SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED April 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
PERIOD FROM TO
Commission file number 1-9186
TOLL BROTHERS, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2416878
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3103 Philmont Avenue, Huntingdon Valley, Pennsylvania 19006
(Address of principal executive offices) (Zip Code)
(215) 938-8000
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, $.01 par value: 36,996,537 shares as of June 1, 1998
PAGE
<PAGE>
TOLL BROTHERS, INC. AND SUBSIDIARIES
INDEX
Page
No.
PART I. Financial Information
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets (Unaudited) 1
as of April 30, 1998 and October 31, 1997
Condensed Consolidated Statements of Income 2
(Unaudited) For the Six Months and Three
Months Ended April 30, 1998 and 1997
Condensed Consolidated Statements of Cash Flows 3
(Unaudited)For the Six Months Ended
April 30, 1998 and 1997
Notes to Condensed Consolidated Financial Statements 4
(Unaudited)
ITEM 2. Management's Discussion and Analysis of 7
Financial Condition and Results of Operations
PART II. Other Information 10
SIGNATURES 12
STATEMENT OF FORWARD-LOOKING INFORMATION
Certain information included herein and in other statements, reports and
S.E.C.filings is foward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995 related to subject matter such as national and
local economic conditions, the effect of governmental regulation on the Company,
the competitive environment in which the Company operates, changes in interest
rates, home prices, availability and cost of land for future growth,
availability of working capital, the availability and cost of labor and
materials and the levels of spending for selling, general and administrative
costs. Such forward looking information involves important risks and
uncertainties that could significantly affect expected results.
These risks and uncertainties are addressed in this and other SEC filings.
PAGE
<PAGE>
<TABLE>
<CAPTION>
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
(Amounts in thousands)
(Unaudited)
April 30, October 31,
1998 1997
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 55,122 $ 147,575
Residential inventories 1,037,315 921,595
Property, construction and office
equipment 14,708 15,074
Receivables, prepaid expenses and
other assets 44,465 31,793
Mortgage notes receivable 2,051 2,589
$1,153,661 $1,118,626
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Loans payable $ 170,016 $ 189,579
Subordinated notes 269,255 319,924
Customer deposits on sales
contracts 71,468 52,698
Accounts payable 49,629 48,600
Accrued expenses 77,196 75,237
Collateralized mortgage
obligations payable 2,285 2,577
Income taxes payable 39,243 44,759
Total liabilities 679,092 733,374
Shareholders' equity:
Preferred stock
Common stock 370 343
Additional paid-in capital 106,677 48,514
Retained earnings 367,522 336,395
Total shareholders' equity 474,569 385,252
$1,153,661 $1,118,626
</TABLE>
See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands except per share data)
(Unaudited)
Six months Three months
ended April 30 ended April 30
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues:
Housing sales $491,447 $409,950 $248,213 $208,513
Interest and other 2,891 1,776 1,410 693
494,338 411,726 249,623 209,206
Costs and expenses:
Land and housing construction 381,156 317,980 192,306 162,599
Selling, general &
administrative 48,517 38,893 24,999 20,073
Interest 14,625 12,742 7,594 6,605
444,298 369,615 224,899 189,277
Income before income taxes
and extraordinary loss 50,040 42,111 24,724 19,929
Income taxes 17,798 15,411 9,037 7,326
Income before extraordinary loss 32,242 26,700 15,687 12,603
Extraordinary loss from
extinguishment of debt,
net of income taxes of $655
in 1998 and $1,659 in 1997 1,115 2,772 1,115
Net income $ 31,127 $ 23,928 $ 14,572 $ 12,603
Earnings per share:
Basic
Income before extraordinary $ .90 $ .78 $ .42 $ .37
loss
Extraordinary loss from
extinguishment of debt .03 .08 .03
Net Income $ .87 $ .70 $ .39 $ .37
Diluted
Income before extraordinary $ .85 $ .74 $ .41 $ .35
loss
Extraordinary loss from
extinguishment of debt .03 .07 .03
Net Income $ .82 $ .67 $ .38 $ .35
Weighted average number
of shares
Basic 35,980 34,035 36,976 34,124
Diluted 38,400 37,083 38,673 37,138
</TABLE>
See accompanying notes
PAGE
<PAGE>
<TABLE>
<CAPTION>
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Six month
ended April 30
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net income $31,127 $23,928
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 2,072 1,696
Amortization of discount on loans 916 190
Extraordinary loss from extinguishment of debt 1,770 4,431
Deferred taxes 3,869 2,764
Changes in operating
assets and liabilities:
Increase in residential inventories (118,724) (59,818)
(Increase) decrease in receivables,
prepaid expenses and other assets (15,881) 802
Increase in customer deposits on sales 18,770 8,016
contracts
Increase (decrease) in accounts payable,
accrued expenses and other liabilities 7,753 (171)
Decrease in current income taxes payable (8,454) (7,449)
Net cash used in operating activities (76,782) (25,611)
Cash flows from investing activities:
Purchase of property, construction and office
equipment, net (1,350) (3,638)
Principal repayments of mortgage notes receivable 538 157
Net cash used in investing activities (812) (3,481)
Cash flows from financing activities:
Proceeds from loans payable 50,000 80,000
Principal payments of loans payable (67,638) (40,027)
Proceeds from the issuance of senior subordinated notes 97,500
Repurchase of subordinated notes (90,434)
Principal payments of collateralized mortgage
obligations (292) (152)
Proceeds from stock options exercised and employee
stock plan purchases 3,348 1,920
Purchase of treasury stock (277)
Net cash (used in) provided by financing (14,859) 48,807
activities
Net (decrease)increase in cash and cash equivalents(92,453) 19,715
Cash and cash equivalents, beginning of period 147,575 22,891
Cash and cash equivalents, end of period $55,122 $42,606
Supplemental disclosures of cash flow information
Interest paid, net of capitalized amount $ 3,946 $ 2,678
Income taxes paid $21,731 $18,102
Supplemental disclosures of non-cash financing activities:
Cost of residential inventories acquired through
seller financing $11,144
Income tax benefit relating to exercise of employee
stock options $ 843 $ 335
Stock bonus award $ 3,564 $ 2,295
Conversion of Subordinated debt $50,712
</TABLE>
See accompanying notes
PAGE
<PAGE>
TOLL BROTHERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands)
(Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the rules and regulations of
the Securities and Exchange Commission for interim financial information.
The October 31, 1997 balance sheet amounts and disclosures included
herein have been derived from the October 31, 1997 audited financial
statements of the Registrant. Since the accompanying condensed consolidated
financial statements do not include all the information and footnotes
required by generally accepted accounting principles for complete financial
statements, it is suggested that they be read in conjunction with the
financial statements and notes thereto included in the Registrant's
October 31, 1997 Annual Report on Form 10-K. In the opinion of management,
the accompanying unaudited condensed consolidated financial statements
include all adjustments, which are of a normal recurring nature,
necessary to present fairly the Company's financial position as of April
30, 1998 the results of its operations for the six months and three
months then ended and its cash flows for the six months then ended. The
results of operations for such interim periods are not necessarily
indicative of the results to be expected for the full year.
In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No.128, "Earnings Per Share". Statement 128
replaced the previously reported primary and fully diluted earnings per
share with basic and diluted earnings per share. Unlike primary earnings
per share, basic earnings per share excludes any dilutive effects of
options, warrants, and convertible securities. Diluted earnings per
share is very similar to the previously reported fully diluted earnings per
share. All earnings per share amounts for all periods have been presented,
and where necessary, restated to conform to the Statement 128 requirements.
PAGE
<PAGE>
<TABLE>
<CAPTION>
2. Residential Inventories
Residential inventories consisted of the following:
April 30, October 31,
1998 1997
<S> <C> <C>
Land and land development costs $251,971 $234,855
Construction in progress 674,572 590,295
Sample homes 49,974 47,920
Land deposits and costs of future
development 38,746 28,314
Deferred marketing and financing
costs 22,052 20,211
$1,037,315 $921,595
</TABLE>
Construction in progress includes the cost of homes under construction,
land and land development and carrying costs of lots that have been
substantially improved.
The Company capitalizes certain interest costs to inventories during the
development and construction period. Capitalized interest is charged to
interest expense when the related inventories are closed. Interest
incurred, capitalized and expensed is summarized as follows:
Six months Three months
ended April 30 ended April 30
1998 1997 1998 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Interest capitalized,
beginning of period $51,687 $46,191 $54,991 $49,198
Interest incurred 19,705 17,993 9,352 8,768
Interest expensed (14,625) (12,742) (7,594) (6,605)
Write off to cost of sales (18) (83) (2)
Interest capitalized,
end of period $56,749 $51,359 $56,749 $51,359
</TABLE>
3. Extinguishment of Debt
In December 1997, the Company called for redemption on January 14, 1998
all of its outstanding 4 3/4% Convertible Senior Subordinated Notes due 2004
at 102.969% of principal amount plus accrued interest. Prior to the
redemption date, $50.8 million of bonds were converted into common stock of
the Company.
In February 1998, the Company entered into a new five year, $355 million
bank credit facility. In connection therewith, the Company repaid $62
million of fixed rate long-term bank loans. The Company recognized an
extraordinary charge in the second quarter of 1998
of $1.1 million, net of $655,000 of income taxes, related to the retirement
of its previous revolving credit agreement and prepayment of the term loans.
In January 1997, the Company called for redemption on March 15, 1997
all of its outstanding 10 1/2% Senior Subordinated Notes due 2002 at
103% of principal amount plus accrued interest. The redemption resulted in
an extraordinary loss in the first quarter of fiscal 1997 of $2,772,000, net
of $1,659,000 of income taxes. The loss represents the redemption
premium and the write-off of unamortized deferred issuance costs.
<PAGE>
<TABLE>
<CAPTION>
4. Earnings per share information: (in thousands)
Six months Three months
ended April 30 ended April 30
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Basic Weighted average
shares outstanding (Basic) 35,980 34,035 36,976 34,124
Stock options 1,539 703 1,697 669
Convertible subordinated
notes 881 2,345 2,345
Diluted weighted
average shares 38,400 37,083 38,673 37,138
Earnings addback related
to interest on convertible
subordinated notes $ 315 $ 756 $ 0 $ 378
</TABLE>
5. Stock Repurchase Program
In April 1997, the Company's Board of Directors authorized the repurchase
of up to 3,000,000 shares of its Common Stock, par value $.01, from time
to time, in open market transactions or otherwise, for the purpose of
providing shares for its various employee benefit plans. As of April 30,
1998, the Company had repurchased 10,000 shares. The Company reissued
these shares to employees upon exercise of stock options.
PAGE
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
The following table sets forth, for the periods indicated, certain income
statement items related to the Company's operations as percentages of
total revenues and certain other data:
Six months Three months
ended April 30 ended April 30
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Land and housing construction 77.1 77.2 77.0 77.7
Selling, general and
administrative 9.8 9.5 10.0 9.6
Interest 3.0 3.1 3.1 3.2
Total costs and expenses 89.9 89.8 90.1 90.5
Income before taxes 10.1% 10.2% 9.9% 9.5%
</TABLE>
Revenues for the six month and three month periods ended April 30, 1998 were
higher than those of the comparable periods of 1997 by approximately $82.6
million, or 20%, and $40.4 million, or 19%, respectively. The increased
revenues for the 1998 periods were primarily attributable to the increase in
the number of the homes delivered during the periods which was due to the
greater number of communities from which the Company was delivering homes
and the larger backlog of homes at the beginning of fiscal 1998 as compared
to the beginning of fiscal 1997. The revenue increases were offset in part
by a 3.6% decrease in the average selling price per home delivered in the
second quarter of fiscal 1998 and delays caused by the excessive rains in
the Company's Western markets. The decrease in the average selling price
per home delivered in the second quarter of fiscal 1998 compared to the
second quarter of 1997 was due principally to an increase in the number of
smaller homes delivered during the period and delays in delivery of some of
the larger homes due to the aforementioned weather conditions.
The value of new sales contracts signed amounted to $706 million (1,751 homes)
and $435 million (1,076 homes) for the six month and three month periods ended
April 30, 1998, respectively. The value of new contracts signed for the
comparable periods of fiscal 1997 were $528 million (1,314 homes) and
$355 million (872 homes), respectively. The increase in new contracts signed
in both periods of 1998 was primarily attributable to an increase both in the
number of communities in which the Company was offering homes for sale and in
the number of contracts signed per community.
Orders for new homes are generally the strongest during the Company's second
quarter and consequently the backlog at April 30 is generally at its highest
level in the Company's fiscal year. As of April 30, 1998, the backlog of
homes under contract amounted to $852 million (2,045 homes), approximately
32% higher than the $644 million (1,593 homes) backlog as of April 30,
1997 and approximately 36% higher than the $627 million (1,551 homes) backlog
as of October 31, 1997. The increase in backlog at April 30, 1998 is primarily
attributable to the increases in the new contracts signed as previously
discussed which exceeded the homes delivered during the applicable periods.
<PAGE>
Land and construction costs as a percentage of revenues decreased in the three
month period ended April 30, 1998 as compared to the same period of 1997. The
decrease was due principally to a shift in the geographic mix of homes
delivered to more profitable markets. The costs as a percentage of revenues
for both six months periods of 1998 and 1997 were comparable.
Selling, general and administrative expenses ("SG&A") in the six month and
three month periods ended April 30, 1998 increased over the comparable
periods of 1997 by $9.6 million or 25%, and $4.9 million or 25%,
respectively. These increases were primarily attributable to the higher
level of spending due to the increase in revenues in the 1998 periods as
compared to the same periods of 1997 and the Company's geographic expansion.
Interest expense is determined on a specific home-by-home basis and will vary
depending on many factors including the period of time that the land under the
home was owned, the length of time that the home was under construction, and
the interest rates and the amount of debt carried by the Company in proportion
to the amount of its inventory during those periods. As a percentage of
revenues, interest expense was lower in the six month and three month periods
of 1998 as compared to 1997.
Income Taxes
The Company's estimated combined state and federal tax rate before providing
for the effect of permanent book-tax differences ("Base Rate") was 37% and
37.5% in the 1998 and 1997 periods, respectively. The decrease in the Base
Rate was due to a decrease in the Company's estimated effective state tax
rate. The effective tax rate for the six month and three month periods of
1998 were 35.6% and 36.6% as compared to 36.6% and 36.8% for the comparable
periods of 1997. The primary differences between the Company's Base Rate and
effective tax rate were tax free income in 1998 and 1997 and in the first
quarter of 1998 and an adjustment due to the recomputation of the Company's
deferred tax liability resulting from the change in the Company's estimated
Base Rate. The Company expects the effective rate for the remainder of fiscal
1998 to increase and for the full 1998 fiscal year to be approximately 36.5%.
EXTRAORDINARY LOSSES FROM EXTINGUISHMENT OF DEBT
In February 1998, the Company entered into a new five year, $355 million bank
credit facility. In connection therewith, the Company repaid $62 million of
fixed rate long-term bank loans. The Company recognized an extraordinary
charge in the second quarter of 1998 of $1.1 million, net of $655,000 of
income taxes, related to the retirement of its previous revolving credit
agreement and prepayment of the term loans.
In January 1997, the Company called for redemption on March 15, 1997 of all
of its outstanding 10 1/2% Senior Subordinated Notes due 2002 at 103% of
principal amount plus accrued interest. The redemption resulted in an
extraordinary loss in the first quarter of fiscal 1997 of $2,772,000, net
of $1,659,000 of income taxes. The loss represents the redemption premium
and a write-off of unamortized deferred issuance costs.
CAPITAL RESOURCES AND LIQUIDITY
Funding for the Company's residential development activities has been
principally provided by cash flows from operations, unsecured bank
borrowings and the public debt and equity markets.
The Company has a $355 million unsecured revolving credit facility
with fifteen banks which extends through February 2003. As of April 30, 1998,
the Company had $50 million of loans and approximately $17 million of
letters of credit outstanding under the facility.
<PAGE>
The Company believes that it will be able to continue to fund its activities
through a combination of operating cash flow and existing sources of
credit.
YEAR 2000
In prior years, many computer programs were written using two digits rather
than four to define the applicable year which could result in systems failures
or errors. Management has reviewed its internal software systems and believes
that the required changes will be completed without causing operational issues
or have a material impact on the Company's results of operations or financial
condition.
<TABLE>
<CAPTION>
HOUSING DATA
Six Months Three Month
Ended April 30 Ended April 30
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Period ended April 30:
# of homes closed 1,310 1,088 665 538
# of homes contracted 1,751 1,314 1,076 872
Sales value of homes
contracted (in thous.) $705,873 $528,126 $435,453 $354,611
April 30, Oct.31, April 30, Oct. 31,
1998 1997 1997 1996
# of homes in backlog 2,045 1,551 1,593 1,367
Sales value of homes in
backlog (in thous.) $852,337 $627,220 $644,370 $526,194
</TABLE>
<PAGE>
PART II. Other Information
ITEM 1. Legal Proceedings
None.
ITEM 2. Changes in Securities
None.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
(a) The Company's 1998 Annual Meeting of Shareholders was
held on March 5, 1998.
(b) Not required.
(c) The following proposals were submitted to a vote of
shareholders and were approved by the affirmative vote of a
majority of the shares of common stock of the Company that
were present in person or by proxy, as indicated below.
(i) The approval of the proposed Toll Brothers, Inc. Stock
Incentive Plan (1998).
FOR AGAINST ABSTAIN
19,298,984 10,947,238 49,002
(ii) The approval of the proposed amendment of the
Company's Certificate of Incorporation.
FOR AGAINST ABSTAIN
27,739,195 2,438,630 117,399
(iii) The approval of Ernst & Young LLP as the Company's
independent auditors for the 1998 fiscal year.
FOR AGAINST ABSTAIN
32,703,632 15,262 17,766
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.1 Credit Agreement dated as of February 25, 1998
among First Huntingdon Finance Corp., The
Registrant, The First National Bank of
Chicago, (Administrative Agent); Bank of
America National Trust and Savings
Association; (Co-Agent); CoreStates Bank, N.A.,
(Co-Agent); Credit Lyonnais New York Branch
(Co-Agent);Comerica Bank; Nationsbank,
National Association; Fleet National Bank;
Guaranty Federal Bank, F.S.B.; Mellon Bank,
N.A.; Banque Paribas; Bayerische Vereinsbank AG,
New York Branch; Kredietbank N.V.; Suntrust
Bank, Atlanta; The Fuji Bank Limited;
and Bank Hapoalim B.M. Philadelphia Branch
<PAGE>
Exhibit 10.2 Agreement dated March 5,1998 between the
Registrant and Bruce E. Toll ("Mr. Toll")
regarding Mr. Toll's resignation and related
matters.
Exhibit 10.3 Consulting and non-competition agreement dated
March 5,1998 between the Registrant and
Bruce E. Toll
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K dated February 25, 1998 filed for the purpose of
recalculating earnings per share for the five years ended
October 31, 1997 in accordance with statement of Financial
Accounting Standards No. 128,"Earnings Per Share".
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOLL BROTHERS, INC.
(Registrant)
Date: June 9, 1998 By: /s/ Joel H. Rassman
Joel H. Rassman
Senior Vice President,
Treasurer and Chief
Financial Officer
Date: June 9, 1998 By: /s/ Joseph R. Sicree
Joseph R. Sicree
Vice President -
Chief Accounting Officer
(Principal Accounting Officer)
<PAGE>
CREDIT AGREEMENT
This Agreement, dated as of February 25, 1998, is among First
Huntingdon Finance Corp., Toll Brothers, Inc., the Lenders and The First
National Bank of Chicago, as Administrative Agent. The parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"ABR Advance" means an Advance that bears interest at the
Alternate Base Rate.
"ABR Loan" means a Loan that bears interest at the Alternate Base
Rate.
"Absolute Rate" means, with respect to an Absolute Rate Loan made
by a Lender for the relevant Competitive Bid Interest Period, the rate of
interest per annum (rounded to the nearest 1/100 of 1%) offered by such
Lender and accepted by the Borrower.
"Absolute Rate Advance" means a borrowing hereunder consisting
of the aggregate amount of the several Absolute Rate Loans made by some
or all of the Lenders to the Borrower at the same time and for the same
Competitive Bid Interest Period.
"Absolute Rate Auction" means a solicitation of Competitive Bid
Quotes setting forth Absolute Rates pursuant to Section 2.3.
"Absolute Rate Loan" means a Loan that bears interest at the
Absolute Rate.
"Additional Lender" means a Qualified Bank (approved by the
Administrative Agent, which approval shall not be unreasonably withheld)
or an existing Lender that elects, upon request by the Borrower, to purchase
the Commitment of another Lender pursuant to Section 2.20 or to issue a
Commitment, or to increase its existing Commitment, pursuant to Section
2.18.
"Administrative Agent" means The First National Bank of Chicago
in its capacity as contractual representative of the Lenders pursuant to
Article XI, and not in its individual capacity as a Lender, and any successor
Administrative Agent appointed pursuant to Article XI.
"Administrative Agent's Fee Letter" means that certain fee letter
agreement dated December 19, 1997, among the Borrower, the Company,
the Administrative Agent and the Arranger, as the same may be modified
or amended from time to time.
"Advance" means a borrowing hereunder (or conversion or
continuation thereof) consisting of the aggregate amount of the several
Loans made on the same Borrowing Date (or date of conversion or
continuation) by some or all of the Lenders to the Borrower of the same
Type (or on the same interest basis in the case of Competitive Bid
Advances) and, in the case of Fixed Rate Advances, for the same Interest
Period. For the avoidance of doubt, the term "Advance" includes each
Competitive Bid Advance and Swing Line Advance.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the
controlling Person owns 10% or more of any class of voting securities (or
other ownership interests) of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Aggregate Available Credit" means at any time the amount by
which (a) the Aggregate Commitment exceeds (b) the sum of (i) the
principal amount of all outstanding Advances, plus (ii) the Facility Letter
of Credit Obligations.
"Aggregate Commitment" means the aggregate of the Commitments
of all the Lenders, as increased or reduced from time to time pursuant to the
terms hereof.
"Aggregate Commitment Limit" means at any time the sum of (a)
$450,000,000 plus (b) the lesser of (i) the amount (if any) by which
Consolidated Net Worth as of the end of the immediately preceding fiscal
quarter for which financial statements have most recently been delivered,
or were required to be delivered, to the Administrative Agent pursuant to
Section 6.4 or Section 7.1 exceeds $385,252,000 and (ii) $100,000,000.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time, applied in a manner
consistent with that used in preparing the financial statements filed by the
Company with the SEC from time to time.
"Agreement of Sale" means a fully-executed written agreement
(substantially in a form approved by the Administrative Agent, which
approval shall not be unreasonably withheld) between a Loan Party and a
purchaser that is not an Affiliate of the Company or any other member of
Toll Group, providing for the sale of a residential unit to such purchaser,
which agreement (i) shall include no contingency for the purchaser selling
another residence, (ii) be accompanied by a non-refundable (except on
terms set forth in such agreement or as may be prevented by applicable law)
deposit equal to the lesser of (x) ten percent (10%) of the purchase price of
the unit sold (at least one-half of which deposit shall have been paid in
cash), (y) the difference between the purchase price set forth in such
agreement and the amount of the mortgage contingency set forth in such
agreement (at least one-half of which deposit shall have been paid in cash)
and (z) the maximum amount of deposit which applicable Law permits the
seller of such unit to retain as liquidated damages if the closing of the sale
of such unit does not occur, and (iii) shall provide that the purchase price
shall be paid in cash or by title company check or by attorney check or by
certified or bank check at or before the closing of the sale (such cash or
check may be obtained by the purchaser from a loan provided by the seller
or an Affiliate of the seller). For the purpose of clause (z) above,
applicable law shall be deemed to prohibit the seller from retaining a
deposit if it creates a presumption that the amount of such deposit is
unreasonable and as such may not be retained by the seller.
"Alternate Base Rate" means, for any day, a rate of interest per
annum equal to the higher of (i) the Corporate Base Rate for such day and
(ii) the sum of the Federal Funds Effective Rate for such day plus 1/2% per
annum.
"Applicable CD Rate Margin" means, with respect to a Fixed CD
Rate Advance, the percentage rate per annum applicable to such Advance,
as determined pursuant to the Pricing Schedule.
"Applicable Eurodollar Rate Margin" means, with respect to a
Eurodollar Ratable Advance at any time, the percentage rate per annum
applicable to such Advance, as determined pursuant to the Pricing
Schedule.
"Applicable Fee Rate" means at any time the percentage rate per
annum at which Facility Fees are accruing on the Aggregate Commitment
(without regard to usage) at such time as determined pursuant to the Pricing
Schedule.
"Applicable Letter of Credit Rate" means, at any time, the
percentage rate per annum at which Facility Letter of Credit Fees are
accruing on outstanding Facility Letters of Credit, which percentage rate
shall be as follows: (a) for (i) Facility Letters of Credit that are
Performance Letters of Credit and (ii) Facility Letters of Credit that are
Financial Letters of Credit to the extent that the aggregate daily average
undrawn face amount thereof does not exceed $10,000,000 during the
quarter (or other applicable period) with respect to which the Facility Letter
of Credit Fees are determined, the rate per annum that constitutes the
Applicable Letter of Credit Rate at such time as determined pursuant to the
Pricing Schedule, and (b) for Facility Letters of Credit that are Financial
Letters of Credit to the extent that the aggregate daily average undrawn face
amount thereof is in excess of $10,000,000 during the quarter (or other
applicable period) with respect to which the Facility Letter of Credit Fees
are determined, a rate per annum equal to the Applicable Eurodollar Rate
Margin at such time as determined pursuant to the Pricing Schedule.
"Application" means, with respect to a Facility Letter of Credit,
such form of application therefor and other documents related thereto
(whether in a single or several documents, taken together) as an Issuing
Bank may employ in the ordinary course of business for its own account,
with such modifications thereto as may be agreed upon by such Issuing
Bank and the Borrower and as are not materially adverse (in the reasonable
judgment of such Issuing Bank and the Administrative Agent) to the
interests of the Lenders; provided, however, in the event of any conflict
between the terms of any Application and this Agreement, the terms of this
Agreement shall control.
"Arranger" means First Chicago Capital Markets, Inc., a Delaware
corporation, and its successors.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Assessment Rate" means, for any CD Interest Period, the
assessment rate per annum (rounded upwards to the next higher multiple of
1/100 of 1% if the rate is not such a multiple) payable to the Federal
Deposit Insurance Corporation (or any successor) by a member of the Bank
Insurance Fund which is classified as adequately capitalized and within
supervisory subgroup "A" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. 327.3(e) (or any successor
provision) for the insurance of time deposits at the offices of such institution
in the United States, as estimated by First Chicago in good faith on the first
day of such Interest Period.
