1
$72,500,000 REVOLVING CREDIT
$15,000,000 TERM LOAN
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
by and among
▇▇▇▇▇▇ HOMES, INC.
and
▇▇▇▇▇▇ HOLDINGS, INC.
and
HEARTHSIDE HOMES, LLC
and
▇▇▇▇▇▇ NATIONAL LAND HOLDING CORPORATION
and
▇▇▇▇▇▇ NATIONAL HOMES HOLDING CORPORATION
and
▇▇▇▇▇▇ LEASING, LLC, as Borrowers and Guarantors
and
▇▇▇▇▇▇ NATIONAL CORPORATION
and
▇▇▇▇▇▇ HOMES OF INDIANA, L.L.C.
and
▇▇▇▇▇▇ HOMES KENTUCKY, LLC, as Guarantors
and
THE BANKS PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION, as Agent
and
BANK OF AMERICA, N.A.
and
BANK ONE, NA, as Co-Agents
Dated as of April 13, 2000
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TABLE OF CONTENTS
-----------------
PAGE
1. CERTAIN DEFINITIONS..................................................2
1.1. Certain Definitions.........................................2
1.2. Construction...............................................19
1.3. Accounting Principles......................................20
2. REVOLVING CREDIT....................................................20
2.1. Revolving Credit Commitments...............................20
2.2. Nature of the Banks' and the Borrowers' Obligations........20
2.3. Certain Fees...............................................20
(a) Facility Fees; Extension Fee; Closing Fee.........20
(b) Commitment Fee....................................21
2.4. Permanent Reductions of Commitments........................21
(a) Mandatory Reductions..............................21
(b) Voluntary Reductions..............................21
(c) Effect of Reductions..............................22
2.5. Revolving Credit Loan Requests.............................22
2.6. Making Revolving Credit Loans..............................22
2.7. Intentionally Omitted......................................23
2.8. Revolving Credit Notes.....................................23
2.9. Letter of Credit Subfacility...............................23
(a) Issuance of Letters of Credit.....................23
(b) Participations....................................23
(c) Letter of Credit Fees.............................24
(d) Disbursements, Reimbursement......................24
(e) Documentation.....................................25
(f) Determinations to Honor Drawing Requests..........25
(g) Nature of Participation and Reimbursement
Obligations.....................................25
(h) Indemnity.........................................26
(i) Liability for Acts and Omissions..................26
2.10. Intentionally Omitted......................................27
2.11. Use of Proceeds............................................27
3. TERM LOANS..........................................................27
3.1. Term Loan Commitments......................................27
3.2. Nature of Banks' Obligations With Respect to Term Loans....28
3.3. Term Loan Facility Fee.....................................28
3.4. Term Loan Notes............................................28
3.5. Use of Proceeds............................................28
4. INTEREST RATE.......................................................28
4.1. Base Rate..................................................28
4.2. Interest After Default.....................................29
4.3. Existing Euro-Rate Loans...................................29
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5. PAYMENTS............................................................29
5.1. Payments...................................................29
5.2. Pro Rata Treatment of the Banks............................30
5.3. Interest Payment Dates.....................................30
5.4. Prepayments................................................30
5.5. Additional Compensation in Certain Circumstances...........32
(a) Increased Costs or Reduced Return
Resulting From Taxes, Reserves,
Capital Adequacy Requirements,
Expenses, Etc...................................32
(b) Indemnity.........................................32
6. REPRESENTATIONS AND WARRANTIES......................................33
6.1. Representations and Warranties.............................33
(a) Organization and Qualification....................33
(b) Capitalization and Ownership; Subsidiaries........33
(c) Intentionally Omitted.............................34
(d) Power and Authority...............................34
(e) Validity and Binding Effect.......................34
(f) No Conflict.......................................34
(g) Litigation........................................35
(h) Title to Properties...............................35
(i) Financial Statements..............................35
(j) Margin Stock......................................36
(k) Full Disclosure...................................36
(l) Taxes.............................................36
(m) Consents and Approvals............................36
(n) No Event of Default; Compliance
With Instruments................................37
(o) Patents, Trademarks, Copyrights,
Licenses, Etc...................................37
(p) Insurance.........................................37
(q) Compliance With Laws..............................37
(r) Material Contracts................................37
(s) Investment Companies..............................38
(t) Plans and Benefit Arrangements....................38
(u) Employment Matters................................39
(v) Environmental Matters.............................39
(w) Senior Debt Status................................40
(x) Restricted Transactions...........................41
(y) Homemax...........................................41
(z) Security Interests................................41
(aa) Mortgage Liens....................................41
(bb) Status of the Pledged Collateral..................42
(cc) Year 2000.........................................42
6.2. Updates to Schedules.......................................42
7. CONDITIONS OF LENDING...............................................43
7.1. Loans After the Closing Date...............................43
7.2. Each Additional Loan.......................................45
8. COVENANTS...........................................................45
8.1. Affirmative Covenants......................................45
(a) Preservation of Existence, Etc....................46
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(b) Payment of Liabilities, Including Taxes, Etc......46
(c) Maintenance of Insurance..........................46
(d) Maintenance of Properties and Leases..............47
(e) Maintenance of Patents, Trademarks, Etc...........47
(f) Visitation Rights.................................47
(g) Keeping of Records and Books of Account...........48
(h) Plans and Benefit Arrangements....................48
(i) Compliance With Laws..............................48
(j) Use of Proceeds...................................48
(k) Subordination of Intercompany Loans, Other
Loans and Advances to the Borrowers.............48
(l) Warburg Dillon Read LLC...........................49
(m) Addition and Release of Collateral................49
8.2. Negative Covenants.........................................49
(a) Indebtedness......................................49
(b) Liens.............................................50
(c) Guaranties........................................50
(d) Loans and Investments; Certain Dividends
and Distributions...............................50
(e) Changes in the Senior and Subordinated
Notes...........................................51
(f) Liquidations, Mergers, Consolidations,
Acquisitions....................................51
(g) Dispositions of Assets or Subsidiaries............51
(h) Affiliate Transactions............................52
(i) Subsidiary, Partnerships and Joint Ventures.......52
(j) Continuation of or Change in Business;
Geographic Expansion............................52
(k) Plans and Benefit Arrangements....................52
(l) Fiscal Year.......................................53
(m) Changes in Organizational Documents...............53
(n) Minimum Fixed Charge Coverage Ratio...............54
(o) Minimum Tangible Net Worth........................54
(p) Maximum Leverage Ratio............................54
(q) Speculative Units.................................54
(r) Model Units.......................................54
(s) Land Ownership or Acquisition.....................55
(t) ▇▇▇▇▇▇ National Maximum Leverage Ratio............55
(u) ▇▇▇▇▇▇ National Minimum Net Worth.................55
(v) Off Balance Sheet Financing.......................55
(w) Limitation on Interest Rate.......................56
(x) Availability and Cash Flow........................56
8.3. Reporting Requirements.....................................56
(a) Monthly Financial Statements and Reports
and Biweekly Cash Flow Forecast.................56
(b) Quarterly Financial Statements....................57
(c) Annual Financial Statements.......................57
(d) Quarterly Compliance Certificate of the
Loan Parties; Updates to Schedules..............58
(e) Borrowing Base Certificate........................58
(f) Notice of Default.................................58
(g) Notice of Litigation..............................58
(h) Budgets, Forecasts, Deliveries Under the
Senior Notes, Other Reports
and Information.................................59
(i) Notices Regarding Plans and Benefit
Arrangements....................................59
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9. DEFAULT.............................................................61
9.1. Events of Default..........................................61
9.2. Consequences of Event of Default...........................63
9.3. Notice of Sale.............................................65
10. THE AGENT...........................................................65
10.1. Appointment................................................65
10.2. Delegation of Duties.......................................65
10.3. Nature of Duties; Independent Credit Investigation.........66
10.4. Actions in Discretion of Agent; Instructions From
the Banks................................................66
10.5. Reimbursement and Indemnification of Agent
by the Borrowers.........................................66
10.6. Exculpatory Provisions.....................................67
10.7. Reimbursement and Indemnification of Agent
by Banks.................................................67
10.8. Reliance by Agent..........................................68
10.9. Notice of Default..........................................68
10.10. Notices....................................................68
10.11. Banks in Their Individual Capacities.......................68
10.12. Holders of Notes...........................................69
10.13. Equalization of Banks......................................69
10.14. Successor Agent............................................69
10.15. Agent's Fee................................................70
10.16. Availability of Funds......................................70
10.17. Calculations...............................................70
10.18. Beneficiaries..............................................70
11. MISCELLANEOUS.......................................................71
11.1. Modifications, Amendments or Waivers.......................71
11.2. No Implied Waivers; Cumulative Remedies;
Writing Required.........................................71
11.3. Reimbursement and Indemnification of Banks
by the Borrower; Taxes...................................72
11.4. Holidays...................................................72
11.5. Funding by Branch, Subsidiary or Affiliate.................73
(a) Intentionally Omitted.............................73
(b) Actual Funding....................................73
11.6. Notices....................................................73
11.7. Severability...............................................73
11.8. Governing Law..............................................74
11.9. Prior Understanding........................................74
11.10. Duration; Survival.........................................74
11.11. Successors and Assigns.....................................74
11.12. Confidentiality............................................75
11.13. Counterparts...............................................75
11.14. Agent's or Bank's Consent..................................75
11.15. Exceptions.................................................76
11.16. Consent to Forum; Waiver of Jury Trial.....................76
11.17. Tax Withholding Clause.....................................76
11.18. Joinder of Guarantors......................................77
11.19. Limitation of Liability....................................77
11.20. Co-Agents..................................................77
11.21. Waiver.....................................................77
11.22. Acknowledgement and Release................................78
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
---------
SCHEDULE 1.1(B) - COMMITMENT OF BANKS
SCHEDULE 2.9(a) - ROLLOVER LCS
SCHEDULE 6.1(a) - QUALIFICATIONS TO DO BUSINESS
SCHEDULE 6.1(b) - CAPITALIZATION AND OWNERSHIP
SCHEDULE 6.1(c) - SUBSIDIARIES
SCHEDULE 6.1(h) - OWNED OR LEASED REAL PROPERTY
SCHEDULE 6.1(m) - CONSENTS AND APPROVALS
SCHEDULE 6.1(o) - PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.
SCHEDULE 6.1(p) - INSURANCE POLICIES
SCHEDULE 6.1(v) - ENVIRONMENTAL DISCLOSURES
SCHEDULE 6.1(w) - MORTGAGE LIEN DISCLOSURES
SCHEDULE 6.1(x) - RESTRICTED TRANSACTIONS
EXHIBITS
--------
EXHIBIT 1.1(A) - FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(C) - FORM OF CASH FLOW FORECAST
EXHIBIT 1.1(G)(1)- FORM OF GUARANTOR JOINDER
EXHIBIT 1.1(G)(2)- FORM OF GUARANTY AGREEMENT
EXHIBIT 1.1(I) - FORM OF INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(M) - FORM OF MORTGAGE
EXHIBIT 1.1(P) - FORM OF PLEDGE AGREEMENT
EXHIBIT 1.1(R) - FORM OF REVOLVING CREDIT NOTE
EXHIBIT 1.1(S) - FORM OF SECURITY AGREEMENT
EXHIBIT 1.1(T) - FORM OF TERM NOTE
EXHIBIT 2.5(a) - FORM OF REVOLVING CREDIT LOAN REQUEST
EXHIBIT 7.1(d) - REQUIREMENTS OF OPINION OF COUNSEL
EXHIBIT 8.3(d) - FORM OF QUARTERLY COMPLIANCE CERTIFICATE
EXHIBIT 8.3(e) - FORM OF BORROWING BASE CERTIFICATE
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT is dated as of April 13,
2000, and is made by and among ▇▇▇▇▇▇ HOMES, INC., an Ohio corporation ("▇▇▇▇▇▇
HOMES"), ▇▇▇▇▇▇ HOLDINGS, INC., an Ohio corporation ("▇▇▇▇▇▇ HOLDINGS"),
HEARTHSIDE HOMES, LLC, an Indiana limited liability company ("HEARTHSIDE"),
▇▇▇▇▇▇ NATIONAL LAND HOLDING CORPORATION, an Ohio corporation ("▇▇▇▇▇▇ LAND
HOLDING"), ▇▇▇▇▇▇ NATIONAL HOMES HOLDING CORPORATION, an Ohio corporation
("▇▇▇▇▇▇ HOMES HOLDING") and ▇▇▇▇▇▇ LEASING, LLC, an Ohio limited liability
company ("▇▇▇▇▇▇ LEASING," and together with ▇▇▇▇▇▇ Homes, ▇▇▇▇▇▇ Holdings,
Hearthside, ▇▇▇▇▇▇ Land Holding and ▇▇▇▇▇▇ Homes Holding collectively, the
"BORROWERS"), ▇▇▇▇▇▇ NATIONAL CORPORATION, an Ohio corporation ("▇▇▇▇▇▇
NATIONAL"), ▇▇▇▇▇▇ HOMES OF INDIANA, L.L.C., an Indiana limited liability
company ("▇▇▇▇▇▇ INDIANA"), ▇▇▇▇▇▇ HOMES KENTUCKY, LLC, a Kentucky limited
liability company ("▇▇▇▇▇▇ HOMES KENTUCKY"), the BANKS (as hereinafter defined),
PNC BANK, NATIONAL ASSOCIATION, in its capacity as agent for the Banks under
this Agreement (hereinafter referred to in such capacity as the "AGENT"), and
BANK OF AMERICA, N.A. (formerly Bank of America NT&SA) and BANK ONE, NA, as
co-agents (hereinafter referred to in such capacity, collectively, as the
"CO-AGENTS").
WITNESSETH:
WHEREAS, ▇▇▇▇▇▇ Homes, as borrower, ▇▇▇▇▇▇ Holdings, ▇▇▇▇▇▇ Indiana and
▇▇▇▇▇▇ Homes Kentucky, as guarantors, the Banks, the Agent and the Co-Agents are
parties to that Credit Agreement (the "ORIGINAL CREDIT AGREEMENT") dated as of
May 13, 1996 pursuant to which the Banks provided to ▇▇▇▇▇▇ Homes a revolving
credit facility in an aggregate principal amount not to exceed $72,500,000 and a
term loan facility in an aggregate principal amount not to exceed $15,000,000,
with outstanding indebtedness under the term facility as of the date hereof in
an aggregate amount of $3,000,000; and
WHEREAS, the Original Credit Agreement was amended and restated pursuant to
that certain Amended and Restated Credit Agreement dated as of February 23, 1998
(the "FIRST AMENDED AND RESTATED CREDIT AGREEMENT") by and among ▇▇▇▇▇▇ Homes,
▇▇▇▇▇▇ Holdings and Hearthside, as Borrowers and Guarantors, ▇▇▇▇▇▇ National,
▇▇▇▇▇▇ Indiana and ▇▇▇▇▇▇ Homes Kentucky, as Guarantors, PNC, as Agent, and the
Co-Agents and the Banks set forth therein; and
WHEREAS, the First Amended and Restated Credit Agreement was
amended and restated pursuant to that certain Second Amended and Restated Credit
Agreement dated as of June 28, 1999 (the "SECOND AMENDED AND RESTATED CREDIT
AGREEMENT") by and among ▇▇▇▇▇▇ Homes, ▇▇▇▇▇▇ Holdings and Hearthside, as
Borrowers and Guarantors, ▇▇▇▇▇▇ National, ▇▇▇▇▇▇ Indiana and ▇▇▇▇▇▇ Homes
Kentucky, as Guarantors, PNC, as Agent, and the Co-Agents and the Banks set
forth therein; and
8
WHEREAS, the revolving credit facility shall be used for general corporate
purposes and the term loan facility was used to refinance existing indebtedness;
and
WHEREAS, the parties hereto wish to amend and restate the Second Amended
and Restated Credit Agreement upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree to amend and restate the Second Amended and Restated
Credit Agreement as follows:
1. CERTAIN DEFINITIONS
------------------------
1.1. CERTAIN DEFINITIONS.
In addition to words and terms defined elsewhere in this Agreement, the
following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
ACCOUNTS PAYABLE shall mean, as of any date of determination,
the accounts payable of the Loan Parties determined and consolidated in
accordance with GAAP.
ACTIVE COMMUNITY shall mean, as of any date of determination,
any community of geographically contiguous residential housing units which any
Loan Party is developing for sale or has sold to buyers; PROVIDED that (A) such
Loan Party has acquired or has an option to acquire in fee simple the lots
comprising such community (or the lots comprising the applicable phase of the
Loan Party's planned development of such community if such Loan Party is
developing such lots in separate phases), and either (i) the site improvements
have been completed on all such lots, or (ii) such Loan Party has, (a) to the
extent required, posted bonds and provided any other security required in
connection with the completion of such site improvements and (b) received
Regulatory Approval for the construction of at least one residential unit within
such Active Community (such Regulatory Approval may be subject in some instances
to completion of certain improvements which are a condition to the issuance of a
building permit with respect to such unit) on such date; and (B) such Loan Party
is then actively soliciting for sale (or has sold all of) such lots or the
residential units on such lots with delivery to the buyer or buyers of such
units or lots contemplated within nine (9) months of the contract date.
ACTIVE UNIT shall mean any residential building owned in fee
simple by a Loan Party which is under development or completed by a Loan Party
in an Active Community with respect to which (i) construction has progressed
beyond completion of the foundation and (ii) only one residential unit is or
shall be contained therein after completion of such building.
AFFILIATE, as to any person, shall mean any other person (i)
which directly or indirectly controls, is controlled by or is under common
control with any Loan Party,
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(ii) which beneficially owns or holds 10% or more of any class of the voting
stock of any Loan Party, or (iii) 10% or more of the voting stock (or in the
case of a person which is not a corporation, 10% or more of the equity interest)
of which is beneficially owned or held, directly or indirectly, by any Loan
Party. "Control," as used herein, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of voting securities, by
contract or otherwise, including the power to elect a majority of the directors
or trustees of a corporation or trust, as the case may be.
AGENT shall mean PNC Bank, National Association and its
successors.
AGENT'S FEE shall have the meaning assigned to that term in
Section 10.15 hereof.
AGREEMENT shall mean this Credit Agreement, as the same may be
supplemented, amended, restated or modified from time to time, including all
schedules and exhibits hereto.
AGREEMENT OF SALE shall mean a written agreement with a person,
which is not an Affiliate or Subsidiary of any Co-Borrower, for the sale of a
residential housing unit to such person, fully executed by all parties to such
agreement, which shall be in form and substance satisfactory to the Agent, which
shall be accompanied by a cash deposit equal to the lesser of (x) the customary
percentage in any geographic area (but in no event less than two percent (2%))
of the purchase price of the unit sold or (y) the difference between the
purchase price set forth in such agreement and the amount of the mortgage
contingency set forth in such agreement, and which shall provide that (i) the
purchase price shall be paid in cash or by title company check, certified or
bank check or attorney trust account check at or before the closing of the sale,
the date of which shall be set forth in the agreement, and (ii) the deposit may
not be refunded except upon a breach by the seller. The Co-Borrowers shall
deliver to the Agent the form of Agreement of Sale which they propose to use for
Agent's review prior to the Closing Date and from time to time thereafter upon
Agent's request. The Co-Borrowers shall not modify such form in any material and
adverse respect without the Agent's prior approval. The Agent may at any time
request to review executed Agreements of Sale. The Co-Borrowers shall promptly
deliver to the Agent copies of such Agreements of Sale or make such Agreements
of Sale available to the Banks for their review, as the Agent may elect.
APPROVED CASH FLOW FORECAST shall mean a Cash Flow Forecast
which has been approved by the Required Banks; a Bank will be deemed to have
approved any Cash Flow Forecast if it does not expressly disapprove of it within
three (3) Business Days after receipt.
APPROVED DEVELOPED LOTS INVENTORY shall mean, on any date of
determination, the aggregate book value, determined in accordance with GAAP, of
the acquisition and development costs of parcels of land which are owned in fee
simple by the Loan Parties (excluding the acquisition and development costs of
lots under Active Units), PROVIDED that with respect to each such parcel the
applicable Loan Party has received Regulatory Approval, has completed
construction relating to any sewers, streets, water and other utilities, and
each such parcel satisfies the requirements for the issuance of a building
permit, but no home
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construction has been commenced. Any asset which is either Sold Inventory, Model
Inventory, Approved Land Under Development Inventory or Approved Land Inventory
is excluded from Approved Developed Lots Inventory.
APPROVED LAND INVENTORY shall mean, on any date of
determination, the aggregate book value, determined in accordance with GAAP, of
the acquisition and development costs of parcels of land which are owned in fee
simple by the Loan Parties (excluding the acquisition and development costs of
lots under Active Units), PROVIDED that with respect to each such parcel, the
applicable Loan Party has received Regulatory Approval, PROVIDED FURTHER,
parcels of land not owned in fee simple but for which purchase price deposits in
amounts not exceeding $1,500,000 in the aggregate have been made ("PERMITTED
LAND DEPOSITS") but which otherwise fit within this definition may also be
included as Approved Land Inventory and PROVIDED FURTHER, parcels of land, which
have not received Regulatory Approval but which otherwise fit within this
definition which together with Permitted Land Deposits, do not exceed $2,000,000
in the aggregate at any time, may also be included as Approved Land Inventory.
Any asset which is either Sold Inventory, Model Inventory, Unsold Building
Inventory, Approved Land Under Development Inventory or Approved Developed Lots
Inventory is excluded from Approved Land Inventory.
APPROVED LAND UNDER DEVELOPMENT INVENTORY shall mean, on any
date of determination, the aggregate book value determined in accordance with
GAAP, of the acquisition and development costs of parcels of land which are
owned in fee simple by the Loan Parties (excluding the acquisition and
development costs of lots under Active Units), PROVIDED that with respect to
each such parcel, the applicable Loan Party has received Regulatory Approval and
has entered into a contract for the construction of sewers, streets, water or
utilities. Any asset which is either Sold Inventory, Model Inventory, Unsold
Building Inventory, Approved Developed Lots Inventory or Approved Land Inventory
is excluded from Approved Land Under Development Inventory.
ASSIGNMENT AND ASSUMPTION AGREEMENT shall mean an Assignment and
Assumption Agreement by and among a Purchasing Bank, the Transferor Bank and the
Agent, as Agent and on behalf of the remaining Banks, substantially in the form
of EXHIBIT 1.1(A).
AUTHORIZED OFFICER shall mean those persons, designated by
written notice to the Agent from the Borrowers, authorized on behalf of the
Borrowers to execute notices, reports and other documents required hereunder.
The Borrowers may amend such list of persons from time to time, PROVIDED that
the Borrowers give written notice of such amendment to the Agent.
BANKS shall mean the financial institutions named on SCHEDULE
1.1(B) and their respective successors and assigns as permitted hereunder, each
of which is referred to herein as a BANK.
BASE RATE shall mean the greater of (i) the interest rate per
annum announced from time to time by the Agent at its Principal Office as its
then prime rate, which
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rate may not be the lowest rate then being charged commercial borrowers by the
Agent, or (ii) the Federal Funds Effective Rate plus one-half of one percent
(1/2%) per annum.
BENEFIT ARRANGEMENT shall mean at any time an "employee benefit
plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the ERISA Group.
BORROWERS shall mean the Co-Borrowers, with respect to the
Revolving Credit Loans, and ▇▇▇▇▇▇ Homes, with respect to the Term Loans.
BORROWING BASE shall be determined based on the most recent
Borrowing Base Certificate delivered pursuant to Section 8.3(e) and shall mean
the sum of clauses (A) through (F) MINUS the sum of clauses (G) through (H), as
follows:
(A) 100% of Sold Inventory; PLUS
(B) 80% of Model Inventory; PLUS
(C) 70% of Unsold Building Inventory; PLUS
(D) 55% of Approved Developed Lots Inventory; PLUS
(E) 55% of Approved Land Under Development Inventory; PLUS
(F) 50% of the Approved Land Inventory; MINUS
(G) the principal amount outstanding of the Term Loans; MINUS
(H) the principal amount outstanding of the Senior Notes;
provided, on June 1, 2000, the advance rate in each of clauses (A)-(F) shall be
reduced by 5% and on September 1, 2000, the advance rate in each of clauses
(A)-(F) shall be further reduced by 5%; PROVIDED FURTHER, in no event shall the
sum of clauses (D)-(F) exceed 45% of the sum of clauses (A)-(F); and PROVIDED,
FURTHER, that no property subject to a Nonrecourse Purchase Money Security
Interest shall be included in clauses (A)-(F) above; PROVIDED, FURTHER, any
"reserve to complete" is expressly excluded as an asset in calculating the
Borrowing Base; and PROVIDED, FURTHER, in no event shall the Borrowing Base
exceed 120% of the projected borrowings as set forth on the most recent Approved
Cash Flow Forecast. Notwithstanding any other provision to the contrary, the
parties expressly acknowledge that, for purposes of calculating the Borrowing
Base, clauses (A)-(F) include only such inventory owned by the Loan Parties
expressly excluding ▇▇▇▇▇▇ National from the definition of Loan Parties.
