assumed by the Assignee pursuant
hereto and the Assignor in an amount equal to the Revolving Commitment retained
by the Assignor under the Loan Agreement, respectively, as specified on Schedule
1.
3. The Assignee (i) confirms that it has received a copy of the
Loan Agreement, together with copies of the financial statements referred to in
Section 6.4 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender or
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Issuing Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents; (iii) confirms that it is an
Eligible Assignee; (iv) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Loan
Documents as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of the Loan Documents are required to be performed by it as a Lender; and
(vi) attaches any U.S. Internal Revenue Service forms required under Section
13.7 of the Loan Agreement.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Loan Agreement and, to
the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and under the other Loan Documents and (ii)
the Assignor shall, to the extent provided in this Assignment and Acceptance,*
relinquish its rights and be released from its obligations under the Loan
Agreement and the other Loan Documents [and shall cease to be a party
thereto].**
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Loan
Agreement, the Revolving Notes, and the other Loan Documents in respect of the
interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Loan Agreement, the Revolving Notes and the other Loan Documents for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of California.
8. This Assignment and Acceptance may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment
--------
* Except as otherwise contemplated in clause (f) of the definition of
the term "Eligible Assignee".
** In the case of any Assignment and Acceptance covering all or the
remaining portion of the Assignor's rights and obligations under the
Loan Agreement.
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and Acceptance by telecopier shall be effective as delivery of a manually
executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
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SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
Facility in respect of
which an interest is being assigned: _________________
Percentage interest assigned: _________________%
Assignee's Revolving Commitment: $________________
Aggregate outstanding principal amount
of Advances assigned: $________________
Principal amount of Revolving Note payable
to Assignee: $________________
Principal amount of Revolving Note payable
to Assignor: $________________
Effective Date (if other than date
of acceptance by Agent): *________________, 19__
[NAME OF ASSIGNOR], as Assignor
By: ______________________________________
Title:
Dated:_____________, 19__
[NAME OF ASSIGNEE], as Assignee
By: ______________________________________
Title:
[Address]
Accepted this ___ day
of ______________, 19__
[NAME OF AGENT]
By: _______________________
Title:
--------
* This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to the Agent.
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EXHIBIT B
BORROWING BASE CERTIFICATE
Reference is made to the Fifth Amended and Restated Loan Agreement (as
the same may be amended, restated, supplemented or modified from time to time,
the "Loan Agreement") dated as of June __, 1998 among ▇▇▇▇▇▇▇ Homes (f/k/a The
▇▇▇▇▇▇▇ Companies), a California corporation, as Borrower, Foothill Capital
Corporation, as the agent (the "Agent") for the Lenders, the Issuing Banks
(other than any Third Party Issuer) and the LC Guarantor (in each case as
defined in the Loan Agreement), and the Lenders parties thereto. All capitalized
terms used herein but not defined herein shall have the meanings defined for
those terms in the Loan Agreement.
This Borrowing Base Certificate (this "Certificate") is executed and
delivered by the undersigned to the Agent, on and as of the date set forth
below, pursuant to Section 4.8(a) of the Loan Agreement.
I, ________________________, in my capacity as the [Chief Financial
Officer] [Vice President/Controller] [President] of the Borrower and on behalf
of the Borrower, hereby certify as follows:
1. The Borrowing Base, calculated as of the last day of
_________________, 19__, in accordance with Section 4.8 of the Loan Agreement,
is $___________________.
2. This Certificate is executed and delivered on and as of
_____________, 19__*.
By: ___________________________________
Name:
Title:[Chief Financial Officer]
[Vice President/Controller]
[President] of ▇▇▇▇▇▇▇ Homes
-------
* This date may be no later than February 15 for each calculation as
of December 31, March 8 for each calculation as of January 31, and
in all other cases the last day of the month immediately following
the month for which the above calculations are certified.
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EXHIBIT C
BORROWING CERTIFICATE
Reference is made to the Fifth Amended and Restated Loan
Agreement (as the same may be amended, restated, supplemented or modified from
time to time, the "Loan Agreement") dated as of June __, 1998 among ▇▇▇▇▇▇▇
Homes (f/k/a The ▇▇▇▇▇▇▇ Companies), a California corporation, (the "Borrower"),
Foothill Capital Corporation, as the agent (the "Agent") for the Lenders, the
Issuing Banks (other than any Third Party Issuer) and the LC Guarantor (in each
case as defined in the Loan Agreement), and the Lenders parties thereto. All
capitalized terms used herein but not defined herein shall have the meanings
defined for those terms in the Loan Agreement.
This Borrowing Certificate (this "Certificate") is executed and
delivered by the undersigned to the Agent, on and as of the date set forth
below, and to each of the Lenders in connection with the Request for Loan
delivered to the Agent on the date hereof (the "Applicable Request for Loan").
I, ________________________________, in my capacity as the [Chief
Financial Officer] [Vice President/Controller] [Vice President/Finance]
[President] of the Borrower and on behalf of the Borrower, hereby certify as
follows:
1. No event has occurred and is continuing, or would result from
the requested Revolving Loan or from the application of the proceeds therefrom,
which constitutes a Default under the Loan Agreement.
2. After giving effect to the Revolving Loan requested in the
Applicable Request for Loan, (i) the aggregate amount of Outstanding Loans will
not exceed the aggregate Revolving Commitments minus Outstanding Letters of
Credit or (ii) to the best of my knowledge as of the date hereof, the
Outstanding Loans will not exceed the Maximum Revolving Loan Amount.
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3. This Certificate is executed and delivered on and as of
_____________, 199_, concurrently with the delivery of the Applicable Request
for Loan dated the date hereof.
By: ___________________________________
Name:
Title:[Chief Financial Officer]
[Vice President/Controller]
[President] of ▇▇▇▇▇▇▇ Homes
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EXHIBIT D
REQUEST FOR LETTER OF CREDIT
SECTION 1. This REQUEST FOR LETTER OF CREDIT is executed and delivered
by ▇▇▇▇▇▇▇ Homes (f/k/a The ▇▇▇▇▇▇▇ Companies), a California corporation (the
"Borrower") to ___________________________, as the "Issuing Bank", pursuant to
the Fifth Amended and Restated Loan Agreement (as the same may be amended,
restated, supplemented or modified from time to time, the "Loan Agreement")
dated as of June __, 1998, entered into by the Borrower, Foothill Capital
Corporation, as the agent (the "Agent") for the Lenders, the Issuing Banks
(other than any Third Party Issuer) and the LC Guarantor (in each case as
defined in the Loan Agreement), and the Lenders parties thereto. Any terms used
herein and not defined herein shall have the meanings defined in the Loan
Agreement.
SECTION 2. The Borrower hereby requests that the Issuing Bank issue a
Letter of Credit for the account of the Borrower pursuant to the Loan Agreement
as follows:
(a) Face Amount of Letter of Credit:
$_______.
(b) Date of Issuance: ________________, 19__.
(c) Type of Letter of Credit (check one box only):
[ ] Standby Letter of Credit.
[ ] Commercial Letter of Credit.
(d) Beneficiary under Letter of Credit:
Name: _________________________________
Address: _________________________________
_________________________________
_________________________________
(e) Expiry Date: ____________________, 19__
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(f) Documents to be submitted with drafts: (attach sample) , no
later than ____ days prior to expiry.
(g) Purpose of Letter of Credit: ________________
(h) Additional Information/Terms: _______________
SECTION 3. The requested Letter of Credit is (check one box only):
[ ] a new Letter of Credit in addition to Letters of Credit
already outstanding.
[ ] renewal, or extension to or of the following outstanding
Letter(s) of
Credit:
[Identify]
SECTION 4. In connection with the issuance of the Letter of Credit
requested herein, the Borrower hereby represents, warrants, and certifies to the
Agent, the Issuing Bank of such Letter of Credit and the other Issuing Banks
(other than any Third Party Issuer), the LC Guarantor and the Lenders that:
(a) As of the date of issuance of the Letter of Credit requested
herein, each representation and warranty made by the Borrower in
Article 6 of the Agreement (other than the representations and
warranties contained in Sections 6.1(c), 6.1(e), 6.4 and 6.5, the last
sentence of Section 6.6, and Sections 6.9, 6.12(a) and 6.20) will be
true and correct in all material respects, both immediately before and
after the issuance of such Letter of Credit, as though such
representations and warranties were made on and as of the date of
issuance of such Letter of Credit; no actions, suits or proceedings
will be pending against or affecting the Borrower or any of its
Subsidiaries or ▇▇▇▇▇▇▇ Delaware or any Property of any of them in any
court of Law or before any Governmental Agency which might reasonably
be expected to materially and adversely affect the business operations
or condition (financial or otherwise) of the Borrower; no material
adverse change will have occurred in the business, operations or
condition (financial or otherwise) of the Borrower, since the Closing
Date which is materially adverse to the interests of the Agent, the
Lenders, the Issuing Banks or the LC Guarantor; and no Default will
have occurred and be continuing. (If any of the foregoing statements is
not true and correct, attach a statement specifying in detail the
circumstances thereof and the actions the Borrower is taking or
proposes to take with respect thereto.)
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(b) Following the issuance of the Letter of Credit requested
herein, (i) Total Outstandings shall not exceed the aggregate Revolving
Commitments, (ii) Outstanding Letters of Credit shall not exceed the
Maximum Letter of Credit Amount, (iii) Outstanding Loans shall not
exceed the Maximum Revolving Loan Amount (as adjusted to reflect the
issuance of the Letter of Credit requested herein), and (iv) giving
effect to the issuance of such Letter of Credit, Outstanding Letters of
Credit issued by Third Party Issuers, the Borrower's obligations in
connection with which are secured by Cash and/or Cash Equivalents, will
not exceed $5,000,000.
(c) The issuance of the Letter of Credit requested herein is
reasonably necessary in connection with transactions in the ordinary
course of business of the Borrower or one of its Subsidiaries
identified as follows:
_______________________________________________.
(d) If the Letter of Credit requested herein is issued in
connection with one or more performance bonds, such performance bonds
relate to a project included in the Borrowing Base.
SECTION 5. This Request for Letter of Credit is executed on
_______________, 19__, by a Responsible Official of the Borrower, on behalf of
the Borrower. The undersigned, in such capacity, hereby certifies each and every
matter contained herein to be true and correct.
BORROWER:
▇▇▇▇▇▇▇ HOMES, a California corporation
By:_______________________________
Its:___________________________
By:_______________________________
Its:___________________________
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EXHIBIT E
REQUEST FOR LOAN
1. This REQUEST FOR LOAN is executed and delivered by ▇▇▇▇▇▇▇ Homes
(f/k/a The ▇▇▇▇▇▇▇ Companies), a California corporation (the "Borrower") to
Foothill Capital Corporation, as the agent (the "Agent") for the Lenders, the
Issuing Banks (other than any Third Party Issuer) and the LC Guarantor (in each
case as defined in the Fifth Amended and Restated Loan Agreement (as the same
may be amended, restated, supplemented or modified from time to time, the "Loan
Agreement") dated as of June __, 1998, entered into by the Borrower, the Agent,
and the Lenders parties thereto. Any terms used herein and not defined herein
shall have the meanings defined in the Loan Agreement.
2. The Borrower hereby requests that the Lenders make a Revolving Loan
for the account of the Borrower pursuant to the Loan Agreement, as follows:
(a) Amount of Revolving Loan: $_________________.
(b) Date of Revolving Loan. _______________, 19__.
(c) Interest Type of Revolving Loan* (check one box only):
[ ] eference Rate Loan
[ ] Offshore Rate Loan with a ____ -month Interest Period.
3. In connection with the Revolving Loan requested herein, the Borrower
hereby represents, warrants and certifies to the Agent and the Lenders that, as
of the date of the Revolving Loan requested herein: [(a) each representation and
warranty made by the Borrower in Article 6 of the Loan Agreement (other than the
representations and warranties contained in Sections 6.1(c), 6.1(e), 6.4 and
6.5, the last sentence of Section 6.6, and Sections 6.9, 6.12(a) and 6.20) will
be true and correct in all material respects, both immediately before and after
such Revolving Loan is made, as though such representations and warranties were
made on and as of the date of such Revolving Loan; (b) no actions, suits or
proceedings will be pending against or affecting the Borrower or any of its
Subsidiaries or ▇▇▇▇▇▇▇ Delaware or any Property of any of them in any court of
law or before any Governmental Agency which might reasonably be expected to
materially and adversely affect the business, operations or condition (financial
or otherwise) of the Borrower; (c) no material adverse change will have occurred
in the business, operations or condition (financial or otherwise) of the
Borrower since the Closing Date which is materially adverse to the interests of
the Agent, the Lenders, the Issuing Banks or the LC
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Guarantor; and (d) no Default will have occurred and be continuing.]* [(a) each
representation and warranty made by the Borrower in Article 6 of the Revolving
Loan Agreement (other than Sections 6.1(c), 6.1(e), 6.4 and 6.5, the last
sentence of Section 6.6, and Sections 6.9, 6.12(a), 6.19 and 6.20) will be true
and correct in all material respects on and as of the date of such Revolving
Loan, both immediately before and after such Revolving Loan is made, as though
made on and as of that date; and (b) there shall not have occurred any Default
that is then continuing or will result from such Advance.]**
(If any of the foregoing statements is not true and correct, attach a
statement specifying in detail the circumstances thereof and the actions the
Borrower is taking or proposes to take with respect thereto.)
4. After giving effect to the Revolving Loan requested herein, no more
than eight (8) Offshore Rate Loans shall be outstanding.
5. This Request for Loan is executed on _________, 19__, by a
Responsible Official of the Borrower, on behalf of the Borrower. The
undersigned, in such capacity, hereby certifies each and every matter contained
herein to be true and correct.
BORROWER:
▇▇▇▇▇▇▇ HOMES, a California corporation
By: ____________________________________
Its:______________________________
By: ____________________________________
Its:______________________________
--------
* For any Advance that increases Total Outstandings.
** For any Advance that does not increase Total Outstandings.
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EXHIBIT F
REQUEST FOR REDESIGNATION OF LOANS
1. This REQUEST FOR REDESIGNATION OF LOANS is executed and delivered by
▇▇▇▇▇▇▇ Homes (f/k/a The ▇▇▇▇▇▇▇ Companies), a California corporation (the
"Borrower") to Foothill Capital Corporation, as agent (the "Agent") for the
Lenders, the Issuing Banks (other than any Third Party Issuer) and the LC
Guarantor (in each case as defined in the Loan Agreement referred to below),
pursuant to the Fifth Amended and Restated Loan Agreement (as the same may be
amended, restated, supplemented or modified from time to time, the "Loan
Agreement") dated as of June __, 1998, entered into by the Borrower, the Agent
and the Lenders parties thereto. Any terms used herein and not defined herein
shall have the meanings defined in the Loan Agreement.
2. The Borrower hereby requests that the Lenders redesignate
outstanding [Reference Rate Loans] [Offshore Rate Loans] heretofore made or
redesignated for the account of the Borrower pursuant to the Loan Agreement, as
follows:
2.1 Date of Redesignation: ______________, 19_____.
2.2 Total Amount of [Reference Rate Loans] [Offshore Rate Loans]
to be redesignated as an Offshore Rate Loan: $ _____________________.
2.3 Applicable Interest Rate Period: ___ months.
3. In connection with the redesignation of Revolving Loans requested
herein, the Borrower hereby represents, warrants and certifies to the Agent, the
Lenders, the Issuing Banks (other than any Third Party Issuer) and the LC
Guarantor that, as of the date of the redesignation of Revolving Loans requested
herein: (a) each representation and warranty made by the Borrower in Article 6
of the Loan Agreement (other than the representations and warranties contained
in Sections 6.1(c), 6.1(e), 6.4 and 6.5, the last sentence of Section 6.6, and
Sections 6.9, 6.12(a), 6.19 and 6.20)) will be true and correct in all material
respects, both immediately before and after such redesignation of Revolving
Loans is made, as though such representations and warranties were made on and as
of the date of such redesignation of Revolving Loans; and (b) no Default will
have occurred and be continuing or will result from such redesignation. (If any
of the foregoing statements is not true and correct, attach a statement
specifying in detail the circumstances thereof and the actions the Borrower is
taking or proposes to take with respect thereto.)
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4. After giving effect to the redesignation of Revolving Loans
requested herein, no more than eight (8) Offshore Rate Loans shall be
outstanding.
5. This Request for Redesignation of Loans is executed on _________,
19__, by a Responsible Official of the Borrower, on behalf of the Borrower. The
undersigned, in such capacity, hereby certifies each and every matter contained
herein to be true and correct.
BORROWER:
▇▇▇▇▇▇▇ HOMES, a California corporation
By:______________________________________
Its:________________________________
By:______________________________________
Its:________________________________
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EXHIBIT G
REVOLVING NOTE
$___________________ ___________, 1998
Los Angeles, California
FOR VALUE RECEIVED, the undersigned promises to pay to the order
of _____________________ (the "Lender") the principal amount of _______________
($______________), or such lesser aggregate amount of Outstanding Advances as
may be made by or otherwise payable to the Lender under the Loan Agreement
hereinafter described, payable as hereinafter set forth. The undersigned
promises to pay interest on the principal amount hereof remaining unpaid from
time to time from the date hereof until the date of payment in full, payable as
hereinafter set forth.
Reference is made to the Fifth Amended and Restated Loan
Agreement dated as of July 6, 1998 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Loan Agreement")
among the undersigned as Borrower, the Lenders that are parties thereto, and
Foothill Capital Corporation, as the Agent. Terms defined in the Loan Agreement
and not otherwise defined herein are used herein as therein defined. This is one
of the Revolving Notes referred to in the Loan Agreement, and any holder hereof
is entitled to all of the rights, remedies, benefits and privileges provided for
in the Loan Agreement as originally executed or as it may from time to time be
supplemented, modified or amended. The Loan Agreement, among other things,
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events upon the terms and conditions therein specified.
This Revolving Note is secured by various real and personal
property Collateral as provided for in the Loan Agreement and the Collateral
Documents referred to therein.
The principal indebtedness evidenced by this Revolving Note shall
be payable as provided in the Loan Agreement and in any event on the Termination
Date.
Interest shall be payable on the outstanding daily unpaid
principal amount of each Revolving Advance hereunder from the date thereof until
payment in full and shall accrue and be payable at the rates and on the dates
set forth in the Loan Agreement both before and after default and before and
after maturity and judgment, with interest on overdue interest and principal to
bear interest at the rate set forth in Section 5.7 of the Loan Agreement, to the
fullest extent permitted by applicable Law.
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The amount of each payment hereunder shall be made to the Agent
at the Agent's Office, for the account of the Lender, in lawful money of the
United States of America and in immediately available funds not later than 10:00
a.m., Los Angeles time, on the day of payment (which must be a Banking Day). All
payments received after 10:00 a.m., Los Angeles time, on any Banking Day, shall
be deemed received on the next succeeding Banking Day. The Lender shall use its
best efforts to keep a record of Revolving Advances made by it and payments of
principal with respect to this Revolving Note, and such record shall be
presumptive evidence of the principal amount owing under this Revolving Note.
The undersigned hereby promises to pay all costs and expenses of
any holder hereof incurred in collecting the undersigned's obligations hereunder
or in enforcing or attempting to enforce any of any holder's rights hereunder,
including attorneys' fees and disbursements, whether or not an action is filed
in connection therewith.
The undersigned hereby waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
This Revolving Note shall be delivered to and accepted by the
Lender, or by the Agent on its behalf, in the State of California and shall be
governed by, and construed and enforced in accordance with, the local Laws
thereof.
▇▇▇▇▇▇▇ Homes, a California corporation
By:_______________________________
Its:___________________________
By:_______________________________
Its:___________________________
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ADVANCES AND PAYMENTS OF PRINCIPAL
(Reference Rate Advances)
Amount of Advance or Amount of Principal
of Redesignation from Paid or Redesignated
another type of into another type of Unpaid Principal Notation
Date Advance Advance Balance Made by
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Amount of Advance or Amount of Principal
of Redesignation from Paid or Redesignated
another type of into another type of Unpaid Principal Notation
Date Advance Advance Balance Made by
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EXHIBIT J
AMENDED AND RESTATED GUARANTY
AMENDED AND RESTATED GUARANTY ("Guaranty"), dated as of , 1998,
made by THE ▇▇▇▇▇▇▇ COMPANIES, a Delaware corporation (the "Guarantor"), in
favor of the lenders (the "Lenders") parties to the Loan Agreement (as
hereinafter defined), the Issuing Banks (other than any Third Party Issuer) and
the LC Guarantor (in each case as defined in the Loan Agreement), and Foothill
Capital Corporation, as agent (the "Agent") for the Lenders, such Issuing Banks
and the LC Guarantor.
PRELIMINARY STATEMENTS.
(1) The Lenders and the Agent have entered into a Fifth Amended
and Restated Loan Agreement dated as of June __, 1998 (said agreement, as it may
hereafter be amended, restated, supplemented or otherwise modified from time to
time, being the "Loan Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with ▇▇▇▇▇▇▇ Homes (f/k/a
The ▇▇▇▇▇▇▇ Companies), a California corporation (the "Borrower"). The Guarantor
will derive substantial direct and indirect benefit from the transactions
contemplated by the Loan Agreement.