"Assumed Purchase Money Loans" means at any time the outstanding
amount of all loans secured by assets purchased by the Designated
Guarantors and assumed or entered into by the applicable Designated
Guarantor on the date of purchase, provided that (i) the amount of any such
loan does not exceed the purchase price of the applicable asset and (ii)
recourse for each such loan is limited to the applicable Designated Guarantor;
and any amendment, modification, extension or refinancing of such loans,
provided that with respect to the loans, as amended, modified, extended, or
refinanced (A) the aggregate amount thereof shall not exceed the amount of
the loans which existed at the time the applicable Designated Guarantor
purchased such asset, (B) such loans and refinancings shall not be secured by
any assets of any Loan Party other than those initially purchased by the
applicable Designated Guarantor and improvements constructed thereon in
the normal course of the Company's homebuilding business, and (C) at least
80% of the amount thereof shall be provided by the same lenders which
provided the loans which existed at the time the applicable Designated
Guarantor purchased such assets.
"Authorized Officers" means those Persons designated by written
notice to the Administrative Agent from the applicable Loan Party,
authorized to execute notices, reports and other documents required
hereunder. The Loan Parties may amend such list of Persons from time to
time by giving written notice of such amendment to the Administrative
Agent.
"Benefit Arrangement" means at any time an "employee benefit plan,"
within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer Plan and which is maintained, sponsored or otherwise
contributed to by any member of the Controlled Group.
"Borrower" means First Huntingdon Finance Corp., a Delaware
corporation, and its successors and assigns.
"Borrowing Base" means at any time the sum of (i) 100% of Category
1 Borrowing Base Assets (except as otherwise hereinafter provided); (ii) 75%
of Category 2 Borrowing Base Assets (except as otherwise hereinafter
provided); (iii) 60% of Category 3 Borrowing Base Assets; and (iv) 50% of
Category 4 Borrowing Base Assets. Notwithstanding the foregoing, the
Borrower may elect to combine the Category 1 Borrowing Base Assets and
Category 2 Borrowing Base Assets into one category, in which event, in
place of items (i) and (ii) above, 85% of the sum of the Category 1 Borrowing
Base Assets and Category 2 Borrowing Base Assets shall be included in the
Borrowing Base, provided that the Borrower shall represent and warrant in
the applicable Borrowing Base Certificate that (A) 85% of the sum of the
Category 1 Borrowing Base Assets and Category 2 Borrowing Base Assets
is less than (B) the sum of items (i) and (ii) above. All Borrowing Base
Assets must be assets owned by the Loan Parties subject only to Permitted
Liens and (except as otherwise provided in Section 7.19) shall be valued at
book value, reduced (without duplication) by the Remediation Adjustment
(if any) applicable to such Borrowing Base Assets.
"Borrowing Base Assets" means the Category 1 Borrowing Base
Assets, Category 2 Borrowing Base Assets, Category 3 Borrowing Base
Assets and Category 4 Borrowing Base Assets.
"Borrowing Base Certificate" means a certificate, in a form satisfactory
to the Administrative Agent, calculating the Borrowing Base as of the last
day of a fiscal quarter, and delivered pursuant to Section 7.1(viii).
"Borrowing Date" means a date on which an Advance is made
hereunder.
"Business Day" means (i) with respect to any borrowing, payment or
rate selection of Eurodollar Advances, 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 and
New York for the conduct of substantially all of their commercial lending
activities.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown
as a liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Category 1 Borrowing Base Assets" means at any time the following
assets owned by the Loan Parties (except any such assets that are Excluded
Assets): (1) residential units and buildings under construction subject to an
Agreement of Sale; (2) completed residential units and buildings subject to
an Agreement of Sale; (3) land (and related site improvements and
development costs) related to the assets described in items (1) and (2); and
(4) interest, overhead, taxes and other costs (to the extent capitalized under
Agreement Accounting Principles) related to the assets described in items
(1), (2) and (3).
"Category 2 Borrowing Base Assets" means at any time the following
assets owned by the Loan Parties (except any such assets that are Excluded
Assets): (1) residential units and buildings under construction not under
Agreement of Sale; (2) completed residential units and buildings not under
Agreement of Sale; (3) land (and related site improvements and
development costs) related to the assets described in items (1) and (2); and
(4) interest, overhead, taxes and other costs (to the extent capitalized under
Agreement Accounting Principles) related to the assets described in items
(1), (2) and (3).
"Category 3 Borrowing Base Assets" means at any time the following
assets owned by the Loan Parties (except any such assets that are Excluded
Assets): (1) site improvements on land owned by a Loan Party that is not
subject to an Agreement of Sale; and (2) interest, overhead, taxes and other
costs (to the extent capitalized under Agreement Accounting Principles)
related to the assets described in item (1).
"Category 4 Borrowing Base Assets" means at any time the following
assets owned by the Loan Parties (except any such assets that are Excluded
Assets): (1) acquisition and development costs (excluding site improvement
costs) of land owned by a Loan Party that is not subject to an Agreement
of Sale; and (2) interest, overhead, taxes and other costs (to the extent
capitalized under Agreement Accounting Principles) related to the assets
described in item (1).
"CD Interest Period" means, with respect to a Fixed CD Rate Advance,
a period of 30, 60, 90 or 180 days (or, subject to approval by all Lenders,
270 or 360 days) commencing on a Business Day selected by the Borrower
pursuant to this Agreement. If such CD Interest Period would end on a day
which is not a Business Day, such CD Interest Period shall end on the next
succeeding Business Day.
"Change" is defined in Section 3.2.
"Change of Control" means the occurrence of any one or more of the
following events:
(A) The acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities
Exchange Act of 1934) of 50% or more of the
outstanding shares of voting stock of a Loan Party;
or
(B) There shall be consummated any consolidation or
merger to which the Company is a party except a
merger or consolidation where the holders of voting
stock of the Company prior to such merger or
consolidation own more than 50% of the voting
stock of the continuing or surviving corporation
outstanding after such merger or consolidation
(whether or not the Company is such continuing or
surviving corporation).
"Closing Date" means the Business Day on which the first Advance is
made hereunder.
"Co-Agents" means Bank of America National Trust and Savings
Association, CoreStates Bank, N.A. and Credit Lyonnais New York
Branch.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender
to make Ratable Loans and to participate in Facility Letters of Credit not
exceeding the amount set forth opposite its signature below or as set forth
in any Notice of Assignment relating to any assignment that has become
effective pursuant to Section 13.3.2 or in any Commitment and Acceptance
that has become effective pursuant to Section 2.18, as such amount may be
modified from time to time pursuant to the terms hereof.
"Commitment and Acceptance" is defined in Section 2.18.
"Company" means Toll Brothers, Inc., a Delaware corporation.
"Competitive Bid Advance" means a borrowing hereunder consisting
of the aggregate amount of the several Competitive Bid Loans made by one
or more of the Lenders to the Borrower at the same time and for the same
Interest Period.
"Competitive Bid Agent" means, with respect to a Competitive Bid
Quote Request, either the Administrative Agent or the Borrower, as
specified in such Competitive Bid Quote Request as provided in Section
2.3.2.
"Competitive Bid Borrowing Notice" is defined in Section 2.3.6.
"Competitive Bid Interest Period" means, in the case of a Eurodollar
Bid Rate Advance, a Eurodollar Interest Period and, in the case of an
Absolute Bid Advance, a period of not less than 14 nor more than 360 days,
in each case as selected by the Borrower pursuant to this Agreement. If
such Competitive Bid Interest Period would end on a day which is not a
Business Day, such Competitive Bid Interest Period shall end on the next
succeeding Business Day (except as otherwise provided in the definition of
"Eurodollar Interest Period").
"Competitive Bid Loan" means a Eurodollar Bid Rate Loan or an
Absolute Rate Loan, or both, as the case may be.
"Competitive Bid Margin" means the margin above or below the
applicable Eurodollar Base Rate offered for a Eurodollar Bid Rate Loan,
expressed as a percentage (rounded to the nearest 1/100 of 1%) to be added
or subtracted from such Eurodollar Base Rate.
"Competitive Bid Note" means a promissory note in substantially the
form of Exhibit A hereto, with appropriate insertions, duly executed and
delivered to the Administrative Agent by the Borrower for the account of
a Lender and payable to the order of such Lender, including any
amendment, modification, renewal or replacement of such promissory note.
"Competitive Bid Quote" means a Competitive Bid Quote substantially
in the form of Exhibit B hereto completed and delivered by a Lender to the
Competitive Bid Agent in accordance with Section 2.3.4.
"Competitive Bid Quote Request" means a Competitive Bid Quote
Request substantially in the form of Exhibit C hereto completed and
delivered by the Borrower to the Administrative Agent in accordance with
Section 2.3.2.
"Competitive Bid Sublimit" means, at any time, an amount equal to
fifty percent (50%) of the Aggregate Commitment, as such Aggregate
Commitment may increase or decrease from time to time hereunder.
"Consolidated Net Income" means, with reference to any period, the
net income (or loss) of the Company and its Subsidiaries calculated on a
consolidated basis for such period in accordance with Agreement
Accounting Principles.
"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the Company and its Subsidiaries calculated on a
consolidated basis as of such time in accordance with Agreement
Accounting Principles.
"Contingent Obligation" of a Person means any agreement, undertaking
or arrangement by which such Person guarantees or in effect guarantees any
Indebtedness of any other Person in any manner, whether directly or
indirectly.
"Contribution Agreement" is defined in Section 5.1(xi).
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether
or not incorporated) under common control which, together with the
Company or any of its Subsidiaries, are treated as a single employer under
Section 414 of the Code.
"Conversion" is defined in Section 10.13.
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time,
changing when and as said corporate base rate changes.
"Declining Lender" is defined in Section 2.17.
"Default" means an event described in Article VIII.
"Designated Guarantors" means any Subsidiary of the Company that at
any time has executed and delivered a Guaranty Agreement and that has not
been released from its Guaranty Agreement in accordance with the
provisions of Section 10.13.
"Environmental Certificate" is defined in Section 7.26.
"Environmental Complaint" means any written complaint setting forth
a cause of action for personal or property damage or equitable relief, order,
notice of violation, citation, request for information issued pursuant to any
Environmental Laws by an Official Body, subpoena or other written notice
of any type relating to, arising out of, or issued pursuant to any of the
Environmental Laws or any Environmental Conditions, as the case may be.
"Environmental Conditions" means any conditions of the environment,
including, without limitation, the work place, the ocean, natural resources
(including flora or fauna), soil, surface water, ground water, any actual or
potential drinking water supply sources, substrata or the ambient air,
relating to or arising out of, or caused by the use, handling, storage,
treatment, recycling, generation, transportation, release, spilling, leaking,
pumping, emptying, discharging, injecting, escaping, leaching, disposal,
dumping, threatened release or other management or mismanagement of
Regulated Substances resulting from the use of, or operations on, the
Property.
"Environmental Laws" means any Laws relating to (i) the protection of
the environment, (ii) the effect of the environment on human health, (iii)
emissions, discharges or releases of pollutants, contaminants, hazardous
substances or wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"Environmentally Approved Land" shall mean land owned by a Loan
Party as to which there has been delivered to such Loan Party and, to the
extent required under Section 7.26, the Administrative Agent an
Environmental Certificate that either (a) contains no exceptions on Exhibit
A thereto except for Permitted Environmental Exceptions, or (b) if it
contains any exceptions other than Permitted Environmental Exceptions,
such exceptions shall have been (i) approved by the Administrative Agent,
which approval has not been reversed by the Majority Banks under Section
7.26 or (ii) approved by the Majority Lenders if the Administrative Agent
initially does not approve such exceptions.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation issued
thereunder.
"Escrow Agreement" means an agreement or other similar arrangement
with a municipality or any other Official Body, including without limitation
any utility, water or sewer authority, or other similar entity, for the purpose
of assuring such municipality or other Official Body that the Company or
an Affiliate of the Company will properly and timely complete work it has
agreed to perform for the benefit of such municipality or other Official
Body, under the terms of which a bank (including a Lender hereunder) or
other Person agrees to set aside or otherwise make available a specified
amount of funds which will be paid to such municipality or other Official
Body upon request by such municipality or other Official Body in
accordance with the terms of such agreement in the event the Company or
such Affiliate fails to perform such work.
"Eurodollar Auction" means a solicitation of Competitive Bid Quotes
setting forth Competitive Bid Margins pursuant to Section 2.3.
"Eurodollar Base Rate" means, with respect to a Eurodollar Ratable
Advance or a Eurodollar Bid Rate Advance for the relevant Eurodollar
Interest Period, the applicable London interbank offered rate for deposits
in U.S. dollars appearing on Dow Jones Markets (Telerate) Page 3750 as
of 11:00 a.m. (London time) two Business Days prior to the first day of
such Eurodollar Interest Period, and having a maturity approximately equal
to such Eurodollar Interest Period. If no London interbank offered rate of
such maturity then appears on Dow Jones Markets (Telerate) Page 3750,
then the Eurodollar Base Rate shall be equal to the London Interbank
offered rate for deposits in U.S. dollars maturing immediately before or
immediately after such maturity, whichever is higher, as determined by the
Administrative Agent from Dow Jones Markets (Telerate) Page 3750. If
Dow Jones Markets (Telerate) Page 3750 is not available, the applicable
Eurodollar Base Rate for the relevant Eurodollar Interest Period shall be the
rate determined by the Administrative Agent to be the rate at which First
Chicago offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Eurodollar Interest Period, in
the approximate amount of First Chicago's relevant Eurodollar Ratable
Loan, or, in the case of a Eurodollar Bid Rate Advance, the amount of the
Eurodollar Bid Rate Advance requested by the Borrower, and having a
maturity approximately equal to such Interest Period.
"Eurodollar Bid Rate" means, with respect to a Eurodollar Bid Rate
Loan made by a given Lender for the relevant Eurodollar Interest Period,
the sum of (a) the Eurodollar Base Rate applicable to such Eurodollar
Interest Period, plus or minus (b) the Competitive Bid Margin offered by
such Lender and accepted by the Borrower. The Eurodollar Bid Rate shall
be rounded to the next higher multiple of 1/100 of 1% if the rate is not such
a multiple.
"Eurodollar Bid Rate Advance" means a Competitive Bid Advance
which bears interest at a Eurodollar Bid Rate.
"Eurodollar Bid Rate Loan" means a Competitive Bid Loan which
bears interest at the Eurodollar Bid Rate.
"Eurodollar Interest Period" means, with respect to a Eurodollar
Ratable Advance, a period of one, two, three or six months (or, subject to
approval by all Lenders, nine or twelve months) or, with respect to a
Eurodollar Bid Rate Advance, a period of one, two, three, six, nine or
twelve months, in each case commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Eurodollar Interest Period
shall end on the day which corresponds numerically to such date one, two,
three, six, nine or twelve months thereafter, provided, however, that if
there is no such numerically corresponding day in such next, second, third,
sixth, ninth or twelfth succeeding month, such Eurodollar Interest Period
shall end on the last Business Day of such next, second, third, sixth, ninth
or twelfth succeeding month. If a Eurodollar Interest Period would
otherwise end on a day which is not a Business Day, such Eurodollar
Interest Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new calendar
month, such Eurodollar Interest Period shall end on the immediately
preceding Business Day.
"Eurodollar Loan" means a Eurodollar Bid Rate Loan or a Eurodollar
Ratable Loan.
"Eurodollar Ratable Advance" means an Advance which bears interest
at a Eurodollar Rate requested by the Borrower pursuant to Section 2.2.
"Eurodollar Ratable Loan" means a Loan which bears interest at a
Eurodollar Rate requested by the Borrower pursuant to Section 2.2.
"Eurodollar Rate" means, with respect to a Eurodollar Ratable Advance
for the relevant Eurodollar Interest Period, the sum of (i) the quotient of (a)
the Eurodollar Base Rate applicable to such Eurodollar Interest Period,
divided by (b) one minus the Reserve Requirement (expressed as a decimal)
applicable to such Eurodollar Interest Period, plus (ii) the Applicable
Eurodollar Margin in effect two Business Days prior to such Advance. The
Eurodollar Rate shall be rounded to the next higher multiple of 1/100 of 1%
if the rate is not such a multiple.
"Excess Investments" means at any time the greater of (a) the amount
by which (i) Special Investments exceeds (ii) 30% of Consolidated Net
Worth and (b) the amount by which (i) Investment in Mortgage Subsidiaries
exceeds (ii) 20% of Consolidated Net Worth.
"Excluded Assets" means at any time any of the following assets of the
Loan Parties: (1) assets subject to any Lien securing Indebtedness (except
for Permitted Purchase Money Loans in which the applicable Loan Party
and its successors shall have full rights to prepay without premium or
penalty, or if a premium or penalty may be imposed, the total potential
premium or penalty is added to the principal amount of such Indebtedness
for computation purposes, provided, that the Borrower may elect in its sole
discretion to designate any asset subject to a Permitted Purchase Money
Loan as an Excluded Asset (thereby excluding such asset from the
calculation of the Borrowing Base), in which event any potential
prepayment penalties and premiums on such Permitted Purchase Money
Loan shall not be included in computing Indebtedness); (2) land, site
improvements, development costs and units or buildings constructed or
under construction on such land if the applicable Loan Party has not
received Preliminary Approval with respect to such land or if such Land is
not Environmentally Approved Land; and (3) payments for options.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Administrative Agent, taxes imposed on its
overall net income, and franchise taxes imposed on it (including in either
case withholding taxes related thereto) by (i) the jurisdiction under the laws
of which such Lender or the Administrative Agent is incorporated or
organized or (ii) the jurisdiction in which the Administrative Agent's or
such Lender's principal executive office or such Lender's applicable
Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Existing Agreement" means that certain Revolving Credit Agreement,
dated as of November 1, 1993 among the Borrower, the Company, certain
Subsidiaries of the Company, PNC Bank, National Association as Agent,
and the other banks named therein, as amended on May 8, 1996.
"Existing Letters of Credit" means those Letters of Credit identified in
Schedule 1 hereto heretofore issued, pursuant to the Existing Agreement,
by the Lenders identified in Schedule 1 and outstanding as of the date
hereof.
"Extension Date" is defined in Section 2.17.
"Extension Request" is defined in Section 2.17.
"Facility Fee" is defined in Section 2.4.
"Facility Letter of Credit" means (i) any Existing Letter of Credit and
(ii) any Letter of Credit (which, in the case of a Performance Letter of
Credit, may be an Escrow Agreement) hereafter issued by an Issuing Bank
for the account of the Borrower or another Loan Party in accordance with
Article IV.
"Facility Letter of Credit Fee" means, for any period, a fee, payable
with respect to each Facility Letter of Credit issued by an Issuing Bank
outstanding in such period, in an amount per annum equal to the product of
(i) the daily average Applicable Letter of Credit Rate during such period
and (ii) the daily average undrawn face amount of such Facility Letter of
Credit, computed on the basis of the actual number of days such Facility
Letter of Credit is outstanding in such period.
"Facility Letter of Credit Notice" is defined in Section 4.4(c).
"Facility Letter of Credit Obligations" means at any time the sum of (i)
the aggregate undrawn face amount of all outstanding Facility Letters of
Credit, and (ii) the aggregate amount paid by an Issuing Bank on any
Facility Letters of Credit to the extent (if any) not reimbursed by the
Borrower or by the Lenders under Section 4.4.
"Facility Termination Date" means February 24, 2003 or any later date
as may be specified as the Facility Termination Date in accordance with
Section 2.17 or any earlier date on which the Aggregate Commitment is
reduced to zero or otherwise terminated pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, (i) the "Federal
Funds Rate" as published in The Wall Street Journal for such day (or, if
such day is not a Business Day, for the immediately preceding Business
Day) or (ii) if such rate is not so published in The Wall Street Journal, an
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 on such day, 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 Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"Federal Funds/Euro-Rate" means, for any day, an interest rate per
annum equal to the greater of (a) the sum of (i) the Federal Funds Effective
Rate for the Business Day immediately preceding such day, plus (ii) the
Applicable Eurodollar Margin, plus (iii) 0.25% per annum, and (b) a rate
equal to the Eurodollar Rate for a Eurodollar Interest Period of 30 days
commencing on the second Business Day after such day. The Federal
Funds/Euro-Rate shall be recomputed each day.
"Federal Funds/Euro-Rate Advance" means an Advance that bears
interest at the Federal Funds/Euro-Rate.
"Federal Funds/Euro-Rate Loan" means a Loan that bears interest at
the Federal Funds/Euro-Rate.
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other
financial instrument with similar characteristics, and (ii) any agreements,
devices or arrangements providing for payments related to fluctuations of
interest rates, exchange rates or forward rates, including, but not limited to,
interest rate exchange agreements, forward currency exchange agreements,
interest rate cap or collar protection agreements, forward rate currency or
interest rate options.
"Financial Letter of Credit" means any Letter of Credit issued on
behalf of a Loan Party that is not a Performance Letter of Credit and that
is issued to a Person to ensure payment by a Loan Party or other Affiliate
of the Company of a financial obligation or satisfaction by a Loan Party or
other Affiliate of any other obligation of a Loan Party or other Affiliate.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Fixed CD Base Rate" means, with respect to a Fixed CD Rate
Advance for the relevant CD Interest Period, the rate determined by the
Administrative Agent to be the arithmetic average of the prevailing bid rates
quoted to the Administrative Agent at or before 10 a.m. (Chicago time) on
the first day of such CD Interest Period by three New York or Chicago
certificate of deposit dealers of recognized standing selected by the
Administrative Agent in its sole discretion for the purchase at face value of
certificates of deposit of First Chicago in the approximate amount of First
Chicago's relevant Fixed CD Rate Loan and having a maturity
approximately equal to such CD Interest Period.
"Fixed CD Rate" means, with respect to a Fixed CD Rate Advance for
the relevant CD Interest Period, a rate per annum equal to the sum of (i) the
quotient of (a) the Fixed CD Base Rate applicable to such CD Interest
Period, divided by (b) one minus the Reserve Requirement (expressed as a
decimal) applicable to such CD Interest Period, plus (ii) the Assessment
Rate applicable to such CD Interest Period, plus (iii) the Applicable CD
Rate Margin as of the date of such Advance. The Fixed CD Rate shall be
rounded to the next higher multiple of 1/100 of 1% if the rate is not such
a multiple.
"Fixed CD Rate Advance" means an Advance that bears interest at a
Fixed CD Rate.
"Fixed CD Rate Loan" means a Loan that bears interest at a Fixed CD
Rate.
"Fixed Ratable Advance" means a Eurodollar Ratable Advance or a
Fixed CD Rate Advance.
"Fixed Ratable Loan" means a Ratable Loan that bears interest at a
Fixed Rate.
"Fixed Rate" means the Fixed CD Rate, the Eurodollar Rate, the
Eurodollar Bid Rate or the Absolute Rate.
"Fixed Rate Advance" means an Advance that bears interest at a Fixed
Rate.
"Fixed Rate Loan" means a Loan that bears interest at a Fixed Rate.
"Floating Rate" means the Alternative Base Rate or the Federal
Funds/Euro-Rate.
"Floating Rate Advance" means an Advance that bears interest at a
Floating Rate.
"Floating Rate Borrowing" means a Loan that bears interest at a
Floating Rate.
"Guarantors" means the Company and the Designated Guarantors.
"Guaranty Agreement" means the guaranty agreement of even date
herewith executed and delivered by the Company and the Designated
Guarantors to the Administrative Agent for the benefit of the Lenders and
any guaranty agreement in substantially the same form hereafter executed and
delivered by one or more Designated Guarantors pursuant to the provisions of
Section 7.16 as any such guaranty agreement may be amended or modified and in
effect from time to time.
INCREASE DATE to QUALIFIED SUBORDINATED INDEBTEDNESS - DEFINITIONS ARE LOCATED
IN SECTION 7.12A.
"Quarterly Payment Date" means the first day of each calendar quarter.
"Ratable Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Ratable Loans made by the Lenders to the
Borrower at the same time, and (except as otherwise provided Section 3.3)
at the same Rate Option, and (in the case of Fixed Ratable Loans) for the
same Interest Period.
"Ratable Borrowing Notice" is defined in Section 2.2.3.
"Ratable Loan" means a Loan made by a Lender pursuant to Section 2.2
hereof.
"Ratable Note" means a promissory note, in substantially the form of
Exhibit E hereto, duly executed by the Borrower and payable to the order of
a Lender in the amount of its Commitment, including any amendment,
modification, renewal or replacement of such promissory note.
"Ratable Share" means, with respect to any Lender on any date, the
ratio of (a) the amount of such Lender's Commitment to (b) the amount of
the Aggregate Commitment.
"Rate Option" means the Alternate Base Rate, the Eurodollar Rate, the
Fixed CD Rate or the Federal Funds/Euro-Rate.
"Rate Option Notice" is defined in Section 2.2.4.
"Rating" means at any time (a) the higher of the Qualified Rating of
Moody's or the Qualified Rating of S&P or (b) if either, but not both, of
Moody's and S&P has issued a Qualified Rating, such Qualified Rating.
"Regulated Substances" means any substance, including without
limitation, Solid Waste, the generation, manufacture, processing, distribution,
treatment, storage, disposal, transport, recycling, reclamation, use, reuse or
other management or mismanagement of which is regulated by the Environmental
Laws.
"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
FederalReserve 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.
"Remediation Adjustment" means, with respect to any Environmentally
Approved Land that is subject to a Permitted Environmental Exception, an amount
equal to 150% of the estimated remaining costs to complete remediation necessary
to cure such exception.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event.
"Required Lenders" means (i) subject to the provisions of Section
2.18(e), if there exists no Default or if a Default exists and is continuing
but there are no Loans or Facility Letters of Credit outstanding, Lenders
(excluding Non-Funding Lenders) whose Commitments aggregate at least 66-2/3%
of the Commitments of all of the Lenders (excluding Non-Funding Lenders),
or (ii) if a Default exists and is continuing and there are Loans or Facility
Letters of Credit outstanding, Lenders (excluding Non-Funding Lenders)
whose Total Exposure aggregates at least 66-2/3% of the Total Exposure of
all of the Lenders (excluding Non-Funding Lenders).
"Reserve Requirement" means, with respect to a CD Interest Period or a
Eurodollar Interest Period, the maximum aggregate reserve requirement (including
all basic, supplemental, marginal and other reserves) which is imposed under
Regulation D on new non-personal time deposits of $100,000 or more with a
maturity equal to that of such CD Interest Period (in the case of Fixed CD Rate
Advances) or on Eurocurrency liabilities (in the case of Eurodollar Ratable
Advances).
"Risk-Based Capital Guidelines" is defined in Section 3.2.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
property by any Person with the intent to lease such property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"SEC" means the Securities and Exchange Commission.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Seller Purchase Money Loans" means at any time outstanding purchase
money loans made to a Loan Party by the seller of improved or unimproved real
estate in a single or separate transactions for the exclusive purpose of
acquiring such real estate for development and secured by a mortgage Lien
on such real estate.
"Senior Executive" means the Chairman of the Board, President, Executive
Vice President, Chief Financial Officer, Chief Accounting Officer or General
Counsel of any Loan Party.
"Senior Indebtedness" means at any time, on a consolidated basis
for the Loan Parties, Total Indebtedness, less Subordinated Indebtedness,
provided that, for purposes of the definition of "Qualified Rating," Senior
Indebtedness shall notinclude Indebtedness of any Person other than
the Company or the Borrower.
"Single Employer Plan" means a Plan maintained by the Company or any
member of the Controlled Group for employees of the Company or any member
of the Controlled Group and no other employer.