BORROWING BASE CERTIFICATE shall have the meaning given to such
term in Section 8.3(e).
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BORROWING DATE shall mean, with respect to any Loan, the date
for the making thereof, which shall be a Business Day.
BUSINESS DAY shall mean a day on which commercial banks are open
for business in Cincinnati, Ohio.
CASH FLOW FORECAST shall mean a rolling thirteen (13) week cash
flow forecast of the Borrowers in the form attached hereto as EXHIBIT 1.1(C)
which will include a comparison of actual versus projected performance for the
prior two (2) week period.
CHANGE OF CONTROL shall mean any transaction or group of
transactions after which (i) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III and ▇▇▇▇ ▇. ▇▇▇▇▇▇ (together
with their respective executors, administrators or heirs in the event of the
death of either of them) shall directly or indirectly own less than twenty-five
percent (25%) of ▇▇▇▇▇▇ National's issued and outstanding common stock, (ii)
another partnership, limited partnership, syndicate or other group which is
deemed a "person" within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934 owns more of ▇▇▇▇▇▇ National's issued and outstanding
common stock than is owned directly or indirectly in the aggregate by ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, III and ▇▇▇▇ ▇. ▇▇▇▇▇▇ (together with their executors, administrators or
heirs in the event of the death of either of them), or (iii) ▇▇▇▇▇▇ National, by
itself or together with one or more of the Co-Borrowers, ceases to own all of
the issued and outstanding capital stock and have full voting control of ▇▇▇▇▇▇
Homes, ▇▇▇▇▇▇ Holdings and Hearthside.
CLOSING DATE shall mean April 13, 2000.
CO-AGENTS shall mean Bank of America, N.A. (formerly Bank of
America NT&SA) and Bank One, NA and their respective successors.
CO-BORROWERS shall mean ▇▇▇▇▇▇ Homes, ▇▇▇▇▇▇ Holdings,
Hearthside, ▇▇▇▇▇▇ Land Holding, ▇▇▇▇▇▇ Homes Holding and ▇▇▇▇▇▇ Leasing, which
are jointly and severally liable with respect to the Revolving Credit Loans.
COLLATERAL shall mean the Pledged Collateral, the UCC Collateral
and the Real Property.
COMMITMENT FEE shall have the meaning assigned to that term in
Section 2.3(b).
COMMITMENTS shall mean collectively the Revolving Credit
Commitments and the Term Loan Commitments.
CONSOLIDATED CASH FLOW FROM OPERATIONS shall mean, for any
period of determination, the following with respect to the Borrowers and their
Subsidiaries for each item for such period determined and consolidated in
accordance with GAAP: (i) the sum of net income, depreciation, amortization,
other noncash charges to net income, interest expense and income tax expense
MINUS (ii) noncash credits to net income.
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CONSOLIDATED FIXED CHARGES shall mean, for any period of
determination, the sum of interest incurred (capitalized and expensed) PLUS
scheduled principal installments of Indebtedness (excluding scheduled principal
installments of Indebtedness due under the Notes on the Revolving Credit
Expiration Date) PLUS dividends (to the extend paid in cash), in each case of
the Borrowers and their Subsidiaries for such period determined and consolidated
in accordance with GAAP.
CONSOLIDATED TANGIBLE NET WORTH shall mean, as of any date of
determination, total stockholders' equity MINUS intangible assets, in each case
of the Borrowers and their Subsidiaries as of such date determined and
consolidated in accordance with GAAP.
CONSOLIDATED TOTAL LIABILITIES shall mean, for any fiscal
quarter for the fiscal quarter then ended, the sum of (i) all Indebtedness and,
without duplication, all other liabilities of the Borrowers and their
Subsidiaries, determined and consolidated in accordance with GAAP, excluding
Indebtedness secured by Nonrecourse Purchase Money Security Interests not to
exceed, in the aggregate at any time, 15% of Consolidated Tangible Net Worth
minus (ii) Eligible Development Costs.
DOLLAR, DOLLARS, U.S. DOLLARS and the symbol $ shall mean lawful
money of the United States of America.
ELIGIBLE DEVELOPMENT COSTS shall mean expenses, to the extent
paid in cash for site development costs which are included in Approved Land
Inventory, Approved Developed Lots Inventory or Approved Land Under Development
Inventory, in connection with sites for which undrawn Letters of Credit are
outstanding to support such site development costs.
ENVIRONMENTAL COMPLAINT shall mean any written complaint setting
forth a cause of action for personal or property damage or natural resource
damage or equitable relief, order, notice of violation, citation, request for
information issued pursuant to any Environmental Laws by an Official Body,
subpoena or other written notice of any type relating to, arising out of or
issued pursuant to any Environmental Laws or any Environmental Conditions, as
the case may be.
ENVIRONMENTAL CONDITIONS shall mean any conditions of the
environment, including, without limitation, the workplace, the ocean, natural
resources (including flora or fauna), soil, surface water, groundwater, any
actual drinking water supply sources or water sources which could reasonably be
expected to be used to supply drinking water, substrata or the ambient air,
relating to, or arising out of or caused by the use, handling, storage,
treatment, recycling, generation, transportation, release, spilling, leaking,
pumping, emptying, discharging, injecting, escaping, leaching, disposal,
dumping, threatened release or other management or mismanagement of Regulated
Substances resulting from the use of, or operations on, the Property.
ENVIRONMENTAL LAWS shall mean all federal, state, local and
foreign Laws and regulations, including, without limitation, permits, licenses,
authorizations, bonds, orders, judgments and consent decrees issued or entered
into pursuant thereto, relating to pollution or protection of human health or
the environment or employee safety in the workplace or the operation of the
activities of the Borrowers and their Subsidiaries.
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ERISA shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
ERISA GROUP shall mean, at any time, the Borrowers and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities which,
together with the Borrower, are treated as a single employer under Section 414
of the Internal Revenue Code.
EVENT OF DEFAULT shall mean any of the Events of Default
described in Section 9.1.
FACILITY FEES shall mean the fees referred to in Sections 2.3(a)
and 3.3.
FEDERAL FUNDS EFFECTIVE RATE for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; PROVIDED, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day for which such rate was announced.
GAAP shall mean generally accepted accounting principles as are
in effect from time to time, subject to the provisions of Section 1.3 hereof,
and applied on a consistent basis (except for changes in application in which
the Borrowers' independent certified public accountants concur) both as to
classification of items and amounts.
GOVERNMENTAL ACTS shall have the meaning given to such term in
Section 2.9(h).
GUARANTOR shall mean each of the parties to this Agreement which
is designated as a "Guarantor" on the signature page hereof and each other
Person which joins this Agreement as a Guarantor after the date hereof pursuant
to Section 11.18.
GUARANTOR JOINDER shall mean a joinder by a Person as a
Guarantor under this Agreement, the Guaranty Agreement and the other Loan
Documents in the form of EXHIBIT 1.1(G)(1).
GUARANTY of any person shall mean any obligation of such person
guaranteeing or in effect guaranteeing any liability or obligation of any other
person in any
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manner, whether directly or indirectly, including, without limiting the
generality of the foregoing, any agreement to indemnify or hold harmless any
other person, any performance bond or other suretyship arrangement and any other
form of assurance against loss, except endorsement of negotiable or other
instruments for deposit or collection in the ordinary course of business.
GUARANTY AGREEMENT shall mean the Second Amended and Restated
Guaranty and Suretyship Agreement in substantially the form attached hereto as
EXHIBIT 1.1(G)(2) executed and delivered by the Guarantors to the Agent for the
benefit of the Banks.
HEARTHSIDE shall mean, Hearthside Homes, LLC, a limited
liability company organized and existing under the laws of the State of Indiana.
INDEBTEDNESS shall mean, as to any person at any time, any and
all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations under any letter of
credit, currency swap agreement, interest rate swap, cap, collar or floor
agreement or other interest rate management device, (iv) any other transaction
(including without limitation forward sale or purchase agreements, capitalized
leases, conditional sales agreements and undrawn and outstanding letters of
credit) having the commercial effect of a borrowing of money entered into by
such person to finance its operations or capital requirements (but not including
trade payables and accrued expenses incurred in the ordinary course of business
which are not represented by a promissory note or other evidence of indebtedness
and which are not more than thirty (30) days past due), or (v) any Guaranty of
any of the foregoing.
INTERCOMPANY SUBORDINATION AGREEMENT shall mean a Second Amended
and Restated Intercompany Subordination Agreement among the Loan Parties in the
form attached hereto as EXHIBIT 1.1(I).
INTEREST PAYMENT DATE shall mean each date specified for the
payment of interest in Section 5.3.
INTERNAL REVENUE CODE shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
ISSUING LETTER OF CREDIT BANK shall mean, with respect to a
Letter of Credit, the Bank which issued that Letter of Credit pursuant to
Section 2.9.
LABOR CONTRACTS shall have the meaning assigned to that term in
Section 6.1(r).
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LAW or LAW shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance, opinion, release,
ruling, order, injunction, writ, decree or award of any Official Body.
LETTER OF CREDIT shall have the meaning assigned to that term in
Section 2.9(a).
LETTER OF CREDIT FEE shall have the meaning assigned to that
term in Section 2.9(c).
LETTER OF CREDIT OUTSTANDINGS shall mean at any time the sum of
(i) the aggregate undrawn face amount of outstanding Letters of Credit and (ii)
the aggregate amount of all unpaid and outstanding Reimbursement Obligations.
LEVERAGE RATIO shall mean the ratio of Consolidated Total
Liabilities to Consolidated Tangible Net Worth.
LIEN shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including but not
limited to any conditional sale or title retention arrangement, and any
assignment, deposit arrangement or lease intended as, or having the effect of,
security and any filed financing statement or other notice of any of the
foregoing (whether or not a lien or other encumbrance is created or exists at
the time of the filing).
LLC INTERESTS shall have the meaning given to such term in
Section 6.1(b).
LOAN DOCUMENTS shall mean this Agreement, the Notes, the
Guaranty Agreement, the Intercompany Subordination Agreement, the Mortgages, the
Pledge Agreement, the Security Agreement, the Subordination Agreement and any
other financing statements, stock certificates, stock powers, instruments,
certificates, agreements or documents delivered or contemplated to be delivered
hereunder or thereunder or in connection herewith or therewith, as the same may
be supplemented, amended or restated from time to time in accordance herewith or
therewith, and LOAN DOCUMENT shall mean any of the Loan Documents.
LOAN PARTIES shall mean the Borrowers and the Guarantors;
PROVIDED, HOWEVER, with respect to Section 8.2 and as used in the definition of
Restricted Transactions and in calculating the Borrowing Base, ▇▇▇▇▇▇ National
Corporation is expressly excluded from the definition of "Loan Parties."
LOAN REQUEST shall mean a request for a Revolving Credit Loan
made in accordance with Section 2.5.
LOANS shall mean collectively, and LOAN shall mean separately,
all Revolving Credit Loans and Term Loans or any Revolving Credit Loan or Term
Loan.
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MATERIAL ADVERSE CHANGE shall mean any set of circumstances or
events which (a) has or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of this Agreement
or any other Loan Document, (b) is or could reasonably be expected to be
material and adverse to the business, properties, assets, financial condition,
results of operations or prospects of the Borrowers and their Subsidiaries taken
as a whole, (c) impairs materially or could reasonably be expected to impair
materially the ability of the Borrowers and their Subsidiaries taken as a whole
to duly and punctually pay or perform their Indebtedness, or (d) impairs
materially or could reasonably be expected to impair materially the ability of
the Agent or any of the Banks, to the extent permitted, to enforce their legal
remedies against the Loan Parties pursuant to this Agreement or any other Loan
Document.
MODEL INVENTORY shall mean, on any date of determination, the
aggregate book value, determined in accordance with GAAP (excluding capitalized
interest), of Model Units. Any asset which is Sold Inventory, Unsold Building
Inventory, Approved Developed Lots Inventory, Approved Land Under Development or
Approved Land Inventory is excluded from Model Inventory.
MODEL UNIT shall mean an Active Unit on which construction has
been completed which is not subject to an Agreement of Sale and which a Loan
Party has designated and is using or plans to use as a model for exhibition.
MONEY MANAGEMENT ARRANGEMENTS shall mean the various deposit
accounts, sweep accounts and other accounts and arrangements between any of the
Loan Parties, their Subsidiaries and the Agent relating to the management and
investment of any of the Loan Parties' and their Subsidiaries' cash assets.
MORTGAGES shall mean the Mortgages in substantially the form of
EXHIBIT 1.1(M) with respect to the Real Property executed and delivered by the
Loan Parties to the Agent for the benefit of the Banks.
MULTIEMPLOYER PLAN shall mean any employee benefit plan which is
a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrowers or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five plan years,
has made or had an obligation to make such contributions.
MULTIPLE EMPLOYER PLAN shall mean a Plan which has two or more
contributing sponsors (including the Borrowers or any member of the ERISA
Group), at least two of whom are not under common control, as such a Plan is
described in Sections 4063 and 4064 of ERISA.
NONRECOURSE PURCHASE MONEY SECURITY INTEREST shall mean Liens
upon property securing loans to a Loan Party or deferred payments by a Loan
Party for the purchase of such property, PROVIDED that the recourse of the
creditor for repayment is limited to such property and does not extend to any
Loan Party.
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NOTES shall mean collectively, and NOTE shall mean separately,
the Revolving Credit Notes and the Term Notes or any Revolving Credit Note or
Term Note.
OFFICIAL BODY shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
ORIGINAL CLOSING DATE shall mean the Business Day on which the
first Loan was made, which was May 17, 1996.
PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor.
PARTNERSHIP INTERESTS shall have the meaning given to such term
in Section 6.1(b).
PERMITTED INVESTMENTS shall mean:
(i) direct obligations of the United States of America
or any agency or instrumentality thereof or obligations backed by the full faith
and credit of the United States of America maturing in twelve months or less
from the date of acquisition;
(ii) commercial paper maturing in 180 days or less rated
not lower than A-1 by Standard & Poor's Corporation or P-1 by ▇▇▇▇▇'▇ Investors
Service on the date of acquisition;
(iii) demand deposits, time deposits or certificates of
deposit maturing within one year in commercial banks whose obligations are rated
A-1, A or the equivalent or better by Standard & Poor's Corporation or ▇▇▇▇▇'▇
Investors Service on the date of acquisition; and
(iv) capital stock of publicly traded companies not to
exceed $100,000 in the aggregate on a cost basis.
PERMITTED LIENS shall mean:
(i) Liens for taxes, assessments or similar charges
incurred in the ordinary course of business and which are not yet due and
payable;
(ii) Pledges or deposits made in the ordinary course of
business to secure payment of workmen's compensation, or to participate in any
fund in connection with workmen's compensation, unemployment insurance, old-age
pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen or
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that
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are not yet due and payable and Liens of landlords securing obligations to pay
lease payments that are not yet due and payable or in default;
(iv) Good-faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders, contracts (other than
for the repayment of borrowed money) or leases, not in excess of the aggregate
amount due thereunder, or to secure statutory obligations or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;
(v) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property for the purpose contemplated by the
Loan Party or the value thereof, and none of which is violated in any material
respect by existing structures or land use;
(vi) Liens in favor of lessors or sellers on personal
property being leased or sold under leases or agreements of sale as and to the
extent permitted in Section 8.2(a)(iii);
(vii) Nonrecourse Purchase Money Security Interests,
PROVIDED that the aggregate amount of loans and deferred payments secured by
such Nonrecourse Purchase Money Security Interests shall not exceed 15% of
Consolidated Tangible Net Worth; and
(viii) The following, if the validity or amount thereof
is being contested in good faith by appropriate and lawful proceedings
diligently conducted so long as either no action to levy or execute thereon has
been commenced or, if such action has commenced, it has been stayed and shall
continue to be stayed:
(1) Claims or Liens for taxes, assessments or charges due and
payable and subject to interest or penalty, PROVIDED that the
applicable Loan Party maintains such reserves or other appropriate
provisions as shall be required by GAAP and pays all such taxes,
assessments or charges forthwith upon the commencement of proceedings
to foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and defects of title to,
real or personal property, including any attachment of personal or
real property or other legal process prior to adjudication of a
dispute on the merits; or
(3) Claims or Liens of mechanics, materialmen, warehousemen or
carriers, or other statutory nonconsensual Liens.
PERSON or person shall mean any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture, government or political subdivision or agency
thereof, or any other entity.
PLAN shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan but not a Multiemployer Plan) which is
covered by Title IV of ERISA
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or is subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained by any member of the ERISA Group for
employees of any member of the ERISA Group or (ii) has at any time within the
preceding five years been maintained by any entity which was at such time a
member of the ERISA Group for employees of any entity which was at such time a
member of the ERISA Group.
PLEDGE AGREEMENT shall mean the Amended and Restated Pledge
Agreement in substantially the form of EXHIBIT 1.1(P) executed and delivered by
▇▇▇▇▇▇ National, ▇▇▇▇▇▇ Homes and ▇▇▇▇▇▇ Holdings to the Agent for the benefit
of the Banks.
PLEDGED COLLATERAL shall mean the property of the Loan Parties
in which security interests are to be granted under the Pledge Agreement.
PNC shall mean PNC Bank, National Association, its successors
and assigns.
POTENTIAL DEFAULT shall mean any event or condition which with
notice, passage of time or a determination by the Agent or the Required Banks,
or any combination of the foregoing, would constitute an Event of Default.
PRINCIPAL OFFICE shall mean the main banking office of the Agent
in Cincinnati, Ohio.
PRIOR SECURITY INTERESTS shall mean a valid and enforceable
perfected first-priority security interest under the Uniform Commercial Code in
the UCC Collateral and the Pledged Collateral which is subject only to Liens for
taxes not yet due and payable to the extent such prospective tax payments are
given priority by statute or Purchase Money Security Interests as permitted
hereunder.
PROHIBITED TRANSACTION shall mean any prohibited transaction as
defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.
PROPERTY shall mean all real property, both owned and leased, of
the Loan Parties.
PROVIDENT GUARANTY shall mean that certain Unconditional
Guaranty dated March 31, 1999 by ▇▇▇▇▇▇ Homes in favor of The Provident Bank
issued in connection with Provident Loan Agreement.
PROVIDENT LOAN AGREEMENT shall mean that certain Loan and
Security Agreement dated as of March 31, 1999 between The Provident Bank and
▇▇▇▇▇▇ National.
PURCHASING BANK shall mean a Bank which becomes a party to this
Agreement by executing an Assignment and Assumption Agreement.
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QUARTERLY COMPLIANCE CERTIFICATE shall have the meaning given to
such term in Section 8.3(d).
RATABLE SHARE shall mean the proportion that a Bank's Commitment
bears to the Commitments of all of the Banks.
REAL PROPERTY shall mean all real estate owned by the Loan
Parties.
REGULATED SUBSTANCES shall mean any substance, including without
limitation any solid, liquid, semisolid, gaseous, thermal, thoriated or
radioactive material, refuse, garbage, wastes, chemicals, petroleum products,
byproducts, coproducts, impurities, dust, scrap, heavy metals, any substance
defined as a "hazardous substance," "pollutant," "pollution," "contaminant,"
"hazardous or toxic substance," "extremely hazardous substance," "toxic
chemical," "toxic waste," "hazardous waste," "industrial waste," "residual
waste," "solid waste," "municipal waste," "mixed waste," "infectious waste,"
"chemotherapeutic waste," "medical waste," "regulated substance" or any related
materials, substances or wastes as now or hereafter defined pursuant to any
Environmental Laws, ordinances, rules, regulations or other directives of any
Official Body, the generation, manufacture, extraction, processing,
distribution, treatment, storage, disposal, transport, recycling, reclamation,
use, reuse, spilling, leaking, dumping, injection, pumping, leaching, emptying,
discharge, escape, release or other management or mismanagement of which is
regulated by the Environmental Laws.
REGULATION U shall mean Regulation U, T, G or X as promulgated
by the Board of Governors of the Federal Reserve System, as amended from time to
time.
REGULATORY APPROVAL shall mean with respect to any land held by
a Loan Party that all preliminary approvals, permits, licenses or other
authorizations under applicable Laws, including those which relate to zoning,
developmental restrictions and Environmental Laws, from required state and local
governmental authorities and agencies or otherwise under Law with respect to the
Loan Party's development plan have been obtained such that there is vested in
such Loan Party the right to develop such real estate for primarily residential
purposes in accordance with the intentions of such Loan Party, subject only to
nonsubstantive conditions which may remain for final approval of such
development.
REIMBURSEMENT OBLIGATIONS shall have the meaning assigned to
such term in Section 2.9(d).
REPORTABLE EVENT means a reportable event described in Section
4043 of ERISA and regulations thereunder with respect to a Plan or Multiemployer
Plan.
REQUIRED BANKS shall mean (i) if there are no Loans outstanding,
Banks whose Commitments aggregate at least 66-2/3% of the Commitments of all of
the Banks; or (ii) if there are Loans outstanding, Banks whose Loans outstanding
aggregate at least 66-2/3% of the total principal amount of the Loans
outstanding hereunder.
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RESTRICTED TRANSACTIONS shall mean all of the following with
respect to the Loan Parties in an aggregate amount not to exceed, at any time
during which the Provident Guaranty is in existence, five percent (5%) of
Consolidated Tangible Net Worth and, at any time after the Provident Guaranty
has been terminated and released, twenty percent (20%) of Consolidated Tangible
Net Worth: (i) loans by any of the Loan Parties directly or indirectly to any
other person (excluding any other Loan Party); (ii) guaranties by any of the
Loan Parties directly or indirectly of the obligations of any other person
(including any other Loan Party); (iii) investments, contributions, dividends or
other distributions by any of the Loan Parties directly or indirectly in or to
the capital of, or other payments directly or indirectly to or for the benefit
of, any other person (excluding any other Loan Party), PROVIDED, acquisitions
permitted pursuant to Section 8.2(f)(ii) shall not constitute Restricted
Transactions; or (iv) other obligations, contingent or otherwise, of any of the
Loan Parties to or for the benefit of any other person (including any other Loan
Party). The definition of Loan Party and Loan Parties, as used in this
definition of Restricted Transactions, expressly does not include ▇▇▇▇▇▇
National and it is expressly acknowledged that the ▇▇▇▇▇▇ Homes Receivable is
not a Restricted Transaction.
REVOLVING CREDIT AVAILABILITY shall mean at any time the sum of
the Revolving Credit Commitments minus the Revolving Facility Usage.
REVOLVING CREDIT COMMITMENT shall mean, as to any Bank at any
time, the amount initially set forth opposite its name on SCHEDULE 1.1(B) in the
column labeled "Amount of Commitment for Revolving Credit Loans," and thereafter
on Schedule I to the most recent Assignment and Assumption Agreement, and
REVOLVING CREDIT COMMITMENTS shall mean the aggregate Revolving Credit
Commitments of all of the Banks.
REVOLVING CREDIT EXPIRATION DATE shall mean, with respect to the
Revolving Credit Commitments, March 31, 2001.
REVOLVING CREDIT LOANS shall mean collectively, and REVOLVING
CREDIT LOAN shall mean separately, all Revolving Credit Loans or any Revolving
Credit Loan made by the Banks or one of the Banks to the Co-Borrowers pursuant
to Section 2.1 and Section 2.6.
REVOLVING CREDIT NOTES shall mean collectively, and REVOLVING
CREDIT NOTE shall mean separately, all the Second Amended and Restated Revolving
Credit Notes of the Co-Borrowers in the form of EXHIBIT 1.1(R) evidencing the
Revolving Credit Loans, together with all amendments, extensions, renewals,
replacements, refinancings or refundings thereof in whole or in part.
REVOLVING FACILITY USAGE shall mean at any time the sum of the
Revolving Credit Loans outstanding and the Letter of Credit Outstandings.
ROLLOVER LCS shall mean those letters of credit identified on
SCHEDULE 2.9(a) which were issued by an Issuing Letter of Credit Bank prior to
the date of the Original Credit Agreement upon the application of ▇▇▇▇▇▇ Homes.
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SECURITY AGREEMENT shall mean the Amended and Restated Security
Agreement in substantially the form of EXHIBIT 1.1(S) executed and delivered by
each of the Loan Parties (other than ▇▇▇▇▇▇ National) to the Agent for the
benefit of the Banks.
SENIOR NOTES shall mean those three (3) term notes, each bearing
interest at the rate of 7.95% per annum and each dated May 18, 1994, issued by
▇▇▇▇▇▇ Homes in favor of PNC, The Fifth Third Bank and The Provident Bank,
respectively, in the respective principal amounts of $2,097,956, $1,400,386 and
$1,746,548.
