EXHIBIT 99
EXECUTION COPY
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TERM LOAN AGREEMENT
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Dated as of December 19, 2000
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BEAZER HOMES USA, INC.,
The Guarantors Parties Thereto,
The Banks Parties Thereto,
and
BANK ONE, NA
As Agent,
GUARANTY FEDERAL BANK, F.S.B.
and
WACHOVIA BANK, N.A.
As Co-Agents
and
BANC ONE CAPITAL MARKETS, INC.
As
Lead Arranger and Sole Bookrunner
$75,000,000 TERM LOAN FACILITY
TABLE OF CONTENTS
SECTION PAGE
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS..........................................................1
Section 1.01. Defined Terms....................................................................1
Section 1.02. Accounting Terms................................................................15
ARTICLE II AMOUNTS AND TERMS OF THE LOANS..........................................................15
Section 2.01. Term Loan.......................................................................15
Section 2.02. Borrowing Base..................................................................15
Section 2.03. Notice and Manner of Borrowing..................................................16
Section 2.04. Non-Receipt of Funds by Agent...................................................16
Section 2.05. Determination of Applicable Margins.............................................17
Section 2.06. Conversions and Renewals........................................................18
Section 2.07. Interest........................................................................19
Section 2.08. Interest Rate Determination.....................................................19
Section 2.09. Fees............................................................................20
Section 2.10. Notes...........................................................................20
Section 2.11. Prepayments.....................................................................20
Section 2.12. Method of Payment...............................................................21
Section 2.13. Use of Proceeds.................................................................21
Section 2.14. Yield Protection................................................................22
Section 2.15. Changes in Capital Adequacy Regulations.........................................22
Section 2.16. Availability of LIBOR Loans.....................................................23
Section 2.17. Funding Indemnification.........................................................23
Section 2.18. Bank Statements; Survival of Indemnity..........................................23
Section 2.19. Extension of Maturity Date......................................................23
Section 2.20. Replacement of Certain Banks....................................................24
Section 2.21. Loan Increase...................................................................25
ARTICLE III CONDITIONS PRECEDENT...................................................................26
Section 3.01. Conditions Precedent to Loans...................................................26
ARTICLE IV REPRESENTATIONS AND WARRANTIES..........................................................28
Section 4.01. Incorporation, Formation, Good Standing, and Due Qualification..................28
Section 4.02. Power and Authority.............................................................28
Section 4.03. Legally Enforceable Agreement...................................................29
Section 4.04. Financial Statements............................................................29
Section 4.05. Labor Disputes and Acts of God..................................................29
Section 4.06. Other Agreements................................................................29
Section 4.07. Litigation......................................................................29
Section 4.08. No Defaults on Outstanding Judgments or Orders..................................30
Section 4.09. Ownership and Liens.............................................................30
Section 4.10. Subsidiaries and Ownership of Stock.............................................30
Section 4.11. ERISA...........................................................................30
Section 4.12. Operation of Business...........................................................31
Section 4.13. Taxes...........................................................................31
Section 4.14. Laws; Environment...............................................................31
Section 4.15. Investment Company Act..........................................................32
Section 4.16. Public Utility Holding Company Act..............................................32
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TABLE OF CONTENTS
(continued)
SECTION PAGE
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ARTICLE V AFFIRMATIVE COVENANTS....................................................................32
Section 5.01. Maintenance of Existence........................................................32
Section 5.02. Maintenance of Records..........................................................32
Section 5.03. Maintenance of Properties.......................................................33
Section 5.04. Conduct of Business.............................................................33
Section 5.05. Maintenance of Insurance........................................................33
Section 5.06. Compliance with Laws............................................................33
Section 5.07. Right of Inspection.............................................................33
Section 5.08. Reporting Requirements..........................................................33
Section 5.09. Subsidiary Reporting Requirements...............................................36
Section 5.10. Environment.....................................................................37
Section 5.11. Use of Proceeds.................................................................37
Section 5.12. Ranking of Obligations..........................................................37
Section 5.13. Taxes...........................................................................37
Section 5.14. Wholly Owned Status.............................................................37
Section 5.15. New Subsidiaries................................................................37
ARTICLE VI NEGATIVE COVENANTS......................................................................37
Section 6.01. Liens...........................................................................38
Section 6.02. Secured Debt....................................................................38
Section 6.03. Mergers, Etc....................................................................38
Section 6.04. Leases..........................................................................39
Section 6.05. Sale and Leaseback..............................................................39
Section 6.06. Sale of Assets..................................................................39
Section 6.07. Investments.....................................................................39
Section 6.08. Guaranties, Etc.................................................................40
Section 6.09. Transactions With Affiliates....................................................40
Section 6.10. Land Inventory..................................................................40
Section 6.11. Housing Inventory...............................................................41
Section 6.12. Senior Debt.....................................................................41
Section 6.13. Amendment or Modification of Senior Indentures..................................41
Section 6.14. UHIC and STIC...................................................................41
Section 6.15. Negative Pledges................................................................41
ARTICLE VII FINANCIAL COVENANTS....................................................................41
Section 7.01. Minimum Consolidated Tangible Net Worth.........................................41
Section 7.02. Leverage Ratio..................................................................41
Section 7.03. Permitted Senior Debt...........................................................42
Section 7.04. Interest Coverage Ratio.........................................................42
Section 7.05. Land Inventory..................................................................42
ARTICLE VIII EVENTS OF DEFAULT.....................................................................42
Section 8.01. Events of Default...............................................................42
Section 8.02. Set Off.........................................................................44
ARTICLE IX GUARANTY................................................................................44
Section 9.01. Guaranty........................................................................45
Section 9.02. No Impairment of Guaranty.......................................................45
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TABLE OF CONTENTS
(continued)
SECTION PAGE
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Section 9.03. Continuation and Reinstatements etc............................................46
Section 9.04. Limitation on Guaranteed Amount................................................46
ARTICLE X AGENCY PROVISIONS........................................................................46
Section 10.01. Authorization and Action.......................................................47
Section 10.02. Liability of Agent.............................................................47
Section 10.03. Rights of Agent as a Bank......................................................47
Section 10.04. Independent Credit Decisions...................................................48
Section 10.05. Indemnification................................................................48
Section 10.06. Successor Agent................................................................48
Section 10.07. Sharing of Payments, Etc.......................................................49
Section 10.08. Withholding Tax Matters........................................................49
Section 10.09. Co-Agents......................................................................50
ARTICLE XI MISCELLANEOUS...........................................................................50
Section 11.01. Amendments, Etc................................................................50
Section 11.02. Notices, Etc...................................................................50
Section 11.03. No Waiver......................................................................50
Section 11.04. Costs, Expenses, and Taxes.....................................................51
Section 11.05. Integration....................................................................51
Section 11.06. Indemnity......................................................................51
Section 11.07. Governing Law..................................................................51
Section 11.08. Severability of Provisions.....................................................51
Section 11.09. Counterparts...................................................................51
Section 11.10. Headings.......................................................................52
Section 11.11. Submission to Jurisdiction.....................................................52
Section 11.12. Jury Trial Waiver..............................................................52
Section 11.13. Governmental Regulation........................................................52
Section 11.14. No Fiduciary Duty..............................................................52
Section 11.15. Confidentiality................................................................52
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS......................................52
Section 12.01. Successors and Assigns.........................................................53
Section 12.02. Participations.................................................................53
Section 12.03. Assignments....................................................................54
Section 12.04. Dissemination of Information...................................................55
Section 12.05. Tax Treatment..................................................................55
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULE OR EXHIBIT DESCRIPTION REFERENCE
------------------- ----------- ---------
Schedule 1 Loan Schedule Definition of "Loan
Schedule"
Exhibit A Form of Note 2.10
Exhibit B Form of Loan Supplement 2.21(b)
Exhibit C Summary of Opinion of Counsel for Borrower and Certain 3.01(5)
Guarantors
Exhibit D Summary of Opinion of Illinois Counsel for Borrower 3.01(5)
Exhibit E Summary of Opinion of Counsel for Agent 3.01(6)
Exhibit F Summary of Opinion of Local Counsel for Certain 3.01(10)
Guarantors
Exhibit G Form of Certificate 3.01(12)
Exhibit H Subsidiaries of Borrower 4.10
Exhibit I Assignment Agreement 12.03(b)
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TERM LOAN AGREEMENT dated as of December 19, 2000 among BEAZER
HOMES USA, INC., a Delaware corporation (the "Borrower"), BEAZER MORTGAGE
CORPORATION, a Delaware corporation, BEAZER HOMES CORP., a Tennessee
corporation, BEAZER HOMES SALES ARIZONA, INC., a Delaware corporation, BEAZER
REALTY CORP., a Georgia corporation, BEAZER/▇▇▇▇▇▇▇ REALTY, INC., a North
Carolina corporation, BEAZER HOMES HOLDINGS CORP., a Delaware corporation,
BEAZER HOMES TEXAS HOLDINGS, INC., a Delaware corporation, BEAZER HOMES TEXAS,
L.P., a Delaware limited partnership, BEAZER REALTY INC., a New Jersey
corporation, HOMEBUILDERS TITLE SERVICES, INC., a Delaware corporation, TEXAS
LONE STAR TITLE, L.P., a Texas limited partnership, HOMEBUILDERS TITLE SERVICES
OF VIRGINIA, INC., a Virginia corporation, and UNIVERSAL SOLUTIONS INSURANCE
AGENCY, INC., a Delaware corporation (collectively, the "Original Guarantors"),
and BANK ONE, NA, GUARANTY FEDERAL BANK, F.S.B., WACHOVIA BANK, N.A. and
SUNTRUST BANK (collectively, the "Banks") and BANK ONE, NA as Agent (the
"Agent") for the Banks and GUARANTY FEDERAL BANK, F.S.B. and WACHOVIA BANK,
N.A., as Co-Agents. The parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (terms defined in the singular shall have the
same meaning when used in the plural and vice versa):
"ABR Loan" means any Loan when and to the extent that the interest rate
therefor is determined by reference to the Alternate Base Rate.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going concern or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership.
"Adjusted Land Value" means, as of any date, (i) the book value of all
Land, less (ii) the sum of (a) the book value of Finished Lots that are subject
to bona fide contracts of sale with Persons that are not Affiliates and (b) the
lesser of (1) the product of (x) the number of Housing Units with respect to
which the Borrower and its Subsidiaries (including any company or other entity
acquired in an Acquisition by the Borrower or a Subsidiary as of such date)
entered into bona fide contracts of sale with Persons that are not Affiliates
during the six-month period ending on such date multiplied by (y) the average
book value of all Finished Lots as of such date and (2) forty percent (40%) of
Consolidated Tangible Net Worth as of such date.
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"Affiliate" means any Person (1) which directly or indirectly controls,
or is controlled by, or is under common control with, the Borrower or a
Subsidiary; (2) which directly or indirectly beneficially owns or holds five
percent (5%) or more of any class of voting stock of the Borrower or any
Subsidiary; or (3) five percent (5%) or more of the voting stock of which is
directly or indirectly beneficially owned or held by the Borrower or a
Subsidiary. The term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means Bank One.
"Agreement" means this Term Loan Agreement, as amended, supplemented, or
modified from time to time.
"Alternate Base Rate" means a fluctuating rate per annum equal to the
higher of (i) the Prime Rate, changing when and as said rate changes, or (ii)
the sum of 1/2 of 1% plus the Federal Funds Rate then in effect.
"Applicable ABR Margin" means, as at any date of determination, the
margin indicated in Section 2.05 as then applicable to ABR Loans (under Section
2.07(a)(i)).
"Applicable LIBOR Margin" means, as at any date of determination, the
margin indicated in Section 2.05 as then applicable to LIBOR Loans (under
Section 2.07(a)(ii)).
"Applicable Margin(s)" means the Applicable ABR Margin and/or the
Applicable LIBOR Margin, as the case may be.
"Bank One" means Bank One, NA having its principal office in Chicago,
Illinois.
"Banks" means the Banks that are signatories to this Agreement, any New
Bank that becomes a party to this Agreement pursuant to a Loan Supplement and
their respective successors and assigns.
"BOCM" means Banc One Capital Markets, Inc.
"Borrowing" means a borrowing consisting of Loans of the same type made,
renewed or converted on the same day.
"Borrowing Base" means, with respect to an Inventory Valuation Date for
which it is to be determined, an amount equal to the sum of the following
unencumbered assets of the Borrower and the Guarantors: (i) the lesser of (a)
one hundred percent (100%) of the Unrestricted Cash and (b) $10,000,000.00, (ii)
one-hundred percent (100%) of the Receivables, (iii) ninety percent (90%) of the
book value of Housing Units Under Contract, (iv) seventy-five percent (75%) of
the book value of Speculative Housing Units, (v) seventy percent (70%) of the
book value of Finished Lots (subject to the limitation set forth below), (vi)
fifty percent (50%) of the book value of Lots under Development (subject to the
limitation set forth below), and (vii) the lesser of (a) twenty-five percent
(25%) of the book value of Entitled Land and (b) $30,000,000.00 (subject to the
limitation set forth below). Notwithstanding the foregoing, the
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Borrowing Base shall not include any amounts under clauses (v), (vi) and (vii)
above to the extent that the sum of such amounts exceeds forty percent (40%) of
the total Borrowing Base. The term "unencumbered" means that such asset is not
subject to any Lien (except for Liens permitted under Sections 6.01(1), (2) or
(6)).
"Borrowing Base Certificate" means a written certificate in a form
acceptable to the Majority Banks setting forth the amount of the Borrowing Base
with respect to the fiscal quarter, or (if applicable under Section 2.01(b) or
(c)) calendar month, most recently completed, certified as true and correct by
the Chief Financial Officer of the Borrower.
"Business Day" means (i) with respect to any Borrowing, payment or rate
selection of LIBOR Loans, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago and New York for the conduct of substantially all
of their commercial lending activities and on which dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities.
"Capital Lease" means all leases which have been or should be capitalized
on the books of the lessee in accordance with GAAP.
"Change of Control" means any of the following: (i) the sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Borrower or (except for an Internal Reorganization) of a Significant Guarantor
or Significant Subsidiary, as an entirety or substantially as an entirety to any
Person or "group" (within the meaning of Section 13(d)(3) of the Exchange Act)
in one or a series of transactions; (ii) the acquisition of fifty percent (50%)
or more of the aggregate voting power of all classes of Common Equity of the
Borrower or (except for an Internal Reorganization) of a Significant Guarantor
or Significant Subsidiary in one transaction or a series of related
transactions; (iii) the liquidation or dissolution of the Borrower or (except
for an Internal Reorganization) of a Significant Guarantor or Significant
Subsidiary; (iv) any transaction or a series of related transactions (as a
result of a tender offer, merger, consolidation or otherwise but excluding an
Internal Reorganization) that results in, or that is in connection with, (a) any
Person, including, a "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) acquiring "beneficial ownership" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the
aggregate voting power of all classes of Common Equity of the Borrower, a
Significant Guarantor or a Significant Subsidiary, or of any Person that
possesses "beneficial ownership" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of fifty percent (50%) or more of the aggregate
voting power of all classes of Common Equity of the Borrower, a Significant
Guarantor or a Significant Subsidiary, or (b) less than fifty percent (50%)
(measured by the aggregate voting power of all classes) of the Common Equity of
the Borrower being registered under Section 12(b) or 12(g) of the Exchange Act;
(v) a majority of the Board of Directors of the Borrower, a Significant
Guarantor or a Significant Subsidiary, not being comprised of persons who (a)
were members of the Board of Directors of such Borrower, Significant Guarantor
or Significant Subsidiary, as of the date of this Agreement ("Original
Directors"), or (b) were nominated for election or elected to the Board of
Directors of such Borrower, Significant Guarantor, or Significant Subsidiary,
with the affirmative vote of at least a majority of the directors who
3
themselves were Original Directors or who were similarly nominated for election
or elected; or (vi) with respect to any Significant Guarantor or Significant
Subsidiary which is not a corporation, any loss of the right or power to control
the activities, directly, or indirectly through one or more intermediaries, or
both. Nothing herein contained shall modify or otherwise affect the provisions
of Section 6.06.
"Closing Date" means the date on which, upon satisfaction of the terms
and conditions herein set forth, the Loans provided for in Section 2.01 are
advanced hereunder.
"Co-Agents" means Guaranty Federal Bank, F.S.B. and Wachovia Bank, N.A.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations and published interpretations thereof.
"Common Equity" of any Person means any and all shares, rights to
purchase, warrants or options (whether or not currently exercisable),
participations, or other equivalents of or interests in (however designated) the
equity (which includes, but is not limited to, common stock, preferred stock and
partnership and joint venture interests) of such Person (excluding any debt
securities convertible into, or exchangeable for, such equity) to the extent
that the foregoing is entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or other
persons that will control the management and policies of such Person.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 414(b) or 414(c) of the Code.
"Consolidated Debt" means the Debt of the Borrower and its Subsidiaries
determined on a consolidated basis (but shall not include Debt of any Joint
Venture or Debt of any Subsidiary which is not a Guarantor, except to the extent
that such Debt is guaranteed by the Borrower or a Guarantor).
"Consolidated Subordinated Debt" means, as of any date, all Debt of the
Borrower and the Guarantors (on a consolidated basis), the payment of which is,
either expressly by its terms or otherwise, subordinated to payment of the
Obligations to the satisfaction of the Majority Banks.
"Consolidated Tangible Assets" of the Borrower means, as of any date, the
total amount of assets of the Borrower and its Subsidiaries (less applicable
reserves) on a consolidated basis at the end of the fiscal quarter immediately
preceding such date (or on such date if such date is the last day of the fiscal
quarter), as determined in accordance with GAAP, less (i) Intangible Assets and
(ii) appropriate adjustments on account of minority interests of other Persons
holding equity Investments in Subsidiaries, in the case of each of clauses (i)
and (ii) above, as would be reflected on a consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of the fiscal quarter immediately
preceding such date (or on such date if such date is the last day of the fiscal
quarter), prepared in accordance with GAAP.
4
"Consolidated Tangible Net Worth" of the Borrower means, at any date, the
consolidated stockholders' equity of the Borrower determined in accordance with
GAAP, less Intangible Assets, all determined as of such date.
"Debt" means, without duplication, with respect to any Person (1)
indebtedness or liability for borrowed money, including, without limitation,
subordinated indebtedness (other than trade accounts payable and accruals
incurred in the ordinary course of business); (2) obligations evidenced by
bonds, debentures, notes, or other similar instruments; (3) obligations for the
deferred purchase price of property (including, without limitation, seller
financing of any Inventory) or services, provided, however, that Debt shall not
include obligations with respect to options to purchase real property that have
not been exercised; (4) obligations as lessee under Capital Leases to the extent
that the same would, in accordance with GAAP, appear as liabilities in the
Borrower's consolidated balance sheet; (5) current liabilities in respect of
unfunded vested benefits under Plans and incurred withdrawal liability under any
Multiemployer Plan; (6) reimbursement obligations under letters of credit
(including contingent obligations with respect to letters of credit not yet
drawn upon); (7) obligations under acceptance facilities; (8) all guaranties,
endorsements (other than for collection or deposit in the ordinary course of
business), and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any other Person or entity, or otherwise
to assure a creditor against loss, provided, however, that "Debt" shall not
include guaranties of performance obligations; (9) obligations secured by any
Liens on any property of such Person, whether or not the obligations have been
assumed; and (10) net liabilities under interest rate swap, exchange or cap
agreements (valued as the termination value thereof, computed in accordance with
a method approved by the International Swaps and Derivatives Association and
agreed to by such Person in the applicable agreement).
"Debt/Cap Ratio" means, as at any date of determination, the quotient
obtained by dividing (a) Consolidated Debt as at such date by (b) the sum of
Consolidated Debt and Consolidated Tangible Net Worth as at such date.
"Default" means any of the events specified in Section 8.01, whether or
not any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means, for any period, on a consolidated basis for the Borrower
and its Subsidiaries, the sum of the amounts for such period of (i) Net Income
(but excluding from such Net Income for the applicable period any income derived
from any Investment in a Joint Venture referred to in Section 6.07(10) to the
extent that such income exceeds the cash distributions thereof received by the
Borrower or its Subsidiaries in such period), plus (ii) charges against income
for foreign, federal, state and local taxes, plus (iii) Interest Expense, plus
(iv) depreciation, plus (v) amortization expense, including, without limitation,
amortization of goodwill and other intangible assets and amortization of
deferred compensation expense, plus (vi) extraordinary losses, minus (vii)
interest income, minus (viii) extraordinary gains (and any unusual gains arising
in or outside of the ordinary course of business not included in extraordinary
gains that have been included in the determination of Net Income).
5
"Eligible Assignee" means a commercial or savings bank, financial
institution, other "accredited investor" (as defined in Regulation D of the
Securities Act) or a "qualified institutional buyer" as defined in Rule 144A of
the Securities Act but shall not include the Borrower or any Affiliate of the
Borrower.
"Entitled Land" means all Lots that are neither Lots under Development
nor Finished Lots.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereof.
"Eurocurrency Reserve Requirement" means, for any Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
"Eurocurrency liabilities" (as such term is used in Regulation D) but without
benefit or credit of proration, exemptions, or offsets that might otherwise be
available from time to time under Regulation D. Without limiting the effect of
the foregoing, the Eurocurrency Reserve Requirement shall reflect any other
reserves required to be maintained against (1) any category of liabilities that
includes deposits by reference to which the LIBOR Interest Rate for LIBOR Loans
is to be determined; or (2) any category of extension of credit or other assets
that include LIBOR Loans.
"Event of Default" means any of the events specified in Section 8.01,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Extension Request" has the meaning assigned to that term in Section
2.19(a).
"Federal Funds Rate" means, for each day, a fluctuating interest rate per
annum equal to the weighted average of the rates on overnight Federal Funds
transactions with members of the Federal Reserve System arranged by Federal
Funds brokers, as published for such day (or, if such day is not a Business Day,
for the immediately preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations at approximately 10:00 A.M. Chicago time on such
day on such transactions received by the Agent from three Federal Funds brokers
of recognized standing selected by the Agent in its sole discretion.
"Finished Lots" means Lots in respect of which a building permit, from
the applicable local governmental authority, has been or could be obtained;
provided, however, that the term "Finished Lots" shall not include any Land upon
which the construction of a Housing Unit has commenced.
"Fitch" means Fitch, Inc.
"GAAP" means generally accepted accounting principles in the United
States in effect from time to time (subject to the provisions of Section 1.02).