"Solid Waste" means any garbage, refuse or sludge from any waste
treatment plant, water supply plant or air pollution control facility
generated by activities on the Property, and any unpermitted release into
the environment or the work place
of any material as a result of activities on the Property, including without
limitation, scrap and used Regulated Substances.
"Special Investments" means, at any time (but without duplication),
the sum of (i) all Investments by Loan Parties in Non-Loan Parties
(including, after its Conversion, any Non-Loan Party that was a Designated
Guarantor prior to its Conversion), and (ii) all Investments in Mortgage
Subsidiaries (whether or not anyone or more of the Mortgage Subsidiaries is
a Loan Party). The amount of such Investments shall include, without
limitation, the book value of stocks, partnership
interests, notes or other securities, and the amount of loans, guaranties and
recourse contingent obligations, and contributions of capital.
"Subordinated Indebtedness" means, with respect to the Loan Parties, the
existing subordinated Indebtedness described on Schedule 4 and any other
unsecured Indebtedness subordinated under terms as favorable to the Lenders
as the terms of the subordination governing the Indebtedness described on
Schedule 4 as determined by the Administrative Agent in its sole discretion.
"Subordinated Loan Documents" means at any time the agreements and other
documents then governing the Subordinated Indebtedness.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one
or more ofits Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any
partnership, limited liability company, association, joint venture or similar
business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Company.
"Substantial Portion" means, with respect to the Property of the Company
and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Company and its Subsidiaries as would be shown in
the consolidated financial statements of the Company and its Subsidiaries as
at the beginning of the period of four consecutive fiscal quarters ending with
the fiscal quarter in which such determination is made.
"Swing Line Advance" is defined in Section 2.19(a).
"Swing Line Borrowing Notice" is defined in Section 2.19(c).
"Swing Line Commitment" means the commitment of the Swing Line Lender
to make Swing Line Advances pursuant to Section 2.19(a). As of the date of this
Agreement, the Swing Line Commitment is in the amount of $50,000,000.
"Swing Line Lender" means First Chicago or any Purchaser to which First
Chicago assigns the Swing Line Commitment in accordance with Sections 13.3.1
and 13.3.3.
"Tangible Net Worth" means at any time Consolidated Net Worth
less the sum of (a) intangible assets (as determined in accordance
with Agreement Accounting Principles), and (b) Excess Investments.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities
with respect to the foregoing, but excluding Excluded Taxes.
"Toll Group" means the Company, the Borrower and all other Subsidiaries
of the Company.
"Total Exposure" means, at any time with respect to any Lender, the sum
of (a) such Lender's outstanding Loans and (b) such Lender's Ratable Share of
the outstanding Facility Letter of Credit Obligations.
"Total Indebtedness" means at any time all Indebtedness of the Loan
Parties on a consolidated basis (including, without limitation, the
Obligations).
"Transferee" is defined in Section 13.4.
"Type" means, with respect to any Ratable Advance, its nature as an ABR
Advance, Eurodollar Ratable Advance, Federal Funds/Euro-Rate Advance or Fixed
CD Rate Advance and (b) with respect to any Competitive Bid Advance, its nature
as an Absolute Rate Advance or Eurodollar Bid Rate Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event that but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. The Loan Facility.
2.1.1. Description of Loan Facility. The Lenders grant to the Borrower
a revolving credit facility (the "Loan Facility") pursuant to which, and upon
the terms and subject to the conditions herein set forth:
(a) each Lender severally agrees to make Ratable
Loans to th Borrower in accordance with Section 2.2;
(b) each Lender may, in its sole discretion, make bids to make
Competitive Bid Loans to the Borrower in accordance with Section 2.3; and
(c) the Swing Line Lender agrees to make Swing Line Advances
to the Borrower in accordance with Section 2.19.
2.1.2. Amount of Loan Facility. The Loan Facility shall be subject to
the following limitations:
(a) In no event shall the sum of (i) the aggregate principal
amount of all outstanding Advances (including Ratable Advances, Competitive
Bid Advances and Swing Line Advances) plus (ii) the Facility Letter of Credit
Obligations exceed the Aggregate Commitment.
(b) In no event shall the outstanding principal amount of all
outstanding Competitive Bid Advances exceed the Competitive Bid Sublimit.
(c) In no event shall the outstanding principal amount of all
outstanding Swing Line Advances exceed the Swing Line Commitment.
2.1.3. Availability of Loan Facility. Subject to the terms hereof,
the Loan Facility is available from the date hereof to the Facility
Termination Date and, upon the Facility Termination Date, the Commitments to
lend hereunder shall expire.
2.1.4. Required Payments. Any outstanding Advances and all other
unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date (except to the extent that, pursuant to Article IV,
Facility Letters of Credit arepermitted to have an expiration date later than
the Facility Termination Date). Atany time that there exists a breach of the
covenant set forth in Section 7.28.2, the Borrower shall immediately pay to
the Administrative Agent, as a payment of the Advances, such amount
(not to exceed the sum of the outstanding Advances)necessary to cure such
breach.
2.2. Ratable Advances.
2.2.1. Ratable Advances. Each Ratable Advance hereunder shall consist
of borrowings made from the several Lenders in their respective Ratable Shares
thereof. The aggregate outstanding amount of Competitive Bid Advances shall
reduce the availability of Advances as provided in Section 2.1.2(a) but shall
not otherwise affect the obligations of the Lenders to make Ratable Advances,
and (without limitation of the foregoing) no Competitive Bid Loan shall reduce
the obligation of the Lender making such Competitive Bid Loan to lend its
Ratable Share of any future Ratable Advances.
2.2.2. Ratable Advance Rate Options. The Ratable Advances may be ABR
Advances, Federal Funds/Euro-Rate Advances, Fixed CD Rate Advances or
Eurodollar Ratable Advances, or a combination thereof, selected by the Borrower
in accordance with Section 2.2.3. No Ratable Advance may mature after the
Facility Termination Date.
2.2.3. Method of Selecting Rate Options and Interest Periods for
Ratable Advances. The Borrower shall select the Rate Option and, in the case of
each Fixed Rate Advance, the Interest Period applicable thereto, from time
to time. The Borrower shall give the Administrative Agent irrevocable notice
(a "Ratable Borrowing Notice') not later than 10:00 a.m. (Chicago time)
(or 10:15 a.m. (Chicago time) if applicable under the next succeeding
sentence), (x) on the Borrowing Date of each Floating Rate Advance,
(y) at least one Business Day prior to the Borrowing Date of each
Fixed CD Rate Advance and (z) at least three Business Days prior to the
Borrowing Date of each Eurodollar Ratable Advance. The time for delivery of a
Ratable Borrowing Notice for a Floating Rate Advanceshall be extended by
15 minutes if the day on which such Ratable Borrowing Notice is given is
also a day on which the Borrower is required to reject one or more bids
offered in connection with an Absolute Rate Auction pursuant to Section 2.3.6,
and the time for delivery of a Ratable Borrowing Notice for a Eurodollar Ratable
Advance shall be extended by 15 minutes if the day on which such Ratable
Borrowing Notice is given is also a day on which the Borrower is required to
reject one or more bids offered in connection with a Eurodollar Auction pursuant
to Section 2.3.6. A Ratable Borrowing Notice shall specify:
(i)the Borrowing Date, which shall be a Business Day, of such
Ratable Advance;
(ii) the aggregate amount of such Ratable Advance;
(iii) the Rate Option selected for such Ratable Advance; and
(iv) in the case of each Fixed Ratable Advance, the Interest
Period applicable thereto (which shall be subject to the limitations set
forth in Section 2.2.6).
2.2.4. Conversion and Continuation of Outstanding Ratable Advances.
Each Floating Rate Advance shall continue as a Floating Rate Advance of that
Type unless and until such Floating Rate Advance is either converted into the
other Type of Floating Rate Advance or a Fixed Ratable Advance in accordance
with this Section 2.2.4 or is prepaid in accordance with Section 2.6. Each Fixed
Ratable Advance shall continue as a Fixed Ratable Advance of such Type
until the end ofthe then applicable Interest Period therefor, at which time
such Fixed Ratable Advance shall be automatically converted into
a Federal Funds/Euro-Rate Advance unless such Fixed Ratable Advance shall
have been either (a)prepaid in accordance with Section 2.6, (b) continued as
a Fixed Ratable Advance of the same or a different Type for the same or
another Interest Period in accordance with this Section 2.2.4 or (c) converted
into an ABR Advance in accordance with this Section 2.2.4. Subject to the
terms of Section 2.5, the Borrower may elect from time to time to convert and/
or continue the Rate Option applicable to all or any part of a Ratable Advance
into another Rate Option; provided, that any conversion or continuation of any
Fixed Ratable Advance shall be made on, and only on, the last day of the
Interest Period applicable thereto. The Borrower shall give the Administrative
Agent irrevocable notice (a "Rate Option Notice") of each conversion of a
Floating Rate Advance into the other Type of Floating Rate Advance or into a
Fixed Ratable Advance, or continuation of a Fixed Ratable Advance or the
conversion of a Fixed Ratable Advance, not later than 10:00 a.m.
(Chicago time) (x) on the Business Day of the conversion of a Floating Rate
Advance into the other Type of Floating Rate Advance or the conversion of a
Fixed Ratable Advance into an ABR Advance, (y) at least one Business Day prior
to the requested conversion of a Floating Rate Advance into, or the requested
conversionor continuation of a Fixed Ratable Advance into, a Fixed CD Rate
Option or (z)at least three Business Days prior to the date of the requested
conversion orcontinuation of a Ratable Advance into a Eurodollar Ratable
Advance, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Rate Option applicable to the
Ratable Advance which is to be converted or continued; and
(iii) the amount and Rate Option(s) of Ratable Advance(s) into
which such Ratable Advance is to be converted or continued
and, in the case of a conversion into or continuation of a
Fixed Ratable Advance, the duration of the Interest Period applicable
thereto (which shall be subject to the limitations set forth in Section 2.2.6).
2.2.5. Limitations. Ratable Advances shall be subject to the applicable
limitations set forth in Section 2.5.
2.2.6. Interest Period. The Interest Period of a Fixed Ratable Advance
may not end later than the Facility Termination Date nor later than the date of
termination of the Commitment of any Declining Lender.
2.3. Competitive Bid Advances.
2.3.1. Competitive Bid Option. In addition to Ratable Advances pursuant
to Section 2.2, but subject to the terms and conditions of this Agreement
(including, without limitation, the limitation set forth in Section 2.1.2(a) as
to the maximum aggregate principal amount of all outstanding Advances and
Facility Letter of Credit Obligations hereunder and the limitation in
Section 2.1.2(b) as to the maximum aggregate amount of all outstanding
Competitive Bid Advances), theBorrower may, as set forth in this Section 2.3,
request the Lenders, prior to theFacility Termination Date, to make offers to
make Competitive Bid Advances to the Borrower. Each Lender may, but shall
have no obligation to, make any such offer in the manner set forth in this
Section 2.3.
2.3.2. Competitive Bid Quote Request. When the Borrower wishes to
request offers to make Competitive Bid Loans under this Section 2.3, it shall
transmit to the Administrative Agent (whether or not it is the Competitive Bid
Agent) by telex or telecopy a Competitive Bid Quote Request substantially in the
form of Exhibit C so as to be received no later than (i) at least five Business
Days prior to the Borrowing Date proposed therein, in the case of a Eurodollar
Auction or (ii) at least two Business Days (or, if so agreed by the Borrower and
the Administrative Agent, one (1) (but not less than one Business Day) prior to
the Borrowing Date proposed therein, in the case of an Absolute Rate Auction.
The Competitive Bid Quote Request shall specify whether the Borrower or the
Administrative Agent shall be the Competitive Bid Agent with respect thereto,
and, if the Administrative Agent is the Competitive Bid Agent, the Borrower
shall deliver the Competitive Bid Quote Request to the Administrative Agent not
later than 9:00 a.m. (Chicago time) on the day on which it is required to be
delivered. Each Competitive Bid Quote Request shall specify:
(i)the proposed Borrowing Date, which shall be a Business
Day, for the proposed Competitive Bid Advance;
(ii)the aggregate principal amount of such proposed
Competitive Bid Advance, which shall be not less than
$10,000,000 and in an integral multiple of $1,000,000 if in
excess thereof;
(iii)whether the Competitive Bid Quotes requested are to set
forth a Competitive Bid Margin or an Absolute Rate; and
(iv) the Competitive Bid Interest Period applicable thereto
(which may not end after the Facility Termination Date).
The Borrower may request offers to make Competitive Bid Loans for more than
one Competitive Bid Interest Period, but not more than five Competitive Bid
Interest Periods, in a single Competitive Bid Quote Request. No Competitive Bid
Quote Request shall be given within five (5) Business Days (or such other number
of days as the Borrower and the Administrative Agent may agree) of any
Competitive Bid Quote Request that did not result in a Competitive Bid Advance
being made. If the Administrative Agent is the Competitive Bid Agent, it may
reject a Competitive Bid Quote Request that does not conform substantially to
the form of Exhibit C, and shall promptly notify the Borrower of such rejection
by telex or telecopy.
2.3.3. Invitation for Competitive Bid Quotes. Promptly and in
any event before the close of business on the same Business Day of
delivery of a Competitive Bid Quote Request that is not rejected pursuant to
Section 2.3.2, the Competitive Bid Agent shall send to each of the Lenders
(except as otherwise provided in Section 2.3.10) by telex or telecopy
an Invitation for Competitive Bid Quotes substantially in the form of
Exhibit D hereto, which shall constitute an invitationby
the Borrower to each such Lender to submit Competitive Bid Quotes offering
to make the Competitive Bid Loans to which such Competitive Bid Quote Request
relates in accordance with this Section 2.3.
2.3.4. Submission and Contents of Competitive Bid Quotes. (a) Except as
otherwise provided in Section 2.3.10, each Lender may, in its sole discretion,
submit a Competitive Bid Quote containing an offer or offers to make Competitive
Bid Loans in response to any Invitation for Competitive Bid Quotes. Each
Competitive Bid Quote must comply with the requirements of this Section 2.3.4
and must be submitted to the Competitive Bid Agent by telex or telecopy at its
offices specified in or pursuant to Article XIV not later than (i) 9:00 a.m.
(Chicago time) at least three Business Days prior to the proposed Borrowing
Date, in the case of a Eurodollar Auction or (ii) 9:00 a.m. (Chicago time)
on the proposed Borrowing Date, in the case of an Absolute Rate Auction
(or, in either case upon reasonable prior notice to the Lenders, such other
time and date as the Borrower and the Administrative Agent may agree);
provided that, if the Administrative Agent is the Competitive Bid Agent,
Competitive Bid Quotes submitted by the Administrative Agent as a Lender may
only be submitted if the Administrative Agent notifies the Borrower of
the terms of the offer or offers contained therein not later than 30 minutes
prior to the latest time at which the relevant Competitive Bid
Quotes must be submitted by the other Lenders. Subject to Articles V and IX,
anyCompetitive Bid Quote so made shall be irrevocable except with the
written consent of the Competitive Bid Agent given on the instructions of
the Borrower (if the Borrower is not the Competitive Bid Agent).
(b) Each Competitive Bid Quote shall be in substantially the form of
Exhibit B and shall in any case specify:
(i) the proposed Borrowing Date, which shall be the same as
that set forth in the applicable Invitation for Competitive Bid
Quotes;
(ii) the principal amount of the Competitive Bid Loan for which
each such offer is being made, which principal amount (A)
may be greater than, less than or equal to the Commitment
of the quoting Lender, (B) must be in an integral multiple of
$1,000,000 and (C) may not exceed the principal amount of
Competitive Bid Loans for which offers were requested;
(iii) in the case of a Eurodollar Auction, the Competitive Bid
Margin offered for each such Competitive Bid Loan;
(iv) the minimum amount, if any, of the Competitive Bid Loan
which may be accepted by the Borrower, which amount
shall not be less than $1,000,000;
(v) in the case of an Absolute Rate Auction, the Absolute Rate
offered for each such Competitive Bid Loan;
(vi) the maximum aggregate amount, if any, of Competitive Bid
Loans offered by the quoting Lender which may be accepted
by the Borrower; and
(vii) the identity of the quoting Lender.
(c) The Competitive Bid Agent shall reject any Competitive Bid Quote
that:
(i) is not substantially in the form of Exhibit B or does not
specify all of the information required by Section 2.3.4(b);
(ii) contains qualifying, conditional or similar language, other
than any such language contained in Exhibit B;
(iii) proposes terms other than or in addition to those set forth in
the applicable Invitation for Competitive Bid Quotes; or
(iv) arrives after the time set forth in Section 2.3.4(a).
If any Competitive Bid Quote shall be rejected pursuant to this
Section 2.3.4(c), then the Competitive Bid Agent shall notify the relevant
Lender of such rejection as soon as practical and (if the Administrative
Agent is the Competitive Bid Agent) shall promptly send a copy of the rejected
Competitive Bid Quote to the Borrower.
2.3.5. Notice to Borrower. If the Administrative Agent is the
Competitive Bid Agent, it shall promptly notify the Borrower of the terms
(i) of any Competitive Bid Quote submitted by a Lender that is in accordance
with Section 2.3.4 and (ii) of any Competitive Bid Quote that amends, modifies
or is otherwise inconsistent with a previous Competitive Bid Quote submitted
by such Lender with respect to the same Competitive Bid Quote Request.
A ny such subsequent Competitive Bid Quote shall be disregarded by the
Competitive Bid Agent unless such subsequent Competitive Bid Quote
specifically states that it is submitted solely to correct a manifest error
in such former Competitive Bid Quote. If the Administrative Agent is
the Competitive Bid Agent, its notice to the Borrower shall specify the
aggregate principal amount of Competitive Bid Loans for which offers have been
received for each Interest Period specified in the related Competitive Bid
Quote Request and the respective principal amounts and Eurodollar Bid Rates or
Absolute Rates, as the case may be, so offered. In addition, if the
Administrative Agent is the Competitive Bid Agent, it shall send copies of each
Competitive BidQuote to the Borrower.
2.3.6. Acceptance and Notice by Borrower. Not later than (i)10:00 a.m.
(Chicago time) at least three Business Days prior to the proposed Borrowing
Date, in the case of a Eurodollar Auction or (ii) 10:00 a.m. (Chicago time)
on the proposed Borrowing Date, in the case of an Absolute Rate Auction (or, in
either case upon reasonable prior notice to the Lenders, such other time
and date as the Borrower and the Administrative Agent may agree), the
Borrower shall notify the Administrative Agent of its acceptance or
rejection of the offers received by it pursuant to Section 2.3.4 or so
notified to it pursuant to Section 2.3.5; provided,
however, that the failure by the Borrower to give such notice to the
AdministrativeAgent shall be deemed to be a rejection of all such offers.
In the case of acceptance, such notice (a "Competitive Bid Borrowing Notice")
shall specify the aggregate principal amount of offers for each Interest Period
that are accepted and (if the Administrative Agent is not the Competitive Bid
Agent) shall include copies of each Competitive Bid Quote that is accepted.
The Borrower may accept any Competitive Bid Quote in whole or in part
(subject to the terms of Section 2.3.4(b)(iv) and (vi)); provided that:
(i) the aggregate principal amount of each Competitive Bid
Advance may not exceed (but, within the limitations set
forth in Section 2.3.2(ii), may be less than) the applicable
amount set forth in the related Competitive Bid Quote
Request;
(ii) acceptance of offers may only be made on the basis of
ascending Eurodollar Bid Rates or Absolute Rates, as the
case may be; and
(iii) the Borrower may not accept any offer that is described in
Section 2.3.4(c) or that otherwise fails to comply with the
requirements of this Agreement.
2.3.7. Allocation by Competitive Bid Agent. If offers are made by two
or more Lenders with the same Eurodollar Bid Rates or Absolute Rates, as the
case may be, for a greater aggregate principal amount than the amount in respect
of which offers are accepted for the related Interest Period, the principal
amount of Competitive Bid Loans in respect of which such offers are accepted
shall be allocated by the Competitive Bid Agent among such Lenders as nearly as
possible(in such multiples, not greater than $1,000,000, as the Competitive Bid
Agent may deem appropriate) in proportion to the aggregate principal amount
of such offers;provided, however, that no Lender shall be allocated a portion of
any CompetitiveBid Advance which is less than the minimum amount which such
Lender has stated in its applicable Competitive Bid Quote that it is willing
to accept. Allocations by the Competitive Bid Agent of the amounts of
Competitive Bid Loans shall be conclusive in the absence of manifest error.
The Administrative Agent shall promptly, but in any event on the same
Business Day, notify each Lender of itsreceipt of a Competitive Bid Borrowing
Notice and the aggregate principal amount of such Competitive Bid Advance
allocated to each participating Lender.
2.3.8. Limitations. Competitive Bid Advances shall be subject to the
applicable limitations contained in the last sentence of Section 2.5.
2.3.9. Administration Fee. The Borrower hereby agrees to pay to the
Administrative Agent an administration fee, in the amount set forth in the
Administrative Agent's Fee Letter, for each Competitive Bid Quote Request
transmitted by the Borrower to the Administrative Agent pursuant to Section
2.3.2. Such administration fee shall be payable in arrears on each Payment Date
hereafter and on the Facility Termination Date (or such earlier date on which
the AggregateCommitment shall terminate or be canceled) for any period then
ending for which such fee, if any, shall not have been theretofore paid.
2.3.10. Declining Lender. Notwithstanding anything to the contrary
contained herein, (a) a Declining Lender shall not be entitled to receive an
Invitation for Competitive Bid Quotes inviting an offer for, and shall not offer
to make and shall not make, a Competitive Bid Loan for a Competitive Bid
Interest Period that expires later than the expiration of such Declining
Lender's Commitment and (b) the Borrower may not request a Competitive Bid
Advance for a Competitive Bid Interest Period expiring later than the
termination of the Commitments of any Declining Lenders if, following the making
of such Competitive Bid Advance, the aggregate amount of all Competitive Bid
Advances for Competitive Bid Interest Periods expiring later than the
termination of suchDeclining Lenders' Commitments would exceed the amount to
which the Competitive Bid Sublimit will be reduced upon the termination of such
Declining Lenders' Commitments.
2.4. Facility Fee; Reductions in Aggregate Commitment. The Borrower
agrees to pay to the Administrative Agent for the account of each Lender a
facility fee ("Facility Fee") at a per annum rate equal to the Applicable Fee
Rate on such Lender's Commitment (whether used or unused) from the date hereof
to and including the Facility Termination Date, payable in advance on the
Closing Date and on each Quarterly Payment Date hereafter and on the Facility
Termination Date (or such earlier date as the Obligations may be accelerated or
become due). The Borrower may permanently reduce the Aggregate Commitment in
whole, or in part ratably among the Lenders (in their respective Ratable Shares)
in integral multiples of $10,000,000, upon at least five Business Days' written
notice to the Administrative Agent, which notice shall specify the amount of any
such reduction, provided, however, that (a) the amount of the Aggregate
Commitment may not be reduced below the sum of (i) aggregate principal amount
of the outstanding Advances and (ii) the Facility Letter of Credit Obligations,
(b) the amount of the Aggregate Commitment may not be reduced to an amount that
is less than twice the outstanding amount of all outstanding Competitive Bid
Advances and (c) the amount of the Aggregate Commitment may not be reduced to
an amount that is less than twice the outstanding amount of all outstanding
Facility Letter of Credit Obligations. All accrued Facility Fees shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Loans hereunder.
2.5. Minimum Amount of Each Advance; Maximum Number of Advances.
Each Fixed Ratable Advance shall be in the minimum amount of$5,000,000 (and
in multiples of $1,000,000 if in excess thereof), and each FloatingRate Advance
shall be in the minimum amount of $1,000,000 (and in multiples of$1,000,000 if
in excess thereof), provided, however, that any Floating Rate
Advance may be in the amount of the unused Aggregate Commitment or in the
amount necessary to repay a Swing Line Advance. Each Competitive Bid Advance
shall be in the minimum amount provided for in Section 2.3. There shall be no
more than ten (10) Fixed Rate Advances outstanding at any time.
2.6. Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances, or, in
a minimum aggregate amount of $1,000,000 or any integral multiple of $1,000,000
in excess thereof, any portion of the outstanding Floating Rate Advances upon
two Business Days' prior notice to the Administrative Agent. The Borrower may
from time to time pay, upon three Business Days' prior notice to the
Administrative Agent, subject to the payment of any funding indemnification
amounts required by Section 3.4 but without penalty or premium, (i) all of a
Fixed Ratable Advance, or (ii) in a minimum aggregate amount of $5,000,000 or
an integral multiple of $1,000,000 in excess thereof (and provided such
payment would not reduce the outstanding principal amount of such Fixed
Ratable Advance to less than $5,000,000) any portion of a Fixed Ratable
Advance. The Borrower may from time to time pay, prior to the last day of
the applicable Competitive Bid Interest Period, upon three Business Days'
prior notice to the Administrative Agent, all (but not less than all) of any
Competitive Bid Loan having an initial Competitive Bid Interest Period of
90 days or longer and, with the approval of the Lender holding such
Competitive Bid Loan, any other Competitive Bid Loan, subject, in any case,
to payment of any funding indemnification amounts required by Section
3.4 but without penalty or premium.
2.7. Funding. Not later than noon (Chicago time) on each Borrowing
Date, each Lender (other than the Swing Line Lender which shall make Swing Line
Advances as provided in Section 2.19(c)) shall make available its Loan or Loans
in funds immediately available in Chicago to the Administrative Agent at its
address specified pursuant to Article XIV. The Administrative Agent will make
the funds so received from the Lenders available to the Borrower at the
Administrative Agent's aforesaid address.
2.8. Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Fixed Rate Advance into a Floating Rate Advance pursuant to Section 2.2.4, to
but excluding the date it is paid or is converted into a Fixed Rate Advance
pursuant to Section 2.2.4 or to a Floating Rate Advance of the other Type,
at a rate per annum equal to (i) the Alternate Base Rate for such day (in the
case of ABR Advances) or (ii) the Federal Funds/Euro-Rate for such day
(in the case of Federal Funds/Euro-Rate Advances). Changes in the rate of
interest on that portion of any Advancemaintained as a Floating Rate Advance
will take effect simultaneously with eachchange in the applicable Floating
Rate. Each Fixed Rate Advance shall bear interest on the outstanding principal
amount thereof from and including the firstday of the Interest Period applicable
thereto to (but not including) the last day ofsuch Interest Period at the
interest rate applicable to such Fixed Rate Advance. NoInterest Period may
end after the Facility Termination Date.