(2) The Guarantor has entered into an Amended and Restated
Guaranty dated as of March 25, 1994 (as amended, the "Existing Guaranty") in
favor of the lenders parties to the Existing Loan Agreement and the agent for
such lenders.
(3) It is a condition precedent to the making of Revolving
Advances by the Lenders under the Loan Agreement that the Guarantor, as owner of
all the outstanding shares of stock of the Borrower, shall have executed and
delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Revolving Advances under the Loan Agreement, the
Guarantor hereby agrees that, effective on and as of the Closing Date, the
Existing Guaranty is amended and restated in its entirety as follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally
guarantees the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all obligations of the Borrower now or hereafter
existing under the Loan Agreement, the Revolving Notes and each other Loan
Document, whether for principal, interest, fees, expenses or otherwise (such
obligations being the "Obligations"), and agrees to pay any and all expenses
(including counsel fees and expenses) incurred by the Agent, the Lenders, the
Issuing Banks (other than any Third Party Issuer) or the LC Guarantor in
enforcing any rights under this Guaranty. Without limiting the generality of the
foregoing, the Guarantor's liability shall extend to all amounts which
constitute part of the Obligations and would be owed by the Borrower to the
Agent, the Lenders, such Issuing Banks or the LC Guarantor under the Loan
Agreement, the Revolving
141
Notes or any other Loan Documents but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Borrower.
SECTION 2. Guaranty Absolute. The Guarantor guarantees that the
Obligations will be paid strictly in accordance with the terms of the Loan
Agreement, the Revolving Notes and the other Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent, the Lenders, the Issuing
Banks (other than any Third Party Issuer) or the LC Guarantor with respect
thereto. The obligations of the Guarantor under this Guaranty are independent of
the Obligations, and a separate action or actions may be brought and prosecuted
against the Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrower or any other Party or whether the
Borrower or any other Party is joined in any such action or actions. The
liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Loan Agreement,
the Revolving Notes, the other Loan Documents or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to departure from the Loan Agreement, the
Revolving Notes or the other Loan Documents, including, without
limitation, any increase in the Obligations resulting from the extension
of additional credit to the Borrower, any of its subsidiaries or any
Party or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Obligations;
(d) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Obligations or any
other assets of the Borrower, any of its subsidiaries or any other
Party;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower, any of its subsidiaries or any
Party;
(f) the existence of any claim, setoff, defense or other rights
which the Borrower or the Guarantor may have at any time against the
Agent, any Issuing Bank, the LC Guarantor or any Lender, any beneficiary
of any Letter of Credit or Set-Aside Letter (or any Persons or entities
for whom any such beneficiary may be acting) or any other Person,
whether in connection with the Loan Agreement, any other Loan Documents
or any other agreement or instrument relating thereto, or any unrelated
transactions;
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(g) any demand, statement or any other document presented under
any Letter of Credit or Set-Aside Letter proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever;
(h) payment by any Issuing Bank under any Letter of Credit
against presentation of a draft or any accompanying document which does
not strictly comply with the terms of such Letter of Credit;
(i) the existence, character, quality, quantity, condition,
packing, value or delivery of any Property purported to be represented
by documents presented in connection with any Letter of Credit or any
difference between any such Property and the character, quality,
quantity, condition or value of such Property as described in such
documents;
(j) the time, place, manner, order or contents of shipments or
deliveries of property as described in documents presented in connection
with any Letter of Credit or the existence, nature and extent of any
insurance relating thereto;
(k) the solvency (or insolvency) or financial responsibility (or
lack thereof) of any party issuing any documents in connection with any
Letter of Credit;
(l) any failure or delay in notice of shipment or arrival of any
Property;
(m) any error in the transmission of any message relating to any
Letter of Credit not caused by the Issuing Bank thereof, or any delay or
interruption in any such message;
(n) any error, neglect or default of any correspondent of any
Issuing Bank in connection with any Letter of Credit; and/or
(o) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower or a guarantor.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the Agent, any Lender, any such Issuing Bank or the LC
Guarantor upon the insolvency, bankruptcy or reorganization of the Borrower, any
of its subsidiaries, any Party or otherwise, all as though such payment had not
been made.
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SECTION 3. Waivers. The Guarantor hereby waives, to the fullest
extent permitted by applicable law:
(a) any requirement that the Agent, any Lender, any Issuing Bank
or the LC Guarantor perfect, secure or insure any security interest or
lien or any property subject thereto or exhaust any right or take any
action against the Borrower or any other Person or any collateral;
(b) any defense arising by reason of any claim or defense based
upon an election of remedies by the Agent, any Lender, any Issuing Bank
or the LC Guarantor (including, without limitation, an election to
nonjudicially foreclose on any real or personal property collateral)
which in any manner impairs, reduces, releases or otherwise adversely
affects its subrogation, reimbursement or contribution rights or other
rights to proceed against the Borrower, any other Person or any
collateral;
(c) any defense arising by reason of the failure of any other
Person to execute this Guaranty or any other guaranty or agreement;
(d) any defense arising by reason of the failure of any Party to
execute properly any Loan Document or otherwise comply with applicable
legal formalities;
(e) any defense or benefits that may be derived from [California
Civil Code Sections 2808, 2809, 2810, 2819, 2845 or 2850, or California
Code of Civil Procedure Sections 580a, 580d or 726,]* or comparable
provisions of the laws of any other jurisdiction and all other
suretyship defenses it would otherwise have under the laws of California
or any other jurisdiction;
(f) any duty on the part of the Agent, any Lender, any Issuing
Bank or the LC Guarantor to disclose to the Guarantor any matter, fact
or thing relating to the business, operation or condition of the
Borrower, any of its subsidiaries or any Party and their respective
assets now known or hereafter known by the Agent, such Lender, such
Issuing Bank or the LC Guarantor;
(g) all benefits of any statute of limitations affecting the
Guarantor's liability under this Guaranty or affecting the enforcement
of this Guaranty or any of the Obligations or realization on the
collateral;
--------
* To confirm.
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(h) all setoffs and counterclaims;
(i) promptness, diligence, presentment, demand for performance
and protest;
(j) notice of nonperformance, default, acceleration, protest or
dishonor;
(k) except for any notice otherwise required by applicable laws
that may not be effectively waived by the Guarantor (all of which are
hereby waived to the fullest extent permitted by law), notice of sale or
other disposition of the collateral; and
(l) notice of acceptance of this Guaranty and of the existence,
creation or incurring of new or additional Obligations.
SECTION 4. Waiver of Defense from Nonjudicial Foreclosure. The
Guarantor acknowledges that if the Agent, acting on the instructions of the
Majority Lenders, forecloses any of the deeds of trust or mortgages or any other
Collateral Documents executed by the Borrower or any other Party in favor of the
Agent or any other deed of trust or mortgage covering interests in real
property, and the interest in real property secured thereby, by nonjudicial
sale, the Guarantor may, if it were not for this Section 4, have a defense to
the recovery under this Guaranty for any deficiency from such nonjudicial sale;
however, the Guarantor hereby waives such defense to the recovery by the Agent,
the Lenders, the Issuing Banks (other than any Third Party Issuer) and the LC
Guarantor against the Guarantor of any deficiency after a nonjudicial sale and
the Guarantor expressly waives any defense or benefits that may be derived from
California Code of Civil Procedure [Section 580a, Section 580d] or any other
similar statute. Without limiting the foregoing, the Guarantor waives any
defense arising out of any such nonjudicial sale even though such sale operates
to impair or extinguish any right of reimbursement or subrogation or any other
right or remedy of the Guarantor against the Borrower or any other Party or any
collateral security.
SECTION 5. Waiver of Subrogation and Contribution Rights. The
Guarantor hereby irrevocably waives any rights (including, without limitation,
any rights arising under California Civil Code Sections [2847, 2848 and 2849)]
which it may acquire by way of subrogation under this Guaranty or any other Loan
Document, by any payment made hereunder or otherwise, including without
limitation, the right to take or receive from the Borrower, directly or
indirectly, in cash or other property or by setoff or in any other manner,
payment or security on account of such subrogation rights. The Guarantor hereby
irrevocably agrees, to the fullest extent permitted by law, that it will not
exercise any rights which it may acquire by way of contribution, reimbursement,
indemnification or exoneration under this Guaranty or any other Loan Document,
by any payment made hereunder or otherwise, all of such rights being expressly
waived herein. If any amount shall be paid to the Guarantor in violation of the
preceding sentences and the Obligations shall not have been paid in full, such
amount shall be deemed to have been paid to the Guarantor for the benefit of,
and held in trust for the benefit of, the Agent, the Lenders, the Issuing Banks
(other than any Third Party Issuer) and the LC Guarantor and shall forthwith be
paid to the Agent for its benefit and the benefit of the Lenders, such Issuing
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Banks and the LC Guarantor to be credited and applied to the Obligations,
whether matured or unmatured, in accordance with the terms of the Loan Agreement
and the other Loan Documents.
SECTION 6. Taxes. The Guarantor agrees, subject to the limits set
forth in Section 13.3 of the Loan Agreement, to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery, registration, filing, recording or enforcement of, or otherwise with
respect to, this Guaranty and the other Loan Documents to which it is party.
SECTION 7. Representations and Warranties. The Guarantor hereby
represents and warrants to the Agent, the Issuing Banks (other than any Third
Party Issuer), the LC Guarantor and the Lenders, and each of them, as follows:
(a) Each of this Guaranty, the other Loan Documents to which it
is party is or has been executed at the request of the Borrower and no
oral promises, assurances, representations or warranties have been made
by or on behalf of the Agent, any Lender, any Issuing Bank or the LC
Guarantor to induce the Guarantor to execute and deliver this Guaranty
and such other Loan Documents.
(b) (i) The Guarantor is a corporation duly formed, validly
existing and in good standing under the Laws of Delaware. The Guarantor
is duly qualified or registered to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
the ownership or leasing of its Properties makes such qualification or
registration necessary, except where the failure so to qualify or
register and to be in good standing would not have a material adverse
effect on the business, operations or condition (financial or otherwise)
of the Guarantor. The Guarantor has all requisite corporate power and
authority to conduct its business, to own and lease its Properties and
to execute, deliver and perform all of its Obligations under this
Guaranty and the other Loan Documents.
(ii) At the Closing Date, the authorized capital stock of the
Guarantor will consist of 100,w000,000 shares of Series
A Stock, par value $.01 per share, 50,000,000 shares of
Series B Stock, par value $.01 per share, and 25,000,000
shares of preferred stock, par value $.01 per share. As
of the Closing Date, the Guarantor will have no
outstanding subscriptions, options, warrants, calls,
contracts, demands, commitments, convertible securities
or other instruments, agreements or arrangements of any
character or nature whatsoever under which the Guarantor
is or may be obligated to issue common stock, preferred
stock, or other securities of any kind which would
constitute or otherwise cause the occurrence of a
Default under the Loan Agreement or under any other Loan
Document. The Guarantor has no other authorized capital
stock. As of the Closing Date, 20,516,371 shares of
Series A Stock and 31,679,307 shares of Series B Stock
will have been issued by the Guarantor, and no shares of
preferred stock will have been issued. All outstanding
shares of common stock of the Guarantor are duly
authorized, validly issued, fully paid, non-
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146
assessable and issued in compliance with all applicable
state and federal securities and other Laws. The
Guarantor meets each of the requirements listed
in Section 25117(a)(2)(A) of the California Corporations
Code.
(iii) The Guarantor is in compliance with all Laws and other
legal requirements applicable to its business, has
obtained all authorizations, consents, approvals,
orders, licenses and permits from, and has accomplished
all filings, registrations and qualifications with, or
obtained exemptions from any of the foregoing from, any
Governmental Agency that are necessary for the
transaction of its business, except where the failure so
to comply, ------ or to obtain authorizations, consents,
approvals, orders, licenses or permits, or file,
register, qualify or obtain exemptions would not have a
material adverse effect on the business, operations or
condition (financial or otherwise) of the Guarantor.
(iv) The Guarantor has no Subsidiary or Subsidiaries other
than the Borrower, ▇▇▇▇▇▇▇ Mortgage Company, a
California corporation, PH Ventures - San ▇▇▇▇, a
California corporation, PH-LP Ventures, a California
corporation, PH Institutional Ventures, a California
corporation, HSP, Inc., a California corporation,
▇▇▇▇▇▇▇ Southwest, Inc., an Arizona corporation, The
▇▇▇▇▇▇▇ Companies, a California corporation, ▇▇▇▇▇▇▇
CMR, Inc., and CMR. The Guarantor owns 100% of the
issued and outstanding common stock of the Borrower.
(c) Except as set forth in Schedule 6.2 to the Loan Agreement,
the execution, delivery and performance of each Loan Document by each
Party, to the extent such Party is a party thereto, have been duly
authorized by all necessary action, and do not and will not:
(i) Require any consent or approval not heretofore obtained
of any partner, director, stockholder, security holder
or creditor;
(ii) Violate or conflict with any provision of such Party's
partnership agreement, certificate of limited
partnership, charter, articles of incorporation or
bylaws, or amendments thereto, as applicable;
(iii) Result in or require the creation or imposition of any
Lien or Right of Others (other than as permitted under
the Loan Documents) upon or with respect to any Property
now owned or leased or hereafter acquired by such Party;
(iv) Constitute a "transfer of an interest" or an "obligation
incurred" that is avoidable by a trustee under Section
548 of the Bankruptcy Code of 1978, as amended, or
constitutes a "fraudulent transfer" or "fraudulent
obligation" within the meaning of the Uniform Fraudulent
Transfer Act as enacted in any jurisdiction or any
analogous Law;
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147
(v) Violate any provision of any Law (including, without
limitation, Regulations T, U and/or X of the Board of
Governors of the Federal Reserve System or the usury
laws of any jurisdiction), order, writ, judgment,
injunction, decree, determination or award presently in
effect and having applicability to such Party; or
(vi) Result in a breach of or constitute a default under, or
cause or permit the acceleration of any obligation owed
under, any indenture or loan or credit agreement or any
other material agreement, lease or instrument to which
such Party is a party or by which such Party or any of
its Property is bound or affected; and neither the
Borrower nor the Guarantor is in default under any Law,
order, writ, judgment, injunction, decree, determination
or award, or any indenture, agreement, lease or
instrument described in Schedule 6.2 to the Loan
Agreement as contemplated above in this subsection (c),
in any respect that is materially adverse to the
interests of the Agent, the Issuing Banks, the LC
Guarantor or the Lenders or that would have any material
adverse effect on the business, operations or condition
(financial or otherwise) of the Borrower or the
Guarantor.
(d) Except as set forth in Schedule 6.3 to the Loan Agreement, no
authorization, consent, approval, order, license or permit from, or
filing, registration or qualification with, or exemption from any of the
foregoing from, any Governmental Agency is or will be required to
authorize or permit under applicable Law the execution, delivery and
performance by any Party of the Loan Documents. As to those matters set
forth in Schedule 6.3 to the Loan Agreement, the Borrower has obtained
such authorizations, consents, approvals, orders, licenses and permits
required to authorize or permit under any applicable Law the execution,
delivery and performance by any Party of the Loan Documents, except as
otherwise indicated on said Schedule.
(e) The Borrower has furnished to the Agent and the Lenders (i)
the audited consolidated balance sheet of the Guarantor as at December
31, 1997, and the related audited consolidated statement of operations
of the Guarantor for the period then ended and (ii) the unaudited
interim consolidated balance sheet of the Guarantor as of April 30, 1998
and the related unaudited interim consolidated statement of operations
for the four months ended April 30, 1998. Such financial statements
fairly present the financial condition and results of operations of the
Guarantor as at such dates and for such periods, in conformity with
GAAP, consistently applied, except that the unaudited interim financial
statements do not include all of the information and footnotes required
by GAAP for complete financial statements. There has been no material
adverse change in the business, prospects, operations or condition
(financial or otherwise) of the Guarantor and the Borrower since April
30, 1998.
(f) Except as set forth in Schedule 6.9 to the Loan Agreement,
there are no actions, suits or proceedings pending or, to the best
knowledge of the Guarantor, threatened against or affecting the
Borrower, any of its Subsidiaries, the Guarantor or any Property of the
Borrower or any such Subsidiary or the Guarantor in any court of Law or
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148
before any Governmental Agency (i) where the amount in controversy is
$1,000,000 or more, (ii) which involve claims under the Racketeer
Influenced and Corrupt Organization Act of 1970, 18 U.S.C. Sections
1961-1968, or any other federal or state law for which the forfeiture of
assets is a potential penalty, or (iii) which, if determined adversely
to the Borrower or such Subsidiary or the Guarantor, as applicable,
would have a material adverse effect on the condition or operations of
the Borrower or the Guarantor, financial or otherwise, or which material
adverse effect may affect the legality, validity or enforceability of
the Loan Documents.
(g) Subject to the exceptions set forth in the Opinion of Counsel
addressed to the Agent and the Lenders and dated as of the Closing Date,
each of the Loan Documents will, when executed and delivered by the
Borrower or the Guarantor, constitute the legal, valid and binding
obligation of the Borrower or the Guarantor, as applicable, enforceable
against the Borrower or the Guarantor, as applicable, in accordance with
its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar
Laws relating to or affecting creditors' rights generally or equitable
principles relating to the granting of specific performance and other
equitable remedies as a matter of judicial discretion.
(h) No event has occurred and is continuing that is a Default.
(i) No written statement made by or on behalf of the Borrower or
the Guarantor to the Agent or any Lender in connection with the Loan
Agreement, or in connection with any Revolving Loan, when taken in
context with all other such statements, contains any untrue statement of
a material fact or omits a material fact necessary to make the statement
made not misleading in light of all of the circumstances existing at the
time the statement was made, including without limitation matters
disclosed to the Agent and the Lenders in any Schedules to the Loan
Agreement or in any other written statement previously delivered to the
Agent and the Lenders pursuant to the Loan Agreement. To the best
knowledge of the Guarantor there is no fact (except for general economic
conditions) which the Borrower has not disclosed to the Agent and the
Lenders in writing which materially and adversely affects nor, so far as
the Guarantor can now reasonably foresee, can reasonably be expected to
affect materially and adversely the business, operations, Properties,
prospects, profits or condition (financial or otherwise) of the Borrower
or the Guarantor, or the ability of either the Borrower or the Guarantor
to perform its Obligations under the Loan Documents.
(j) The Borrower, each of its Subsidiaries and the Guarantor have
filed all federal and state income tax returns, and all material tax
returns other than federal and state income tax returns, that are
required (subject to any extensions obtained pursuant to applicable Law)
to be filed, and have paid, or made provision for the payment of, all
taxes payable by the Borrower or such Subsidiary or the Guarantor with
respect to the periods, Property or transactions covered by said
returns, or pursuant to any assessment received by the Borrower or such
Subsidiary or the Guarantor, except such taxes, if any, as are being
contested in good faith by appropriate proceedings and as to which
adequate reserves have been established and maintained.
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(k) [Deleted]
(l) The Guarantor has established adequate means of obtaining
from the Borrower on a continuing basis information pertaining to, and
is now and on a continuing basis will be completely familiar with, the
financial condition, operations, properties and prospects of the
Borrower, and, independently and without reliance upon the Agent, any
Lender or Issuing Bank or the LC Guarantor, has made its own credit
analysis and decision to enter into this Guaranty.
(m) The Guarantor has received and approved copies of all of the
other Loan Documents.
(n) There are no conditions precedent to the effectiveness of
this Guaranty that have not been satisfied or waived.
SECTION 8. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the obligations shall remain unpaid (other
than any contingent indemnity obligations under any Loan Document) or any Lender
shall have any Revolving Commitment, the Guarantor shall, unless the Majority
Lenders otherwise consent in writing:
(a) Pay and discharge promptly all taxes, assessments and
governmental charges or levies imposed upon it or its Property or any
part thereof, upon its income or profits or any part thereof or, subject
to the provisions of Section 13.7 of the Loan Agreement, upon any right
or interest of the Agent, any Issuing Bank, the LC Guarantor or any
Lender under any Loan Document, except that it shall not be required to
pay or cause to be paid (i) any income, net worth or gross receipts tax,
or any tax imposed in lieu of such income, gross receipts or net worth
taxes, applicable to any Lender or any participant of any Lender, or
(ii) any tax, assessment, charge or levy that is not yet delinquent, or
is being contested in good faith by appropriate proceedings, so long as
it has established and maintains adequate reserves for the payment of
the same and by reason of such nonpayment and contest no material item
or portion of its Property is in jeopardy of being seized, levied upon
or forfeited.
(b) Preserve and maintain its existence, and all material
licenses, rights, franchises and privileges in the jurisdiction of its
formation and all authorizations, consents, approvals, orders, licenses,
permits, or exemptions from, or registrations with, any Governmental
Agency that are necessary for the transaction of its business,
including, without limitation, all notices, permits or licenses, if any,
filed or obtained with regard to compliance with Environmental Laws, and
qualify and remain qualified to transact business in each jurisdiction
in which such qualification is necessary in view of its business or the
ownership or leasing of its Properties.
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(c) Maintain, preserve and protect all of its depreciable
Properties and equipment in good order and condition, subject to wear
and tear in the ordinary course of business, and not permit any waste
(other than developmental waste) of its Properties, except that the
failure to maintain, preserve and protect a particular item of
depreciable Property or equipment that is not of significant value,
either intrinsically or to its operations, shall not constitute a
violation of this covenant.