6
"Guarantor" means an Original Guarantor and any Person that, pursuant to
Section 5.15, guarantees the Obligations.
"Guaranty" means the guaranty of the Obligations by each Guarantor under
the provisions of Article IX contained herein or under a guaranty of the
Obligations delivered under Section 5.15.
"Housing Unit" means a single-family dwelling, including the Land on
which such dwelling is located, whether such dwelling is detached or attached
(including condominiums but excluding mobile homes), which dwelling is either
under construction or completed and is (or, upon completion of construction
thereof, will be) available for sale; the term "Housing Unit" includes a
Speculative Housing Unit.
"Housing Unit Closing" means a closing of the sale of a Housing Unit by
the Borrower or a Subsidiary (including any company or other entity acquired in
an Acquisition by the Borrower or a Subsidiary) to a bona fide purchaser for
value that is not an Affiliate.
"Housing Unit Under Contract" means a Housing Unit owned by the Borrower
or a Subsidiary as to which the Borrower or such Subsidiary has a bona fide
contract of sale, in a form customarily employed by the Borrower or such
Subsidiary and reasonably satisfactory to the Majority Banks, entered into not
more than 15 months prior to the date of determination with a Person who is not
an Affiliate, under which contract no defaults then exist and not less than
$1,000.00 toward the purchase price has been paid; provided, however, that in
the case of any Housing Unit the purchase of which is to be financed in whole or
in part by a loan insured by the Federal Housing Administration or guaranteed by
the Veterans Administration, the required minimum downpayment shall be the
amount (if any) required under the rules of the relevant agency.
"Incur" means to, directly or indirectly, create, incur, assume,
guarantee, extend the maturity of or otherwise become liable with respect to any
Debt; provided, however, that neither the accrual of interest (whether such
interest is payable in cash or kind) nor the accretion of original issue
discount shall be considered an Incurrence of Debt.
"Initial Maturity Date" means December 18, 2004.
"Intangible Assets" means, at any time, the amount (to the extent
reflected in determining consolidated stockholders equity of the Borrower and
its Subsidiaries) of (i) Investments in any Subsidiaries that are not Guarantors
and (ii) all unamortized debt discount and expense, unamortized deferred
charges, good will, patents, trademarks, service marks, trade names, copyrights
and all other items which would be treated as intangibles on a consolidated
balance sheet of the Borrower and its Subsidiaries prepared in accordance with
GAAP.
"Interest Coverage Ratio" means, for any period, the ratio of (a) EBITDA
to (b) the sum (on a consolidated basis for the Borrower and its Subsidiaries)
of all interest incurred, including capitalized interest.
"Interest Deficit" has the meaning assigned to that term in Section
2.08(b) hereof.
7
"Interest Expense" means, for any period, the total interest expense of
the Borrower and its Subsidiaries, whether paid directly or amortized through
cost of sales (including the interest component of Capital Leases).
"Interest Period" means, with respect to any LIBOR Loan, the period
commencing on the date such Loan is made, converted or renewed, and ending, as
the Borrower may select pursuant to Section 2.03, on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, except that each such Interest Period that commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(a) No Interest Period may extend beyond the Maturity Date or, until a
Rejecting Bank is replaced as provided in Section 2.20 or paid in full, such
Rejecting Bank's Maturity Date; and
(b) If an Interest Period would end on a day that is not a Business Day,
such Interest Period shall be extended to the next Business Day unless such
Business Day would fall in the next calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day.
"Internal Reorganization" means any reorganization between or among the
Borrower and any Subsidiary or Subsidiaries or between or among any Subsidiary
and one or more other Subsidiaries or any combination thereof by way of
liquidations, mergers, consolidations, conveyances, assignments, sales,
transfers and other dispositions of all or substantially all of the assets of a
Subsidiary (whether in one transaction or in a series of transactions); provided
that (a) the Borrower shall preserve and maintain its status as a validly
existing corporation and (b) all assets, liabilities, obligations and guarantees
of any Subsidiary party to such reorganization will continue to be held by such
Subsidiary or be assumed by the Borrower or a Wholly-Owned Subsidiary of the
Borrower.
"Inventory" means all Housing Units, Lots, goods, merchandise and other
personal property wherever located to be used for or incorporated into any
Housing Unit.
"Inventory Valuation Date" means (a) the last day of the most recent
fiscal quarter of the Borrower with respect to which the Borrower is required to
have delivered a Borrowing Base Certificate pursuant to Section 5.08(6) hereof
or (b) if the Borrower elects pursuant to Section 2.02(b) or is required
pursuant to Section 2.02(c) to deliver a Borrowing Base Certificate with respect
to a calendar month subsequent to such most recent fiscal quarter, the last day
of such subsequent calendar month.
"Investment" has the meaning provided therefor in Section 6.07. The
amount of any Investment shall include (a) in the case of any loan or advance,
the outstanding amount of such loan or advance and (b) in the case of any equity
Investment, the amount of the "net equity investment" as determined in
accordance with GAAP; provided, however, that, solely for
8
purposes of Section 6.07(10), the amount of the Investment in a Joint Venture
shall be the "net cash investment" therein, as determined in accordance with
GAAP, but not less than zero (0).
"Joint Venture" means any Person (other than a Subsidiary) in which the
Borrower or a Subsidiary holds any stock, partnership interest, joint venture
interest, limited liability company interest or other equity interest.
"Land" means land owned by the Borrower or a Subsidiary, which land is
being developed or is held for future development or sale.
"Lending Office" means, with respect to any Bank, the Lending Office of
such Bank (or of an affiliate of such Bank) designated on the signature pages
hereof or such other office or branch of such Bank (or of an affiliate of such
Bank) as that Bank may from time to time specify to the Borrower and the Agent
as the office or branch at which its Loans (or Loans of a type designated in
such notice) are to be made and maintained.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued by a financial institution upon the application of
such Person or upon which such Person is an account party or for which such
Person is in any way liable.
"Level" means the level of a Pricing Factor or Applicable Margin (as
applicable) as designated in the Table set forth in Section 2.05. The five
Levels in such Table are identified as Levels I through V, and Level I shall
constitute the lowest Level and Level V shall constitute the highest Level.
"LIBOR Interest Rate" means, for each LIBOR Loan for the relevant
Interest Period, the rate per annum (rounded upward, if necessary, to the
nearest one-sixteenth of 1%) determined by the Agent to be equal to the quotient
of (a) the London Interbank Offered Rate for such LIBOR Loan for such Interest
Period divided by (b) one minus the Eurocurrency Reserve Requirement for such
Interest Period.
"LIBOR Loan" means any Loan when and to the extent that the interest rate
therefor is determined by reference to the LIBOR Interest Rate.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing).
"Loan(s)" means a loan (including any advance of a Loan Increase) made by
a Bank pursuant to this Agreement. Each such Loan shall be an ABR Loan or a
LIBOR Loan.
"Loan Document(s)" means this Agreement, the Notes and any and all
documents delivered hereunder or pursuant hereto.
9
"Loan Increase" has the meaning assigned to that term in Section 2.21(a).
"Loan Schedule" means Schedule I hereto, setting forth the aggregate
amount of each Bank's Loans, as such Schedule may be modified as provided in
Section 2.21(e).
"Loan Supplement" has the meaning assigned to that term in Section
2.21(b).
"London Interbank Offered Rate" means, with respect to a LIBOR Loan for
the relevant Interest Period, the rate determined by the Agent to be the rate at
which deposits in U.S. Dollars are offered by Bank One to first-class banks in
the London interbank market at approximately 11:00 A.M. (London time) two (2)
Business Days prior to the first day of such Interest Period, in the approximate
amount of Bank One's relevant LIBOR Loan and having a maturity approximately
equal to such Interest Period.
"Lots" means all Land owned by the Borrower and/or a Subsidiary which is
zoned by the municipality in which such real property is located for residential
building and use, and with respect to which the Borrower or such Subsidiary has
obtained all necessary approvals for its subdivision for Housing Units;
provided, however, that the term "Lots" shall not include any Land upon which
the construction of a Housing Unit has commenced.
"Lots under Development" means Lots with respect to which construction of
streets or other subdivision improvements has commenced but which are not
Finished Lots.
"Majority Banks" means at any time the Banks holding at least sixty-six
and two-thirds percent (66 2/3%) of the then aggregate unpaid principal amount
of the Notes held by the Banks (including in such amount any participation held
by such Bank as a result of its purchase thereof pursuant to Section 10.07).
"Maturity Date" means the Initial Maturity Date or any later date as may
be specified as the Maturity Date in accordance with Section 2.19.
"Merged Banks" has the meaning assigned to that term in Section 12.03(c).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a plan described in Section 4001(a)(3) of
ERISA in respect of which the Borrower, a Subsidiary or a Commonly Controlled
Entity is an "employer" as defined in Section 3(5) of ERISA.
"Net Income" means, for any period, the net earnings (or loss) after
taxes of the Borrower and its Subsidiaries on a consolidated basis for such
period.
"New Bank" means any bank not theretofore a party to this Agreement that
is approved by the Borrower and the Agent to advance all or any part of a Loan
Increase pursuant to Section 2.21.
"Note(s)" means the promissory notes described in Section 2.10 hereof or
Section 2.21(b) hereof.
10
"Notice of Assignment" has the meaning assigned to that term in Section
12.03(b) hereof.
"Obligations" means (a) the due and punctual payment of principal of and
interest on the Loans and the Notes (including, if and when advanced, any Loan
Increase and any Notes delivered pursuant to Section 2.21(b)) and (b) the due
and punctual payment of fees, expenses, reimbursements, indemnifications and
other present and future monetary obligations of the Borrower to the Banks or to
any Bank, the Agent or any indemnified party under the Loan Documents.
"Original Guarantors" has the meaning assigned to that term in the
preamble to this Agreement.
"Participant" has the meaning assigned to that term in Section 12.02(a)
hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Performance Letter of Credit" means any Letter of Credit of the Borrower
or a Guarantor that is issued for the benefit of a municipality, other
governmental authority, utility, water or sewer authority, or other similar
entity for the purpose of assuring such beneficiary of the Letter of Credit of
the proper and timely completion of construction work.
"Permitted Acquisition" means any Acquisition (other than by means of a
hostile takeover, hostile tender offer or other similar hostile transaction) of
a business or entity engaged primarily in the business of home building;
provided that, immediately after giving effect to such Acquisition, no Default
or Event of Default has occurred and is continuing.
"Permitted Senior Debt" means the sum of all Debt of the Borrower and its
Subsidiaries on a consolidated basis, excluding (i) Secured Debt, (ii)
Performance Letters of Credit, (iii) performance bonds and (iv) Debt of any
Joint Venture.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, limited liability company, unincorporated
association, joint venture, governmental authority, or other entity of whatever
nature.
"Plan" means any pension plan which is covered by Title IV of ERISA and
in respect of which (a) the Borrower or a Subsidiary or a Commonly Controlled
Entity is an "employer" as defined in Section 3(5) of ERISA and (b) the Borrower
or a Subsidiary has any material liability; PROVIDED, HOWEVER, that the term
"Plan" shall not include any Multiemployer Plan.
"Pricing Factor" means either the Debt/Cap Ratio or the Senior Debt
Rating.
"Prime Rate" means a rate per annum equal of the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
11
"Principal Office" means, with respect to the Agent, the Principal Office
of the Agent designated as such on the signature pages hereof or such other
office of the Agent as the Agent may from time to time specify to the Borrower
and the Banks as its Principal Office.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code that could subject the Borrower or any
Subsidiary to any material liability.
"Purchaser" has the meaning assigned to that term in Section 12.03(a)
hereof.
"Ratable Share" means, with respect to any Bank on any date, the ratio of
(a) the outstanding principal balance of the Loans held by such Bank to (b) the
outstanding principal balance of all Loans hereunder.
"Receivables" means the net proceeds payable to, but not yet received by,
the Borrower or a Subsidiary following a Housing Unit Closing.
"Refinancing Debt" means Debt that refunds, refinances or extends any
applicable Debt ("Refinanced Debt") but only to the extent that (i) the
Refinancing Debt is subordinated to or PARI PASSU with the Obligations to the
same extent as such Refinanced Debt, if at all, (ii) the Refinancing Debt is
scheduled to mature no earlier than the earlier of (A) the current maturity date
of such Refinanced Debt or (B) a date three (3) years after the Maturity Date
(as determined at the time such Refinancing Debt is Incurred), (iii) such
Refinancing Debt is in an aggregate amount that is equal to or less than the sum
of (A) the aggregate amount then outstanding under the Refinanced Debt, PLUS (B)
accrued and unpaid interest on such Refinanced Debt, PLUS (C) reasonable fees
and expenses incurred in obtaining such Refinancing Debt, it being understood
that this clause (iii) shall not preclude the Refinancing Debt from being a part
of a Debt financing that includes other or additional Debt otherwise permitted
herein, (iv) such Refinancing Debt is Incurred by the same Person that initially
Incurred such Refinanced Debt or by another Person of which the Person that
initially Incurred such Refinanced Debt is a Subsidiary, and (v) such
Refinancing Debt is Incurred within 60 days after such Refinanced Debt is so
refunded, refinanced or extended.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
12
"Rejecting Bank" has the meaning assigned to such term in Section
2.19(a).
"Rejecting Bank's Maturity Date" has the meaning assigned to such term in
Section 2.19(a).
"Replacement Bank" has the meaning assigned to such term in Section 2.20.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA with respect to a Plan (excluding any such event with respect to which the
PBGC has waived the 30-day notice requirement).
"Revolving Credit Agreement" means that certain Second Amended and
Restated Credit Agreement dated December 29, 1999 among the Borrower, the
Original Guarantors, Bank One as agent and the other banks party thereto, as the
same may be amended, modified or replaced and in effect from time to time.
"S&P" means Standard & Poor's Rating Services.
"Secured Debt" means all Debt of the Borrower or any of its Subsidiaries
(excluding Debt owing to the Borrower or any of its Subsidiaries) that is
secured by a Lien on assets of the Borrower or any of its Subsidiaries.
"Senior Debt" means the Senior Notes or, if the Senior Notes are
refinanced, the Refinancing Debt with respect thereto.
"Senior Debt Rating" means the second highest rating among the publicly
announced ratings of Moody's, S&P and/or Fitch of the Borrower's unsecured
long-term debt (including the Senior Debt and the Obligations), provided,
however, (i) at any time at which neither of the two highest ratings is by
Moody's or S&P, the Senior Debt Rating shall be (x) the rating assigned by
either Moody's or S&P at any time at which only one of Moody's or S&P shall
publicly announce a rating of the Borrower's unsecured long-term debt, or (y)
the higher of the two ratings by Moody's and S&P at any time at which both shall
publicly announce a rating of the Borrower's unsecured long-term debt, and (ii)
at any time at which (A) none of Moody's, S&P or Fitch publicly announces
ratings of the Borrower's unsecured long-term debt, or (B) neither Moody's nor
S&P publicly announces ratings of the Borrower's unsecured long-term debt, no
Senior Debt Rating shall be deemed to exist. The Senior Debt Rating shall change
if and when such rating(s) change, and such change in the Senior Debt Rating
shall have the effect provided for in Section 2.05 and elsewhere in this
Agreement.
"Senior Indentures" means either of the Indentures identified in the
definition of the term "Senior Notes" and any other Indenture hereafter entered
into by the Borrower pursuant to which the Borrower Incurs any Refinancing Debt
with respect to any of the Senior Notes.
"Senior Notes" means (i) the 9% Senior Notes due 2004 of the Borrower
issued in the original principal amount of $115,000,000 pursuant to the
Indenture dated March 2, 1994 and (ii) the 8 7/8 percent Senior Notes due 2008
of the Borrower issued in the original principal amount of $100,000,000 pursuant
to the Indenture dated March 25, 1998.
13
"Significant Guarantor" means, at any date of determination thereof, any
Guarantor that (together with its Subsidiaries) accounts for five percent (5%)
or more of the Consolidated Tangible Assets as of the last day of the most
recent fiscal quarter then ended and of the net revenues for the twelve-month
period ending on the last day of the most recent fiscal quarter then ended, in
each case of the Borrower and its Subsidiaries taken as a whole. Such percentage
shall be determined on the basis of financial reports that shall be available
not later than 25 days (or, in the case of the last fiscal quarter of the fiscal
year, 35 days) following the end of such fiscal quarter.
"Significant Subsidiary" means, at any date of determination thereof, any
Subsidiary that (together with its Subsidiaries) accounts for five percent (5%)
or more of the Consolidated Tangible Assets as of the last day of the most
recent fiscal quarter then ended and of the net revenues for the twelve-month
period ending on the last day of the most recent fiscal quarter then ended, in
each case of the Borrower and its Subsidiaries taken as a whole. Such percentage
shall be determined on the basis of financial reports that shall be available
not later than 25 days (or, in the case of the last fiscal quarter of the fiscal
year, 35 days) following the end of such fiscal quarter.
"Speculative Housing Unit" means any Housing Unit owned by the Borrower
or a Subsidiary that is not a Housing Unit Under Contract.
"STIC" means Security Title Insurance Company, Inc., a Vermont
corporation and Wholly Owned Subsidiary of the Borrower.
"Subsidiary" means, as to the Borrower or a Guarantor, in the case of a
corporation, a corporation of which shares of stock having ordinary voting power
(other than stock having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation are at the time owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by the Borrower or such Guarantor, as the case may be, or in the case of an
entity which is not a corporation, the activities of which are controlled
directly, or indirectly through one or more intermediaries, or both, by the
Borrower or such Guarantor, as the case may be.
"Transferee" has the meaning assigned to that term in Section 12.04.
"UHIC" means United Homes Insurance Corporation, a Vermont corporation
and Wholly Owned Subsidiary of the Borrower.
"Unrestricted Cash" of a Person means the cash of such Person that would
not be identified as "restricted" on a balance sheet of such Person prepared in
accordance with GAAP.
"Wholly Owned Subsidiary" of any Person means (i) a Subsidiary, of which
one hundred percent (100%) of the outstanding Common Equity (except for
directors' qualifying shares or certain minority interests owned by other
Persons solely due to local law requirements that there be more than one
stockholder, but which interest is not in excess of what is required for such
purpose) is owned directly by such Person or through one or more other Wholly
Owned
14
Subsidiaries of such Person, or (ii) any entity other than a corporation in
which such Person, directly or indirectly, owns all of the outstanding Common
Equity of such entity.
SECTION 1.02. ACCOUNTING TERMS. (a) All accounting terms not specifically
defined herein shall be construed in accordance with GAAP consistent with those
applied in the preparation of the financial statements referred to in Section
4.04, and all financial data submitted pursuant to this Agreement shall be
prepared in accordance with such principles.
(b) Notwithstanding anything to the contrary contained in this Agreement,
in determining the Borrower's compliance with the provisions of Article VII
hereof, GAAP shall not include modifications of generally accepted accounting
principles that become effective after the date hereof.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. TERM LOAN. (a) Each Bank severally agrees, on the terms and
conditions hereinafter set forth, to make Loans to the Borrower on the Closing
Date in the respective amount set forth in the Loan Schedule. Except for any
Loan Increase advanced in accordance with Section 2.21, the entire amounts of
all Loans shall, subject to the terms and conditions contained herein, be
advanced on the Closing Date, and there shall be no advances of Loans after the
Closing Date. Any Loan that is paid or prepaid may not be reborrowed.
(b) The Loans made on the Closing Date shall consist of either LIBOR
Loans or ABR Loans or both. Each LIBOR Loan shall be in an amount not less than
One Million Dollars ($1,000,000) and, if in excess thereof, in integral
multiples of One Hundred Thousand Dollars ($100,000). Each ABR Loan shall be in
an amount not less than Five Hundred Thousand Dollars ($500,000) and, if in
excess thereof, in integral multiples of One Hundred Thousand Dollars
($100,000).
SECTION 2.02. BORROWING BASE. (a) The aggregate amount of Permitted
Senior Debt at any one time outstanding may not exceed the Borrowing Base as of
the most recent Inventory Valuation Date.
(b) The Borrower may elect to deliver to the Agent a Borrowing Base
Certificate setting forth the Borrowing Base as of the last day of a calendar
month subsequent to the most recent fiscal quarter with respect to which a
Borrowing Base Certificate was required to be delivered under Section 5.08(6) of
the Agreement.
(c) The Agent or the Majority Lenders may, upon notice to the Borrower
from the Agent, require the Borrower to deliver a Borrowing Base Certificate
determined as of the last day of a calendar month (as designated in such notice)
subsequent to the fiscal quarter with respect to which a Borrowing Base
Certificate was required to be delivered under Section 5.08(6) of the Agreement,
provided that the Borrowing Base Certificate under this Section 2.02(c) shall
only be required to be delivered on the later to occur of (i) the tenth (10th)
day following the Agent's notice to the Borrower under this Section 2.02(c) or
(ii) the twenty-fifth (25th) day after the last day of the applicable calendar
month (as designated in such notice).
15
SECTION 2.03. NOTICE AND MANNER OF BORROWING. The Borrower shall give the
Agent notice of the Loans under this Agreement, on the Business Day of each ABR
Loan, and at least three (3) Business Days before each LIBOR Loan, specifying:
(1) the date of such Loan; (2) the amount of such Loan; (3) the type of Loan
(whether an ABR Loan or a LIBOR Loan); and (4) in the case of a LIBOR Loan, the
duration of the Interest Period applicable thereto. All notices given by the
Borrower under this Section 2.03 shall be irrevocable and shall be given not
later than 10:00 A.M. Chicago time on the day specified above for such notice.
The Agent shall notify each Bank of each such notice not later than 11:00 A.M.
Chicago time on the date it receives such notice from the Borrower if such
notice is received by the Agent at or before 10:00 A.M. Chicago time. In the
event such notice from the Borrower is received after 10:00 A.M. Chicago time,
it shall be treated as if received on the next succeeding Business Day, and the
Agent shall notify each Bank of such notice as soon as practicable but not later
than 11:00 A.M. Chicago time on the next succeeding Business Day. Not later than
1:00 P.M. Chicago time on the Closing Date, each Bank will make available to the
Agent in immediately available funds, such Bank's Loans in the amount set forth
in the Loan Schedule. After the Agent's receipt of such funds, on the Closing
Date and upon fulfillment of the applicable conditions set forth in Article III,
the Agent will make the Loans available to the Borrower in immediately available
funds by crediting the amount thereof to the Borrower's account with the Agent.