2.9. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.2 or 2.3, during the continuance of a Default or
Unmatured Default (except for (a) Unmatured Defaults that will be cured,and that
the Borrower certifies will be cured, by the use of the proceeds of an Advance
that
the Borrower has requested hereunder or by the issuance, amendment or extension
of a Facility Letter of Credit that the Borrower has requested hereunder or (b)
Unmatured Defaults (other than the failure to pay any Obligation hereunder) that
are not reasonably likely to have a Material Adverse Effect and that theBorrower
certifies that it reasonably expects to cure before the date on which the same
becomes a Default) the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 9.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued (after the then applicable Interest Period therefor)
as a Fixed Rate Advance. During the continuance of a Default the Required
Lenders may, at their option, by notice to the Borrower (which notice may be
revoked at the option of the Required Lenders notwithstanding any provision of
Section 9.2requiring unanimous consent of the Lenders to changes in interest
rates), declare that (i) each Fixed Rate Advance shall bear interest for
the remainder of the applicable Interest Period at the rate otherwise
applicable to such Interest Periodplus 2% per annum and (ii) each Floating Rate
Advance shall bear interest at a rate per annum equal to the applicable
Floating Rate in effect from time to time plus 2%
per annum, provided that, during the continuance of a Default under Section 8.5
or 8.6, the interest rates set forth in clauses (i) and (ii) above shall be
applicable to all Advances without any election or action on the part of the
Administrative Agent or any Lender.
2.10. Method and Allocation of Payments. (a) All payments of the
Obligations hereunder shall be made, without setoff, deduction, or counterclaim,
in immediately available funds to the Administrative Agent at the Administrative
Agent's address specified pursuant to Article XIV, or at any other Lending
Installation of the Administrative Agent specified in writing by the
Administrative Agent to the Borrower, by noon (Chicago time) on the date when
due. Eachpayment delivered to the Administrative Agent for the account of
any Lender shallbe delivered promptly by the Administrative Agent to such
Lender in the same typeof funds that the Administrative Agent received at its
address specified pursuant toArticle XIV or at any Lending Installation
specified in a notice received by theAdministrative Agent from such Lender.
The Administrative Agent is herebyauthorized to charge the account of the
Borrower maintained with First Chicago foreach payment of principal, interest
and fees as it becomes due hereunder.
(b) Except as otherwise provided in Section 2.10(d), payments of principal and
interest on Ratable Advances received by Administrative Agent shall be allocated
among the Lenders based on their pro rata shares of such Ratable Advances.
Payments of principal and interest on Swing Line Advances received by the
Administrative Agent shall be paid solely to the Swing Line Lender. Except as
otherwise provided in Section 2.10(d), payments of principal on any Competitive
Bid Advance received by the Administrative Agent shall be paid, on a pro rata
basis, to the Lender or Lenders holding the Competitive Bid Loan or Loans
comprising such Advance and payments of interest on such Competitive Bid
Advance received by the Administrative Agent shall be allocated to the Lender or
Lenders that funded such Advance, pro rata based on the amount of interest due
each such Lender on its outstanding principal (it being acknowledged that the
rate of interest payable to Lenders on the Competitive Bid Loans may differ).
Except as provided in Section 2.10(c) or Section 2.10(d), payments made by the
Borrower shall be applied to the Advances or interest thereon (or both, as
applicable)designated by the Borrower.
(c) Notwithstanding the provisions of Section 2.10(b), if each of the conditions
listed in Clauses (A) through (C) below exists on the date on which a payment on
any Loan is made, then such payment shall be allocated on a pro-rata basis
between the holders of the Competitive Bid Loans and holders of the Ratable
Loans based upon the respective amounts of such Competitive Bid Loans and
Ratable Loans outstanding if it is a payment of principal and shall be
allocated on a pro rata basisbetween holders of the Competitive Bid Loans
and holders of the Ratable Loansbased on the amount of interest due to such
holders if it is a payment of interest:
(A) a Default exists and is continuing and has not been waived, (B) the Loans
have been accelerated or otherwise shall have become due, and (C) the fractional
share of one or more of the Lenders in the total amount of all outstanding
Competitive Bid Loans does not equal its Ratable Share.
(d) Notwithstanding the foregoing provisions of this Section 2.10, a Non-Funding
Lender shall not be entitled to receive any payments of principal, interest,
fees or other Obligations hereunder unless and until (i) such Non-Funding
Lenders hall have cured the default or other circumstances that
resulted in its being a Non-Funding Lender or (ii) the Lenders shall have
received payments of their RatableLoans hereunder that reduce the principal
amount of all Ratable Loans such that allLenders (including such Non-Funding
Lender but excluding any other Non-Funding Lender) hold Ratable Loans in their
respective Pro Rata Shares.
(e) If the Administrative Agent receives payments on any Business Day of any
amounts payable to any Lender hereunder and fails to pay such amount to such
Lender on or before the next succeeding Business Day, the Administrative Agent
shall pay to such Lender interest on such unpaid amount at the Federal Funds
Effective Rate until such amount is so paid to such Lender.
2.11. Noteless Agreement; Evidence of Indebtedness. (a) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(b) The Administrative Agent shall also maintain accounts in which it will
record (i) the amount of each Loan made hereunder and the Rate Option and
Interest Period with respect thereto, (ii) the amount of any principal or
interest dueand payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(c) The entries maintained in the accounts maintained pursuant to
Sections2.11(a) and (b) above shall be prima facie evidence of the existence
and amounts of the Obligations therein recorded; provided, however, that the
failure of the Administrative Agent or any Lender to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Obligations in accordance with their terms.
(d) Any Lender may request that its Ratable Loans be evidenced by a
Ratable Note and that its Competitive Bid Loans be evidenced by a
Competitive Bid Note. In such event, the Borrower shall prepare,
execute and deliver to such Lender the applicable Note or Notes payable
to the order of such Lender in a form supplied by the Administrative Agent.
Thereafter, the Loans evidenced by such Note and interest thereon shall
at all times (including after any assignment pursuant to Section 13.3)
be represented by one or more Notes payable to the order of the payee
named therein or any assignee pursuant to Section 13.3, except to the extent
that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Loans once again be evidenced as described
in Sections 2.11(a) and (b) above.
2.12. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Administrative Agent to extend, convert or continue Advances, effect
selections of Rate Options and to transfer funds based on telephonic notices
made by any person or persons the Administrative Agent or any Lender in good
faith believes to be an Authorized Officer acting on behalf of the Borrower.
The Borrower agrees to deliver promptly to the Administrative Agent a written
confirmation, if such confirmation is requested by the Administrative Agent or
any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Administrative Agent and the Lenders, the records of the Administrative
Agent and the Lenders shall govern absent manifest error.
2.13. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each the first date of
each calendarm onth, commencing with the first such date to occur after the date
hereof. Interest accrued on each Fixed Rate Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Fixed Rate
Advance is prepaid, whether due to acceleration or otherwise, and at maturity.
Interest accrued on each Fixed Rate Advance having an Interest Period longer
than three months shall also be payable on each Quarterly Payment Date during
such Interest Period. Interest and fees under this Agreement shall be
calculated for actual days
elapsed on the basis of a 360-day year except that interest on Floating Rate
Advances and Absolute Rate Advances shall be calculated for actual days elapsed
on the basis of a 365-day (or, if applicable, 366-day) year. Interest shall be
payable for the day an Advance is made but not for the day of any payment on the
amount paid if payment is received prior to noon (Chicago time) at the place of
payment. If any payment of principal of or interest on an Advance shall become
due on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.
2.14. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Administrative Agent
will notify each Lender of the contents of each Aggregate Commitment reduction
notice, Ratable Borrowing Notice, Rate Option Notice, Competitive Bid Borrowing
Notice (except as otherwise provided in Section 2.3.10), and repayment notice
received by it hereunder. The Administrative Agent will notify each Lender of
the interest rate applicable to each Fixed Ratable Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
2.15. Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of such Lending Installation. Each
Lender may, by written notice to the Administrative Agent and the Borrower in
accordance with Article XIV, designate replacement or additional Lending
Installations through which Loans will be made by it and for whose account Loan
payments are to be made.
2.16. Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the
Administrative Agent of (i) in the case of a Lender, the proceeds of a Loan or
(ii) in the case of the Borrower, a payment of principal, interest or fees to
the Administrative Agent for the account of any of the Lenders, that it
does not intend to make such payment,
the Administrative Agent may assume that such payment has been made. The
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption.
If such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Administrative Agent, the recipient of such payment shall, on
demand by the Administrative Agent, repay to the Administrative Agent the
amount so made available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made available by
the Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (y) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
2.17. Extension of Facility Termination Date. The Borrower may request,
but not more than once in each fiscal year of the Borrower, an extension of the
Facility Termination Date by submitting a request for an extension to the
Administrative Agent (an "Extension Request"). The Extension Request must
specify the new Facility Termination Date requested by the Borrower ("Extension
Date"), which shall be not more than three (3) years after the then current
Facility Termination Date, provided the Extension Date shall not be more than
five years after the date of the Extension Request. Promptly upon receipt
of an Extension Request, the Administrative Agent shall notify each Lender
of the contents thereof and shall request each Lender to approve the
Extension Request (which approval may be given or withheld by each Lender
in its sole discretion). Each Lender approving the Extension Request shall
deliver its written approval no later than 75 days following the Extension
Request. If such written approval of the Required Lenders is not received
by the Administrative Agent within such 75-day period, the
Extension Request shall be denied. If such written approval of the Required
Lenders is received by the Administrative Agent within such 75-day period, the
Facility Termination Date shall be extended to the Extension Date specified in
the Extension Request but only with respect to the Lenders that have given such
written approval. Except to the extent that a Lender that did not give its
written approval to such Extension Request ("Declining Lender") is replaced
prior to the ExtensionDate as provided in Section 2.20, the Aggregate Commitment
shall be decreased by the Commitments of the Declining Lenders, and the
Loans and all interest, fees and other amounts owed to such Declining Lenders
shall be paid in full, on the Facility Termination Date (determined prior
to such Extension Request).
2.18. Increase in Aggregate Commitment. (a) The Borrower may, at any
time and from time to time, by notice to the Administrative Agent, request an
increase in the Aggregate Commitment within the limitations hereafter described,
which notice shall set forth the amount of such increase. The Aggregate
Commitment may be so increased either by having one or more New Lenders
become Lenders and/or by having any one or more of the then existing Lenders (at
their respective election in their sole discretion) that have been approved by
the Borrower, increase the amount of their Commitments, provided that (i) the
Commitment of any New Lender shall be in an amount not less than $10,000,000
(and, if in excess thereof, in an integral multiple of $1,000,000); (
ii) the sum of the Commitments of the New Lenders and the increases in the
Commitments of theAdditional Lenders that are not New Lenders shall be in an
aggregate amount ofnot less than $5,000,000 (and, if in excess thereof,
in an integral multiple of $1,000,000); (iii) the Commitment of each Additional
Lender following suchincrease in the Aggregate Commitment shall not exceed
$50,000,000; and (iv) the Aggregate Commitment shall not exceed the Aggregate
Commitment Limit. (b) As a condition to any increase in the Aggregate
Commitment, (i) the Borrower and each Additional Lender shall have executed and
delivered acommitment and acceptance (the "Commitment and Acceptance")
substantially in the form of Exhibit F hereto, and the Administrative Agent
shall have accepted andexecuted the same; (ii) if requested by an Additional
Lender, the Borrower shall have executed and delivered to the Administrative
Agent a Ratable Note and/or Competitive Bid Note payable to the order of
such Additional Lender; (iii) theGuarantors shall have consented in writing
to the new Commitments or increases in Commitments (as applicable) and shall
have agreed that their Guaranty Agreements continue in full force and effect;
(iv) the Borrower and each AdditionalLender shall otherwise have executed and
delivered such other instruments anddocuments as the Administrative Agent shall
have reasonably requested inconnection with such new Commitment or increase
in the Commitment (asapplicable); and (v) the Borrower shall have delivered to
the Administrative Agentopinions of counsel (substantially similar to the forms
of opinions provided for in Section 5.1(viii), modified to apply to the increase
in the Aggregate Commitment and to each Note, Commitment and Acceptance,
consent of Guarantors, and other documents executed and delivered in connection
with such increase in the Aggregate Commitment). The form and substance of
the documents required under clauses (i) through (v) above shall be fully
acceptable to the Administrative Agent.
The Administrative Agent shall provide written notice to all of the Lenders
hereunder of the Commitment of any New Lender or the increase in the
Commitment of any other Additional Lender hereunder and shall furnish to each
of the Lenders copies of the documents required under clauses (i) through (v)
above.
(c) Upon the effective date of any increase in the Aggregate Commitment
pursuant to the provisions hereof (the "Increase Date"), which Increase Date
shall be mutually agreed upon by the Borrower, each Additional Lender and the
Administrative Agent, (i) unless such Increase Date is a Quarterly Payment Date,
such Additional Lender shall not have any interest in any Facility Letter of
Credit outstanding on or issued after such Increase Date (except with respect to
any Commitment held by such Additional Lender prior to such Increase Date)
until the first Quarterly Payment Date after such Issuance Date and shall not be
entitled to issue Facility Letters of Credit until the first Quarterly Payment
Date after such Increase Date; (ii) on such Increase Date, the Borrower shall
repay all outstanding Floating Rate Advances and reborrow a Floating Rate
Advance in a like amount from the Lenders (including the Additional Lender);
(iii) such Additional Lender shall not participate in any then outstanding
Fixed Ratable Advances; (iv) if the Borrower shall at any time on or after
such Increase Date convert or continue any Fixed Ratable Advance outstanding
on such Increase Date, the Borrower shall be deemed to repay such Fixed
Ratable Advance on the date of the conversion or continuation thereof and
then to reborrow as a Ratable Advance a like amount on such date so that
the Additional Lender shall make a Ratable Loan on such date;
and (v) such Additional Lender shall make its Ratable Share of all Ratable
Advances made on or after such Increase Date (including those referred to in
clauses (iii) and (iv) above) and shall otherwise have all of the rights and
obligations of a Lender hereunder on and after such Increase Date. On the first
Quarterly Payment Date following such Increase Date (or on such Increase Date
if it is a Quarterly Payment Date), such Additional Lender shall be deemed to
have irrevocably and unconditionally purchased and received, without recourse or
warranty, from the Lenders party to this Agreement immediately prior to the
effective date of such increase, an undivided interest and participation in any
Facility Letter of Credit then outstanding, ratably, such that each Lender
(including each Additional Lender) holds a participation interest in each such
Facility Letter of Credit in the amount of its then Ratable Share thereof.
Notwithstanding the foregoing, upon the occurrence of a Default prior to the
date on which such Additional Lender is holding Fixed Ratable Loans equal
to its Ratable Share of all Fixed Ratable Advances hereunder, such
Additional Lender shall, upon notice from the Administrative Agent,
on or after the date on which the Obligations are accelerated or become due
following such Default, pay to the Administrative Agent (for the account of
the other Lenders, to which the Administrative Agent shall pay their Ratable
Shares thereof upon receipt) a sum equal to such Additional Lender's
Ratable Share of each Fixed Ratable Advance then outstanding with respect to
which such Additional Lender does not then hold a Fixed Ratable Loan equal to
its Ratable Share thereof; such payment by such Additional Lender shall
constitute anABR Loan hereunder.
(d) On the Increase Date, the Additional Lender shall pay to the
Administrative Agent, as an additional administrative fee, an amount equal to
the product of (i) the number of Fixed Ratable Advances outstanding on such
Increase Date and (ii) $250.00.
(e) Solely for purposes of clause (i) of the definitions of "Majority
Lenders"and "Required Lenders," until such time as an Additional Lender holds
Ratable Loans equaling its Pro Rata Share of all outstanding Ratable Advances
(if any) andparticipation interests equaling its Pro Rata Share of all
outstanding Facility Lettersof Credit (if any), the amount of such
Additional Lender's new Commitment or the increased amount of its Commitment
shall be excluded from the amount of the Commitments and there shall be included
in lieu thereof at any time an amount equal to the sum of the outstanding
Ratable Loans and the participation interests in Facility Letters of Credit held
by such Additional Lender with respect to its new Commitment or the increased
amount of its Commitment.
(f) Nothing contained herein shall constitute, or otherwise be deemed to
be, a commitment or agreement on the part of any Lender to increase its
Commitment hereunder at any time or a commitment or agreement on the part of the
Borrower or the Administrative Agent to give or grant any Lender the right to
increase its Commitment hereunder at any time.
2.19. Swing Line. (a) The Swing Line Lender agrees, on the terms and
conditions hereinafter set forth, to make Advances ("Swing Line Advances") to
the Borrower from time to time during the period from the date of this
Agreement, up to but not including the fifth (5th) day prior to the Facility
Termination Date, in an aggregate principal amount not to exceed at any time
outstanding the lesser of (i)the Swing Line Commitment or (ii) the Aggregate
Available Credit. (b)the Swing Line Advance shall be in an amount not less t
han One Million Dollars and, if in excess thereof, in integral multiples of One
Million Dollars. Within the limits set forth in Section 2.19(a), the Borrower
may borrow, repay and reborrow under this Section 2.19.
(c) The Borrower shall give the Swing Line Lender (and, if the Swing
Line Lender is not also the Administrative Agent, the Administrative Agent)
notice requesting a Swing Line Advance ("Swing Line Borrowing Notice") not
later than 1:00 p.m. (Chicago time) on the Business Day of such Swing Line
Advance,specifying the amount of such requested Swing Line Advance. Each such
Swing Line Borrowing Notice shall be accompanied by the Ratable Borrowing Notice
provided for in Section 2.19(d). All Swing Line Borrowing Notices and Ratable
Borrowing Notices given by the Borrower under this Section 2.19(c) shall be
irrevocable. Upon satisfaction of the applicable conditions set forth in
Section 5.2, the Swing Line Lender will make the Swing Line Advance available to
the Borrower in immediately available funds by crediting the amount thereof to
the Borrower's account with the Swing Line Lender. If the Swing Line Lender is
not also the Administrative Agent, the Swing Line Lender shall not advance the
SwingLine Advance unless and until the Administrative Agent shall have
confirmed (bytelephonic notice) that such applicable conditions have been
satisfied. (d) Each Swing Line Advance shall bear interest at the Alternate Base
Rate and shall be paid in full on or before the third Business Day following the
making of such Swing Line Loan and, if not so paid by the Borrower, shall be
paid in full from the proceeds of a Ratable Advance made pursuant to Section 2.2
on the third Business Day following the making of such Swing Line Advance.
Each Swing Line Borrowing Notice given by the Borrower under Section 2.19(c)
shall include, or if it does not include shall be deemed to include, an
irrevocable Ratable Borrowing Notice under Section 2.2 requesting the Lenders to
make a Ratable Advance, on or before the third Business Day following the
making of such SwingLine Advance, of the full amount of such Swing Line Advance,
unless such Swing Line Advance is sooner paid in full by the Borrower.
(e) Provided that the applicable conditions set forth in Section 5.2
shall have been satisfied at the time of the making of such Swing Line
Advance, the Lenders irrevocably agree to make the Ratable Advance provided
for in Section 2.19(d), notwithstanding any subsequent failure to satisfy
such conditions or any other facts or circumstances including (without
limitation) the existence of a Default. If and to the extent that any
Lender shall fail to make a Ratable Loan in the amount of its Ratable Share
of such Ratable Advance, such Lender shall be irrevocably deemed to have
purchased from the Swing Line Lender a participation interest in such
Swing Line Advance in an amount equal to the amount of such Lender's Ratable
Share of such Ratable Advance.
2.20. Replacement of a Lender. If(a) a Lender sustains or incurs a loss
or expense or reduction of income and requests reimbursement therefor from the
Borrower pursuant to Section 3.1, 3.2 or 3.5, (b) a Lender determines that
maintenance of any of its Fixed Rate Loans at a suitable Lending Installation
would violate any applicable Law and so notifies the Administrative Agent
pursuant toSection 3.3, or (c) a Lender is a Declining Lender under Section
2.17, theBorrower may within ninety (90) days after the date on which the
Borrower receives such request (in the case of clause (a) above) or after the
date on which the Administrative Agent gives the Borrower notice of the
Administrative Agent's receipt of the notice from such Lender under Section 3.3
(in the case of clause (b)above) or at any time prior to the expiration or
termination of such DecliningLender's Commitment (in the case of clause
(c) above) notify the AdministrativeAgent and such Lender that an Additional
Lender designated by the Borrower inthe notice has agreed to replace such
lender, provided that (i) the Borrower shalldeliver satisfactory evidence
to the Administrative Agent, at least fifteen Business Days prior to such
replacement, that any proposed Additional Lender that is a New Lender is a
Qualified Bank, and the Administrative Agent shall have approved
such New Lender (which approval shall not be unreasonably withheld) and (ii) the
Borrower shall have paid any amounts due pursuant to Section 3.1, 3.2 or 3.5 to
the Lender to be replaced on or before such replacement. The Lender to be
replaced shall assign all of its Commitments and Loans and interests in
outstanding Facility Letters of Credit hereunder to the Additional Lender
pursuant to the procedures for assignments contained in Section 13.3 and
shall receive, concurrently with such assignments, payment of an amount equal
to all outstanding amounts payable to such assigning Lender hereunder,
including without limitation the aggregate outstanding principal amount
of the Loans held by such Lender, all interest thereon to the date of the
assignment, all accrued fees to the date of such assignment and any amounts
payable under Section 3.4 with respect to any payment of any Fixed Rate Loan
resulting from such assignment. Such assigning Lender shall not be responsible
for the payment to the Administrative Agent of the fee provided for in
Section 13.3.2, which fee shall be paid by such Additional Lender. In the
case of an assignment by a Declining Lender under this Section 2.20, the
Additional Lender that is the assignee of the Declining Lender shall agree at
the time of such assignment to the extension to the applicable Extension Date of
the Commitment assigned to it, which agreement shall be set forth in a written
instrument delivered and satisfactory to the Borrower and the Administrative
Agent.
2.21. Termination of Commitment of Declining Lender. At any time prior
to the replacement of a Declining Lender pursuant to Section 2.20, the Borrower
may, upon not less than 15 days' prior notice to the Administrative Agent and
such Declining Lender, terminate the Commitment of such Declining Lender as of a
Business Day (prior to the expiration of such Commitment) set forth in such
notice. In the event of such termination, the Borrower shall pay to the
Administrative Agent on the date of termination of such Commitment, for the
account of such Declining Lender, all Loans and other sums payable to such
Declining Lender hereunder and all amounts (if any) payable to such Declining
Lender under Section 3.4 by reason of such payment.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental
or quasi-governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i)subjects at least two Lenders or applicable Lending
Installations to any Taxes, or changes the basis of taxation
of payments (other than with respect to Excluded Taxes) to such
Fixed Rate Loans, 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, at least two Lenders or applicable Lending Installations
(other than reserves and assessments taken into account in
determining the interest rate applicable to Fixed Rate Advances),
or
(iii)imposes any other condition the result of which is to increase the
cost to at least two Lenders or applicable Lending Installations
of making, funding or maintaining Fixed Rate Loans or reduces any
amount receivable by at least two Lenders or applicable Lending
Installations in connection with their Eurodollar Loans, or
requires at least two Lenders or applicable Lending Installations
to make any payment calculated by reference to the amount of Fixed
Rate Loans held or interest received by them, by an amount
deemed material by such Lenders,
and the result of any of the foregoing is to increase the cost to such Lenders
or applicable Lending Installations of making or maintaining their Fixed Rate
Loans or Commitments or to reduce the return received by such Lenders or
applicable Lending Installations in connection with such Fixed Rate Loans or
Commitments,then, within 30 days of demand by such Lenders, the Borrower shall
pay such Lenders such additional amount or amounts as will compensate such
Lenders for such increased cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If at least two Lenders
determine the amount of capital required or expected to be maintained by such
Lenders, any Lending Installation of such Lenders or any corporation controlling
such Lenders is increased as a result of a Change (as hereinafter defined),then,
within 30 days of demand by such Lenders, the Borrower shall pay such Lenders
the amount necessary to compensate for any shortfall in the rate of return on
the portion of such increased capital which such Lenders determine is
attributable to this Agreement, their Loans or their Commitments to make
Loans or to issue or participate in Facility Letters of Credit hereunder (after
taking into account such Lenders' policies as to capital adequacy). "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 Lender or any Lending Installation or any
corporation controlling any Lender. "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 Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3. Availability of Certain Advances. If any Lender determines that
maintenance of any of its Fixed Rate Loans at a suitable Lending Installation
would violate any applicable Law and so notifies the Administrative Agent, the
Borrowershall repay any Fixed Rate Loans held by such Lender that violate any
Law and (if such Loan is a Ratable Loan) immediately reborrow the amount thereof
as a Floating Rate Loan from such Lender. In the event that Lenders whose
Commitments aggregate not more than one-third of the Aggregate Commitment
have determined that maintenance of a Type of Fixed Rate Loan at a suitable
Lending Institution would violate any applicable Law, the Borrower may, but only
for a period of 90 days, request Ratable Advances of, or conversions into or
continuations of Advances of, such Type, in which event the Lenders that have
determined that maintenance of such Type of Fixed Rate Loans would violate
applicable Law shall make their Ratable Shares of such Advances
(or continuations or conversions) as Floating Rate Loans, and all other Lenders
shall make theirRatable Shares of such Advances (or continuations or
conversions) as Fixed RateLoans of such Type. Except as provided in the
preceding sentence, if any Lender determines that maintenance of any of its
Fixed Rate Loans at a suitable Lending Installation would violate any applicable
Law, Fixed Rate Advances of such Type shall be suspended with respect to all
Lenders. If the Required Lenders determine that (i) deposits of a type and
maturity appropriate to match fund Eurodollar Ratable Advances are not
available or (ii) the interest rate applicable to a Rate Option does not
accurately reflect the cost of making or maintaining the applicable Ratable
Advance, then the Administrative Agent shall suspend the availability of
the affected Rate Option.
3.4. Funding Indemnification. If any payment of a Fixed Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Fixed Rate
Advance is notmade, or any Advance is not continued or converted into a
Fixed Rate Advance, on the date specified by the Borrower for any reason
other than default by the Lenders, the Borrower will indemnify each Lender
for any loss or cost (including any internal administrative costs not to
exceed $250.00) incurred by it resulting therefrom, including, without
limitation, any loss or cost in liquidating or employing deposits acquired to
fund or maintain such Fixed Rate Advance. Notwithstanding the foregoing, if
such loss or cost results from an occurrence otherthan (i) a prepayment by
the Borrower (except a prepayment required to be made under Section 3.3 by
reason of a change in any Law or interpretation of Law occurring after the
making of, or conversion into or continuation of, a Type of Fixed Rate Loan
and resulting in the determination that maintenance by a Lender of such Type
of Fixed Rate Loan violates applicable Law pursuant to Section 3.3,
or (ii) a default by the Borrower or by the Lenders,the Borrower's obligation to
indemnify the Lenders shall be limited to one-half (1/2) of the losses or costs
incurred by each Lender.
3.5. Taxes. (a) The Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note ("Other Taxes").
(b) The Borrower agrees unconditionally to indemnify and save the
Administrative Agent and the Lenders harmless from and against any or all
presentor future claims, liabilities or losses with respect to or resulting from
any omission by the Borrower to pay, or any delay in paying, any Other Taxes.
Such indemnification payments by the Borrower shall be made within 30 days of
the date the Administrative Agent or such Lender makes demand therefor pursuant
to Section 3.6.