SHAREHOLDER SUBORDINATED DEBT shall mean the unsecured
subordinated Indebtedness in the aggregate principal amount of $5,000,000
payable by ▇▇▇▇▇▇ National to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III pursuant to the Subordinated
Note attached as Exhibit A to the Subordination Agreement.
SIDE LETTERS shall mean that certain letter dated February 6,
1996 between PNC Securities Corp. and ▇▇▇▇▇▇ Homes, that certain letter dated
February 4, 1998 between PNC and ▇▇▇▇▇▇ Homes and that certain letter between
PNC and ▇▇▇▇▇▇ Homes dated June 11, 1999.
SOLD INVENTORY shall mean, on any date of determination, the
aggregate book value, determined in accordance with GAAP (excluding capitalized
interest), of all Active Units which are subject to an Agreement of Sale which
requires a closing no later than six (6) months from the date of execution of
such Agreement of Sale and the lots (and related site improvements and
development costs) under such Active Units to be sold therewith, PROVIDED that
with respect to each such Active Unit and related parcel of land, if any, the
applicable Loan Party has received Regulatory Approval. Any asset which is Model
Inventory, Unsold Building Inventory, Approved Developed Lots Inventory,
Approved Land Under Development Inventory or Approved Land Inventory is excluded
from Sold Inventory.
SPECULATIVE UNIT shall mean any Active Unit which is (i) not
subject to an Agreement of Sale and (ii) not a Model Unit.
SUBORDINATION AGREEMENT shall mean that certain Subordination
Agreement dated as of March 31, 2000 by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III in favor of the
Agent, on behalf of the Banks, and acknowledged and accepted by ▇▇▇▇▇▇ National.
SUBSIDIARY of any person at any time shall mean (i) any
corporation or trust of which more than 50% (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such person or one or
more of such person's Subsidiaries, or any partnership of which such person is a
general partner, or of which more than 50% of the partnership interests are at
the time directly or indirectly owned by such person or one or more of such
person's Subsidiaries, and (ii) any corporation, trust, partnership or other
entity which is controlled or capable of being controlled by such person or one
or more of such person's Subsidiaries.
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SUBSIDIARY SHARES shall have the meaning assigned to such term
in Section 6.1(b).
TERM LOAN COMMITMENT shall mean, as to any Bank at any time, the
amount initially set forth opposite its name on SCHEDULE 1.1(B) in the column
labeled "Amount of Commitment for Term Loans," and thereafter on Schedule I to
the most recent Assignment and Assumption Agreement, and TERM LOAN COMMITMENTS
shall mean the aggregate Term Loan Commitments of all of the Banks.
TERM LOAN MATURITY DATE shall mean March 31, 2001.
TERM LOANS shall mean collectively, and TERM LOAN shall mean
separately, all term loans or any term loan made by the Banks or one of the
Banks to ▇▇▇▇▇▇ Homes pursuant to Section 3.1.
TERM NOTES shall mean collectively, and TERM NOTE shall mean
separately, all of the Amended and Restated Term Notes of ▇▇▇▇▇▇ Homes in the
form of EXHIBIT 1.1(T) evidencing the Term Loans, together with all amendments,
extensions, renewals, restatements, replacements, refinancings or refunds
thereof in whole or in part.
TRANSFEROR BANK shall mean the selling Bank pursuant to an
Assignment and Assumption Agreement.
UCC COLLATERAL shall mean the property of the Loan Parties in
which security interests are to be granted under the Security Agreement.
UNSOLD BUILDING INVENTORY shall mean, on any date of
determination, the aggregate book value, determined in accordance with GAAP
(excluding capitalized interest) of all Active Units which are not subject to an
Agreement of Sale and the lots (and related site improvements and development
costs) under such Active Units to be sold therewith, PROVIDED that with respect
to each such Active Unit, the applicable Loan Party has received Regulatory
Approval. Any asset which is Sold Inventory, Model Inventory, Approved Developed
Lots Inventory, Approved Land Under Development Inventory or Approved Land
Inventory is excluded from Unsold Building Inventory.
▇▇▇▇▇▇ HOLDINGS shall mean ▇▇▇▇▇▇ Holdings, Inc., a corporation
organized and existing under the laws of the State of Ohio.
▇▇▇▇▇▇ HOMES shall mean ▇▇▇▇▇▇ Homes, Inc., a corporation
organized and existing under the laws of the State of Ohio.
▇▇▇▇▇▇ HOMES HOLDING shall mean ▇▇▇▇▇▇ National Homes Holding
Corporation, a corporation organized and existing under the laws of the State of
Ohio.
▇▇▇▇▇▇ HOMES RECEIVABLE shall have the meaning set forth in
Section 8.2(d)(vi).
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▇▇▇▇▇▇ INDIANA shall mean ▇▇▇▇▇▇ Homes of Indiana, L.L.C., a
limited liability company organized and existing under the laws of the State of
Indiana.
▇▇▇▇▇▇ KENTUCKY shall mean ▇▇▇▇▇▇ Homes Kentucky, LLC, a limited
liability company organized and existing under the laws of the Commonwealth of
Kentucky.
▇▇▇▇▇▇ LAND HOLDING shall mean ▇▇▇▇▇▇ National Land Holding
Corporation, a corporation organized and existing under the laws of the State of
Ohio.
▇▇▇▇▇▇ LEASING shall mean ▇▇▇▇▇▇ Leasing, LLC, a limited
liability company organized and existing under the laws of the State of Ohio.
▇▇▇▇▇▇ NATIONAL shall mean ▇▇▇▇▇▇ National Corporation, a
corporation organized and existing under the laws of the State of Ohio.
▇▇▇▇▇▇ NATIONAL NET WORTH shall mean, as of any date of
determination, total stockholders' equity of ▇▇▇▇▇▇ National and its
Subsidiaries PLUS, for any date of determination during the fiscal quarters
ending March 31, 2000 and June 30, 2000 only, the Shareholder Subordinated Debt,
as of such date determined and consolidated in accordance with GAAP (excluding
First Cincinnati Land LLC and First Cincinnati Leasing LLC).
▇▇▇▇▇▇ NATIONAL TANGIBLE NET WORTH shall mean, as of any date of
determination, total stockholders' equity MINUS intangible assets, in each case
of ▇▇▇▇▇▇ National and its Subsidiaries as of such date determined and
consolidated in accordance with GAAP (excluding First Cincinnati Land LLC and
First Cincinnati Leasing LLC).
▇▇▇▇▇▇ NATIONAL TOTAL LIABILITIES shall mean, for the fiscal
quarter then ended, all Indebtedness and, without duplication, all other
liabilities including minority interests of ▇▇▇▇▇▇ National and its
Subsidiaries, determined and consolidated in accordance with GAAP (excluding
First Cincinnati Land LLC and First Cincinnati Leasing LLC).
1.2. CONSTRUCTION.
Unless the context of this Agreement otherwise clearly requires,
references to the plural include the singular, the singular the plural, and the
part the whole, "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation." References in this Agreement to "determination" of or by
the Agent or the Banks shall be deemed to include good-faith estimates by the
Agent or the Banks (in the case of quantitative determinations) and good-faith
beliefs by the Agent or the Banks (in the case of qualitative determinations).
Whenever the Agent or the Banks are granted the right herein to act in its or
their sole discretion, or to grant or withhold consent, such right shall be
exercised in good faith. The words "hereof," "herein," "hereunder" and similar
terms in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement. The section and other headings contained
in this Agreement and the Table of Contents preceding this Agreement are for
reference purposes only and shall not control or affect
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the construction of this Agreement or the interpretation thereof in any respect.
Section, subsection, schedule and exhibit references are to this Agreement
unless otherwise specified.
1.3. ACCOUNTING PRINCIPLES.
Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP.
2. REVOLVING CREDIT
---------------------
2.1. REVOLVING CREDIT COMMITMENTS.
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make Revolving Credit Loans to the Co-Borrowers at any time or from time to time
on or after the date hereof to, but not including, the Revolving Credit
Expiration Date; PROVIDED that, after giving effect to such Revolving Credit
Loans, (i) the aggregate principal amount of each Bank's Revolving Credit Loans
outstanding hereunder shall not exceed, at any one time, such Bank's Revolving
Credit Commitment MINUS such Bank's Ratable Share of the Letter of Credit
Outstandings, and (ii) the aggregate of the Revolving Facility Usage MINUS
Eligible Development Costs shall not exceed the Borrowing Base. Within such
limits of time and amount and subject to the other provisions of this Agreement,
the Co-Borrowers may borrow, repay and reborrow pursuant to this Section 2.1.
2.2. NATURE OF THE BANKS' AND THE BORROWERS' OBLIGATIONS.
Each Bank shall be obligated to participate in each request for Revolving
Credit Loans pursuant to Section 2.6 in accordance with its Ratable Share. The
aggregate of each Bank's Revolving Credit Loans outstanding hereunder to the
Co-Borrowers at any time shall never exceed its Revolving Credit Commitment
MINUS its Ratable Share of the Letter of Credit Outstandings at such time. The
obligations of each Bank hereunder are several. The failure of any Bank to
perform its obligations hereunder shall not affect the obligations of the
Co-Borrowers to any other party, nor shall any other party be liable for the
failure of such Bank to perform its obligations hereunder. The Banks shall have
no obligation to make Revolving Credit Loans hereunder on or after the Revolving
Credit Expiration Date.
2.3. CERTAIN FEES.
(a) FACILITY FEES; EXTENSION FEE; CLOSING FEE.
As consideration for each Bank's Revolving Credit Commitment, a
nonrefundable facility fee equal to 0.125% of such Bank's Revolving Credit
Commitment was
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paid to the Agent for the account of each Bank on the Original Closing Date. The
Co-Borrowers paid to the Agent for the account of each Bank, as consideration
for the extension of the Revolving Credit Expiration Date pursuant to the First
Amended and Restated Credit Agreement, a nonrefundable facility fee equal to
0.03% of each Bank's Revolving Credit Commitment on the closing date for the
First Amended and Restated Credit Agreement. The Co-Borrowers paid to the Agent
for the account of each Bank, as consideration for the extension of the
Revolving Credit Expiration Date pursuant to the Second Amended and Restated
Credit Agreement, a nonrefundable facility fee equal to 0.25% of each Bank's
Revolving Credit Commitment on the closing date. The Co-Borrowers hereby agree
to pay to the Agent, for the account of each Bank in accordance with its Ratable
Share, as consideration for entering into the Third Amended and Restated Credit
Agreement, a nonrefundable facility fee equal to (i) 1/2% of the aggregate
Revolving Credit Commitments and Term Loans outstanding on the Closing Date and
(ii) 1/4% of the aggregate Revolving Credit Commitments and Term Loans then
outstanding payable on each of September 1, 2000, November 1, 2000 and January
1, 2001.
(b) COMMITMENT FEE.
Accruing from the Original Closing Date until the Revolving Credit
Expiration Date, the Co-Borrowers agree to pay to the Agent for the account of
each Bank, as consideration for such Bank's Revolving Credit Commitment
hereunder, a commitment fee (the "COMMITMENT FEE") equal to 1/2% per annum
(computed on the basis of a year of 360 days and actual days elapsed) on the
average daily unborrowed amount of such Bank's Revolving Credit Commitment as
the same may be constituted from time to time (for purposes of this computation,
Letter of Credit Outstandings shall be deemed to be borrowed amounts under each
Bank's Revolving Credit Commitments in accordance with its Ratable Share, and
the amount of any Revolving Credit Loans that any Bank wrongfully fails to fund
shall not be deemed to be an unborrowed amount under such Bank's Revolving
Credit Commitment).
All Commitment Fees shall be payable in arrears on the first Business Day of
each month after the date hereof, on the Revolving Credit Expiration Date and
upon any acceleration of the Notes.
2.4. PERMANENT REDUCTIONS OF COMMITMENTS.
(a) MANDATORY REDUCTIONS.
The Revolving Credit Commitments shall be permanently reduced on
July 1, 2000 to $67,500,000 and on October 1, 2000 to $62,500,000, and each
Bank's Revolving Credit Commitment shall be reduced in accordance with its
Ratable Share on such dates. After each such reduction, the Commitment Fee shall
be calculated upon the Revolving Credit Commitments as so reduced, and the
amount of the reduction shall not be reinstated.
(b) VOLUNTARY REDUCTIONS.
The Co-Borrowers shall be permitted, without premium or penalty,
at any time upon five (5) Business Days' notice to the Agent, to reduce
permanently the Revolving
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Credit Commitments in an aggregate amount of not less than $1,000,000 and in
integral multiples thereof for amounts in excess of $1,000,000, and each Bank's
Revolving Credit Commitments shall be reduced in accordance with its Ratable
Share; PROVIDED, HOWEVER, the principal amount of all Revolving Credit Loans
outstanding at any time shall not be permitted to exceed the Revolving Credit
Commitments of all the Banks at such time.
(c) EFFECT OF REDUCTIONS.
After each such reduction, the Commitment Fee shall be calculated
upon the Revolving Credit Commitments of the Banks as so reduced, and the amount
of the reduction of the Revolving Credit Commitments may not be reinstated.
2.5. REVOLVING CREDIT LOAN REQUESTS.
Except as otherwise provided herein, the Co-Borrowers may from time to time
prior to the Revolving Credit Expiration Date request the Banks to make
Revolving Credit Loans, by the delivery to the Agent, not later than 11:00 a.m.,
Cincinnati time, on the proposed Borrowing Date, of a duly completed request
therefor substantially in the form of EXHIBIT 2.5(a) or a request by telephone
immediately confirmed in writing by letter, facsimile or telex (each, a
"REVOLVING CREDIT LOAN REQUEST" or "LOAN REQUEST"), it being understood that the
Agent may rely on the authority of any person making such a telephonic request
without the necessity of receipt of such written confirmation. Each Revolving
Credit Loan Request shall be irrevocable and shall specify (i) the proposed
Borrowing Date; and (ii) the aggregate principal amount of the proposed
Revolving Credit Loans, which shall be not less than the lesser of $500,000 or
the maximum amount available under the Revolving Credit Commitments.
2.6. MAKING REVOLVING CREDIT LOANS.
The Agent shall, promptly after receipt by it of a Revolving Credit Loan
Request pursuant to Section 2.5, notify the Banks of its receipt of such
Revolving Credit Loan Request, specifying: (i) the proposed Borrowing Date and
the time and method of disbursement of such Revolving Credit Loan; (ii) the
amount of such Revolving Credit Loan; and (iii) the apportionment among the
Banks of the Revolving Credit Loans as determined by the Agent in accordance
with Section 2.2. Each Bank shall remit the principal amount of each Revolving
Credit Loan to the Agent such that the Agent is able to, and the Agent shall, to
the extent the Banks have made funds available to it for such purpose, fund such
Revolving Credit Loan to the Co-Borrowers in U.S. Dollars and immediately
available funds at the Principal Office prior to 3:00 p.m., Cincinnati time, on
the Borrowing Date; PROVIDED that if any Bank fails to remit such funds to the
Agent in a timely manner, the Agent may elect in its sole discretion to fund
with its own funds the Revolving Credit Loan of such Bank on the Borrowing Date;
and PROVIDED, FURTHER, that such funding by the Agent shall not be deemed to
increase the Revolving Credit Commitment of the Agent or to reduce the Revolving
Credit Commitment of such Bank.
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2.7. INTENTIONALLY OMITTED.
2.8. REVOLVING CREDIT NOTES.
The obligation of the Co-Borrowers to repay the aggregate unpaid principal
amount of the Revolving Credit Loans made to it by each Bank, together with
interest thereon, shall be evidenced by a promissory note of the Co-Borrowers
dated the date hereof in the form of EXHIBIT 1.1(R) payable to the order of each
Bank in a face amount equal to the Revolving Credit Commitment of such Bank. The
Revolving Credit Notes shall be payable in three installments as follows: (a) on
July 1, 2000, any outstanding Revolving Credit Loans in excess of $67,500,000
shall be repaid, (b) on October 1, 2000, any outstanding Revolving Credit Loans
in excess of $62,500,000 shall be repaid, and (c) the balance shall be paid in
full on the Revolving Credit Expiration Date or earlier acceleration of the
Notes.
2.9. LETTER OF CREDIT SUBFACILITY.
(a) ISSUANCE OF LETTERS OF CREDIT.
The Co-Borrowers may request the issuance of a letter of credit (each
a "LETTER OF CREDIT") on behalf of any Co-Borrower or a Guarantor by delivering
to the applicable Issuing Letter of Credit Bank with a copy to the Agent a
completed application and agreement for letters of credit in such form as the
applicable Issuing Letter of Credit Bank may specify from time to time by no
later than 11:00 a.m., Cincinnati time, at least three (3) Business Days, or
such shorter period as may be agreed to by the applicable Issuing Letter of
Credit Bank, in advance of the proposed date of issuance. Subject to the terms
and conditions hereof and in reliance on the agreements of the other Banks set
forth in this Section 2.9, such Issuing Letter of Credit Bank will issue a
Letter of Credit; PROVIDED that each Letter of Credit shall (A) have a maximum
maturity of twenty-four (24) months from the date of issuance and (B) in no
event expire later than five (5) Business Days prior to the Revolving Credit
Expiration Date; and PROVIDED, FURTHER, that in no event shall (i) the Letter of
Credit Outstandings exceed, at any one time, $10,000,000, (ii) the Revolving
Facility Usage exceed, at any one time, the Revolving Credit Commitments, or
(iii) the Revolving Facility Usage exceed the Borrowing Base. Each of the
Rollover LCs listed on SCHEDULE 2.9(a) has been deemed to have been issued
hereunder on the Original Closing Date by the applicable Issuing Letter of
Credit Bank and shall be deemed to be a Letter of Credit for all purposes of
this Agreement.
(b) PARTICIPATIONS.
Immediately upon issuance of each Letter of Credit, and without
further action, each Bank shall be deemed to, and hereby agrees that it shall,
have irrevocably purchased for such Bank's own account and risk from the
applicable Issuing Letter of Credit Bank an individual participation interest in
such Letter of Credit and drawings thereunder in an amount equal to such Bank's
Ratable Share of the maximum amount which is or at any time may become available
to be drawn thereunder, and each such Bank shall be responsible to reimburse
such Issuing Letter of Credit Bank immediately for its Ratable Share of any
disbursement under any
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Letter of Credit which has not been reimbursed by the Co-Borrowers in accordance
with Section 2.9(d).
(c) LETTER OF CREDIT FEES.
The Co-Borrowers shall pay to the Agent for the ratable account of the
Banks a fee (the "LETTER OF CREDIT FEE") equal to one and one-eighth percent
(1-1/8%) per annum (computed on the basis of a year of 360 days and actual days
elapsed), which fee shall be computed on the daily average Letter of Credit
Outstandings. The Letter of Credit Fee shall be payable quarterly in arrears
commencing with the first Business Day of each July, October, January and April
following issuance of each Letter of Credit and on the Revolving Credit
Expiration Date and any earlier acceleration of the Notes. The Co-Borrowers
shall pay to the applicable Issuing Letter of Credit Bank for its own account a
fronting fee as determined by such Issuing Letter of Credit Bank and the
Co-Borrowers. The Co-Borrowers shall also pay to the applicable Issuing Letter
of Credit Bank for its sole account the Issuing Letter of Credit Bank's
then-in-effect customary fees and administrative expenses payable with respect
to the Letters of Credit as such Issuing Letter of Credit Bank may generally
charge or incur from time to time in connection with the issuance, maintenance,
modification (if any), assignment or transfer (if any), negotiation and
administration of Letters of Credit.
(d) DISBURSEMENTS, REIMBURSEMENT.
The Co-Borrowers shall be obligated immediately to reimburse the
applicable Issuing Letter of Credit Bank for all amounts which such Issuing
Letter of Credit Bank is required to advance pursuant to the Letters of Credit
(collectively, the "REIMBURSEMENT OBLIGATIONS"). The applicable Issuing Letter
of Credit Bank will promptly notify (A) the Co-Borrowers of each demand or
presentment for payment or other drawing under each Letter of Credit issued by
such Issuing Letter of Credit Bank, and (B) the Agent of the amount required to
be paid by such Issuing Letter of Credit Bank pursuant to each such Letter of
Credit. The Agent shall promptly notify each Bank of the amount required to be
paid by such Bank as a result of a drawing upon such Letter of Credit if the
applicable Issuing Letter of Credit Bank shall have notified the Agent that the
Co-Borrowers have not timely reimbursed such Issuing Letter of Credit Bank for
such draw. If such notice is received by a Bank before 10:00 a.m., Cincinnati
time, such Bank shall deliver such Bank's Ratable Share of such payment in
immediately available funds to the Agent on that Business Day. If such notice is
received by a Bank after 10:00 a.m., Cincinnati time, such Bank shall, before
10:00 a.m., Cincinnati time, on the next succeeding Business Day, deliver to the
Agent such Bank's Ratable Share of such payment as a Revolving Credit Loan from
such Bank in immediately available funds. Upon receipt of each Bank's Ratable
Share of such payment, the Agent shall immediately deliver such Bank's Ratable
Share of such payment to the applicable Issuing Letter of Credit Bank. Such
amounts advanced shall become, at the time the amounts are advanced, Revolving
Credit Loans from the Banks. Such Revolving Credit Loans shall bear interest at
the rate set forth in Section 4.1.
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(e) DOCUMENTATION.
The Co-Borrowers agree to be bound by the terms of each Issuing Letter
of Credit Bank's application and agreement for Letters of Credit and each
Issuing Letter of Credit Bank's written regulations and customary practices
relating to Letters of Credit, though such interpretation may be different from
the Co-Borrowers' own. In the event of a conflict between such application or
agreement and this Agreement, this Agreement shall govern. It is understood and
agreed that, except in the case of gross negligence or willful misconduct, the
Issuing Letter of Credit Bank shall not be liable for any error, negligence
and/or mistakes, whether of omission or commission, in following the
Co-Borrowers' instructions or those contained in the Letters of Credit or any
modifications, amendments or supplements thereto.
(f) DETERMINATIONS TO HONOR DRAWING REQUESTS.
In determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, the applicable Issuing Letter of
Credit Bank shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit.
(g) NATURE OF PARTICIPATION AND REIMBURSEMENT OBLIGATIONS.
The obligation of the Banks to participate in Letters of Credit
pursuant to Section 2.9(b), the obligation of the Banks pursuant to Section
2.9(d) to fund Revolving Credit Loans upon a draw under a Letter of Credit and
the obligation of the Co-Borrowers to reimburse the applicable Issuing Letter of
Credit Bank upon a draw under a Letter of Credit pursuant to Section 2.9(d)
shall be absolute, unconditional and irrevocable and shall be performed strictly
in accordance with the terms of such Sections under all circumstances, including
the following circumstances:
(i) the failure of the Co-Borrowers or any other Person to comply
with the conditions set forth in Section 2.1, 2.5, 2.6 or 7.2 or as otherwise
set forth in this Agreement for the making of a Revolving Credit Loan, it being
acknowledged that such conditions are not required for the making of a Revolving
Credit Loan under Section 2.9(d);
(ii) any lack of validity or enforceability of any Letter of
Credit;
(iii) the existence of any claim, set-off, defense or other right
which the Co-Borrowers, any other Loan Party or any Bank may have at any time
against a beneficiary or any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the Agent or other Bank or any
other Person or, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between the Co-Borrowers or Subsidiaries of the Co-Borrowers and the
beneficiary for which any Letter of Credit was procured);
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(iv) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(v) payment by the applicable Issuing Letter of Credit Bank under
any Letter of Credit against presentation of a demand, draft or certificate or
other document which does not comply with the terms of such Letter of Credit;
(vi) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of the Co-Borrowers or
Subsidiaries of the Co-Borrowers;
(vii) any breach of this Agreement or any other Loan Document by
any party thereto;
(viii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing;
(ix) the fact that an Event of Default or a Potential Default
shall have occurred and be continuing; or
(x) the Revolving Credit Expiration Date shall have passed or this
Agreement or the Revolving Credit Commitments hereunder shall have been
terminated.
(h) INDEMNITY.
In addition to amounts payable as provided in Section 10.5, the
Co-Borrowers hereby agree to protect, indemnify, pay and save harmless each
Issuing Letter of Credit Bank from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Letter of Credit Bank may incur or be subject to as
a consequence, direct or indirect, of (i) the issuance of any Letter of Credit,
other than as a result of (A) the gross negligence or willful misconduct of such
Issuing Letter of Credit Bank as determined by a final judgment of a court of
competent jurisdiction, or (B) subject to the following clause (ii), the
wrongful dishonor by such Issuing Letter of Credit Bank of a proper demand for
payment made under any Letter of Credit; or (ii) the failure of such Issuing
Letter of Credit Bank to honor a drawing under any such Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority (all such acts
or omissions herein called "GOVERNMENTAL ACTS").
(i) LIABILITY FOR ACTS AND OMISSIONS.