SECTION 2.04. NON-RECEIPT OF FUNDS BY AGENT. (a) Unless the Agent shall
have received notice from a Bank prior to the date (in the case of a LIBOR
Loan), or by 12:00 noon Chicago time on the date (in the case of an ABR Loan),
on which such Bank is to provide funds to the Agent for a Loan to be made by
such Bank that such Bank will not make available to the Agent such funds, the
Agent may assume that such Bank has made such funds available to the Agent on
the date of such Loan in accordance with Section 2.03 and the Agent in its sole
discretion may, but shall not be obligated to, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent such Bank shall not have given the notice provided for above and
shall not have made such funds available to the Agent, such Bank agrees to repay
to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at the Federal
Funds Rate for three Business Days and thereafter at the Alternate Base Rate. If
such Bank shall repay to the Agent such corresponding amount, such amount so
repaid shall constitute such Bank's Loan for purposes of this Agreement. If such
Bank does not pay such corresponding amount forthwith upon Agent's demand
therefor, the Agent shall promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Agent with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent, at the rate of interest applicable
at the time to such proposed Loan. Nothing set forth in this Section shall
affect the rights of the Borrower with respect to any Bank that defaults in the
performance of its obligation to make a Loan hereunder.
(b) Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Banks hereunder that the Borrower
will not make such payment in full, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date and the Agent in its sole
discretion may, but shall not be obligated to, in reliance upon such assumption,
cause to be distributed to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Borrower shall not have so
16
made such payment in full to the Agent, each Bank shall repay to the Agent
forthwith on demand such amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Agent, at the Federal Funds
Rate for three Business Days and thereafter at the Alternate Base Rate.
SECTION 2.05. DETERMINATION OF APPLICABLE MARGINS. (a) The Applicable
Margins shall be determined by reference to the Senior Debt Rating and the
Debt/Cap Ratio in accordance with the following table and the provisions of this
Section 2.05:
-------------- ---------------------- ----------------------- ------------------- -----------------
Level Senior Debt/Cap Ratio Applicable LIBOR Applicable
Debt Rating Margin ABR Margin
-------------- ---------------------- ----------------------- ------------------- -----------------
V BBB-/Baa3 less than 30% 1.20% -0-
-------------- ---------------------- ----------------------- ------------------- -----------------
IV BB+/Ba1 equal to or more than 1.40% -0-
30% and less than 35%
-------------- ---------------------- ----------------------- ------------------- -----------------
III BB/Ba2 equal to or more than 1.50% -0-
35% and less than 40%
-------------- ---------------------- ----------------------- ------------------- -----------------
II BB-/Ba3 equal to or more than 1.625% -0-
B+/B1 40% and less than 55%
-------------- ---------------------- ----------------------- ------------------- -----------------
I B/B2 & Below 55% or more 1.875% 0.35%
-------------- ---------------------- ----------------------- ------------------- -----------------
The Applicable Margins shall be determined on the basis of the Levels of
the Pricing Factors in accordance with the following provisions:
(i) At any time at which the Pricing Factors are at the same
Level, the Applicable Margins shall be at that Level;
(ii) At any time at which the Pricing Factors are at different
Levels, the Applicable Margins shall be at the Level that corresponds to
(A) the Level of the higher of the two Pricing Factors (i.e. the lower
pricing) whenever the Pricing Factors differ by one Level and (B) the
Level that is one Level lower than the higher of the two Pricing Factors
whenever the Pricing Factors differ by more than one Level;
(iii) At any time at which there is or is deemed to be no Senior
Debt Rating, the Applicable Margins shall be at the Level that is one
Level lower than the Level of the Debt/Cap Ratio; and
17
(iv) At any time at which (A) Fitch does not publicly announce a
rating of the Borrower's unsecured long-term debt, and (B) ▇▇▇▇▇'▇ or S&P
(but not both) publicly announces a rating of the Borrower's unsecured
long-term debt, the Applicable Margin shall be determined in accordance
with subsections (i) and (ii) above (as applicable), except that the
Applicable LIBOR Margin set forth in the Table above shall be increased
by 0.075%.
(b) The Applicable Margin shall be adjusted, from time to time, effective
(as applicable) on the first Business Day after any change in the Senior Debt
Ratings that results in any change in the Applicable Margins or the fifth (5th)
Business Day after the Agent's receipt of the Borrower's quarterly or annual
financial statements evidencing a change in the Debt/Cap Ratio that results in
any change in the Applicable Margins, provided, however, that any change in the
Applicable LIBOR Margin shall only apply to LIBOR Loans for Interest Periods
commencing after such change in the Applicable LIBOR Margin is effective.
SECTION 2.06. CONVERSIONS AND RENEWALS. (a) The Borrower may elect from
time to time to convert all or a part of one type of Loan into another type of
Loan or to renew all or part of a Loan by giving the Agent notice at least one
(1) Business Day before conversion into an ABR Loan, and at least three (3)
Business Days before the conversion into or renewal of a LIBOR Loan, specifying:
(1) the renewal or conversion date; (2) the amount of the Loan to be converted
or renewed; (3) in the case of conversions, the type of Loan to be converted
into; and (4) in the case of renewals of or a conversion into a LIBOR Loan, the
duration of the Interest Period applicable thereto; provided that (i) the
minimum principal amount of each Loan of each Bank outstanding after a renewal
or conversion shall be One Million Dollars ($1,000,000) in the case of a LIBOR
Loan, and Two Hundred Fifty Thousand Dollars ($250,000) in the case of an ABR
Loan; and (ii) LIBOR Loans may be converted on a Business Day that is not the
last day of the Interest Period for such Loan only if the Borrower pays on the
date of conversion all amounts due pursuant to Section 2.17 hereof; and (iii)
the Borrower may not renew a LIBOR Loan or convert an ABR Loan into a LIBOR Loan
at any time that a Default has occurred that is continuing. Each such notice
shall be accompanied by a Borrowing Base Certificate dated as at the date of
such notice. All conversions and renewals shall be made in the proportion of the
Banks' respective Ratable Shares. All notices given by the Borrower under this
Section 2.06 shall be irrevocable and shall be given not later than 10:00 A.M.
Chicago time on the day which is not less than the number of Business Days
specified above for such notice. The Agent shall notify each Bank of each such
notice not later than 11:00 A.M. Chicago time on the date it receives such
notice from the Borrower if such notice is received by the Agent at or before
10:00 A.M. Chicago time. In the event such notice from the Borrower is received
after 10:00 A.M. Chicago time, it shall be treated as if received on the next
succeeding Business Day, and the Agent shall notify each Bank of such notice as
soon as practicable but not later than 11:00 A.M. Chicago time on the next
succeeding Business Day. Notwithstanding the foregoing, if the Borrower shall
fail to give the Agent the notice as specified above for the renewal or
conversion of a LIBOR Loan prior to the end of the Interest Period with respect
thereto, such LIBOR Loan shall automatically be converted into an ABR Loan on
the last day of the Interest Period for such Loan.
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(b) In the event of any Loan Increase advanced in accordance with Section
2.21, the provisions of Section 2.06(a) shall apply to the conversion of
outstanding Loans and to the Loan Increase as provided in Section 2.21(c).
SECTION 2.07. INTEREST. (a) The Borrower shall pay interest to the Agent
for the account of each Bank on the outstanding and unpaid principal amount of
the Loans at the following rates:
(i) If an ABR Loan, then at a rate per annum equal to the sum of
(A) the Applicable ABR Margin in effect from time to time as interest
accrues and (B) the Alternate Base Rate in effect from time to time as
interest accrues; and
(ii) if a LIBOR Loan, then at a rate per annum for the Interest
Period applicable to such LIBOR Loan equal to the sum of (A) the
Applicable LIBOR Margin in effect on the first day of such Interest
Period and (B) the LIBOR Interest Rate determined for such Interest
Period.
(b) Any change in the interest rate based on the Alternate Base Rate
resulting from a change in the Alternate Base Rate shall be effective as of the
opening of business on the day on which such change in the Alternate Base Rate
becomes effective. Interest on each LIBOR Loan shall be calculated on the basis
of a year of 360 days for the actual number of days elapsed. Interest on each
ABR Loan shall be calculated on the basis of a year of 365 days for the actual
number of days elapsed.
(c) Interest on the Loans shall be paid (in an amount set forth in a
statement delivered by the Agent to the Borrower, PROVIDED, HOWEVER, that the
failure of the Agent to deliver such statement shall not limit or otherwise
affect the obligations of the Borrower hereunder) in immediately available funds
to the Agent at its Principal Office for the account of the applicable Lending
Office of each Bank as follows:
(1) For each ABR Loan on the first day of each calendar month
commencing on the first such date after such Loan;
(2) For each LIBOR Loan, on the last day of the Interest Period with
respect thereto, except that, if such Interest Period is longer
than three months, interest shall also be paid on the last day of
the third month of such Interest Period; and
(3) If not sooner paid, then on the Maturity Date or such earlier date
as the Loans may be due or declared due hereunder.
(d) Any principal amount of any Loan not paid when due (at maturity, by
acceleration, or otherwise) shall bear interest thereafter until paid in full,
payable on demand, at a rate per annum equal to the Alternate Base Rate or the
applicable LIBOR Interest Rate, as the case may be, for such Loan in effect from
time to time as interest accrues, plus the Applicable Margin in effect from time
to time as interest accrues, plus two percent (2%) per annum.
SECTION 2.08. INTEREST RATE DETERMINATION. (a) The Agent shall determine
each London Interbank Offered Rate, as applicable. The Agent shall give prompt
notice to the
19
Borrower and the Banks of the applicable interest rate determined by the Agent
pursuant to the terms of this Agreement.
(b) If the provisions of this Agreement or any Note would at any time
require payment by the Borrower to a Bank of any amount of interest in excess of
the maximum amount then permitted by the law applicable to any Loan, the
interest payments to such Bank shall be reduced to the extent necessary so that
such Bank shall not receive interest in excess of such maximum amount. If, as a
result of the foregoing a Bank shall receive interest payments hereunder or
under a Note in an amount less than the amount otherwise provided hereunder,
such deficit (hereinafter called "Interest Deficit") will cumulate and will be
carried forward (without interest) until the termination of this Agreement.
Interest otherwise payable to a Bank hereunder and under a Note for any
subsequent period shall be increased by the maximum amount of the Interest
Deficit that may be so added without causing such Bank to receive interest in
excess of the maximum amount then permitted by the law applicable to the Loans.
The amount of the Interest Deficit relating to the Loans shall be treated as a
prepayment premium (to the extent permitted by law) and paid in full at the time
of any optional prepayment by the Borrower to the Banks of all the Loans at that
time outstanding pursuant to Section 2.11 hereof. The amount of the Interest
Deficit relating to the Loans at the time of any complete payment of the Loans
at that time outstanding (other than an optional prepayment thereof pursuant to
Section 2.11 hereof) shall be canceled and not paid.
SECTION 2.09. FEES. The Borrower shall pay to BOCM upon the execution of
this Agreement a one time, nonrefundable fee in the amount provided for in that
certain fee letter dated November 7, 2000 from the Agent and BOCM to the
Borrower and accepted by the Borrower on November 15, 2000. The Agent shall
deliver to each Bank its applicable fee (as set forth in the invitation letter
dated November 15, 2000 from BOCM to such Banks) promptly upon the Agent's
receipt thereof. The Borrower shall pay to the Agent from time to time such
additional fees as are specified in a fee letter from the Agent and BOCM to the
Borrower dated November 7, 2000 accepted by the Borrower on November 15, 2000.
SECTION 2.10. NOTES. The Loans made by each Bank under this Agreement
shall be evidenced by, and repaid with interest in accordance with, a single
promissory note of the Borrower in substantially the form of EXHIBIT A hereto,
in each case duly completed, dated the date of this Agreement, and payable to
such Bank for the account of its applicable Lending Office, such Note to
represent the obligation of the Borrower to repay the Loans made by such Bank.
Each Bank is hereby authorized by the Borrower to endorse on the schedule
attached to the Note held by it the amount and type of each Loan and each
renewal, conversion, and payment of principal amount received by such Bank for
the account of its applicable Lending Office on account of its Loans, which
endorsement shall, in the absence of manifest error, be conclusive as to the
outstanding balance of the Loans made by such Bank; PROVIDED, HOWEVER, that the
failure to make such notation with respect to any Loan or renewal, conversion,
or payment shall not limit or otherwise affect the obligations of the Borrower
under this Agreement or the Note held by such Bank. All Loans shall be repaid on
the Maturity Date.
SECTION 2.11. PREPAYMENTS. (a) The Borrower may, upon notice to the Agent
not later than 11:00 A.M. (Chicago time) on the date of prepayment in the case
of ABR Loans and at least three (3) Business Days' prior notice to the Agent in
the case of LIBOR Loans,
20
prepay (including, without limitation, all amounts payable pursuant to the terms
of Section 2.17 hereof) the Notes in whole or in part with accrued interest to
the date of such prepayment on the amount prepaid, provided that (1) each
partial payment shall be in a principal amount of not less than One Million
Dollars ($1,000,000) in the case of a LIBOR Loan and Two Hundred Fifty Thousand
Dollars ($250,000) in the case of an ABR Loan; and (2) LIBOR Loans may be
prepaid only on the last day of the Interest Period for such Loans; PROVIDED,
HOWEVER, that such prepayment of LIBOR Loans may be made on any other Business
Day if the Borrower pays at the time of such prepayment all amounts due pursuant
to Section 2.17 hereof. Upon receipt of any such prepayments, the Agent will
promptly thereafter cause to be distributed the applicable Ratable Share of such
prepayment to each Bank for the account of its applicable Lending Office.
(b) Borrower shall immediately upon a Change in Control prepay the Notes
in full and all accrued interest to the date of such prepayment, and in the case
of LIBOR Loans all amounts due pursuant to Section 2.17 hereof.
(c) Any Loan that is prepaid, in whole or in part, may not be reborrowed.
SECTION 2.12. METHOD OF PAYMENT. The Borrower shall make each payment
under this Agreement and under the Notes not later than 11:00 A.M. Chicago time
on the date when due in lawful money of the United States to the Agent for the
account of the applicable Lending Office of each Bank in immediately available
funds. The Agent will promptly thereafter cause to be distributed (1) the
applicable Ratable Share of such payments of principal and interest with respect
to Loans in like funds to each Bank for the account of its applicable Lending
Office and (2) other fees payable to any Bank to be applied in accordance with
the terms of this Agreement. If any such payment is not received by a Bank on
the Business Day on which the Agent received such payment (or the following
Business Day if the Agent's receipt thereof occurs after 2:00 P.M. (Chicago
time)), such Bank shall be entitled to receive from the Agent interest on such
payment at the Federal Funds Rate for three Business Days and thereafter at the
Alternate Base Rate (which interest payment shall not be an obligation for the
Borrower's account, including under Section 11.04 or Section 11.06). The
Borrower hereby authorizes each Bank, if and to the extent payment is not made
when due under this Agreement or under the Notes, to charge from time to time
against any account of the Borrower with such Bank any amount as due. Whenever
any payment to be made under this Agreement or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall be included in
the computation of the payment of interest, except, in the case of a LIBOR Loan,
if the result of such extension would be to extend such payment into another
calendar month, such payment shall be made on the immediately preceding Business
Day.
SECTION 2.13. USE OF PROCEEDS. The proceeds of the Loans hereunder shall
be used by the Borrower for working capital and general corporate purposes of
the Borrower and the Guarantors to the extent permitted in this Agreement. The
Borrower will not, directly or indirectly, use any part of such proceeds for the
purpose of repaying the Senior Notes or for purchasing or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or to extend credit to any Person for the purpose of
purchasing or carrying any such margin stock, or for any purpose which violates,
or is inconsistent with, Regulation X of such Board of Governors.
21
SECTION 2.14. YIELD PROTECTION. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any interpretation thereof, or the compliance
of any Bank therewith,
(i) subjects any Bank or any applicable Lending Office to any tax,
duty, charge or withholding on or from payments due from the
Borrower (excluding federal taxation of the overall net income of
any Bank or applicable Lending Office), or changes the basis of
taxation of payments to any Bank in respect of its Loans or other
amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended
by, any Bank or any applicable Lending Office (other than reserves
and assessments taken into account in determining the interest
rate applicable to LIBOR Loans), or
(iii) imposes any other condition the result of which is to increase the
cost to any Bank or any applicable Lending Office of making,
funding or maintaining loans or reduces any amount receivable by
any Bank or any applicable Lending Office in connection with
loans, or requires any Bank or any applicable Lending Office to
make any payment calculated by reference to the amount of loans
held or interest received by it, by an amount deemed material by
such Bank,
then, within fifteen (15) days of demand by such Bank, the Borrower shall pay
such Bank that portion of such increased expense incurred or reduction in an
amount received which such Bank reasonably determines is attributable to making,
funding and maintaining its Loans.
SECTION 2.15. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Bank
determines the amount of capital required or expected to be maintained by such
Bank, any Lending Office of such Bank or any corporation controlling such Bank
is increased as a result of a Change, then, within 10 days of demand by such
Bank, the Borrower shall pay such Bank the amount necessary to compensate for
any shortfall in the rate of return on the portion of such increased capital
which such Bank determines is attributable to this Agreement, its Loans or its
obligation to make Loans hereunder (after taking into account such Bank's
policies as to capital adequacy); provided, however, that a Bank shall impose
such cost upon the Borrower only if such Bank is generally imposing such cost on
its other borrowers having similar credit arrangements. "Change" means (i) any
change after the date of this Agreement in the Risk-Based Capital Guidelines or
(ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Bank or any Lending Office or any corporation controlling any
Bank. "Risk-Based Capital Guidelines" means (i) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
22
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
SECTION 2.16. AVAILABILITY OF LIBOR LOANS. If any Bank determines that
maintenance of its LIBOR Loans at the Lending Office selected by the Bank would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law (and it is not reasonably possible for the Bank to
designate an alternate Lending Office without being adversely affected thereby),
or if the Majority Banks determine that (i) deposits of a type and maturity
appropriate to match fund LIBOR Loans are not available or (ii) the interest
rate applicable to LIBOR Loans does not accurately reflect the cost of making or
maintaining such LIBOR Loans, then the Agent shall suspend the availability of
LIBOR Loans and require any LIBOR Loans to be repaid.
SECTION 2.17. FUNDING INDEMNIFICATION. If any payment of a LIBOR Loan
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a LIBOR Loan is not
made on the date specified by the Borrower for any reason other than default by
the Banks, the Borrower will indemnify each Bank for any loss or cost incurred
by it resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits required to fund or maintain the LIBOR Loan.
SECTION 2.18. BANK STATEMENTS; SURVIVAL OF INDEMNITY. To the extent
reasonably possible, each Bank shall designate an alternate Lending Office with
respect to its LIBOR Loans to reduce any liability of the Borrower to such Bank
under Sections 2.14 and 2.15 or to avoid the unavailability of LIBOR Loans. Each
Bank shall deliver a written statement of such Bank as to the amount due, if
any, under Sections 2.14, 2.15 or 2.17. Such written statement shall set forth
in reasonable detail the calculations upon which such Bank determined such
amount and shall be final, conclusive and binding on the Borrower in the absence
of manifest error. Determination of amounts payable under such Sections in
connection with a LIBOR Loan shall be calculated as though each Bank funded its
LIBOR Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the LIBOR Rate
applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement shall
be payable on demand after receipt by the Borrower of the written statement. The
obligations of the Borrower under Sections 2.14, 2.15 and 2.17 shall survive
payment of the Obligations and termination of this Agreement.
SECTION 2.19. EXTENSION OF MATURITY DATE. (a) Not more than once in any
fiscal year of the Borrower, the Borrower may request an extension of the
Maturity Date to the first or second anniversary of the then scheduled Maturity
Date (but in no event later than the fourth anniversary of the date of such
request) by submitting a request for an extension to the Agent not less than 180
days prior to the then scheduled Maturity Date. At the time of or prior to the
delivery of such request, the Borrower shall propose to the Agent the amount of
the fees that the Borrower would agree to pay with respect to such extension if
approved by the Banks. Promptly upon (but not later than five Business Days
after) the Agent's receipt and approval of the extension request and fee
proposal (as so approved, the "Extension Request"), the Agent shall deliver to
each Bank a copy of, and shall request each Bank to approve, the Extension
Request. Each Bank approving the Extension Request shall deliver its written
approval no later than 60
23
days after such Bank's receipt of the Extension Request. If the written approval
of the Extension Request by the Majority Banks is received by the Agent within
such 60-day period, the Maturity Date shall be extended to the first or second
anniversary of the then scheduled Maturity Date (as specified in the Extension
Request) but only with respect to the Banks that have given such written
approval. Except to the extent that a Bank that did not give its written
approval to such Extension Request ("Rejecting Bank") is replaced as provided in
Section 2.20, the Loans and all interest, fees and other amounts owed to such
Rejecting Bank shall be paid in full on the Maturity Date as determined prior to
such Extension Request (the "Rejecting Bank's Maturity Date").
(b) Within ten days of the Agent's notice to the Borrower that the
Majority Banks have approved an Extension Request, the Borrower shall pay to the
Agent for the account of each Bank that has approved the Extension Request the
applicable extension fees specified in the Extension Request.
SECTION 2.20. REPLACEMENT OF CERTAIN BANKS. (a) In the event a Bank
("Affected Bank"): (i) shall have requested compensation from the Borrower under
Sections 2.14 or 2.15 to recover additional costs incurred by such Bank that are
not being incurred generally by the other Banks, (ii) shall have delivered a
notice pursuant to Section 2.16 claiming that such Bank is unable to extend
LIBOR Loans to the Borrower for reasons not generally applicable to the other
Banks, (iii) shall have invoked Section 11.13 or (iv) is a Rejecting Bank
pursuant to Section 2.19, then, in any such case, the Borrower or the Agent may
make written demand on such Affected Bank (with a copy to the Agent in the case
of a demand by the Borrower and a copy to the Borrower in the case of a demand
by the Agent) for the Affected Bank to assign, and, if a Replacement Bank (as
hereinafter defined) notifies the Affected Bank of its willingness to purchase
the Affected Bank's interest and the Agent and the Borrower consent thereto in
writing, then such Affected Bank shall assign pursuant to one or more duly
executed assignment and acceptance agreements in substantially and in all
material respects in the form and substance of EXHIBIT I five (5) Business Days
after the date of such demand, to one or more financial institutions that comply
with the provisions of Section 12.03(a) that the Borrower or the Agent, as the
case may be, shall have engaged for such purpose ("Replacement Bank"), all (or,
to the extent permitted under Section 2.20(b), a part) of such Affected Bank's
rights and obligations (from and after the date of such assignment) under this
Agreement and the other Loan Documents (including, without limitation, all Loans
owing to it) in accordance with Section 12.03. The Agent agrees, upon the
occurrence of such events with respect to an Affected Bank and upon the written
request of the Borrower, to use its reasonable efforts to obtain the commitments
from one or more financial institutions to act as a Replacement Bank. As a
condition to any such assignment, the Affected Bank shall have concurrently
received, in cash, all amounts due and owing to the Affected Bank hereunder or
under any other Loan Document, including, without limitation, the aggregate
outstanding principal amount of the Loans owed to such Bank, together with
accrued interest thereon through the date of such assignment, amounts payable
under Sections 2.14 and 2.15 with respect to such Affected Bank; provided that
upon such Affected Bank's replacement, such Affected Bank shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.14,
2.15, 2.17, 11.04 and 11.06, and shall continue to be obligated under Section
10.05 with respect to obligations and liabilities accruing prior to the
replacement of such Affected Bank.