(c) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, notless than ten Business Days after the date of this Agreement,
(i) deliver to each ofthe Borrower and the Administrative Agent two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224,
certifying in either case thatsuch Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States
federal income taxes, and (ii) deliver to each of the Borrower and the
Administrative Agent a United States Internal Revenue Form W-8 or W-9,
as the case may be, and certify that it is entitled to an exemption from
United States backup withholding tax. Each Non-U.S. Lender further
undertakes to deliver to each of the Borrower and the Administrative Agent
(x) renewals or additional copies of such form (or any successor form) on or
before the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Administrative Agent.
All forms or amendments described in the preceding sentence shall certify
that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes,
unless an event (including without limitation any change in treaty,
law or regulation) has occurred after the date such Lender becomes a Lender
hereunder and prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the Administrative Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(d) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to Section 3.5(c) (unless
such failure is due to a change in treaty, law or regulation, or any change
in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 3.5 with respect
to Taxes imposed by the United States; provided that, should a Non-U.S. Lender
which is otherwise exempt from or subject to a reduced rate of withholding tax
become subject to Taxes because of its failure to deliver a form required under
Section 3.5(c), the Borrower shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such Taxes, at no
cost to the Borrower.
(e) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its applicable Fixed Rate Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
unavailability of the applicable Fixed Rate Advances under Section 3.3, so
long as such designation is not, in the judgment of such Lender, materially
disadvantageous to such Lender. Each Lender shall deliver a written statement of
such Lender to the Borrower (with a copy to the Administrative Agent) as to the
amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written
statement shall set forth in reasonable detail the calculations upon which
such Lender determined such amount (which calculations shall be made in good
faith), shall be delivered within 90 days after the date on
which such Lender becomes aware of such amounts being due and ascertains the
amount so due, 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 Fixed Rate Loan shall be calculated as though each Lender
funded its Fixed Rate Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
interest 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
of any Lender shall be payable within 30 days after receipt by the Borrower of
such written statement. The obligations of the Borrower under Sections 3.1,
3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of
this Agreement.
ARTICLE IV
THE LETTER OF CREDIT FACILITY
4.1. Facility Letters of Credit. At the request of the Borrower, each
Lender shall, within the limitations of its Issuing Bank L/C Limit and on the
terms and conditions set forth in this Agreement, issue from time to time for
agree, one or more Facility Letters of Credit (which, in the case of a
Performance Letter of Credit, may be an Escrow Agreement) in accordance with
this Article IV, during the period commencing on the date of this Agreement and
ending on the Business Day prior to the Facility Termination Date.
4.2. Limitations. No Issuing Bank shall issue, amend or extend, at
any time, any Facility Letter of Credit:
(i) if, after giving effect to the Facility Letter of Credit or amendment
or extension thereof requested hereunder, (A) the aggregate
maximum amount then available for drawing under Letters of Credit
issued by such Issuing Bank shall exceed any limit imposed by Law
upon such Issuing Bank or (B) the outstanding undrawn face amount
of all Facility Letters of Credit issued by such Issuing Bank shall
exceed such Issuing Bank's L/C Limit;
(ii) if, after giving effect to the Facility Letter of Credit or amendment
or extension thereof requested hereunder, the aggregate principal
amount of the Facility Letter of Credit Obligations would exceed the
L/C Sublimit or the limitations set forth in Section 4.4(f);
(iii) that is in (or in the case of an amendment of a Facility Letter of
Credit, increases the face amount thereof by) an amount in excess
of the then Aggregate Available Credit;
(iv) if such Issuing Bank receives written notice from the Administrative
Agent on the proposed Issuance Date of such Facility Letter of
Credit that the conditions precedent contained in Sections 5.1 or
5.2, as applicable, would not on such Issuance Date be satisfied
unless such conditions are thereafter satisfied and written notice of
such satisfaction is given to such Issuing Bank by the Administrative
Agent;
(v) that is in a currency other than U.S. Dollars; or
(vi) that has a stated maturity date later than the earlier of (A) four years
after the Issuance Date and (B) one year after the Facility
Termination Date. For purposes of this clause (vi) and Section
4.4(f), the"stated maturity date" is the expiration date of the Facility
Letter of Credit, giving effect to any future extension thereof under
an automatic renewal provision, unless such automatic renewal
provision permits the Issuing Bank to elect not to extend by giving
written notice of cancellation to the beneficiary of such Facility
Letter of Credit.
4.3. Conditions. In addition to being subject to the satisfaction of the
conditions contained in Sections 5.1 and 5.2, as applicable, the issuance of any
Facility Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered to such Issuing Bank at such
times and in such manner as the Issuing Bank may reasonably
prescribe such documents (including, if requested, an Application)
and materials as may be reasonably required pursuant to the terms
thereof, and the proposed Facility Letter of Credit shall be
reasonably satisfactory to such Issuing Bank in form and content;
and
(ii) as of the Issuance Date no order, judgment or decree of any court,
arbitrator or governmental authority shall enjoin or restrain such
Issuing Bank from issuing the Facility Letter of Credit and no Law
applicable to such Issuing Bank and no directive from any Official
Body with jurisdiction over such Issuing Bank shall prohibit such
Issuing Bank from issuing Letters of Credit generally or from
issuing that Facility Letter or Credit.
4.4. Procedure for Issuance of Facility Letters of Credit.
(a) The Borrower shall give such Issuing Bank and the Administrative Agent not
less than five (5) Business Days' (or such shorter period as such Issuing Bank,
the Borrower and the Administrative Agent shall agree) prior notice (in writing
or by telephonic notice confirmed promptly in writing) of any requested issuance
of a Facility Letter of Credit under this Agreement. Such notice shall specify
(i) the stated amount of the Facility Letter of Credit requested,
(ii) the requested Issuance Date, which shall be a Business Day, (iii) the
date on which such requested Facility Letter of Credit is to expire, which
date shall be in compliance with the requirements of Section 4.2(vi), (iv)
the purpose for which such Facility Letter of Credit is to be issued, (v)
the Person for whose benefit the requested Facility Letter of Credit is to be
issued, and (vi) whether such Facility Letter of Credit is a Performance
Letter of Credit (and, if so, whether it is an Escrow Agreement) or a Financial
Letter of Credit. At the time such request is made, the Borrower shall
also provide such IssuingBank with a copy of the form of the Facility Letter of
Credit it is requesting be issued.
(b) As soon as practicable and in no event later than one Business Day
prior to the requested date of issuance of such Facility Letter of Credit, such
Issuing Bank shall approve or disapprove, in its reasonable discretion, the
issuance of such requested Facility Letter of Credit and shall notify the
Borrower and the Administrative Agent of such approval or disapproval, but the
issuance of such approved Facility Letter of Credit shall continue
to be subject to the provisions of this Article IV.
(c) As soon as practicable and in no event later than one Business Day
prior to the issuance of a Facility Letter of Credit approved by an Issuing
Bank as provided in Section 4.4(b), the Borrower shall confirm by notice
("Facility Letter of Credit Notice") in writing to the Administrative Agent and
to such Issuing Bank the intended Issuance Date and amount of such Facility
Letter of Credit. Not later than 10:00 a.m. (Chicago time) on the Business
Day following its receipt of a Facility Letter of Credit Notice, the
Administrative Agent shall determine and shall notify the Issuing Bank and
the Borrower (in writing or by telephonic notice confirmed promptly thereafter
in writing) whether issuance of the requested Facility Letter of Credit would
be permitted under the provisions of Sections 4.2(ii) and (iii). If the
Administrative Agent notifies such Issuing Bank and the Borrower that such
issuance would be so permitted, then, subject to the terms and conditions of
this Article IV and provided that the applicable conditions set forth in
Sections 5.1 and 5.2 have been satisfied, such Issuing Bank shall, on the
requested Issuance Date, issue the requested Facility Letter of Credit in
accordance with such Issuing Bank's usual and customary business practices.
Such Issuing Bank shall give the Administrative Agent written notice, or
telephonic notice confirmed promptly thereafter in writing, of the issuance
of a Facility Letter of Credit.
(d) An Issuing Bank shall not extend (other than by operation of an
automatic renewal provision) or amend any Facility Letter of Credit unless
the requirements of this Section 4.4 are met as though a new Facility Letter of
Credit were being requested and issued.
(e) Any Lender may, but shall not be obligated to, issue to the Company
or any Subsidiary Letters of Credit (that are not Facility Letters of Credit)
for its own account, and at its own risk. None of the provisions of this
Article IV shall apply to any Letter of Credit that is not a Facility Letter of
Credit.
(f) The Borrower may not request the issuance, amendment or extension of
any Facility Letter of Credit for or to a stated maturity date later than the
termination of the Commitments of any Declining Lenders if, following the
issuance, amendment or extension of such Facility Letter of Credit, the
outstanding amount of all Facility Letters of Credit having a stated maturity
date later than the termination of such Declining Lender's Commitments would
exceed the amount to which the LC Sublimit will be reduced following the
termination of such Declining Lenders' Commitments.
4.5. Duties of Issuing Bank. Any action taken or omitted to be taken by
an Issuing Bank under or in connection with any Facility Letter of Credit, if
taken or omitted in the absence of willful misconduct or gross negligence, shall
not put such Issuing Bank under any resulting liability to any Lender or,
provided that such Issuing Bank has complied with the procedures specified in
Section 4.4 in all material respects, relieve any Lender of its obligations
hereunder to such Issuing Bank. In determining whether to pay under any
Facility Letter of Credit, an Issuing Bank shall have no obligation to the
Lenders other than to confirm that any documents required to be delivered
under such Facility Letter of Credit appear to have been delivered in
compliance with the requirements of such Facility Letter of Credit.
4.6. Participation. (a) Immediately upon issuance by an Issuing Bank
of any Facility Letter of Credit in accordance with Section 4.4 and, with
respect to the Existing Letters of Credit, on the Closing Date, each Lender
shall be deemed to have irrevocably and unconditionally purchased and
received from such Issuing Bank, without recourse or warranty, an undivided
interest and participation, in the amount of its Ratable Share of, such
Facility Letter of Credit (including, without limitation, all obligations of
the Borrower with respect thereto other than amounts owing to such Issuing
Bank under Section 3.2 or 4.7(b)). Immediately upon the termination of the
Declining Lenders' Commitments, each other Lender shall be deemed to have
irrevocably and unconditionally purchased and received from such Declining
Lenders, without recourse or warranty, a portion of each such Declining
Lender's undivided interest and participation in all outstanding Facility
Letters of Credit (in the proportion of the Ratable Shares of such purchasing
Lenders determined immediately following the termination of the Declining
Lenders' Commitments) such that, upon such purchase, each Lender holds an
undivided interest and participation in all outstanding Facility Letters of
Credit in the amount of its then Ratable Share thereof.
(b) In the event that an Issuing Bank makes any payment under any
Facility Letter of Credit, the Borrower shall immediately and unconditionally
reimburse theIssuing Bank therefor, whether through an Advance hereunder or
otherwise. If theBorrower shall not have repaid such amount to such Issuing
Bank on or before the date of such payment by such Issuing Bank, such Issuing
Bank shall promptly so notify the Administrative Agent, which shall promptly
so notify each Lender. Upon receipt of such notice, each Lender shall
promptly and unconditionally pay to the Administrative Agent (in same day
funds) for the account of such Issuing Bank the amount of such Lender's
Ratable Share of the payments so made by such Issuing Bank, and the
Administrative Agent shall promptly pay such amount, and any other amounts
received by the Administrative Agent for such Issuing Bank's account pursuant
to this Section 4.6(b), to such Issuing Bank. If the Administrative
Agent so notifies such Lender prior to 10:00 a.m. (Chicago time) on any Business
Day, such Lender shall make available to the Administrative Agent for the
account of such Issuing Bank such Lender's Ratable Share of the amount of
such payment on such Business Day in same day funds. If and to the extent such
Lender shall not have so made its Ratable Share of the amount of such payment
available to the Administrative Agent for the account of such Issuing Bank,
such Lender agrees to pay to the Administrative Agent for the account of such
Issuing Bank forthwith on demand such amount, together with interest thereon,
for each day from the date such payment was first due until the date such
amount is paid to the Administrative Agent for the account of such Issuing
Bank, at the Federal Funds Effective Rate. The failure of any Lender to make
available to the Administrative Agent for the account of such Issuing Bank
such Lender's Ratable Share of any such payment shall not relieve any other
Lender of its obligation hereunder to make available to the Administrative
Agent for the account of such Issuing Bank its Ratable Share of any payment
on the date such payment is to be made.
(c) The payments made by the Lenders to an Issuing Bank in reimbursement
of amounts paid by it under a Facility Letter of Credit shall constitute, and
the Borrower hereby expressly acknowledges and agrees that such payments shall
constitute, Advances hereunder and such payments shall for all purposes
be treated as Advances (notwithstanding that the amounts thereof may not comply
with the provisions of Section 2.5). Such Advances shall be ABR Advances,
subject to the Borrower's rights under Article II hereof.
(d) Upon the request of the Administrative Agent or any Lender, an
Issuing Bank shall furnish to the requesting Administrative Agent or Lender
copies of any Facility Letter of Credit or Application to which such Issuing
Bank is party.
(e) The obligations of the Lenders to make payments to the Administrative
Agent for the account of an Issuing Bank with respect to a Facility Letter of
Credit shall be irrevocable, not subject to any qualification or exception
whatsoever and shall be made in accordance with, but not subject to, the
terms and conditions of this Agreement under all circumstances, including
without limitation the following:
(i) any lack of validity or enforceability of this Agreement or any of the
other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right which the
Borrower may have at any time against a beneficiary named in a
Facility Letter of Credit or any transferee of any Facility Letter of
Credit (or any Person for whom any such transferee may be acting),
such Issuing Bank, the Administrative Agent, any Lender, or any
other Person, whether in connection with this Agreement, any
Facility Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transactions
between the Borrower or any other Loan Party and the beneficiary
named in any Facility Letter of Credit);
(iii) any draft, certificate or any other document presented under the
Facility Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents;
(v) any failure by the Administrative Agent or an Issuing Bank to make
any reports required pursuant to Section 4.8; or
(vi ) the occurrence of any Default or Unmatured Default.
4.7. Compensation for Facility Letters of Credit. (a) The
Borrower agrees to pay to the Administrative Agent (except to the extent
that the Borrower shall be required to pay directly to the Lenders as provided
in Section 4.7(c)), in the case of each outstanding Facility Letter of Credit,
the Facility Letter of Credit Fee therefor, payable quarterly in arrears on
each Quarterly Payment Date (including, if any Facility Letter of Credit remains
outstanding after the Facility Termination Date, each Quarterly Payment Date
thereafter until the first Quarterly Payment Date after the date on which the
last outstanding Facility Letter of Credit ceases to be outstanding) on the
reductions) of each Facility Letter of Credit outstanding at any time during the
preceding calendar quarter (but excluding any period prior to the Closing Date
during which an Existing Letter of Credit was outstanding). The Administrative
Agent shall promptly remit such Facility Letter of Credit Fees, when paid, to
the Lenders in their pro rata shares thereof.
(b) The Borrower agrees to pay to the Administrative Agent for the
account of each Issuing Bank (except to the extent that the Borrower shall
be required to pay directly to the Issuing Bank as provided in Section 4.7(c))
an issuance fee of 0.125% per annum payable quarterly in arrears on each
Quarterly Payment Date (including, if any Facility Letter of Credit remains
outstanding after the Facility Termination Date, each Quarterly Payment Date
thereafter until the first Quarterly Payment Date after the date on which the
last outstanding Facility Letter of Credit ceases to be outstanding) on the
daily average face amount (net of permanent reductions) of each Facility
Letter of Credit issued by such Issuing Bank and that was outstanding at any
time during the preceding calendar quarter (but excluding any period prior to
the Closing Date during which an Existing Letter of Credit was outstanding).
The Administrative Agent shall promptly remit to such Issuing Bank such
issuance fee, when paid.
(c) After the Facility Termination Date and the payment in full of all
other Obligations, the Borrower shall make (i) payments of Facility Letter
of Credit Fees under Section 4.7(a) directly to the Lenders
in the amounts of their respective
Ratable Shares thereof and (ii) payments of issuance fees under Section 4.7(b)
directly to each Issuing Bank that issued a Facility Letter of Credit that was
outstanding at any time during the prior calendar quarter.
(d) Facility Letter of Credit Fees and issuance fees payable to the
Issuing Bank shall be calculated, on a pro rata basis for the period to which
such payment applies, for actual days elapsed during such period, on the basis
of a 360-day year.
4.8. Issuing Bank Reporting Requirements. Each Issuing Bank shall,
no later than the tenth day following the last day of each month,
provide to the Administrative Agent a schedule of the Facility Letters of
Credit issued by it, in form and substance reasonably satisfactory to the
Administrative Agent, showing the Issuance Date, account party, original
face amount, amount (if any) paid thereunder, expiration date and the
reference number of each Facility Letter of Credit outstanding at any time
during such month and the aggregate amount (if any) payable by the Borrower
to such Issuing Bank during the month pursuant to Section 3.2. Copies of
such reports shall be provided promptly to each Lender and the Borrower
by the Administrative Agent.
4.9. Indemnification; Nature of Issuing Bank's Duties. (a) In
addition to amounts payable as elsewhere provided in this Article IV, the
Borrower hereby agrees to protect, indemnify, pay and save the Administrative
Agent and each Lender and Issuing Bank harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) arising from the claims of third
parties against the Administrative Agent, any Issuing Bank or any Lender as a
consequence, direct or indirect, of (i) the issuance of any Facility Letter
of Credit other than, in the case of an Issuing Bank, as a result of its
willful misconduct or gross negligence, or (ii) the failure of an Issuing
Bank to honor a drawing under a Facility Letter of Credit issued by it
as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority.
(b) As among the Borrower, the Lenders, the Administrative Agent and
any Issuing Bank, the Borrower assumes all risks of the acts and omissions of,
or misuse of Facility Letters of Credit by, the respective beneficiaries of such
Facility Letters of Credit. In furtherance and not in limitation of the
foregoing, neither the Administrative Agent nor any Lender nor (subject to the
provisions of Section 4.9(d)) an Issuing Bank shall be responsible: (i) for the
form, validity, sufficiency,accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for
and issuance of the Facility Letters of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Facility Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective
for any reason; (iii) for failure of the beneficiary of a Facility Letter of
Credit to comply fully with conditions required in order to draw upon such
Facility Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (v) for errors
in interpretation of technical terms; (vi) for any loss or delay
in the transmission or otherwise of any document required in order to make a
drawing under any Facility Letter of Credit or of the proceeds thereof; (vii)
for the misapplication by the beneficiary of a Facility Letter of Credit
of the proceeds of any drawing under such Facility Letter of Credit;
and (viii) for any consequences arising from causes beyond the control of the
Administrative Agent, such Issuing Bank and the Lenders including, without
limitation, any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority. None of the
above shall affect, impair, or prevent the vesting of any of an Issuing Bank's
rights or powers under this Section 4.9.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by an
Issuing Bank under or in connection with the Facility Letters of Credit
or any related certificates, if taken or omitted in good faith, shall not put
such Issuing Bank, the Administrative Agent or any Lender under any resulting
liability to the Borrower or relieve the Borrower of any of its obligations
hereunder to any such Person.
(d) Notwithstanding anything to the contrary contained in this
Section 4.9, the Borrower shall have no obligation to indemnify an Issuing
Bank under this Section4.9 in respect of any liability incurred by such Issuing
Bank arising primarily out of the willful misconduct or gross negligence of
such Issuing Bank, as determined by a court of competent jurisdiction, or out
of the wrongful dishonor by such Issuing Bank of a proper demand for payment
made under the Facility Letters of Credit issued by such Issuing Bank, unless
such dishonor was made at the request of the Borrower.
4.10. Cash Collateralization. If the expiration date of any Facility
Letter of Credit is later than the Facility Termination Date or later than the
date on which the Commitment of any Declining Lender is terminated pursuant to
Section 2.21 or expires, the Borrower shall, or shall cause one or more of
the other Loan Parties to, cash collateralize such Facility Letter of Credit
not less than fifteen (15) days prior to the Facility Termination Date or
termination or expiration of the Commitment of such Declining Lender (as
applicable). For purposes hereof, "cash collateralize" means, with respect
to any Facility Letter of Credit, that the Borrower or another Loan Party
shall provide cash or other collateral satisfactory to the applicable Issuing
Bank and the Required Lenders in an amount equal to such Facility Letter of
Credit and shall enter into such other indemnification agreement as the
Issuing Bank and the Required Lenders may require.
4.11. No Obligation. No Lender shall have any obligation hereunder to
accept or approve any request for, or to issue, amend or extend, any Letter of
Credit hereunder except Facility Letters of Credit in accordance with this
Article IV.
ARTICLE V
CONDITIONS PRECEDENT
5.1. Initial Advance. The Lenders shall not be required to make the initial
Advance hereunder, and the Issuing Bank shall not be required to issue the
initial Facility Letter of Credit hereunder, unless the Borrower has furnished
to the Administrative Agent:
(i) Copies of the articles or certificate of incorporation of each of the
Borrower and the Company, together with all amendments, and a
certificate of good standing, each certified by the appropriate
governmental officer in its jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of each of
the Borrower and the Company, of the by-laws and Board of
Directors' resolutions and resolutions or actions of any other body
authorizing the execution of the Loan Documents to which the
Borrower or the Company (as applicable) is a party.
(iii) An incumbency certificate, executed by the Secretary or Assistant
Secretary of each of the Borrower and the Company, which shall
identify by name and title and bear the signatures of the Authorized
Officers and any other officers of the Borrower or the Company (as
applicable) authorized to sign the Loan Documents to which the
Borrower or the Company (as applicable) is a party, upon which
certificate the Administrative Agent and the Lenders shall be
entitled to rely until informed of any change in writing by the
Borrower or the Company (as applicable).
(iv) To the extent requested by the Administrative Agent, copies of the
articles or certificate of incorporation, partnership agreement or
limited liability company operating agreement of each other Loan
Party, together with all amendments, and a certificate of good
standing, each certified by the appropriate governmental officer in
its jurisdiction of incorporation.
(v) To the extent requested by the Administrative Agent, copies,
certified by the Secretary or Assistant Secretary of each other Loan
Party, of its by-laws and of its Board of Directors' resolutions and
of resolutions or actions of any other body authorizing the execution
of the Loan Documents to which such Loan Party is a party.
(vi) An incumbency certificate, executed by the Secretary or Assistant
Secretary of each other Loan Party, which shall identify by name
and title and bear the signatures of the Authorized Officers and any
other officers of such Loan Party authorized to sign the Loan
Documents to which such Loan Party is a party.
(vii) A certificate, signed by the chief financial officer, controller or
chief accounting officer of the Borrower, stating that on the initial
Borrowing Date no Default or Unmatured Default has occurred and
is continuing.
(viii) Written opinions of the Borrower's counsel, addressed to the
Lenders in substantially the forms of Exhibit G, Exhibit H and
Exhibit I.
(ix) Any Notes requested by a Lender pursuant to Section 2.11 payable
to the order of each such requesting Lender.
(x) A Guaranty Agreement duly executed by each of the Guarantors in
substantially the form of Exhibit J hereto.
(xi) A Contribution and Indemnity Agreement executed by each of the
Guarantors in substantially the form of Exhibit K ("Contribution
Agreement").
(xii) Written money transfer instructions, in substantially the form of
Exhibit L, addressed to the Administrative Agent and signed by an
Authorized Officer, together with such other related money transfer
authorizations as the Administrative Agent may have reasonably
requested.
(xiii) Appropriate payoff letters or other documents confirming that the
Facility A Loans under the Existing Agreement shall be terminated
and paid in full effective as of the Closing Date.
(xiv) Written agreements, satisfactory to the Administrative Agent, from
the holders of the Indebtedness identified in Schedule 5 releasing
any "springing" or other Liens, or rights to create or require the
creation of Liens, securing such Indebtedness.
(xv) Such other documents as any Lender or its counsel may have
reasonably requested.
5.2. Each Advance. The Lenders shall not be required to make any
Advance (other than an Advance that, after giving effect thereto and to the
application of the proceeds thereof, does not increase the aggregate amount of
outstanding Advances), and the Issuing Bank shall not be required to issue,
amend or extend a Facility Letter of Credit unless on the applicable
Borrowing Date or Issuance Date:
(i) There exists no Default or Unmatured Default, except for (A)
Unmatured Defaults that will be cured, and that the Borrower
certifies will be cured, by the use of the proceeds of such Advance
or the issuance, amendment or extension of such Facility Letter of
Credit or (B) Unmatured Defaults (other than the failure to pay any
Obligation hereunder) that are not reasonably likely to have a
Material Adverse Effect and that the Borrower certifies that it
reasonably expects to cure before the date on which the same
becomes a Default.
(ii) The representations and warranties contained in Article VI are true
and correct in all material respects as of such Borrowing Date or
Issuance Date except to the extent any such representation or
warranty is stated to relate solely to an earlier date, in which
case such representation or warranty shall have been true and
correct in all material respects on and as of such earlier date.
(iii) All legal matters incident to the making of such Advance or
issuance, amendment or extension of such Facility Letter of Credit
shall be satisfactory to the Administrative Agent and its counsel
and,in the case of a Facility Letter of Credit, the Issuing Bank
and its counsel.
Each Ratable Borrowing Notice, Competitive Bid Borrowing Notice and Swing
ine Borrowing Notice with respect to each such Advance, and each Facility Letter
Credit Notice with respect to the issuance, amendment or extension of each such
Facility Letter of Credit, shall constitute a representation and warranty by the
Borrower that the conditions contained in Sections 5.2(i) and (ii) have been
satisfied. The Administrative Agent or the Issuing Bank may require a duly
completed compliance certificate in substantially the form of Exhibit M (but
without any requirement for updating the calculations of compliance with
financial covenants) as a condition to making an Advance or the issuance,
amendment or extension of a Facility Letter of Credit.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrower and the Company each represent and warrant to the Lenders
that:
6.1. Existence and Standing. Each of the Borrower and the Company is a
corporation, duly and properly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted. Each of the other Loan Parties is a corporation,
partnership or limited liability company duly and properly incorporated or
organized, as the case may be, validly existing and (to the extent such concept
applies to such entity) in good standing under the laws of its jurisdiction of
incorporation or organization and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted to the
extent in each case it is material to the operation of thebusinesses of the
Loan Parties taken as a whole.
6.2. Authorization and Validity. Each Loan Party has the power and
authority and legal right to execute and deliver the Loan Documents to which
it is a party and to perform its obligations thereunder. The execution and
delivery by each Loan Party of the Loan Documents to which it is a party and
the performance of its obligations thereunder have been duly authorized by
proper corporate (or, in the case of Loan Parties that are not corporations,
other) proceedings, and the Loan Documents constitute legal, valid and
binding obligations of the applicable Loan Parties enforceable against them
in accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar Laws affecting the enforcement of creditors'
rights generally and except, in the case of any Designated Guarantor that,
upon request by the Borrower in accordance with Section 10.13 would be
converted to a Non-Loan Party, any violation of the foregoing that does not
have a material adverse effect on the ability of the Lenders or the
Administrative Agent to substantially realize the benefits afforded under the
Loan Documents (it being agreed that the parties will work together diligently
to remedy promptly any such violation).