(d) Comply in all material respects with the requirements of all
applicable Laws and orders of any Governmental Agency, including all
applicable provisions of ERISA, except that it need not comply with a
requirement then being contested by it in good faith by appropriate
proceedings so long as no interest of the Agent or any Lender or Issuing
Bank or the LC Guarantor would be materially impaired thereby.
(e) At any time during regular business hours and as often as
requested, permit the Agent or any other Lender, or any employee, agent
or representative thereof, (a) to examine, audit and make copies and
abstracts from the records and books of account of, and to visit and
inspect the Properties of, the Borrower, any of its Subsidiaries and the
Guarantor and to discuss the affairs, finances and accounts of the
Borrower, any such Subsidiary and the Guarantor with any of its officers
and key employees, customers or vendors, and/or (b) to inspect the real
Property of the Borrower and any such Subsidiary, and any books,
records, journals, orders, receipts, correspondence, notices, permits or
licenses of the Borrower, any such Subsidiary and the Guarantor, with
regard to compliance with Environmental Laws, and, upon request, furnish
promptly to the Agent or any other Lender true copies of all financial
information and all information pertaining to the Borrower's and such
Subsidiary's compliance with Environmental Laws made available to the
senior management of the Borrower or such Subsidiary.
(f) Keep adequate records and books of account reflecting all
financial transactions in conformity with GAAP, consistently applied,
and in material conformity with all applicable requirements of any
Governmental Agency having regulatory jurisdiction over it.
(g) Promptly and fully comply with all of its agreements, duties
and obligations under the Loan Documents, and under any other material
agreements, indentures, leases and/or instruments to which it is a
party, whether such other agreements, indentures, leases or instruments
are with the Agent, any Lender or any other Person, except that it need
not comply with any such other agreements, indentures, leases or
instruments then being contested by it in good faith by appropriate
proceedings or if the failure to comply with such other agreements,
indentures, leases or instruments would not have a material adverse
effect on it, in either case so long as no material interest of the
Agent or any Lender or Issuing Bank or the LC Guarantor would be
materially impaired thereby.
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(h) At any time and from time to time upon the request of the
Agent or the Majority Lenders, forthwith, and in any event within five
Banking Days after such request, execute and deliver or cause to be
executed and delivered to the Agent such Collateral Documents as may be
requested by the Agent or the Majority Lenders, in the form furnished to
the Guarantor by the Agent in connection with such request, covering any
or all of its Property as requested, to secure payment and performance
of the Obligations of such Person or of any other Party, or such portion
thereof as may be specified by the Agent or the Majority Lenders. In
addition, at any time and from time to time, the Guarantor forthwith
shall deliver or cause to be delivered to the Agent at the Guarantor's
sole expense such appraisals, surveys, and policies of title insurance
and endorsements thereto relating to any or all of the Property of the
Guarantor as the Agent or the Majority Lenders may request.
(i) Cause all of its Cash and Cash Equivalents to be deposited
into the Operating Account, unless otherwise agreed by the Majority
Lenders or otherwise permitted under Section 7.11 of the Loan Agreement.
(j) Cause the Borrower to deliver to the Agent and each Lender,
at the Borrower's sole expense, as soon as practicable, and in any event
within 30 days after the end of each fiscal month of the Borrower other
than December and January, within 45 days after the end of each
December, and within 36 days after the end of each January, (i) a
consolidated balance sheet of the Guarantor as at the end of such month,
setting forth in comparative form the corresponding figures as at the
end of the preceding month and (ii) a consolidated statement of
operations of the Guarantor for such month and for the portion of its
fiscal year ended with such month, setting forth in comparative form the
corresponding figures for the preceding month, all in reasonable detail.
The preceding financial statements shall include, on a
project-by-project basis, a breakdown of Real Estate Inventory costs. In
addition, the preceding financial statements shall be certified by a
Responsible Official of the Borrower as fairly presenting the financial
condition and results of operations of the Guarantor in accordance with
GAAP, consistently applied as at such date and for such periods, subject
only to normal year-end audit adjustments, provided that such financial
statements need not contain all footnotes and disclosures required by
generally accepted accounting principles.
(k) Cause the Borrower to deliver to the Agent and each Lender,
at the Borrower's sole expense, as soon as practicable, and in any event
within 120 days after the close of each fiscal year of the Borrower, (i)
a consolidated balance sheet of the Guarantor as at the end of such
fiscal year, and (ii) a consolidated statement of operations and of
changes in financial position of the Guarantor for such fiscal year, all
in reasonable detail. Such balance sheet and statements shall be
prepared in accordance with GAAP, consistently applied, and shall be
accompanied by a report and opinion of Ernst & Young LLP or other
independent public accountants of recognized standing selected by the
Borrower and reasonably satisfactory to the Majority Lenders, which
report and opinion shall be prepared in accordance with generally
accepted auditing standards as at such date, and shall not be subject to
any qualifications or limitations except as approved by
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the Majority Lenders, which approval shall not be unreasonably withheld.
Such accountants' report and opinion shall be accompanied by a separate
report stating that, during their examination of the financial
statements of the Guarantor, nothing came to the attention of such
accountants that would give them knowledge of the existence of any
Default under the Loan Agreement, or, if, in the opinion of such
accountants, any such Default shall exist, stating the nature and status
of such Default, and setting forth the financial calculations under
Section 8.17 of the Loan Agreement as of the date of the balance sheet.
(l) Deliver to the Agent and each Lender:
(i) Promptly after request by the Agent, copies of any
detailed audit reports or recommendations submitted to the Guarantor by
independent accountants in connection with the accounts or books of the
Guarantor or any audit of any of them;
(ii) Promptly after request by the Agent, copies of any
report or other document filed by the Guarantor with any Governmental
Agency;
(iii) Promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or
communication sent to the shareholders of the Guarantor, and copies of
all annual, regular, periodic and special reports and registration
statements which the Guarantor may file or be required to file with the
Securities and Exchange Commission or any similar or corresponding
Governmental Agency or with any securities exchange;
(iv) Promptly upon any corporate officer of the Guarantor
becoming aware that (i) any Person commenced a legal proceeding with
respect to a claim against the Guarantor in excess of $1,000,000 not
arising under a contract that is not fully covered by insurance or (ii)
any creditor or lessor under a written credit agreement or material
lease has asserted a default thereunder on the part of the Guarantor or
(iii) any Person commenced a legal proceeding with respect to a claim
against the Guarantor under a contract that is not a credit agreement or
material lease in excess of $500,000 or which otherwise may reasonably
be expected to result in a material adverse effect on the Guarantor, a
written notice describing the pertinent facts relating thereto and what
action the Guarantor is taking or proposes to take with respect thereto;
(v) Promptly (but in any event within five Banking Days) upon
becoming aware of any casualty loss affecting any Property of the
Guarantor in excess of $500,000, or any other event that may have a
material adverse effect on the financial condition or operations of the
Guarantor, written notice of the same and the pertinent facts relating
thereto; and
(vi) Such other data and information as from time to time may
be reasonably requested by the Agent or the Majority Lenders.
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SECTION 9. Negative Covenants. The Guarantor covenants and agrees
that, so long as any part of the Obligations shall remain unpaid (other than any
contingent indemnity obligations under any Loan Document) or any Lender shall
have any Revolving Commitment, the Guarantor shall not, unless the Majority
Lenders (or all the Lenders (other than any Lender which is, at such time, a
Defaulting Lender), if expressly required below) shall otherwise consent in
writing:
(a) Enter into any transaction of any kind with any Affiliate of
the Guarantor other than arms'-length transactions with Affiliates that
are permitted with non-Affiliates pursuant to Section 9(c).
(b) Without the written consent of the Majority Lenders (other
than any Defaulting Lender), merge, consolidate or amalgamate with or
into any Person.
(c) [(i) Make any Acquisition (as hereinafter defined) or enter
into any agreement to make any Acquisition, or make or suffer to exist
any Investment, other than (A) the Guarantor's Investment in the
Borrower, (B) Investments consisting of Cash or Cash Equivalents that
are maintained in deposit accounts in accordance with Section 7.11 of
the Loan Agreement, and (C) Investments consisting of any prepaid
expenses made on customary terms and in the ordinary course of the
business of the Guarantor, or (ii) acquire any real Property. For the
purposes hereof "Acquisition" shall mean any transaction, or any series
of related transactions, by which the Guarantor or any Affiliate
directly or indirectly (i) acquires any going business or all or
substantially all of the assets of any firm, partnership, joint venture,
corporation or division thereof, whether through purchase of assets,
merger or otherwise, or (ii) acquires (in one transaction or as the most
recent transaction in a series of transactions) control of at least a
majority in ordinary voting power of the securities of a corporation
which have ordinary voting power for the election of directors.]
(d) Transfer, sell, encumber, hypothecate, pledge or otherwise
dispose of any interest in the Borrower.
(e) [(i) Engage in any sale and leaseback transactions with any
Person, or (ii) sell, lease, transfer or otherwise dispose of any of its
Properties, whether now owned or hereafter acquired, or grant any option
or other right to purchase, lease or otherwise acquire any such
Property, to any Person.]
(f) Accept dividends or other distributions with respect to
capital stock of the Borrower which are prohibited by Section 8.5 of the
Loan Agreement.
(g) Make any material change in the nature of the business of the
Guarantor, as conducted and presently proposed to be conducted.
(h) Create, incur, assume or suffer to exist any Lien of any
nature upon or with respect to any of its Properties, whether now owned
or hereafter acquired; create, incur or assume any indebtedness for
borrowed money or in connection with the purchase of
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Property or any liability to the issuer of any letter of credit;
guaranty the indebtedness or obligations of any other Person or provide
to a creditor of any other Person any agreement to maintain net worth or
liquidity of the Person or any other analogous agreement designed to
provide credit assurance to such creditor; or incur any lease obligation
that is required to be capitalized under GAAP; except:
(i) Liens securing taxes, assessments or governmental charges
or levies, or in connection with workers' compensation, unemployment
insurance or social security obligations, or the claims or demands of
carriers, warehousemen, landlords and other like Persons not yet
delinquent or which are being contested in good faith by appropriate
proceedings with adequate reserves set aside;
(ii) Attachment, judgment or other similar Liens arising in
connection with court proceedings that do not, in the aggregate,
materially detract from the value of the Guarantor's Property,
materially impair the use thereof in the operation of the Guarantor's
business, or materially impair the Guarantor's ability to perform the
Obligations and (A) that are discharged or stayed within thirty days of
attachment or levy, or (B) payment of which is covered in full (subject
to customary and reasonable deductibles) by insurance, surety bond or
reserves;
(iii) Indebtedness, liabilities, guarantees or Liens in favor
of the Agent or the Lenders, the Issuing Banks or the LC Guarantor under
the Loan Agreement, the Notes and the other Loan Documents;
(iv) Unsecured indebtedness incurred to vendors in the
ordinary course of business;
(v) Guarantees arising from endorsement, in the ordinary
course of collection, of negotiable instruments; and
(vi) Indebtedness in respect of High Yield Securities.
SECTION 10. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty, and no consent to any departure by the Guarantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent and the Majority 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 no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders (other than any Lender
which is, at such time, a Defaulting Lender), (a) limit the liability of the
Guarantor hereunder, (b) postpone any date fixed for payment hereunder, or (c)
change the number of Lenders required to take any action hereunder. Nothing
contained in this Section 10 shall prohibit or prevent the Majority Lenders from
agreeing with the Guarantor to forbear in the exercise of remedies on account of
any Default.
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SECTION 11. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied, telegraphed,
telexed, cabled or delivered to it, if to the Guarantor, at its address
specified on the signature page hereto, and if to the Agent or any Lender or
Issuing Bank (other than any Third Party Issuer) or the LC Guarantor, at its
address specified in the Loan Agreement, or, as to any party, at such other
address (other than a post office box) as shall be designated by such party in a
written notice to each other party. Any notice, request, demand, direction or
other communication given by telegram, telecopier, telex or cable must be
confirmed within 48 hours by letter mailed or delivered to the appropriate party
at its respective address. Except as otherwise expressly provided in any Loan
Document, if any notice, request, demand, direction or other communication
required or permitted by any Loan Document is given by mail it will be effective
on the earlier of receipt or the third Banking Day after deposit in the United
States mail with first class or airmail postage prepaid; if given by telegraph
or cable, when delivered to the telegraph company with charges prepaid; if given
by telex or telecopier, when sent; or if given by personal delivery, when
delivered.
SECTION 12. No Waiver; Remedies. No failure on the part of the
Agent or any Lender or Issuing Bank (other than any Third Party Issuer) or the
LC Guarantor to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 13. Right of Set-off. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 11.2 of the Loan Agreement to
authorize the Agent to declare the Notes due and payable pursuant to the
provisions of said Section 11.2, each of the Lenders, the Issuing Banks (other
than any Third Party Issuer) and the LC Guarantor is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, but only
with the consent of the Majority Lenders, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender or Issuing Bank or
the LC Guarantor to or for the credit or the account of the Guarantor against
any and all of the obligations of the Guarantor now or hereafter existing under
this Guaranty, whether or not such Lender or Issuing Bank or the LC Guarantor
shall have made any demand under this Guaranty and although such obligations may
be contingent and unmatured. Each of the Lenders, the Issuing Banks (other than
any Third Party Issuer) and the LC Guarantor agrees promptly to notify the
Guarantor after any such set-off and application made by such Lender or Issuing
Bank or the LC Guarantor, provided that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each of
the Lenders, the Issuing Banks (other than any Third Party Issuer) and the LC
Guarantor under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which such Lender or
Issuing Bank or the LC Guarantor may have.
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SECTION 14. Continuing Guaranty. This Guaranty is a continuing
guaranty, is irrevocable, and shall (i) remain in full force and effect until
the later of (x) the payment in full of the Obligations (other than any
contingent indemnity obligations under any Loan Document) and all other amounts
payable under this Guaranty and (y) the termination of the aggregate Commitments
under the Loan Agreement, (ii) be binding upon the Guarantor, its successors and
assigns, and (iii) inure to the benefit of, and be enforceable by, the Agent,
the Lenders, the Issuing Banks (other than any Third Party Issuer), the LC
Guarantor and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (iii), any Lender may assign or
otherwise transfer all or any portion of its rights and obligations under the
Loan Agreement (including, without limitation, all or any portion of its
Revolving Commitments, the Revolving Advances owing to it and the Revolving Note
held by it) to any other person or entity (which person or entity must be an
Eligible Assignee if and to the extent required under Section 13.7 of the Loan
Agreement), and such other person or entity shall thereupon become vested with
all the benefits in respect thereof granted to such Lender herein or otherwise,
subject, however, to the provisions of Article 12 (concerning the Agent) and
Section 13.7 (concerning assignments) of the Loan Agreement.
SECTION 15. Severability. The provisions of this Guaranty are
severable, and if any clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Guaranty in
any jurisdiction.
SECTION 16. Survival of Representations and Warranties. All
representations and warranties contained herein or in any other Loan Document,
or in any certificate or other writing delivered by or on behalf of any one or
more of the Parties to any Loan Document, will survive the making and repayment
of the Revolving Loans under the Loan Agreement and the execution and delivery
of the Revolving Notes, and have been or will be relied upon by the Agent, each
Issuing Bank (other than any Third Party Issuer), the LC Guarantor and each
Lender notwithstanding any such investigation made by the Agent, any such
Issuing Bank, the LC Guarantor or any Lender.
SECTION 17. Waiver of Jury Trial. The Guarantor hereby waives any
right to a trial by jury in any action or proceeding to enforce or defend any
rights under this Guaranty or any other Loan Documents or relating thereto or
arising from the lending relationship which is the subject of the Loan Agreement
or the relationship which is the subject of this Guaranty and the other Loan
Documents and agrees that any such action or proceeding shall be tried before a
court and not before a jury.
SECTION 18. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
THE ▇▇▇▇▇▇▇ COMPANIES,
a Delaware corporation
By:
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President -
Chief Financial Officer
By:
-----------------------------------
Name: W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President -
Corporate Controller
Address:
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
Chief Financial Officer
and
W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President - Corporate
Controller
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT K
AMENDED AND RESTATED SECURITY AGREEMENT
This AMENDED AND RESTATED SECURITY AGREEMENT ("Agreement"), dated
as of _________, 1994, is made by The ▇▇▇▇▇▇▇ Companies, a California
corporation ("Grantor'), as the Grantor, in favor of FOOTHILL CAPITAL
CORPORATION, as the Agent under the Loan Agreement hereinafter referred to, and
in favor of each of the Lenders therein named and the issuing Banks (other than
any Third Party Issuer) and the LC Guarantor (in each case as defined in
▇▇▇.▇▇▇▇ Agreement), collectively as the Secured Party, with reference to the
following facts:
RECITALS
A. Pursuant to the Loan Agreement (as defined below), the Secured
Party is making certain credit facilities available to the Grantor.
B. The Grantor has entered into an Amended and Restated Security
Agreement dated as of May 7, 1993 (as amended, the "Existing Security
Agreement") in favor of the agent under the Existing Loan Agreement and the
lenders named therein.
C. As a condition of the availability of such credit facilities, the
Grantor is required to enter into this Agreement and to grant security interests
to the Secured Party as herein provided.
D. The Grantor expects to realize direct indirect benefits as a
result of the availability of the aforementioned credit facilities.
AGREEMENT
NOW, THEREFORE, in order to induce the Secured Party to extend the
aforementioned credit facilities, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Grantor hereby
agrees that, effective on and as of the Closing Date, the Existing Security
Agreement is amended and restated in its entirety as follows, and hereby
represents, warrants, covenants, agrees, assigns and grants as follows:
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SECTION 1. Definitions.
"Loan Agreement" means that certain Fourth Amended and Restated
Loan Agreement dated as of March 25, 1994 among the Grantor, the Lenders and the
Agent, as it may from time to time be amended, restated, extended, renewed,
modified or supplemented. This Agreement is one of the "Loan Documents" referred
to in the Loan Agreement. Terms defined in the Loan Agreement and not otherwise
defined in this Agreement shall have the meanings defined for those terms in the
Loan Agreement. Terms defined in the California Commercial Code and not
otherwise defined in this Agreement or in the Loan Agreement shall have the
meanings defined for those terms in the California Commercial Code. As used in
this Agreement, the following terms shall have the meanings respectively set
forth after each:
"Agreement" means this Amended and Restated Security Agreement,
and any extensions, modifications, renewals, restatements, supplements or
amendments hereof.
"Collateral" means and includes all present and future or
after-acquired right, title and interest of the Grantor in or to any Property or
assets whatsoever, and all rights and powers of the Grantor to transfer any
interest in or to any Property or assets whatsoever, including, without
limitation, any and all of the following Property:
(a) All present and future accounts accounts receivable,
agreements, contracts, leases, contract rights, rights to payment, instruments
(including without limitation the Notes Receivable), documents, chattel paper,
security agreements, guaranties, undertakings, surety bonds, insurance policies,
notes and drafts, and all forms of obligations owing to the Grantor or in which
the Grantor may have any interest, however created or arising, and any
collateral or security for any of the foregoing;
(b) All present and future general intangibles, all tax refunds
of every kind and nature to which the Grantor now or hereafter may become
entitled, however arising, all other refunds, and all deposits, goodwill,
choices in action, trade secrets, computer programs, software, customer lists,
trademarks, trade names, patents, licenses, copyrights, technology, processes,
proprietary information, insurance proceeds, plans and specifications and, to
the extent that the following can be made subject hereto without adversely
affecting the Grantor's rights therein, governmental entitlements and
governmental credits;
(c) All present and future deposit accounts of the Grantor,
including, without limitation, the Operating Account, the other operating
accounts referred to in Section 7.11 of the Loan Agreement (other than clauses
(i), to the extent such accounts are subject to Liens in favor of lenders
providing secured financing to divisions referred to therein, and (iv) thereof)
and any demand, time, savings, passbook or like account maintained by the
Grantor with any bank, savings and loan association, credit union or like
organization, and all money, cash and cash equivalents (including, without
limitation, the Cash and Cash Equivalents) of the Grantor, whether or not
deposited in any such deposit account;
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(d) All present and future books and records, including, without
limitation, books of account and ledgers of every kind and nature, all
electronically recorded data relating to the Grantor or the business thereof,
all receptacles and containers for such records, and all files and
correspondence;
(e) All present and future goods, including,, without limitation, all
consumer goods, farm products, inventory, equipment, machinery, tools, molds,
dies, furniture, furnishings, fixtures, trade fixtures, motor vehicles and all
other goods used in connection with or in the conduct of the Grantor's business;
(f) All present and future inventory and merchandise, including, without
limitation, all present and future goods held for sale or lease or to be
furnished under a contract of service, all raw materials, work in process and
finished goods, all packing materials, supplies and containers relating to or
used in connection with any of the foregoing, and all bills of lading, warehouse
receipts or documents of title relating to any of the foregoing;
(g) All present and future stocks (including, without limitation, all
outstanding stock of ▇▇▇▇▇▇▇ CMR, Inc., a California corporation), bonds,
debentures, securities, subscription rights, options, warrants, puts, calls,
certificates, partnership interests (including, without limitation, in Palm
Desert Resorter, a California general partnership), joint venture interests
(including, without limitation, the Grantor's joint venture interests in CMR and
Horsethief Canyon Ranch Partnership), Investments and/or brokerage accounts and
all rights, preferences, privileges, dividends, distributions, redemption
payments, or liquidation payments with respect thereto;
(h) All present and future accessions, appurtenances, components,
repairs, repair parts, spare parts, replacements, substitutions, additions,
issue and/or improvements to or of or with respect to any of the foregoing;
(i) All other tangible and intangible Property of the Grantor (other
than any of its real Property located in New Mexico which secures other
indebtedness of the Grantor to the extent permitted by Section 8.8(i)(ii) of the
Loan Agreement and other than the operating accounts described in clauses (i),
to the extent such accounts are subject to Liens in favor of lenders providing
secured financing to the divisions referred to in such clause, and (iv) of
Section 7.11 of the Loan Agreement);
(j) All rights, remedies, powers and/or privileges of the Grantor with
respect to any of the foregoing; and
(k) Any and all proceeds and products of any of the foregoing,
including, without limitation, all money, accounts, general intangibles, deposit
accounts, documents, instruments, chattel paper, goods, insurance proceeds, and
any other tangible or intangible property received upon the sale or disposition
of any of the foregoing.