As between any Loan Party and each Issuing Letter of Credit Bank, the
Co-Borrowers assume all risks of the acts and omissions of, or misuse of the
Letters of Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the applicable Issuing
Letter of Credit Bank shall not be responsible for: (i) the form,
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validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for an issuance of any
such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Letter of Credit Bank, including
any Governmental Acts, and none of the above shall affect or impair, or prevent
the vesting of, any of such Issuing Letter of Credit Bank's rights or powers
hereunder.
In furtherance and extension, and not in limitation, of the specific
provisions set forth above, any action taken or omitted by the applicable
Issuing Letter of Credit Bank under or in connection with the Letters of Credit
issued by it or any documents and certificates delivered thereunder, if taken or
omitted in good faith, shall not put such Issuing Letter of Credit Bank under
any resulting liability to the Co-Borrowers.
The Banks and any Loan Party may not commence a proceeding against any
Issuing Letter of Credit Bank for wrongful disbursement under a Letter of Credit
as a result of acts or omissions constituting gross negligence or willful
misconduct of such Issuing Letter of Credit Bank until the Banks have made and
the Co-Borrowers have repaid the Revolving Credit Loans described in Section
2.9(d).
2.10. INTENTIONALLY OMITTED.
2.11. USE OF PROCEEDS.
The proceeds of the Revolving Credit Loans shall be used for lawful
purposes in accordance with the fourth recital clause above.
3. TERM LOANS
---------------
3.1. TERM LOAN COMMITMENTS.
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank made a term loan (the
"TERM LOAN") to ▇▇▇▇▇▇ Homes on the Original Closing Date in the principal
amount of such Bank's Term Loan Commitment.
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3.2. NATURE OF BANKS' OBLIGATIONS WITH RESPECT TO TERM LOANS.
The Banks shall have no obligation to make Term Loans hereunder after the
Original Closing Date. The Term Loan Commitments are not revolving credit
commitments, and ▇▇▇▇▇▇ Homes shall not have the right to borrow, repay or
reborrow under Section 3.1.
3.3. TERM LOAN FACILITY FEE.
As consideration for such Bank's Term Loan Commitment, a nonrefundable
facility fee equal to 0.125% of such Bank's Term Loan Commitment was paid to the
Agent for the account of each Bank by ▇▇▇▇▇▇ Homes on the Original Closing Date.
3.4. TERM LOAN NOTES.
The obligation of ▇▇▇▇▇▇ Homes to repay the unpaid principal amount of the
Term Loans made to it by each Bank, together with interest thereon, shall be
evidenced by an Amended and Restated Term Note dated the Closing Date in the
form of EXHIBIT 1.1(T) payable to the order of each Bank in a face amount equal
to the Term Loan Commitment of such Bank. The principal amount as provided
therein of the Term Notes shall be payable quarterly in arrears on the first
Business Day of each July, October, January and April in twenty (20) equal
quarterly installments of $750,000, beginning on July 1, 1996, with a final
installment of $750,000 on the Term Loan Maturity Date, or in full upon the
earlier acceleration of the Notes.
3.5. USE OF PROCEEDS.
The proceeds of the Term Loans shall be used for lawful purposes in
accordance with the fourth recital clause above.
4. INTEREST RATE
------------------
4.1. BASE RATE.
Subject to Section 4.3 [Existing Euro-Rate Loans], the Borrowers shall pay
interest in respect of the outstanding unpaid principal amount of the Loans at
the Base Rate plus 1%; PROVIDED, however, (a) if the Revolving Credit
Commitments exceed $40,000,000 on September 1, 2000, the interest rate
applicable to all Loans on and after such date will increase to the Base Rate
plus 2%, (b) if the Revolving Credit Commitments exceed $25,000,000 on November
1, 2000, the interest rate applicable to all Loans on and after such date will
increase to the Base Rate plus 3% and (c) if the Revolving Credit Commitments
exceed $5,000,000 on January 1, 2001, the interest rate applicable to all Loans
on and after such date will increase to the Base Rate plus 4%. The Agent's
determination of a rate of interest and any change therein shall, in the absence
of manifest error, be conclusive and binding upon all parties hereto. If at any
time the designated rate applicable to any Loan made by the Bank exceeds such
Bank's highest lawful rate, the rate of interest on such Bank's Loan shall be
limited to such Bank's highest lawful rate; PROVIDED, that the portion of
interest which exceeds the amount such Bank
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can lawfully receive and, thus, is not paid to such Bank shall be due and
payable upon the following Interest Payment Date(s) to the extent lawfully
permissible.
4.2. INTEREST AFTER DEFAULT.
To the extent permitted by Law, upon the occurrence and during the
continuance of an Event of Default, and after expiration of any applicable grace
period, (a) the Letter of Credit Fee applicable pursuant to Section 2.9(c) shall
be increased by 3% per annum until paid in full (before and after judgment), (b)
each Loan shall thereafter bear interest at a rate per annum equal to 3% above
the then applicable interest rate until paid in full (before and after
judgment), and (c) each other obligation hereunder, if not paid when due, shall
bear interest at a rate per annum equal to the sum of the then applicable
interest rate plus an additional 3% per annum from the time such obligation
becomes due and payable until paid in full (before and after judgment), payable
on demand. The Borrowers acknowledge that such increased interest rate reflects,
among other things, the fact that such Loans or other amounts have become a
substantially greater risk given their default status and that the Banks are
entitled to additional compensation for such risk.
4.3. EXISTING EURO-RATE LOANS.
All Loans to which the Euro-Rate Option (as defined in the Second Amended
and Restated Credit Agreement) applies shall, at the end of the applicable
Euro-Rate Interest Period (as defined in the Second Amended and Restated Credit
Agreement), automatically be converted to Revolving Credit Loans to which the
Base Rate applies, commencing upon the last day of such Euro-Rate Interest
Period. Until all Loans to which the Euro-Rate Option currently applies are
converted to Loans to which the Base Rate applies pursuant to the foregoing
sentence, Section 4.4 [Euro-Rate Unascertainable], Section 5.4 [Prepayments],
Section 5.5 [Additional Compensation in Certain Circumstances] and Section
11.5(a) [Notional Funding] and all defined terms used therein, as set forth in
the Second Amended and Restated Credit Agreement, are hereby incorporated by
reference with respect to such Loans.
5. PAYMENTS
-------------
5.1. PAYMENTS.
All payments and prepayments to be made in respect of principal, interest,
Commitment Fees, Letter of Credit Fees, Agent's Fees or other amounts due from
the Borrowers hereunder (other than the fees and expenses referenced in Section
2.9(c) which are to be paid to the Issuing Letter of Credit Bank as provided in
such Section) shall be payable prior to 11:00 a.m., Cincinnati time (or 3:00
p.m., Cincinnati time, in the event payments are to be made using the proceeds
of Loans to be made on such date), on the date when due without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived
by the Borrowers, and without set-off, counterclaim or other deduction of any
nature, and an action therefor shall immediately accrue. Such payments shall be
made to the Agent at the Principal Office for the ratable accounts of the Banks
with respect to the Revolving Credit Loans and Term
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Loans in U.S. Dollars and in immediately available funds, and the Agent shall
promptly distribute such amounts to the Banks in immediately available funds,
subject to the provisions of Section 5.5; PROVIDED that in the event payments
are received by 11:00 a.m., Cincinnati time, by the Agent with respect to the
Revolving Credit Loans and such payments are not distributed to the Banks on the
same day received by the Agent, the Agent shall pay the Banks the Federal Funds
Effective Rate with respect to the amount of such payments for each day held by
the Agent and not distributed to the Banks. The Agent's and each Bank's
statement of account, ledger or other relevant record shall, in the absence of
manifest error, be conclusive as the statement of the amount of principal of and
interest on the Loans and other amounts owing under this Agreement and shall be
deemed an "account stated."
The Loan Parties hereby authorize the Agent to charge any account
designated by the Loan Parties related to the Money Management Arrangements or
any deposit account maintained by the Loan Parties, individually or jointly with
others, with PNC for any payment when due under this Agreement or the other Loan
Documents. Payments received will be applied to charges, fees and expenses
(including attorneys' fees), accrued interest and principal in such order as the
Agent may elect in its sole discretion. In the event there are insufficient
balances in the designated accounts related to the Money Management Arrangements
to pay any charges, fees and expenses (including attorneys' fees), accrued
interest and principal, as any of the same shall become due, any such amounts
shall be immediately due and payable by the Borrowers.
5.2. PRO RATA TREATMENT OF THE BANKS.
Each borrowing and each payment or prepayment by the Borrowers with respect
to principal, interest, Commitment Fees, Letter of Credit Fees or other fees
(except for the Agent's Fees or any Issuing Letter of Credit Bank's fees) or
amounts due from the Borrowers hereunder to the Banks with respect to the
Revolving Credit Loans and Term Loans, shall (except as provided in Section 4.3,
5.4 or 5.5) be made in proportion to the Revolving Credit Loans and Term Loans
outstanding from each Bank and, if no Revolving Credit Loans or Term Loans are
then outstanding, in proportion to the Ratable Share of each Bank.
5.3. INTEREST PAYMENT DATES.
Except as set forth in the following sentence, interest on all Loans shall
be due and payable in arrears on the first Business Day of each month after the
date hereof, on the Revolving Credit Expiration Date (with respect to Revolving
Credit Loans), on the Term Loan Maturity Date (with respect to Term Loans) and
upon any earlier acceleration of the Notes. Interest on the existing Loans to
which the Euro-Rate Option applies shall be due and payable on the last day of
the applicable Euro-Rate Interest Period.
5.4. PREPAYMENTS.
(a) The Borrowers shall have the right at their option from time to
time to prepay the Loans in whole or part without premium or penalty (except as
provided in subsection (b) below or in Section 5.5) at any time.
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Whenever the Borrowers desire to prepay any part of the Loans, they shall
provide a prepayment notice to the Agent, at least one (1) Business Day prior to
the date of prepayment of Revolving Credit Loans or Term Loans setting forth the
following information:
(x) the date, which shall be a Business Day, on which the
proposed prepayment is to be made; and
(y) the total principal amount of such prepayment, which
shall not be less than $1,000,000 for any Revolving
Credit Loan or Term Loan.
All prepayment notices shall be irrevocable. The principal amount of the
Loans for which a prepayment notice is given shall be due and payable on the
date specified in such prepayment notice as the date on which the proposed
prepayment is made; but interest on such principal amount and any related fees
shall be due and payable on the next scheduled Interest Payment Date. All
prepayments permitted pursuant to this Section 5.4(a) shall be applied to the
unpaid installments of principal of the Loans in the inverse order of scheduled
maturities.
(b) In the event any Bank (i) gives notice under Section 5.5(a), (ii)
does not fund Loans because the making of such Loans would contravene any Law
applicable to such Bank pursuant to Section 7.2, or (iii) becomes subject to the
control of an Official Body (other than normal and customary supervision), then
the Borrowers shall have the right at their option, with the consent of the
Agent, which shall not be unreasonably withheld, to prepay the Loans of such
Bank in whole, together with all interest accrued thereon, within ninety (90)
days after (w) receipt of such Bank's notice under Section 5.5(a), (x) the date
such Bank has failed to fund Loans pursuant to Section 7.2 because the making of
such Loans would contravene Law applicable to such Bank, (y) the date of
obtaining the consent which such Bank has not approved, or (z) the date such
Bank became subject to the control of an Official Body, as applicable; PROVIDED
that the Borrowers shall also pay to such Bank at the time of such prepayment
any amounts required under Section 5.4(a) and Section 5.5 and any accrued
interest due on such amount and any related fees; PROVIDED, HOWEVER, that the
Revolving Credit Commitment of such Bank shall be provided by one or more of the
remaining Banks or a replacement bank acceptable to the Agent and the Borrowers
in the exercise of their reasonable discretion; and PROVIDED, FURTHER, the
remaining Banks shall have no obligation hereunder to increase their Revolving
Credit Commitments. Notwithstanding the foregoing, the Agent may be replaced
only in accordance with Section 10.14, and the Agent must at all times be a Bank
hereunder.
(c) Whenever the Revolving Facility Usage MINUS the Eligible
Development Costs exceeds the Borrowing Base, the Co-Borrowers shall make,
within three (3) Business Days after the Co-Borrowers learn of such excess and
whether or not the Agent has given notice to such effect, a mandatory prepayment
of principal equal to the excess of the Revolving Facility Usage MINUS the
Eligible Development Costs over the Borrowing Base, together with accrued
interest on such principal amount at the default rate set forth in Section 4.2.
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5.5. ADDITIONAL COMPENSATION IN CERTAIN CIRCUMSTANCES.
(a) INCREASED COSTS OR REDUCED RETURN RESULTING FROM TAXES, RESERVES,
CAPITAL ADEQUACY REQUIREMENTS, EXPENSES, ETC.
If any Law, guideline or interpretation, or any change in any Law,
guideline or interpretation or the application thereof by any Official Body
charged with the interpretation or administration thereof, or compliance with
any request or directive (whether or not having the force of Law) of any central
bank or other Official Body:
(i) subjects any Bank to any tax or changes the basis of taxation
with respect to this Agreement, the Notes, the Loans or payments by the
Borrowers of principal, interest, Commitment Fees, Letter of Credit Fees,
Agent's Fees or other amounts due from the Borrowers hereunder or under the
Notes (except for taxes on the overall net income of such Bank),
(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against credits or commitments to extend credit
extended by, or assets (funded or contingent) of, deposits with or for the
account of, or other acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any capital adequacy
or similar requirement (A) against assets (funded or contingent) of, or credits
or commitments to extend credit extended by, any Bank, or (B) otherwise
applicable to the obligations of any Bank under this Agreement,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by or impose any expense (including loss of margin) upon any
Bank with respect to this Agreement, the Notes or the making, maintenance or
funding of any part of the Loans (or, in the case of any capital adequacy or
similar requirement, to have the effect of reducing the rate of return on the
capital of such Bank or such Bank's parent, taking into consideration the
customary policies of such Bank or such Bank's parent with respect to capital
adequacy) by an amount which such Bank in its sole discretion deems to be
material, such Bank shall from time to time notify in writing the Borrowers and
the Agent of the amount determined in good faith (using any averaging and
attribution methods employed in good faith) by such Bank (which determination
shall be conclusive absent manifest error) to be necessary to compensate such
Bank for such increase in cost, reduction of income or additional expense,
PROVIDED that a Bank shall not give the Borrowers notice hereunder unless the
Bank is generally imposing such increased costs on its similarly situated
customers. Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrowers to such
Bank within thirty (30) calendar days after such notice is given.
(b) INDEMNITY.
In addition to the compensation required by subsection (a) of this
Section 5.5, the Borrowers shall indemnify each Bank against all liabilities,
losses or expenses
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(including loss of margin and any loss or expense incurred in liquidating or
employing deposits from third parties which such Bank sustains or incurs
hereunder as a result of any:
(i) attempt by the Borrowers to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any notice relating to Loan
Requests under Section 2.5 or voluntary prepayments under Section 5.4; or
(ii) default by the Borrowers in the performance or observance of
any covenant or condition contained in this Agreement or any other Loan
Document, including any failure of the Borrowers to pay when due (by
acceleration or otherwise) any principal, interest, Commitment Fees, Letter of
Credit Fees, Agent's Fees or any other amount due hereunder.
Notwithstanding the foregoing, nothing in the foregoing Section 5.5(b)(i)
or (ii) shall be construed to permit the Borrowers to engage in any action
otherwise prohibited hereunder. If any Bank sustains or incurs any such loss or
expense, it shall from time to time notify the Borrowers of the amount
determined in good faith by such Bank (which determination shall be conclusive
absent manifest error and may include such assumptions, allocations of costs and
expenses and averaging or attribution methods as such Bank shall deem
reasonable) to be necessary to indemnify such Bank for such loss or expense.
Such notice shall set forth in writing in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrowers to such
Bank ten (10) Business Days after such notice is given.
6. REPRESENTATIONS AND WARRANTIES
-----------------------------------
6.1. REPRESENTATIONS AND WARRANTIES.
The Loan Parties jointly and severally represent and warrant to the Agent
and each of the Banks as follows:
(a) ORGANIZATION AND QUALIFICATION.
Each of the Loan Parties is a corporation or partnership duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each Loan Party has the lawful power to own or
lease its properties and to engage in the business it presently conducts or
proposes to conduct. Each Loan Party is duly licensed or qualified and in good
standing in each jurisdiction listed on SCHEDULE 6.1(a) hereto. SCHEDULE 6.1(a)
lists all of the jurisdictions where the property owned or leased by it or the
nature of the business transacted by it or both make such licensing or
qualification necessary.
(b) CAPITALIZATION AND OWNERSHIP; SUBSIDIARIES.
SCHEDULE 6.1(b) states the name of each of the Borrowers and the
Borrowers' Subsidiaries, its jurisdiction of incorporation, its authorized
capital stock, the issued and outstanding shares (referred to herein as the
"SUBSIDIARY SHARES") and (with the exception of
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▇▇▇▇▇▇ National) the owners thereof if it is a corporation and its outstanding
partnership interests (the "PARTNERSHIP INTERESTS") if it is a partnership and
its outstanding limited liability company interests, interests assigned to
managers thereof and the voting rights associated therewith (the "LLC
INTERESTS") if it is a limited liability company. Each Borrower and each
Subsidiary of each Borrower has good and marketable title to all of the
Subsidiary Shares, Partnership Interests and LLC Interests it purports to own,
free and clear in each case of any Lien. All Subsidiary Shares, Partnership
Interests and LLC Interests have been validly issued, and all Subsidiary Shares
are fully paid and nonassessable. All capital contributions in connection with
the issuance of the Partnership Interests and LLC Interests have been made or
paid, as the case may be. There are no options, warrants or other rights
outstanding to purchase any such Subsidiary Shares, Partnership Interests or LLC
Interests except as indicated on SCHEDULE 6.1(b). ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III and ▇▇▇▇
▇. ▇▇▇▇▇▇, directly or indirectly, own the issued and outstanding shares of
common stock of ▇▇▇▇▇▇ National set forth on SCHEDULE 6.1(b). There are no
options, warrants or other rights outstanding to purchase any such shares except
as indicated on SCHEDULE 6.1(b).
(c) INTENTIONALLY OMITTED.
(d) POWER AND AUTHORITY.
Each Loan Party has full corporate or partnership or other power to
enter into, execute, deliver and carry out this Agreement and the other Loan
Documents to which it is a party, to incur the Indebtedness contemplated by the
Loan Documents and to perform its obligations under the Loan Documents to which
it is a party, and all such actions have been duly authorized by all necessary
proceedings on its part.
(e) VALIDITY AND BINDING EFFECT.
This Agreement on the date hereof has been, and each other Loan
Document to which it is a party on the date on which it is required to be
executed and delivered pursuant hereto shall have been, duly and validly
executed and delivered by each of the Loan Parties. This Agreement and each of
the other Loan Documents delivered by the Loan Parties pursuant to the
provisions hereof will constitute legal, valid and binding obligations of each
of the Loan Parties, enforceable against each of the Loan Parties in accordance
with their respective terms, except to the extent that enforceability of any of
the foregoing Loan Documents may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforceability of
creditors' rights generally or limiting the right of specific performance.
(f) NO CONFLICT.
Neither the execution and delivery of this Agreement or the other Loan
Documents by the Loan Parties nor the consummation of the transactions herein or
therein contemplated or compliance with the terms and provisions hereof or
thereof by them will conflict with, constitute a default under or result in any
breach of (i) the terms and conditions of the certificate of incorporation,
bylaws or other organizational documents of any of the Loan Parties or (ii) any
Law or any material agreement or instrument or order, writ, judgment, injunction
or decree to which any of the Loan Parties is a party or by which it is bound or
to which it is
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subject, or result in the creation or enforcement of any Lien, charge or
encumbrance whatsoever upon any property (now or hereafter acquired) of any of
the Loan Parties.
(g) LITIGATION.
There are no actions, suits, proceedings or investigations pending or,
to the knowledge of any of the Loan Parties, threatened against any of the Loan
Parties at law or equity before any Official Body which individually or in the
aggregate could reasonably be expected to result in any Material Adverse Change.
None of the Loan Parties is in violation of any order, writ, injunction or
decree of any Official Body which may result in any Material Adverse Change.
(h) TITLE TO PROPERTIES.
The real property owned or leased by each Loan Party and each
Subsidiary of each Loan Party is described on SCHEDULE 6.1(h). Each of the Loan
Parties has good and marketable title to or valid leasehold interest in all
properties, assets and other rights which it purports to own or lease or which
are reflected as owned or leased on its books and records, free and clear of all
Liens and encumbrances except Permitted Liens, and subject to the terms and
conditions of the applicable leases. All leases of property are in full force
and effect. Promptly upon request by the Agent, the Borrowers will provide to
the Agent and the Banks a list of all real property owned or leased by each of
the Loan Parties.
(i) FINANCIAL STATEMENTS.
(A) HISTORICAL STATEMENTS. ▇▇▇▇▇▇ Homes has delivered to the
Agent copies of its audited year-end financial statements for and as of the end
of the three (3) fiscal years ended December 31, 1994 - 1996 and ▇▇▇▇▇▇ National
has delivered to the Agent copies of its audited year-end financial statements
for and as of the end of the two (2) fiscal years ended December 31, 1997 - 1998
(collectively, the "HISTORICAL STATEMENTS"). The Historical Statements were
compiled from the books and records maintained by ▇▇▇▇▇▇ Homes' or ▇▇▇▇▇▇
National's, as applicable, management, are correct and complete in all material
respects and fairly represent the consolidated financial condition of ▇▇▇▇▇▇
Homes or ▇▇▇▇▇▇ National, as applicable, as of their dates and the results of
operations for the fiscal periods then ended, and have been prepared in
accordance with GAAP consistently applied.
(B) FINANCIAL PROJECTIONS. The Co-Borrowers (with respect to the
Co-Borrowers and their Subsidiaries) have delivered to the Agent financial
projections for the fiscal year ending December 31, 2000 derived from
assumptions of the Co-Borrowers' management (collectively, the "FINANCIAL
PROJECTIONS"). The Financial Projections represent a reasonable range of
possible results (predicted to be within such range and not at an exact
numerical level) in light of the history of the business, present and
foreseeable conditions and the intentions of the Co-Borrowers' management. The
Financial Projections with respect to the Co-Borrowers accurately reflect the
liabilities of the Co-Borrowers upon the consummation of the transactions
contemplated hereby as of the Closing Date.
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(C) ACCURACY OF FINANCIAL STATEMENTS. Neither ▇▇▇▇▇▇ Homes nor
▇▇▇▇▇▇ National has any material liabilities, contingent or otherwise, or
forward or long-term material commitments that are not disclosed in the
Historical Statements or in the notes thereto, and except as disclosed therein,
there are no unrealized or anticipated losses from any commitments of ▇▇▇▇▇▇
Homes or ▇▇▇▇▇▇ National which may cause a Material Adverse Change. Since
December 31, 1999, no Material Adverse Change has occurred.
(j) MARGIN STOCK.
None of the Loan Parties engages or intends to engage principally, or
as one of its important activities, in the business of extending credit for the
purpose, immediately, incidentally or ultimately, of purchasing or carrying
margin stock (within the meaning of Regulation U). No part of the proceeds of
any Loan has been or will be used, immediately, incidentally or ultimately, to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock or to refund Indebtedness originally
incurred for such purpose, or for any purpose which entails a violation of or
which is inconsistent with the provisions of the regulations of the Board of
Governors of the Federal Reserve System. None of the Loan Parties holds or
intends to hold margin stock in such amounts that more than 25% of the
reasonable value of the assets of such Loan Party are or will be represented by
margin stock.
(k) FULL DISCLOSURE.
Neither this Agreement nor any other Loan Document, nor any
certificate, statement, agreement or other document furnished to the Agent or
any Bank by the Loan Parties in connection herewith or therewith, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements of the Loan Parties contained herein and
therein, in light of the circumstances under which they were made, not
misleading.
(l) TAXES.
All federal, state, local and other tax returns required to have been
filed with respect to each Loan Party have been filed, and payment or adequate
provision for the payment of all taxes, fees, assessments and other governmental
charges which have or may become due pursuant to said returns or to assessments
received has been made, except to the extent that such taxes, fees, assessments
and other charges are being contested in good faith by appropriate proceedings
diligently conducted and for which such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made. There are
no agreements or waivers extending the statutory period of limitations
applicable to any federal income tax return of any Loan Party for any period.
(m) CONSENTS AND APPROVALS.
No consent, approval, exemption, order or authorization of, or a
registration or filing with, any Official Body or any other person is required
by any Law or any agreement in connection with, the execution, delivery and
carrying out of this Agreement and the
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other Loan Documents by the Loan Parties, except as listed on SCHEDULE 6.1(m)
attached hereto, all of which shall have been obtained or made on or prior to
the Closing Date.
(n) NO EVENT OF DEFAULT; COMPLIANCE WITH INSTRUMENTS.