6.3. No Conflict; Consent. Neither the execution and delivery by the
Loan Parties of the Loan Documents, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate(i)
any Law binding on any of the Loan Parties or their respective Property or(ii)
the articles or certificate of incorporation, partnership agreement,
certificate of partnership, articles or certificate of organization, by-laws,
or operating or other management agreement, as the case may be, of the Loan
Parties, or (iii) the provisions of any material indenture, instrument or
agreement to which any Loan Party is a party or is subject, or by which it,
or its Property, is bound, or conflict with or constitute a default thereunder,
or result in, or require, the creation or imposition of any Lien in, of or on
the Property of any Loan Party pursuant to the terms of any such indenture,
instrument or agreement. As of the Closing Date, no order, consent,
adjudication, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other action in
respect of any Official Body or any other Person that has not been obtained
by any Loan Party, is required to be obtained by any Loan Party in connection
with the execution and delivery of the Loan Documents, the borrowings and the
issuance of Facility Letters of Credit under this Agreement, the payment and
performance by the Loan Parties of the Obligations or the legality, validity,
binding effect or enforceability of any of the Loan Documents.
6.4. Financial Statements. The October 31, 1997 consolidated financial
statements of the Company and its Subsidiaries heretofore delivered to the
Lenders were prepared in accordance with Agreement Accounting Principles in
effect on the date such statements were prepared and fairly present the
consolidated financial condition and operations of the Company and its
Subsidiaries at such date and the consolidated results of their operations
for the period then ended.
6.5. Material Adverse Change. As of the Closing Date, since October
31, 1997 there has been no change in the business, Property, condition
(financial or otherwise) or results of operations of the Loan Parties that
could reasonably be expected to have a Material Adverse Effect.
6.6. Taxes. Except for violations or failures that individually or
in the aggregate are not reasonably likely to have a Material Adverse Effect,
the Loan Parties have filed all United States federal tax returns and all
other tax returns which are required to be filed and have paid all taxes due
pursuant to said returns or pursuant to any assessment received by any of the
Loan Parties, except such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided in accordance with
Agreement Accounting Principles. The United States income tax returns of the
Company and its Subsidiaries have been audited by the Internal Revenue Service
through the fiscal year ended October 31, 1993. Except for violations or
failures that individually or in the aggregate are not reasonably likely to
have a Material Adverse Effect, (i) no tax Liens have been filed and no
claims are being asserted with respect to any such taxes, (ii) the charges,
accruals and reserves on the books of the Loan Parties in respect of any taxes
or other governmental charges are adequate in all material respects and (iii)
if any Loan Party is a limited liability company, each such limited liability
company qualifies for partnership tax treatment under United States federal
tax law.
6.7. Litigation and Contingent Obligations. Except as set forth on
Schedule 6, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting any of the Loan Parties that (a) could
reasonably be expected to have a Material Adverse Effect or (b) seeks to
prevent, enjoin or delay the making of any Loans except (but only in the case of
any litigation, arbitration,governmental investigation, proceeding or inquiry
described in this clause (b) arising after the Closing Date) to the extent
that the Borrower has disclosed the same to the Administrative Agent and has
concluded, on the basis of advice of independent counsel, and to the
satisfaction of the Administrative Agent, that the same is not reasonably
likely to result in the prevention, injunction or delay in the making of the
Loans and that the pendency of such litigation, arbitration, governmental
investigation, proceeding or inquiry does not have a Material Adverse Effect.
Other than any liability incident to any litigation, arbitration or
proceeding that (i) could not reasonably be expected to have a Material Adverse
Effect or (ii) is set forth on Schedule 6, as of the Closing Date, the Loan
Parties have no material Contingent Obligations not provided for or
disclosed in the financial statements referred to in Section 6.4.
6.8. Subsidiaries. Schedule 7 contains an accurate list of all
Subsidiaries of the Company as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Company,
the Borrower or other Subsidiaries. All of the issued and outstanding shares
of capital stock or other ownership interests of such Subsidiaries have been
(to the extent such concepts are relevant with respect to such ownership
interests) duly authorized and issued and are fully paid and non-assessable.
6.9. Accuracy of Information. No information, exhibit or report
furnished by any of the Loan Parties to the Administrative Agent or to any
Lender on or before the Closing Date in connection with the negotiation of,
or compliance with, the Loan Documents contained any material misstatement of
fact or omitted to state a material fact or any fact necessary to make the
statements contained therein not misleading.
6.10. Regulation U. None of the Loan Parties holds or intends to hold
margin stock (as defined in Regulation U) in amounts such that more than 25% of
the value of the assets of any Loan Party are represented by margin stock.
6.11. Material Agreements. None of the Loan Parties is a party to any
agreement or instrument or subject to any charter or other corporate restriction
which could reasonably be expected to have a Material Adverse Effect. None of
the Loan Parties is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement
to which it is a party, which default could reasonably be expected to have a
Material Adverse Effect.
6.12. Compliance With Laws. The Loan Parties have complied with all
Laws applicable to the conduct of their respective businesses or the ownership
of their respective Property, except for any failure to comply that could not
reasonably be expected to have a Material Adverse Effect.
6.13. Ownership of Properties. Except as set forth on Schedule 8, on
the Closing Date, the Loan Parties will have good title, free of all Liens other
than Permitted Liens, to all of the Property and assets reflected in the
Company's most recent consolidated financial statements provided to the
Administrative Agent as owned by the Loan Parties.
6.14. ERISA.
6.14.1. Plan Assets; Prohibited Transactions. None of the Loan Parties
is an entity deemed to hold "plan assets" within the meaning of 29 C.F.R.
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making
of Loans nor the issuance of Facility Letters of Credit hereunder gives rise
to a Prohibited Transaction.
6.14.2. Liabilities. The Unfunded Liabilities of all Single Employer
Plans do not in the aggregate exceed $10,000,000. Neither the Company nor
any other member of the Controlled Group has incurred, or is reasonably
expected to incur, any withdrawal liability to Multiemployer Plans or
Multiple Employer Plans that individually or in the aggregate with all such
withdrawal liabilities exceeds $10,000,000.
6.14.3. Plans and Benefit Arrangements. Except as set forth in
Schedule 9 or to the extent a violation of the foregoing would not reasonably
be expected to have a Material Adverse Effect:
(i) The Company and each member of the Controlled Group is in
compliance with any applicable provisions of ERISA with respect
to all Benefit Arrangements, Plans and Multiemployer Plans. There
has not been any Prohibited Transaction with respect to any Benefit
Arrangement or any Plan or, to the best knowledge of the
Company, with respect to any Multiemployer Plan or Multiple
Employer Plan. The Company and all members of the Controlled
Group have made any and all payments required to be made under
any agreement relating to a Multiemployer Plan or a Multiple
Employer Plan or any Law pertaining thereto. With respect to each
Plan and Multiemployer Plan, the Company and each member of the
Controlled Group (i) have fulfilled their obligations under the
minimum funding standards of ERISA, (ii) have not incurred any
liability to the PBGC and (iii) have not had asserted against them
any penalty for failure to fulfill the minimum funding requirements
of ERISA.
(ii) To the best of the Company's knowledge, each Multiemployer Plan
and Multiple Employer Plan is able to pay benefits thereunder when
due.
(iii) Neither the Company nor any other member of the Controlled
Group has instituted proceedings to terminate any Plan.
(iv) No event requiring notice to the PBGC under Section 302(f)(4)(A)
of ERISA has occurred or is reasonably expected to occur with
respect to any Plan, and no amendment with respect to which
security is required under Section 307 of ERISA has been made or
is reasonably expected to be made to any Plan.
(v) The aggregate actuarial present value of all benefit liabilities
(whether or not vested) under each Plan, determined on a plan
termination basis, as disclosed from time to time in and as of the
date of the actuarial reports for such Plan does not exceed the
aggregate fair market value of the assets of such Plan.
(vi) Neither the Company nor any other member of the Controlled
Group has been notified by any Multiemployer Plan or Multiple
Employer Plan that such Multiemployer Plan or Multiple Employer
Plan has been terminated within the meaning of Title IV of ERISA
and, to the best knowledge of the Company, no Multiemployer Plan
or Multiple Employer Plan is or shall be reasonably expected to be
reorganized or terminated, within the meaning of Title IV of
ERISA.
(vii) To the extent that any Benefit Arrangement is insured, the Company
and all members of the Controlled Group have paid when due all
premiums required to be paid. To the extent that any Benefit
Arrangement is funded other than with insurance, the Company and
all members of the Controlled Group have made all contributions
required to be paid for all prior periods.
6.15. Investment Company Act. None of the Loan Parties is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
6.16. Public Utility Holding Company Act. None of the Loan Parties 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.
6.17. Employment Matters. The Loan Parties are in compliance with the
Labor Contracts and all applicable federal, state and local labor and employment
Laws including, but not limited to, those related to equal employment
opportunity and affirmative action, labor relations, minimum wage, overtime,
child labor, medical insurance continuation, worker adjustment and relocation
notices, immigration controls and worker and unemployment compensation, except
for failures to comply that would not individually or in the aggregate have a
Material Adverse Effect. There are no outstanding grievances, arbitration
awards or appeals therefrom arising out of the Labor Contracts or current or
threatened strikes, picketing, handbilling or other work stoppages or slowdowns
at facilities of the Company or any Loan Party that in any case or in the
aggregate would have a Material Adverse Effect.
6.18. Environmental Matters. Except as disclosed on Schedule 10:
(i) In the ordinary course of its business, the officers of the Company
consider the effect of Environmental Laws on the business of the
Company and its Subsidiaries, in the course of which they identify
and evaluate potential risks and liabilities accruing to the
Company due to Environmental Laws, and, on the basis of this
consideration, the Company has concluded that compliance with
Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect.
(ii) Except for violations or failures that individually and in the
aggregate are not reasonably likely to result in a Material Adverse
Effect, (A) none of the Loan Parties has received any
Environmental Complaint from any Official Body or other Person
alleging that any Loan Party or any prior or subsequent owner of
the Property is a potentially responsible party under the
Comprehensive Environmental Response, Cleanup and Liability
Act, 42 U.S.C. 9601, et seq., and none of the Loan Parties has
any reason to believe that such an Environmental Complaint might
be received and (B) there are no pending or, to the Company's
knowledge, threatened Environmental Complaints relating to any
Loan Party or, to the Company's knowledge, any prior or
subsequent owner of the Property pertaining to, or arising out of,
any Environmental Conditions.
(iii) Except for conditions, violations or failures which individually
and in the aggregate are not reasonably likely to have a Material
Adverse Effect, (A) there are no circumstances at, on or under the
Property that constitute a breach of or non-compliance with any of
the Environmental Laws, and (B) there are no past or present
Environmental Conditions at, on or under the Property or, to the
Company's knowledge, at, on or under adjacent property, that
prevent compliance with Environmental Laws at the Property.
(iv) Except for conditions, violations or failures which individually
and in the aggregate are not reasonably likely to have a Material
Adverse Effect, neither the Property nor any structures,
improvements, equipment, fixtures, activities or facilities thereon
or thereunder contain or use Regulated Substances except in
compliance with Environmental Laws. There are no processes,
facilities, operations, equipment or other activities at, on or
under the Property, or, to the Company's knowledge, at, on or under
adjacent property, that result in the release or threatened
release of Regulated Substances onto the Property, except to the
extent that such releases or threatened releases are not a
breach of or otherwise a violation of any Environmental Laws, or
are not likely to have a Material Adverse Effect.
(v) Except for violations or failures which individually and in the
aggregate are not likely to have a Material Adverse Effect, (A)
there are no underground storage tanks, or underground piping
associated with such tanks, used for the management of Regulated
Substances at, on or under the Property that do not have a full
operational secondary containment system in place and are not in
compliance with all Environmental Laws, and (B) there are no
abandoned underground storage tanks or underground piping
associated with such tanks, previously used for the management
of Regulated Substances at, on or under the Property that have
not been either abandoned in place, or removed, in accordance
with the Environmental Laws.
(vi) Except for violations or failures which individually and in the
aggregate are not likely to have a Material Adverse Effect, (A)
each Loan Party has all material permits, licenses, authorizations
and approvals necessary under the Environmental Laws for the
conduct of the business of such Loan Party as conducted by such
Loan Party and (B) the Loan Parties have submitted all material
notices, reports and other filings required by the Environmental
Laws to be submitted to an Official Body which pertain to past and
current operations on the Property.
(vii) Except for violations which individually and in the aggregate are
not likely to have a Material Adverse Effect, all past and present
on-site generation, storage, processing, treatment, recycling,
reclamation of disposal of Solid waste at, on, or under the
Property and all off-site transportation, storage, processing,
treatment, recycling, reclamation and disposal of Solid Waste
have been done in accordance with the Environmental Laws.
6.19. Senior Debt Status. The Obligations rank (a) at least pari
passu in priority of payment with all other Indebtedness of the Loan Parties
except Indebtedness secured by Permitted Liens and (b) prior in right of
payment over the Subordinated Indebtedness.
6.20. Designated Guarantors. All Subsidiaries of the Company that are
integral to the homebuilding business of the Toll Group are Designated
Guarantors.
ARTICLE VII
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
7.1. Financial Reporting. The Company will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Audited Financial Statements. Within 95 days after the close of
each of its fiscal years, an unqualified (except for qualifications (a)
relating to changes in accounting principles or practices reflecting
changes in generally accepted accounting principles and required or
approved by the Company's independent certified public
accountants or (b) which are not adverse in the judgment of the
Majority Lenders) audit report certified by independent certified
public accountants acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a consolidated
basis for the Company and its Subsidiaries, including balance sheets
as of the end of such period, a related consolidated profit and loss
statement, and a consolidated statement of cash flows, accompanied
by any management letter prepared by said accountants.
(ii) Quarterly Financial Statements. Within 50 days after the close of
the first three quarterly periods of each fiscal year of the Company,
for the Company and its Subsidiaries, consolidated unaudited
balance sheets as at the close of each such period and a related
consolidated profit and loss statement and a consolidated statement
of cash flows for the period from the beginning of such fiscal year
to the end of such quarter, which statements shall be either a
complete and accurate copy of such signed statements as filed with
the SEC or certified by the Company's chief financial officer, chief
accounting officer or controller (which certificate shall be
satisfactory in form to the Administrative Agent).
(iii) Annual Plan and Forecast. As soon as available, but in any event
within 120 days after the beginning of each fiscal year of the
Company, a copy of the plan and forecast (including a projected
consolidated balance sheet, income statement and funds flow
statement) of the Company for such fiscal year.
(iv) Compliance Certificate. Within five (5) days after each of the dates
on which financial statements are required to be delivered under
Sections 7.1(i) and (ii), a compliance certificate in substantially the
form of Exhibit M signed by the chief financial officer, chief
accounting officer or controller of the Company showing the
calculations necessary to determine compliance with this Agreement
and stating that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status
thereof.
(v) Annual ERISA Statement. If applicable, within 270 days after the
close of each fiscal year, a statement of the Unfunded Liabilities of
each Single Employer Plan, certified as correct by an actuary
enrolled under ERISA.
(vi) Reportable Event. As soon as possible and in any event within 10
days after any Loan Party knows that any Reportable Event has
occurred with respect to any Plan, a statement, signed by the chief
financial officer, chief accounting office or controller of the
Company, describing said Reportable Event and the action which
the Company proposes to take with respect thereto.
(vii) Environmental Notices. As soon as possible and in any event
within 10 days after a Senior Executive of a Loan Party receives the
same, a copy of (a) any notice or claim to the effect that any Loan
Party is or may be liable to any Person as a result of the release by
any Loan Party or any other Person of any toxic or hazardous waste
or substance into the environment, and (b) any notice alleging any
violation of any federal, state or local environmental, health or
safety law or regulation by any Loan Party, that, in either case,
could reasonably be expected to have a Material Adverse Effect.
(viii) Borrowing Base Certificate. At any time that the Leverage Ratio
equals or exceeds 1.75 to 1.00 as of the last day of a fiscal quarter,
simultaneous with the delivery of the next Compliance Certificate
due pursuant to Section 7.1(iv), a Borrowing Base Certificate.
(ix) Notices Regarding Plans and Benefit Arrangements. (A) Promptly
upon becoming aware of the occurrence thereof, notice (including
the nature of the event and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with
respect thereto) of: (1) any Prohibited Transaction that could
subject the Company or any member of the Controlled Group to a
civil penalty assessed pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Internal Revenue Code in
connection with any Plan, Benefit Arrangement or any trust created
thereunder that in either case would reasonably be expected to result
in a liability in excess of $1,000,000; (2) any assertion of material
withdrawal liability with respect to any Multiemployer Plan or
Multiple Employer Plan; (3) any partial or complete withdrawal
from a Multiemployer Plan, by the Company or any member of the
Controlled Group under Title IV of ERISA (or assertion thereof),
which such withdrawal is likely to result in a material liability; (4)
any withdrawal by the Company or any member of the Controlled
Group from a Multiple Employer Plan; (5) any failure by the
Company or any member of the Controlled Group to make a
payment to a Plan required to avoid imposition of a lien under
Section 302(f) of ERISA; (6) the adoption of any amendment to a
Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA; or (7) any change in the actuarial
assumptions or funding methods used for any Plan, where the effect
of such change is to materially increase the unfunded benefit
liability or to materially reduce the liability to make periodic
contributions.
(B) Promptly after receipt thereof, copies of (a) all notices
received by the Company or any member of the Controlled Group
of the PBGC's intent to terminate any Plan administered or
maintained by the Company or any member of the Controlled
Group, or to have a trustee appointed to administer any such Plan;
and (b) at the request of the Administrative Agent or any Lender
each annual report (IRS Form 5500 series) and all accompanying
schedules, the most recent actuarial reports, the most recent
financial information concerning the financial status of each Plan
administered or maintained by the Company or any member of the
Controlled Group, and schedules showing the amounts contributed
to each such Plan by or on behalf of the Company or any member
of the Controlled Group in which any of their personnel participate
or from which such personnel may derive a benefit, and each
Schedule B (Actuarial Information) to the annual report filed by the
Company or any member of the Controlled Group with the Internal
Revenue Service with respect to each such Plan.
(C) Promptly upon the filing thereof, copies of any Form
5310, or any successor or equivalent form to Form 5310, filed with
the IRS in connection with the termination of any Plan.
(x) Project Reports. Within thirty (30) days after the end of each fiscal
quarter of the Borrower and, from and after delivery of a
Compliance Certificate evidencing that the Leverage Ratio exceeds
1.75 to 1.00 as of the last day of a fiscal quarter and until the
delivery of a Compliance Certificate for a subsequent fiscal quarter
evidencing that the Leverage Ratio does not exceed 1.75 to 1.00 as
of the last day of such fiscal quarter, each calendar month,
statements accompanied by a certificate of the chief financial
officer, chief accounting officer or controller of Company, actually
setting forth for the last week of the prior calendar quarter or month
(as applicable) sales reports showing unit sales and unsold inventory
completed or under construction by the Loan Parties in connection
with each of their projects.
(xi) Subordinated Loan Documents. Prior to any Loan Party's entering
into or amending any Subordinated Loan Documents, copies thereof
and a description of any material differences between the
subordination provisions of such Subordinated Loan Documents and
the subordinated provision of the Subordinated Loan Documents
identified in Schedule 4 or most recently approved hereunder.
(xii) Notice of Litigation. Promptly after the commencement thereof,
notice of all actions, suits, proceedings or investigations before or
by any Official Body or any other Person against any Loan Party
which would be required to be reported by the Company on Forms
10-Q, 10-K or 8-K filed with the SEC.
(xiii) Shareholder Reports. Promptly upon the furnishing thereof to the
shareholders of the Company, complete and accurate copies of all
financial statements, reports and proxy statements so furnished.
(xiv) SEC Filings. Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other
regular reports that any of the Loan Parties files with the SEC.
(xv) Other Information. Such other information (including non-financial
information) as the Administrative Agent may from time to time
reasonably request.
7.2. Use of Proceeds. The Borrower and each other Loan Party will use
the proceeds of the Advances for lawful, general business purposes. Neither the
Borrower nor any other Loan Party will use any of the proceeds of the Advances
to purchase or carry any "margin stock" (as defined in Regulation U).
7.3. Notice of Default. The Borrower will give prompt notice in writing
to the Lenders of the occurrence of any Default or Unmatured Default (excepting
any Unmatured Default that has not had and could not reasonably be expected to
have a Material Adverse Effect and that the Borrower reasonably expects to cure
prior to the date on which such Unmatured Default would become a Default) and
of any other development, financial or otherwise, that could reasonably be
expected to have a Material Adverse Effect.
7.4. Conduct of Business. The Loan Parties will carry on and conduct
their businesses in substantially the same manner and in substantially the same
fields of enterprise as presently conducted (and fields reasonably related
thereto) and, in the case of the Borrower and the Company, will do (and in
the case of any other Loan Party, to the extent that its failure to do so
could reasonably be expected to have a Material Adverse Effect, will do) all
things necessary to remain duly incorporated or organized, validly existing and
(to the extent such concept applies to such entity) in good standing as a
domestic corporation, partnership or limited liability company in its
jurisdiction of incorporation or organization, as the case
may be, and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
7.5. Taxes. Except for violations or failures that individually and in
the aggregate are not reasonably likely to have a Material Adverse Effect,
each Loan Party will file in a timely manner complete and correct United
States federal and applicable foreign, state and local tax returns required
by law and 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 in accordance with Agreement
Accounting Principles.
7.6. Insurance. Each Loan Party will maintain with financially sound
and reputable insurance companies insurance on all its Property in such amounts
and covering such risks as is consistent with sound business practice, and the
Borrower will furnish to any Lender upon request full information as to the
insurance carried.
7.7. Compliance with Laws. Each Loan Party will comply in all material
respects with all Laws to which it may be subject (excluding Environmental Laws
compliance with which is governed by Section 7.25).
7.8. Maintenance of Properties. Each Loan Party will maintain,
preserve, protect and keep its Property in good repair, working order and
condition (ordinary wear and tear and casualty excepted) in accordance with
the general practice of other businesses of similar character and size, and
make all necessary and proper repairs, renewals and replacements so that its
business carried on in connection therewith may be properly conducted at all
times.
7.9. Inspection. Each Loan Party will permit the Administrative Agent
and the Lenders, by their respective representatives and agents, to inspect any
of the Property, books and financial records of the Loan Parties, examine and
make excerpts of the books of accounts and other financial records of the
Loan Parties, and to discuss the affairs, finances and accounts of the Loan
Parties with, and to be advised as to the same by, their respective officers at
such reasonable times and intervals as the Administrative Agent or any Lender
may designate.
7.10 Mergers; Consolidations; Dissolutions. No Loan Party shall merge
into or consolidate with any other Person or permit any other Person to merge
into or consolidate with it unless (i) there is no Change of Control of the
Loan Party; (ii) the character of the business of the Toll Group on a
consolidated basis will not be materially changed by such occurrence; and (iii)
such occurrence shall not constitute or give rise to a Default or Unmatured
Default. Neither the Toll Group nor any portion thereof the dissolution,
liquidation or winding up of which could reasonably be expected to have a
Material Adverse Effect shall dissolve, liquidate, or wind up its business by
operation of law or otherwise.
7.11. Distributions of Securities. The Company shall not distribute
to its shareholders any securities of any Subsidiary unless (a) such Subsidiary
is a Non-Loan Party; (b) such distribution does not constitute or give rise to a
Default or Unmatured Default; (c) such distribution does not result in a
Change in Control of a Loan Party; and (d) such distribution does not
materially change the operations of the Toll Group.
7.12. Disposition of Assets. None of the Loan Parties will sell,
convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily
or involuntarily, any of its Property (including but not limited to sale,
assignment, discount or other disposition of accounts, contract rights,
chattel paper, equipment or general intangibles with or without recourse or
of capital stock (other than capital stock of the Company), shares of
beneficial interest or partnership interests of another Loan Party or an
Affiliate of a Loan Party), except:
(i) transactions involving the sale of inventory in the ordinary course
of business;
(ii) any sale, transfer or lease of assets which are no longer necessary
or required in the conduct of such Loan Party's business;
(iii) any sale, transfer or lease of assets to any other Loan Party;
(iv) any sale, transfer or lease of assets which are replaced by
substitute assets acquired or leased;
(v) any sale, transfer or lease of assets of, or interests in, a Non-
Loan Party or any other Affiliate of the Company that is not a Loan Party: and
(vi) mergers or consolidations permitted in this Agreement.
SECTION 7.12A
"Increase Date" is defined in Section 2.18(c).
"Indebtedness" of a Person means, without duplication, such Person's
(i) obligations for borrowed money, (ii) obligations representing the deferred
purchase price of Property or services (other than accounts payable arising
in the ordinary course of such Person's business payable on terms customary
in the trade), (iii) obligations, whether or not assumed, secured by Liens,
(iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
property arising out of or in connection with the sale of the same or
substantially similar securities or property, (vi) Capitalized Lease
Obligations, (vii) Contingent Obligations, (viii) reimbursement obligations
under Financial Letters of Credit, and (ix) any other obligation for borrowed
money which in accordance with Agreement Accounting Principles would be shown
as a liability on the consolidated balance sheet of such Person.
The amount of Indebtedness shall include potential prepayment penalties and
premiums on such Indebtedness to the extent provided in the definition of
"Excluded Assets." In no event shall Indebtedness include (a) Indebtedness
owed by one Loan Party to another Loan Party or (b) any obligation of a Loan
Party to reimburse the issuer of a performance bond issued in the ordinary
course of business.
"Intercompany Agreement" is defined in Section 7.18.
"Intercompany Loans" means the loans from the Borrower to the
applicable Loan Party using the proceeds of Loans hereunder.
"Intercompany Notes" is defined in Section 7.18.
"Interest Period" means a CD Interest Period or a Eurodollar Interest
Period or a Competitive Bid Interest Period (as applicable).
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable
arising in the ordinary course of business on terms customary in the trade)
or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities
owned by such Person; any deposit accounts and certificate of deposit owned by
such Person; and structured notes, derivative financial instruments and other
similar instruments or contracts owned by such Person.
"Investment Grade Rating" means a Qualified Rating of (i) BBB- or
higher by S&P, or (ii) Baa3 or higher by Moody's.
"Investments in Mortgage Subsidiaries" means, without duplication, at
any time the sum of the following: (i) all Investments by any Loan Party
directly or indirectly in the capital stock of or other payments (except in
connection with the transactions for fair value in the ordinary course of
business) to any of the Mortgage Subsidiaries, (ii) all loans by any Loan
Party directly or indirectly to any of the Mortgage Subsidiaries, (iii) all
Contingent Obligations of any Loan Party directly or indirectly in respect of
the obligations of any of the Mortgage Subsidiaries, and (iv) all other
obligations, contingent or otherwise, of the Loan Parties to or for the benefit
of any of the Mortgage Subsidiaries; provided that, Investments in Mortgage
Subsidiaries shall not include any amounts that a Mortgage Subsidiary owes to a
Loan Party to reimburse such Loan Party for any taxes paid or payable by such
Loan Party on account of such Mortgage Subsidiary.
"Invitation for Competitive Bid Quotes" means an Invitation for
Competitive Bid Quotes substantially in the form of Exhibit D hereto,
completed and delivered by the Competitive Bid Agent to the Lenders in
accordance with Section 2.3.3.