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"Grantor" means The ▇▇▇▇▇▇▇ Companies, a California corporation,
and its successors and permitted assigns.
"Secured Obligations" means any and all present and future
Obligations of any type or nature of the Grantor to the Secured Party arising
under or relating to the Loan Documents or any one or more of them, whether due
or to become due, matured or unmatured, liquidated or unliquidated, contingent
or noncontingent, and whether arising in contract, tort or otherwise, including
Obligations of performance as well as obligations of payment, and including
interest that accrues after the commencement of any bankruptcy or insolvency
proceeding by or against the Grantor or any Affiliate of the Grantor.
"Secured Party" means the Agent (acting as the Agent and/or on
behalf or the Lenders, the Issuing Banks (other than any Third Party Issuer)
and,the LC Guarantor), and the Lenders, such Issuing Banks and the LC Guarantor,
collectively, and each of them, and any one or more of them. Subject to the
terms of the Loan Agreement, any right, remedy, privilege or power of the
Secured Party hereunder may be exercised by the Agent, or by the Majority
Lenders, or by any Lender, or any such Issuing Bank, or the LC Guarantor, in
each case if acting with the consent of the Majority Lenders.
SECTION 2. Further Assurances. At any time and from time to time
at the request of the Secured Party, the Grantor shall execute and deliver to
the Secured Party all such financing statements and other instruments and
documents in form and substance satisfactory to the Secured Party as shall be
necessary or desirable to fully perfect, when filed and/or recorded, the Secured
Party's security interests granted pursuant to Section 3 of this Agreement, At
any time and from time to time, the Agent, for the Secured Party, shall be
entitled to file and/or record any or all such financing statements, instruments
and documents held by it, and any or all such further financing statements,
documents and instruments, and to take all such other actions, as the Secured
Party may deem appropriate to perfect and to maintain perfected the security
interests granted in Section 3 of this Agreement. Before and after the
occurrence of any Event of Default, at the Secured Party's request, the Grantor
shall execute all such further financing statements, instruments and documents,
and shall do all such further acts and things, as may be deemed necessary or
desirable by the Secured Party to create and perfect, and to continue and
preserve, an indefeasible security interest in the Collateral in favor of the
Secured Party, or the priority thereof. With respect to any Collateral
consisting of certificated securities, instruments, documents, certificates of
title or the like, as to which the Secured Party's security interest need be
perfected by, or the priority thereof need be assured by, possession of such
Collateral, the Grantor will upon demand of the Secured Party deliver possession
of same in pledge to the Agent, for the Secured Party. With respect to any
Collateral consisting of securities, instruments, partnership or joint venture
interests or the like, the Grantor hereby consents and agrees that the issuers
of, or obligors on, any such Collateral, or any registrar or transfer agent or
trustee for any such Collateral, shall be entitled to accept the provisions of
this Agreement as conclusive
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evidence of the right of the Secured Party to effect any transfer or exercise
any right hereunder or with respect to any such Collateral, notwithstanding any
other notice or direction to the contrary heretofore or hereafter given by the
Grantor or any other Person to such issuers or such obligors or to any such
registrar or transfer agent or trustee.
SECTION 3. Security Agreement. For valuable consideration, the
Grantor hereby assigns and pledges to the Secured Party, and grants to the
Secured Party a security interest in, all presently existing and hereafter
acquired Collateral, as security for the timely payment and performance of the
Secured Obligations, and each of them. This Agreement is a continuing and
irrevocable agreement and all the rights, powers, privileges and remedies
hereunder shall apply to any and all Secured Obligations, including those
arising under successive transactions which shall either continue the Secured
Obligations, increase or decrease them, or from time to time create new Secured
Obligations after all or any prior Secured Obligations have been satisfied, and
notwithstanding the bankruptcy of the Grantor or any other Person or any other
event or proceeding affecting the Grantor or any other Person.
SECTION 4. Grantor's Representations, Warranties and Agreements.
Except as otherwise disclosed to the Secured Party in writing concurrently
herewith, the Grantor represents, warrants and agrees that: (a) the Grantor will
pay, prior to delinquency, all taxes, charges, Liens and assessments against the
Collateral, except such as are timely contested in good faith by appropriate
proceedings, so long as the Grantor has established and maintains adequate
reserves for the payment of the same and by reason of such nonpayment and
contest no material item of Collateral is in jeopardy of being seized, levied
upon or forfeited, and upon its failure to pay or so contest such taxes,
charges, Liens and assessments, the Secured Party at its option may pay any of
them, and the Secured Party shall be the sole judge of the legality or validity
thereof and the amount necessary to discharge the same; (b) the Collateral will
not be used for any unlawful purpose or in violation of any Law, regulation or
ordinance, nor used in any way that will void or impair any insurance required
to be carried in connection therewith; (c) the Grantor will, to the extent
consistent with good business practice, keep the Collateral in reasonably good
repair, working order and condition, and from time to time make all needful and
proper repairs, renewals, replacements, additions and improvements thereto and,
as appropriate and applicable, will otherwise deal with the Collateral in all
such ways as are considered good practice by owners of like Property; (d) the
Grantor will take all reasonable steps to preserve and protect the Collateral;
(e) the Grantor will maintain, with responsible insurance companies, insurance
covering the Collateral against such insurable losses as is required by the Loan
Agreement and as is consistent with sound business practice, and will cause the
Secured Party to be designated as an additional insured and loss payee with
respect to such insurance, will obtain the written agreement of the insurers
that such insurance shall not be cancelled, terminated or materially modified to
the detriment of the Secured Party without at least 30 days prior written notice
to the Secured Party, and will furnish copies of such insurance policies or
certificates to the Secured Party promptly upon request therefor and will
otherwise comply with Section 7.4 of the Loan Agreement with respect to such
insurance; and (f) the Grantor will promptly notify the Secured Party in writing
in the event of any substantial or material damage to the Collateral from
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any source whatsoever, and, except for the disposition of collections and other
proceeds of the Collateral permitted by Section 6 hereof, the Grantor will not
remove or permit to be removed any part of the Collateral from its places of
business without the prior written consent of the Secured Party, for such items
of the Collateral as are removed in the ordinary course of business or in
connection with any transaction or disposition otherwise permitted by the Loan
Documents.
SECTION 5. Secured Party's Rights Regarding Collateral. At any time
(whether or not a Default has occurred), without notice or demand and at the
expense of the Grantor, the Secured Party may, to the extent it may be necessary
or desirable to protect the security hereunder, but the Secured Party shall not
be obligated to: (a) enter upon any premises on which Collateral is situated and
examine the same or (b) perform any obligation of the Grantor under this
Agreement or any other Loan Document or any obligation of any other Person under
the Loan Documents. At any time and from time to time upon the occurrence and
during the continuance of an Event of Default, at the expense of the Grantor,
the Secured Party may, to the extent it may be necessary or desirable to protect
the security hereunder, but the Secured Party shall not be obligated to: (i)
notify obligors on the Collateral that the Collateral has been assigned to the
Secured Party; (ii) at any time and from time to time request from obligors on
the Collateral, in the name of the Grantor or in the name of the Secured Party,
information concerning the Collateral and the amounts owing thereon; and (iii)
cause the Collateral to be registered in the name of the Secured Party, as legal
owner. The Grantor shall maintain books and records pertaining to the Collateral
in such detail, form and scope as the Secured Party shall reasonably require
consistent with the Secured Party's interests hereunder. The Grantor shall at
any time at the Secured Party's request ▇▇▇▇ the Collateral and/or the Grantor's
ledger cards, books of account and other records relating to the Collateral with
appropriate notations satisfactory to the Secured Party disclosing that they are
subject to the Secured Party's security interests. The Secured Party shall at
all reasonable times on reasonable notice have full access to and the right to
audit any and all of the Grantors' books and records pertaining to the
Collateral to the extent provided in the Loan Agreement, and subject to the
limits set forth in this Agreement, and to confirm and verify the value of the
Collateral and to do whatever else the Secured Party reasonably may deem
necessary or desirable to protect its interests; provided, however, that any
such action which involves communicating with customers of the Grantor shall be
carried out by the Secured Party through the Grantor's independent auditors
unless the Secured Party shall then have the right directly to notify obligors
on the Collateral as provided in Section 9. The Secured Party shall be under no
duty or obligation whatsoever to take any action to preserve any rights of or
against any prior or other parties in connection with the Collateral, to
exercise any voting rights or managerial rights with respect to any Collateral,
whether or not a Default or Event of Default shall have occurred, or to make or
give any presentments, demands for performance, notices of non-performance,
protests, notices of protests, notices of dishonor or notices of any other
nature whatsoever in connection with the Collateral or the Secured Obligations.
The Secured Party shall be under no duty or obligation whatsoever to take any
action to protect or preserve the Collateral or any rights of the Grantor
therein, or to make collections or enforce payment thereon, or to participate in
any foreclosure or other proceeding in connection therewith.
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SECTION 6. Collections on the Collateral. Except as otherwise
provided in any Loan Document, the Grantor shall have the right to use and to
continue to make collections on and receive dividends and other proceeds of all
of the Collateral in the ordinary course of business so long as no Event of
Default shall have occurred and be continuing. Upon the occurrence and during
the continuance of an Event of Default, at the option of the Secured Party, the
Grantor's right to make collections on and receive dividends and other proceeds
of the Collateral and to use or dispose of such collections and proceeds shall
terminate, and any and all dividends, proceeds and collections, including all
partial or total prepayments, then held or thereafter received on or on account
of the Collateral will be held or received by the Grantor in trust for the
Secured Party and immediately delivered in kind to the Agent, for the Secured
Party. Any remittance received by the Grantor from any person shall be presumed
to relate to the Collateral and to be subject to the Secured Party's security
interests. Upon the occurrence and during the continuance of an Event of
Default, the Secured Party shall have the right at all times to receive, receipt
for, endorse, assign, deposit and deliver, in the name of the Secured Party or
in the name of the Grantor, any and all checks, notes, drafts and other
instruments for the payment of money constituting proceeds of or otherwise
relating to the Collateral; and the Grantor hereby authorizes the Secured Party
to affix, by facsimile signature or otherwise, the general or special
endorsement of it, in such manner as the Secured Party shall deem advisable, to
any such instrument in the event the same has been delivered to or obtained by
the Secured Party without appropriate endorsement, and the Secured Party and any
collecting bank are hereby authorized to consider such endorsement to be a
sufficient, valid and effective endorsement by the Grantor, to the same extent
as though it were manually executed by the duly authorized officer of the
Grantor, regardless of by whom or under what circumstances or by what authority
such facsimile signature or other endorsement actually is affixed, without duty
of inquiry or responsibility as to such matters, and the Grantor hereby
expressly waives demand, presentment, protest and notice of protest or dishonor
and all other notices of every kind and nature with respect to any such
instrument.
SECTION 7. Possession of Collateral by Secured Party. All the
Collateral now, heretofore or hereafter delivered to the Secured Party shall be
held by the Secured Party in its possession, custody and control, subject, in
the case of deposit accounts, to use by the Grantor in the manner permitted by
the Loan Agreement. Any or all of the Collateral which is cash delivered to the
Secured Party may be held in an interest bearing or non-interest bearing
account, in the Secured Party's sole and absolute discretion, and the Secured
Party may, in its discretion, apply any such interest to payment of the Secured
Obligations. Nothing herein shall obligate the Secured Party to invest any
Collateral or obtain any particular return thereon. Upon the occurrence and
during the continuance of an Event of Default, whenever any of the Collateral is
in the Secured Party's possession, custody or control, the Secured Party may
use, operate and consume the Collateral, whether for the purpose of preserving
and/or protecting the Collateral, or for the purpose of performing any of the
Grantor's obligations with respect thereto, or otherwise. The Secured Party may
at any time deliver or redeliver the Collateral or any part thereof to the
Grantor, and the receipt of any of the same by the Grantor shall be complete and
full acquittance for the Collateral so delivered, and the Secured Party
thereafter shall be discharged from any
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liability or responsibility therefor. So long as the Secured Party exercises
reasonable care with respect to any Collateral in its possession, custody or
control, the Secured Party shall have no liability for any loss of or damage to
such Collateral, and in no event shall the Secured Party have liability for any
diminution in value of any Collateral occasioned by economic or market
conditions or events. The Secured Party shall be deemed to have exercised
reasonable care within the meaning of the preceding sentence if the Collateral
in the possession, custody or control of the Secured Party is accorded treatment
substantially equal to that which the Secured Party accords its own property, it
being understood that the Secured Party shall not have any responsibility for
(a) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Collateral, whether or not
the Secured Party has or is deemed to have knowledge of such matters, or (b)
taking any necessary steps to preserve rights against any Person with respect to
any Collateral.
SECTION 8. Events of Default. There shall be an Event of Default
hereunder upon the occurrence and during the continuance of an Event of Default
under the Loan Agreement.
SECTION 9. Rights Upon Event of Default. Upon the occurrence and
during the continuance of an Event of Default, the Secured Party shall have, in
any jurisdiction where enforcement hereof is sought, in addition to all other
rights and remedies that the Secured Party may have under applicable Law or in
equity or under this Agreement (including, without limitation, all rights set
forth in Section 6 hereof) or under any other Loan Document, all rights and
remedies of a secured party under the Uniform Commercial Code as enacted in any
jurisdiction where any Collateral may be located, and, in addition, the
following rights and remedies, all of which may be exercised with or without
notice to the Grantor and without affecting the Obligations of the Grantor
hereunder or under any other Loan Document, or the enforceability of the Liens
and security interests created hereby: (a) to foreclose the Liens and security
interests created hereunder or under any other agreement relating to any
Collateral by any available judicial procedure or without judicial process; (b)
to enter any premises where any Collateral may be located for the purpose of
securing, protecting, inventorying, appraising, inspecting, repairing,
preserving, storing, preparing, processing, taking possession of or removing the
same; (c) to sell, assign, lease or otherwise dispose of any Collateral or any
part thereof, either at public or private sale or at any broker's board, in lot
or in bulk, for cash, on credit or otherwise, with or without representations or
warranties and upon such terms as shall be acceptable to the Secured Party; (d)
to notify obligors on the Collateral that the Collateral has been assigned to
the Secured Party and that all payments thereon are to be made directly and
exclusively to the Secured Party; (e) to collect by legal proceedings or
otherwise all dividends, distributions, interest, principal or other sums now or
hereafter payable upon or on account of the Collateral; (f) to enter into any
extension, reorganization, deposit, merger or consolidation agreement, or any
other agreement relating to or affecting the Collateral, and in connection
therewith the Secured Party may deposit or surrender control of the Collateral
and/or accept other Property in exchange for the Collateral; (g) to settle,
compromise or release, on terms acceptable to the Secured Party, in whole or in
part, any amounts owing on the Collateral and/or any
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disputes with respect thereto; (h) to extend the time of payment, make
allowances and adjustments and issue credits in connection with the Collateral
in the name of the Secured Party or in the name of the Grantor; (i) to enforce
payment and prosecute any action or proceeding with respect to any or all of the
Collateral and take or bring, in the name of the Secured Party or in the name of
the Grantor, any and all steps, actions, suits or proceedings deemed by the
Secured Party necessary or desirable to effect collection of or to realize upon
the Collateral, including any judicial or nonjudicial foreclosure thereof or
thereon, and the Grantor specifically consents to any nonjudicial foreclosure of
any or all of the Collateral or any other action taken by the Secured Party
which may release any obligor from personal liability on any of the Collateral,
and the Grantor, to the fullest extent permitted by applicable Law, waives any
right not expressly provided for in this Agreement to receive notice of any
public or private judicial or nonjudicial sale or foreclosure of any security or
any of the Collateral; and any money or other property received by the Secured
Party in exchange for or on-account of the Collateral, whether representing
collections or proceeds of Collateral, and whether resulting from voluntary
payments or foreclosure proceedings or other legal action, taken by the Secured
Party or the Grantor may be applied by the Secured Party without notice to the
Grantor to the Secured Obligations in such order and manner as the Secured Party
in its sole discretion shall determine; (j) to insure, protect and preserve the
Collateral; (k) to exercise all rights, remedies, powers or privileges provided
under any of the Loan Documents; (1) to remove, from any premises where the same
may be located, the Collateral and any and all documents, instruments, files and
records, and any receptacles and cabinets containing the same, relating to the
Collateral, and the Secured Party, may, at the cost and expense of the Grantor,
use such of the Grantor's supplies, equipment, facilities and space at its
places of business as may be necessary or appropriate to properly administer,
process, store, control, prepare for sale or disposition and/or sell or dispose
of the Collateral or to properly administer and control the handling of
collections and realizations thereon, and the Secured Party shall be deemed to
have a rent-free tenancy of any premises of the Grantor for such purposes and
for such periods of time as reasonably required by the Secured Party; (m) to
receive, open and dispose of all mail addressed to the Grantor and notify postal
authorities to change the address for delivery thereof to such address as the
Secured Party may designate; provided that the Secured Party agrees that it will
promptly deliver over to the Grantor such opened mail as does not relate to the
Collateral; and (n) to exercise all other rights, powers, privileges and
remedies, of an owner of the Collateral; all at the Secured Party's sole option
and as the Secured Party in its sole discretion may deem advisable. The Grantor
will, at the Secured Party's request, assemble the Collateral and make it
available to the Secured Party at places which the Secured Party may designate,
whether at the premises of the Grantor or elsewhere, and will make available to
the Secured Party, free of cost, all premises, equipment and facilities of the
Grantor for the purpose of the Secured Party's taking possession of the
Collateral or storing same or removing or putting the Collateral in salable form
or selling or disposing of same.
Upon the occurrence and during the continuance of an Event of
Default, the Secured Party also shall have the right, without notice or demand,
either in person, by agent or by a receiver to be appointed by a court (and the
Grantor hereby expressly consents upon the occurrence and during the continuance
of an Event of Default to the appointment of such a
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receiver), and without regard to the adequacy of any security for the Secured
Obligations, to take possession of the Collateral or any part thereof and to
collect and receive the rents, issues, profits, income and proceeds thereof.
Taking possession of the Collateral shall not cure or waive any Event of Default
or notice thereof or invalidate any act done pursuant to such notice. The
rights, remedies and powers of any receiver appointed by a court shall be
ordered by said court.
Any public or private sale or other disposition of the Collateral
may be held at any office of the Secured Party, or at the Grantor's places of
business, or at any other place permitted by applicable Law, and without the
necessity of the Collateral's being within the view of prospective purchasers.
The Secured Party may direct the order and manner of sale of the Collateral, or
portions thereof, as it in its sole and absolute discretion may determine, and
the Grantor expressly waives any right to direct the order and manner of sale of
any Collateral. To the extent permitted by applicable Law, the Secured Party or
any person on the Secured Party's behalf may bid and purchase at any such sale
or other disposition. The net cash proceeds resulting from the collection,
liquidation, sale, lease or other disposition of the Collateral shall be
applied, first, to the expenses including reasonable attorneys' fees and
disbursements) of retaking, holding, storing, processing and preparing for sale
or lease, selling, leasing, collecting, liquidating and the like, and, subject
to the Loan Agreement, then to the satisfaction of the Secured Obligations in
such order as shall be determined by the Secured Party in its sole and absolute
discretion. The Grantor and any other Person then obligated therefor shall pay
to the Secured Party on demand any deficiency with regard thereto which may
remain after such sale, disposition, collection or liquidation of the
Collateral.
Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market, the
Secured Party will send or otherwise make available to the Grantor reasonable
notice of the time and place of any public sale thereof or of the time on or
after which any private sale thereof is to be made. The Grantor expressly agrees
that the requirement of sending reasonable notice conclusively shall be met if
such notice is mailed, first class mail, postage prepaid, to the Grantor at its
address set forth in the Loan Agreement, or delivered or otherwise sent to the
Grantor, at least five (5) days before the date of the sale. The Grantor
expressly waives any right to receive notice of any public or private sale of
any Collateral or other security for the Secured Obligations except as expressly
provided for in this paragraph.