24
(b) In the event that the Affected Bank is a Rejecting Bank, the Borrower
may elect to have a part of the Rejecting Bank's rights and obligations under
this Agreement and the other Loan Documents assigned pursuant to this Section
2.20, provided that the Borrower also prepays in full, on the same date on which
the assignment by the Rejecting Bank to the Replacement Bank of such part of the
Rejecting Bank's rights and obligations under this Agreement is consummated, the
principal balance of the Loans not so assigned to the Replacement Bank, together
with accrued interest thereon and other amounts payable with respect thereto to
the Rejecting Bank (including amounts payable under Sections 2.14 and 2.15).
SECTION 2.21. LOAN INCREASE. (a) The Borrower may, at any time and from
time to time, by notice to the Agent, request, within the limitations
hereinafter set forth, an increase in the principal amount of the Loans
hereunder ("Loan Increase"), which notice by the Borrower shall set forth the
amount of such requested Loan Increase. A Loan Increase may be effected either
by having one or more New Banks become Banks hereunder and advance the Loan
Increase and/or by having one or more of the Banks that is theretofore a party
to this Agreement (at the election and sole discretion of any such Bank) and
that has been approved by the Borrower and the Agent increase the amount of its
Loans, provided that (i) any Loan Increase advanced by a Bank that was
theretofore a party to this Agreement shall be in an amount of not less than
$5,000,000 (and, if in excess thereof, in an integral multiple of $1,000,000,
(ii) the amount of the Loan Increase advanced by any New Bank shall be in an
amount of not less than $10,000,000 (and, if in excess thereof, in an integral
multiple of $1,000,000) and (iii) in no event shall the maximum outstanding
principal amount of all Loans hereunder upon the advance of such Loan Increase
exceed $100,000,000.
(b) As a condition to any Loan Increase, (i) the Borrower and each New
Bank or other Bank advancing such Loan Increase shall have executed and
delivered a supplement to this Agreement (the "Loan Supplement") substantially
in the form of EXHIBIT B hereto, and the Agent shall have accepted and executed
the same; (ii) Borrower shall have executed and delivered to the Agent, with
respect to each New Bank or other Bank that is a party to the Loan Supplement, a
Note substantially in the form of the note attached hereto as EXHIBIT A payable
to the order of (A) each New Bank in the amount of the Loan Increase to be
advanced by it and (B) each other Bank advancing all or any part of the Loan
Increase in the amount of the sum of all of its Loans (including such Loan
Increase) hereunder, in substitution for the Note theretofore held by such Bank
which shall be promptly canceled and returned to the Borrower following the
advance of the Loan Increase; (iii) the Guarantors shall have consented in
writing to the Loan Increase and shall have agreed that their Guaranties
continue in full force and effect; and (iv) the Borrower and each New Bank or
other Bank advancing such Loan Increase shall have executed and delivered, or
caused to be executed and delivered, such other instruments and documents as the
Agent shall have reasonably requested in connection with such Loan Increase,
including, in the case of the Borrower, resolutions evidencing the authority for
the Loan Increase, an incumbency certificate and opinions of counsel. The form
and substance of the documents required under this Section 2.21(b) shall be
subject to the approval of the Agent, which shall not be unreasonably withheld.
(c) Effective on the date on which the Loan Increase is advanced, which
date shall be mutually agreed upon by the Borrower, the Agent and each New Bank
and other Bank advancing such Loan Increase, (i) all Loans outstanding hereunder
shall be converted into, and
25
the Loan Increase shall be advanced as, LIBOR Loans or ABR Loans (or both) as
selected by the Borrower by notice to the Agent in accordance with the
provisions of Section 2.06, such that all Loans so selected by the Borrower
(including the amount of the Loan Increase) are held by the Banks (including any
New Banks) in the proportion of their Ratable Shares, as determined taking into
account the Loan Increase and (ii) each New Bank and other Bank that is a party
to the Loan Supplement shall advance the amount of the Loan Increase provided to
be advanced by it thereunder, by making such funds available to the Agent, in
immediately available funds, not later than 1:00 p.m. Chicago time on such date.
After the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Section 2.21(b) above, the Agent will make the Loan
Increase available to the Borrower in immediately available funds by crediting
the amount thereof to the Borrower's account with the Agent. If any conversion
of a LIBOR Loan pursuant to the foregoing provisions occurs on a day that is not
the last day of the applicable Interest Period, the provisions of Section 2.17
shall apply thereto.
(d) Nothing herein contained shall constitute or otherwise be deemed to
be a commitment or agreement on the part of any Bank at any time to advance any
Loan Increase or to make any Loans other than those specified in Section 2.01 or
a commitment or agreement on the part of the Borrower or the Agent at any time
to give or grant any Bank the right to advance any Loan Increase or to make any
additional Loans.
(e) Following the occurrence of any Loan Increase hereunder, the Agent
shall furnish to each of the Banks a copy of the Loan Supplement, together with
a revised Loan Schedule reflecting the amounts of the respective Banks' Loans
following such Loan Increase.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. CONDITIONS PRECEDENT TO LOANS. The Banks shall not be
required to make the Loans hereunder, unless and until the Borrower has paid to
the Agent the applicable fees referred to in Section 2.09 and the Agent shall
have received each of the following, in form and substance satisfactory to the
Agent and its counsel and (except for the Notes) in sufficient copies for each
Bank:
(1) NOTES. A Note payable to each Bank duly executed by the Borrower;
(2) EVIDENCE OF ALL CORPORATE ACTION BY THE BORROWER. Certified copies of
all corporate action taken by the Borrower, including resolutions of its Board
of Directors, authorizing the execution, delivery and performance of the Loan
Documents to which it is a party and each other document to be delivered
pursuant to this Agreement;
(3) INCUMBENCY AND SIGNATURE CERTIFICATE OF BORROWER. A certificate of
the Secretary or Assistant Secretary of the Borrower certifying the names and
true signatures of the officers of the Borrower authorized to sign the Loan
Documents to which it is a party and the other documents to be delivered by the
Borrower under this Agreement;
26
(4) ARTICLES OF INCORPORATION OF BORROWER. Copies of the articles of
incorporation of the Borrower, together with all amendments, and a certificate
of good standing, all certified by the appropriate governmental officer in its
jurisdiction of incorporation;
(5) OPINIONS OF COUNSEL FOR BORROWER. A favorable opinion of Paul,
Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for the Borrower and for the Guarantors
that are Delaware Persons, in substantially the form of EXHIBIT C and as to such
other matters as the Agent may reasonably request and of the Borrower's Illinois
counsel (as approved by the Agent), in substantially the form of EXHIBIT D and
as to such other matters as the Agent may reasonably request;
(6) OPINION OF COUNSEL FOR AGENT. A favorable opinion of Sidley & Austin,
counsel for the Agent, in substantially the form of EXHIBIT E hereto;
(7) EVIDENCE OF ALL CORPORATE OR PARTNERSHIP ACTION BY GUARANTORS. With
respect to each corporate Guarantor, certified (as of the date of this
Agreement) copies of all corporate action taken by such Guarantor, including
resolutions of its Board of Directors, authorizing the execution, delivery, and
performance of the applicable Guaranty, and with respect to each limited
partnership Guarantor, partnership action taken by such Guarantor, including any
and all necessary partnership consents authorizing the execution, delivery, and
performance of the applicable Guaranty;
(8) ARTICLES OF INCORPORATION OF GUARANTORS. Copies of the articles of
incorporation of each corporate Guarantor, together with all amendments, and a
certificate of good standing, all certified by the appropriate governmental
officer in its jurisdiction of incorporation; provided, however, that, if a
certificate of good standing is not currently available, the Guarantor shall
deliver other reasonably satisfactory evidence of its good standing and, within
thirty (30) days, shall deliver a certificate of good standing;
(9) INCUMBENCY AND SIGNATURE CERTIFICATE OF GUARANTORS. A certificate
(dated as of the date of this Agreement) of the Secretary or Assistant Secretary
of each corporate Guarantor or the general partner of each partnership Guarantor
certifying the names and true signatures of the officers of each such corporate
Guarantor and the representative of each partnership Guarantor authorized to
sign the Guaranty;
(10) OPINION OF COUNSEL FOR CERTAIN GUARANTORS. With respect to Beazer
Homes Corp., a Tennessee corporation, Beazer Homes Texas, L.P., a Texas limited
partnership, and Texas Lone Star Title, L.P., a Texas limited partnership, a
favorable opinion of counsel to each such Guarantor in the state in which it is
formed or organized to do business (as approved by the Agent), in substantially
the form of EXHIBIT F hereto, and as to such other matters as the Agent may
reasonably request;
(11) PARTNERSHIP AGREEMENT. A true and complete copy of the limited
partnership agreement of each limited partnership Guarantor, including without
limitation, any and all amendments and modifications thereto, and any and all
filed partnership certificates; and
27
(12) CERTIFICATE. A certificate, substantially in the form of the
certificate attached hereto as EXHIBIT G, signed by a duly authorized officer of
the Borrower dated the date of the disbursement of the Loans, certifying that:
(a) The representations and warranties contained in Article IV of this
Agreement are correct on and as of such date as though made on and
as of such date;
(b) No Default or Event of Default has occurred and is continuing, or
would result from the disbursement of the Loans; and
(c) Upon the making of the requested Loans, the aggregate outstanding
amount of Permitted Senior Debt shall not exceed the Borrowing
Base.
(13) OTHER DOCUMENTS. Such other and further documents as any Bank or its
counsel may have reasonably requested.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower and each of the Guarantors, jointly and severally, represent
and warrant that:
SECTION 4.01. INCORPORATION, FORMATION, GOOD STANDING, AND DUE
QUALIFICATION. The Borrower, each Subsidiary, and each of the Guarantors is (in
the case of a corporation) a corporation duly incorporated or (in the case of a
limited partnership) a limited partnership duly formed, validly existing, and in
good standing under the laws of the jurisdiction of its incorporation or
formation; has the power and authority to own its assets and to transact the
business in which it is now engaged or proposed to be engaged in; and is duly
qualified and in good standing under the laws of each other jurisdiction in
which such qualification is required.
SECTION 4.02. POWER AND AUTHORITY. The execution, delivery and
performance by the Borrower and the Guarantors of the Loan Documents to which
each is a party have been duly authorized by all necessary corporate or
partnership action, as the case may be, and do not and will not (1) require any
consent or approval of the stockholders of such corporation, or partners of such
partnership; (2) contravene such corporation's charter or bylaws, or such
partnership's partnership agreement; (3) violate, in any material respect, any
provision of any law, rule, regulation (including, without limitation,
Regulations U and X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination, or award presently in
effect having applicability to such corporation or partnership; (4) result in a
breach of or constitute a default under any indenture or loan or credit
agreement or any other material agreement, lease, or instrument to which such
corporation or partnership is a party or by which it or its properties may be
bound or affected; (5) result in, or require, the creation or imposition of any
Lien, upon or with respect to any of the properties now owned or hereafter
acquired by such corporation or partnership; and (6) cause such corporation or
partnership to be in default, in any material respect, under any such law, rule,
regulation,
28
order, writ, judgment, injunction, decree, determination, or award or any such
indenture, agreement, lease or instrument.
SECTION 4.03. LEGALLY ENFORCEABLE AGREEMENT. This Agreement is, and each
of the other Loan Documents when delivered under this Agreement will be legal,
valid, and binding obligations of the Borrower or each Guarantor, as the case
may be, enforceable against the Borrower or each Guarantor, as the case may be,
in accordance with their respective terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency, and other
similar laws affecting creditors' rights generally.
SECTION 4.04. FINANCIAL STATEMENTS. The consolidated balance sheet of the
Borrower and its Subsidiaries as at June 30, 2000, and the consolidated
statements of operations, cash flow and changes to stockholders' equity of the
Borrower and its Subsidiaries for the period of three fiscal quarters ended June
30, 2000, are complete and correct and fairly present as at such date the
financial condition of the Borrower and its Subsidiaries and the results of
their operations for the periods covered by such statements, all in accordance
with GAAP consistently applied (subject to year-end adjustments), and since June
30, 2000, there has been no material adverse change in the condition (financial
or otherwise), business, or operations of the entities for which combined
financial statements have been furnished to the Banks. There are no liabilities
of the Borrower or any Subsidiary, fixed or contingent, which are material but
are not reflected in the financial statements or in the notes thereto, other
than liabilities arising in the ordinary course of business since June 30, 2000.
No information, exhibit, or report furnished by the Borrower to any Bank in
connection with the negotiation of this Agreement taken together, contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not materially misleading.
SECTION 4.05. LABOR DISPUTES AND ACTS OF GOD. Neither the business nor
the properties of the Borrower or any Subsidiary or any Guarantor are affected
by any fire, explosion, accident, strike, lockout, or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or of the public enemy, or
other casualty (whether or not covered by insurance), materially and adversely
affecting such business or properties or the operation of the Borrower or such
Subsidiary or such Guarantor.
SECTION 4.06. OTHER AGREEMENTS. Neither the Borrower nor any Significant
Subsidiary nor any Significant Guarantor is a party to any indenture, loan or
credit agreement, or to any lease or other agreement or instrument or subject to
any charter, corporate or other restriction which could have a material adverse
effect on the business, properties, assets, operations, or conditions, financial
or otherwise, of the Borrower or any Significant Subsidiary or any Significant
Guarantor, or the ability of the Borrower or any Significant Guarantor to carry
out its obligations under the Loan Documents to which it is a party. Neither the
Borrower nor any Significant Subsidiary nor any Significant Guarantor is in
default in any material respect in the performance, observance, or fulfillment
of any of the obligations, covenants, or conditions contained in any agreement
or instrument material to its business to which it is a party.
SECTION 4.07. LITIGATION. Except as reflected in or reserved for in the
financial statements referred to in Section 4.04, there is no pending or, to the
knowledge of the Borrower or any Guarantor, threatened action or proceeding
against or affecting the Borrower or any
29
Significant Subsidiary or any Significant Guarantor before any court,
governmental agency, or arbitrator, which may, in any one case or in the
aggregate, materially adversely affect the financial condition, operations,
properties, or business of the Borrower or any Significant Subsidiary or any
Significant Guarantor or the ability of the Borrower or any Significant
Guarantor to perform its obligation under the Loan Documents to which it is a
party.
SECTION 4.08. NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. Except for
judgments with respect to which the liability of the Borrower, each Significant
Subsidiary and each Significant Guarantor does not exceed $1,000,000 in the
aggregate for all such judgments, (a) Borrower, each Significant Subsidiary and
each Significant Guarantor have satisfied all judgments, and (b) neither the
Borrower nor any Significant Subsidiary nor any Significant Guarantor is in
default with respect to any judgment, writ, injunction, decree, rule, or
regulation of any court, arbitrator, or federal, state, municipal, or other
governmental authority, commission, board, bureau, agency, or instrumentality,
domestic or foreign.
SECTION 4.09. OWNERSHIP AND LIENS. The Borrower and each Subsidiary and
each Guarantor have title to, or valid leasehold interests in, all of their
respective properties and assets, real and personal, including the properties
and assets and leasehold interests reflected in the financial statements
referred to in Section 4.04 (other than any properties or assets disposed of in
the ordinary course of business), and none of the properties and assets owned by
the Borrower or any Subsidiary or any Guarantor and none of their leasehold
interests is subject to any Lien, except such as may be permitted pursuant to
Section 6.01 of this Agreement.
SECTION 4.10. SUBSIDIARIES AND OWNERSHIP OF STOCK. Set forth in EXHIBIT H
hereto is a complete and accurate list of the Subsidiaries of the Borrower,
showing the jurisdiction of incorporation or formation of each and showing the
percentage of the Borrower's ownership of the outstanding stock or partnership
interest of each Subsidiary. All of the outstanding capital stock of each such
corporate Subsidiary has been validly issued, is fully paid and nonassessable,
and is owned by the Borrower free and clear of all Liens. The limited
partnership agreement of each such limited partnership Subsidiary is in full
force and effect and has not been amended or modified, except for such
amendments or modifications as are delivered to the Agent under Section
3.01(11). Each of the Guarantors is a Wholly Owned Subsidiary of the Borrower.
SECTION 4.11. ERISA. The Borrower and each Subsidiary and each Guarantor
are in compliance in all material respects with all applicable provisions of
ERISA. Neither a Reportable Event nor a Prohibited Transaction has occurred and
is continuing with respect to any Plan; no notice of intent to terminate a Plan
has been filed, nor has any Plan been terminated; no circumstances exist which
constitute grounds entitling the PBGC to institute proceedings to terminate, or
appoint a trustee to administer, a Plan, nor has the PBGC instituted any such
proceedings; neither the Borrower nor any Commonly Controlled Entity has
completely or partially withdrawn from a Multiemployer Plan under circumstances
that could subject the Borrower or any Subsidiary to material withdrawal
liability; the Borrower and each Commonly Controlled Entity have met their
minimum funding requirements under ERISA with respect to all of their Plans and
the present value of all vested benefits under each Plan does not materially
exceed the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA; and
30
neither the Borrower nor any Commonly Controlled Entity has incurred any
material liability to the PBGC under ERISA.
SECTION 4.12. OPERATION OF BUSINESS. The Borrower, each Subsidiary and
each Guarantor possess all licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, to conduct their respective
businesses substantially as now conducted and as presently proposed to be
conducted and the Borrower and each of its Subsidiaries and each Guarantor are
not in violation of any valid rights of others with respect to any of the
foregoing where the failure to possess such licenses, permits, franchises,
patents, copyrights, trademarks, trade names or rights thereto or the violation
of the valid rights of others with respect thereto may, in any one case or in
the aggregate, adversely affect in any material respect the financial condition,
operations, properties, or business of the Borrower or any Significant
Subsidiary or any Significant Guarantor or the ability of the Borrower or any
Significant Guarantor to perform its obligation under the Loan Documents to
which it is a party.
SECTION 4.13. TAXES. All income tax liabilities or income tax obligations
of the Borrower, each Subsidiary and each Guarantor have been paid or have been
accrued by or reserved for by the Borrower. The Borrower constitutes the parent
of an affiliated group of corporations for purposes of filing a consolidated
United States federal income tax return.
SECTION 4.14. LAWS; ENVIRONMENT. The Borrower, each Subsidiary and each
Guarantor have duly complied, and their businesses, operations, assets,
equipment, property, leaseholds, or other facilities are in compliance, in all
material respects, with the provisions of all federal, state, and local
statutes, laws, codes, and ordinances and all rules and regulations promulgated
thereunder (including without limitation those relating to the environment,
health and safety). The Borrower, each Subsidiary and each Guarantor have been
issued and will maintain all required federal, state, and local permits,
licenses, certificates, and approvals relating to (1) air emissions; (2)
discharges to surface water or groundwater; (3) noise emissions; (4) solid or
liquid waste disposal; (5) the use, generation, storage, transportation, or
disposal of toxic or hazardous substances or hazardous wastes (intended hereby
and hereafter to include any and all such materials listed in any federal,
state, or local law, code, or ordinance and all rules and regulations
promulgated thereunder as hazardous); or (6) or, to the extent that failure to
maintain the same may, in any one case or in the aggregate, adversely affect in
any material respect the financial condition, operations, properties, or
business of the Borrower or any Significant Subsidiary or any Significant
Guarantor or the ability of the Borrower or any Significant Guarantor to perform
its obligation under the Loan Documents to which it is a party, other
environmental, health or safety matters. Neither the Borrower nor any Subsidiary
nor any Guarantor has received notice of, or has actual knowledge of any
violations of any federal, state, or local environmental, health, or safety
laws, codes or ordinances or any rules or regulations promulgated thereunder
with respect to its businesses, operations, assets, equipment, property,
leaseholds, or other facilities, which violation may, in any one case or in the
aggregate, adversely affect in any material respect the financial condition,
operations, properties, or business of the Borrower or any Significant
Subsidiary or any Significant Guarantor or the ability of the Borrower or any
Significant Guarantor to perform its obligation under the Loan Documents to
which it is a party. Except in accordance with a valid governmental permit,
license, certificate or approval, there has been no material emission, spill,
release, or discharge into or upon (1) the air; (2) soils, or any improvements
located thereon; (3) surface water or groundwater; or (4) the
31
sewer, septic system or waste treatment, storage or disposal system servicing
the premises, of any toxic or hazardous substances or hazardous wastes at or
from the premises; and accordingly the premises of the Borrower, each Subsidiary
and each Guarantor have not been adversely affected, in any material respect, by
any toxic or hazardous substances or wastes. There has been no complaint, order,
directive, claim, citation, or notice by any governmental authority or any
person or entity with respect to violations of law or damages by reason of
Borrower's or any Subsidiary's (1) air emissions; (2) spills, releases, or
discharges to soils or improvements located thereon, surface water, groundwater
or the sewer, septic system or waste treatment, storage or disposal systems
servicing the premises; (3) noise emissions; (4) solid or liquid waste disposal;
(5) use, generation, storage, transportation, or disposal of toxic or hazardous
substances or hazardous waste; or (6) other environmental, health or safety
matters affecting the Borrower, any Subsidiary or any Guarantor or its business,
operations, assets, equipment, property, leaseholds, or other facilities.
Neither the Borrower nor any Subsidiary nor any Guarantor has any material
indebtedness, obligation, or liability, absolute or contingent, matured or not
matured, with respect to the storage, treatment, cleanup, or disposal of any
solid wastes, hazardous wastes, or other toxic or hazardous substances
(including without limitation any such indebtedness, obligation, or liability
with respect to any current regulation, law, or statute regarding such storage,
treatment, cleanup, or disposal).