No event has occurred and is continuing and no condition exists or
will exist after giving effect to the borrowings to be made on the Closing Date
under the Loan Documents which constitutes an Event of Default or Potential
Default. None of the Loan Parties is in violation of (i) any term of its
certificate of incorporation, bylaws or other organizational documents or (ii)
any material agreement or instrument to which it is a party or by which it or
any of its properties may be subject or bound where such violation would
constitute a Material Adverse Change.
(o) PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.
Each Loan Party owns or possesses all the material patents,
trademarks, service marks, trade names, copyrights, licenses, registrations,
franchises, permits and rights necessary to own and operate its properties and
to carry on its business as presently conducted and planned to be conducted by
such Loan Party, without known conflict with the rights of others. All material
patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises and permits of each Loan Party are listed and
described on SCHEDULE 6.1(o) hereto.
(p) INSURANCE.
SCHEDULE 6.1(p) hereto lists all insurance policies and other bonds to
which any of the Loan Parties is a party, all of which are valid and in full
force and effect. No notice has been given or claim made and no grounds exist to
cancel or avoid any of such policies or bonds or to reduce the coverage provided
thereby. Such policies and bonds provide coverage in amounts sufficient to
insure the assets and risks of each of the Loan Parties in accordance with
prudent business practice in the industry of such Loan Parties.
(q) COMPLIANCE WITH LAWS.
Each of the Loan Parties is in compliance in all material respects
with all applicable Laws (other than Environmental Laws, which are specifically
addressed in subsection (v)) in all jurisdictions in which such Loan Party is
presently or will be doing business, except where the failure to do so would not
constitute a Material Adverse Change.
(r) MATERIAL CONTRACTS.
Promptly upon request by the Agent, the Borrowers will provide to the
Agent and the Banks a list of all material contracts relating to the business
operations of the Loan Parties, including, without limitation, all employee
benefit plans, employment agreements, collective bargaining agreements and labor
contracts (the "LABOR CONTRACTS"). Each material contract to which a Loan Party
is a party is valid, binding and enforceable upon each of the Loan
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Parties and other persons which is a party thereto in accordance with its
respective terms, and there is no default thereunder, to any of the Loan
Parties' knowledge, with respect to parties other than the Loan Parties, except
to the extent that any such default does not impair the practical realization by
the Loan Parties of the benefits from such contract.
(s) INVESTMENT COMPANIES.
None of the Loan Parties is an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as such term
is defined in the Investment Company Act of 1940, and shall not become such an
"investment company."
(t) PLANS AND BENEFIT ARRANGEMENTS.
(i) The Borrowers and each member of the ERISA Group are in
compliance in all material respects with any applicable provisions of ERISA with
respect to all Benefit Arrangements, Plans and Multiemployer Plans. There has
been no Prohibited Transaction with respect to any Benefit Arrangement or any
Plan or, to the best knowledge of the Borrowers, with respect to any
Multiemployer Plan or Multiple Employer Plan which could result in any material
liability of the Borrowers or any other member of the ERISA Group. The Borrowers
and all members of the ERISA Group have made when due any and all payments
required to be made under any agreement relating to a Multiemployer Plan or a
Multiple Employer Plan or any Law pertaining thereto. With respect to each Plan
and Multiemployer Plan, the Borrowers and each member of the ERISA Group (i)
have fulfilled in all material respects their obligations under the minimum
funding standards of ERISA, (ii) have not incurred any liability to the PBGC,
and (iii) have not had asserted against them any penalty for failure to fulfill
the minimum funding requirements of ERISA.
(ii) To the best of each Borrower's knowledge, each Multiemployer
Plan and Multiple Employer Plan is able to pay benefits thereunder when due.
(iii) No Borrower or any other member of the ERISA Group has
instituted or intends to institute proceedings to terminate any Plan.
(iv) No event requiring notice to the PBGC under Section
302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur with
respect to any Plan, and no amendment with respect to which security is required
under Section 307 of ERISA has been made or is reasonably expected to be made to
any Plan.
(v) The aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan, determined on a plan
termination basis, as disclosed in, and as of the date of, the most recent
actuarial report for such Plan, does not exceed the aggregate fair market value
of the assets of such Plan.
(vi) No Borrower or any other member of the ERISA Group has
incurred or reasonably expects to incur any material withdrawal liability under
ERISA with respect to any Multiemployer Plan or Multiple Employer Plan. No
Borrower or any other
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member of the ERISA Group has been notified by any Multiemployer Plan or
Multiple Employer Plan that such Multiemployer Plan or Multiple Employer Plan
has been terminated, within the meaning of Title IV of ERISA, and to the best
knowledge of each Borrower, no Multiemployer Plan or Multiple Employer Plan is
reasonably expected to be reorganized or terminated, within the meaning of Title
IV of ERISA.
(vii) To the extent that any Benefit Arrangement is insured, the
Borrowers and all members of the ERISA Group have paid when due all premiums
required to be paid for all periods through and including the Closing Date. To
the extent that any Benefit Arrangement is funded other than with insurance, the
Borrowers and all members of the ERISA Group have made when due all
contributions required to be paid for all periods through and including the
Closing Date.
(viii) All Plans, Benefit Arrangements and Multiemployer Plans
have been administered in accordance with their terms and applicable Law in all
material respects.
(u) EMPLOYMENT MATTERS.
Each of the Loan Parties is in compliance with the Labor Contracts and
all applicable federal, state and local labor and employment Laws, including,
but not limited to, those related to equal employment opportunity and
affirmative action, labor relations, minimum wage, overtime, child labor,
medical insurance continuation, worker adjustment and relocation notices,
immigration controls and worker and unemployment compensation, where the failure
to comply would constitute a Material Adverse Change. There are no outstanding
grievances, arbitration awards or appeals therefrom arising out of the Labor
Contracts or current or threatened strikes, picketing, handbilling or other work
stoppages or slowdowns at facilities of any Loan Party which in any case would
constitute a Material Adverse Change. The Borrowers have delivered to the Agent
true and correct copies of each of the Labor Contracts.
(v) ENVIRONMENTAL MATTERS.
Except as disclosed on SCHEDULE 6.1(v) hereto:
(i) None of the Loan Parties has received any Environmental
Complaint from any Official Body or private person alleging that any Loan Party
or any prior or subsequent owner of the Property is a potentially responsible
party under the Comprehensive Environmental Response, Cleanup, and Liability
Act, 42 U.S.C. section 9601 ET SEQ., and each Loan Party has no reason to
believe that such an Environmental Complaint might be received. There are no
pending or, to any Loan Party's knowledge, threatened Environmental Complaints
relating to any Loan Party or, to any Loan Party's knowledge, any prior or
subsequent owner of the Property pertaining to, or arising out of, any
Environmental Conditions, except for Environmental Complaints which are not
reasonably likely to result in a Material Adverse Change.
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(ii) Except for conditions, violations or failures which
individually or in the aggregate are not reasonably likely to result in a
Material Adverse Change, to the knowledge of the Loan Parties, there are no
circumstances at, on or under the Property that constitute a breach of or
noncompliance with any of the Environmental Laws, and there are no past or
present Environmental Conditions at, on or under the Property or, to any Loan
Party's knowledge, at, on or under adjacent property that prevent compliance
with the Environmental Laws at the Property.
(iii) Neither the Property nor any structures, improvements,
equipment, fixtures, activities or facilities thereon or thereunder contain or
use Regulated Substances except in compliance with Environmental Laws. There are
no processes, facilities, operations, equipment or any other activities at, on
or under the Property or, to any Loan Party's knowledge, at, on or under
adjacent property that currently result in the release or threatened release of
Regulated Substances onto the Property, except to the extent that such releases
or threatened releases are not a breach of or otherwise not a violation of the
Environmental Laws or are not likely to result in a Material Adverse Change.
(iv) There are no aboveground storage tanks, underground storage
tanks or underground piping associated with such tanks used for the management
of Regulated Substances at, on or under the Property that (a) do not have, to
the extent required by Environmental Laws, a full operational secondary
containment system in place and (b) are not otherwise in compliance with all
Environmental Laws. There are no abandoned underground storage tanks or
underground piping associated with such tanks previously used for the management
of Regulated Substances at, on or under the Property that have not either been
closed in place in accordance with Environmental Laws or removed in compliance
with all applicable Environmental Laws, and no contamination associated with the
use of such tanks exists on the Property that is not in compliance with
Environmental Laws.
(v) Each Loan Party has all material permits, licenses,
authorizations, plans and approvals necessary under the Environmental Laws for
the conduct of the business of such Loan Party as presently conducted. Each Loan
Party has submitted all material notices, reports and other filings required by
the Environmental Laws to be submitted to an Official Body which pertain to past
and current operations on the Property.
(vi) Except for violations which individually or in the aggregate
are not likely to result in a Material Adverse Change, all present and, to the
knowledge of the Loan Parties, past on-site generation, storage, processing,
treatment, recycling, reclamation, disposal or other use or management of
Regulated Substances at, on or, to the knowledge of the Loan Parties, under the
Property and all off-site transportation, storage, processing, treatment,
recycling, reclamation, disposal or other use or management of Regulated
Substances has been done in accordance with the Environmental Laws.
(w) SENIOR DEBT STATUS.
The obligations of each Loan Party under this Agreement, the Notes and
the Guaranty Agreement, and each of the other Loan Documents to which it is a
party to the
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Banks or Agent do rank and will rank at least pari passu in priority of payment
and all other rights to all other Indebtedness of such Loan Party, except
Indebtedness of any Loan Party secured by Permitted Liens. There is no lien upon
or with respect to any of the properties or income of any Loan Party which
secures Indebtedness or other obligations of any Person except for Permitted
Liens.
(x) RESTRICTED TRANSACTIONS.
SCHEDULE 6.1(x) sets forth, as of the Closing Date, all Restricted
Transactions, including a brief description and the amount of each Restricted
Transaction.
(y) HOMEMAX.
THE TOTAL LIABILITIES (BOTH FIXED AND CONTINGENT) OF ▇▇▇▇▇▇ NATIONAL
WITH RESPECT TO HOMEMAX, INC., HOMEMAX OPERATING PROPERTIES LLC AND CENTRON
FINANCIAL SERVICES CORP. DO NOT EXCEED $1,250,000 FROM AND AFTER THE CLOSING
DATE THROUGH THE END OF FISCAL YEAR 2000, $800,000 IN FISCAL YEAR 2001 AND
$175,000 IN FISCAL YEAR 2002, AND WILL TERMINATE BY MARCH 16, 2002.
(z) SECURITY INTERESTS.
The Liens and security interests granted to the Agent for the benefit
of the Banks pursuant to the Pledge Agreement and the Security Agreement in the
Collateral (other than the Real Property) constitute and will continue to
constitute Prior Security Interests under the Uniform Commercial Code as in
effect in each applicable jurisdiction (the "UNIFORM COMMERCIAL CODE") or other
applicable Law entitled to all the rights, benefits and priorities provided by
the Uniform Commercial Code or such Law. Upon the filing of financing statements
relating to said security interests in each office and in each jurisdiction
where required in order to perfect the security interests described above,
taking possession of any stock certificates or other certificates evidencing the
Pledged Collateral, all such action as is necessary or advisable to establish
such rights of the Agent will have been taken, and there will be upon execution
and delivery of the Pledge Agreement and the Security Agreement, such filings
and such taking of possession, no necessity for any further action in order to
preserve, protect and continue such rights, except the filing of continuation
statements with respect to such financing statements within six months prior to
each five-year anniversary of the filing of such financing statements. All
filing fees and other expenses in connection with each such action have been or
will be paid by the Borrowers.
(aa) MORTGAGE LIENS.
Except as set forth on SCHEDULE 6.1(aa), all Real Property is
encumbered by a Mortgage. The Liens granted to the Agent for the benefit of the
Banks pursuant to the Mortgages constitute a valid first priority Lien under
applicable law. All such action as will be necessary or advisable to establish
such Lien of the Agent and its priority as described in the preceding sentence
will be taken at or prior to the time required for such purpose, and there will
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be as of the date of execution and delivery of the Mortgages no necessity for
any further action in order to protect, preserve and continue such Lien and such
priority.
(bb) STATUS OF THE PLEDGED COLLATERAL.
All the shares of capital stock, Partnership Interests or LLC
Interests included in the Pledged Collateral to be pledged pursuant to the
Pledge Agreement are or will be upon issuance validly issued and nonassessable
and owned beneficially and of record by the Pledgor free and clear of any Lien
or restriction on transfer, except as otherwise provided by the Pledge Agreement
and except as the right of the Banks to dispose of the Shares, Partnership
Interests or LLC Interests may be limited by the Securities Act of 1933, as
amended, and the regulations promulgated by the Securities and Exchange
Commission thereunder and by applicable state securities laws. There are no
shareholder, partnership, limited liability company or other agreements or
understandings with respect to the shares of capital stock, Partnership
Interests or LLC Interests included in the Pledged Collateral except for the
partnership agreements and limited liability company agreements described on
SCHEDULE 6.1(bb). The Loan Parties have delivered true and correct copies of
such partnership agreements and limited liability company agreements to the
Agent.
(cc) YEAR 2000.
The Loan Parties have reviewed the areas within their business and
operations which could be adversely affected by, and have developed a program to
address on a timely basis, the risk that certain computer applications used by
the Loan Parties (or any of their respective material suppliers, customers or
vendors) may be unable to recognize and perform properly date-sensitive
functions involving dates prior to and after December 31, 1999 (the "YEAR 2000
PROBLEM"). The Year 2000 Problem will not result in any Material Adverse Change.
6.2. UPDATES TO SCHEDULES.
Should any of the information or disclosures provided on any of the
Schedules attached hereto become outdated or incorrect in any material respect,
the Borrowers shall promptly provide the Agent in writing with such revisions or
updates to such Schedule as may be necessary or appropriate to update or correct
the same; PROVIDED, unless any such Schedules have become outdated or incorrect
in any material and adverse respect, the Borrowers may provide such revisions or
updates on a quarterly basis at the same time as the Borrowers deliver their
quarterly compliance certificate in accordance with Section 8.3(d); and
PROVIDED, FURTHER, that no Schedule that has become outdated or incorrect in any
material and adverse respect shall be deemed to have been amended, modified or
superseded by any such correction or update unless accepted in writing by the
Agent, nor shall any breach of warranty or representation resulting from the
inaccuracy or incompleteness of any such Schedule be deemed to have been cured
thereby.
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7. CONDITIONS OF LENDING
-------------------------
The obligation of the Agent and each Bank to make Loans or issue Letters of
Credit hereunder on and after the Closing Date is subject to the performance by
each of the Loan Parties of its obligations to be performed hereunder at or
prior to the making of any such Loans and to the satisfaction of the following
further conditions:
7.1. LOANS AFTER THE CLOSING DATE.
On the Closing Date:
(a) The representations and warranties of each of the Loan Parties
contained in Article 6 hereof shall be true and accurate on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date (except representations and warranties
which relate solely to an earlier date or time, which representations and
warranties shall be true and correct on and as of the specific dates or times
referred to therein), and each of the Loan Parties shall have performed and
complied with all covenants and conditions hereof; no Event of Default or
Potential Default under this Agreement shall have occurred and be continuing or
shall exist; and there shall be delivered to the Agent for the benefit of each
Bank a certificate of the Loan Parties, dated the Closing Date and signed by the
Chief Executive Officer, President or Chief Financial Officer of each of the
Loan Parties, to each such effect.
(b) There shall be delivered to the Agent for the benefit of each Bank
a certificate dated the Closing Date and signed by the Secretary or an Assistant
Secretary of each of the Loan Parties, certifying as appropriate as to:
(i) all corporate or partnership action taken by such Loan Party
in connection with this Agreement and the other Loan Documents;
(ii) the names of the officer or officers authorized to sign this
Agreement and the other Loan Documents and the true signatures of such officer
or officers, and specifying the Authorized Officers permitted to act on behalf
of each Loan Party for purposes of this Agreement and the true signatures of
such officers, on which the Agent and each Bank may conclusively rely; and
(iii) copies of its organizational documents, including its
certificate of incorporation, bylaws or certificate of partnership or
partnership agreement, as applicable, as in effect on the Closing Date certified
by the appropriate state official where such documents are filed in a state
office, together with certificates from the appropriate state officials as to
the continued existence and good standing of each Loan Party in each state where
organized or qualified to do business.
(c) The Notes, the Guaranty Agreement, the Intercompany Subordination
Agreement, the Mortgages, the Pledge Agreement, together with related stock
certificates and stock powers, the Security Agreement, together with related
financing
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statements, and the Subordination Agreement shall have been duly executed and
delivered to the Agent for the benefit of the Banks.
(d) There shall be delivered to the Agent for the benefit of each Bank
a written opinion of Frost & ▇▇▇▇▇▇, counsel for the Loan Parties (who may rely
on the opinions of such other counsel as may be acceptable to the Agent), dated
the Closing Date and in form and substance satisfactory to the Agent and its
counsel:
(i) as to the matters set forth in EXHIBIT 7.1(d) hereto; and
(ii) as to such other matters incident to the transactions
contemplated herein as the Agent may reasonably request.
Notwithstanding the foregoing, the legal opinions regarding the Mortgages with
respect to the Real Property located in Indiana, Kentucky and South Carolina
shall be delivered to the Agent for the benefit of the Banks on or before May
15, 2000. Such legal opinions shall address the enforceability of the Mortgages,
the perfection of the lien of the Mortgages and such other matters as the Agent
may reasonably request.
(e) All legal details and proceedings in connection with the
transactions contemplated by the Agreement and the other Loan Documents shall be
in form and substance satisfactory to the Agent and counsel for the Agent, and
the Agent shall have received all such other counterpart originals or certified
or other copies of such documents and proceedings in connection with such
transactions, in form and substance reasonably satisfactory to the Agent and
said counsel, as the Agent or said counsel may reasonably request.
(f) The Borrowers shall pay, or cause to be paid, to the Agent for
itself or for the account of the Banks, as applicable, to the extent not
previously paid, the Facility Fees, any other fees payable on or before the
Closing Date, as set forth in the Side Letters, and all other costs and expenses
accrued through the Closing Date for which the Agent and the Banks are entitled
to be reimbursed.
(g) All material consents, including without limitation the consent of
the holders of the Senior Notes, required to effectuate the transactions
contemplated hereby as set forth on SCHEDULE 6.1(m) shall have been obtained.
(h) There shall be no Material Adverse Change in the Historical
Statements or the Financial Projections (as defined in Section 6.1(i)) since
their respective dates; since December 31, 1999, no Material Adverse Change in
any of the Loan Parties shall have occurred; prior to the Closing Date, there
shall be no material change in the management of the Loan Parties; and there
shall be delivered, to the Agent for the benefit of each Bank, a certificate
dated the Closing Date and signed by the Chief Executive Officer, President or
Chief Financial Officer of the Loan Parties to each such effect.
(i) The making of the Loans shall not contravene any Law applicable to
the Loan Parties or any of the Banks.
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(j) No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement or the consummation of the
transactions contemplated hereby.
(k) The Loan Parties shall deliver evidence acceptable to the Agent
that adequate insurance in compliance with Section 8.1(c) is in full force and
effect and that all premiums then due thereon have been paid, with additional
insured and lender loss payable endorsements in form and substance satisfactory
to the Agent and its counsel naming the Agent as additional insured and lender
loss payee.
(l) The Borrowers shall have delivered to the Agent for the benefit of
the Banks a Borrowing Base Certificate for the calendar month of February and a
Quarterly Compliance Certificate for the calendar quarter ending December 31,
1999, certified by the Chief Executive Officer, President or Chief Financial
Officer of the Borrowers in a form acceptable to the Agent.
7.2. EACH ADDITIONAL LOAN.
At the time of making any Loans or issuing any Letters of Credit other than
Loans made or Letters of Credit issued on the Closing Date hereunder and after
giving effect to the proposed borrowings: the representations and warranties of
the Loan Parties contained in Article 6 hereof shall be true on and as of the
date of such additional Loan or Letter of Credit with the same effect as though
such representations and warranties had been made on and as of such date (except
representations and warranties which expressly relate solely to an earlier date
or time, which representations and warranties shall be true and correct on and
as of the specific dates or times referred to therein), and the Loan Parties
shall have performed and complied with all covenants and conditions hereof; no
Event of Default or Potential Default shall have occurred and be continuing or
shall exist; the making of such Loan or the issuance of such Letter of Credit
shall not contravene any Law applicable to the Loan Parties or any of the Banks;
and the Borrowers shall have delivered to the Agent and, if applicable, the
Issuing Letter of Credit Bank a duly executed and completed Loan Request or
request for Letters of Credit, as applicable.
8. COVENANTS
------------
8.1. AFFIRMATIVE COVENANTS.
The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans and interest thereon, termination or expiration of
all of the Letters of Credit, satisfaction of all of the Loan Parties' other
obligations hereunder and termination of the Revolving Credit Commitments, the
Loan Parties shall comply at all times with the following affirmative covenants:
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(a) PRESERVATION OF EXISTENCE, ETC.
Each of the Loan Parties shall maintain its corporate or partnership
existence and its license or qualification and good standing in each
jurisdiction in which its ownership or lease of property or the nature of its
business makes such license or qualification necessary.
(b) PAYMENT OF LIABILITIES, INCLUDING TAXES, ETC.
Each of the Loan Parties shall duly pay and discharge all liabilities
to which it is subject or which are asserted against it, promptly as and when
the same shall become due and payable, including all taxes, assessments and
governmental charges upon it or any of its properties, assets, income or
profits, prior to the date on which penalties attach thereto, except to the
extent that such liabilities, including taxes, assessments or charges, are being
contested in good faith and by appropriate and lawful proceedings diligently
conducted and for which such reserve or other appropriate provisions, if any, as
shall be required by GAAP shall have been made, but only to the extent that
failure to discharge any such liabilities would not result in any additional
liability which would adversely affect to a material extent the financial
condition of any Loan Party, PROVIDED that each Loan Party will pay all such
liabilities forthwith upon the commencement of proceedings to foreclose any Lien
which may have attached as security therefor.
(c) MAINTENANCE OF INSURANCE.
Each Loan Party shall insure its properties and assets against loss or
damage by fire and such other insurable hazards against which such assets are
commonly insured (including fire, extended coverage, property damage, worker's
compensation, public liability and business interruption insurance) and against
other risks (including errors and omissions) in such amounts as similar
properties and assets are insured by prudent companies in similar circumstances
carrying on similar businesses, and with reputable and financially sound
insurers, including self-insurance to the extent customary, all as reasonably
determined by the Agent. At the request of the Agent, the Loan Parties shall
deliver (x) on the Closing Date and annually thereafter an original certificate
of insurance signed by the Loan Parties' independent insurance broker describing
and certifying as to the existence of the insurance on the Collateral required
to be maintained by this Agreement and the other Loan Documents, together with a
copy of the endorsement described in the next sentence attached to such
certificate, and (y) from time to time a summary schedule indicating all
insurance then in force with respect to each of the Loan Parties. Such policies
of insurance shall contain special endorsements, in form and substance
acceptable to the Agent, which shall (i) specify the Agent as an additional
insured and lender loss payee as its interests may appear, with the
understanding that any obligation imposed upon the insured (including the
liability to pay premiums) shall be the sole obligation of the applicable Loan
Parties and not that of the insured, (ii) provide that the interest of the Banks
shall be insured regardless of any breach or violation by the applicable Loan
Parties of any warranties, declarations or conditions contained in such policies
or any action or inaction of the applicable Loan Parties or others insured under
such policies, (iii) provide a waiver of any right of the
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insurers to set-off or counterclaim or any other deduction, whether by
attachment or otherwise, (iv) provide that any and all rights of subrogation
which the insurers may have or acquire shall be, at all times and in all
respects, junior and subordinate to the prior payment in full of the
Indebtedness hereunder and that no insurer shall exercise or assert any right of
subrogation until such time as the Indebtedness hereunder has been paid in full
and the Revolving Credit Commitments have terminated, (v) provide, except in the
case of public liability insurance and workmen's compensation insurance, that
all insurance proceeds for losses of less than $2,000,000 shall be adjusted with
and payable to the applicable Loan Parties and that all insurance proceeds for
losses of $2,000,000 or more shall be adjusted with and payable to the Agent,
(vi) include effective waivers by the insurer of all claims for insurance
premiums against the Agent, (vii) provide that no cancellation of such policies
for any reason (including nonpayment of premium) or any change therein shall be
effective until at least thirty (30) days after receipt by the Agent of written
notice of such cancellation or change, (viii) be primary without right of
contribution of any other insurance carried by or on behalf of any additional
insureds, and (ix) provide that inasmuch as the policy covers more than one
insured, all terms, conditions, insuring agreements and endorsements (except
limits of liability) shall operate as if there were a separate policy covering
each insured. The applicable Loan Parties shall notify the Agent promptly of any
occurrence causing a material loss or decline in value of its properties and the
estimated (or actual, if available) amount of such loss or decline. Any monies
received by the Agent constituting insurance proceeds may, at the option of the
Agent, (i) be applied by the Agent to the payment of the Loans in such manner as
the Agent may reasonably determine or (ii) be disbursed to the applicable Loan
Parties on such terms as are deemed appropriate by the Agent for the repair,
restoration and/or replacement of property in respect of which such proceeds
were received.