With respect to any Collateral consisting of securities,
partnership interests, joint venture interests, Investments or the like, and
whether or not any of such Collateral has been effectively registered under the
Securities Act of 1933 or other applicable Laws, the Secured Party may, in its
sole and absolute discretion, sell all or any part of such Collateral at private
sale in such manner and under such circumstances as the Secured Party may deem
necessary or advisable in order that the sale may be lawfully conducted. Without
limiting the foregoing, the Secured Party may (i) approach and negotiate with a
limited number of potential purchasers, and (ii) restrict the prospective
bidders or purchasers to persons who will represent and agree that they are
purchasing such Collateral for their own account for investment and not with a
view to
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the distribution or resale thereof. In the event that any such Collateral is
sold at private sale, the Grantor agrees that if such Collateral is sold for a
price which the Secured Party in good faith believes to be reasonable under the
circumstances then existing, then (a) the sale shall be deemed to be
commercially reasonable in all respects, (b) the Grantor shall not be entitled
to a credit against the Secured Obligations in an amount in excess of the
purchase price, and (c) the Secured Party shall not incur any liability or
responsibility to the Grantor in connection therewith, notwithstanding the
possibility that a substantially higher price might have been realized at a
public sale. The Grantor recognizes that a ready market may not exist for such
Collateral if it is not regularly traded on a recognized securities exchange,
and that a sale by the Secured Party of any such Collateral for an amount
substantially less than, a pro rata share of the fair market value of the
issuers assets minus liabilities may be commercially reasonable in view of the
difficulties that may be encountered in attempting to sell a large amount of
such Collateral or Collateral that is privately traded.
Upon consummation of any sale of Collateral hereunder, the Secured
Party shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. Each such purchaser at any such sale
shall hold the Collateral so sold absolutely free from any claim or right upon
the part of the Grantor or any other Person, and the Grantor hereby waives (to
the extent permitted by applicable Laws) all rights of redemption, stay and
appraisal which it now has or may at any time in the future have under any rule
of Law or statute now existing or hereafter enacted. If the sale of all or any
part of the Collateral is made on credit or for future delivery, the Secured
Party shall not be required to apply any portion of the sale price to the
Secured Obligations until such amount actually is received by the Secured Party,
and any Collateral so sold may be retained by the Secured Party until the sale
price is paid in full by the purchaser or purchasers thereof. The Secured Party
shall not incur any liability in case any such purchaser or purchasers shall
fail to pay for the Collateral so sold, and, in case of any such failure, the
Collateral may be sold again.
SECTION 10. Voting Rights; Dividends; Etc. With respect to any
Collateral consisting of securities, partnership interests, joint venture
interests, Investments or the like (referred to collectively and individually in
this Section 10 and in Section 11 as the "Investment Collateral"), so long as no
Event of Default occurs and remains continuing:
10.1 Voting Rights. The Grantor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Investment Collateral, or any part thereof, for any purpose not inconsistent
with the terms of this Agreement, the Loan Agreement, or the other Loan
Documents; provided, however, that the Grantor shall not exercise, or shall
refrain from exercising, any such right if it would result in a Default or Event
of Default.
10.2 Dividend and Distribution Rights. Except as otherwise
provided in any Loan Document, the Grantor shall be entitled to receive and to
retain and use any and all dividends or distributions paid in respect of the
Investment Collateral; provided, however, that any and all such dividends or
distributions received in the form of capital stock, certificated
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securities, warrants, options or rights to acquire capital stock or certificated
securities forthwith shall be, and the certificates representing such capital
stock or certificated securities, if any, forthwith shall be delivered to the
Agent, for the Secured Party, to hold as pledged Collateral and shall, if
received by the Grantor, be received in trust for the benefit of the Secured
Party, be segregated from the other Property of the Grantor, and forthwith be
delivered to the Agent, for the Secured Party, as pledged Collateral in the same
form as so received (with any necessary endorsements).
SECTION 11. Rights During Event of Default. With respect to any
Investment Collateral, so long as an Event of Default has occurred and is
continuing:
11.1 Voting, Dividend and Distribution Rights. At the
option of the Secured Party, all rights of the Grantor to exercise the voting
and other consensual rights which it would otherwise be entitled to exercise
pursuant to Section 10.1 above, and to receive the dividends and distributions
which it would otherwise be authorized to receive and retain pursuant to Section
10.2 above, shall cease, and all such rights thereupon shall become vested in
the Secured Party which thereupon shall have the sole right to exercise such
voting and other consensual rights and to receive and to hold as pledged
Collateral such dividends and distributions.
11.2 Dividends and Distributions Held in Trust. All
dividends and other distributions which are received by the Grantor contrary to
the provisions of this Agreement shall be received in trust for the benefit of
the Secured Party, shall be segregated from other funds of the Grantor, and
forthwith shall be paid over to the Agent, for the Secured Party, as pledged
Collateral in the same form as so received (with any necessary endorsements).
11.3 Irrevocable Proxy. The Grantor does hereby revoke
all previous proxies with regard to the Investment Collateral and does hereby
appoint the Agent, for the Secured Party, as its proxyholder to attend and vote
at any and all meetings of the shareholders or other equity holders of the
Persons that issued the Investment Collateral and any adjournments thereof, held
on or after the date of the giving of this proxy and prior to the termination of
this proxy, and to execute any and all written consents of shareholders or
equity holders of such Persons executed on or after the date of the giving of
this proxy and prior to the termination of this proxy, with the same effect as
if the Grantor had personally attended the meetings or had personally voted its
shares or other interests or had personally signed the written consents;
Provided, however, that the proxyholder shall have rights hereunder only upon
the occurrence and during the continuance of an Event of Default. The Grantor
hereby authorizes the Secured Party to substitute another Person as the
proxyholder and, upon the occurrence and during the continuance of any Event of
Default, hereby authorizes the proxyholder to file this proxy and any
substitution instrument with the secretary or other appropriate official of the
appropriate Person. This proxy is coupled with an interest and is irrevocable
until such time as all Secured Obligations have been paid and performed in full.
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SECTION 12. Attorney-in-Fact. The Grantor hereby irrevocably
nominates and appoints the Secured Party as its attorney-in-fact for the
following purposes: (a) to do all acts and things which the Secured Party may
deem necessary or advisable to perfect and continue perfected the security
interests created by this Agreement and, upon the occurrence and during the
continuance of an Event of Default, to preserve, process, develop, maintain and
protect the Collateral; (b) upon the occurrence and during the continuance of an
Event of Default, to do any. and every act which the Grantor is obligated to do
under this Agreement, at the expense of the Grantor and without any obligation
to do so; (c) in the case of the Agent, for the Secured Party, to prepare, sign,
file and/or record, for the Grantor, in the name of the Grantor, any financing
statement, application for registration, or like paper, and to take any other
action deemed by the Secured Party necessary or desirable in order to perfect or
maintain perfected the security interests granted hereby; and (d) upon the
occurrence and during the continuance of an Event of Default, to execute any and
all papers and instruments and do all other things necessary or desirable to
preserve, and protect the Collateral and to protect the Secured Party's security
interests therein; provided, however, that the Secured Party shall be under no
obligation whatsoever to take any of the foregoing actions, and, absent bad
faith or actual malice, the Secured Party shall have no liability or
responsibility for any act taken or omission with respect thereto.
SECTION 13. Costs and Expenses. The Grantor agrees to pay to the
Secured Party all costs and expenses, (including, without limitation, reasonable
attorneys fees and disbursements) incurred by the Secured Party in the
enforcement or attempted enforcement of this Agreement, whether or not an action
is filed in connection therewith, and in connection with any waiver or amendment
of any term or provision hereof. All advances, charges, costs and expenses,
including reasonable attorneys fees and disbursements, incurred or paid by the
Secured Party in exercising any right, privileged power or remedy conferred by
this Agreement (including, without limitation, the right to perform any Secured
Obligation of the Grantor under the Loan Documents), or in the enforcement or
attempted enforcement thereof, shall be secured hereby and shall become a part
of the Secured obligations and shall be paid to the Secured Party by the
Grantor, immediately upon demand, together with interest thereon at the rate(s)
provided for under the Loan Agreement.
SECTION 14. Statute of Limitations and Other Laws. Until the
Secured Obligations shall have been paid and performed in full, the power of
sale and all other rights, privileges, powers and remedies granted to the
Secured Party hereunder shall continue to exist and may be exercised by the
Secured Party at any time and from time to time irrespective of the fact that
any of the Secured Obligations may have become barred by any statute of
limitations. The Grantor expressly waives the benefit of any and all statutes of
limitation, and any and all Laws providing for exemption of property from
execution or for valuation and appraisal upon foreclosure, to the maximum extent
permitted by applicable Law.
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SECTION 15. Other Agreements. Nothing herein shall in any way modify
or limit the effect of terms or conditions set forth in any other security or
other agreement executed by the Grantor or in connection with the Secured
Obligations, but each and every term and condition hereof shall be in addition
thereto. All provisions contained in the Loan Agreement or any other Loan
Document that apply to Loan Documents generally are fully applicable to this
Agreement and are incorporated herein by this reference.
SECTION 16. Understandings With Respect to Waivers and Consents.
The Grantor warrants and agrees that each of the waivers and consents set forth
herein are made after consultation with legal counsel and with full knowledge of
their significance and consequences, with the understanding that events giving
rise to any defense or right waived may diminish, destroy or otherwise adversely
affect rights which the Grantor otherwise might have against the Secured Party
or others, or against Collateral, and that, under the circumstances, the waivers
and consents herein given are reasonable and not contrary to public policy or
Law. If any of the waivers or consents herein are determined to be contrary to
any applicable Law or public policy, such waivers and consents shall be
effective to the maximum extent permitted by Law.
SECTION 17. Release of Grantor. This Agreement and all Secured
Obligations of the Grantor hereunder shall be released when all Secured
Obligations have been paid in full in cash or otherwise performed in full (other
than any contingent indemnity obligations under any 'Loan Document) and when no
portion of any Commitment remains then outstanding. Upon such release, any
Secured Party shall return any pledged Collateral to the Grantor, or to the
Person or Persons legally entitled thereto, and shall endorse, execute, deliver,
record and file all instruments, and documents, and do all other acts and
things, reasonably required for the return of the Collateral to the Grantor, or
to the Person or Persons legally entitled thereto, and to evidence or document
the release of the Secured Party's interests arising under this Agreement, all
as reasonably requested by, and at the sole expense of, the Grantor.
IN WITNESS WHEREOF, the Grantor has executed this Agreement by its
duly authorized officers as of the date first written above.
"Grantor"
THE ▇▇▇▇▇▇▇ COMPANIES,
a California corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇,
Title: Senior Vice President - Chief
Financial Officer
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By: /s/ W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President - Corporate
Controller
ACCEPTED AND AGREED AS OF
THE DATE FIRST ABOVE WRITTEN:
"Secured Party"
FOOTHILL CAPITAL CORPORATION
as the Agent, and for and on behalf of the
Lenders, the Issuing Banks (other than any Third Party Issuer)
and the LC Guarantor
BY:
-----------------------------------
Name:
Title:
173
EXHIBIT L
INDEMNITY AGREEMENT
INDEMNITY AGREEMENT ("Agreement") dated as of __________, 1994 made
by THE ▇▇▇▇▇▇▇ COMPANIES, a California corporation (the "Indemnitor"), in favor
of the lenders (the "Lenders") parties to the Loan Agreement (as hereinafter
defined), the Issuing Banks (other than any Third Party Issuer) and the LC
Guarantor (in each case as defined in the Loan Agreement) and Foothill Capital
Corporation, as agent (the "Agent") for the Lenders,, such Issuing Banks and the
LC Guarantor.
PRELIMINARY STATEMENTS
A. The Indemnitor is executing this Agreement to induce the Agent
and the Lenders to enter into and become bound by that certain Fourth Amended
and Restated Loan Agreement dated as of March 25, 1994 (said Agreement, as it
may hereafter be amended or otherwise modified from time to time being the "Loan
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined).
B. The Loans existing under and made pursuant to the Loan Agreement
are evidenced by promissory notes (the "Notes") made payable to the Lenders in
an aggregate principal amount equal to the aggregate Commitments, The Loans are
secured by numerous deeds of trust and mortgages (the "Deeds of Trust") and by
other collateral, as more fully described in the Loan Agreement.
Because the Lenders are making the Loans (and, in the case of
Issuing Banks, issuing Letters of Credit and, as applicable to such Issuing
Banks, Set-Aside Letters, and, in the case of the LC Guarantor, LC Guaranties)
and obtaining the Deeds of Trust, the Lenders and such Issuing Banks and the LC
Guarantor may potentially become subject to certain costs, risks and
liabilities. Among other things, the Lenders and such Issuing Banks and the LC
Guarantor may become subject to liabilities or alleged liabilities relating to
environmental conditions as an "owner" or "operator" under applicable
environmental law. These costs and liabilities may arise before or after
repayment of the Loans and payments in respect of Letters of Credit, Set-Aside
Letters and the LC Guaranties, and before or after foreclosure under all or some
of the Deeds of Trust. Because these costs and liabilities, if they occur, will
be the result of the Lenders' agreement to make the Loans (and, in the case of
Issuing Banks, issue Letters of Credit and, as applicable to such Issuing Banks,
Set-Aside Letters, and, in the case of the LC Guarantor, LC Guaranties), and in
consideration of that agreement, the Lenders, the Agent and the Indemnitor have
agreed as set forth below.
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D. The obligations of the Indemnitor hereunder are secured
obligations under the Deeds of Trust and other Collateral Documents for so long
as the Deeds of Trust or the other Collateral Documents shall remain in effect,
and thereafter shall survive and be unsecured obligations of the Indemnitor to
the extent permitted by applicable law.
NOW, THEREFORE, in consideration of the foregoing and the Lenders'
agreement to make Loans (and, in the case of Issuing Banks, issue Letters of
Credit and, as applicable to such Issuing Banks, Set-Aside Letters, and, in the
case of the LC Guarantor, LC Guaranties) and other valuable consideration, the
receipt of which are hereby acknowledged, the Indemnitor covenants and agrees to
and for the benefit of the Lenders, the Issuing Banks (other than any Third
Party Issuer), the LC Guarantor and the Agent as follows:
I. Definitions.
In addition to any terms defined elsewhere in this Agreement or in
the Loan Agreement, as used in this Agreement:
1.1 "Hazardous means any substance, material or waste (including
petroleum and petroleum products) which is or becomes designated, classified or
regulated as being "toxic" or "hazardous" or a "pollutant," or which is or
becomes similarly designated, classified or regulated, under any federal, state
or local law, regulation or ordinance.
1.2 "Indemnified Costs" means all actual or threatened liabilities,
claims, actions, causes or action, judgments, orders, damages (including
foreseeable and unforeseeable consequential damages, punitive damages, exemplary
damages, diminution in value of any of the Properties, as defined below, damages
for the loss or restriction of use of any of the Properties and damages arising
from any adverse impact on marketing any of the Properties), costs, expenses,
fines, penalties and losses(including sums paid in settlement of claims and all
consultant, expert and legal fees and expenses of the Lenders', the Issuing
Banks' (other than any Third Party Issuer), the LC Guarantor's and the Agent's
counsel), including those incurred in connection with any investigation of site
conditions or any clean-up, remedial, removal or restoration work (whether of
the Properties or any other property), or any resulting damages, harm or
injuries to the person or property of any third parties or to any natural
resources, in each case, unless otherwise specified, arising in connection with
any of the Properties.
1.3 "Indemnified Parties" means and includes each Lender, each
Issuing Bank (other than any Third Party Issuer), the LC Guarantor and the
Agent, and their respective parents, subsidiaries and affiliated companies,
assignees of any of any Lender's interest in the Loans (or any such Issuing
Bank's interest in the Letters of Credit and Set-Aside Letters or the LC
Guarantor's interest in the LC Guaranties) or the Loan Documents, owners of
participation or other interests in the Loans (or Letters of Credit, Set-Aside
Letters or LC Guaranties) or the Loan Documents, any purchasers of any of the
Properties at any foreclosure sale or from the Agent,
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any Lender, any such Issuing Bank, the LC Guarantor or any of their respective
affiliates, and the officers, directors, employees and agents of each of them.
1.4 "Property" means all property that is or was at
any time encumbered by any Deed of Trust, which may later include any and all
property previously released from such Deed of Trust.
1.5 "Release" means any presence, use, generating, storing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing of Hazardous Substances into the
environment, or about, on, from, under, within or affecting any of the
Properties, or transported to or from any of the Properties, including
continuing migration of Hazardous Substances into or through soil, surface water
or groundwater.
1.6 "Termination Date" means, with respect to any Property, the
earlier of (a) the time of foreclosure of the respective Deed of Trust, (b) the
time of acceptance by the Agent of a deed in lieu of foreclosure of the
respective Deed of Trust, and (c) the time of full reconveyance of the
respective Deed of Trust.
1.7 "1991 Statute" means California Civil Code Section 2929.5 and
California Code of Civil Procedure Sections 564, 726.5 and 736, as added to such
Codes or amended by Chapter 1167 of the Laws of 1991, as the same may be
subsequently amended.
II.Indemnity Agreement.
2.1 Agreement Secured By the Deeds of Trust and Other Collateral
Documents. For as long as the Deeds of Trust and the other Collateral Documents
shall be and remain in effect, this Indemnity shall be secured by the Deeds of
Trust and the other Collateral Documents, and thereafter the provisions of this
Indemnity shall be deemed to be unsecured obligations of Indemnitor and shall be
enforceable to the fullest extent permitted by applicable law, including without
limitation the ▇▇▇▇ ▇▇▇▇▇▇▇ and all applicable law that would apply in the
absence of the 1991 Statute. Notwithstanding any other provisions of this
Indemnity or any of the Loan Documents, any liability of Indemnitor hereunder
shall be its personal liability, and may be asserted against the Indemnitor's
interest in any Collateral as well as against any and all of its other assets.
2.2 Indemnity Regarding Hazardous Substances. The Indemnitor
indemnities, defends and holds the Indemnified Parties harmless from and against
any and all Indemnified Costs directly or indirectly arising out of or resulting
from any Hazardous Substance being present or released in, on or around any part
of any of the Properties, or in the soil, groundwater or soil vapor on or under
any of the Properties prior to the Termination Date, including:
(a) any claim for such Indemnified Costs asserted by any federal,
state or local Governmental Agency, including the United States Environmental
Protection Agency and the
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California Department of Toxic Substance Control, and including any claim that
any Indemnified Party is liable for any such Indemnified Costs as an "owner" or
"operator" of the Property under any law relating to Hazardous Substances; and
(b) any such Indemnified Costs claimed against any Indemnified
Party by any Person other than a Governmental Agency, including any Person who
may purchase or lease all or any portion of the Properties from the Indemnitor,
from any Indemnified Party, or from any other purchaser or lessee; any Person
who may at any time have any interest in all or any portion of any of the
Properties; any Person who may at any time be responsible for any clean-up costs
or other Indemnified Costs relating to any of the Properties; and any Person
claiming to have been injured in any way as a result of exposure to any
Hazardous Substance; and
(c) any such Indemnified Costs which any Indemnified Party
reasonably believes at any time must be incurred to comply with any law,
judgment, order, regulation or regulatory directive relating to Hazardous
Substances, or which any Indemnified Party reasonably believes at any time must
be incurred to protect the public health or safety; and
(d) any such Indemnified Costs resulting from currently existing
conditions in, on or around any of the Properties, whether known or unknown by
the Indemnitor or the Indemnified Parties at the time this Agreement is
executed, and any such Indemnified Costs resulting from the activities of the
Indemnitor, the Indemnitor's tenants, contractors, subcontractors or agents, or
any other Person in, on or around any of the Properties.
2.3 Indemnity Regarding Construction and Other Risks. The
Indemnitor indemnities, defends and holds the Indemnified Parties harmless from
and against any and all Indemnified Costs directly or indirectly arising out of
or resulting from construction of any improvements on any of the Properties
prior to the Termination Date, including any defective workmanship or materials;
or prior to the Termination Date, any failure to satisfy any requirements of any
laws, regulations, ordinances, governmental policies or standards, reports,
subdivision maps or development agreements that apply or pertain to any of the
Properties; or prior to the Termination Date, breach of any representation or
warranty made or given by the Indemnitor to any of the Indemnified Parties or to
any prospective or actual buyer of all or any portion of any of the Properties;
or any claim or cause of action of any kind by any party that any Indemnified
Party is liable for any act or omission of the Indemnitor or any other Person in
connection with the ownership, sale, operation or development of any of the
Properties prior to the Termination Date.
2.4 Defense of Indemnified Parties. Upon demand by any Indemnified
Party, the Indemnitor shall defend any investigation, action or proceeding
involving any Indemnified Costs which is brought or commenced against any
Indemnified Party, whether alone or together with the Indemnitor or any other
Person, all at the Indemnitor's own cost and by counsel to be approved by the
Indemnified Party in the exercise of its reasonable judgment. If the Indemnitor
fails to comply with the foregoing provision, any Indemnified Party may elect to
conduct its own
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defense at the expense of the Indemnitor. The Indemnified Parties shall, to the
extent practicable, retain one counsel to represent all Indemnified Parties.
2.5 Representation and Warranty Regarding Hazardous Substances.
The Indemnitor represents and warrants that it has no actual or constructive
knowledge of, the disposal or release of any Hazardous Substance or the
threatened release of any Hazardous Substance, in, on, under or around the
Properties in violation of any applicable law, regulation, ordinance,
governmental policy or standard, except in compliance with Environmental Laws,
and except as the Indemnitor has disclosed to the Agent in writing.