SECTION 4.15. INVESTMENT COMPANY ACT. Neither the Borrower nor any
Subsidiary thereof is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.16. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower
nor any Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note shall remain unpaid, the Borrower and each Guarantor
will (unless otherwise agreed to by the Majority Banks in writing):
SECTION 5.01. MAINTENANCE OF EXISTENCE. Preserve and maintain, and cause
each Subsidiary to preserve and maintain (except for a Subsidiary that ceases to
maintain its existence solely as a result of an Internal Reorganization), its
corporate or limited partnership existence and good standing in the jurisdiction
of its incorporation or formation and qualify and remain qualified to transact
business in each jurisdiction in which such qualification is required.
SECTION 5.02. MAINTENANCE OF RECORDS. Keep and cause each Subsidiary to
keep, adequate records and books of account, in which complete entries will be
made in accordance with GAAP consistently applied, reflecting all financial
transactions of the Borrower and its Subsidiaries.
32
SECTION 5.03. MAINTENANCE OF PROPERTIES. Maintain, keep, and preserve,
and cause each Subsidiary to maintain, keep, and preserve, all of its properties
(tangible and intangible) necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted.
SECTION 5.04. CONDUCT OF BUSINESS. Continue, and cause each Subsidiary to
continue (except in the case of a Subsidiary that ceases to engage in business
solely as a result of an Internal Reorganization), to engage in a business of
the same general type and in the same manner as conducted by it on the date of
this Agreement.
SECTION 5.05. MAINTENANCE OF INSURANCE. Maintain, and cause each
Subsidiary to maintain, insurance with financially sound reputable insurance
companies or associations (or, in the case of insurance for construction
warranties and builder default protection for buyers of Housing Units from the
Borrower or any of its Subsidiaries, UHIC) in such amounts and covering such
risks as are usually carried by companies engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof.
SECTION 5.06. COMPLIANCE WITH LAWS. Comply, and cause each Subsidiary to
comply, in all material respects with all applicable laws, rules, regulations,
and orders, such compliance to include, without limitation, paying before the
same become delinquent all taxes, assessments and governmental charges imposed
upon it or upon its property, other than any such taxes, assessments and charges
being contested by the Borrower in good faith which will not have a material
adverse effect on the financial condition of the Borrower.
SECTION 5.07. RIGHT OF INSPECTION. At any reasonable time and from time
to time, permit any Bank or any agent or representative thereof to examine and
make copies of and abstracts from the records and books of account of, and visit
the properties of, the Borrower and any Subsidiary, and to discuss the affairs,
finances, and accounts of the Borrower and any Subsidiary with any of their
respective officers and directors and the Borrower's independent accountants.
SECTION 5.08. REPORTING REQUIREMENTS. Furnish to the Agent for delivery
to each of the Banks:
(1) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any event
within sixty (60) days after the end of each of the first three quarters of each
fiscal year of the Borrower, an unaudited condensed consolidated balance sheet
of the Borrower and its Subsidiaries as of the end of such quarter, unaudited
condensed consolidated statements of operations and cash flow of the Borrower
and its Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, and unaudited condensed
consolidated statements of changes in stockholders' equity of the Borrower and
its Subsidiaries for the portion of the fiscal year ended with the last day of
such quarter, all in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the previous fiscal
year and all prepared in accordance with GAAP consistently applied and certified
by the chief financial officer of the Borrower (subject to year-end
adjustments);
33
statements in the form of the Borrower's quarterly 10-Q report to the Securities
and Exchange Commission that are consistent with the foregoing requirements
shall satisfy such requirements;
(2) ANNUAL FINANCIAL STATEMENTS. As soon as available and in any event
within one hundred (100) days after the end of each fiscal year of the Borrower,
a consolidated balance sheet of the Borrower and its Subsidiaries as of the end
of such fiscal year, consolidated statements of operations and cash flow of the
Borrower and its Subsidiaries for such fiscal year, and consolidated statements
of changes in stockholders' equity of the Borrower and its Subsidiaries for such
fiscal year, all in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the prior fiscal
year and all prepared in accordance with GAAP consistently applied and
accompanied by an opinion thereon acceptable to the Agent by Deloitte & Touche
or other independent accountants selected by the Borrower and acceptable to the
Agent; statements in the form of the Borrower's annual 10-K report to the
Securities and Exchange Commission that are consistent with the foregoing
requirements shall satisfy such requirements;
(3) FINANCIAL PROJECTIONS. On August 15, 2001 and each anniversary
thereof, two-year financial projections (including a consolidated income
statement, balance sheet and statement of cash flows for the Borrower and its
Subsidiaries) broken down by quarters, and as soon as available (but not later
than June 15 of each year), a mid-year update of the financial projections for
the current year;
(4) VARIANCE ANALYSIS. (a) Within sixty (60) days of the end of each of
the first three fiscal quarters of each fiscal year of the Borrower, a quarterly
variance analysis comparing actual quarterly results versus the most recently
projected quarterly results for the fiscal quarter most recently ended
(including consolidated income statements of the Borrower and its Subsidiaries,
an analysis of revenues, closings and operating profits of the Borrower and each
Subsidiary on a state by state basis, and such other items as are requested by
any of the Banks), together with a written explanation of material variances.
(b) Within one hundred (100) days after the end of each fiscal year of
the Borrower, a quarterly variance analysis comparing actual quarterly results
versus the most recently projected quarterly results for the fiscal year most
recently ended (including consolidated income statements of the Borrower and its
Subsidiaries accompanied by an opinion thereon acceptable to the Agent by
Deloitte & Touche or other independent accountants selected by the Borrower and
acceptable to the Agent, an analysis of revenues, closings and operating profits
of the Borrower and each Subsidiary on a state by state basis, and such other
items as are requested by any of the Banks), together with a written explanation
of material variances.
(5) MANAGEMENT LETTERS. Promptly upon receipt thereof, copies of any
reports submitted to the Borrower or any Subsidiary by independent certified
public accountants in connection with examination of the financial statements of
the Borrower or any Subsidiary made by such accountants.
(6) BORROWING BASE CERTIFICATE. Within thirty-five (35) days after the
end of each fiscal quarter, a Borrowing Base Certificate, with respect to the
Inventory Valuation Date occurring on the last day of such fiscal quarter.
34
(7) COMPLIANCE CERTIFICATE. Within sixty (60) days after the end of each
of the first three quarters, and within one hundred (100) days after the end of
each fourth quarter, of each fiscal year of the Borrower, a certificate of the
President or chief financial officer of the Borrower certifying (a) the
Borrower's compliance with all financial covenants including, without
limitation, those set forth in Sections 6.10 and 6.11 and Article VII hereof,
which certificate shall set forth in reasonable detail the computation thereof
and (b) certifying that to the best of his knowledge no Default or Event of
Default has occurred and is continuing, or if a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof and the action
which is proposed to be taken with respect thereto;
(8) PRODUCTION MONITOR SUMMARY. Upon request by the Agent, within sixty
(60) days after the end of each of the first three quarters, and within one
hundred (100) days after the end of each fourth quarter, of each fiscal year of
the Borrower, a certificate of the President or Chief Operating Officer of the
Borrower certifying the Inventory as at such date which lists by state of
location each item of Inventory, in the following categories: (a)
pre-foundation, (b) foundation, (c) framed, (d) being finished, and (e) model
homes; such summary shall include a delineation of sold or unsold items in each
category;
(9) LAND BANK INVENTORY. Within sixty (60) days after the end of each of
the first three quarters, and within one hundred (100) days after the end of
each fourth quarter, of each fiscal year of the Borrower, a certificate of the
President or Chief Operating Officer of the Borrower certifying the Land as at
such date, which lists by state of location all Land, delineating Finished Lots,
Lots under Development, Entitled Land and estimated undeveloped Lots.
(10) ACCOUNTANT'S REPORT. Simultaneously with the delivery of the annual
financial statements referred to in Section 5.08(2), a certificate of the
independent public accountants who audited such statements to the effect that,
in making the examination necessary for the audit of such statements, they have
obtained no knowledge of any condition or event which constitutes a Default or
Event of Default, or if such accountants shall have obtained knowledge of any
such condition or event, specifying in such certificate each such condition or
event of which they have knowledge and the nature and status thereof;
(11) NOTICE OF LITIGATION. Promptly after the commencement thereof,
notice of all actions, suits, and proceedings before any court or governmental
department, commission, board, bureau, agency, or instrumentality, domestic or
foreign, affecting the Borrower or any Subsidiary which, if determined adversely
to the Borrower or such Subsidiary, would reasonably be expected to result in a
judgment against the Borrower or such Subsidiary in excess of $1,000,000 or
would reasonably be expected to have a material adverse effect on the financial
condition, properties, or operations of the Borrower or such Subsidiary;
(12) NOTICE OF DEFAULTS AND EVENTS OF DEFAULT. As soon as possible and in
any event within ten (10) days after the occurrence of each Default or Event of
Default, a written notice setting forth the details of such Default or Event of
Default and the action which is proposed to be taken by the Borrower with
respect thereto;
(13) ERISA REPORTS. As soon as possible, and in any event within thirty
(30) days after the Borrower knows or has reason to know that any circumstances
exist that constitute
35
grounds entitling the PBGC to institute proceedings to terminate a Plan subject
to ERISA with respect to the Borrower or any Commonly Controlled Entity, and
promptly but in any event within two (2) Business Days of receipt by the
Borrower or any Commonly Controlled Entity of notice that the PBGC intends to
terminate a Plan or appoint a trustee to administer the same, and promptly but
in any event within five (5) Business Days of the receipt of notice concerning
the imposition of withdrawal liability in excess of $50,000 with respect to the
Borrower or any Commonly Controlled Entity, the Borrower will deliver to each
Bank a certificate of the chief financial officer of the Borrower setting forth
all relevant details and the action which the Borrower proposes to take with
respect thereto;
(14) REPORTS TO OTHER CREDITORS. Promptly after the furnishing thereof,
copies of any statement, report, document, notice, certificate, and
correspondence furnished to any other party pursuant to the terms of any
indenture, loan, credit, or similar agreement and not otherwise required to be
furnished to the Bank pursuant to any other clause of this Section 5.08;
(15) PROXY STATEMENTS, ETC. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements, and reports which the
Borrower or any Subsidiary sends to its stockholders, and copies of all regular,
periodic, and special reports, and all registration statements which the
Borrower or any Subsidiary files with the Securities and Exchange Commission or
any governmental authority which may be substituted therefor, or with any
national securities exchange; and
(16) GENERAL INFORMATION. Such other information respecting the condition
or operations, financial or otherwise, of the Borrower or any Subsidiary as any
Bank may from time to time reasonably request.
SECTION 5.09. SUBSIDIARY REPORTING REQUIREMENTS. In the event any of the
following statements are prepared with respect to any Subsidiary, then upon
written request from any Bank, furnish to the Agent for delivery to each of the
Banks the following with respect to any Subsidiary:
(1) QUARTERLY FINANCIAL STATEMENTS. An unaudited balance sheet of such
Subsidiary as of the end of most recently completed fiscal quarter, statements
of operations and cash flow of such Subsidiary for the period commencing at the
end of the previous fiscal year and ending with the end of such quarter, and
statements of changes in stockholders' equity of such Subsidiary for the portion
of the fiscal year ended with the last day of such quarter, all in reasonable
detail and stating in comparative form the respective figures for the
corresponding date and period in the previous fiscal year and all prepared in
accordance with GAAP consistently applied and certified by the chief financial
officer of such Subsidiary (subject to year-end adjustments);
(2) ANNUAL FINANCIAL STATEMENTS. A balance sheet of such Subsidiary as of
the end of such fiscal year, statements of operations and cash flow of such
Subsidiary for such fiscal year, and statements of changes in stockholders'
equity of such Subsidiary for such fiscal year, all in reasonable detail and
stating in comparative form the respective figures for the corresponding date
and period in the prior fiscal year and all prepared in accordance with GAAP
consistently applied and as to the consolidated statements accompanied by an
opinion thereon
36
acceptable to the Agent by Deloitte & Touche or other independent accountants
selected by the Borrower and acceptable to the Agent.
SECTION 5.10. ENVIRONMENT. Be and remain, and cause each Subsidiary to be
and remain, in compliance with the provisions of all federal, state, and local
environmental, health, and safety laws, codes and ordinances, and all rules and
regulations issued thereunder; notify the Agent promptly of any notice of a
hazardous discharge or environmental complaint received from any governmental
agency or any other party (and the Agent shall notify the Banks promptly
following its receipt of any such notice from the Borrower); notify the Agent
promptly of any hazardous discharge from or affecting its premises (and the
Agent shall notify the Banks promptly following its receipt of any such notice
from the Borrower); promptly contain and remove the same, in compliance with all
applicable laws; promptly pay any fine or penalty assessed in connection
therewith; permit any Bank to inspect the premises, to conduct tests thereon,
and to inspect all books, correspondence, and records pertaining thereto; and at
such Bank's request, and at the Borrower's expense, provide a report of a
qualified environmental engineer, satisfactory in scope, form, and content to
the Majority Banks, and such other and further assurances reasonably
satisfactory to the Majority Banks that the condition has been corrected.
SECTION 5.11. USE OF PROCEEDS. Use the proceeds of the Loans solely as
provided in Section 2.13 hereof.
SECTION 5.12. RANKING OF OBLIGATIONS. Ensure that at all times its
Obligations under the Loan Documents shall be and constitute unconditional
general obligations of the Borrower ranking at least PARI PASSU with all its
other unsecured Debt.
SECTION 5.13. TAXES. Pay and cause each Subsidiary to pay when due all
taxes, assessments and governmental charges and levies upon it or its income,
profits or property, except those which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
set aside.
SECTION 5.14. WHOLLY OWNED STATUS. Ensure that at all times each of the
Guarantors is a Wholly Owned Subsidiary of the Borrower.
SECTION 5.15. NEW SUBSIDIARIES. Within thirty (30) days after the date on
which any Person shall become a Subsidiary, cause such Subsidiary to execute and
deliver to the Agent, for the benefit of the Banks, a guaranty of the
Obligations in the form of Article IX and an opinion of counsel, certified
copies of resolutions, articles of incorporation, incumbency certificates and
other documents with respect to such Subsidiary and its Guaranty substantially
similar to the documents delivered pursuant to Section 3.01 with respect to the
Original Guarantors and Guaranty, all of which shall be reasonably satisfactory
to the Majority Banks in form and substance. Neither STIC nor UHIC shall be
required to deliver a Guaranty.
ARTICLE VI
NEGATIVE COVENANTS
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So long as any Note shall remain unpaid, the Borrower and each Guarantor
will not (unless otherwise agreed to by the Majority Banks in writing):
SECTION 6.01. LIENS. Create, incur, assume, or suffer to exist, or permit
any Subsidiary to create, incur, assume, or suffer to exist, any Lien, upon or
with respect to any of its properties, now owned or hereafter acquired, except
the following:
(1) Liens for taxes or assessments or other government charges or levies
if not yet due and payable or, if due and payable, if they are being contested
in good faith by appropriate proceedings and for which appropriate reserves are
maintained;
(2) Liens imposed by law, such as mechanics', materialmen's, landlords',
warehousemen's, and carriers' Liens, and other similar Liens, securing
obligations incurred in the ordinary course of business which are not past due
for more than ninety (90) days or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(3) Liens under workers' compensation, unemployment insurance, Social
Security, or similar legislation;
(4) Liens, deposits, or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), Capital
Leases (permitted under the terms of this Agreement), public or statutory
obligations, surety, stay, appeal, indemnity, performance, or other similar
bonds, or other similar obligations arising in the ordinary course of business;
(5) Judgment and other similar Liens arising in connection with any court
proceeding, provided the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings;
(6) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use, and enjoyment by the Borrower or any Subsidiary of the property
or assets encumbered thereby in the normal course of its business or materially
impair the value of the property subject thereto;
(7) Liens securing Secured Debt permitted under Section 6.02.
SECTION 6.02. SECURED DEBT. Create, incur, assume or suffer to exist, or
permit any Subsidiary to create, incur, assume or suffer to exist, any Secured
Debt, except for Secured Debt in an aggregate amount outstanding at any one time
not exceeding $50,000,000.
SECTION 6.03. MERGERS, ETC. Wind up, liquidate or dissolve itself,
reorganize, merge or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person, or acquire all or substantially all
the assets or the business of any Person, or permit any Subsidiary to do so,
except (1) for any
38
Permitted Acquisition, (2) that any Subsidiary (other than STIC and UHIC) may
merge into or transfer assets to the Borrower as a result of an Internal
Reorganization or otherwise and (3) that any Subsidiary (other than STIC and
UHIC) may merge into or consolidate with or transfer assets to any other
Subsidiary (other than STIC and UHIC) as a result of an Internal Reorganization
or otherwise.
SECTION 6.04. LEASES. Create, incur, assume, or suffer to exist, or
permit any Subsidiary to create, incur, assume, or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal property,
except (1) Capital Leases not otherwise prohibited by the terms of this
Agreement; (2) leases existing on the date of this Agreement and any extension
or renewals thereof; (3) leases between the Borrower and any Subsidiary or
between any Subsidiaries; (4) operating leases entered into in the ordinary
course of business; and (5) any lease of property having a value of $500,000 or
less.
SECTION 6.05. SALE AND LEASEBACK. Sell, transfer or otherwise dispose of,
or permit any Subsidiary to sell, transfer, or otherwise dispose of, any real or
personal property to any Person and thereafter directly or indirectly lease back
the same or similar property, except for the sale and leaseback of model homes.
SECTION 6.06. SALE OF ASSETS. Sell, lease, assign, transfer, or otherwise
dispose of, or permit any Subsidiary to sell, lease, assign, transfer, or
otherwise dispose of, any of its now owned or hereafter acquired assets
(including, without limitation, shares of stock and indebtedness of
subsidiaries, receivables, and leasehold interests), except: (1) Inventory
disposed of in the ordinary course of business; (2) the sale or other
disposition of assets no longer used or useful in the conduct of its business;
(3) the sale and leaseback of model homes, or (4) that any Subsidiary (other
than STIC and UHIC) may sell, lease, assign, or otherwise transfer its assets to
the Borrower or any Wholly Owned Subsidiary (other than STIC and UHIC) in
connection with an Internal Reorganization or otherwise.
SECTION 6.07. INVESTMENTS. Make, or permit any Subsidiary to make, any
loan or advance to any Person, or purchase or otherwise acquire, or permit any
Subsidiary to purchase or otherwise acquire, any capital stock, assets (other
than assets acquired in the ordinary course of business), obligation, or other
securities of, make any capital contribution to, or otherwise invest in or
acquire any interest in any Person including, without limitation, any hostile
takeover, hostile tender offer or similar hostile transaction (collectively,
"Investments"), except: (1) a direct obligation of the United States or any
agency thereof with maturities of one year or less from the date of acquisition;
(2) commercial paper rated at least "A-1" by Standard & Poor's Corporation or
"P-1" by ▇▇▇▇▇'▇ Investors Service, Inc.; (3) certificates of deposit with
maturities of one year or less from the date of acquisition issued by any
commercial bank or federal savings bank having capital and surplus in excess of
$250,000,000; (4) a direct obligation of any state or municipality within the
United States with maturities of one year or less from the date of acquisition
and which, at the time of such acquisition, is accorded one of the two highest
debt ratings for obligations of such type by Standard & Poor's or Moody's; (5)
mutual funds investing in assets of the type described in items (1), (2), (3) or
(4) above which in any case would be classified as a current asset in accordance
with GAAP which are managed by a fund manager of recognized standing in the
United States and having capital and surplus of at least $100,000,000 or having
at least $250,000,000 under management; (6) stock, obligation, or
39
securities received in settlement of debts (created in the ordinary course of
business) owing to the Borrower or any Subsidiary provided such issuance is
approved by the board of directors of the issuer thereof; (7) a loan or advance
from the Borrower to a Subsidiary, or from a Subsidiary to a Subsidiary, or from
a Subsidiary to the Borrower (subject, however, to the limitations set forth
below in the case of Investments in STIC and UHIC); (8) any Permitted
Acquisition for which the total consideration payable for such Permitted
Acquisition does not exceed, or have a value exceeding, $50,000,000; (9) an
Investment in a Wholly Owned Subsidiary, which Investment is, or constitutes a
part of, an Internal Reorganization (subject, however, to the limitations set
forth below in the case of Investments in STIC and UHIC); (10) Investments in
STIC, UHIC and any Joint Venture (subject, however, to the limitations set forth
below); or (11) any other Investment of $5,000,000 or less (subject, however, to
the limitations set forth below); PROVIDED that the aggregate amount of all
Investments by the Borrower and its Subsidiaries permitted under clauses (10)
and (11) above does not at any time exceed fifteen percent (15%) of Consolidated
Tangible Net Worth.
SECTION 6.08. GUARANTIES, ETC. Assume, guarantee, endorse, or otherwise
be or become directly or contingently responsible or liable, or permit any
Subsidiary to assume, guarantee, endorse, or otherwise be or become directly or
contingently responsible or liable (including, but not limited to, an agreement
to purchase any obligation, stock, assets, goods, or services, or to supply or
advance any funds, assets, goods, or services, or an agreement to maintain or
cause such Person to maintain a minimum working capital or net worth or
otherwise to assure the creditors of any Person against loss), for obligations
of any Person, except: (1) guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business; (2) guaranties of performance obligations in the ordinary course of
business; (3) guaranties of any obligation of $500,000 or less, PROVIDED,
HOWEVER, that neither the Borrower nor any Subsidiary shall guarantee an
obligation of STIC or UHIC; and (4) that the Borrower or any Subsidiary or any
Guarantor may, whether as a result of an Internal Reorganization or otherwise,
guarantee the Debt of any other Subsidiary (other than STIC and UHIC) or
Guarantor or the Borrower permitted under this Agreement.
SECTION 6.09. TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate, or permit any Subsidiary to
enter into any transaction, including, without limitation, the purchase, sale,
or exchange of property or the rendering of any service, with any Affiliate,
except in the ordinary course of and pursuant to the reasonable requirements of
the Borrower's or such Guarantor's or any Subsidiary's business and upon fair
and reasonable terms no less favorable to the Borrower or such Guarantor or any
Subsidiary than would obtain in a comparable arm's-length transaction with a
Person not an Affiliate (which exception shall include the payment of insurance
premiums to UHIC for the purchase of construction warranties and builder default
protection for buyers of Housing Units from the Borrower or any of its
Subsidiaries and to STIC for title insurance); provided, however, that the
following transactions shall not be prohibited by this Section 6.09: (i)
transactions involving the purchase, sale or exchange of property having a value
of $500,000 or less; and (ii) transactions otherwise permitted by this
Agreement.