(d) MAINTENANCE OF PROPERTIES AND LEASES.
Each Loan Party shall maintain in good repair, working order and
condition (ordinary wear and tear excepted), in accordance with the general
practice of other businesses of similar character and size, all of those
properties useful or necessary to its business, and from time to time, such Loan
Party will make or cause to be made all appropriate repairs, renewals or
replacements thereof.
(e) MAINTENANCE OF PATENTS, TRADEMARKS, ETC.
Each Loan Party shall maintain in full force and effect all patents,
trademarks, trade names, copyrights, licenses, franchises, permits and other
authorizations necessary for the ownership and operation of its properties and
business if the failure so to maintain the same would constitute a Material
Adverse Change.
(f) VISITATION RIGHTS.
Each Loan Party shall permit any of the officers or authorized
employees or representatives of the Agent or any of the Banks to visit and
inspect any of its properties and to examine and make excerpts from its books
and records and discuss its business affairs, finances and accounts with its
officers, all in such detail and at such times and as often as any of
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the Banks may reasonably request, PROVIDED that each Bank shall provide the
Borrowers and the Agent with reasonable notice prior to any visit or inspection.
(g) KEEPING OF RECORDS AND BOOKS OF ACCOUNT.
Each Loan Party shall maintain and keep proper books of record and
account which enable the Loan Parties to issue financial statements in
accordance with GAAP and as otherwise required by applicable Laws of any
Official Body having jurisdiction over the Loan Parties, and in which full, true
and correct entries shall be made in all material respects of all its dealings
and business and financial affairs.
(h) PLANS AND BENEFIT ARRANGEMENTS.
The Borrowers shall, and shall cause each member of the ERISA Group
to, comply with ERISA, the Internal Revenue Code and other applicable Laws
applicable to Plans and Benefit Arrangements, except where such failure, alone
or in conjunction with any other failure, would not result in a Material Adverse
Change. Without limiting the generality of the foregoing, the Borrowers shall
cause all of their Plans and all Plans maintained by any member of the ERISA
Group to be funded in accordance with the minimum funding requirements of ERISA
and shall make, and cause each member of the ERISA Group to make, in a timely
manner, all contributions due to Plans, Benefit Arrangements and Multiemployer
Plans.
(i) COMPLIANCE WITH LAWS.
Each Loan Party shall comply with all applicable Laws, including all
Environmental Laws, in all respects, PROVIDED that it shall not be deemed to be
a violation of this Section 8.1(i) if any failure to comply with any Law would
not result in fines, penalties, remediation costs, other similar liabilities or
injunctive relief which in the aggregate would constitute a Material Adverse
Change.
(j) USE OF PROCEEDS.
The Borrowers will use the proceeds of the Loans only for lawful
purposes in accordance with Sections 2.11 and 3.5 hereof, as applicable, and
such uses shall not contravene any applicable Law or any other provision hereof.
(k) SUBORDINATION OF INTERCOMPANY LOANS, OTHER LOANS AND ADVANCES TO
THE BORROWERS.
The Loan Parties shall cause any intercompany Indebtedness, loans or
advances owed by any of the Loan Parties to any other Loan Party to be
subordinated pursuant to the terms of the Intercompany Subordination Agreement.
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(l) WARBURG DILLON READ LLC.
▇▇▇▇▇▇ National shall continue to employ Warburg Dillon Read LLC to
evaluate a range of strategic alternatives including the possible sale of part
or all of ▇▇▇▇▇▇ National and its Subsidiaries.
(m) ADDITION AND RELEASE OF COLLATERAL.
Until an event of Default or Potential Default has occurred, prior to
the beginning of each month, the Loan Parties will provide the Agent with (i) a
list of scheduled home closings for such month, and (ii) amendments to the
Mortgages to add any Real Property acquired by any Loan Party in the prior
month, and the Agent will deliver appropriate releases for such scheduled
closings, as directed by the Loan Parties, to either the Loan Parties, their
attorneys or their title agent, in each case to hold in escrow pending such
closings. After the occurrence of an Event of Default or Potential Default, the
Loan Parties shall, simultaneously with the acquisition of any Real Property,
provide amendments to the Mortgages to add such Real Property, and the Agent
shall determine the mechanics for providing releases for scheduled closings.
8.2. NEGATIVE COVENANTS.
The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans and interest thereon, termination or expiration of
all of the Letters of Credit, satisfaction of all of the Loan Parties' other
obligations hereunder and termination of the Revolving Credit Commitments, the
Loan Parties shall comply with the following negative covenants:
(a) INDEBTEDNESS.
Each of the Loan Parties shall not at any time create, incur, assume
or suffer to exist any Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Unsecured leases of equipment in the ordinary course of
business;
(iii) Indebtedness under capitalized leases or secured by
purchase money security interests (other than Nonrecourse Purchase Money
Security Interests) which shall not exceed 2% of Consolidated Tangible Net Worth
in the aggregate at any time;
(iv) Indebtedness secured by Nonrecourse Purchase Money Security
Interests not exceeding 15% of Consolidated Tangible Net Worth in the aggregate
at any time;
(v) Indebtedness under the Senior Notes;
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(vi) Indebtedness constituting a Restricted Transaction with the
prior written consent of the Required Banks, such consent to be granted or
withheld in their sole discretion;
(vii) Indebtedness of a Loan Party to another Loan Party;
(viii) the Provident Guaranty in an amount not to exceed
$10,000,000 in principal in the aggregate; and
(ix) Indebtedness not included in clauses (i) - (viii) above in
an amount not to exceed $500,000 in the aggregate at any time.
(b) LIENS.
Each of the Loan Parties shall not at any time create, incur,
assume or suffer to exist any Lien on any of its property or assets, tangible or
intangible, now owned or hereafter acquired, or agree or become liable to do so,
except Permitted Liens.
(c) GUARANTIES.
Each of the Loan Parties shall not at any time, directly or
indirectly, become or be liable in respect of any Guaranty, or assume,
guarantee, become surety for, endorse or otherwise agree, become or remain
directly or contingently liable upon or with respect to any obligation or
liability of any other person, except for Guaranties under the Loan Documents,
Guaranties constituting a Restricted Transaction with the prior written consent
of the Required Banks, such consent to be granted or withheld in their sole
discretion, or Guaranties permitted under Section 8.2(a)(viii).
(d) LOANS AND INVESTMENTS; CERTAIN DIVIDENDS AND DISTRIBUTIONS.
Each of the Loan Parties shall not at any time make or suffer to
remain outstanding any loan or advance to, or purchase, acquire or own any
stock, bonds, notes or securities of, or any partnership interest (whether
general or limited) in or any other investment or interest in, or make any
capital contribution to, any other person, or agree, become or remain liable to
do any of the foregoing, or to make or pay, or agree to become liable to make or
pay, any dividend or other distribution of any nature (whether in cash,
property, securities or otherwise) on account of or in respect of its shares of
capital stock, partnership interests or limited liability company interests on
account of the purchase, redemption, retirement or acquisition of its shares of
capital stock (or warrants, options or rights therefor), partnership interests
or limited liability company interests (except dividends or other distributions
payable to another Loan Party), except:
(i) trade credit extended on usual and customary terms in the
ordinary course of business;
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(ii) advances to employees to meet expenses incurred by such
employees in the ordinary course of business;
(iii) Permitted Investments;
(iv) loans, advances, investments, dividends or distributions
constituting a Restricted Transaction with the prior written consent of the
Required Banks, such consent to be granted or withheld in their sole discretion;
(v) loans, advances and investments in other Loan Parties; and
(vi) the net intercompany receivable owing from ▇▇▇▇▇▇ National
to ▇▇▇▇▇▇ Homes in an amount not greater than $16,900,000 as of the date hereof,
as further reduced from time to time as a result of any payments but in no event
increased (other than in connection with any tax sharing agreements between
▇▇▇▇▇▇ Homes and ▇▇▇▇▇▇ National (which is a non-cash event) (the "▇▇▇▇▇▇ HOMES
RECEIVABLE").
(e) CHANGES IN THE SENIOR AND SUBORDINATED NOTES.
▇▇▇▇▇▇ Homes shall not amend or modify any provisions of the Senior
Notes, the Subordinated Notes or any related documents without the consent of
the Required Banks.
(f) LIQUIDATIONS, MERGERS, CONSOLIDATIONS, ACQUISITIONS.
Each of the Loan Parties shall not dissolve, liquidate or wind up its
affairs, or become a party to any merger or consolidation, or acquire by
purchase, lease or otherwise all or substantially all of the assets or capital
stock of any other person; PROVIDED that (i) any Loan Party other than the
Borrowers may consolidate or merge into another Loan Party, and (ii) the Loan
Parties may acquire all or substantially all of the assets or all of the capital
stock of other persons engaged in the same business as the business of the Loan
Parties with the prior written consent of the Required Banks, such consent to be
granted or withheld in their sole discretion.
(g) DISPOSITIONS OF ASSETS OR SUBSIDIARIES.
Each of the Loan Parties shall not sell, convey, assign, lease,
abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any
of its properties or assets, tangible or intangible (including but not limited
to sale, assignment, discount or other disposition of accounts, contract rights,
chattel paper, equipment or general intangibles, with or without recourse, or of
capital stock, shares of beneficial interest or partnership interests of a
Subsidiary), except:
(i) transactions involving the sale of land and building
inventory in the ordinary course of business;
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(ii) any sale, transfer, lease, abandonment or other disposition
of assets in the ordinary course of business which are no longer necessary or
required in the conduct of the Loan Party's business; and
(iii) any sale, transfer or lease of assets in the ordinary
course of business which are replaced by substitute assets acquired.
(h) AFFILIATE TRANSACTIONS.
Each of the Loan Parties shall not enter into or carry out any
transaction (including, without limitation, purchasing property or services from
or selling property or services to any Affiliate or other person) unless such
transaction is not otherwise prohibited by this Agreement, is entered into in
the ordinary course of business upon fair and reasonable arm's length terms and
conditions, is in accordance with all applicable Law and, except for the lease
payments and land purchases provided for in an Approved Cash Flow Forecast,
employee lease payments and tax sharing agreements, is consented to in advance
in writing by the Required Banks, such consent to be granted or withheld in
their sole discretion.
(i) SUBSIDIARY, PARTNERSHIPS AND JOINT VENTURES.
Each of the Loan Parties shall not own or create, directly or
indirectly, any Subsidiaries other than Subsidiaries which join this Agreement
as Guarantors pursuant to Section 11.18. None of the Loan Parties shall become
or agree to become a general or limited partner in any general or limited
partnership or a joint venturer in any joint venture except for limited
partnerships and joint ventures which constitute Restricted Transactions with
the prior written consent of the Required Banks, such consent to be granted or
withheld in their sole discretion; PROVIDED if any Loan Party makes a loan or
advance in excess of $500,000 to any such limited partnership or joint venture,
then such limited partnership or joint venture shall join this Agreement as a
Guarantor pursuant to Section 11.18.
(j) CONTINUATION OF OR CHANGE IN BUSINESS; GEOGRAPHIC EXPANSION.
Each of the Loan Parties shall not engage in any business other than
the development of residential homes, the provision of title insurance and the
ownership of commercial real estate incidental to residential real estate
development (to the extent such ownership is permitted hereunder), in each
instance as such business has been conducted and operated by the Loan Parties
during the present fiscal year, and the Borrowers shall not permit any material
change in such business. The Loan Parties shall not, without the consent of the
Required Banks, which consent shall not be unreasonably withheld, acquire land,
develop homes or conduct business in any states other than Ohio, Kentucky,
Indiana, Tennessee, North Carolina and South Carolina.
(k) PLANS AND BENEFIT ARRANGEMENTS.
Each of the Loan Parties shall not:
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(i) fail to satisfy the minimum funding requirements of ERISA and
the Internal Revenue Code with respect to any Plan;
(ii) request a minimum funding waiver from the Internal Revenue
Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with any Plan, Benefit
Arrangement or Multiemployer Plan which, alone or in conjunction with any other
circumstances or set of circumstances resulting in liability under ERISA, would
constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan, determined on a plan
termination basis, as disclosed in the most recent actuarial report completed
with respect to such Plan, to exceed, as of any actuarial valuation date, the
fair market value of the assets of such Plan;
(v) fail to make when due any contribution to any Multiemployer
Plan that the Borrowers or any member of the ERISA Group may be required to make
under any agreement relating to such Multiemployer Plan or any Law pertaining
thereto;
(vi) withdraw (completely or partially) from any Multiemployer
Plan or withdraw (or be deemed under Section 4062(e) of ERISA to withdraw) from
any Multiple Employer Plan, where any such withdrawal is likely to result in a
material liability of Borrowers or any member of the ERISA Group;
(vii) terminate, or institute proceedings to terminate, any Plan,
where such termination is likely to result in a material liability to the
Borrowers or any member of the ERISA Group;
(viii) make any amendment to any Plan with respect to which
security is required under Section 307 of ERISA; or
(ix) fail to give any and all notices or make all disclosures and
governmental filings required under ERISA or the Internal Revenue Code, where
such failure is likely to result in a Material Adverse Change.
(l) FISCAL YEAR.
None of the Loan Parties shall change its fiscal year from the
twelve-month period beginning January 1 and ending December 31.
(m) CHANGES IN ORGANIZATIONAL DOCUMENTS.
Each of the Loan Parties shall not amend in any respect its
certificate of incorporation (including any provisions or resolutions relating
to capital stock) without providing at least fifteen (15) calendar days' prior
written notice to the Agent and the Banks and, in the
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event such change would be adverse to the Banks as determined by the Agent in
its sole discretion, obtaining the prior written consent of the Required Banks.
(n) MINIMUM FIXED CHARGE COVERAGE RATIO.
The Loan Parties shall not permit the ratio of Consolidated Cash Flow
From Operations to Consolidated Fixed Charges, calculated as of the end of each
fiscal quarter for the fiscal quarter then ending, to be less than the ratio set
forth below for the periods specified below:
PERIOD RATIO
Fiscal quarter ending 6/30/00 .75
Fiscal quarters ending 9/30/00 and 12/31/00 1.50
(o) MINIMUM TANGIBLE NET WORTH.
The Loan Parties shall not at any time permit Consolidated Tangible
Net Worth to be less than $40,000,000.
(p) MAXIMUM LEVERAGE RATIO.
The Loan Parties shall not permit the Leverage Ratio, for each fiscal
quarter for the quarter then ending, to exceed 3.50 to 1.00 for the fiscal
quarters ending March 31, 2000 and thereafter.
(q) SPECULATIVE UNITS.
The Loan Parties shall not at any time permit (i) the number of
Speculative Units in any Active Community to exceed five (5) on or after April
1, 2000, four (4) on or after May 1, 2000 or three (3) on or after June 1, 2000
or (ii) the number of Speculative Units in all Active Communities to exceed 15%
of the aggregate number of Active Units sold during the previous twelve (12)
month period.
(r) MODEL UNITS.
The Loan Parties shall not at any time permit the number of Model
Units owned or leased including without limitation Model Units leased from First
Cincinnati Leasing, LLC (i) in any Active Community to exceed two (2) in each
distinctive price point, as determined by the Borrowers and acceptable to the
Agent, but in no event more than four (4) in the aggregate, or (ii) in all
Active Communities of a Loan Party to exceed one hundred percent (100%) of the
number of such Active Communities.
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(s) LAND OWNERSHIP OR ACQUISITION.
The Loan Parties shall not acquire, own, purchase, lease or otherwise
invest in, directly or indirectly, any land or other real estate other than, in
each case so long as such acquisition or other investment is consistent with the
then current Approved Cash Flow Forecast and all such real estate is being
actively marketed or is under an Agreement of Sale:
(i) real estate held or acquired by a Loan Party for construction
and sale of Active Units, PROVIDED that Regulatory Approval has been received
therefor; and
(ii) real estate which does not fall under clause (i) above in an
amount not to exceed $2,000,000 in the aggregate at any time.
(t) ▇▇▇▇▇▇ NATIONAL MAXIMUM LEVERAGE RATIO.
▇▇▇▇▇▇ National shall not at any time permit the ratio of ▇▇▇▇▇▇
National Total Liabilities to ▇▇▇▇▇▇ National Tangible Net Worth, for each
fiscal quarter for the quarter then ending, to exceed the ratio set forth below
for the periods specified below:
PERIOD RATIO
Fiscal quarters ending 3/31/00 and 6/30/00 8.50 to 1.00
Fiscal quarter ending 9/30/00 7.00 to 1.00
Fiscal quarter ending 12/31/00 6.00 to 1.00
(u) ▇▇▇▇▇▇ NATIONAL MINIMUM NET WORTH.
▇▇▇▇▇▇ National shall not permit the ▇▇▇▇▇▇ National Net Worth to be
less than the amounts set forth below, measured at the dates set forth below:
MEASUREMENT DATE MINIMUM NET WORTH
3/31/00 $20,000,000
6/30/00 $20,000,000
9/30/00 $24,000,000
12/31/00 $27,500,000
(v) OFF BALANCE SHEET FINANCING.
Each of the Loan Parties shall not permit the aggregate amount of off
balance sheet financing provided by or to parties under common control with
▇▇▇▇▇▇ National, any Loan Party or any Affiliate of any Loan Parties (including
without limitation First Cincinnati
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Land, LLC and First Cincinnati Leasing, LLC) related to Model Units and Approved
Land Inventory to exceed $30,000,000.
(w) LIMITATION ON INTEREST RATE.
▇▇▇▇▇▇ National shall not charge any of its Subsidiaries or Affiliates
(including without limitation any Loan Party, First Cincinnati Land, LLC and
First Cincinnati Leasing, LLC) in excess of the Base Rate PLUS one percent (1%)
for the use of its investment capital. The parties hereto expressly acknowledge
that the use of ▇▇▇▇▇▇ National's investment capital described above constitutes
a Restricted Transaction which requires the prior written consent of the
Required Banks, such consent to be granted or withheld in their sole discretion.
(x) AVAILABILITY AND CASH FLOW.
Beginning with the week ending May 5, 2000, the Loan Parties shall at
all times maintain (i) Revolving Credit Availability of not less than 80% of the
"estimated bank credit availability" as set forth in the most recent Approved
Cash Flow Forecast or (ii) actual cash flow of the Borrowers (positive or
negative) within a 20% variance of the projected cash flow of the Borrowers as
set forth in the most recent Approved Cash Flow Forecast.
8.3. REPORTING REQUIREMENTS.
The Loan Parties jointly and severally covenant and agree that
until payment in full of the Loans and interest thereon, termination or
expiration of all Letters of Credit, satisfaction of all of the Loan Parties'
other obligations hereunder and termination of the Revolving Credit Commitments,
the Loan Parties will furnish or cause to be furnished to the Agent and each of
the Banks:
(a) MONTHLY FINANCIAL STATEMENTS AND REPORTS AND BIWEEKLY CASH FLOW
FORECAST.
(i) As soon as available and in any event within thirty (30)
calendar days after the end of each calendar month, the Borrowers' combining
balance sheet as of the end of such month and combining income statement for the
month then ended and for the year to date, all in reasonable detail (and in
similar format to the December 31, 1998 financial statements) and certified
(subject to normal year-end audit adjustments) by the Chief Executive Officer,
President or Chief Financial Officer of the Borrowers as having been prepared in
accordance with GAAP, consistently applied.
(ii) As soon as available and in any event within thirty (30)
calendar days after the end of each calendar month, ▇▇▇▇▇▇ National's
consolidating balance sheet as of the end of such month and consolidating income
statement for the month then ended and for the year to date, all in reasonable
detail and certified (subject to normal year-end audit adjustments) by the Chief
Executive Officer, President or Chief Financial Officer of ▇▇▇▇▇▇ National as
having been prepared in accordance with GAAP, consistently applied.
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(iii) As soon as available and in any event within thirty (30)
calendar days after the end of each calendar month, a reconciliation of balances
presented in the financial statements delivered pursuant to Sections 8.3(a)(i)
and (ii).
(iv) As soon as available and in any event within fifteen (15)
calendar days after the end of each calendar month, the Borrowers' sales and
closing reports as of the end of such month in form and in such detail as is
reasonably acceptable to the Agent.
(v) Within five (5) calendar days after the end of each two (2)
week period, a Cash Flow Forecast.
(b) QUARTERLY FINANCIAL STATEMENTS.
As soon as available and in any event within forty-five (45) calendar
days after the end of each of the first three (3) fiscal quarters in each fiscal
year, financial statements of ▇▇▇▇▇▇ National and its Subsidiaries, consisting
of (i) a consolidated balance sheet as of the end of such fiscal quarter; (ii)
related consolidated statements of income together with comparisons to the prior
year for the fiscal quarter then ended and the fiscal year through that date;
and (iii) the consolidated statements of retained earnings and cash flow (in
comparative form) for the fiscal year through that date, all in reasonable
detail and certified (subject to normal year-end audit adjustments) by the Chief
Executive Officer, President or Chief Financial Officer of ▇▇▇▇▇▇ National as
having been prepared in accordance with GAAP, consistently applied, and setting
forth in comparative form the respective financial statements for the
corresponding date and period in the previous fiscal year. As soon as available
and in any event within forty-five (45) calendar days after the end of each of
the first three (3) fiscal quarters in each fiscal year, Form 10-Q filed by
▇▇▇▇▇▇ National with the Securities and Exchange Commission.
(c) ANNUAL FINANCIAL STATEMENTS.
As soon as available and in any event within ninety (90) days after
the end of each fiscal year of ▇▇▇▇▇▇ National, financial statements of ▇▇▇▇▇▇
National and its Subsidiaries, consisting of a consolidating and consolidated
balance sheet as of the end of such fiscal year and related consolidating and
consolidated statements of income, retained earnings and cash flows for the
fiscal year then ended, all in reasonable detail and setting forth in
comparative form the financial statements as of the end of and for the preceding
fiscal year, and certified by independent certified public accountants of
nationally recognized standing satisfactory to the Agent. The certificate or
report of accountants shall be free of qualifications (other than any
consistency qualification that may result from a change in the method used to
prepare the financial statements as to which such accountants concur) and shall
not indicate the occurrence or existence of any event, condition or contingency
which would materially impair the prospect of payment or performance of any
covenant, agreement or duty of any Loan Party under any of the Loan Documents.
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(d) QUARTERLY COMPLIANCE CERTIFICATE OF THE LOAN PARTIES; UPDATES TO
SCHEDULES.
Concurrently with the financial statements of ▇▇▇▇▇▇ National and the
Borrowers furnished to the Agent and to the Banks pursuant to Sections 8.3(b)
and 8.3(c) hereof, a certificate of the Loan Parties signed by the Chief
Executive Officer, President or Chief Financial Officer of the Loan Parties and
independent certified public accountants of nationally recognized standing
satisfactory to the Agent, in the form of EXHIBIT 8.3(D) hereto (the "QUARTERLY
COMPLIANCE CERTIFICATE"), to the effect that, except as described pursuant to
Section 8.3(f) below, (i) the representations and warranties of the Loan Parties
contained in Article 6 hereof are true on and as of the date of such certificate
with the same effect as though such representations and warranties had been made
on and as of such date (except representations and warranties which expressly
relate solely to an earlier date or time), and the Loan Parties have performed
and complied with all covenants and conditions hereof, (ii) no Event of Default
or Potential Default exists and is continuing on the date of such certificate,
and (iii) containing calculations in sufficient detail to demonstrate compliance
as of the date of the financial statements with all financial covenants
contained in Section 8.2 hereof and reconciliation with the monthly and
quarterly financial statements provided pursuant to Sections 8.3(a)(i) and
8.3(b). The Loan Parties shall deliver together with such Quarterly Compliance
Certificate the updated Schedules to the Agreement referred to in Section 6.2.
(e) BORROWING BASE CERTIFICATE.
Within twenty (20) calendar days after the end of each calendar month,
a certificate computing the Borrowing Base and demonstrating compliance with the
covenants set forth in Sections 8.2(q), (r) and (s) as of the end of the
preceding calendar month in the form of EXHIBIT 8.3(E) (the "BORROWING BASE
CERTIFICATE"), appropriately completed, executed and delivered by an Authorized
Officer together with reconciliation with the monthly financial statements
provided pursuant to Section 8.3(a)(i) any supporting information which the
Agent may from time to time request.
(f) NOTICE OF DEFAULT.
Promptly after any officer of any of the Loan Parties has learned of
the occurrence of an Event of Default or Potential Default, a certificate signed
by the Chief Executive Officer, President or Chief Financial Officer of such
Loan Party setting forth the details of such Event of Default or Potential
Default and the action which the Loan Party proposes to take with respect
thereto.