"Issuance Date" means the date on which a Facility Letter of Credit is
issued, amended or extended (as applicable).
"Issuing Bank" means any Lender that has issued an Existing Letter of
Credit or may from time to time issue a Facility Letter of Credit in accordance
with the provisions of Article IV.
"Issuing Bank's L/C Limit" means, with respect to a Lender, the amount
so designated on Schedule 2 or, with respect to a Lender that becomes a party
to this Agreement after the date hereof, an amount agreed to by such Lender,
the Borrower and the Administrative Agent, as such amount may in any case be
increased or decreased from time to time with the approval of the Borrower,
the Administrative Agent and such Lender.
"Labor Contracts" means all employee benefit plans, employment
agreements, collective bargaining agreements and labor contracts to which any
Loan Party is a party.
"Land and Land Development Costs" means at any time the book value of
all land owned by the Loan Parties and all land development and carrying costs
related thereto, excluding all land which has been substantially improved and
the land development and carrying costs related thereto.
"Law" means any and all applicable federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses and other governmental restrictions.
"L/C Sublimit" means at any time an amount equal to fifty percent (50%)
of the Aggregate Commitment, as such Aggregate Commitment may increase or
decrease from time to time hereunder.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and, from and after the effective date of their respective
Commitments and Acceptances, any New Lenders, and the respective successors and
assigns of any of the foregoing.
"Lending Installation" means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or affiliate of such Lender
or the Administrative Agent listed on the signature pages hereof or on a
Schedule or otherwise selected by such Lender or the Administrative Agent
pursuant to Section 2.15.
"Letter of Credit" of a Person means a letter of credit or similar
instrument (such as an Escrow Agreement) which is issued 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.
"Leverage Ratio" means at any time the ratio of (a) the amount by which
(i) Total Indebtedness, less Permitted Nonrecourse Indebtedness, exceeds (ii)
the cash in excess of $10,000,000 held by the Toll Group, to (b) the sum of
(i) Tangible Net Worth and (ii) fifty percent (50%) of Qualified Subordinated
Indebtedness (provided that the amount in this clause (ii) shall not exceed
66-2/3% of Consolidated Net Worth).
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, the interest of a vendor
or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof). For
avoidance of doubt, the term "Loan" includes each Competitive Bid Loan and
Swing Line Advance.
"Loan Documents" means this Agreement, the Guaranty Agreements, the
Contribution Agreement and any Notes issued pursuant to Section 2.11.
"Loan Facility" is defined in Section 2.1.1, as the same may be modified
or amended and in effect from time to time.
"Loan Parties" means the Company, the Borrower and (subject to the
provisions ofSection 10.13) the Designated Guarantors.
"Majority Lenders" means (i) subject to the provisions of Section
2.18(e), if thereexists no Default or if a Default exists but there are no
Loans or Facility Letters of Creditoutstanding, Lenders (excluding Non-Funding
Lenders) whose Commitments aggregate51% or more of the Commitments of all of
the Lenders (excluding Non-Funding Lenders), or (ii) if a Default exists and is
continuing and there are Loans or Facility Letters of Credit outstanding,Lenders
(excluding Non-Funding Lenders) whose Total Exposure aggregates 51% or more
of the Total Exposure of all of the Lenders (excluding
Non-Funding Lenders).
"Material Adverse Effect" means a material adverse effect on (i) the
business,Property, condition (financial or otherwise) or results of operations
of the Loan Parties taken as a whole, (ii) the ability of the Loan Parties taken
as a whole to perform their obligations under the Loan Documents, or (iii) the
validity or enforceability of any of the Loan Documents or the rights or
remedies of the Administrative Agent or the Lenders thereunder.
"Material Indebtedness" is defined in Section 8.4.
"Maximum Deductible Amount" is defined in Section 7.28.4.
"Moody's" means Moody's Investors Service, Inc. or any successor thereto.
"Mortgage Banking Business" means the business of issuing mortgage loans on
residential properties (whether for purchase of homes or refinancing of existing
mortgages), purchasing and selling mortgage loans, issuing securities backed by
mortgage loans, acting as a broker of mortgage loans and other activities
customarily associated with mortgage banking and related businesses.
"Mortgage Subsidiaries' Adjusted Shareholders' Equity" means at any time the
stockholders' equity (less goodwill) of the Mortgage Subsidiaries determined on
a consolidated basis in accordance with Agreement Accounting Principles, plus
the outstanding amount of any loans made by the Loan Parties to the Mortgage
Subsidiaries (except for intercompany payables to one or more of the Loan
Parties in respect of the Mortgage Subsidiaries' share of accrued consolidated
income tax liabilities which have not yet been paid by the Loan Parties) or
other Investments in Mortgage Subsidiaries that are not included in the
stockholders' equity of the Mortgage Subsidiaries.
"Mortgage Subsidiaries' Liabilities" means at any time all Indebtedness
of any of the Mortgage Subsidiaries at such date determined on a combined
basis as a group in accordance with Agreement Accounting Principles, plus
accrued income taxes payable by any of the Mortgage Subsidiaries within one
year of such date.
"Mortgage Subsidiary" means any corporation, limited partnership,
limited liability company or business trust that is (a) organized after the
Closing Date or designated by the Company as a Mortgage Subsidiary after the
Closing Date, (b) a Subsidiary of the Company and (c) engaged in the Mortgage
Banking Business.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party and to which more than one employer
is obligated to make contributions.
"Multiple Employer Plan" means a Plan which has two or more contributing
sponsors (including the Company or any member of the Controlled Group) at least
two of whom are not under common control, as such a plan is described in
Sections 4063 and 4064 of ERISA.
"New Lender" means an Additional Lender that, immediately prior to
its purchase of the Commitment of a Lender pursuant to Section 2.20 or its
issuance of a Commitment pursuant to Section 2.18, was not a Lender hereunder.
"Non-Designation" is defined in Section 10.13.
"Non-Loan Parties" means members of the Toll Group or any Affiliate
thereof, excluding the Company, the Borrower and the Designated Guarantors.
"Non-Funding Lender" means any Lender that has (a) failed to make a
Loan required to be made by it hereunder or (b) given notice to the Borrower
or the Administrative Agent that it will not make, or that it has disaffirmed
or repudiated any obligation to make, Loans required to be made hereunder.
"Non-U.S. Lender" is defined in Section 3.5(c).
"Notes" means, collectively, the Competitive Bid Notes and the Ratable
Notes; and"Note" means any one of the Notes.
"Notice of Assignment" is defined in Section 13.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, the Facility Letter of Credit Obligations, all accrued
and unpaid fees and all expenses, reimbursements, indemnities and other
obligations of the Loan Parties to the Lenders or to any Lender, the
Administrative Agent or any indemnified party arising under the Loan Documents.
"Official Body" means any national, federal, state, local or other
government or political subdivision or any agency, authority, bureau, central
bank, commission, department or instrumentality of any of the foregoing, or
any court, tribunal, grand jury or arbitrator, in each case whether foreign
or domestic.
"Other Taxes" is defined in Section 3.5(b).
"Participant" is defined in Section 13.2.1.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Performance Letter of Credit" means (a) any Letter of Credit issued on
behalf of a Loan Party in favor of a municipality or any other Official Body,
including without limitation, any utility, water or sewer authority, or other
similar entity for the purpose of assuring such municipality, other Official
Body, utility, water or sewer authority or similar entity that an Affiliate
of the Company will properly and timely complete work it has agreed to
perform for the benefit of such municipality, other Official Body, utility,
water or sewer authority or similar entity or (b) an Escrow Agreement.
"Permitted Environmental Exception" means an exception set forth on an
Environmental Certificate that an independent environmental engineer certifies
can, in the judgment of such engineer, be cured by remediation that shall
cost less than $100,000 to complete and that the Borrower certifies to the
Lenders that it or another Loan Party shall timely cure in accordance with
applicable Environmental Laws. If the engineer cannot or does not determine
and certify as to the cost of such remediation, the exception shall not be a
Permitted Environmental Exception.
"Permitted Investments" means Investments that are (i) cash or cash
equivalents including corporate bonds, stocks and similar Investments; (ii)
accounts receivable and trade credit created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (iii) Investments in a Designated Guarantor; (iv)
loans to directors, officers, employees, agents, customers or suppliers in
the ordinary course, including the financing to purchasers of homes and other
residential properties from a Loan Party; (v) Investments in Mortgage
Subsidiaries; (vi) Investments in joint ventures (whether in partnership,
corporate or other form); (vii) Investments in real estate and/or mortgages
and/or receivables secured by real estate including stock or partnership
interests in real estate related companies; (viii) Investments in Non-Loan
Parties or entities which will become Non-Loan Parties by reason of such
Investment; (ix) loans to employees for the purpose of acquiring the Company's
stock; (x) Financial Contracts permitted hereunder; and (xi) other items in
the ordinary course of business.
"Permitted Liens" means
(i) Liens for taxes, assessments, or similar charges, incurred in the
ordinary course of business and which are not yet due and payable
and pledges or deposits made in the ordinary course of business to
secure payment of workmen's compensation, or to participate in
any fund in connection with workmen's compensation,
unemployment insurance, old-age pensions or other social security
programs;
(ii) Statutory Liens and other Liens of mechanics, workmen and
contractors, provided that the Liens permitted by this subsection
(ii) have not been filed or, if such Liens have been filed, either
(i) a stay of enforcement thereof has been obtained within 60 days,
or
(ii) such Liens have been satisfied of record within 60 days after
the date of filing thereof;
(iii) Good faith escrows, pledges or deposits of cash or cash
equivalents made (A) by the Loan Parties in the ordinary course
of business to secure performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases, or to
secure statutory obligations, or surety, appeal, indemnity,
performance or other similar bonds required in the ordinary
course of business, or (B) by third parties in favor of the Loan
Parties pursuant to Agreements of Sale;
(iv) Encumbrances consisting of zoning restrictions, easements or
other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof,
and none of which is violated in any material respect by existing
or proposed structures or land use;
(v) Liens, security interests and mortgages, if any, in favor of the
Administrative Agent for the benefit of the Lenders and cash
collateral granted to a Lender as security for the obligations of
the Loan Parties under Facility Letters of Credit;
(vi) Any Lien existing on the date of this Agreement and described on
Schedule 3 hereto and any Lien securing a refinancing of the
Indebtedness secured by a Lien described on Schedule 3, provided
that the principal amount secured thereby is not hereafter
increased and no additional assets (except for improvements
constructed on such assets in the normal course of the Company's
business) become subject to such Lien unless such change would
be permitted under other provisions hereof;
(vii) The following, (A) if the validity or amount thereof is being
contested in good faith by appropriate and lawful proceedings
diligently conducted so long as levy and execution thereon have
been stayed and continue to be stayed or (B) if a final judgment is
entered and such judgment is discharged, stayed or bonded within
thirty (30) days of entry:
(1) Claims or Liens for taxes, assessments or charges due and
payable and subject to interest or penalty, provided that the
Loan Parties maintain such reserves and other appropriate
provisions as shall be required by Agreement Accounting
Principles and pay all such taxes, assessments or charges
forthwith upon the commencement of proceedings to
foreclose any such Lien; or
(2) Claims, Liens or encumbrances upon, and defects of title
to, real or personal property, including any attachment of
personal or real property or other legal process prior to
adjudication of a dispute on the merits; or
(3) Other judgment Liens not in excess of $10,000,000
individually or $30,000,000 in the aggregate;
(viii) Purchase money security interests in equipment acquired or
deemed to be acquired;
(ix) Liens securing Permitted Purchase Money Loans and Permitted
Non-Recourse Indebtedness described in the definitions of
such terms;
(x) Liens securing additional Senior Indebtedness, provided
such liens are either pari passu or subordinated to Liens
in favor of the Administrative Agent for the benefit of
the Lenders;
(xi) Liens on assets of Non-Loan Parties;
(xii) Liens on Investments in Non-Loan Parties;
(xiii) Liens on Investments in Mortgage Subsidiaries;
(xiv) Liens of a Loan Party which existed prior to such entity becoming
a Loan Party (and were not incurred in anticipation of becoming
a Loan Party); and
(xv) Liens to which assets were subject prior to the acquisition of such
assets by a Loan Party (and were not incurred in anticipation
becoming a Loan Party).
"Permitted Nonrecourse Indebtedness" means Indebtedness for money
borrowed that is incurred by a Loan Party in a transaction for purposes of
acquiring real estate and that is secured by such real estate and
improvements thereon, provided (a) the amount of the Investment of the Loan
Parties in the assets that secure such Indebtedness (in excess of the amount
of the loan secured thereby) does not exceed $2,000,000 for such acquisition
as of the time of its acquisition or (for purposes of the Leverage Ratio)
$10,000,000 in the aggregate at any time for all such Investments and (b)
either (x) the liability of the Loan Parties for such Indebtedness is limited
solely to the assets of the Loan Parties that secure such Indebtedness or (y)
only a Loan Party other than the Company and the Borrower is liable for the
Indebtedness and the sum (without duplication) of the shareholders' equity
(including amounts owed by such Loan Party to another Loan Party or other
Affiliate of the Company that is either subordinate in right of payment to, or
collection of which is postponed in favor of, such Indebtedness) of, Investments
in, and loans to (i) such Loan Party does not exceed $2,000,000 and (ii) all
such Loan Parties does not exceed (for purposes of the Leverage Ratio)
$10,000,000 in the aggregate.
"Permitted Purchase Money Loans" means, collectively, Seller Purchase Money
Loans and Assumed Purchase Money Loans.
"Person" means any natural person, corporation, firm, joint venture, partnership
limited liability company, association, enterprise, trust or other entity or
organization, or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Preliminary Approval" means preliminary approval from required state
and local governmental authorities and agencies of a Loan Party's preliminary
development plan in accordance with provisions of the Pennsylvania
Municipalities Planning Code or itsequivalent in any other applicable
jurisdiction in which such Loan Party is doing businesssuch that in each
instance there is vested in such Loan Party the right to develop such real
estate for residential purposes substantially in accordance with the intentions
of such Loan Party, subject only to obtaining such additional approvals
which do not impose on suchLoan Party any material burdens that are not usual
and customary for a development of such type and with respect to which there is
no reasonable expectation that final approval shall not be obtained.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Prohibited Transaction" means a "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code for which neither a statutory
exemption, an individual exemption nor a class exemption has been issued by the
United States Department of Labor.
"Property" means any and all property, whether real, personal, tangible,
intangible,or mixed, of a Loan Party, or other assets owned, leased or operated
by a Loan Party.
"Purchaser" is defined in Section 13.3.1.
"Qualified Bank" means (a) any Lender, (b) a bank with a minimum issuer
credit rating of "C" under Thompson's Bank Watch or an equivalent rating under a
bank rating system acceptable to the Administrative Agent and the Majority
Lenders, (c) during the first six months after the Closing Date, any bank
approved by the Borrower and the Administrative Agent, or (d) any other bank
approved by all Lenders.
"Qualified Rating" means a public or private rating of the Senior
Indebtedness of the Company or the Indebtedness under this Agreement or an
implied rating of any Indebtedness of the Company senior to the Subordinated
Indebtedness of the Company obtained from a Qualified Rating Agency.
A Qualified Rating must be one of the following:
1. An actual rating of the Indebtedness under this Agreement exclusive of
any other Senior Indebtedness of the Company;
2. An actual rating of the Senior Indebtedness of the Company;
3. An implied rating of the Indebtedness under this Agreement exclusive of
any other Senior Indebtedness of the Company;
4. An implied rating of the Senior Indebtedness of the Company; or
5. An implied rating of Indebtedness senior to current outstanding
Subordinated Indebtedness of the Company.
If the Company receives more than one rating from a Qualified Rating
Agency, the rating which falls in the lowest number category above shall be
the Qualified Rating. An implied rating of any Indebtedness shall not be a
Qualified Rating if it assumes that such Indebtedness is secured.
"Qualified Rating Agency" means Moody's or S&P.
"Qualified Subordinated Indebtedness" means at any time, on a
consolidated basis, any Subordinated Indebtedness of the Loan Parties
having a maturity date later than the Facility Termination Date.
7.13. Borrower a Wholly-Owned Subsidiary. The Borrower
will at all times be a Wholly-Owned Subsidiary of the Company or of a
successor to the Company (but only if the ownership by such successor
does not constitute or result in a Change of Control).
7.14. Investments and Acquisitions. None of the Loan Parties
will make or suffer to exist any Investments (including without
limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or will create any Subsidiary or
will become or remain a partner in any partnership or joint venture,
except Permitted Investments.
7.15. Liens. None of the Loan Parties will create, incur, or
suffer to exist any Lien in, of or on any Property, except Permitted
Liens.
7.16. Additional Designated Guarantors. The Borrower may at
any time designate (in the manner hereinafter provided) any Wholly-Owned
Subsidiary of the Company as a Designated Guarantor, and shall
designate (in the manner hereinafter provided) each newly-formed or
newly-acquired Wholly-Owned Subsidiary of the Company (other than a
Mortgage Subsidiary) as a Designated Guarantor on a quarterly basis
simultaneously with its delivery of the next Compliance Certificate
pursuant to Section 7.1(iv) (unless, prior to the time of such delivery, the
Borrower satisfies the requirements of Non-Designation of such Wholly-Owned
Subsidiary in accordance with Section 10.13) in accordance with
the provisions of this Section 7.16. Such designation of a Wholly-Owned
Subsidiary of the Company as a Designated Guarantor shall be
effected by the delivery by the Borrower to the Administrative Agent of
each of the following:
(i) Notice by the Borrower and the Company identifying such
Designated Guarantor, the state of its incorporation, and
the ownership of the capital stock or other ownership
interests in such Designated Guarantor;
(ii) A Guaranty Agreement duly executed and delivered by
such Designated Guarantor;
(iii) An amendment to the Contribution Agreement adding
such new Designated Guarantor as a party thereto, duly
executed by it and the other Guarantors;
(iv) Documents with respect to such Designated Guarantor
addressing the requirements set forth in clauses (iv), (v)
and (vi) of Section 5.1; and
(v) Such information relating to the organization, operations
and finances of such Designated Guarantor as the
Administrative Agent shall reasonably request.
Upon the Administrative Agent's receipt of the foregoing, all of
which shall be reasonably satisfactory to the Administrative Agent in
form and substance, such Wholly-Owned Subsidiary of the Company
shall be a Designated Guarantor and a Loan Party hereunder.
7.17. Subordinated Indebtedness. Except as otherwise
permitted in the last sentence of this Section 7.17, no Loan Party will
make any amendment or modification to any Subordinated Loan
Document, without providing at least thirty (30) days' prior written
notice thereof to the Administrative Agent and the Lenders, and
obtaining the prior written consent of the Required Lenders thereto. The
Loan Parties may amend or modify any Subordinated Loan Document
without obtaining the consent of the Required Lenders if after giving
effect to such amendment or modification (a) the subordination
provisions therein would be permitted under this Agreement, and (b) the
Administrative Agent in its sole discretion determines that the covenants
governing such Subordinated Indebtedness affected by the amendment
are no more onerous to the borrower of such Subordinated Indebtedness
than those contained under this Agreement.
7.18. Intercompany Loans, Loans from Non-Loan Parties. The
Borrower shall make Intercompany Loans available to the Guarantors
using proceeds of the Loans. Each Intercompany Loan shall be
evidenced either by a promissory note of the obligor under such
Intercompany Loan (individually, an "Intercompany Note" and
collectively, the "Intercompany Notes") or an intercompany account
agreement between Borrower and the obligor under such Intercompany
Loan (individually, an "Intercompany Agreement" and collectively, the
"Intercompany Agreements") which shall provide for repayment of such
Intercompany Loans on such terms as the Borrower and the Guarantors
agree. Each Intercompany Loan shall be subordinated to the Guarantors'
obligations under the Guaranty Agreements pursuant to the terms of the
Guaranty Agreement and shall become due and payable upon the
acceleration of the Loans pursuant to Section 9.1 after the occurrence of
a Default hereunder. Any Intercompany Note or Intercompany
Agreement may in turn be assigned by the Borrower to another
Guarantor as a capital contribution to such Guarantor. The Company
shall establish and maintain such books and records relating to
Intercompany Loans and other Investments in the Designated Guarantors
as are required to enable it and the Administrative Agent to trace
advances and repayments of principal of Intercompany Loans and other
investments in the Guarantors.
7.19. Appraisals.
7.19.1. Procedures. The Loan Parties shall cooperate with the
Lenders and the appraisers in making appraisals of the Borrowing Base
Assets which the Administrative Agent, at the direction of the Majority
Lenders, may from time to time request. The Borrower may, within ten
(10) days following any such request by the Administrative Agent,
specify which other of the Borrowing Base Assets it requests to have
similarly appraised. Following the first to occur of (A) completion of all
appraisals requested at any one time by the Administrative Agent and the
Borrower under this Section 7.19, and (B) a date specified by the
Administrative Agent no earlier than 45 days after the last request for an
appraisal has (or could have) been made by the Borrower in accordance
with the immediately preceding sentence, the appraised values of all
Borrowing Base Assets which have been appraised (rather than their
book value) shall be used for purposes of applying the covenant
contained in Section 7.28.2. The Majority Lenders shall have the right
to request appraisals pursuant to this Section 7.19 not more than two
times in any period of twelve consecutive months, and shall specify in
such request all of the Borrowing Base Assets for which the Lenders
desire appraisals.
7.19.2. Costs. Any appraisals by the Administrative Agent shall
be at the Lenders' expense (in the proportion of their respective Ratable
Shares), unless using such appraised values would result in the covenant
contained in Section 7.28.2 being violated, in which event all such
appraisals shall be at the Borrower's expense.
7.19.3. Appraisers. Any appraisals requested at any one time
pursuant to this Section 7.19 shall be made by one or more appraisers for
all properties (there shall be no more than one appraiser for each
property) located in each state selected by the Borrower from a list of at
least three appraisers submitted by the Administrative Agent with respect
to such state at the time it makes its request. All appraisers submitted by
the Administrative Agent pursuant to this Section 7.19 shall be
appraisers who have been approved by the Majority Lenders and the
Borrower (such approval not to be unreasonably withheld) and in either
event have committed to prepare appraisals within 45 days following the
date such appraisals are requested.
7.20. Mortgage Subsidiaries. The Company shall notify the
Administrative Agent of the creation of any Mortgage Subsidiary within
seven (7) Business Days after such creation. Such notice shall include
the name, state of incorporation and ownership of the capital stock or
other ownership interests thereof. The Company shall cause the
Mortgage Subsidiaries to engage exclusively in the Mortgage Banking
Business. The Company shall deliver information relating to the
organization, operations and finances of the Mortgage Subsidiaries as the
Administrative Agent may reasonably request from time to time.
7.21. Qualified Ratings. The Company shall at all times have
received at least one Qualified Rating of the Company's Senior
Indebtedness or the Indebtedness under the Agreement or any
Indebtedness senior to the Subordinated Indebtedness from at least one
Qualified Rating Agency, and the Company shall have contracted with at
least one such Qualified Rating Agency for the periodic modification and
updating of such Qualified Ratings. The Company shall notify the
Administrative Agent of any new rating of the Company's Senior
Indebtedness or its Indebtedness under this Agreement which the
Company or any of its Subsidiaries receives or any modification of an
existing rating of any such Indebtedness which the Company or any
Subsidiary receives, in each instance within three (3) Business Days
following the date of such receipt by a Senior Executive of the Company.
The Company shall deliver to the Administrative Agent copies of any
documents which the Company receives evidencing, describing or
explaining or relating to such new or modified rating within such three-
(3-) Business Day Period. If the Company shall at any time fail to have
at least one Qualified Rating from either S&P or Moody's pursuant to
the first sentence above, the Company shall immediately notify the
Administrative Agent of such failure.
7.22. Updates to Schedules. Should any of the information or
disclosures provided on Schedules 6, 9 and 10 become outdated or
incorrect in any material respect, the Borrower and the Company shall
promptly provide the Administrative Agent in writing with such
revisions or updates to such Schedules as may be necessary or
appropriate to update or correct the applicable schedules hereto (i)
simultaneously with or promptly following the notice by any of the Loan
Parties of a breach of covenant which renders one or more of such
schedules misleading or (ii) within five (5) Business Days following the
Administrative Agent's request that the Borrower provide updates to
either of those Schedules; provided, however that neither Schedule 6 nor
Schedule 9 nor Schedule 10 shall be deemed to have been amended,
modified or superseded by any such correction or update, nor shall any
breach of any covenant, warranty or representation resulting from the
inaccuracy or incompleteness of either Schedule be deemed to have been
cured thereby, unless and until the Required Lenders, in their sole and
absolute discretion, shall have accepted in writing such revisions or
updates to such Schedules. The Borrower shall deliver to the
Administrative Agent an updated Schedule 7, together with the delivery
of the Borrower's quarterly Compliance Certificate pursuant to Section
7.1(iv), if the information contained on the Schedule 7 then in effect
shall have changed.
7.23. Plans and Benefit Arrangements. Except as set forth in
Schedule 9 or to the extent a violation of the foregoing would not
reasonably be expected to have a Material Adverse Effect either
individually or in the aggregate with all other violations:
(i) The Company and each member of the Controlled Group
shall comply with any applicable provisions of ERISA
with respect to all Benefit Arrangements, Plans and
Multiemployer Plans. The Company shall not permit to
occur any Prohibited Transaction with respect to any
Benefit Arrangement or any Plan or with respect to any
Multiemployer Plan or Multiple Employer Plan. The
Company and all members of the Controlled Group shall
make all payments required to be made under any
agreement relating to a Multiemployer Plan or a Multiple
Employer Plan or any Law pertaining thereto. With
respect to each Plan and Multiemployer Plan, the
Company and each member of the Controlled Group (i)
shall fulfill their obligations under the minimum funding
standards of ERISA, (ii) shall not incur any liability to the
PBGC and (iii) shall not have asserted against them any
penalty for failure to fulfill the minimum funding
requirements of ERISA.
(ii) Each Multiemployer Plan and Multiple Employer Plan
shall be able to pay benefits thereunder when due.
(iii) Neither the Company nor any other member of the
Controlled Group shall institute proceedings to terminate
any Plan.
(iv) The Company shall not permit to occur any event
requiring notice to the PBGC under Section 302(f)(4)(A)
of ERISA with respect to any Plan, and no amendment
with respect to which security is required under Section
307 of ERISA shall be made to any Plan.
(v) The aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan,
determined on a plan termination basis, as disclosed from
time to time in and as of the date of the actuarial reports
for such Plan shall not exceed the aggregate fair market
value of the assets of such Plan.
(vi) Neither the Company nor any other member of the
Controlled Group shall incur any withdrawal liability
under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Neither the Company nor any other
member of the Controlled Group shall be notified by any
Multiemployer Plan or Multiple Employer Plan that such
Multiemployer Plan or Multiple Employer Plan has been
terminated within the meaning of Title IV of ERISA and
no Multiemployer Plan or Multiple Employer Plan shall
be reorganized or terminated, within the meaning of Title
IV of ERISA.