SECTION 6.10. LAND INVENTORY. Permit the ratio, determined as at the end
of any fiscal quarter, of (i) the sum of the number
40
of Finished Lots and the reasonably estimated number of Finished Lots that will
be developed on other Land, all determined as at the end of such fiscal quarter,
to (ii) the number of Housing Unit Closings for the period of four (4) full
fiscal quarters ending with such fiscal quarter, to exceed 2.5 to 1.0.
SECTION 6.11. HOUSING INVENTORY. Permit the number of Speculative Housing
Units, as at the end of any fiscal quarter, to exceed the greater of (a) the
number of Housing Unit Closings occurring during the period of twelve (12)
months ending on the last day of such fiscal quarter, multiplied by thirty
percent (30%) or (b) the number of Housing Unit Closings occurring during the
period of six (6) months ending on the last day of such fiscal quarter,
multiplied by seventy percent (70%).
SECTION 6.12. SENIOR DEBT. Prepay in whole or in part the principal of
the Senior Debt, except for refinancings thereof from the proceeds of
Refinancing Debt with respect thereto.
SECTION 6.13. AMENDMENT OR MODIFICATION OF SENIOR INDENTURES. Amend or
modify, or permit any amendment or modification of, either of the Senior
Indentures (other than those provided for in clauses (i), (ii), (iii), (v) or
(vi) of Section 10.01(a) of such Senior Indentures).
SECTION 6.14. UHIC AND STIC. Permit UHIC to engage in any business other
than the issuance of construction warranties and builder default protection for
buyers of Housing Units from the Borrower or any of its Subsidiaries or permit
STIC to engage in any business other than title insurance.
SECTION 6.15. NEGATIVE PLEDGES. Directly or indirectly enter into any
agreement (other than this Agreement and the Senior Indentures) with any Person
that prohibits or restricts or limits the ability of the Borrower or any
Guarantor to create, incur, pledge or suffer to exist any Lien upon any assets
of the Borrower or any Guarantor (except that agreements creating or securing
Secured Debt permitted under Section 6.02 may prohibit, restrict or limit other
Liens on those assets encumbered by the Liens securing such Secured Debt).
ARTICLE VII
FINANCIAL COVENANTS
So long as any Note shall remain unpaid:
SECTION 7.01. MINIMUM CONSOLIDATED TANGIBLE NET WORTH. The Borrower will
maintain at all times a Consolidated Tangible Net Worth of not less than the sum
of (i) $195,000,000, (ii) an amount equal to fifty percent (50%) of the
cumulative Net Income of the Borrower earned after March 31, 2000 (excluding any
quarter in which there is a loss), and (iii) one hundred percent (100%) of the
net proceeds received after March 31, 2000 by the Borrower or any Subsidiary
from the sale or issuance of any of its Common Equity.
SECTION 7.02. LEVERAGE RATIO. The Borrower will not permit the ratio of
Consolidated Debt to Consolidated Tangible Net Worth to exceed (a) 2.25 to 1.00
at any time that the Borrower maintains an Interest Coverage Ratio of at least
2.5 to 1.0 or (b) 2.0 to 1.0 at
41
any other time. For purposes of this Section 7.02, Consolidated Tangible Net
Worth shall exclude the Borrower's and Guarantors' Investments in Joint Ventures
and in Subsidiaries that are not Guarantors.
SECTION 7.03. PERMITTED SENIOR DEBT. The Borrower will not permit the
outstanding amount of the Permitted Senior Debt to exceed the Borrowing Base.
SECTION 7.04. INTEREST COVERAGE RATIO. The Borrower shall maintain an
Interest Coverage Ratio of not less than 2.0 to 1.0, which ratio shall be
determined as of the last day of each fiscal quarter for the four-quarter period
ending on such day.
SECTION 7.05. LAND INVENTORY. The Borrower shall not permit the ratio of
(i) Adjusted Land Value to (ii) the sum of (a) Consolidated Tangible Net Worth
plus (b) fifty percent (50%) of Consolidated Subordinated Debt to exceed 1.0 to
1.0.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. EVENTS OF DEFAULT. If any of the following events shall
occur:
(1) The Borrower shall fail to pay (a) the principal of any Note as and
when due and payable or (b) interest on any Note or any fee or other amount
payable hereunder within five (5) Business Days after the same is due and
payable;
(2) Any representation or warranty made or deemed made by the Borrower or
by any Guarantor in any Loan Document or which is contained in any certificate,
document, opinion, or financial or other statement furnished at any time under
or in connection with this Agreement shall prove to have been incorrect,
incomplete, or misleading in any material respect on or as of the date made or
deemed made;
(3) The Borrower or any Guarantor shall fail to perform or observe any
term, covenant, or agreement contained in Articles V, VI or VII hereof, and such
failure shall continue for a period of thirty (30) consecutive days;
(4) The Borrower or any Significant Subsidiary or any Significant
Guarantor shall (a) fail to pay (within the applicable cure period, if any) any
amount in respect of indebtedness for borrowed money (including without
limitation indebtedness arising under the Revolving Credit Agreement) equal to
or in excess of $5,000,000 in the aggregate (other than the Notes) of the
Borrower or such Significant Subsidiary or such Significant Guarantor, as the
case may be, or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise); or (b) fail
to perform or observe any term, covenant, or condition on its part to be
performed or observed (within the applicable cure period, if any) under any
agreement or instrument relating to any such indebtedness, when required to be
performed or observed, if the effect of such failure to perform or observe is to
accelerate, or permit the acceleration of after the giving of notice or passage
of time, or both, the maturity of such indebtedness, whether or not such failure
to perform or observe shall be waived by the holder of such indebtedness, or any
such indebtedness shall be declared to be due and payable, or
42
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(5) The Borrower or any Significant Subsidiary or any Significant
Guarantor (a) shall generally not pay, or shall be unable to pay, or shall admit
in writing its inability to pay its debts as such debts become due; or (b) shall
make an assignment for the benefit of creditors, or petition or apply to any
tribunal for the appointment of a custodian, receiver, or trustee for it or a
substantial part of its assets; or (c) shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or (d) shall have had any such petition or application filed or any such
proceeding commenced against it in which an order for relief is entered or an
adjudication or appointment is made and which remains undismissed for a period
of forty (40) days or more; or (e) shall take any corporate action indicating
its consent to, approval of, or acquiescence in any such petition, application,
proceeding, or order for relief or the appointment of a custodian, receiver, or
trustee for all or any substantial part of its properties; or (f) shall suffer
any such custodianship, receivership, or trusteeship to continue undischarged
for a period of forty (40) days or more;
(6) One or more judgments, decrees, or orders for the payment of money in
excess of $10,000,000 in the aggregate shall be rendered against the Borrower
and/or any Subsidiary and/or any Guarantor, and such judgments, decrees, or
orders shall continue unsatisfied and in effect for a period of twenty (20)
consecutive days without being vacated, discharged, satisfied, or stayed or
bonded pending appeal;
(7) Any Guaranty hereunder shall at any time after its execution and
delivery and for any reason cease to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by the Guarantor or the Guarantor shall deny it has any further
liability or obligation under, or shall fail to perform its obligations under,
the Guaranty (except to the extent that the foregoing occurs solely by reason of
the liquidation or dissolution of a Guarantor as a result of an Internal
Reorganization);
(8) Any Change of Control of the Borrower or any Subsidiary or any
Guarantor shall occur;
(9) Any of the following events shall occur or exist with respect to the
Borrower, any Subsidiary or any Commonly Controlled Entity under ERISA: any
Reportable Event shall occur; complete or partial withdrawal from any
Multiemployer Plan shall take place; any Prohibited Transaction shall occur; a
notice of intent to terminate a Plan shall be filed, or a Plan shall be
terminated; or circumstances shall exist which constitute grounds entitling the
PBGC to institute proceedings to terminate a Plan, or the PBGC shall institute
such proceedings; and in each case above, such event or condition, together with
all other events or conditions described in this Section 8.01(9), if any, could
subject the Borrower or any Significant Guarantor or Significant Subsidiary to
any tax, penalty, or other liability which in the aggregate may exceed $500,000;
or
(10) If any federal, state, or local agency asserts a material claim
against the Borrower or any Significant Guarantor or Significant Subsidiary
and/or its assets, equipment,
43
property, leaseholds, or other facilities for damages or cleanup costs relating
to a hazardous discharge or an environmental complaint; PROVIDED, HOWEVER, that
such claim shall not constitute a default if, within fifteen (15) days of the
occurrence giving rise to the claim, (a) the Borrower can prove to the
reasonable satisfaction of the Majority Banks that the Borrower has commenced
and is diligently pursuing either: (i) a cure or correction of the event which
constitutes the basis for the claim, and continues diligently to pursue such
cure or correction or (ii) proceedings for an injunction, a restraining order or
other appropriate emergent relief preventing such agency or agencies from
asserting such claim, which relief is granted within thirty (30) days of the
occurrence giving rise to the claim and the injunction, order, or emergent
relief is not thereafter resolved or reversed on appeal or (iii) the defense
against the claim through action in a court or agency exercising jurisdiction
over the claim; and (b) in any of the foregoing events, the Borrower has posted
a bond, letter of credit, or other security satisfactory in form, substance, and
amount to the Majority Banks and the agency or entity asserting the claim to
secure the correction of the event which constitutes the basis for the claim in
accordance with applicable laws;
then, and in any such event, the Agent shall at the request of, or may, with the
consent of, the Majority Banks, by notice to the Borrower, (1) declare the
Banks' obligation to make Loans to be terminated, whereupon the same shall
forthwith terminate; and (2) declare the outstanding Notes, all interest
thereon, and all other amounts payable under this Agreement to be forthwith due
and payable, whereupon the Notes, all such interest, and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest,
or further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, in the case of an event described in Section
8.01(5) hereof the obligations of the Banks to make Loans hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Agent or any Bank.
SECTION 8.02. SET OFF. Upon the occurrence and during the continuance of
any Event of Default, each Bank is hereby authorized at any time and from time
to time, without notice to the Borrower (any such notice being expressly waived
by the Borrower), to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Bank to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement or the Bank's Note or any other Loan Document, irrespective
of whether or not the Agent or such Bank shall have made any demand under this
Agreement or such Bank's Note or such other Loan Document and although such
obligations may be unmatured. Each Bank agrees promptly to notify the Borrower
(with a copy to the Agent) after any such set-off and application, provided that
the failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Bank under this Section 8.02 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which each Bank may have.
ARTICLE IX
GUARANTY
44
SECTION 9.01. GUARANTY. (a) Each of the Guarantors unconditionally and
irrevocably guarantees the due and punctual payment and performance of the
Obligations. Each of the Guarantors further agrees that the Obligations may be
extended or renewed, in whole or in part, without notice or further assent from
it, and it will remain bound upon this Guaranty notwithstanding any extension or
renewal of any Obligation.
(b) Each of the Guarantors waives presentation to, demand for payment
from and protest to the Borrower or any other Guarantor of any of the
Obligations, and also waives notice of protest for nonpayment. The Obligations
of the Guarantors hereunder shall not be affected by (i) the failure of the
Agent or any Bank to assert any claim or demand or to enforce any right or
remedy against the Borrower or any other Guarantor under the provisions of this
Agreement or any other agreement or otherwise; (ii) any extension or renewal of
any provision hereof or thereof; (iii) any rescission, waiver, compromise,
acceleration, amendment or modification of any of the terms or provisions of any
Loan Document or any other agreement; (iv) the release, exchange, waiver or
foreclosure of any security held by the Agent or any Bank for the Obligations or
any of them; (v) the failure of the Agent or any Bank to exercise any right or
remedy against any other guarantor of the Obligations; or (vi) the release or
substitution of any Guarantor.
(c) Each of the Guarantors further agrees that this Guaranty constitutes
a guaranty of performance and of payment when due and not just of collection,
and waives any right to require that any resort be had by the Agent or any Bank
to any security held for payment of the Obligations or to any balance of any
deposit, account or credit on the books of a Bank in favor of the Borrower or
any other Guarantor, or to any other Person. (d) Each of the Guarantors hereby
expressly assumes all responsibilities to remain informed of the financial
condition of the Borrower and each other Guarantor and any circumstances
affecting the ability of the Borrower to perform under this Agreement. Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the Loans contemplated by this Agreement and that the Banks required as a
condition to entering into this Agreement, and in order to secure the prompt and
complete payment, observance and performance of the Obligations, that each
Guarantor shall make this Guaranty.
(e) Each of the Guarantors' guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Obligations, the
Notes or any other instrument evidencing any Obligations, or by the existence,
validity, enforceability, perfection, or extent of any collateral therefor or by
any other circumstance relating to the Obligations which might otherwise
constitute a defense to this Guaranty. The Agent makes no representation or
warranty in respect of any such circumstances and has no duty or responsibility
whatsoever to the Guarantors in respect of the management and maintenance of the
Obligations or any such collateral.
SECTION 9.02. NO IMPAIRMENT OF GUARANTY. The Obligations of the
Guarantors hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or set-off, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
45
Obligations or otherwise. Without limiting the generality of the foregoing, the
Obligations of the Guarantors hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Agent or any Bank to assert any claim
or demand or to enforce any remedy under this Agreement or any other agreement,
by any waiver or modification of any provision thereof, by any default, failure
or delay, willful or otherwise, in the performance of the Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of the Guarantors or would
otherwise operate as a discharge of the Guarantors as a matter of law, unless
and until the Obligations are paid in full.
SECTION 9.03. CONTINUATION AND REINSTATEMENTS ETC. (a) Each of the
Guarantors further agrees that its guaranty hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal or of interest on any Obligation is rescinded or must
otherwise be restored by the Agent or any Bank upon the bankruptcy or
reorganization of the Borrower or a Guarantor, or otherwise. In furtherance of
the provisions of this Article IX, and not in limitation of any other right
which the Agent or any Bank may have at law or in equity against the Borrower or
the Guarantors by virtue hereof, upon failure of the Borrower to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice or otherwise, each of the Guarantors hereby promises
to and will, upon receipt of written demand by the Agent on behalf of the Banks,
forthwith pay or cause to be paid to the Agent on behalf of the Banks in cash an
amount equal to the unpaid amount of all the Obligations, and thereupon the
Banks shall assign such Obligation, together with all security interests, if
any, then held by the Agent in respect of such Obligation, to the Guarantor or
Guarantors making such payment.
(b) Upon payment by any Guarantor of any sums to the Agent on behalf of
the Banks hereunder, all rights of such Guarantor against the Borrower, arising
as a result thereof by way of right of subrogation or otherwise, shall in all
respects be subordinate and junior in right of payment to the prior final and
indefeasible payment in full of all the Obligations to the Agent on behalf of
the Banks. If any amount shall be paid to such Guarantor for the account of the
Borrower, such amount shall be held in trust for the benefit of the Banks and
shall forthwith be paid to the Agent on behalf of the Banks to be credited and
applied to the Obligations, whether matured or unmatured.
SECTION 9.04. LIMITATION ON GUARANTEED AMOUNT. Notwithstanding any other
provision of this Article IX, the amount guaranteed by any Guarantor hereunder
shall be limited to the extent, if any, required so that its obligations under
this Article IX shall not be subject to avoidance under Section 548 of the
Bankruptcy Code or to being set aside or annulled under any applicable state law
relating to fraud on creditors. In determining the limitations, if any, on the
amount of such Guarantor's obligations hereunder pursuant to the preceding
sentence, any rights of subrogation or contribution which such Guarantor may
have under this Article IX or applicable law shall be taken into account.
ARTICLE X
AGENCY PROVISIONS
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SECTION 10.01. AUTHORIZATION AND ACTION. Each Bank hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto. The duties of the Agent shall be mechanical and administrative in
nature and the Agent shall not by reason of this Agreement be a trustee or
fiduciary for any Bank. The Agent shall have no duties or responsibilities
except those expressly set forth herein. As to any matters not expressly
provided for by this Agreement (including, without limitation, enforcement or
collection of the Notes), the Agent shall not be required to act or to refrain
from acting except upon the instructions of the Majority Banks or, to the extent
required under Section 11.01, all Banks (and shall be fully protected in so
acting or so refraining from acting), and such instructions shall be binding
upon all Banks and all holders of Notes; provided, however, 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 applicable law. The Agent shall
administer the Loan in the same manner that it would administer a comparable
loan held 100% for its own account.
SECTION 10.02. LIABILITY OF AGENT. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable for any action taken
or omitted to be taken by it or them under or in connection with this Agreement
in the absence of its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Agent (1) may treat the
payee of any Note as the holder thereof until the Agent receives written notice
of the assignment or transfer thereof signed by such payee and in form
satisfactory to the Agent; (2) may consult with legal counsel (including counsel
for the Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants, or
experts; (3) makes no warranty or representation to any Bank and shall not be
responsible to any Bank for any statements, warranties, or representations made
in or in connection with this Agreement; (4) shall not have any duty to
ascertain or to inquire as to the performance or observance of any terms,
covenants, or conditions of this Agreement on the part of the Borrower, or to
inspect the property (including the books and records) of the Borrower; (5)
shall not be responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, perfection, sufficiency or value of this Agreement
or any other instrument or document furnished pursuant hereto; and (6) shall
incur no liability under or in respect of this Agreement by acting upon any
notice, consent, certificate or other instrument or writing (which may be sent
by telegram, telefax, or facsimile transmission) reasonably believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 10.03. RIGHTS OF AGENT AS A BANK. With respect to the Loans made
by it and the Note issued to it, the Agent shall have the same rights and powers
under this Agreement as any other Bank and may exercise the same as though it
were not the Agent; and the term "Bank" or "Banks" shall, unless otherwise
expressly indicated, include the Agent in its individual capacity. The Agent,
each Bank and each of their respective Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, the Borrower, any of its Subsidiaries and any Person who may
do business with or own securities of the Borrower or any Subsidiary, all as if
the Agent were not the Agent and without any duty to account therefor to the
other Banks.
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SECTION 10.04. INDEPENDENT CREDIT DECISIONS. Each Bank acknowledges that
it has, independently and without reliance upon the Agent or any other Bank and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement. The Agent shall promptly provide the
Banks with copies of all notices of default and other formal notices sent or
received in accordance with Section 11.02 of this Agreement, any written notice
relating to changes in the Borrower's debt ratings that affect the Senior Debt
Rating received from the Borrower or a ratings agency, any documents received by
the Agent pursuant to Section 5.08 (except to the extent that the Borrower has
furnished the same directly to the Banks) and any other documents or notices
received by the Agent with respect to the Agreement and requested in writing by
any Bank. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall have no duty or responsibility to provide any Bank with any credit
or other information concerning the affairs, financial condition or business of
the Borrower or any of its Subsidiaries (or any of their Affiliates) which may
come into possession of the Agent or any of its Affiliates.
SECTION 10.05. INDEMNIFICATION. The Banks severally agree to indemnify
the Agent in its capacity as Agent and not as a Bank (to the extent not
reimbursed by the Borrower), in the proportion of their Ratable Shares, from and
against any and 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 any way relating to or arising out of this Agreement or any action
taken or omitted by the Agent under this Agreement, provided that no Bank shall
be liable for any portion of any of the foregoing (i) resulting from the Agent's
gross negligence or willful misconduct, (ii) on account of a strictly internal
or regulatory matter relating to the Agent (such as relating to legal lending
limit violation by the Agent), or (iii) in connection with a breach of an
express agreement made by the Agent to a Bank under this Agreement. Without
limitation of the foregoing, each Bank severally agrees to reimburse the Agent
(to the extent not reimbursed by the Borrower) promptly upon demand for its
Ratable Share of any reasonable out-of-pocket expenses (including counsel fees)
incurred by the Agent in connection with the preparation, administration, or
enforcement of, or legal advice in respect of rights or responsibilities under,
this Agreement; provided, however, that no Bank shall be required to reimburse
the Agent for any such expenses incurred (i) resulting from the Agent's gross
negligence or willful misconduct, (ii) on account of a strictly internal or
regulatory matter relating to the Agent (such as relating to legal lending limit
violation by the Agent), or (iii) in connection with a breach of an express
agreement made by the Agent to a Bank under this Agreement.
SECTION 10.06. SUCCESSOR AGENT. (a) The Agent may resign at any time by
giving at least sixty (60) days' prior written notice thereof to the Banks and
the Borrower and may be removed at any time with or without cause by the
Majority Banks. Upon any such resignation or removal, the Majority Banks shall
have the right to appoint a successor Agent, subject to Section 10.06(b). If no
successor Agent shall have been so appointed by the Majority Banks, and shall
have accepted such appointment, within thirty (30) days after the retiring
Agent's giving of notice of resignation or the Majority Banks' removal of the
retiring Agent,
48
then the retiring Agent may, on behalf of the Banks, appoint a successor Agent,
which shall be a commercial bank or federal savings bank organized under the
laws of the United States of America or of any State thereof, subject to Section
10.06(b). Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
(b) The appointment of any successor Agent that is not a Bank shall be
subject to the prior written approval of the Borrower, which approval shall not
be unreasonably withheld.
SECTION 10.07. SHARING OF PAYMENTS, ETC. If any Bank shall obtain any
payments (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Note held by it in excess of its
Ratable Share of payments on account of the Notes obtained by all the Banks,
such Bank shall purchase from the other Banks such participations in the Notes
held by them as shall be necessary to cause such purchasing Bank to share the
excess payment ratably with each of the other Banks, PROVIDED, HOWEVER, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each Bank shall be rescinded and each Bank
shall repay to the purchasing Bank the purchase price to the extent of such
recovery together with an amount equal to such Bank's ratable share (according
to the proportion of (1) the amount of such Bank's required repayment to (2) the
total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees that any Bank so purchasing a participation from
another Bank pursuant to this Section 10.07 may, to the fullest extent permitted
by law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Bank were the direct creditor
of the Borrower in the amount of such participation.