(g) NOTICE OF LITIGATION.
Promptly after the commencement thereof, notice of all actions, suits,
proceedings or investigations before or by any Official Body or any other person
against any of the Loan Parties (other than proceedings in the ordinary course
of business in connection with obtaining Regulatory Approval, PROVIDED that the
conduct of those proceedings does not otherwise violate the provisions of this
Agreement) involving a claim or series of claims in
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excess of $500,000 or which if adversely determined would constitute a Material
Adverse Change with respect to any of the Loan Parties.
(h) BUDGETS, FORECASTS, DELIVERIES UNDER THE SENIOR NOTES, OTHER
REPORTS AND INFORMATION.
Promptly upon their becoming available to the applicable Loan Party:
(i) the annual budget and any forecasts or projections of such
Loan Party, to be supplied not later than ninety (90) days after the
commencement of such fiscal year,
(ii) any reports, including management letters submitted to such
Loan Party by independent accountants in connection with any annual, interim or
special audit,
(iii) any reports, notices or proxy statements generally
distributed by such Loan Party to its stockholders, on a date no later than the
date supplied to the stockholders,
(iv) regular or periodic reports, including Forms 10-K, 10-Q and
8-K, registration statements and prospectuses, filed by such Loan Party with the
Securities and Exchange Commission,
(v) copies of notices, reports and other information sent by any
of the Loan Parties to the holders of the Senior Notes under the Senior Notes or
any related documents, at the same time such Loan Party sends the same to such
holders,
(vi) a copy of any order in any proceeding to which any Loan
Party is a party issued by any Official Body which could result in a Material
Adverse Change, and
(vii) such other reports and information as the Banks may from
time to time reasonably request.
(i) NOTICES REGARDING PLANS AND BENEFIT ARRANGEMENTS.
(i) Promptly upon becoming aware of the occurrence thereof,
notice (including the nature of the event and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with respect thereto) of:
(A) any Reportable Event with respect to the Borrowers or
any member of the ERISA Group (regardless of whether the obligation to report
said Reportable Event to the PBGC has been waived),
(B) any Prohibited Transaction which could subject the
Borrowers or any member of the ERISA Group to a civil penalty assessed pursuant
to
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Section 502(i) of ERISA or a tax imposed by Section 4975 of the Internal
Revenue Code in connection with any Plan, Benefit Arrangement or any trust
created thereunder,
(C) any assertion of material withdrawal liability with
respect to any Multiemployer Plan,
(D) any partial or complete withdrawal from a Multiemployer
Plan by the Borrowers or any member of the ERISA Group under Title IV of ERISA
(or assertion thereof), where such withdrawal is likely to result in material
withdrawal liability,
(E) any cessation of operations (by the Borrowers or any
member of the ERISA Group) at a facility in the circumstances described in
Section 4063(e) of ERISA,
(F) withdrawal by the Borrowers or any member of the ERISA
Group from a Multiple Employer Plan,
(G) a failure by the Borrowers or any member of the ERISA
Group to make a payment to a Plan required to avoid imposition of a lien under
Section 302(f) of ERISA,
(H) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA, or
(I) any change in the actuarial assumptions or funding
methods used for any Plan, where the effect of such change is to materially
increase or materially reduce the unfunded benefit liability or obligation to
make periodic contributions.
(ii) Promptly after receipt thereof, copies of (a) all notices
received by the Borrowers or any member of the ERISA Group of the PBGC's intent
to terminate any Plan administered or maintained by the Borrowers or any member
of the ERISA Group, or to have a trustee appointed to administer any such Plan;
and (b) at the request of the Agent or any Bank, each annual report (IRS Form
5500 series) and all accompanying schedules, the most recent actuarial reports,
the most recent financial information concerning the financial status of each
Plan administered or maintained by the Borrowers or any member of the ERISA
Group, and schedules showing the amounts contributed to each such Plan by or on
behalf of the Borrowers or any member of the ERISA Group in which any of their
personnel participate or from which such personnel may derive a benefit, and
each Schedule B (Actuarial Information) to the annual report filed by the
Borrowers or any member of the ERISA Group with the Internal Revenue Service
with respect to each such Plan.
(iii) Promptly upon the filing thereof, copies of any Form 5310,
or any successor or equivalent form to Form 5310, filed with the PBGC in
connection with the termination of any Plan.
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9. DEFAULT
----------
9.1. EVENTS OF DEFAULT.
An Event of Default shall mean the occurrence or existence of any one or
more of the following events or conditions (whatever the reason therefor and
whether voluntary, involuntary or effected by operation of Law):
(a) The Borrowers shall fail to pay any principal of any Loan
(including scheduled installments, mandatory prepayments or payment due at
maturity) or shall fail to pay any interest on any Loan or any other amount
owing hereunder or under the other Loan Documents after such principal, interest
or other amount becomes due in accordance with the terms hereof or thereof;
(b) Any representation or warranty made at any time by any of the Loan
Parties herein or by any of the Loan Parties in any other Loan Document or in
any certificate, other instrument or statement furnished pursuant to the
provisions hereof or thereof shall prove to have been false or misleading in any
material respect as of the time it was made or furnished;
(c) Any of the Loan Parties shall default in the observance or
performance of any covenant contained in Section 8.1(f) or (l) or Section 8.2;
(d) Any of the Loan Parties shall default in the observance or
performance of any other covenant, condition or provision hereof or of any other
Loan Document, and such default shall continue unremedied for a period of ten
(10) Business Days after any officer of any Loan Party becomes aware of the
occurrence thereof (such grace period to be applicable only in the event such
default can be remedied by corrective action of the Loan Parties as determined
by the Agent in its reasonable discretion);
(e) A default or event of default shall occur at any time under the
Senior Notes or any related documents or under the terms of any other agreement
involving borrowed money or the extension of credit or any other Indebtedness
under which any Loan Party may be obligated as borrower or guarantor (except for
nonrecourse Indebtedness secured by Nonrecourse Purchase Money Security
Interests permitted hereunder) in excess of $500,000 in the aggregate
outstanding at any time, and such breach, default or event of default consists
of the failure to pay (beyond any period of grace permitted with respect
thereto, whether waived or not) any Indebtedness when due (whether at stated
maturity, by acceleration or otherwise) or if such breach or default permits or
causes the acceleration of any Indebtedness (whether or not such right shall
have been waived) or the termination of any commitment to lend;
(f) Any final judgments or orders for the payment of money (not
adequately covered by insurance) in excess of $500,000 in the aggregate
outstanding at any time shall be entered against any Loan Party by a court
having jurisdiction in the premises, which judgment is not paid or discharged,
vacated, bonded or stayed pending appeal within a period of thirty (30) days
from the date of entry;
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(g) Any of the Loan Documents shall cease to be a legal, valid and
binding agreement enforceable against the Loan Parties in accordance with the
respective terms thereof or shall in any way be terminated (except in accordance
with its terms) or become or be declared ineffective or inoperative or shall in
any way be challenged or contested or cease to give or provide the respective
rights, titles, interests, remedies, powers or privileges intended to be created
thereby;
(h) There shall occur any material uninsured damage to or loss, theft
or destruction of any assets of the Loan Parties, or any of the Loan Parties'
assets are attached, seized, levied upon or subjected to a writ or distress
warrant, or such come within the possession of any receiver, trustee, custodian
or assignee for the benefit of creditors and the same is not cured within thirty
(30) days thereafter;
(i) A notice of lien or assessment in excess of $500,000 is filed of
record with respect to all or any part of any of the Loan Parties' assets by the
United States, or any department, agency or instrumentality thereof, or by any
state, county, municipal or other governmental agency, including, without
limitation, the Pension Benefit Guaranty Corporation, or if any taxes or debts
owing at any time or times hereafter to any one of these become payable and the
same are not paid within thirty (30) days after the same become payable;
(j) Any Loan Party ceases to be solvent or admits in writing its
inability to pay its debts as they mature;
(k) Any of the following occurs: (i) any Reportable Event, which the
Agent determines in good faith constitutes grounds for the termination of any
Plan by the PBGC or the appointment of a trustee to administer or liquidate any
Plan, shall have occurred and be continuing; (ii) proceedings shall have been
instituted or other action taken to terminate any Plan, or a termination notice
shall have been filed with respect to any Plan; (iii) a trustee shall be
appointed to administer or liquidate any Plan; (iv) the PBGC shall give notice
of its intent to institute proceedings to terminate any Plan or Plans or to
appoint a trustee to administer or liquidate any Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, the Agent determines in good faith
that the amount of Borrowers' liability is likely to exceed 10% of their
Consolidated Tangible Net Worth; (v) the Borrowers or any member of the ERISA
Group shall fail to make any contributions when due to a Plan or a Multiemployer
Plan; (vi) the Borrowers or any member of the ERISA Group shall make any
amendment to a Plan with respect to which security is required under Section 307
of ERISA; (vii) the Borrowers or any member of the ERISA Group shall withdraw
completely or partially from a Multiemployer Plan; (viii) the Borrowers or any
member of the ERISA Group shall withdraw (or shall be deemed under Section
4062(e) of ERISA to withdraw) from a Multiple Employer Plan; or (ix) any
applicable Law is adopted, changed or interpreted by any Official Body with
respect to or otherwise affecting one or more Plans, Multiemployer Plans or
Benefit Arrangements; and, with respect to any of the events specified in (v),
(vi), (vii), (viii) or (ix), the Agent determines in good faith that any such
occurrence would be reasonably likely to result in a Material Adverse Change;
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(l) Any Loan Party ceases to conduct its business as contemplated or
is enjoined, restrained or in any way prevented by court order from conducting
all or any material part of its business, and such injunction, restraint or
other preventive order is not dismissed within thirty (30) days after the entry
thereof;
(m) A Change of Control occurs;
(n) A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
any Loan Party in an involuntary case under any applicable bankruptcy,
insolvency, reorganization or other similar Law now or hereafter in effect, or a
receiver, liquidator, assignee, custodian, trustee, sequestrator or conservator
(or similar official) of any Loan Party for any substantial part of its
property, or for the winding-up or liquidation of its affairs, and such
proceeding shall remain undismissed or unstayed and in effect for a period of
thirty (30) consecutive days or such court shall enter a decree or order
granting any of the relief sought in such proceeding; or
(o) Any Loan Party shall commence a voluntary case under any
applicable bankruptcy, insolvency, reorganization or other similar Law now or
hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such Law, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or conservator (or other similar official) of itself or for any
substantial part of its property or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due or shall take any action in furtherance of any of the foregoing.
9.2. CONSEQUENCES OF EVENT OF DEFAULT.
(a) If an Event of Default specified under subsections (a) through (m)
of Section 9.1 hereof shall occur and be continuing, the Agent and the Banks
shall be under no further obligation to make Loans or issue Letters of Credit
hereunder, and the Agent may, and upon the request of the Required Banks shall,
(i) by written notice to the Borrowers, declare the unpaid principal amount of
the Notes then outstanding and all interest accrued thereon, any unpaid fees and
all other Indebtedness of the Borrowers to the Banks hereunder and thereunder to
be forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Agent for the benefit of each Bank without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, and (ii) require the Co-Borrowers to, and the
Co-Borrowers shall thereupon, deposit in a non-interest-bearing account with the
Agent, as cash collateral for its obligations under the Loan Documents, an
amount equal to the maximum amount currently or at any time thereafter available
to be drawn on all outstanding Letters of Credit, and the Co-Borrowers hereby
pledge to the Agent and the Banks, and grant to the Agent and the Banks a
security interest in, all such cash as security for such obligations. Upon the
curing of all existing Events of Default to the satisfaction of the Required
Banks, the Agent shall return such cash collateral to the Co-Borrowers; and
(b) If an Event of Default specified under subsections (n) or (o) of
Section 9.1 hereof shall occur, the Banks shall be under no further obligation
to make Loans
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hereunder, and the unpaid principal amount of the Notes then outstanding and all
interest accrued thereon, any unpaid fees and all other Indebtedness of the
Borrowers to the Banks hereunder and thereunder shall be immediately due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived; and the Agent may, and upon the request of the
Required Banks shall, require the Co-Borrowers to provide cash collateral as set
forth in Section 9.2(a)(ii); and
(c) If an Event of Default shall occur and be continuing, any Bank to
whom any obligation is owed by any Loan Party hereunder or under any other Loan
Document or any participant of such Bank which has agreed in writing to be bound
by the provisions of Section 10.13 hereof, and any branch, subsidiary or
affiliate of such Bank or participant anywhere in the world, shall have the
right, in addition to all other rights and remedies available to it, without
notice to Borrowers or such Loan Party, to set off against and apply to the then
unpaid balance of all the Loans and all other obligations of the Borrowers and
the other Loan Parties hereunder or under any other Loan Document any debt owing
to, and any other funds held in any manner for the account of, the Borrowers or
such other Loan Party by such Bank or participant or by such branch, subsidiary
or affiliate, including, without limitation, all funds in all deposit accounts
(whether time or demand, general or special, provisionally credited or finally
credited, or otherwise) now or hereafter maintained by the Borrowers or such
other Loan Party for its own account (but not including funds held in custodian
or trust accounts or payroll withholding tax accounts) with such Bank or
participant or such branch, subsidiary or affiliate. Such right shall exist
whether or not any Bank or the Agent shall have made any demand under this
Agreement or any other Loan Document, whether or not such debt owing to or funds
held for the account of the Borrowers or such other Loan Party is or are matured
or unmatured and regardless of the existence or adequacy of any security, right
or remedy available to any Bank or the Agent; and
(d) If an Event of Default shall occur and be continuing, and whether
or not the Agent shall have accelerated the maturity of Loans of the Borrowers
pursuant to any of the foregoing provisions of this Section 9.2, the Agent or
any Bank, if owed any amount with respect to the Notes, may proceed to protect
and enforce its rights by suit in equity, action at law and/or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement or the Notes, including as permitted by applicable
Law the obtaining of the EX PARTE appointment of a receiver, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of the Agent or such Bank;
and
(e) From and after the date on which the Agent has taken any action
pursuant to this Section 9.2 and until all obligations of the Loan Parties have
been paid in full, any and all proceeds received by the Agent, or any part
thereof, or the exercise of any other remedy by the Agent, shall be applied as
follows:
(i) first, to reimburse the Agent and the Banks for out-of-pocket
costs, expenses and disbursements, including without limitation reasonable
attorneys' fees
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and legal expenses, incurred by the Agent or the Banks in connection with
collection of any obligations of any of the Loan Parties under any of the Loan
Documents;
(ii) second, to the repayment of all Indebtedness then due and
unpaid of the Loan Parties to the Banks incurred under this Agreement or any of
the Loan Documents, whether of principal, interest, fees, expenses or otherwise,
in such manner as the Agent may determine in its discretion; and
(iii) the balance, if any, as required by Law.
(f) In addition to all of the rights and remedies contained in this
Agreement or in any of the other Loan Documents (including the Mortgages, the
Pledge Agreement and the Security Agreement), the Agent shall have all of the
rights and remedies of a secured party under the Uniform Commercial Code or
other applicable Law, all of which rights and remedies shall be cumulative and
nonexclusive, to the extent permitted by Law. The Agent may, and upon the
request of the Required Banks shall, exercise all post-default rights granted to
the Agent and the Banks under the Loan Documents or applicable Law.
9.3. NOTICE OF SALE.
Any notice required to be given by the Agent of a sale, lease, or other
disposition of the Collateral or any other intended action by the Agent, if
given ten (10) days prior to such proposed action, shall constitute commercially
reasonable and fair notice thereof to the Loan Parties.
10. THE AGENT
-------------
10.1. APPOINTMENT.
Each Bank hereby irrevocably designates, appoints and authorizes PNC to act
as Agent for such Bank under this Agreement to execute and deliver or accept on
behalf of each of the Banks the other Loan Documents. Each Bank hereby
irrevocably authorizes, and each holder of any Note by the acceptance of a Note
shall be deemed irrevocably to authorize, the Agent to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
any other instruments and agreements referred to herein, and to exercise such
powers and to perform such duties hereunder, as are specifically delegated to or
required of the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. PNC agrees to act as the Agent on behalf of the
Banks to the extent provided in this Agreement.
10.2. DELEGATION OF DUTIES.
The Agent may perform any of its duties hereunder by or through agents or
employees (provided such delegation does not constitute a relinquishment of its
duties as Agent) and, subject to Sections 10.5 and 10.6 hereof, shall be
entitled to engage and pay for the advice
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or services of any attorneys, accountants or other experts concerning all
matters pertaining to its duties hereunder and to rely upon any advice so
obtained.
10.3. NATURE OF DUTIES; INDEPENDENT CREDIT INVESTIGATION.
The Agent shall have no duties or responsibilities except those expressly
set forth in this Agreement, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have, by reason of this Agreement,
a fiduciary or trust relationship in respect of any Bank; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein. Each Bank expressly acknowledges (i) that the Agent
has not made any representations or warranties to it and that no act by the
Agent hereafter taken, including any review of the affairs of any of the Loan
Parties, shall be deemed to constitute any representation or warranty by the
Agent to any Bank; (ii) that it has made and will continue to make, without
reliance upon the Agent, its own independent investigation of the financial
condition and affairs and its own appraisal of the creditworthiness of each of
the Loan Parties in connection with this Agreement and the making and
continuance of the Loans hereunder; and (iii) except as expressly provided
herein, that the Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank with any credit or other information
with respect thereto, whether coming into its possession before the making of
any Loan or at any time or times thereafter.
10.4. ACTIONS IN DISCRETION OF AGENT; INSTRUCTIONS FROM THE BANKS.
The Agent agrees, upon the written request of the Required Banks, to take
or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein, PROVIDED that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Banks, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Banks or
all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section
10.6 hereof. Subject to the provisions of Section 10.6, no Bank shall have any
right of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Banks or, in the absence of such instructions, in the absolute
discretion of the Agent.
10.5. REIMBURSEMENT AND INDEMNIFICATION OF AGENT BY THE BORROWERS.
The Borrowers unconditionally agree to pay or reimburse the Agent and save
the Agent harmless against (a) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements, including but not limited to
fees and expenses of counsel, appraisers and environmental and financial
consultants, incurred by the Agent (i) in connection with the development,
negotiation, preparation, printing, execution, administration, syndication,
interpretation and performance of this Agreement and the other Loan Documents,
(ii) relating to
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any requested amendments, waivers or consents pursuant to the provisions hereof,
(iii) in connection with the enforcement of this Agreement or any other Loan
Document or collection of amounts due hereunder or thereunder or the proof and
allowability of any claim arising under this Agreement or any other Loan
Document, whether in bankruptcy or receivership proceedings or otherwise, and
(iv) in any workout, restructuring or in connection with the protection,
preservation, exercise or enforcement of any of the terms hereof or of any
rights hereunder or under any other Loan Document or in connection with any
foreclosure, collection or bankruptcy proceedings; and (b) all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Document or
any action taken or omitted by the Agent hereunder or thereunder, PROVIDED that
the Borrowers shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements if the same result from the Agent's gross negligence
or willful misconduct, or if the Borrowers were not given notice of the subject
claim and the opportunity to participate in the defense thereof, at their
expense, or if the same result from a compromise or settlement agreement entered
into without the consent of the Borrowers. In addition, the Borrowers agree to
reimburse and pay all reasonable out-of-pocket expenses of the Agent's regular
employees and agents engaged periodically to perform audits of the Loan Parties'
books, records and business properties.
10.6. EXCULPATORY PROVISIONS.
Neither the Agent nor any of its directors, officers, employees, agents,
attorneys or affiliates shall (a) be liable to any Bank or any Loan Party for
any action taken or omitted to be taken by it or them hereunder, or in
connection herewith, including without limitation pursuant to any Loan Document,
unless caused by its or their own gross negligence or willful misconduct, (b) be
responsible in any manner to any of the Banks for the effectiveness,
enforceability, genuineness, validity or due execution of this Agreement or any
other Loan Document or for any recital, representation, warranty, document,
certificate, report or statement herein or made or furnished under or in
connection with this Agreement or any other Loan Document, or (c) be under any
obligation to any of the Banks to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions hereof or thereof on
the part of the Loan Parties, or the financial condition of the Loan Parties, or
the existence or possible existence of any Event of Default or Potential
Default. Neither the Agent nor any Bank nor any of their respective directors,
officers, employees, agents, attorneys or affiliates shall be liable to any of
the Loan Parties for consequential damages resulting from any breach of
contract, tort or other wrong in connection with the negotiation, documentation,
administration or collection of the Loans or any of the Loan Documents.
10.7. REIMBURSEMENT AND INDEMNIFICATION OF AGENT BY BANKS.
Each Bank agrees to reimburse and indemnify the Agent (to the extent not
reimbursed by the Borrowers and without limiting the obligation of the Borrowers
to do so) in proportion to its Ratable Share from and against all liabilities,
obligations, losses, damages,
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penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Document or any action taken or omitted
by the Agent hereunder or thereunder, PROVIDED that no Bank shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements (a) if the same
result from the Agent's gross negligence or willful misconduct, or (b) if such
Bank was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense, or (c) if the same result
from a compromise and settlement agreement entered into without the consent of
such Bank.
10.8. RELIANCE BY AGENT.
The Agent shall be entitled to rely upon any writing, telegram, telex or
teletype message, resolution, notice, consent, certificate, letter, cablegram,
statement, order or other document or conversation by telephone or otherwise
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person or persons, and upon the advice and opinions of counsel and
other professional advisors selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action hereunder unless it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
10.9. NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the occurrence
of any Potential Default or Event of Default unless the Agent has received
written notice from a Bank or the Borrowers referring to this Agreement,
describing such Potential Default or Event of Default and stating that such
notice is a "notice of default."
10.10. NOTICES.
The Agent shall promptly send to each Bank a copy of all notices received
from the Borrowers pursuant to the provisions of this Agreement or the other
Loan Documents promptly upon receipt thereof. The Agent shall promptly notify
the Borrowers and the other Banks of each change in the Base Rate and the
effective date thereof.
10.11. BANKS IN THEIR INDIVIDUAL CAPACITIES.
With respect to its Revolving Credit Commitments, the Letters of Credit and
advances in respect of drawings thereunder and the Revolving Credit Loans made
by it, the Agent shall have the same rights and powers hereunder as any other
Bank and may exercise the same as though it were not the Agent, and the term
"Banks" shall, unless the context otherwise indicates, include the Agent in its
individual capacity. PNC and its affiliates and each of the Banks and their
respective affiliates may, without liability to account, except as prohibited
herein, make loans to, accept deposits from, discount drafts for, act as trustee
under indentures of and generally engage in any kind of banking or trust
business with the Borrowers and their
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Affiliates, in the case of the Agent, as though it were not acting as Agent
hereunder and, in the case of each Bank, as though such Bank were not a Bank
hereunder.
10.12. HOLDERS OF NOTES.
The Agent may deem and treat any payee of any Note as the owner thereof for
all purposes hereof unless and until written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any request, authority or
consent of any person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.
10.13. EQUALIZATION OF BANKS.
The Banks and the holders of any participations in any Notes agree among
themselves that, with respect to all amounts received by any Bank or any such
holder for application on any obligation hereunder or under any Note or under
any such participation, whether received by voluntary payment, by realization
upon security, by the exercise of the right of set-off or banker's lien, by
counterclaim or by any other non-pro rata source, equitable adjustment will be
made in the manner stated in the following sentence, so that, in effect, all
such excess amounts will be shared ratably among the Banks and such holders in
proportion to their interests in payments under the Notes, except as otherwise
provided in Section 5.4(b) or 5.5 hereof. The Banks, or any such holder
receiving any such amount, shall purchase for cash from each of the other Banks
an interest in such Bank's Loans in such amount as shall result in a ratable
participation by the Banks and each such holder in the aggregate unpaid amount
under the Notes; PROVIDED that if all or any portion of such excess amount is
thereafter recovered from the Bank or the holder making such purchase, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, together with interest or other amounts, if any, required by Law
(including court order) to be paid by the Bank or the holder making such
purchase.
10.14. SUCCESSOR AGENT.
The Agent may resign as Agent upon not less than thirty (30) days' prior
written notice to the Borrowers and the Banks. If the Agent shall resign under
this Agreement, then either (a) the Required Banks shall appoint from among the
Banks a successor agent for the Banks, and such successor shall be subject to
the consent of the Borrowers, which shall not be unreasonably withheld, or (b)
if a successor agent shall not be so appointed and approved within the thirty
(30) day period following the Agent's notice to the Banks of its resignation,
then the Agent shall appoint, with the consent of the Borrowers, such consent
not to be unreasonably withheld, a successor agent who shall serve as Agent
until such time as the Required Banks appoint a successor agent. Upon its
appointment pursuant to either clause (a) or (b) above, such successor agent
shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall mean such successor agent, effective upon its appointment; and the
former Agent's rights, powers and duties as Agent shall be terminated without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. After the resignation of any
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Agent hereunder, the provisions of this Article 10 shall inure to the benefit of
such former Agent, and such former Agent shall not by reason of such resignation
be deemed to be released from liability for any actions taken or not taken by it
while it was an Agent under this Agreement.