2.6 Compliance Regarding Hazardous Substances. The Indemnitor has
complied, shall comply and shall use its best efforts to cause all tenants,
contractors, subcontractors and any other Persons who may come upon any of the
Properties to comply in all materials respects, with all laws, regulations and
ordinances governing or applicable to Hazardous Substances, including those
requiring disclosures to prospective and actual buyers of all or any portion of
any of the Properties.
2.7 Notices Regarding Hazardous Substances. If the Indemnitor
shall receive:
(i) notice that any violation of any Environmental Law may have
been committed or is.about to be committed by the Indemnitor,
(ii) notice that any administrative or judicial complaint or order
has been filed or is about to be filed against, the Indemnitor alleging
violations of any Environmental Law or requiring the Indemnitor to take any
action in connection with the release or threatened release of hazardous
substances or solid waste into the environment, or
(iii) any notice from a federal, state, or local
governmental agency or private party alleging that the Indemnitor may be liable
or responsible for costs associated with a response to or cleanup of a release
or disposal of a hazardous substance or solid waste into the environment or any
damages caused thereby, including without limitation any notice that the
Indemnitor is a potentially responsible party" as defined by CERCLA,
the Indemnitor shall provide the Agent and each Lender with a copy of such
notice within ten (10) days of the Indemnitor's receipt thereof.
2.8 Site Visits, Observations and Testing. The Indemnified
Parties and their agents and representatives shall have the right in a
reasonable manner and at reasonable intervals to enter and visit any of the
Properties for the purposes of observing such Properties, taking and removing
soil or groundwater samples, and conducting tests on any part of such Property.
The Indemnified Parties have no duty, however, to visit or observe the
Properties or to conduct tests, and no site visit, observation or testing by any
Indemnified Party shall impose any liability on any
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Indemnified Party. In no event shall any site visit, observation or testing by
any Indemnified Party be a representation that Hazardous Substances are or are
not present in, on or under any of the Properties, or that there has been or
shall be compliance with any law, regulation or ordinance pertaining to
Hazardous Substances or any other applicable governmental law. Neither the
Indemnitor nor any other Person is entitled to rely on any site visit,
observation or testing by any Indemnified Party, The Indemnified Parties owe no
duty of care to protect the Indemnitor or any other Person against, or to inform
the Indemnitor or any other Person of, any Hazardous Substances or any other
adverse condition affecting any of the Properties. Any Indemnified Party shall
give the Indemnitor reasonable notice before entering any of the Properties and
shall make reasonable efforts to avoid interfering with the Indemnitors use of
the Properties in exercising any rights provided in this Section 2.8.
2.9 Remedial Work. In the event that any investigation, site
monitoring, containment, cleanup, removal, restoration, precautionary actions or
other remedial work of any kind or nature (the "Remedial Work") is required
under any applicable Environmental Law as a result of, or in connection with,
any Release, suspected Release, or threatened Release, the Indemnitor shall
within thirty days after receipt of information that such Remedial Work is or
may be required (or such shorter period of time as may be required under
applicable law regulation, order or agreement), commence the performance of, or
cause to be commenced, and thereafter diligently prosecute to completion, the
performance of all such Remedial Work. All Remedial Work shall be performed by
one or more contractors, approved in advance in writing by the the Majority
Lenders, and under the supervision of a consulting engineer approved in advance
in writing by the the Majority Lenders, which consent shall not be unreasonably
withheld. All costs and expenses of such Remedial Work shall be paid by the
Indemnitor, including, without limitation, the charges of such contractors
and/or the consulting engineer, the reasonable attorneys' fees and costs of the
Lenders, the Issuing Banks (other than any Third Party Issuer), the LC Guarantor
or the Agent, including, without limitation, fees and costs of both outside and
staff counsel incurred in connection with monitoring or review of such Remedial
Work. In the event the Indemnitor shall fail to timely commence, or cause to be
commenced, or fail to diligently prosecute to completion, the performance of
such Remedial Work, the Majority Lenders may, but shall not be required to,
cause such Remedial Work to be performed and all costs and expenses thereof, or
incurred in connection therewith, shall be deemed claims hereunder.
2.10 Interest Accrued. Any amount claimed hereunder by an
Indemnified Party not paid within thirty days after written demand from such
Indemnified Party with an explanation of the amounts claimed shall bear interest
at a rate per annum equal to the Reference Rate (as defined in the Loan
Agreement) plus 4% per annum.
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2.11 Costs and Expenses. The Indemnitor agrees to pay all of the
Indemnified Parties' costs and expenses, including attorneys' fees, which may be
incurred in-any effort to enforce any term of this Agreement, including all such
costs and expenses which may be incurred by any Indemnified Party in any legal
action, reference or arbitration proceeding. From the times incurred until paid
in full to the Indemnified Party, those sums shall bear interest at the
Reference Rate plus 4% per annum.
2.12 Election by Indemnified Parties. Any Indemnified Party may, in
its sole discretion, elect to enforce the obligations hereunder pursuant to and
as limited by the 1991 Statute, in order to prevent any such enforcement from
being deemed an "action" within the meaning of Section 580a, 580b or 580d, or
subdivision (b) of Section 726 of the California Code of Civil Procedure. In any
such case, the Indemnified Party may elect to limit the obligations of the
Indemnitor and all other provisions hereunder to the extent necessary to conform
to the 1991 Statute.
III. General Provisions.
3.1 Events of Default. Lenders may declare the Indemnitor to be in
default under this Agreement upon the occurrence of any of the following events
("Events of Default"):
(a) the Indemnitor fails to perform any of its obligations under
this Agreement; or
(b) the Indemnitor revokes this Agreement or this Agreement becomes
ineffective for any reason.
3.2 Reservation of Other Rights and Remedies. Nothing in this
Agreement shall be construed to limit any claim or right which any Indemnified
Party may otherwise have at any time against the Indemnitor or any other Person
arising from any source other than this Agreement, including any claim for
fraud, misrepresentation, waste or breach of contract other than this Agreement,
and any rights of contribution or indemnity under federal or state environmental
law or any other applicable law, regulation or ordinance.
3.3 Delay; Cumulative Remedies. If any Indemnified Party delays in
exercising or fails to exercise any right or remedy against the Indemnitor, that
alone shall not be construed as a waiver of such right or remedy. All remedies
of any Indemnified party against the Indemnitor are cumulative.
3.4 Rules of Construction. The word "include(s)" means "include(s),
without limitation," and the word "including" means "including, but not limited
to", When the context and construction so require, all words used in the
singular shall be deemed to have been used in the plural and vice versa. All
headings appearing in this Agreement are for convenience only and shall be
disregarded in construing this Agreement.
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3.5 Severability. Every provision of this Agreement is intended to
be severable. In the event any terms provision, section or subsection of this
Agreement is declared to be illegal or invalid, for any reason whatsoever, by a
court of competent jurisdiction, such illegality or invalidity shall not affect
the other terms, provisions, sections or subsections of this Agreement, which
shall remain binding and enforceable.
3.6 In-House Counsel Fees. Whenever the Indemnitor is obligated to
pay or reimburse any Indemnified Party for any attorneys' fees, those fees shall
include the allocated costs for services of in-house counsel.
3.7 Integration; Modifications. The Loan Documents, including this
Agreement, (a) integrate all the terms and conditions mentioned in or incidental
to this Agreement, (b) supersede all oral negotiations and prior writings with
respect to their subject matter, and (c) are intended by the parties as the
final expression of the agreement with respect to the terms and conditions set
forth in the Loan Documents and as the complete and exclusive statement of the
terms agreed to by the parties. No representation, understanding, promise or
condition shall be enforceable against any party unless it is contained in the
Loan Documents. This Agreement may not be modified except in a writing signed by
the Lenders, the Issuing Banks (other than any Third Party Issuer), the LC
Guarantor, the Agent and the Indemnitor.
3.9 Miscellaneous. The provisions of this Agreement shall bind and
benefit the heirs, executors, administrators, legal representatives, successors
and assigns (which assigns must be Eligible Assignees if and to the extent
required under Section 13.7 of the Loan Agreement) of the Indemnitor and the
Indemnified Parties; provided, however, that the Indemnitor may not assign this
Agreement, or assign or delegate any of its rights or obligations under this
Agreement, without the prior written consent of the Lenders, the Issuing Banks
(other than any Third Party Issuer), the LC Guarantor and the Agent in each
instance, The liability of all Persons who are in any manner obligated under
this Agreement shall be joint and several. This Agreement shall be governed by,
and construed in accordance with, the law of the State of California.
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IN WITNESS WHEREOF, the Indemnitor has caused this Agreement to be
duly executed as of the date first above written.
"INDEMNITOR":
THE ▇▇▇▇▇▇▇ COMPANIES, a
California corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice
President - Chief
Financial Officer
By: /s/ W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President -
Corporate Controller
Address where notices to
the Indemnitor are to be sent:
The ▇▇▇▇▇▇▇ Companies
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Mr. David M, ▇▇▇▇▇▇
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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EXHIBIT M
PLEDGE AGREEMENT (BORROWER)
PLEDGE AGREEMENT ("Agreement") dated as of July 6, 1998, made by
▇▇▇▇▇▇▇ HOMES, a California corporation (the "Pledgor"), to FOOTHILL CAPITAL
CORPORATION, as agent (the "Agent") for the lenders (the "Lenders") parties to
the Loan Agreement (as hereinafter defined) and the Issuing Banks (other than
any Third Party Issuer) and LC Guarantor (in each case as defined in the Loan
Agreement).
PRELIMINARY STATEMENTS:
(1) The Lenders and the Agent have entered into a Fifth Amended
and Restated Loan Agreement dated as of July 6, 1998 (said agreement, as it may
hereafter be amended, restated, supplemented or otherwise modified from time to
time, being the "Loan Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with the Pledgor.
(2) Pursuant to the Loan Agreement, the Lenders, the Issuing
Banks (other than Third Party Issuers) and the LC Guarantor is making certain
credit facilities available to the Pledgor.
(3) It is a condition precedent of the availability of such
credit facilities under the Loan Agreement that the Pledgor, shall have made the
pledge contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders, the Issuing Banks (other than any Third Party Issuer) and
the LC Guarantor to provide the aforementioned credit facilities, the Pledgor
hereby agrees with the Agent for its benefit and the ratable benefit of the
Lenders, the Issuing Banks (other than any Third Party Issuer) and the LC
Guarantor as follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the Agent for
its benefit and the ratable benefit of the Lenders, the Issuing Banks (other
than any Third Party Issuer) and the LC Guarantor, and grants to the Agent for
its benefit and the ratable benefit of the Lenders, such Issuing Banks and the
LC Guarantor a security interest in, the following (the "Pledged Collateral"):
(a) all right, title and interest of the Pledgor as a partner
(limited or general), joint venturer or member now existing or
hereafter acquired in (i) any person which is a partnership, joint
venture or limited liability company including, without limitation,
the persons identified on Schedule 6.20 to the Loan Agreement (other
than CMR) (collectively, the "Partnerships"), (ii) the partnership
agreements, joint venture
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agreements and operating agreements (as the same may from time to
time be amended, supplemented, restated or otherwise modified from
time to time in accordance with the terms hereof, the "Partnership
Agreements"), if any, under which any of the Partnerships exist, and
(iii) all certificates, instruments or other documents evidencing or
representing the same, if any (all of the foregoing being hereinafter
collectively referred to as the "Pledged Equity Interests");
(b) all right, title and interest of the Pledgor in and to all
present and future payments, proceeds, distributions, instruments,
compensation, property, assets, interests and rights, and all monies
due or to become due and payable to the Pledgor in connection with
the Pledged Equity Interests or otherwise paid, issued or distributed
from time to time in respect of or in exchange therefor, and any
certificate, instrument or other document evidencing or representing
the same (including, without limitation, all proceeds of dissolution
or liquidation);
(c) all of the Pledgor's rights, interests, powers and
privileges, if any, now owned or hereafter acquired in or with
respect to each of the Partnerships, whether as a partner (general or
limited), joint venturer or member of any of the Partnerships or
creditor thereof, including, without limitation, the Pledgor's right,
title and interest in, to and under (i) the capital of any of the
Partnerships, (ii) any subscription and antidilution rights with
respect to interests in any of the Partnerships, (iii) the Pledgor's
claims, rights, powers, privileges, security interests, liens and
remedies against any of the Partnerships or any partner (general or
limited), joint venturer or member with respect to any such
Partnership's property or operations, under the Partnership
Agreements or at law, and (iv) all other rights, title and interest
of the Pledgor in and to any of the Partnerships, and the proceeds of
and distributions in respect of any of the foregoing; and
(d) all instruments of indebtedness (whether now existing or
hereinafter arising) by any Partnership which name the Pledgor as
payee thereunder (the "Pledged Debt"), and
(e) all proceeds of any and all of the foregoing collateral
(including, without limitation, proceeds that constitute property of
the types described above).
SECTION 2. Security for Obligations. This Agreement secures the
payment of all obligations of the Pledgor now or hereafter existing under the
Loan Agreement, the Revolving Notes and the other Loan Documents to which it is
a party, whether for principal, interest, fees, expenses or otherwise (all such
obligations of the Pledgor being the "Obligations"). Without limiting the
generality of the foregoing, this Agreement secures the payment of all amounts
which constitute part of the Obligations and would be owed by the Pledgor to the
Agent, the Lenders, the Issuing Banks (other than any Third Party Issuer) or the
LC Guarantor under the Loan Agreement, the Revolving Notes or any other Loan
Documents but for the fact that they are
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unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Pledgor.
SECTION 3. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of the Agent pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Agent. The Agent shall have the right, upon the occurrence
and during the continuance of an Event of Default, after ten days, prior written
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Pledged Collateral, subject only to the
revocable rights specified in Section 6(a). In addition, the Agent shall have
the right at any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations.
SECTION 4. Representations and Warranties. The Pledgor represents
and warrants to the Agent, the Lenders, the Issuing Banks (other than any Third
Party Issuer) and the LC Guarantor, and each of them, as follows:
(a) The Pledgor is the legal and beneficial owner of the Pledged
Collateral free and clear of any lien, security interest, option or
other charge or encumbrance except for the security interest created
by this Agreement and any interests arising under the Partnership
Agreements.
(b) The pledge of the Pledged Collateral pursuant to this
Agreement creates a valid and perfected first priority security
interest in the Pledged Collateral, securing the payment of the
Obligations.
(c) No consent of any other person or entity and no
authorization, approval, or other action by, and no notice to or
filing with, any governmental authority or regulatory body is
required (i) for the pledge by the Pledgor of the Pledged Collateral
pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by the Pledgor, (ii) for the perfection
or maintenance of the security interest created hereby (including the
first priority nature of such security interest) or (iii) subject to
the Partnership Agreements, the remedies in respect of the Pledged
Collateral pursuant to this Agreement (except as may be required in
connection with any disposition of any portion of the Pledged
Collateral by laws affecting the offering and sale of securities
generally).
(d) The Pledged Collateral constitutes, and will continue to
constitute, all of the equity and debt interests of the Pledgor in
each Partnership.
(e) There are no conditions precedent to the effectiveness of
this Agreement that have not been satisfied or waived.
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(f) The Pledgor has, independently and without reliance upon the
Agent or any Lender or Issuing Bank or the LC Guarantor and based on
such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.
SECTION 5. Further Assurances. The Pledgor agrees that at any
time and from time to time, at the expense of the Pledgor, the Pledgor will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that the Agent may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral.
SECTION 6. Voting Rights; Proceeds; Etc. (a) So long as no Event
of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise or refrain
from exercising any and all voting and other consensual rights
pertaining to the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this Agreement or the Loan
Agreement.
(ii) The Pledgor shall be entitled to receive and retain
any and all monies, proceeds, distributions or payments paid in
respect of the Pledged Collateral to the extent that such dividends
are not prohibited by the Loan Agreement.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of the Pledgor (x) to exercise or refrain
from exercising the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 6(a)(i) shall,
upon ten days' prior written notice to the Pledgor by the Agent,
cease and (y) to receive the dividends payments which it would
otherwise be authorized to receive and retain pursuant to Section
6(a)(ii) shall automatically cease, and all such rights shall
thereupon, in the case of dividends, or after the expiration of said
ten-day notice period in the case of voting and consensual rights,
become vested in the Agent who shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual
rights and to receive and hold as Pledged Collateral such dividends.
(ii) All monies, proceeds, distributions or payments which
are received by the Pledgor contrary to the provisions of paragraph
(i) of this Section 6(b) shall be received in trust for the benefit
of the Agent, shall be segregated from other funds of the Pledgor and
shall be forthwith paid over to the Agent as Pledged Collateral in
the same form as so received (with any necessary endorsement).
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SECTION 7. Transfers and Other Liens; Additional Shares. (a) The
Pledgor agrees that it will not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, any of
the Pledged Collateral, or (ii) create or permit to exist any lien, security
interest, option or other charge or encumbrance upon or with respect to any of
the Pledged Collateral, except for the security interest under this Agreement
(or arising under the Partnership Agreements).
(b) The Pledgor agrees that it will pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all other equity
securities or debt obligations of each issuer of the Pledged Collateral.
SECTION 8. Agent Appointed Attorney-in-Fact. The Pledgor hereby
appoints the Agent the Pledgor's attorney-in-fact, which appointment shall
become effective upon the occurrence and during the continuance of an Event of
Default, with full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time in the Agent's discretion to
take any action and to execute any instrument which the Agent may deem necessary
or advisable to accomplish the purposes of this Agreement (subject to the rights
of the Pledgor under Section 6), including, without limitation, to receive,
indorse and collect all instruments made payable to the Pledgor representing any
dividend or other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same.
SECTION 9. Agent May Perform. If the Pledgor fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by the Pledgor under Section 13.
SECTION 10. The Agent's Duties. The powers conferred on the Agent
hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the safe
custody of any Pledged Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Agent shall have no duty as to any
Pledged Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not the Agent or any Lender or Issuing Bank or
the LC Guarantor has or is deemed to have knowledge of such matters, or as to
the taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to any Pledged Collateral. The Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Agent, in its individual capacity, accords
its own property.
SECTION 11. Remedies upon Default. If any Event of Default shall
have occurred and be continuing:
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(a) The Agent may exercise in respect of the Pledged Collateral,
in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party on default under the Uniform Commercial Code in effect in the
State of California at that time (the "Code") (whether or not the
Code applies to the affected Collateral), and may also, without
notice except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Agent may deem commercially reasonable. The
Pledgor agrees that, to the extent notice of sale shall be required
by law, at least five days' notice to the Pledgor of the time and
place of any public sale or the time after which any private sale is
to be made shall constitute reasonable notification. The Agent shall
not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Agent may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(b) Any cash held by the Agent as Pledged Collateral and all cash
proceeds received by the Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Pledged
Collateral may, in the discretion of the Agent, be held by the Agent
as collateral for, and/or then or at any time thereafter be applied
(after payment of any amounts payable to the Agent pursuant to
Section 13) in whole or in part by the Agent for the ratable benefit
of the Lenders, the Issuing Banks (other than any Third Party Issuer)
and the LC Guarantor against, all or any part of the Obligations in
such order as the Agent shall elect. Any surplus of such cash or cash
proceeds held by the Agent and remaining after payment in full of all
the Obligations shall be paid over to the Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
SECTION 12. [Deleted]
SECTION 13. Expenses. The Pledgor will upon demand pay to the
Agent the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the Agent
may incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Agent or the Lenders or Issuing Banks
(other than any Third Party Issuer) or the LC Guarantor hereunder or (iv) the
failure by the Pledgor to perform or observe any of the provisions hereof, in
each case, to the extent provided in Section 13.3 of the Loan Agreement.
SECTION 14. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Obligations, and a separate
action or actions may be brought and prosecuted against the Pledgor to enforce
this Agreement, irrespective of whether any action is brought against any other
Party or whether any other Party is joined in any such
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action or actions. All rights of the Agent and security interests hereunder, and
all obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Loan Agreement,
the Revolving Notes, the other Loan Documents or any other agreement
or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Loan
Agreement, the Revolving Notes or the other Loan Documents,
including, without limitation, any increase in the Obligations
resulting from the extension of additional credit to the Pledgor, any
of its subsidiaries or any Party or otherwise;
(c) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the
Obligations;
(d) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other
disposition of any collateral for all or any part of the Obligations
or any other assets of the Pledgor, any of its subsidiaries or any
other Party;
(e) any change, restructuring or termination of the corporate
structure or existence of the Pledgor, any of its subsidiaries or any
other Party;
(f) the existence of any claim, setoff, defense or other rights
which the Pledgor may have at any time against the Agent, any Issuing
Bank, the LC Guarantor or any Lender, any beneficiary of any Letter
of Credit or Set-Aside Letter (or any Persons or entities for whom
any such beneficiary may be acting) or any other Person, whether in
connection with the Loan Agreement, any other Loan Documents or any
other agreement or instrument relating thereto, or any unrelated
transactions;
(g) any demand, statement or any other document presented under
any Letter of Credit or Set-Aside Letter proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever;
(h) payment by any Issuing Bank under any Letter of Credit
against presentation of a draft or any accompanying document which
does not strictly comply with the terms of such Letter of Credit;
(i) the existence, character, quality, quantity, condition,
packing, value or delivery of any Property purported to be
represented by documents presented in
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connection with any Letter of Credit or any difference between any
such Property and the character, quality, quantity, condition or
value of such Property as described in such documents;
(j) the time, place, manner, order or contents of shipments or
deliveries of property as described in documents presented in
connection with any Letter of Credit or the existence, nature and
extent of any insurance relating thereto;
(k) the solvency (or insolvency) or financial responsibility (or
lack thereof) of any party issuing any documents in connection with
any Letter of Credit;
(l) any failure or delay in notice of shipment or arrival of any
Property;
(m) any error in the transmission of any message relating to any
Letter of Credit not caused by the Issuing Bank thereof, or any delay
or interruption in any such message;
(n) any error, neglect or default of any correspondent of any
Issuing Bank in connection with any Letter of Credit; and/or
(o) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, a third party pledgor,
except for the payment in full of the Obligations (other than any
contingent indemnity obligations under any Loan Document) if, at such
time no portion of the Revolving Commitments remain outstanding.