SECTION 10.08. WITHHOLDING TAX MATTERS. Each Bank which is a Non-United
States Person agrees to execute and deliver to the Agent for delivery to the
Borrower, before the first scheduled payment date in each year, two duly
completed copies of United States Internal Revenue Service Forms W-8BEN or
W-8ECI, or any successor forms, as appropriate, properly completed and
certifying that such Bank is entitled to receive payments under this Agreement
without withholding or deduction of United States federal taxes. Each Bank which
is a Non-United States Person represents and warrants to the Borrower and to the
Agent that, at the date of this Agreement, (i) its Lending Offices are entitled
to receive payments of principal, interest, and fees hereunder without deduction
or withholding for or on account of any taxes imposed by the United States or
any political subdivision thereof and (ii) it is permitted to take the actions
described in the preceding sentence under the laws and any applicable double
taxation treaties of the jurisdictions specified in the preceding sentence. Each
Bank which is a Non-United States Person further agrees that, to the extent any
form claiming complete or partial exemption from withholding and deduction of
United States federal taxes delivered under this Section 10.08 is found to be
incomplete or incorrect in any material respect, such Bank shall execute and
deliver to the Agent a complete and correct replacement form.
49
SECTION 10.09. CO-AGENTS. None of the Banks identified in this Agreement
as a "Co-Agent" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Banks as such. Without limiting the foregoing, none of such Banks shall have or
be deemed to have a fiduciary relationship with any Bank. Each Bank hereby makes
the same acknowledgements with respect to such Banks as it makes with respect to
the Agent in Section 10.04.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. AMENDMENTS, ETC. No amendment, modification, termination,
or waiver of any provision of any Loan Document to which the Borrower is a
party, nor consent to any departure by the Borrower from any Loan Document to
which it is a party, shall in any event be effective unless the same shall be in
writing and signed by the Majority Banks and the Borrower, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; PROVIDED, HOWEVER, that no amendment, waiver or consent
shall, unless in writing and signed by all the Banks and the Borrower, do any of
the following: (1) require any Bank to advance any Loan after the Closing Date
or otherwise subject the Banks to any additional obligations; (2) reduce the
principal of, or interest on, the Notes or any fees (other than the Agent's
fees) hereunder; (3) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees (other than the Agent's fees) hereunder; (4)
change the percentage of the aggregate unpaid principal amount of the Notes or
the number of Banks which shall be required for the Banks or any of them to take
action hereunder (including, without limitation, any change in the number of
Banks required to extend the Maturity Date under the provisions of Section
2.19); (5) release any Significant Guarantor; or (6) amend, modify or waive any
provision of Article X or this Section 11.01; and, provided further, that no
amendment, waiver, or consent shall, unless in writing and signed by the Agent
in addition to the Banks required above to take such action, affect the rights
or duties of the Agent under any of the Loan Documents.
SECTION 11.02. NOTICES, ETC. All notices and other communications
provided for under this Agreement and under the other Loan Documents to which
the Borrower is a party shall be in writing (including telegraphic, telex, and
facsimile transmissions) and mailed or transmitted or hand delivered, if to the
Borrower, a Guarantor, a Bank or the Agent at its respective address set forth
on the signature pages hereof; or, as to each party, at such other address as
shall be designated by such party in a written notice to all other parties
complying as to delivery with the terms of this Section 11.02. Except as is
otherwise provided in this Agreement, all such notices and communications shall
be effective when deposited in the mails or delivered to the telegraph company,
or transmitted, answerback received, or hand delivered, respectively, addressed
as aforesaid, except that notices to the Agent pursuant to the provisions of
Article II shall not be effective until received by the Agent.
SECTION 11.03. NO WAIVER. No failure or delay on the part of any Bank or
the Agent in exercising any right, power, or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power, or remedy preclude any other or further exercise thereof or the exercise
of any other right, power, or remedy hereunder. The
50
making of a Loan notwithstanding the existence of a Default or Event of Default
shall not constitute any waiver or acquiescence of such Default or Event of
Default. The rights and remedies provided herein are cumulative, and are not
exclusive of any other rights, powers, privileges, or remedies, now or hereafter
existing, at law, in equity or otherwise.
SECTION 11.04. COSTS, EXPENSES, AND TAXES. The Borrower agrees to
reimburse the Agent for any reasonable costs, internal charges and out-of-pocket
expenses (including reasonable fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent) paid or incurred by the Agent in
connection with the preparation, negotiation, execution, delivery, review,
amendment, modification and administration of the Loan Documents and the
collection of the Loans and enforcement of the Loan Documents. In addition, the
Borrower shall pay any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing, and
recording of any of the Loan Documents and the other documents to be delivered
under any such Loan Documents, and agrees to hold the Agent and each of the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or failing to pay such taxes and fees. This
provision shall survive termination of this Agreement.
SECTION 11.05. INTEGRATION. This Agreement (including the Borrower's
obligation to pay the fees provided in Section 2.09 and the letter referred to
therein) and the Loan Documents contain the entire agreement between the parties
relating to the subject matter hereof and supersede all oral statements and
prior writings with respect thereto.
SECTION 11.06. INDEMNITY. The Borrower hereby agrees to defend,
indemnify, and hold each Bank harmless from and against all claims, damages,
judgments, penalties, costs, and expenses (including attorney fees and court
costs now or hereafter arising from the aforesaid enforcement of this clause)
arising directly or indirectly from the activities of the Borrower and its
Subsidiaries, its predecessors in interest, or third parties with whom it has a
contractual relationship, or arising directly or indirectly from the violation
of any environmental protection, health, or safety law, whether such claims are
asserted by any governmental agency or any other person. This indemnity shall
survive termination of this Agreement.
SECTION 11.07. GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of Illinois
(without regard to principles of conflict of law) but giving effect to federal
laws applicable to national banks.
SECTION 11.08. SEVERABILITY OF PROVISIONS. Any provision of any Loan
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 11.09. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.
51
SECTION 11.10. HEADINGS. Article and Section headings in the Loan
Documents are included in such Loan Documents for the convenience of reference
only and shall not constitute a part of the applicable Loan Documents for any
other purpose.
SECTION 11.11. SUBMISSION TO JURISDICTION. The Borrower, each Subsidiary,
and each Guarantor hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Northern District of Illinois and of any Illinois
State court sitting in The City of Chicago for purposes of all legal proceedings
which may arise hereunder or under the Notes. The Borrower, each Subsidiary, and
each Guarantor irrevocably waives to the fullest extent permitted by law, any
objection which it may have or hereafter have to the laying of the venue of any
such proceeding brought in such a court, and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. The Borrower,
each Subsidiary, and each Guarantor hereby consents to process being served in
any such proceeding by the mailing of a copy thereof by registered or certified
mail, postage prepaid, to its address specified in Section 11.02 hereof or in
any other manner permitted by law.
SECTION 11.12. JURY TRIAL WAIVER. THE BORROWER, EACH SUBSIDIARY, EACH
GUARANTOR, THE AGENT, AND EACH BANK HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF
OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS. NO OFFICER OF ANY
BANK OR OF THE AGENT HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS
PROVISION.
SECTION 11.13. GOVERNMENTAL REGULATION. Anything contained in this
Agreement to the contrary notwithstanding, no Bank shall be obligated to extend
credit to the Borrower in violation of any limitation or prohibition provided by
any applicable statute or regulation.
SECTION 11.14. NO FIDUCIARY DUTY. The relationship between the Borrower
and the Banks and the Agent shall be solely that of borrower and lender. Neither
the Agent nor any Bank shall have any fiduciary responsibilities to the
Borrower. Neither the Agent nor any Bank undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations.
SECTION 11.15. CONFIDENTIALITY. Each Bank agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to other Banks and their respective
affiliates, (ii) to legal counsel, accountants, and other professional advisors
to that Bank or to a Transferee, (iii) to regulatory officials, (iv) to any
Person as requested pursuant to or as required by law, regulation, or legal
process, (v) to any Person in connection with any legal proceeding to which that
Bank is a party, and (vi) permitted by Section 12.04.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
52
SECTION 12.01. SUCCESSORS AND ASSIGNS. The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of the Borrower
and the Agent and the Banks and their respective successors and assigns, except
that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents without the consent of all Banks and (ii)
any assignment by any Bank must be made in compliance with Section 12.03.
Notwithstanding clause (ii) of this Section, any Bank may at any time, without
the consent of the Borrower or the Agent, pledge all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank as security
for an obligation of such pledgor or of an affiliated entity to such Federal
Reserve Bank; provided, however, that no such pledge shall release the pledgor
Bank from its obligations hereunder. The Agent may treat the payee of any Note
as the owner thereof for all purposes hereof unless and until such payee
complies with Section 12.03 in the case of an assignment thereof. Any assignee
or transferee of a Note agrees by acceptance thereof to be bound by all the
terms and provisions of the Loan Documents. 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 thereof.
SECTION 12.02. PARTICIPATIONS. (a) PERMITTED PARTICIPANTS; EFFECT. Any
Bank may, in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such Bank, any
Note held by such Bank or any other interest of such Bank under the Loan
Documents in an amount not less than Five Million Dollars ($5,000,000). In the
event of any such sale by a Bank of participating interests to a Participant,
such Bank's obligations under the Loan Documents shall remain unchanged, such
Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Bank shall remain the holder of any such
Note for all purposes under the Loan Documents, all amounts payable by the
Borrower under this Agreement shall be determined as if such Bank had not sold
participating interests, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under the Loan Documents.
(b) VOTING RIGHTS. Each Bank shall with respect to its Participants, if
any, retain the sole right to approve, without the consent of any Participant,
any amendment, modification or waiver of any provision of the Loan Documents
other than any amendment, modification or waiver with respect to any Loan in
which such Participant has an interest which forgives principal or interest or
reduces the interest rate payable with respect to any such Loan, postpones any
date fixed for any regularly scheduled payment of principal of or interest on
any such Loan or releases any Significant Guarantor.
(c) BENEFIT OF SET-OFF. The Borrower agrees that each Participant shall
be deemed to have the rights of set-off provided in Sections 2.12 and 8.02 in
respect of its participating interest in amounts owing under the Loan Documents
to the same extent as if the amount of its participating interest were owing
directly to it as a Bank under the Loan Documents, provided that each Bank shall
retain the right of set-off provided in Sections 2.12 and 8.02 with respect to
the amount of participating interests sold to each Participant. The Banks agree
to share with each Participant, and each Participant, by exercising the right of
set-off provided in Section 2.12 or 8.02, agrees to share with each Bank, any
amount received pursuant
53
to the exercise of its right of set-off, such amounts to be shared in accordance
with Section 10.07 as if each Participant were a Bank.
SECTION 12.03. ASSIGNMENTS. (a) PERMITTED ASSIGNMENTS. Any Bank may, in
the ordinary course of its business and in accordance with applicable law, at
any time assign to one or more Eligible Assignees ("Purchasers") all, or any
part (but in an amount not less than Five Million Dollars ($5,000,000) of its
Loans and its rights and obligations under the Loan Documents, provided,
however, that, based upon facts and circumstances existing at the time of any
such assignment, such assignment does not result in an event described in
Sections 2.14, 2.15, or 2.16 hereof. Such assignment shall be substantially in
the form of EXHIBIT I hereto or in such other form as may be agreed to by the
parties thereto. The consent of the Borrower and the Agent (which consents shall
not be unreasonably withheld) shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Bank or an Affiliate
thereof; provided, however, that if an Event of Default has occurred and is
continuing, the consent of the Borrower shall not be required.
(b) EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent of a notice of
assignment, substantially in the form attached as Exhibit 1 to EXHIBIT I hereto
(a "Notice of Assignment"), together with any consents required by Section
12.03; and (ii) payment (by either the assignor or the assignee) of a $4,000.00
fee (or, in the case of an assignment to the assignor's Affiliate or by reason
of the provisions of Section 2.19, a $2,000 fee) to the Agent for processing
such assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. The Notice of Assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Loans under the applicable assignment agreement
are "plan assets" as defined under ERISA and that the rights and interests of
the Purchaser in and under the Loan Documents will not be "plan assets" under
ERISA. On and after the effective date of such assignment, such Purchaser shall
for all purposes be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank under the Loan Documents, to the same extent as if it
were an original party hereto, and no further consent or action by the Borrower,
the Banks or the Agent shall be required to release the transferor Bank with
respect to the Loans or interests therein assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this Section 12.03(b),
the transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that replacement Notes are issued to such transferor Bank and
new Notes or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting the principal amounts of the Loans
held by them.
(c) BANK ACQUISITIONS AND MERGERS. If, as a result of acquisitions or
mergers by Banks (or by entities of which a Bank or Banks are subsidiaries), a
Bank or two or more Banks that are, directly or indirectly, subsidiaries of a
common parent (collectively, "Merged Banks") hold Loans in an aggregate amount
exceeding the amount of the Loans held by the Bank that is the Agent hereunder,
the Bank that is the Agent may, at its election, but without any obligation to
do so, acquire from such Merged Banks a portion of their Loans and rights and
obligations hereunder in an amount necessary to reduce the aggregate amount of
the Loans held by the Merged Banks, and to increase the Loans held by the Bank
that is Agent, to equal amounts. Such election shall be exercisable by notice
from the Agent to the Merged Banks and shall be effected, on a date designated
in such notice, by Assignment substantially in the form of
54
EXHIBIT H hereto or such other form as may be agreed to by the parties. On the
date of delivery of such Assignment the assignor shall pay to the assignee an
amount equal to the outstanding principal balance of the Loans so assigned.
SECTION 12.04. DISSEMINATION OF INFORMATION. The Borrower authorizes each
Bank to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Bank's possession
concerning the creditworthiness of the Borrower, each Subsidiary, or each
Guarantor, provided that such Transferee or prospective Transferee agrees to be
subject to Section 11.15 to the same effect as if it were a Bank.
SECTION 12.05. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Bank shall cause such Transferee, concurrently with the effectiveness of such
transfer to comply with the provisions of Section 10.08.
55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written.
BEAZER HOMES USA, INC.
By:________________________________
Name: _____________________________
Title: ____________________________
Address for Notices
-------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BEAZER MORTGAGE CORPORATION
By:________________________________
Name: _____________________________
Title: ____________________________
BEAZER HOMES CORP.
By:________________________________
Name: _____________________________
Title: ____________________________
BEAZER HOMES SALES ARIZONA, INC.
By:________________________________
Name: _____________________________
Title: ____________________________
BEAZER REALTY CORP.
By:________________________________
Name: _____________________________
Title: ____________________________
56
BEAZER/▇▇▇▇▇▇▇ REALTY, INC.
By:________________________________
Name: _____________________________
Title: ____________________________
BEAZER HOMES HOLDINGS CORP.
By:________________________________
Name: _____________________________
Title: ____________________________
BEAZER HOMES TEXAS HOLDINGS, INC.
By:________________________________
Name: _____________________________
Title: ____________________________
BEAZER HOMES TEXAS, L.P.
By: BEAZER HOMES TEXAS HOLDINGS, INC.,
its general partner
By:________________________________
Name: _____________________________
Title: ____________________________
BEAZER REALTY, INC.
By:________________________________
Name: _____________________________
Title: ____________________________
HOMEBUILDERS TITLE SERVICES, INC.
By: _______________________________
Name: _____________________________
Title: ____________________________
57
TEXAS LONE STAR TITLE, L.P.
By: BEAZER HOMES TEXAS HOLDINGS, INC.
By:________________________________
Name: _____________________________
Title: ____________________________
HOMEBUILDERS TITLE SERVICES OF
VIRGINIA, INC.
By:________________________________
Name: _____________________________
Title: ____________________________
UNIVERSAL SOLUTIONS INSURANCE
AGENCY, INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
Addresses for Notices to all Guarantors
---------------------------------------
c/o Beazer Homes USA, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
58
BANK ONE, NA
By:________________________________
Name: _____________________________
Title: ____________________________
Addresses for Notices
---------------------
Bank One, NA
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Loans
------------------------
Bank One, NA
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
59
GUARANTY FEDERAL BANK, F.S.B.
By: ___________________________
Name: _________________________
Title: ________________________
Address for Notices
-------------------
Guaranty Federal Bank, F.S.B.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Loans
-----------------
Guaranty Federal Bank, F.S.B.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
60
WACHOVIA BANK, N.A.
By: ___________________________
Name: _________________________
Title: ________________________
Address for Notices
-------------------
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Loans
-----------------
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
AND
Ms. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
61
SUNTRUST BANK
By: ____________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices
-------------------
SunTrust Bank
303 Peachtree Street, N.E.
3rd Fl.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Addresses for Loans
-------------------
SunTrust Bank
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Mr. Datanian Oldham
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
62
Schedule I
LOAN SCHEDULE
Bank Loan Amount
---- -----------
Bank One, NA $20,000,000
Guaranty Federal Bank, F.S.B. $20,000,000
Wachovia Bank, N.A. $20,000,000
SunTrust Bank $15,000,000
-----------
Total $75,000,000
Exhibit A
NOTE
$_____________________ __________________, ____
FOR VALUE RECEIVED, the undersigned, BEAZER HOMES USA, INC., a
Delaware corporation (the "Borrower") HEREBY PROMISES TO PAY to the order of
_______________________ (the "Bank") to BANK ONE, NA, as Agent, at the Agent's
Office located at ▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, for the account of the
applicable Lending Office of the Bank, in lawful money of the United States and
in immediately available funds, the principal amount of _________________
Dollars ($_______) or the aggregate unpaid principal amount of all Loans made to
the Borrower by the Bank pursuant to the Term Loan Agreement and outstanding on
the Maturity Date, whichever is less, and to pay interest from the date of this
Note, in like money, at said office for the account of the applicable Lending
Office, at the time and at a rate per annum as provided in the Term Loan
Agreement. The Bank is hereby authorized by the Borrower to endorse on the
schedule attached to the Note held by it the amount and type of each Loan and
each renewal, conversion, and payment of principal amount received by the Bank
for the account of the applicable Lending Office on account of its Loans, which
endorsement shall, in the absence of manifest error, be conclusive as to the
outstanding balance of the Loans made by the Bank; provided, however, that the
failure to make such notation with respect to any Loan or renewal, conversion,
or payment shall not limit or otherwise affect the obligations of the Borrower
hereunder.
This Note is one of the Notes referred to in, and is entitled to the benefits
of, the Term Loan Agreement, dated as of December 19, 2000, between the
Borrower, the Guarantors, the Bank and certain other banks parties thereto
(which, as it may be amended, modified, renewed or extended from time to time,
is herein called the "Term Loan Agreement"). Terms used herein which are defined
in the Term Loan Agreement shall have their defined meanings when used herein.
The Term Loan Agreement, among other things, contains provisions for
acceleration of the maturity of this Note upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity of this Note upon the terms and conditions specified in the Term Loan
Agreement.
The Borrower hereby agrees to pay all reasonable costs and expenses (including
reasonable attorney's fees and expenses) paid or incurred by the holder of this
Note in the collection of any principal or interest payable under this Note or
the enforcement of this Note or any other Loan Documents.
This Note shall be governed by the laws of the State of Illinois.
BEAZER HOMES USA, INC.
By:________________________________
Name: _____________________________
Title: ____________________________
1
SCHEDULE TO NOTE
Unpaid Principal Name of Person
Date Made Type of Amount of Principal Balance of Making
or Paid Loan Paid Note Notation
--------- ------- ------------------- ---------------- --------------
2
Exhibit B
SUPPLEMENT TO TERM LOAN AGREEMENT
This Supplement to Term Loan Agreement ("Supplement") dated as of ______,
20__, is entered into among the parties listed on the signature pages hereof.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Term Loan Agreement (as defined below).
PRELIMINARY STATEMENTS
Reference is made to that certain Term Loan Agreement dated December 19,
2000, by and among Beazer Homes USA, Inc., its Subsidiaries that are parties
thereto as Guarantors, Bank One, NA, as Agent, and the Banks that are parties
thereto (as amended, modified, supplemented or restated from time to time, the
"Term Loan Agreement").
Pursuant to Section 2.21 of the Term Loan Agreement, the Borrower has
requested a Loan Increase in the aggregate amount of $_____________, and, to
effect such Loan Increase, the Borrower, the Agent and the parties identified as
"Banks" on the signature pages hereof hereby agree as follows:
1. LOAN INCREASE. Effective as of ______________* and subject to the
satisfaction of the conditions set forth in Section 2.21(b) of the Term Loan
Agreement each Bank identified on the signature pages hereof not heretofore a
party to the Term Loan Agreement shall become a party to the Term Loan Agreement
as a Bank and shall have all of the rights and obligations of a Bank and shall
agree to be bound by the terms and provisions thereof, and (b) each Bank
identified on the signature pages hereof shall advance the amount of the Loan
Increase set forth opposite its signature.
* This date is to be agreed upon by the parties to this Supplement (as provided
in Section 2.21(c)).
2. REPRESENTATIONS OF BANKS. Each Bank party hereto (i) confirms that it
has received a copy of the Term Loan Agreement, together with copies of such
financial statements requested by it and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Supplement, (ii) agrees that it will, independently and without
reliance upon the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, (iii)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Loan Documents as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto, (iv) agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the Loan Documents are required to be
performed by it as a Bank, (v) agrees that its payment instructions and notice
instructions are as set forth in the attachment to Schedule 1, (vi) confirms
that none of the funds, monies, assets or other consideration being used to make
the purchase and assumption hereunder are "plan assets" as defined under ERISA
and that its rights, benefits and interests in and under the Loan Documents will
not be "plan assets" under ERISA, [and (vii) attaches the forms prescribed by
1
the Internal Revenue Service of the United States certifying that the Bank is
entitled to receive payments under the Loan Documents without deduction or
withholding of any United States federal income taxes]** .
** to be inserted if the Bank is not incorporated under the laws of the United
States, or a state thereof.
3. REPRESENTATIONS OF BORROWER. The Borrower hereby represents and
warrants that, as of the date hereof and as of the date set forth in Section 1
above, (a) no event or condition shall have occurred and then be continuing
which constitutes an Event of Default or Default and (b) the representations and
warranties contained in Article IV of the Term Loan Agreement are true and
correct in all material respects (except to the extent any such representation
or warranty is stated to relate solely to an earlier date).
4. GOVERNING LAW. This Supplement shall be governed by the internal law,
and not the law of conflicts, of the State of Illinois.
IN WITNESS WHEREOF, the parties hereto have executed this Supplement by
their duly authorized officers as of the date first above written.
BORROWER:
BEAZER HOMES USA, INC.