10.15. AGENT'S FEE.
▇▇▇▇▇▇ Homes shall pay to the Agent a nonrefundable fee (the "AGENT'S FEE")
as set forth in the Side Letters.
10.16. AVAILABILITY OF FUNDS.
Unless the Agent shall have been notified by a Bank prior to the date upon
which a Loan is to be made that such Bank does not intend to make available to
the Agent such Bank's portion of such Loan, the Agent may assume that such Bank
has made or will make such proceeds available to the Agent on such date, and the
Agent may, in reliance upon such assumption (but shall not be required to), make
available to the Borrowers a corresponding amount. If such corresponding amount
is not in fact made available to the Agent by such Bank, the Agent shall be
entitled to recover such amount on demand from such Bank (or, if such Bank fails
to pay such amount forthwith, upon such demand from the Borrowers) together with
interest thereon, in respect of each day during the period commencing on the
date such amount was made available to the Borrowers and ending on the date the
Agent recovers such amount, at a rate per annum equal to the Federal Funds
Effective Rate.
10.17. CALCULATIONS.
In the absence of gross negligence or willful misconduct, the Agent shall
not be liable for any error in computing the amount payable to any Bank, whether
in respect of the Loans, fees or any other amounts due to the Banks under this
Agreement. In the event an error in computing any amount payable to any Bank is
made, the Agent, the Borrowers and each affected Bank shall, forthwith upon
discovery of such error, make such adjustments as shall be required to correct
such error, and any compensation therefor will be calculated at the Federal
Funds Effective Rate.
10.18. BENEFICIARIES.
Except as expressly provided herein, the provisions of this Article 10 are
solely for the benefit of the Agent and the Banks, and the Loan Parties shall
not have any rights to rely on or enforce any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for any
of the Loan Parties.
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11. MISCELLANEOUS
-----------------
11.1. MODIFICATIONS, AMENDMENTS OR WAIVERS.
With the written consent of the Required Banks, the Agent, acting on behalf
of all the Banks, and the Borrowers, on behalf of the Loan Parties, may from
time to time enter into written agreements amending or changing any provision of
this Agreement or any other Loan Document or the rights of the Banks or the Loan
Parties hereunder or thereunder, or may grant written waivers or consents to a
departure from the due performance of the obligations of the Loan Parties
hereunder or thereunder. Any such agreement, waiver or consent made with such
written consent shall be effective to bind all the Banks and the Loan Parties;
PROVIDED that, without the written consent of all the Banks, no such agreement,
waiver or consent may be made which will:
(a) Reduce the amount of the Commitment Fee or any other fees payable
to any Bank hereunder, or amend Sections 5.2 [Pro Rata Treatment of Banks], 10.6
[Exculpatory Provisions], 10.13 [Equalization of Banks] or 11.19 [Limitation of
Liability] hereof;
(b) Whether or not any Loans are outstanding, extend the time for
payment of principal or interest of any Loan or any fees, or reduce the
principal amount of or the rate of interest borne by any Loan or the amount of
any fees, or increase the amount of the commitments or extend the Revolving
Credit Expiration Date;
(c) Except for releases of parcels from the Mortgages permitted by
Section 8.1(m) [Addition and Release of Collateral] and sales of assets
permitted by Section 8.2(g) [Disposition of Assets or Subsidiaries], release any
Collateral consisting of capital stock or other ownership interests of any Loan
Party or assets of any Loan Party, any Guarantor from its obligations under the
Guaranty Agreement or any other security for any of the Loan Parties'
obligations; or
(d) Amend this Section 11.1, change the definition of Required Banks
or change any requirement providing for the Banks or the Required Banks to
authorize the taking of any action hereunder.
11.2. NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED.
No course of dealing and no delay or failure of the Agent or any Bank in
exercising any right, power, remedy or privilege under this Agreement or any
other Loan Document shall affect any other or future exercise thereof or operate
as a waiver thereof, nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right, power, remedy or
privilege preclude any further exercise thereof or of any other right, power,
remedy or privilege. The rights and remedies of the Agent and the Banks under
this Agreement and any other Loan Document are cumulative and not exclusive of
any rights or remedies which they would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of any Bank of any
breach or default under this Agreement or
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any such waiver of any provision or condition of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in such
writing.
11.3. REIMBURSEMENT AND INDEMNIFICATION OF BANKS BY THE BORROWER; TAXES.
The Borrowers jointly and severally agree unconditionally upon demand to
pay or reimburse to each Bank (other than the Agent, as to which the Borrowers'
obligations are set forth in Section 10.5) and to save such Bank harmless
against (i) liability for the payment of all reasonable out-of-pocket costs,
expenses and disbursements (including fees and expenses of counsel for each Bank
except with respect to (a) and (b) below) incurred by such Bank (a) in
connection with the administration and interpretation of this Agreement and
other instruments and documents to be delivered hereunder, (b) relating to any
amendments, waivers or consents pursuant to the provisions hereof, (c) in
connection with the enforcement of this Agreement or any other Loan Document, or
collection of amounts due hereunder or thereunder, or the proof and allowability
of any claim arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (d) in any workout,
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document, or in connection with any foreclosure, collection or
bankruptcy proceedings; or (ii) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Bank, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Document or any action taken or omitted
by such Bank hereunder or thereunder, PROVIDED that the Borrowers shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent such portion resulted from (A) such Bank's gross negligence or willful
misconduct, or (B) the failure to provide the Borrowers with notice of the
subject claim and the opportunity to participate in the defense thereof, at
their expense, or (C) a compromise or settlement agreement entered into without
the consent of the Borrowers. The Banks will attempt to minimize the fees and
expenses of legal counsel for the Banks which are subject to reimbursement by
the Borrowers hereunder by considering the usage of one law firm to represent
the Banks and the Agent if appropriate under the circumstances. The Borrowers
jointly and severally agree unconditionally to pay all stamp, document,
transfer, recording or filing taxes or fees and similar impositions now or
hereafter determined by the Agent or any Bank to be payable in connection with
this Agreement or any other Loan Document, and the Borrowers jointly and
severally agree unconditionally to save the Agent and the Banks harmless from
and against any and all present or future claims, liabilities or losses with
respect to or resulting from any omission to pay or delay in paying any such
taxes, fees or impositions.
11.4. HOLIDAYS.
Whenever any payment or action to be made or taken hereunder shall be
stated to be due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Days, and such extension
of time shall be included in computing interest or fees, if any, in connection
with such payment or action.
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11.5. FUNDING BY BRANCH, SUBSIDIARY OR AFFILIATE.
(a) INTENTIONALLY OMITTED.
(b) ACTUAL FUNDING.
Each Bank shall have the right from time to time to make or maintain
any Loan by arranging for a branch, subsidiary or affiliate of such Bank to make
or maintain such Loan, subject to the last sentence of this Section 11.5(b). If
any Bank causes a branch, subsidiary or affiliate to make or maintain any part
of the Loans hereunder, all terms and conditions of this Agreement shall, except
where the context clearly requires otherwise, be applicable to such part of the
Loans to the same extent as if such Loans were made or maintained by such Bank,
but in no event shall any Bank's use of such a branch, subsidiary or affiliate
to make or maintain any part of the Loans hereunder cause such Bank or such
branch, subsidiary or affiliate to incur any cost or expenses payable by the
Borrowers hereunder or require the Borrowers to pay any other compensation to
any Bank (including, without limitation, any expenses incurred or payable
pursuant to Section 5.5 hereof) which would otherwise not be incurred.
11.6. NOTICES.
All notices, requests, demands, directions and other communications
(collectively "NOTICES") given to or made upon any party hereto under the
provisions of this Agreement shall be by telephone in person (as opposed to
voice mail or answering machine message) or in writing (including telex or
facsimile communication, PROVIDED receipt of such telex or facsimile
communication is confirmed within twenty-four (24) hours of receipt) unless
otherwise expressly permitted hereunder and shall be delivered or sent by telex
or facsimile to the respective parties at the addresses and numbers set forth
under their respective names on the signature pages hereof or in accordance with
any subsequent unrevoked written direction from any party to the others. All
notices shall, except as otherwise expressly herein provided, be effective (a)
in the case of telex or facsimile, when received, (b) in the case of
hand-delivered notice, when hand delivered, (c) in the case of telephone, when
telephoned, PROVIDED, however, that in order to be effective, telephonic notices
must be confirmed in writing no later than the next day by letter, facsimile or
telex, (d) if given by mail, four (4) days after such communication is deposited
in the mail with first-class postage prepaid, return receipt requested, and (e)
if given by any other means (including by air courier), when delivered;
PROVIDED, that notices to the Agent shall not be effective until received. Any
Bank giving any notice to any Loan Party shall simultaneously send a copy
thereof to the Agent, and the Agent shall promptly notify the other Banks of the
receipt by it of any such notice.
11.7. SEVERABILITY.
The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
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11.8. GOVERNING LAW.
This Agreement shall be deemed to be a contract under the laws of the State
of Ohio and for all purposes shall be governed by and construed and enforced in
accordance with the laws of the State of Ohio without regard to its conflict of
laws principles.
11.9. PRIOR UNDERSTANDING.
This Agreement supersedes all prior understandings and agreements, whether
written or oral, between the parties hereto and thereto relating to the
transactions provided for herein and therein, including any prior
confidentiality agreements and commitments, except the Side Letters, which
remain in force and effect.
11.10. DURATION; SURVIVAL.
All representations and warranties of the Loan Parties contained herein or
made in connection herewith shall survive the making of Loans and shall not be
waived by the execution and delivery of this Agreement, any investigation by the
Agent or the Banks, the making of Loans or payment in full of the Loans. All
covenants and agreements of the Loan Parties contained herein shall continue in
full force and effect from and after the date hereof, so long as the Borrowers
may borrow hereunder and until termination of the Revolving Credit Commitments,
payment in full of the Loans and termination or expiration of all Letters of
Credit. All covenants and agreements of the Borrowers contained herein relating
to the payment of principal, interest, premiums, additional compensation or
expenses and indemnification, including those set forth in the Notes, Article 5
and Sections 10.5, 10.7, and 11.3 hereof, shall survive payment in full of the
Loans, termination of the Revolving Credit Commitments and termination or
expiration of all Letters of Credit.
11.11. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and shall inure to the benefit of the
Banks, the Agent, the Borrowers and their respective successors and assigns,
except that the Borrowers may not assign or transfer any of their rights and
obligations hereunder or any interest herein. Each Bank may, at its own cost and
without the Borrowers' consent, sell participations in all or any part of its
Commitments and the Loans made by it. Each Bank may, at its own cost, make
assignments of all or any part of its Commitment and the Loans made by it,
PROVIDED that each of the following conditions is met: (i) the Commitments and
Loans that are assigned to any assignee, in the aggregate, must equal or exceed
$10,000,000, and (ii) the Agent shall consent to the assignee, such consent not
to be unreasonably withheld.
In the case of an assignment, upon receipt by the Agent of the Assignment
and Assumption Agreement, the assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights, benefits and
obligations as it would have if it had been a signatory Bank hereunder, the
Commitments in Section 2.1 shall be adjusted accordingly, and upon surrender of
any Note subject to such assignment, the Borrowers shall execute and deliver new
Notes to the assignee in an amount equal to the amount of the Commitments
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assumed by it and new Notes to the assigning Bank in an amount equal to the
Commitments retained by it hereunder. The assigning Bank shall pay to the Agent
a service fee in the amount of $2,000 for each assignment.
In the case of a participation, the participant shall have only the
rights specified in Section 9.2(c) (the participant's rights against such Bank
in respect of such participation to be those set forth in the agreement executed
by such Bank in favor of the participant relating thereto and not to include any
voting rights except with respect to changes of the type referenced in clauses
(a), (b) or (c) under Section 11.1 hereof), all of such Bank's obligations under
this Agreement or any other Loan Document shall remain unchanged, and all
amounts payable by any of the Loan Parties hereunder or thereunder shall be
determined as if such Bank had not sold such participation. Each Bank may
furnish any publicly available information concerning any of the Loan Parties
and any other information concerning any of the Loan Parties in the possession
of such Bank from time to time to assignees and participants (including
prospective assignees or participants), PROVIDED such assignees and participants
agree to be bound by the provisions of Section 11.12 hereof.
11.12. CONFIDENTIALITY.
The Agent and the Banks each agree to keep confidential all information
obtained from the Borrowers which is nonpublic and confidential or proprietary
in nature (including any information the Borrowers specifically designate as
confidential), except as provided below, and to use such information only in
connection with their respective capacities under this Agreement and for the
purposes contemplated hereby. The Agent and the Banks shall be permitted to
disclose such information (i) to affiliates of the Agent and the Banks and to
outside legal counsel, accountants and other professional advisors who need to
know such information in connection with the administration and enforcement of
this Agreement, subject to agreement of such persons to maintain the
confidentiality, (ii) to assignees and participants as contemplated by Section
11.11, (iii) to the extent requested by any bank regulatory authority or, with
notice to the Borrowers, as otherwise required by applicable Law or by any
subpoena or similar legal process, or in connection with any investigation or
proceeding arising out of the transactions contemplated by this Agreement, (iv)
if it becomes publicly available other than as a result of a breach of this
Agreement or becomes available from a source not subject to confidentiality
restrictions, or (v) if the Borrowers shall have consented to such disclosure.
11.13. COUNTERPARTS.
This Agreement may be executed by different parties hereto on any number of
separate counterparts, each of which, when so executed and delivered, shall be
an original, and all such counterparts shall together constitute one and the
same instrument.
11.14. AGENT'S OR BANK'S CONSENT.
Whenever the Agent's or any Bank's consent is required to be obtained under
this Agreement or any of the other Loan Documents as a condition to any action,
inaction, condition or event, the Agent and each Bank shall be authorized to
give or withhold such consent in its sole
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and absolute discretion and to condition its consent upon the giving of
additional collateral, the payment of money or any other matter.
11.15. EXCEPTIONS.
The representations, warranties and covenants contained herein shall be
independent of each other, and no exception to any representation, warranty or
covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
11.16. CONSENT TO FORUM; WAIVER OF JURY TRIAL.
Each of the Loan Parties hereby irrevocably consents to the nonexclusive
jurisdiction of the Court of Common Pleas of ▇▇▇▇▇▇▇▇ County, Ohio and the
United States District Court for the Southern District of Ohio, and waives
personal service of any and all process upon it and consents that all such
service of process be made by certified or registered mail directed to such Loan
Party at the addresses provided for in Section 11.6 hereof and service so made
shall be deemed to be completed upon actual receipt thereof. Each Loan Party
waives any objection to jurisdiction and venue of any action instituted against
it as provided herein and agrees not to assert any defense based on lack of
jurisdiction or venue. Each Loan Party, the Agent and the Banks hereby waive
trial by jury in any action, suit, proceeding or counterclaim of any kind
arising out of or related to this Agreement or any other Loan Document to the
full extent permitted by Law.
11.17. TAX WITHHOLDING CLAUSE.
At least five (5) Business Days prior to the first date on which interest
or fees are payable hereunder for the account of any Bank, each Bank that is not
incorporated under the laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrowers and the Agent two (2) duly
completed copies of (i) Internal Revenue Service Form W-9, 4224 or 1001, or
other applicable form prescribed by the Internal Revenue Service, certifying in
either case that such Bank is entitled to receive payments under this Agreement
and the other Loan Documents without deduction or withholding of any United
States federal income taxes or is subject to such tax at a reduced rate under an
applicable tax treaty, or (ii) Form W-8 or other applicable form or a
certificate of the Bank indicating that no such exemption or reduced rate is
allowable with respect to such payments. Each Bank which so delivers a Form W-8,
W-9, 4224 or 1001 further undertakes to deliver to each of the Borrowers and the
Agent two (2) additional copies of such form (or a successor form) on or before
the date that such form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent form so delivered by it, and
such amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrowers or the Agent, either certifying that such Bank is
entitled to receive payments under this Agreement and the other Loan Documents
without deduction or withholding of any United States federal income taxes or is
subject to such tax at a reduced rate under an applicable tax treaty or stating
that no such exemption or reduced rate is allowable. The Agent shall be entitled
to withhold United States federal income taxes at the full
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withholding rate unless the Bank establishes an exemption or at the applicable
reduced rate as established pursuant to the above provisions.
11.18. JOINDER OF GUARANTORS.
(a) Any Subsidiary of the Loan Parties which is required to join this
Agreement pursuant to Section 8.2(i) must execute and deliver to Agent (i) a
Guarantor Joinder attached hereto as EXHIBIT 1.1(G)(1) pursuant to which it
shall join as a Guarantor each of the documents to which the Guarantors are
parties; (ii) documents in the forms described in Section 7.1, modified as
appropriate to relate to such Subsidiary; and (iii) documents necessary to grant
and perfect Prior Security Interests to the Agent for the benefit of the Banks
in all Collateral held by such Subsidiary. The Loan Parties shall deliver the
foregoing documents specified in the preceding clauses (i)-(iii) to the Agent
within five (5) Business Days after the date of the filing of the articles of
incorporation or certificate of limited partnership or other equivalent
effective date of the organization of such Subsidiary if such Subsidiary is not
a limited partnership or corporation. Upon execution and delivery of such
documents, a Subsidiary shall be a party hereto and an obligor under the
Guaranty and one of the Loan Parties and Guarantors hereunder and under each of
the other Loan Documents for all purposes.
11.19. LIMITATION OF LIABILITY.
TO THE FULLEST EXTENT PERMITTED BY LAW, NO CLAIM MAY BE MADE BY THE
BORROWERS OR ANY OTHER LOAN PARTY OR ANY OTHER PERSON AGAINST THE AGENT AND THE
BANKS, OR ANY OF THEM, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY
OR AGENT OF THE AGENT OR THE BANKS FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT,
OMISSION OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (WHETHER FOR
BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY); AND THE BORROWERS
HEREBY WAIVE, RELEASE AND AGREE NOT TO ▇▇▇ UPON ANY CLAIM FOR ANY SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN THEIR
FAVOR.
11.20. CO-AGENTS.
The Co-Agents shall have no rights, obligations or duties under this
Agreement other than in their respective capacities as Banks hereunder.
11.21. WAIVER.
The Banks hereby waive compliance by (a) ▇▇▇▇▇▇ National of Section 8.2(t)
[▇▇▇▇▇▇ National Leverage Ratio] of the Second Amended and Restated Agreement
for the fiscal quarters ending June 30, 1999, September 30, 1999 and December
31, 1999 and of Section 8.2(u) [▇▇▇▇▇▇ National Fixed Charge Coverage Ratio] of
the Second Amended and
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Restated Agreement for the fiscal quarter ending December 31, 1999, (b) the
Borrower and their Subsidiaries of Section 8.2(n) [Minimum Fixed Charge Coverage
Ratio] and Section 8.2(p) [Maximum Leverage Ratio] of the Second Amended and
Restated Agreement for the fiscal quarter ending December 31, 1999, and waive
increasing the interest rate applicable to the Loans pursuant to Section 4.2
during such periods. The Loan Parties acknowledge that the waiver of compliance
with the foregoing sections is expressly limited to the time periods set forth
above.
11.22. ACKNOWLEDGEMENT AND RELEASE.
Each Loan Party acknowledges that it has no claim, counterclaim, setoff,
action or cause of action of any kind or nature whatsoever against all or any of
the Agent, the Banks or any of the Agent's or the Banks' directors, officers,
employees, agents, attorneys, legal representatives, successors and assigns (the
Agent, the Banks and their directors, officers, employees, agents, attorneys,
legal representatives, successors and assigns are collectively referred to as
the "LENDER GROUP"), that directly or indirectly arise out of or are based upon
or in any manner connected with any "PRIOR EVENT" (as defined below), and each
Loan Party hereby releases the Lender Group from any liability whatsoever should
any nonetheless exist with respect to such claims. As used herein the term
"Prior Event" means any transaction, event, circumstance, action, failure to act
or occurrence of any sort or type, whether known or unknown, which occurred,
existed, was taken, permitted or begun prior to the execution of this Agreement
and occurred, existed, was taken, permitted or begun in accordance with,
pursuant to or by virtue of any terms of this Agreement or any Loan Document or
oral or written agreement relating to any of the foregoing.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE 1 OF 8 OF CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above
written.
BORROWERS AND GUARANTORS:
ATTEST: ▇▇▇▇▇▇ HOMES, INC.
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ----------------------------------------------
[Seal] Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Chief Financial Officer
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: ▇▇▇▇▇▇ HOLDINGS, INC.
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ----------------------------------------------
[Seal] Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
86
[SIGNATURE PAGE 2 OF 8 OF CREDIT AGREEMENT]
HEARTHSIDE HOMES, LLC
By: ▇▇▇▇▇▇ National Corporation, as member
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- -------------------------------------------
[Seal] Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary/Treasurer
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: ▇▇▇▇▇▇ NATIONAL LAND HOLDING CORPORATION
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- -------------------------------------------
[Seal] Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary/Treasurer
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
87
[SIGNATURE PAGE 3 OF 8 OF CREDIT AGREEMENT]
ATTEST: ▇▇▇▇▇▇ NATIONAL HOMES HOLDING CORPORATION
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------- -------------------------------------------
[Seal] Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary/Treasurer
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: ▇▇▇▇▇▇ LEASING, LLC
By: ▇▇▇▇▇▇ National Corporation, as sole
member and manager
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------- -------------------------------------------
[Seal] Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary/Treasurer
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
88
[SIGNATURE PAGE 4 OF 8 OF CREDIT AGREEMENT]
GUARANTORS:
▇▇▇▇▇▇ NATIONAL CORPORATION
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------- ---------------------------------------------
[Seal] Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary/Treasurer
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: ▇▇▇▇▇▇ HOMES OF INDIANA, L.L.C.
By: ▇▇▇▇▇▇ Homes, Inc., as member
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------- ---------------------------------------------
[Seal] Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Chief Financial Officer
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
89
[SIGNATURE PAGE 5 OF 8 OF CREDIT AGREEMENT]
ATTEST: ▇▇▇▇▇▇ HOMES KENTUCKY, LLC,
By: ▇▇▇▇▇▇ Holdings, Inc., as manager
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------- ---------------------------------------------
[Seal] Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
90
[SIGNATURE PAGE 6 OF 8 OF CREDIT AGREEMENT]
AGENT:
PNC BANK, NATIONAL ASSOCIATION,
as Agent and as a Bank
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Address for Notices:
PNC Bank, National Association
▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: PNC Realty Holding Corporation
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
PNC Bank, National Association
One PNC Plaza - Fourth Floor Annex
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Multi-Bank Loan Administration
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
91
[SIGNATURE PAGE 7 OF 8 OF CREDIT AGREEMENT]
CO-AGENTS:
ATTEST: BANK OF AMERICA, N.A. (formerly Bank of America
NT&SA), as a Co-Agent and as a Bank
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------- ----------------------------------------------
[Seal] Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
Address for Notices:
Managed Assets Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: BANK ONE, NA, as a Co-Agent and as a Bank
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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[Seal] Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: First Vice President
Address for Notices:
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▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
92
[SIGNATURE PAGE 8 OF 8 OF CREDIT AGREEMENT]
OTHER BANKS:
ATTEST: COMERICA BANK,
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇
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[Seal] Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address for Notices:
Special Assets
One Detroit Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code 3205
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: THE FIFTH THIRD BANK
/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇
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[Seal] Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
(Notarial Seal - State of Ohio)
Address for Notices:
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Mail Drop 109051
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
93
SCHEDULE 1.1(B)
COMMITMENTS OF BANKS
Amount of
Amount of Commitment Original Amount of
for Revolving Credit Commitment for Outstanding Term Ratable
Loans ($US) Term Loans ($US) Loans ($US) Share (%)
----------------------------------------- ---------------------- ------------------ ------------------- --------------
PNC Bank, National Association $18,639,800 $3,860,200 $771,300 25.71%
----------------------------------------- ---------------------- ------------------ ------------------- --------------
Bank of America, N.A. $16,573,500 $3,426,500 $685,800 22.86%
----------------------------------------- ---------------------- ------------------ ------------------- --------------
Bank One, NA $16,573,500 $3,426,500 $685,800 22.86%
----------------------------------------- ---------------------- ------------------ ------------------- --------------
Comerica Bank $12,426,500 $2,573,500 $514,200 17.14%
----------------------------------------- ---------------------- ------------------ ------------------- --------------
The Fifth Third Bank $8,286,700 $1,713,300 $342,900 11.43%
----------- ----------- ---------- -------
----------------------------------------- ---------------------- ------------------ ------------------- --------------
TOTAL $72,500,000 $15,000,000 $3,000,000 100.00%
=========== =========== ========== =======
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