SECTION 15. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent and the Pledgor, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
SECTION 16. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied, telegraphed,
telexed, cabled or delivered to it, if to the Pledgor, at its address specified
on the signature page hereto, and if to the Agent, at its address specified in
the Loan Agreement, or, as to either party, at such other address (other than a
post office box) as shall be designated by such party in-a written notice to the
other party. Any notice, request, demand, direction or other communication given
by telegram, telecopier, telex or cable must be confirmed within 48 hours by
letter mailed or delivered to the appropriate party at its respective address.
Except as otherwise expressly provided in any Loan Document, if any notice,
request, demand, direction or other communication required or permitted by any
Loan Document is given by mail it will be effective on the earlier of receipt or
the third Banking Day after deposit in the United States mail with first class
or airmail postage prepaid; if given by telegraph or
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cable, when delivered to the telegraph company with charges prepaid; if given by
telex or telecopier, when sent; or if given by personal delivery, when
delivered.
SECTION 17. Continuing Security Interest; Assignments under Loan
Agreement; Termination of Pledge in Certain Circumstances. This Agreement shall
create a continuing security interest in the Pledged Collateral and shall (i)
remain in full force and effect until the later of (x) the payment in full of
the Obligations (other than any contingent indemnity obligations under any Loan
Document) and all other amounts payable under this Agreement and (y) the
termination in full of the aggregate Revolving Commitments under the Loan
Agreement, (ii) be binding upon the Pledgor, its successors and assigns, and
(iii) inure, together with the rights and remedies of the Agent hereunder, to
the benefit of, and be enforceable by, the Agent, the Lenders, the Issuing Banks
(other than any Third Party Issuer), the LC Guarantor and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (iii), subject to the provisions of Section 13.7 of the Loan
Agreement, any Lender may assign or otherwise transfer all or any portion of its
rights and obligations under the Loan Agreement (including, without limitation,
all or any portion of its Revolving Commitments, the Revolving Advances owing to
it and any Revolving Note held by it) to any other person or entity (which
person or entity must be an Eligible Assignee if and to the extent required
under Section 13.7 of the Loan Agreement), and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, subject, however, to the provisions of Article 12
(concerning the Agent) and Section 13.7 (concerning assignments) of the Loan
Agreement. Upon the later of the payment in full of the Obligations (other than
any contingent indemnity obligations under any Loan Document) and all other
amounts payable under this Agreement and the expiration or termination of the
Revolving Commitments, the security interest granted hereby shall terminate and
all rights to the Pledged Collateral shall revert to the Pledgor. Upon any such
termination, the Agent will, at the Pledgor's expense, return to the-Pledgor
such of the Pledged Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof and execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such termination.
SECTION 18. Governing Law; Terms. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
California. Unless otherwise defined herein or in the Loan Agreement, terms
defined in Article 9 of the Code are used herein as therein defined.
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IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
▇▇▇▇▇▇▇ HOMES,
a California corporation
By:
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President -
Chief Financial Officer
By:
-----------------------------------
Name: W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President -
Corporate Controller
Address:
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
Chief Financial Officer
and
W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President -
Corporate Controller
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Accepted, as of the date
first above written
FOOTHILL CAPITAL CORPORATION,
as Agent
By
--------------------------------
Name:
Title:
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SCHEDULE I
Attached to and forming a part of that certain
Pledge Agreement
dated as of July 6, 1998 by
▇▇▇▇▇▇▇ Homes, a California corporation
as Pledgor, to Foothill Capital Corporation,
as Agent
List and Description of Pledged Equity Interests
Name of Partnership Description of Partnership Agreement Description of Pledgor's Interest
------------------- ------------------------------------ ---------------------------------
List and Description of Pledged Debt
Obligation Issuer Description of Obligation Maturity Date Original Principal Amount
----------------- ------------------------- ------------- -------------------------
193
EXHIBIT N
AMENDED AND RESTATED PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT ("Agreement") dated as of
July __, 1998, made by THE ▇▇▇▇▇▇▇ COMPANIES, a Delaware corporation (the
"Pledgor"), to FOOTHILL CAPITAL CORPORATION, as agent (the "Agent") for the
lenders (the "Lenders") parties to the Loan Agreement (as hereinafter defined)
and the Issuing Banks (other than any Third Party Issuer) and LC Guarantor (in
each case as defined in the Loan Agreement).
PRELIMINARY STATEMENTS:
(1) The Lenders and the Agent have entered into a Fifth Amended
and Restated Loan Agreement dated as of July 6, 1998 (said agreement, as it may
hereafter be amended, restated, supplemented or otherwise modified from time to
time, being the "Loan Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with ▇▇▇▇▇▇▇ Homes (f/k/a
The ▇▇▇▇▇▇▇ Companies), a California corporation (the "Borrower"). The Pledgor
will derive substantial direct and indirect benefit from the transactions
contemplated by the Loan Agreement.
(2) The Pledgor is the owner of the shares (the "Pledged Shares")
of stock described in Schedule I hereto and issued by the Borrower.
(3) The Pledgor has entered into a Pledge Agreement dated as of
May 20, 1994 (as amended, the "Existing Pledge Agreement") in favor of the agent
for the lenders parties to the Existing Pledge Agreement.
(4) It is a condition precedent to the making of Revolving
Advances by the Lenders under the Loan Agreement that the Pledgor, as owner of
100 percent of the outstanding shares of stock of the Borrower, shall have made
the pledge contemplated by this Agreement and shall have amended and restated
the Existing Pledge Agreement as set forth below.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Revolving Advances under the Loan Agreement, the
Pledgor hereby agrees with the Agent for its benefit and the ratable benefit of
the Lenders, the Issuing Banks (other than any Third Party Issuer) and the LC
Guarantor that, effective on and as of the Closing Date, the Existing Pledge
Agreement is amended and restated in its entirety as follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the Agent for
its benefit and the ratable benefit of the Lenders, the Issuing Banks (other
than any Third Party Issuer) and the LC Guarantor, and grants to the Agent for
its benefit and the ratable benefit of the Lenders, such Issuing Banks and the
LC Guarantor a security interest in, the following (the "Pledged Collateral"):
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(a) the Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of the Borrower from time to
time acquired by the Pledgor in any manner, and the certificates
representing such additional shares, and all dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares; and
(c) all proceeds of any and all of the foregoing collateral
(including, without limitation, proceeds that constitute property of the
types described above).
SECTION 2. Security for Obligations. This Agreement secures the
payment of (i) all obligations of the Borrower now or hereafter existing under
the Loan Agreement, the Revolving Notes and the other Loan Documents to which it
is a party, whether for principal, interest, fees, expenses or otherwise, and
(ii) all obligations of the Pledgor now or hereafter existing under this
Agreement, the Guaranty and the other Loan Documents to which it is a party (all
such obligations of the Borrower and the Pledgor being the "Obligations").
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts which constitute part of the Obligations and would be
owed by the Borrower or the Pledgor to the Agent, the Lenders, the Issuing Banks
(other than any Third Party Issuer) or the LC Guarantor under the Loan
Agreement, the Revolving Notes, the Guaranty or any other Loan Documents but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Borrower or the
Pledgor. The Pledgor hereby ratifies and confirms that, notwithstanding the
provisions of Section 17(b) of the Existing Pledge Agreement, the grant of the
security interest contained in the Existing Pledge Agreement continues in full
force and effect without interruption, and the security interest granted in the
Existing Pledge Agreement as amended and restated pursuant hereto constitutes
the single grant of a security interest.
SECTION 3. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of the Agent pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Agent. The Agent shall have the right, upon the occurrence
and during the continuance of an Event of Default, after ten days, prior written
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Pledged Collateral, subject only to the
revocable rights specified in Section 6(a). In addition, the Agent shall have
the right at any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations.
SECTION 4. Representations and Warranties. The Pledgor represents
and warrants to the Agent, the Lenders, the Issuing Banks (other than any Third
Party Issuer) and the LC Guarantor, and each of them, as follows:
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(a) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(b) The Pledgor is the legal and beneficial owner of the Pledged
Collateral free and clear of any lien, security interest, option or other
charge or encumbrance except for the security interest created by this
Agreement.
(c) The pledge and delivery to the Agent of the Pledged Shares
pursuant to this Agreement create a valid and perfected first priority
security interest in the Pledged Collateral, securing the payment of the
Obligations.
(d) No consent of any other person or entity and no
authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required (i) for the
pledge by the Pledgor of the Pledged Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by the
Pledgor, (ii) for the perfection or maintenance of the security interest
created hereby (including the first priority nature of such security
interest) or (iii) for the exercise by the Agent of the voting or other
rights provided for in this Agreement or the remedies in respect of the
Pledged Collateral pursuant to this Agreement (except as may be required in
connection with any disposition of any portion of the Pledged Collateral by
laws affecting the offering and sale of securities generally).
(e) The Pledged Shares constitute 100% of the issued and
outstanding shares of stock of the Borrower.
(f) There are no conditions precedent to the effectiveness of
this Agreement that have not been satisfied or waived.
(g) The Pledgor has, independently and without reliance upon the
Agent or any Lender or Issuing Bank or the LC Guarantor and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.
SECTION 5. Further Assurances. The Pledgor agrees that at any
time and from time to time, at the expense of the Pledgor, the Pledgor will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that the Agent may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral.
SECTION 6. Voting Rights; Dividends; Etc. So long as no Event of
Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise or refrain
from exercising any and all voting and other consensual rights pertaining to
the Pledged Collateral or any part thereof for any purpose not inconsistent
with the terms of this Agreement or the Loan Agreement;
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provided, however, that the Pledgor shall give the Agent at least five days'
written notice of the manner in which it intends to exercise any such right,
except for the exercise of such rights in connection with voting for members
of the Borrower's Board of Directors and with the ratification or
appointment of Ernst & Young LLP or other independent public accountants of
recognized standing.
(ii) The Pledgor shall be entitled to receive and retain
any and all dividends paid in respect of the Pledged Collateral to the
extent that such dividends are made in accordance with Section 8.5 of the
Loan Agreement, provided, however, that any and all
(A) dividends paid or payable other than in cash in
respect of, and instruments and other property
received, receivable or otherwise distributed in
respect of, or in exchange for, any Pledged
Collateral,
(B) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in
connection with a partial or total liquidation or
dissolution or in connection with a reduction of
capital, capital surplus or paid-in surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in
exchange for, any Pledged Collateral
shall be, and shall be forthwith delivered to the Agent to hold as, Pledged
Collateral and shall, if received by the Pledgor, be received in trust for
the benefit of the Agent, be segregated from the other property or funds of
the Pledgor, and be forthwith delivered to the Agent as Pledged Collateral
in the same form as so received (with any necessary endorsement or
assignment).
(iii) The Agent shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purpose of
enabling the Pledgor to exercise the voting and other rights which it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends which it is authorized to receive and retain pursuant to paragraph
(ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of the Pledgor (x) to exercise or refrain
from exercising the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 6(a)(i) shall, upon
ten days' prior written notice to the Pledgor by the Agent, cease and (y) to
receive the dividends payments which it would otherwise be authorized to
receive and retain pursuant to Section 6(a)(ii) shall automatically cease,
and all such rights shall thereupon, in the case of dividends, or after the
expiration of said ten-day notice period in the case of voting and
consensual rights, become vested in the Agent who shall thereupon have the
sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Pledged Collateral such
dividends.
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(ii) All dividends which are received by the Pledgor
contrary to the provisions of paragraph (i) of this Section 6(b) shall be
received in trust for the benefit of the Agent, shall be segregated from
other funds of the Pledgor and shall be forthwith paid over to the Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement).
SECTION 7. Transfers and Other Liens; Additional Shares. (a) The
Pledgor agrees that it will not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, any of
the Pledged Collateral, or (ii) create or permit to exist any lien, security
interest, option or other charge or encumbrance upon or with respect to any of
the Pledged Collateral, except for the security interest under this Agreement.
(b) The Pledgor agrees that it will (i) cause the Borrower not to
issue any stock or other equity securities in addition to or in substitution for
the Pledged Shares, except to the Pledgor and (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
shares of stock or other equity securities of each issuer of the Pledged Shares.
SECTION 8. Agent Appointed Attorney-in-Fact. The Pledgor hereby
appoints the Agent the Pledgor's attorney-in-fact, which appointment shall
become effective upon the occurrence and during the continuance of an Event of
Default, with full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time in the Agent's discretion to
take any action and to execute any instrument which the Agent may deem necessary
or advisable to accomplish the purposes of this Agreement (subject to the rights
of the Pledgor under Section 6), including, without limitation, to receive,
indorse and collect all instruments made payable to the Pledgor representing any
dividend or other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same.
SECTION 9. Agent May Perform. If the Pledgor fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by the Pledgor under Section 13.
SECTION 10. The Agent's Duties. The powers conferred on the Agent
hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the safe
custody of any Pledged Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Agent shall have no duty as to any
Pledged Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not the Agent or any Lender or Issuing Bank or
the LC Guarantor has or is deemed to have knowledge of such matters, or as to
the taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to any Pledged Collateral. The Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Agent, in its individual capacity, accords
its own property.
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SECTION 11. Remedies upon Default. If any Event of Default shall
have occurred and be continuing:
(a) The Agent may exercise in respect of the Pledged Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code in effect in the State of California at
that time (the "Code") (whether or not the Code applies to the affected
Collateral), and may also, without notice except as specified below, sell
the Pledged Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange, broker's board or at any of the Agent's
offices or elsewhere, for cash, on credit or for future delivery, and upon
such other terms as the Agent may deem commercially reasonable. The Pledgor
agrees that, to the extent notice of sale shall be required by law, at least
five days' notice to the Pledgor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute
reasonable notification. The Agent shall not be obligated to make any sale
of Pledged Collateral regardless of notice of sale having been given. The
Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
(b) Any cash held by the Agent as Pledged Collateral and all cash
proceeds received by the Agent in respect of any sale of, collection from,
or other realization upon all or any part of the Pledged Collateral may, in
the discretion of the Agent, be held by the Agent as collateral for, and/or
then or at any time thereafter be applied (after payment of any amounts
payable to the Agent pursuant to Section 13) in whole or in part by the
Agent for the ratable benefit of the Lenders, the Issuing Banks (other than
any Third Party Issuer) and the LC Guarantor against, all or any part of the
Obligations in such order as the Agent shall elect. Any surplus of such cash
or cash proceeds held by the Agent and remaining after payment in full of
all the Obligations shall be paid over to the Pledgor or to whomsoever may
be lawfully entitled to receive such surplus.
SECTION 12. Registration Rights. In connection with the Agent's
right to sell all or any of the Pledged Collateral pursuant to Section 11, the
Pledgor agrees that, upon request of the Agent, the Pledgor will, at its own
expense:
(a) execute and deliver, and cause each issuer of the Pledged
Collateral contemplated to be sold and the directors and officers thereof to
execute and deliver, all such instruments and documents, and do or use its
best efforts to cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such
Pledged Collateral under the provisions of the Securities Act of 1933, as
from time to time amended (the "Securities Act"), and use its best efforts
to cause the registration statement relating thereto to become effective and
to remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the opinion of the Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission
applicable thereto;
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(b) use its best efforts to qualify the Pledged Collateral under
the state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Pledged Collateral, as requested
by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earning statement which will satisfy the
provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as may
be necessary to make such sale of the Pledged Collateral or any part thereof
valid and binding and in compliance with applicable law.
The Pledgor further acknowledges the impossibility of ascertaining the amount of
damages which would be suffered by the Agent or the Lenders or Issuing Banks
(other than any Third Party Issuer) or the LC Guarantor by reason of the failure
by the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Pledged Collateral on the date the Agent shall demand
compliance with this Section.
SECTION 13. Expenses. The Pledgor will upon demand pay to the
Agent the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the Agent
may incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Agent or the Lenders or Issuing Banks
(other than any Third Party Issuer) or the LC Guarantor hereunder or (iv) the
failure by the Pledgor to perform or observe any of the provisions hereof, in
each case, to the extent provided in Section 13.3 of the Loan Agreement.
SECTION 14. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Obligations, and a separate
action or actions may be brought and prosecuted against the Pledgor to enforce
this Agreement, irrespective of whether any action is brought against the
Borrower or any other Party or whether the Borrower or any other Party is joined
in any such action or actions. All rights of the Agent and security interests
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Loan Agreement,
the Revolving Notes, the other Loan Documents or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Loan Agreement, the
Revolving Notes or the other Loan Documents, including, without limitation,
any increase in the Obligations resulting from the extension of additional
credit to the Borrower, any of its subsidiaries or any Party or otherwise;
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(c) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Obligations;
(d) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other disposition
of any collateral for all or any part of the Obligations or any other assets
of the Borrower, any of its subsidiaries or any other Party;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower, any of its subsidiaries or any other
Party;
(f) the existence of any claim, setoff, defense or other rights
which the Borrower or the Pledgor may have at any time against the Agent,
any Issuing Bank, the LC Guarantor or any Lender, any beneficiary of any
Letter of Credit or Set-Aside Letter (or any Persons or entities for whom
any such beneficiary may be acting) or any other Person, whether in
connection with the Loan Agreement, any other Loan Documents or any other
agreement or instrument relating thereto, or any unrelated transactions;
(g) any demand, statement or any other document presented under
any Letter of Credit or Set-Aside Letter proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect whatsoever;
(h) payment by any Issuing Bank under any Letter of Credit
against presentation of a draft or any accompanying document which does not
strictly comply with the terms of such Letter of Credit;
(i) the existence, character, quality, quantity, condition,
packing, value or delivery of any Property purported to be represented by
documents presented in connection with any Letter of Credit or any
difference between any such Property and the character, quality, quantity,
condition or value of such Property as described in such documents;
(j) the time, place, manner, order or contents of shipments or
deliveries of property as described in documents presented in connection
with any Letter of Credit or the existence, nature and extent of any
insurance relating thereto;
(k) the solvency (or insolvency) or financial responsibility (or
lack thereof) of any party issuing any documents in connection with any
Letter of Credit;
(l) any failure or delay in notice of shipment or arrival of any
Property;
(m) any error in the transmission of any message relating to any
Letter of Credit not caused by the Issuing Bank thereof, or any delay or
interruption in any such message;
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(n) any error, neglect or default of any correspondent of any
Issuing Bank in connection with any Letter of Credit; and/or
(o) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower or a third party
pledgor, except for the payment in full of the Obligations (other than any
contingent indemnity obligations under any Loan Document) if, at such time
no portion of the Revolving Commitment remains outstanding.
SECTION 15. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent and the Pledgor, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
SECTION 16. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied, telegraphed,
telexed, cabled or delivered to it, if to the Pledgor, at its address specified
on the signature page hereto, and if to the Agent, at its address specified in
the Loan Agreement, or, as to either party, at such other address (other than a
post office box) as shall be designated by such party in-a written notice to the
other party. Any notice, request, demand, direction or other communication given
by telegram, telecopier, telex or cable must be confirmed within 48 hours by
letter mailed or delivered to the appropriate party at its respective address.
Except as otherwise expressly provided in any Loan Document, if any notice,
request, demand, direction or other communication required or permitted by any
Loan Document is given by mail it will be effective on the earlier of receipt or
the third Banking Day after deposit in the United States mail with first class
or airmail postage prepaid; if given by telegraph or cable, when delivered to
the telegraph company with charges prepaid; if given by telex or telecopier,
when sent; or if given by personal delivery, when delivered.
SECTION 17. Continuing Security Interest; Assignments under Loan
Agreement; Termination of Pledge in Certain Circumstances. This Agreement shall
create a continuing security interest in the Pledged Collateral and shall (i)
remain in full force and effect until the later of (x) the payment in full of
the Obligations (other than any contingent indemnity obligations under any Loan
Document) and all other amounts payable under this Agreement and (y) the
termination in full of the aggregate Revolving Commitments under the Loan
Agreement, (ii) be binding upon the Pledgor, its successors and assigns, and
(iii) inure, together with the rights and remedies of the Agent hereunder, to
the benefit of, and be enforceable by, the Agent, the Lenders, the Issuing Banks
(other than any Third Party Issuer), the LC Guarantor and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (iii), subject to the provisions of Section 13.7 of the Loan
Agreement, any Lender may assign or otherwise transfer all or any portion of its
rights and obligations under the Loan Agreement (including, without limitation,
all or any portion of its Revolving Commitments, the Revolving Advances owing to
it and any Revolving Note held by it) to any other person or entity (which
person or entity must be an Eligible Assignee if and to the extent required
under Section 13.7 of the Loan Agreement), and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise,
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subject, however, to the provisions of Article 12 (concerning the Agent) and
Section 13.7 (concerning assignments) of the Loan Agreement. Upon the later of
the payment in full of the Obligations (other than any contingent indemnity
obligations under any Loan Document) and all other amounts payable under this
Agreement and the expiration or termination of the Revolving Commitments, the
security interest granted hereby shall terminate and all rights to the Pledged
Collateral shall revert to the Pledgor. Upon any such termination, the Agent
will, at the Pledgor's expense, return to the-Pledgor such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof and execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.