By: _____________________________
Name: ___________________________
Title: __________________________
AGENT:
BANK ONE, NA
as Agent
By: _____________________________
Name: ___________________________
Title: __________________________
BANK(S):
[NAME]
$_________________ By: _____________________________
Name: ___________________________
Title: ____________________________
2
[NAME]
$_________________ By: _____________________________
Name: ___________________________
Title: __________________________
3
ATTACH EACH BANK'S ADMINISTRATIVE INFORMATION SHEET
4
Exhibit C
The opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, to be rendered
pursuant to Section 3.01(5) of the Term Loan Agreement to which this Exhibit is
attached shall be substantially to the following effect:
(a) The Borrower and each of Beazer Mortgage Corporation, a Delaware
corporation, Beazer Homes Corp., a Tennessee corporation, Beazer Homes Sales
Arizona Inc., a Delaware corporation, Beazer Homes Holding Corp., a Delaware
corporation, Beazer Homes Texas Holdings, Inc., a Delaware corporation, Beazer
Realty Corp., a Georgia corporation, Beazer Homes Texas, L.P., a Delaware
limited partnership, Homebuilders Title Services, Inc., a Delaware corporation,
Texas Lone Star Title, L.P., a Texas limited partnership, and Universal
Solutions Insurance Agency, Inc., a Delaware corporation (collectively the
"Guarantors") is a corporation duly incorporated (or, in the case of Beazer
Homes Texas, L.P., and Texas Lone Star Title, L.P., a partnership duly formed),
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation or formation and has all requisite power and authority, corporate
or otherwise, to conduct its business, to own its properties and to execute and
deliver, and to perform all of its obligations under the Loan Documents.
(b) The Loan Documents have been duly executed and delivered by the
Borrower and the Guarantors. The execution and delivery by the Borrower and each
Guarantor of the Loan Documents and the performance of their respective
obligations thereunder have been duly authorized by all necessary corporate or
other action and do not and will not (i) require any consent or approval of its
stockholders, (ii) violate any provision of any law, rule or regulation
(including, without limitation, Regulation T, U or X of the Board of Governors
of the Federal Reserve System), or, to our knowledge, any order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to it which violation would (x) impair its ability to perform its
obligations under the Loan Documents or (y) have a material adverse effect on
its financial condition, properties, or operations, or on its charter or
by-laws, (iii) to our knowledge, result in a breach of or constitute a default
under any indenture or lease or loan or credit agreement or any other material
agreement or instrument to which it is a party or by which it or its properties
may be bound or affected, or (iv) to our knowledge, result in, or require, the
creation or imposition of any Lien upon any of the properties now owned or
hereafter acquired by it.
(c) No authorization, consent, approval, license, exemption of or filing
or registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for the valid execution, delivery or performance by the Borrower and each
Guarantor of the Loan Documents.
(d) Except as have been disclosed to the Agent and the Banks in writing,
there are to our knowledge no actions, suits or proceedings pending or
threatened against the Borrower or any Subsidiary or their properties before any
court or governmental department, commission,
1
board, bureau, agency or instrumentality, domestic or foreign, the probable
outcome of which would have a material adverse effect on the consolidated
financial condition, properties, or operations of the Borrower and its
Subsidiaries taken as a whole.
In rendering the foregoing opinion with respect to Beazer Homes Corp., we
have relied upon the opinion of ___________________ as to matters of Tennessee
law and _______________ as to matters of Texas law.
In rendering the foregoing opinion we express no opinion as to the effect
(if any) of any laws of any jurisdiction, except those of the General
Corporation Law and Revised Uniform Limited Partnership Act of the State of
Delaware, the laws of the State of Georgia, the Federal laws of the United
States and, to the extent provided for in the preceding paragraph, the laws of
States of Tennessee and Texas.
We express no opinion with respect to Beazer/▇▇▇▇▇▇▇ Realty, Inc., a
North Carolina corporation, Beazer Realty, Inc., a New Jersey corporation, or
Homebuilders Title Services of Virginia, Inc., a Virginia corporation.
2
Exhibit D
The opinion of Illinois counsel to be rendered pursuant to Section
3.01(5) of the Term Loan Agreement to which this Exhibit is attached shall be
substantially to the following effect:
The Loan Documents, when executed and delivered by the parties thereto,
will constitute the legal, valid and binding obligations of the Borrower and
each Guarantor enforceable against it in accordance with their respective terms,
except as enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium, fraudulent transfer or similar laws
affecting creditors' rights generally or by general equitable principles.
Counsel is a member of the Bar of the State of Illinois.
In rendering the foregoing opinion we express no opinion as to the effect
(if any) of any laws of any jurisdiction, except those of the State of Illinois
and the Federal laws of the United States.
1
Exhibit E
Bank One, NA,
as Agent
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Term Loan Agreement dated as of December 19, 2000 (the
"Term Loan Agreement") among Beazer Homes USA, Inc., the
Guarantors parties thereto, and each of the banks ("Banks")
parties thereto
Ladies and Gentlemen:
We have acted as your special counsel in connection with the Term Loan
Agreement. Terms used in the Term Loan Agreement are used herein as defined
therein.
We have examined the opinions (the "Opinions") and other documents
delivered by the Borrower and the Guarantors pursuant to Article III of the Term
Loan Agreement. We have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
the originals of all documents submitted to us as copies and the due authority
of all persons executing the same. We have relied as to factual matters on the
documents which we have reviewed, and as to matters of law covered by the
Opinions on such Opinions. We are qualified to practice law in the State of
Illinois and we do not purport to be experts on, or to express any opinion
herein concerning, the laws of any other jurisdiction.
Subject to the exceptions expressed in the preceding paragraph
and while we have not independently considered the matters covered by the
Opinions to the extent necessary to enable us to express the conclusions therein
stated, we are of the opinion that the Opinions and other documents delivered
pursuant to Article III of the Term Loan Agreement are substantially responsive
to the requirements of said Section. In that regard, we note that such Section
does not require the Opinions to address matters relating to Beazer/▇▇▇▇▇▇▇
Realty, Inc., a North Carolina
1
corporation, Beazer Realty, Inc., a New Jersey corporation, or Homebuilders
Title Services of Virginia, Inc., a Virginia corporation.
This opinion may be relied upon by each Bank that is a party to the Loan
Agreement.
Very truly yours,
2
Exhibit F
The opinion of local counsel to be rendered pursuant to Section 3.01(10)
of the Term Loan Agreement to which this Exhibit is attached shall be
substantially to the following effect:
(a) The Guarantor is a corporation duly incorporated validly existing,
and in good standing under the laws of the jurisdiction of its incorporation,
and has all requisite power and authority, corporate or otherwise, to conduct
its business, to own its properties and to execute and deliver, and to perform
all of its obligations under the Loan Documents.
(b) The execution and delivery by the Guarantor of the Term Loan
Agreement and the performance of its obligations thereunder have been duly
authorized by all necessary corporate or other action and do not and will not
(i) require any consent or approval of its stockholders, or (ii) violate any
provision of any law, rule or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal Reserve System),
or, to our knowledge, any order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to it which
violation would (x) impair its ability to perform its obligations under the Loan
Documents (y) have a material adverse effect on its financial condition,
properties, or operations, or on its charter or by-laws.
(c) No authorization, consent, approval, license, exemption of or filing
or registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for the valid execution, delivery or performance by the Guarantor of the Term
Loan Agreement.
(d) Except as have been disclosed to the Agent and the Banks in writing,
there are to our knowledge no actions, suits or proceedings pending or
threatened against the Guarantor or its properties before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, the probable outcome of which would have a material adverse
effect on the consolidated financial condition, properties, or operations of the
Guarantor.
Counsel is a member of the Bar of the State of __________________.
In rendering the foregoing opinion we express no opinion as to the effect
(if any) of any laws of any jurisdiction, except those of the State of
______________, and the Federal laws of the United States.
1
Exhibit G
CERTIFICATE
This Certificate is delivered pursuant to the Term Loan Agreement dated
as of December 19, 2000 among Beazer Homes USA, Inc., Bank One, NA as Agent, the
Banks party thereto and the Guarantors party thereto (the "Term Loan
Agreement"). Capitalized terms used herein and not defined herein shall have the
meanings provided therefor in the Term Loan Agreement. This Certification is
delivered pursuant to Section 3.01(12) of the Term Loan Agreement.
The undersigned, being a duly authorized officer of the Borrower, hereby
certifies as follows:
1. The representations and warranties contained in Article IV of the Term
Loan Agreement are correct on and as of the date hereof.
2. No Default or Event of Default has occurred and is continuing or would
result from the Borrowing of the Loans on the date hereof.
3. Upon such Borrowing, the Permitted Senior Debt shall not exceed the
Borrowing Base as set forth in the Borrowing Base Certificate delivered herewith
by the Borrower to the Agent.
Date: December __, 2000
Name: _______________________________
Title: ______________________________
1
Exhibit H
Subsidiaries of Borrower
------------------------
State of Borrower's
Subsidiary Incorporation % Ownership
---------- ------------- -----------
Beazer Mortgage Corporation Delaware 100%
Beazer Homes Corp. Tennessee 100%
Beazer Home Sales Arizona, Inc. Delaware 100%
Beazer Realty Corp. Georgia 100%
Beazer/▇▇▇▇▇▇▇ Realty, Inc. North Carolina 100%
Beazer Homes Holdings Corp. Delaware 100%
Beazer Homes Texas Holdings, Inc. Delaware 100%
Beazer Homes Texas, L.P. Delaware 99%(1)
Beazer Realty, Inc. New Jersey 100%
Homebuilders Title Services, Inc. Delaware 100%
Texas Lone Star Title, L.P. Texas 99%(2)
Homebuilders Title Services of Virginia, Inc. Virginia 100%
Universal Solutions Insurance Agency, Inc. Delaware 100%
Security Title Insurance Company, Inc. Vermont 100%
United Home Insurance Corporation Vermont 100%
--------
(1) The 99% interest is held by Beazer Homes Corp., and the remaining 1% is held
by Beazer Homes Texas Holdings, Inc.
(2) The 99% interest is held by Beazer Home Sales Arizona Inc., and the
remaining 1% is held by Beazer Homes Texas Holdings, Inc.
1
Exhibit I
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
_____________ (the "Assignor") and __________________ (the "Assignee") is dated
as of _____________, 2000. The parties hereto agree as follows:
(1) PRELIMINARY STATEMENT. The Assignor is a party to a Term Loan
Agreement (which, as it may be amended, modified, renewed or extended from time
to time, is herein called the "Term Loan Agreement") described in Item 1 of
Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the Term
Loan Agreement.
(2) ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Term Loan
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Term Loan Agreement and the other Loan Documents. The amount of the
Loans purchased by the Assignee hereunder is set forth in Item 3 of Schedule 1.
(3) EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 3 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after a
Notice of Assignment substantially in the form of Exhibit 1 attached hereto has
been delivered to the Agent. Such Notice of Assignment must include any consents
required to be delivered to the Agent by Section 12.03 of the Term Loan
Agreement (including the consent of the Agent). In no event will the Effective
Date occur if the payments required to be made by the Assignee to the Assignor
on the Effective Date under Sections 4 and 5 hereof are not made on the proposed
Effective Date. The Assignor will notify the Assignee of the proposed Effective
Date no later than the Business Day prior to the proposed Effective Date. As of
the Effective Date, (i) the Assignee shall have the rights and obligations of a
Bank under the Loan Documents with respect to the rights and obligations
assigned to the Assignee hereunder and (ii) the Assignor shall relinquish its
rights and be released from its corresponding obligations under the Loan
Documents with respect to the rights and obligations assigned to the Assignee
hereunder.
(4) PAYMENTS, OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Agent all payments of principal, interest
and fees with respect to the interest assigned hereby. The Assignee shall
advance funds directly to the Agent with respect to all Loans and reimbursement
payments made on or after the Effective Date with respect to the interest
assigned hereby. [In consideration for the sale and assignment of Loans
hereunder, (i) the Assignee shall pay the Assignor on the Effective Date, an
amount equal to the principal amount of the portion of all ABR Loans assigned to
the Assignee hereunder and (ii) with respect to each LIBOR Loan made by the
Assignor and assigned to the Assignee
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hereunder which is outstanding on the Effective Date, (a) on the last day of the
Interest Period therefor or (b) on such earlier date agreed to by the Assignor
and the Assignee or (c) on the date on which any such LIBOR Loan either becomes
due (by acceleration or otherwise) or is prepaid (the date as described in the
foregoing clauses (a), (b) or (c) being hereinafter referred to as the "Payment
Date"), the Assignee shall pay the Assignor an amount equal to the principal
amounts of the portion of such LIBOR Loan assigned to the Assignee which is
outstanding on the Payment Date. If the Assignor and the Assignee agree that the
Payment Date for such LIBOR Loan shall be the Effective Date, they shall agree
to the interest rate applicable to the portion of such Loan assigned hereunder
for the period from the Effective Date to the end of the existing Interest
Period applicable to such LIBOR Loan (the "Agreed Interest Rate") and any
interest received by the Assignee in excess of the Agreed Interest Rate shall be
remitted to the Assignor. In the event interest for the period from the
Effective Date to but not including the Payment Date is not paid by the Borrower
with respect to any LIBOR Loan sold by the Assignor to the Assignee hereunder,
the Assignee shall pay to the Assignor interest for such period on the portion
of such LIBOR Loan sold by the Assignor to the Assignee hereunder at the
applicable rate provided by the Term Loan Agreement. In the event a prepayment
of any LIBOR Loan which is existing on the Payment Date and assigned by the
Assignor to the Assignee hereunder occurs after the Payment Date but before the
end of the Interest Period applicable to such LIBOR Loan, the Assignee shall
remit to the Assignor the excess of the prepayment penalty paid with respect to
the portion of such LIBOR Loan assigned to the Assignee hereunder over the
amount which would have been paid if such prepayment penalty was calculated
based on the Agreed Interest Rate. The Assignee will also promptly remit to the
Assignor (i) any principal payments received from the Agent with respect to
LIBOR Loans prior to the Payment Date and (ii) any amounts of interest on Loans
and fees received from the Agent which relate to the portion of the Loans
assigned to the Assignee hereunder for periods prior to the Effective Date, in
the case of ABR Loans, or the Payment Date, in the case of LIBOR Loans, and not
previously paid by the Assignee to the Assignor.]* In the event that either
party hereto receives any payment to which the other party hereto is entitled
under this Assignment Agreement, then the party receiving such amount shall
promptly remit it to the other party hereto.
*THE PARTIES MAY INSERT ALTERNATIVE PAYMENT PROVISIONS IN LIEU OF THE PAYMENT
TERMS INCLUDED IN THIS EXHIBIT.
(5) FEES PAYABLE BY THE ASSIGNEE. [To the extent applicable, the Assignee
shall pay to the Assignor a fee on each day on which a payment of interest is
made under the Term Loan Agreement with respect to the amounts assigned to the
Assignee hereunder (other than a payment of interest for the period prior to the
Effective Date or, in the case of LIBOR Loans, the Payment Date, which the
Assignee is obligated to deliver to the Assignor pursuant to Section 4 hereof).
The amount of such fee shall be the difference between (i) the interest paid
with respect to the amounts assigned to the Assignee hereunder and (ii) the
interest which would have been paid with respect to the amounts assigned to the
Assignee hereunder if each interest rate was ___ of 1% less than the interest
rate paid by the Borrower. In addition, the Assignee agrees to pay ____% of the
recordation fee required to be paid to the Agent pursuant to the Term Loan
Agreement in connection with this Assignment Agreement.]*
*THE PARTIES MAY INSERT ALTERNATIVE PAYMENT PROVISIONS IN LIEU OF THE PAYMENT
TERMS INCLUDED IN THIS EXHIBIT.
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(6) REPRESENTATIONS OF THE ASSIGNOR: LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor nor
any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectibility of any Loan Documents, including
without limitation, documents granting the Assignor and the other Banks a
security interest in assets of the Borrower, any Subsidiary, or any Guarantor,
(ii) any representation, warranty or statement made in or in connection with any
of the Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower, any Subsidiary, or any Guarantor, (iv) the performance of or
compliance with any of the terms or provisions of any of the Loan Documents, (v)
inspecting any of the property, books or records of the Borrower, any
Subsidiary, or any Guarantor, (vi) the validity, enforceability, perfection,
priority, condition, value or sufficiency of any collateral securing or
purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
(7) REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it
has received a copy of the Term Loan Agreement, together with copies of such
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, (iii) appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Bank, (v) agrees that its
payment instructions and notice instructions are as set forth in the attachment
to Schedule 1, (vi) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are "plan
assets" as defined under ERISA and that its rights, benefits and interests in
and under the Loan Documents will not be "plan assets" under ERISA, [and (vii)
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying that the Assignee is entitled to receive payments under the
Loan Documents without deduction or withholding of any United States federal
income taxes]* and (viii) represents and warrants that the assignment hereunder
does not and will not, as of the effective date of such assignment, result in
any increased costs or expenses, including without limitation pursuant to
Section 2.14 or 2.15 of the Term Loan Agreement, payable by the Borrower or any
Guarantor.
*TO BE INSERTED IF THE ASSIGNEE IS NOT INCORPORATED UNDER THE LAWS OF THE UNITED
STATES, OR A STATE THEREOF.
(8) INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable
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attorneys' fees) and liabilities incurred by the Assignor in connection with or
arising in any manner from the Assignee's non-performance of the obligations
assumed under this Assignment Agreement.
(9) SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to Section 12.03 of the Term Loan Agreement to assign
the rights which are assigned to the Assignee hereunder to any entity or person,
provided that (i) any such subsequent assignment does not violate any of the
terms or conditions of the Loan Documents or any law, rule, regulation, order,
writ, judgment, injunction or decree and that all consents required under the
terms of the Loan Documents have been obtained and (ii) unless the prior written
consent of the Assignor is obtained, the Assignee is not thereby released from
its obligations to the Assignor hereunder, if any remain unsatisfied, including,
without limitation, its obligations under Sections 4, 5 and 8 hereof.
(10) REDUCTIONS OF LOANS. If any reduction in the outstanding principal
balance of the Loan occurs between the date of this Assignment Agreement and the
Effective Date, the percentage interest specified in Item 3 of Schedule 1 shall
remain the same, but the dollar amount purchased shall be recalculated based on
the reduced amount of the Loans.
(11) ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
of Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
(12) GOVERNING LAW. This Assignment Agreement shall be governed by and
construed in accordance with, the laws of the State of Illinois without regard
to principles of conflict of laws.
(13) NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Term Loan Agreement. For the purpose hereof the
addresses of the parties hereto (until notice of a change is delivered) shall be
the addresses set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By:________________________________
Title:_____________________________
[NAME OF ASSIGNEE]
By:________________________________
Title:_____________________________
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SCHEDULE 1
to Assignment Agreement
1. Description and Date of Term Loan Agreement: Term Loan Agreement
dated December 19, 2000 with Beazer Homes USA, Inc.
2. Date of Assignment Agreement: _________________, 20__
3. Amounts (As of Date of Item 2 above):
a. Total of outstanding Loans under
Term Loan Agreement $_______
b. Aggregate Loan amount
purchased by Assignee hereunder: $_______
4. Proposed Effective
Date: ________, 20__
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By:_____________________ By:______________________
Title:__________________ Title:___________________
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Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must include
notice address for the Assignor and the Assignee and the ABR Loan Lending Office
address and the LIBOR Loan Lending Office address for the Assignee.
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EXHIBIT 1
to Assignment Agreement
NOTICE
OF ASSIGNMENT
_______________________, 20__
To: [NAME OF BORROWER]*
____________________
____________________
[NAME OF AGENT]
____________________
____________________
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
(1) We refer to that certain Term Loan Agreement (the "Term Loan
Agreement") described in Item I of Schedule 1 attached hereto ("Schedule 1").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Term Loan Agreement.
(2) This Notice of Assignment (this "Notice") is given and delivered to
[the Borrower and]* the Agent pursuant to Section 12.03 of the Term Loan
Agreement.
(3) The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of __________, 20__ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Term Loan Agreement. The Effective
Date of the Assignment shall be the later of the date specified in Item 5 of
Schedule 1 or two Business Days (or such shorter period as agreed to by the
Agent) after this Notice of Assignment and any consents and fees required by
Section 12.03 of the Term Loan Agreement have been delivered to the Agent,
provided that the Effective Date shall not occur if any condition precedent
agreed to by the Assignor and the Assignee has not been satisfied.
*TO BE INCLUDED ONLY IF CONSENT MUST BE OBTAINED FROM THE BORROWER PURSUANT TO
SECTION 12.03 OF THE TERM LOAN AGREEMENT.
(4) The Assignor and the Assignee hereby give to the Borrower and the
Agent notice of the assignment and delegation referred to herein. The Assignor
will confer with the
1
Agent before the date specified in Item 4 of Schedule 1 to determine if the
Assignment Agreement will become effective on such date pursuant to Section 3
hereof, and will confer with the Agent to determine the Effective Date pursuant
to Section 3 hereof if it occurs thereafter. The Assignor shall notify the Agent
if the Assignment Agreement does not become effective on any proposed Effective
Date as a result of the failure to satisfy the conditions precedent agreed to by
the Assignor and the Assignee. At the request of the Agent, the Assignor will
give the Agent written confirmation of the satisfaction of the conditions
precedent.
(5) The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $4,000.00 required by Section 12.03 of the
Term Loan Agreement.
(6) If any Notes are outstanding on the Effective Date, the Assignor and
the Assignee request and direct that the Agent prepare and cause the Borrower to
execute and deliver new Notes or, as appropriate, replacement Notes, to the
Assignor and the Assignee. The Assignor and, if applicable, the Assignee each
agree to deliver to the Agent the original Note received by it from the Borrower
upon its receipt of a new Note (or replacement Note) in the appropriate amount,
whereupon such original Note shall be marked "canceled" and returned to the
Borrower.
(7) The Assignee advises the Agent that notice and payment instructions
are set forth in the attachment to Schedule 1.
(8) The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment Agreement are "plan assets" as defined under ERISA and that
its rights, benefits, and interests in and under the Loan Documents will not be
"plan assets" under ERISA.
(9) The Assignee authorizes the Agent to act as its agent under the Loan
Documents in accordance with the terms thereof. The Assignee acknowledges that
the Agent has no duty to supply information with respect to the Borrower or the
Loan Documents to the Assignee until the Assignee becomes a party to the Term
Loan Agreement.*
*MAY BE ELIMINATED IF ASSIGNEE IS A PARTY TO THE TERM LOAN AGREEMENT PRIOR TO
THE EFFECTIVE DATE.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By:________________________ By:___________________________
Title:_____________________ Title:________________________
ACKNOWLEDGED [AND CONSENTED ACKNOWLEDGED [AND CONSENTED
TO] BY (NAME OF AGENT] TO] BY (NAME OF BORROWER]
By:________________________ By:___________________________
Title:_____________________ Title:________________________
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[Attach photocopy of Schedule 1 to Assignment)
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