SECTION 18. Governing Law; Terms. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
California. Unless otherwise defined herein or in the Loan Agreement, terms
defined in Article 9 of the Code are used herein as therein defined.
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IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
THE ▇▇▇▇▇▇▇ COMPANIES
a Delaware corporation
By:
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice
President - Chief Financial Officer
By:
-----------------------------------
Name: W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President -
Corporate Controller
Address:
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
Chief Financial Officer
and
W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President - Corporate
Controller
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Accepted, as of the date
first above written
FOOTHILL CAPITAL CORPORATION,
as Agent
By
--------------------------------
Name:
Title:
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SCHEDULE I
Attached to and forming a part of that certain
Amended and Restated Pledge Agreement
dated as of July 6, 1998 by
The ▇▇▇▇▇▇▇ Companies, a Delaware corporation
as Pledgor, to Foothill Capital Corporation,
as Agent
Percentage of
Stock Certificate Number of Outstanding
Stock Issuer Class of Stock No(s). Par Value Shares Shares
------------ -------------- ----------------- --------- --------- -------------
▇▇▇▇▇▇▇ Homes, a Common 35 0.00 115,875 100%
California
corporation
205
Schedules 1.1(a) and (b)
PROPOSED CLASSIFIED BOARD AMENDMENT
1. Resolved that Article FOUR of the Certificate of Incorporation of this
corporation (the "Certificate") shall be amended in its entirety to read as
follows:
"FOUR" The total number of shares of all classes of capital stock which
this corporation shall have authority to issue is 175,000,000 shares,
divided into the following two classes:
l. 150,000,000 shares of Common Stock, par value $.01 per share,
(Common Stock) consisting of the following series:
(x) 100,000,000 share of Series A Common Stock ("Series A
Common"); and
(y) 50,000,000 share of Series B Common Stock ("Series B
Common"); and
2. 25,000,000 shares of preferred stock, par value $.01 per
share, ("Preferred Stock").
Upon the filing with the Office of the Secretary of State of the State
of Delaware of the Certificate of Amendment by which this Article FOUR is added
to the Certificate (the "Filing"), and without further action on the part of the
corporation or its stockholders, Board of Directors or officers, each
outstanding share of the corporation's Common Stock, par value $.01 per share
("Old Common"), shall be automatically reclassified and changed into one fully
paid and nonassessable share of Series A Common. Upon the Filing, stock
certificates previously representing shares of Old Common shall represent the
same number of shares of Series A Common, and each option, warrant or other
right to purchase shares of Old Common immediately prior to the Filing shall,
from and after the Filing, be deemed to be an option, warrant or other right to
purchase the same number of shares of series A Common.
▇. ▇▇▇▇▇▇, Rights and Privileges of Holders of Series A Common and
Series B Common.
Except as provided by this Article FOUR, Series A Common and
Series B Common shall have equal powers, preferences, rights and privileges, and
except as provided by this Article FOUR, the holders of Series A Common and the
holders of series B Common shall vote together as a single class. Without
limiting the immediately preceding sentence, the corporation may not, except by
the percentage votes required by Paragraph D of this Article FOUR to amend
paragraphs A, B, C and D of this Article FOUR, effect a stock split, reverse
stock split or other similar event or declare or pay or otherwise distribute any
dividend with respect to any series of the corporation's Common Stock unless it
lawfully effects at the same time an identical stock split, reverse stock split
or other such event or declares or pays or
206
otherwise distributes a dividend in an equal amount of kind per share with
respect to all series of the corporation's Common Stock, except that stock
dividends on Series A Common will be made only in the form of Series A Common
and stock dividends on Series B Common will be made only in the form of Series B
Common.
B. Board of Directors
(1) From and after the Filing, the Board of Directors of this
corporation shall be comprised of six members (the "Series A Directors") until
the date (the "Increase Date") this corporation shall have issued shares of
Series B Common, and from and after the Increase Date the Board of Directors of
this corporation shall be compromised of nine members, until such number is
decreased pursuant to Paragraph B(4) of this Article FOUR. From and after the
Increase Date, six of the directors (the "Series A Directors") shall be elected
by the holders of Series A Common, voting separately as a class, and the
remaining director or directors (the "Series B Director") shall be elected by
the holders of Series B Common, voting separately as a class.
(2) The series A Directors shall be divided into three classes,
each consisting of two directors, and designated Class I, Class II and Class
III, respectively. At the annual meeting of stockholders held in 1994, Series A
Directors of Class I shall initially be elected to hold office for a term
expiring at the annual meeting of stockholders in 1995, Series A Directors of
Class II shall be elected to hold office for a term expiring at the annual
meeting of stockholders in 1996 and Series A Directors of Class III shall be
elected to hold office for a term expiring at the annual meeting of stockholders
in 1997. At each annual meeting of stockholders following such initial
classification and election, the Series A Directors to be elected at such
meeting shall be elected for three-year terms, and each director so elected
shall hold office for such three-year term and until his or her successor is
duly elected and qualified or until his or her earlier resignation or removal.
At every annual meeting of stockholders called for the election of directors,
the holders of Series A Common, voting separately as a class, shall elect the
Series A Directors entitled to be elected at such meeting. From and after the
Cause Date (as defined below in this Paragraph(2)), no Series A Director may be
elected to the Board of Directors or removed from the Board of Directors by
written consent of stockholders or at any meeting of stockholders except an
annual meeting of stockholders, each of which shall be held not sooner that 11
months following the immediately preceding annual meeting of stockholders. Any
Series A Director or Directors may be removed with or without cause, and may be
removed without cause only by a vote of the holders of a majority of the shares
of Series A Common; provided however that from and after the date the number of
outstanding shares of Series A Common is more than 18,500,000 (the "Cause
Date"), any Series A Director or Directors may be removed only for cause.
Notwithstanding any of the foregoing, upon the occurrence of a Conversion Change
of Control (as defined in Paragraph C(7) of this Article FOUR) or upon the
occurrence and during the continuance of a Conversion Event of Default (as
defined in Paragraph C(7) of this Article FOUR), any Series A Director or
Directors may be removed with or without cause by written consent of
stockholders or at any meeting of stockholders, by the consent or vote of the
holders of a majority of the outstanding shares of Series A Common.
From and after the Increase Date and until the number of Series B
Directors is reduced below three pursuant to Paragraph B(4) below, the Series B
Directors shall be divided into three classes, each consisting of one director,
and designated Class I, Class II and Class III, respectively.
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After the Increase Date and before the first annual meeting of stockholders to
be held after the Increase Date (the "First Meeting"), a majority of the holders
of Series B Common may by written consent elect the Series B Director of Class
I, to hold office for a term expiring at the First Meeting, and the Series B
Director of Class II to hold office for a term expiring at the second annual
meeting of stockholders to be held after the Increase Date (unless sooner
terminated pursuant to the provisions of either of the two immediately following
unnumbered paragraphs), and the Series B Director of Class III, to hold office
for a term expiring at the third annual meeting of stockholders to be held after
the Increase Date (unless sooner terminated pursuant to the provisions of either
of the two immediately following unnumbered paragraphs).
At the first annual stockholders' meeting at which only two
Series B Directors are to be elected pursuant to Paragraph B(4) below (the "One
Reduction Meeting"), if any, the terms of all Series B Directors shall cease and
the Series B Directors shall be divided into two classes, designated Class I and
Class II, respectively, and the Series B Directors elected to such Classes shall
be determined at the One Reduction Meeting by the vote of a majority of the
outstanding shares of Series B Common. The Series B Director elected as the
Class I Director shall hold office for a term expiring at the annual meeting of
stockholders next following the One Reduction Meeting, and the Series B Director
elected as the Class II Director shall hold office for a term expiring at the
second annual meeting of stockholders next following the One Reduction Meeting
(unless sooner terminated pursuant to the provisions of the immediately
following unnumbered paragraph).
At the first annual stockholders' meeting at which only one Series
B Director is to be elected pursuant to Paragraph B(4) below (the "Two Reduction
Meeting"), if any, the terms of all Series B Directors shall cease, there shall
be no classes of Series B Directors, and the person to serve as the sole Series
B Director shall be determined by the vote of a majority of the outstanding
shares of Series B Common.
At each annual meeting of stockholders following the initial
classification and election of Series B Directors, the Series B Director to be
elected at such meeting shall be elected for a three-year term (if the Series B
Directors are then divided into three classes) or two years (if the Series B
Directors are then divided into two classes) or one year (if there is then only
one Series B Director), and each director so elected shall hold office for such
term (except as previously provided) and until his or her successor is duly
elected and qualified or until his or her earlier resignation or removal. At
every annual meeting of stockholders called for the election of directors, the
holders of Series B Common, voting separately as a class, shall elect the Series
B Director entitled to be elected at such meeting. Except as otherwise provided
in this Paragraph B(2), no Series B Director may be elected to the Board of
Directors by written consent of stockholders or at any meeting of stockholders
except an annual meeting of stockholders, each of which shall be held not sooner
than 11 months following the immediately preceding annual meeting of
stockholders. Any Series B Director or Directors may be removed only for cause
so long as there is more than one Series B Director.
(3) If a vacancy or vacancies shall occur in the number of Series
A Directors, by death, resignation or otherwise (other than removal by the
holders of the Series A Common in accordance with this Article FOUR), such
vacancy or vacancies may be filled by a majority vote or written consent of the
remaining Series A Directors or the sole remaining Series A Director if there is
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only one or if there is no remaining series A Director or if the remaining
Series A Director or Directors fail to fill the vacancy within 60 days of such
vacancy occurring or if such vacancy exists as a result of removal by the
holders of the Series A Common in accordance with this Article FOUR, by the vote
or written consent of the holders of a majority of the outstanding shares of
Series A Common. Any director so elected to fill any such vacancy shall be a
Series A Director, If a vacancy or vacancies shall occur in the number of Series
B Directors, by death, resignation or otherwise, such vacancy or vacancies may
be filled by a majority vote or written consent of the remaining Series B
Directors or the sole remaining Series B Director if there is only one or, if
the remaining Series B Director or Directors fail to fill the vacancy within 60
days of such vacancy occurring or if there is no remaining Series B Director, by
the vote or written consent of the holders of a majority of the outstanding
shares of Series B Common. Any director so elected to fill any such vacancy
shall be a Series B Director.
(4) The number of Series B Directors shall be decreased in the
following circumstances: (i) the number of Series B Directors shall
automatically become two at the first annual stockholders' meeting occurring
after the Increase Date at which Series B Directors are to be elected and at
which the number of outstanding shares of Series B Common entitled to vote is
less than 35%, but at least 14%, of the total number of outstanding shares of
Common Stock; and (ii) the number of Series B Directors shall automatically
become one at the first annual stockholders' meeting occurring after the
Increase Date at which Series B Directors are to be elected and at which the
number of outstanding shares of Series B Common entitled to vote is less than
14%, but at least 5%, of the total number of outstanding shares of Common Stock;
and (iii) there shall be no Series B Directors from and after the date of the
first annual stockholders' meeting occurring after the Increase Date (whether or
not directors are to be elected at such meeting) on which the number of
outstanding shares of Series B common is less than five percent of the total
number of outstanding shares of Common Stock.
(5) Except as provided by this Article FOUR, each of the Series A
Directors and Series B Directors shall have one vote on all matters on which the
Board of Directors votes or takes any action by written consent.
(6) A quorum for any meeting of the Board of Directors shall be a
majority of the total number of Series A Directors and Series B Directors, so
long as such majority includes at least three Series A Directors and one Series
B Director or so long as such meeting is held after at least five days' written
notice to all directors; provided however that no quorum requirement shall be
applicable for any meeting held for the sole purpose of filling a vacancy or
vacancies that exist in the number of Series A Directors or in the number of
Series B Directors, but no business other than the filling of such vacancy or
vacancies in the number of Directors of that series shall be conducted at such
meeting.
(7) To the extent the provisions of this Section B conflict with
the Bylaws of this corporation, the provisions of this Section B shall govern.
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C. Conversion of Series B Common.
(1) Each share of Series B Common shall be convertible into one
share of Series A Common, at the option of the holder thereof, at any time from
and after the Initial Conversion Date (as hereinafter defined).
(2) Any holder of a share of Series B Common may exercise the
conversion rights set forth in this Article FOUR as to such share from and after
the Initial Conversion Date (but in the case of an Initial Conversion Date
arising by reason of the occurrence of a Conversion Event of Default, only if
such conversion rights are exercised during the continuance of such Conversion
Event of Default) by delivering to the corporation during regular business
hours, at the principal office of the corporation or at such other place as may
be designated in a written notice delivered to all holders of Series B Common by
the corporation, the certificate for the share of Series B Common to be
converted, duly endorsed for transfer to the corporation, accompanied by written
notice stating the number of such shares that the holder elects to convert.
Conversion shall be deemed to have been effected at 5:00 p.m.(Pacific Time) on
the date such delivery is made, and such date is referred to herein as the
"Conversion Date," As promptly as practicable thereafter, but in any case within
30 days, the corporation shall issue and deliver to such holder a certificate or
certificates for the number of shares of Series A Common to which such holder is
entitled. The holder shall be deemed to have become a shareholder of record of
the Series A Common on the applicable conversion Date with all of the powers,
rights and privileges of a Series A Common stockholder. Upon conversion of only
a portion of the number of shares of Series B Common represented by a
certificate surrendered for conversion, the corporation shall issue and deliver
to such holder, at the expense of the corporation a new certificate representing
the number of shares of Series B Common not converted.
(3) Each share of Series B Common which is outstanding on the
Automatic Conversion Date shall automatically be converted into one share of
Series A Common, without the requirement of any notice or other action on the
part of the holder of such share or the Company or any other person. Thereafter,
the stock certificate which represented the share of Series B Common so
converted shall represent the share of Series A Common issued as a result of
such conversion, until that certificate is surrendered to the corporation for
cancellation and a new certificate issued in place thereof. The "Automatic
Conversion Date" shall be the first date after the Increase Date on which less
than 1,000,000 shares of Series B common are outstanding.
(4) If any share of Series A Common to be reserved for the
purpose of conversion of Series B Common requires registration or listing with
or approval of any governmental authority, stock exchange or other regulatory
body under any federal or state law or regulation or otherwise before such share
may be validly issued or delivered upon conversion, the corporation shall at its
sole cost and expense in good faith and as expeditiously as practical endeavor
to secure such registration, listing or approval, as the case may be.
(5) All shares of Series A Common issued upon conversion of
Series B Common shall be validly issued, fully paid and nonassessable. The
corporation will pay any and all documentary and other taxes that may be payable
in respect of any issue of shares of Series A Common on conversion of Series B
Common pursuant hereto. The corporation shall not, however,
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be required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Series A Common in a name other
than that in which the Series B Common so converted were registered, and no such
issue or delivery shall be made unless and until the person requesting such
transfer has paid to the corporation the amount of any such tax or has
established to the satisfaction of the corporation that such tax has been paid.
(6) All certificates representing shares of Series B Common
shall, upon conversion, be appropriately cancelled on the books of the
corporation except under the circumstances described in Paragraph C(3) of this
Article FOUR. Shares of Series B Common converted into shares of Series A Common
may not be reissued.
(7) The "Initial Conversion Date" for any share of Series B
Common means the date three years after the date of the Filing or, if earlier,
the first date upon which any of the events described in the immediately
following clauses (a), (b) and (c) shall occur: (a) the date of sale of the
share of Series A Common into which thee share of Series B Common is being
converted (the "Conversion Common Share") if such sale is a public sale (as
"Public Sale" is defined in that certain Shareholders' Agreement dated as of
[_______,] 1994, as the same may be amended from time to time, among the
Company, Foothill Capital Corporation ("Foothill") and others) and is made in
accordance with the requirements of said Shareholders' Agreement; or (b) the
date a Conversion Change of Control of the corporation occurs (a "Conversion
Change of Control" shall be deemed to take place on the date determined in
accordance with the definition of a Conversion Change of Control in said
Shareholders' Agreement); or (c) the date of the occurrence and during the
continuance of a Conversion Event of Default (a "Conversion Event of Default"
shall be deemed to take place, and to continue, as determined in accordance with
the definition of a Conversion Event of Default in said Shareholders Agreement).
D. Amendment, etc. of Article FOUR.
Any stockholder approval required to amend, alter, modify or
repeal any provision of any of Paragraphs A, B, C or D of this Article FOUR or
any provision of the Bylaws of this corporation shall be effective only if such
approval consists of the affirmative vote or written consent of the holders of
more than seventy-five percent (75%) of the outstanding shares of Series A
Common, voting as a separate class, and the affirmative vote or written consent
of the holders of more than seventy five percent (75%) of the outstanding shares
of Series B Common, voting as a separate class.
E. Preferred stock,
The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors is authorized to fix the number of shares of
any series of Preferred Shares and to determine the designation of any such
series. The Board of Directors is also authorized to determine or alter the
powers, preferences, rights, qualifications, limitations and restrictions
granted to or imposed upon any wholly unissued series of Preferred Stock and,
within the limits and restrictions stated in any resolution or resolutions of
the Board of Directors originally fixing the number of shares constituting any
series, to increase or decrease (but not below the number of shares of such
series then outstanding the number of shares of any such series subsequent to
the issue of shares of that series)."
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RESOLVED FURTHER, that the Chairman of the Board of Directors, Chief
Executive Officer or the President or any Vice President, and the Secretary, the
Chief Financial Officer, the Treasurer or any Assistant Secretary of the
corporation are each authorized to execute, verify and file a certificate of
amendment with respect to the amendment of Article FOUR of the Certificate as
set forth above.
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SCHEDULE 1.1(g)
Revolving Commitments
Approximate
Percentage of
Revolving Aggregate Revolving
Lender Commitment Commitments
------ ------------ -------------------
Foothill Capital Corporation $100,000,000 100%
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
213
SCHEDULE 6.2
NECESSARY CONSENTS
None
SCHEDULE 6.2
214
SCHEDULE 6.3
NECESSARY GOVERNMENT AUTHORIZATION
None
SCHEDULE 6.3
215
SCHEDULE 6.5
LIABILITIES AND CONTINGENT LIABILITIES
Set-Aside Letters Under the Existing Loan Agreement
1) Issuer: Foothill Capital Corporation
Beneficiary: ▇▇▇ ▇▇▇▇▇ & Associates, Managing General Partner
for American Motorists Insurance Company
Date of Issue: January 20, ▇▇▇▇
▇▇▇▇▇▇: $1,000,000
Date of Expiration: January 20, 1999
Account (Obligor): The ▇▇▇▇▇▇▇ Companies
2) Issuer: Foothill Capital Corporation
Beneficiary: ▇▇▇ ▇▇▇▇▇ & Associates, Managing General Partner
for American Motorists Insurance Company
Date of Issue: ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇: $500,000
Date of Expiration: January 20, 1999
Account (Obligor): The ▇▇▇▇▇▇▇ Companies
SCHEDULE 6.5
216
SCHEDULE 6.9
PENDING LITIGATION
VIEWPOINT NORTH COMMUNITY CORPORATION v THE ▇▇▇▇▇▇▇ COMPANIES, et al. Orange
County Superior Court Case No. 87457
▇▇▇▇ ▇▇▇▇▇, et ▇▇ ▇ ▇▇▇▇▇▇▇ HOMES, et al. Riverside Superior Court Case No.
302555
THE HORIZONS COMMUNITY ASSOCIATION v ▇▇▇▇▇▇▇ OF SOUTHERN CALIFORNIA, et al.
Orange County Superior Court Case No. 783152
▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇, et al v CARMEL MOUNTAIN RANCH, et al. San Diego
Superior Court Case No. 690105
BLACK DIAMOND OWNERS ASSOCIATION v THE ▇▇▇▇▇▇▇ COMPANIES, et al. Contra
Costa County Superior Court Case No. 97-01858
SCHEDULE 6.9
217
SCHEDULE 6.12
PENSION PLANS AND MULTI-EMPLOYER PLANS
None
SCHEDULE 6.12
218
SCHEDULE 6.19
ENVIRONMENTAL MATTERS
None
SCHEDULE 6.19
219
SCHEDULE 6.20
PARTNERSHIPS, JOINT VENTURES AND
LIMITED LIABILITY COMPANIES
Carmel Mountain Ranch, a California general partnership
Cerro Plata Associates, LLC, a Delaware limited liability company
Laurel Creek Associates, LLC, a Delaware limited liability company
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ I Associates, LLC, a Delaware limited liability company
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ II Associates, LLC, a Delaware limited liability company
▇▇▇▇▇▇▇ ▇▇▇▇▇ Associates, LLC, a Delaware limited liability company
PHI Otay Ranch Associates, LLC, a Delaware limited liability company
PHI Castle Creek Associates, LLC, a Delaware limited liability company
▇▇▇▇▇▇▇ Homes - Thousand Oaks, L.P., a California limited partnership
Stonecrest - San Diego, L.P., a California limited partnership
White Cloud Estates - Simi Valley, L.P., a California limited partnership
SCHEDULE 6.20