(vii) To the extent that any Benefit Arrangement is insured, the
Company and all members of the Controlled Group shall
pay when due all premiums required to be paid. To the
extent that any Benefit Arrangement is funded other than
with insurance, the Company and all members of the
Controlled Group shall make all contributions required to
be paid for all prior periods.
7.24. Employment Matters. The Loan Parties shall comply with
the Labor Contracts and all applicable labor and employment Laws
including, but not limited to, those related to equal employment
opportunity and affirmative action, labor relations, minimum wage,
overtime, child labor, medical insurance continuation, worker adjustment
and relocation notices, immigration controls and worker and
unemployment compensation, where the failure to comply would have a
Material Adverse Effect either individually or in the aggregate with all
other such failures. The Company and the Borrower shall not permit any
grievances, arbitration awards or appeals therefrom arising out of the
Labor Contracts or strikes or threatened strikes, picketing, handbilling or
other work stoppages or slowdowns at facilities of any Loan Party that in
any case or in the aggregate would have a Material Adverse Effect.
7.25. Environmental Matters. Except as disclosed on Schedule
10 hereto:
(i) Except for violations or failures which individually and in
the aggregate are not reasonably likely to have a Material
Adverse Effect, (A) no Environmental Complaint shall be
issued by any Official Body or other Person alleging that
any Loan Party or any prior or subsequent owner of the
Property is a potentially responsible party under the
Comprehensive Environmental Response, Cleanup and
Liability Act, 42 U.S.C. 9601, et seq. and (B) the
Company and the Borrower shall not permit to occur any
Environmental Complaint relating to any Loan Party or
any prior or subsequent owner of the Property pertaining
to, or arising out of, any Environmental Conditions.
(ii) Except for conditions, violations or failures which
individually and in the aggregate are not reasonably likely
to have a Material Adverse Effect, (A) the Company and
the Borrower shall not permit to occur any circumstances
at, on or under the Property that constitute a breach of or
non-compliance with any of the Environmental Laws or
(B) any past or present Environmental Conditions at, on
or under the Property or at, on or under adjacent
property, that prevent compliance with Environmental
Laws at the Property.
(iii) Except for conditions, violations or failures which
individually and in the aggregate are not reasonably likely
to have a Material Adverse Effect, neither the Property
nor any structures, improvements, equipment, fixtures,
activities or facilities thereon or thereunder shall contain
or use Regulated Substances except in compliance with
Environmental Laws. The Company and the Borrower
shall not permit to occur any processes, facilities,
operations, equipment or other activities at, on or under
the Property, or at, on or under adjacent property that
result in the release or threatened release of Regulated
Substances onto the Property, except to the extent that
such releases or threatened releases are not a breach of or
otherwise a violation of any Environmental Laws, or are
not likely to have a Material Adverse Effect either
individually or in the aggregate.
(iv) Except for violations or failures which individually and in
the aggregate are not likely to have a Material Adverse
Effect, (A) the Company and the Borrower shall not
permit any underground storage tanks, or underground
piping associated with such tanks, to be used for the
management of Regulated Substances at, on or under the
Property that do not have a full operational secondary
containment system in place or are not in compliance with
all Environmental Laws, and (B) the Company and the
Borrower shall not permit the abandonment of any
underground storage tanks or underground piping
associated with such tanks, previously used for the
management of Regulated Substances at, on or under the
Property, except those abandoned in place, or removed, in
accordance with the Environmental Laws.
(v) Except for violations or failures which individually and in
the aggregate are not likely to have a Material Adverse
Effect, (A)each Loan Party shall have all material permits,
licenses, authorizations and approvals necessary under the
Environmental Laws for the conduct of the business of
such Loan Party as conducted by such Loan Party and (B)
the Loan Parties shall submit all material notices, reports
and other filings required by the Environmental Laws to
be submitted to an Official Body which pertain to
operations on the Property.
(vi) Except for violations which individually and in the
aggregate are not likely to have a Material Adverse Effect,
all on-site generation, storage, processing, treatment,
recycling, reclamation of disposal of Solid waste at, on, or
under the Property and all off-site transportation, storage,
processing, treatment, recycling, reclamation and disposal
of Solid Waste shall be done in accordance with the
Environmental Laws.
7.26. Environmental Certificates. The Borrowing Base Assets
shall not include any Property for which a Loan Party has not obtained
either (i) a certificate approved by the agent (or the lenders) under the
Existing Agreement (evidence of which approval has been furnished to
the reasonable satisfaction of the Administrative Agent) or (ii) a
completed Certificate (including an accompanying Phase I environmental
report which report shall be in conformity with industry standards) in
respect of such Property in substantially the form of Exhibit N (an
"Environmental Certificate") from a qualified independent environmental
engineer. The Borrower shall, at the request of the Administrative
Agent, furnish to the Administrative Agent Environmental Certificates
with respect to any Property requested by the Administrative Agent that
the Borrower has included in the Borrowing Base and may, in order to
request approval of any exception on Exhibit A of an Environmental
Certificate that is not a Permitted Environmental Exception so that the
underlying assets may be included in the Borrowing Base, furnish an
Environmental Certificate to the Administrative Agent. The
Administrative Agent shall with reasonable promptness notify the
Borrower and the Lenders of the Administrative Agent's approval or
disapproval of any exception on Exhibit A of any such Environmental
Certificate that is not a Permitted Environmental Exception. The other
Lenders shall have ten (10) Business Days to reverse such approval or
disapproval by the vote of the Majority Lenders, in the absence of which
vote the Administrative Agent's decision shall stand. The Borrower
shall have the right from time to time to submit another Environmental
Certificate in respect of Property that was not initially Environmentally
Approved Land following the cleanup of any hazardous materials which
constituted exceptions to a prior Environmental Certificate in respect of
such Property. Neither the Administrative Agent nor any other Lender
shall be liable to any Lender or to any Loan Party for any approval or
disapproval of any exceptions in any Environmental Certificate made by
it in good faith.
7.27. Senior Debt Status. The Obligations will at all times rank
(a) at least pari passu in priority of payment with all other Indebtedness
of the Loan Parties except Indebtedness secured by Permitted Liens and
(b) prior in right of payment to all Subordinated Indebtedness.
7.28. Financial Covenants.
7.28.1. Leverage Ratio. The Company and the Borrower
will not permit the Leverage Ratio at any time to be greater than
2.25 to 1.00.
7.28.2. Borrowing Base. At any time that the Leverage
Ratio as of the end of a fiscal quarter equals or exceeds 1.75 to 1.00,
the Company and the Borrower will not permit the Borrowing Base
(determined as of the end of such fiscal quarter and set forth on the
Borrowing Base Certificate required to be delivered for such fiscal
quarter pursuant to Section 7.1(viii)) to be less than the sum of (a)
Senior Indebtedness (other than Permitted Purchase Money Loans),
plus (b) an amount equal to 125% of all Permitted Purchase Money
Loans secured by any of the Borrowing Base Assets, it being
understood that a Permitted Purchase Money Loan shall not be
included in the foregoing calculation unless Borrower has included
in the Borrowing Base the assets securing such Permitted Purchase
Money Loan.
7.28.3. Land. Unless and until the covenant contained in
this Section 7.28.3 is released as hereinafter provided, at any time
that the Leverage Ratio equals or exceeds 1.75 to 1.00 as of the end
of a fiscal quarter, the Company and the Borrower shall not permit
the ratio of (a) the sum of Land and Land Development Costs as of
the end of such fiscal quarter to (b) the sum of (i) Tangible Net
Worth as of the end of such fiscal quarter and (ii) 50% of
Subordinated Indebtedness as of the end of such fiscal quarter to
exceed 1.0 to 1.0. At any time that the Company shall have
received an Investment Grade Rating for a continuous period of 24
months, the covenants set forth in this Section 7.28.3 shall be
released. If the Company loses its Investment Grade Rating at any
time prior to such release, a new period (for the purpose of
satisfying such 24-month requirement) shall commence if and when
the Company again achieves an Investment Grade Rating.
7.28.4. Tangible Net Worth. The Company will maintain
at the end of each fiscal quarter a Tangible Net Worth of not less
than the amount by which (i) the sum of (a) $280,000,000, (b) 50%
of Consolidated Net Income after October 31, 1997, and (c) 50% of
the proceeds of capital stock of the Company sold by the Company
after October 31, 1997 exceeds (ii) the aggregate amount paid by the
Company for repurchase of its capital stock at any time after the
Closing Date (but only to the extent such repurchases do not exceed
the Maximum Deductible Amount (as defined below)). As used
herein, the term "Maximum Deductible Amount" shall mean an
amount equal to (A) the cost of purchases and repurchases by the
Company or any of its Subsidiaries of capital stock of the Company
made after the Closing Date not to exceed, in the aggregate during
any one-year period (as measured from each anniversary of the
Closing Date) ten percent (10%) of the Tangible Net Worth as of the
end of the fiscal year of the Company preceding such one-year
period, plus (B) in addition to the purchases and repurchases of
capital stock under clause (A), the cost of other purchases or
repurchases by the Company or any of its Subsidiaries of capital
stock of the Company at any time, not to exceed $35,000,000 in the
aggregate after October 31, 1997.
7.28.5. Mortgage Subsidiaries. The Company and the
Borrower shall not permit the ratio of Mortgage Subsidiaries'
Liabilities to Mortgage Subsidiaries' Adjusted Shareholders Equity
to exceed at the end of any fiscal quarter 15.0 to 1.0.
7.29. Financial Contracts. No Loan Party will enter into or
remain liable upon any Financial Contract, except for Financial
Contracts entered into for the purpose of managing interest rate risks
associated with other Indebtedness of the Loan Parties and other risks
associated with the business of the Loan Parties and not for speculative
purposes.
ARTICLE VIII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
8.1. Any representation or warranty made or deemed made by
or on behalf of any Loan Party to the Lenders or the Administrative
Agent under or in connection with this Agreement, any Loan, or any
certificate or information delivered in connection with this Agreement or
any other Loan Document shall be false in any material respect on the
date as of which made or deemed made.
8.2. (i) Nonpayment of principal of any Loan when due, or (ii)
nonpayment of interest upon any Loan or of any fee or other Obligations
under any of the Loan Documents within five days after notice (which
notice may include a billing statement therefor) that the same is due.
8.3. The breach by any Loan Party (other than a breach which
constitutes a Default under another Section of this Article VIII) of any of
the terms or provisions of this Agreement or any of the other Loan
Documents which is not cured within thirty days after notice thereof
given in accordance with Section 14.1 or after the date on which any
Senior Executive becomes aware of the occurrence thereof, whichever
first occurs (such grace period to be applicable only in the event such
breach can be cured by corrective action of the Loan Parties as
determined by the Administrative Agent in its sole discretion).
8.4. Failure of any Loan Party to pay when due any
Indebtedness (other than Permitted Nonrecourse Indebtedness)
aggregating in excess of $10,000,000 ("Material Indebtedness"); or the
default by any Loan Party in the performance (beyond the applicable
grace period with respect thereto, if any) of any term, provision or
condition contained in any agreement or agreements under which any
such Material Indebtedness was created or is governed, or any other
event shall occur or condition exist, the effect of which default or event
is to cause, or to permit the holder or holders of such Material
Indebtedness to cause, such Material Indebtedness to become due prior
to its stated maturity; or any Material Indebtedness of any Loan Party
shall be declared to be due and payable or required to be prepaid or
repurchased (other than by a regularly scheduled payment) prior to the
stated maturity thereof; or any Loan Party shall not pay, or shall admit in
writing its inability to pay, its debts generally as they become due.
8.5. Any Loan Party shall (i) have an order for relief entered
with respect to it under the Federal bankruptcy laws as now or hereafter
in effect, (ii) make an assignment for the benefit of creditors, (iii) apply
for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws as now or hereafter
in effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to
file an answer or other pleading denying the material allegations of any
such proceeding filed against it, (v) take any corporate, partnership or
limited liability company action to authorize or effect any of the
foregoing actions set forth in this Section 8.5 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 8.6.
8.6. Without the application, approval or consent of a Loan
Party, a receiver, trustee, examiner, liquidator or similar official shall be
appointed for such Loan Party or any Substantial Portion of the Property
of the Loan Parties, or a proceeding described in Section 8.5(iv) shall be
instituted against any Loan Party and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a
period of 60 consecutive days.
8.7. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of,
all or any portion of the Property of any Loan Party which, when taken
together with all other Property of the Loan Parties so condemned,
seized, appropriated, or taken custody or control of, during the period of
four consecutive fiscal quarters ending with the quarter in which any
such action occurs, constitutes a Substantial Portion.
8.8. The Loan Parties shall fail within 30 days to pay, bond or
otherwise discharge any one or more judgments or orders for the
payment of money (other than in respect of Permitted Nonrecourse
Indebtedness) in excess of $10,000,000 in the aggregate, which are not
stayed on appeal or otherwise being appropriately contested in good
faith.
8.9. The Unfunded Liabilities of all Single Employer Plans
shall exceed in the aggregate $10,000,000 or any Reportable Event shall
occur in connection with any Plan.
8.10. The Company or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan
or Multiple Employer Plan that it has incurred withdrawal liability to
such Multiemployer Plan or Multiple Employer Plan in an amount
which, when aggregated with all other amounts required to be paid to
Multiemployer Plans or Multiple Employer Plan by the Company or any
other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $10,000,000 or
requires payments exceeding $5,000,000 per annum.
8.11. The Company or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan
or Multiple Employer Plan that such Multiemployer Plan or Multiple
Employer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the
other members of the Controlled Group (taken as a whole) to all
Multiemployer Plans and Multiple Employer Plans which are then in
reorganization or being terminated have been or will be increased over
the amounts contributed to such Multiemployer Plans and Multiple
Employer Plans for the respective plan years of each such Multiemployer
Plan and Multiple Employer Plans immediately preceding the plan year
in which the reorganization or termination occurs by an amount
exceeding $10,000,000.
8.12. Any Loan Party shall (i) be the subject of any proceeding
or investigation pertaining to the release of any Regulated Substance into
the environment, or (ii) violate any Environmental Law, which, in the
case of an event described in clause (i) or clause (ii) or all such events in
the aggregate, could reasonably be expected to have a Material Adverse
Effect.
8.13. Any Change in Control shall occur.
8.14. Any action shall be taken by a Loan Party to discontinue
or to assert the invalidity or unenforceability of any Guaranty
Agreement, or any Guarantor shall deny that it has any further liability
under any Guaranty Agreement to which it is a party, or shall give notice
to such effect.
8.15. Any Loan Document shall fail to remain in full force and
effect unless released by the Lenders.
8.16. The representations and warranties set forth in Section
6.14.1 ("Plan Assets; Prohibited Transactions") shall at any time not be
true and correct.
The Borrower may cure any Default (other than any failure to pay
the Obligations) that relates exclusively to a Designated Guarantor by
Conversion of such Designated Guarantor to a Non-Loan Party, to the
extent permitted by and subject to and in accordance with the provisions
of Section 10.13, provided that such Conversion is completed (except as
otherwise provided in Section 10.13(b)) not later than thirty (30) days
after the first to occur of (a) such Default or (b) the day that a Senior
Executive of the Company first learned of the Unmatured Default that,
with the lapse of time or giving of notice, or both, has ripened or may
ripen into such Default.
ARTICLE IX
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
9.1. Acceleration. If any Default described in Section 8.5 or
8.6 occurs with respect to the Borrower or the Company, the obligations
of the Lenders to make Loans hereunder and the obligations of the
Lenders to issue, amend or extend any Facility Letter of Credit
hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on
the part of the Administrative Agent or any Lender. If any other Default
occurs, the Required Lenders (or the Administrative Agent with the
consent of the Required Lenders) may terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation of
any Lender to issue, amend or extend any Facility Letter of Credit
hereunder, or declare the Obligations to be due and payable, or both,
whereupon the Obligations shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which
the Borrower hereby expressly waives.
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make
Loans and of the Issuing Bank to issue, amend or extend Facility Letters
of Credit hereunder as a result of any Default (other than any Default as
described in Section 8.5 or 8.6 with respect to the Borrower or the
Company) and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required
Lenders (in their sole discretion) shall so direct, the Administrative
Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
9.2. Amendments. Subject to the provisions of this Article IX,
the Required Lenders (or the Administrative Agent with the consent in
writing of the Required Lenders), the Borrower and the Company may
enter into agreements for the purpose of adding or modifying any
provisions to the Loan Documents or changing in any manner the rights
of the Lenders or the Borrower hereunder or waiving any Default
hereunder; provided, however, that no such agreement or any waiver
shall, without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan or forgive all or any
portion of the principal amount thereof, or reduce the rate
(whether by modification of the Pricing Schedule or
otherwise) or extend the time for payment of or forgive
interest or fees thereon.
(ii) Reduce, directly or indirectly, the percentage specified in
the definition of "Majority Lenders" or "Required
Lenders," or change any provision that calls for consent,
approval or other action by the Required Lenders,
Majority Lenders, all Lenders or any particular affected
Lender.
(iii) Extend the Facility Termination Date (except as provided
in Section 2.17), or increase the amount of the
Commitment of any Lender hereunder (except as agreed
to by such Lender pursuant to the provisions of Section
2.18), or permit the Borrower to assign its rights under
this Agreement.
(iv) Amend this Section 9.2.
(v) Release any Guarantor (except for the release of a
Designated Guarantor as provided in Section 10.13).
No amendment of any provision of this Agreement relating to the
Administrative Agent or the Swing Line Lender shall be effective
without its written consent, and no amendment of any provision of this
Agreement relating to any outstanding Facility Letter of Credit issued by
any Issuing Bank shall be effective without its written consent. The
Administrative Agent may waive payment of the fee required under
Section 13.3.2 without obtaining the consent of any other party to this
Agreement.
9.3. Preservation of Rights. No delay or omission of the
Lenders or the Administrative Agent to exercise any right under the
Loan Documents shall impair such right or be construed to be a waiver
of any Default or an acquiescence therein, and the making of a Loan or
the issuance, amendment or extension of a Facility Letter of Credit
notwithstanding the existence of a Default or the inability of the
Borrower to satisfy the conditions precedent to such Loan or the
issuance, amendment or extension of such Facility Letter of Credit shall
not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or
the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders
required pursuant to Section 9.2, and then only to the extent in such
writing specifically set forth. All remedies contained in the Loan
Documents or by law afforded shall be cumulative and all shall be
available to the Administrative Agent and the Lenders until the
Obligations have been paid in full.
ARTICLE X
GENERAL PROVISIONS
10.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive the
making of the Loans and the issuance of the Facility Letters of Credit
herein contemplated.
10.2. Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be obligated
to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
10.3. Headings. Section headings in the Loan Documents are
for convenience of reference only, and shall not govern the interpretation
of any of the provisions of the Loan Documents.
10.4. Entire Agreement. The Loan Documents embody the
entire agreement and understanding among the Borrower, the Company,
Administrative Agent and the Lenders and supersede all prior
agreements and understandings among the Borrower, the Company, the
Administrative Agent and the Lenders relating to the subject matter
thereof (other than the Administrative Agent's Fee Letter).
10.5. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint
or joint and several and no Lender shall be the partner or agent of any
other (except to the extent to which the Administrative Agent is
authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as
to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns, provided,
however, that the parties hereto expressly agree that the Arranger (and,
in the case of the provisions of Section 10.6(b), any other Person
indemnified by the Borrower thereunder) shall enjoy the benefits of the
provisions of Sections 10.6, 10.10 and 11.11 to the extent specifically set
forth therein and shall have the right to enforce such provisions on its,
his or her own behalf and in its, his or her own name to the same extent
as if it, he or she were a party to this Agreement.
10.6. Expenses; Indemnification. (a) The Borrower shall
reimburse the Administrative Agent and the Arranger for any costs,
internal charges and out-of-pocket expenses (including attorneys' fees
and expenses of attorneys for the Administrative Agent and the Arranger
and (but only (1) after the occurrence of any Default or (2) with the
Borrower's prior approval, which shall not be unreasonably withheld)
other advisors and professionals engaged by the Administrative Agent or
the Arranger) paid or incurred by the Administrative Agent or the
Arranger in connection with the preparation, negotiation, execution,
delivery, syndication, amendment, modification, and administration of
the Loan Documents. The Borrower also agrees to reimburse the
Administrative Agent, the Arranger and the Lenders for any costs,
internal charges and out-of-pocket expenses (including fees and expenses
of attorneys for the Administrative Agent, the Arranger and the
Lenders), paid or incurred by the Administrative Agent, the Arranger or
any Lender in connection with the collection and enforcement of the
Loan Documents.
(b) The Borrower hereby further agrees to indemnify the
Administrative Agent, the Arranger and each Lender, its directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all
expenses of litigation or preparation therefor whether or not the
Administrative Agent, the Arranger or any Lender is a party thereto)
which any of them may pay or incur arising out of or relating to this
Agreement, the other Loan Documents, the transactions contemplated
hereby or the direct or indirect application or proposed application of the
proceeds of any Loan hereunder except to the extent that they are
determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful
misconduct of the party seeking indemnification. The obligations of the
Borrower under this Section 10.6 shall survive the termination of this
Agreement.
10.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall (if the Administrative Agent so
requests) be furnished to the Administrative Agent with sufficient
counterparts so that the Administrative Agent may furnish one to each of
the Lenders.
10.8. Accounting. Except as provided to the contrary herein,
all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement
Accounting Principles.
10.9. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction
or the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
10.10. Nonliability of Lenders. The relationship between the
Borrower on the one hand and the Lenders and the Administrative Agent
on the other hand shall be solely that of borrower and lender. Neither
the Administrative Agent, the Arranger nor any Lender shall have any
fiduciary responsibilities to the Borrower, the Company or any other
Loan Party. Neither the Administrative Agent, the Arranger nor any
Lender undertakes any responsibility to the Borrower, the Company or
any other Loan Party to review or inform the Borrower, the Company or
any other Loan Party of any matter in connection with any phase of the
Borrower's, the Company's or any other Loan Party's business or
operations. The Borrower and the Company agree that neither the
Administrative Agent, the Arranger nor any Lender shall have liability to
the Borrower, the Company or any other Loan Party (whether sounding
in tort, contract or otherwise) for losses suffered by the Borrower, the
Company or any other Loan Party in connection with, arising out of, or
in any way related to, the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event
occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Administrative Agent, the
Arranger nor any Lender shall have any liability with respect to, and the
Borrower, the Company and each other Loan Party hereby waives,
releases and agrees not to sue for, any special, indirect or consequential
damages suffered by the Borrower, the Company or any other Loan
Party in connection with, arising out of, or in any way related to the
Loan Documents or the transactions contemplated thereby.
10.11. Confidentiality. Each Lender agrees to hold any
confidential information which it may receive from the Borrower
pursuant to this Agreement in confidence, except for disclosure (i) to its
Affiliates and to other Lenders and their respective Affiliates, (ii) to legal
counsel, accountants, and other professional advisors to that Lender 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 Lender is a
party, and (vi) permitted by Section 13.4.
10.12. Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U of
the Board of Governors of the Federal Reserve System) for the
repayment of the Loans provided for herein.
10.13. Conversion and Non-Designation of Designated
Guarantors. (a) The Borrower may, by written notice to the
Administrative Agent, request that a Designated Guarantor be released
from its Guaranty Agreement and thereby be converted to a Non-Loan
Party (a "Conversion") or that a Wholly-Owned Subsidiary of the
Company not be required to be designated as a Designated Guarantor (a
"Non-Designation"), on and subject to the following conditions:
(i) No Default or Unmatured Default shall exist (except any
Default or Unmatured Default that will be cured as a
result of such Conversion or Non-Designation) and no
other Default or Unmatured Default will exist as a result
of such Conversion or Non-Designation.
(ii) In the case of a Conversion, the stockholders' equity in
such Designated Guarantor and in the case of a Non-Designation,
the stockholders' equity in such Wholly-Owned Subsidiary, shall not
exceed five percent (5%) of the total consolidated stockholders'
equity in all Loan Parties. Determination of such percentages of
stockholders' equity shall be made as of the end of the
most recent fiscal quarter of the Company for which the
financial statements required under Sections 7.1(i) or (ii)
(as applicable) are available at the time of such request for
Conversion or Non-Designation.
(iii) The stockholders' equity in all Designated Guarantors that
the Borrower requests to be converted into Non-Loan
Parties in any period of four consecutive fiscal quarters
and in all Wholly-Owned Subsidiaries of the Company
that the Borrower requests not to be designated as
Designated Guarantors during such four-quarter period
shall not in the aggregate exceed ten percent (10%) (or
fifteen percent (15%) if and to the extent necessary to
permit the Borrower to cure a Default by Conversion of a
Designated Guarantor) of the lowest total consolidated
stockholders' equity in all Loan Parties at the end of any
fiscal quarter during such four-quarter period.
Determination of such aggregate amounts of stockholders'
equity of such applicable Designated Guarantors or
Wholly-Owned Subsidiaries shall be made by adding the
amounts of stockholders' equity of each such applicable
Designated Guarantor and Wholly-Owned Subsidiary (as
determined at the time of request for Conversion of such
Designated Guarantor or Non-Designation or such
Wholly-Owned Subsidiary in accordance with clause (ii)
above).
(iv) The disposition by the Company of such Designated
Guarantor (in the case of a Conversion) or Wholly-Owned
Subsidiary (in the case of a Non-Designation) would not
have a material effect on the homebuilding business of the
other Loan Parties, operationally or otherwise.
(v) The Borrower shall deliver to the Administrative Agent,
together with the Borrower's notice requesting the
Conversion of a Designated Guarantor or Non-Designation of a
Wholly-Owned Subsidiary, a certificate of the Borrower and the
Company, certifying that the conditions set forth in clauses (i)
through (iv) above are satisfied with respect to such Conversion
or Non-Designation, together with (A) in the case of a
Conversion, a Compliance Certificate, as of the end of the
most recent fiscal quarter for which financial statements
are available, prepared taking into account such
Conversion and a projection of the calculations for the
Compliance Certificate for the next succeeding fiscal
quarter and (B) in any case, such other evidence in
support of the satisfaction of such conditions as the
Administrative Agent shall request.
Upon the Administrative Agent's determination that the foregoing
conditions with respect to the Conversion of a Designated Guarantor
have been satisfied, the Administrative Agent shall (except as otherwise
provided in Section 10.13(b)) promptly (1) execute and deliver, for and
on behalf of itself and the Lenders, a release of such Designated
Guarantor from its Guaranty Agreement, whereupon such Designated
Guarantor shall cease to be a Designated Guarantor and Loan Party and
shall be a Non-Loan Party, and (2) give notice to the Lenders of the
Conversion of such Designated Guarantor. Upon the Administrative
Agent's determination that the foregoing conditions with respect to the
Non-Designation of a Wholly-Owned Subsidiary of the Company have
been satisfied, the Administrative Agent shall promptly give notice of
such Non-Designation to the Borrower and the Lenders.
(b) Notwithstanding the satisfaction of the conditions for
Conversion of a Designated Guarantor pursuant to Section 10.13(a), if
requested by the Borrower, the Administrative Agent may elect, in its
sole discretion, not to release such Designated Guarantor from its
Guaranty, in which event such Designated Guarantor shall remain a
Guarantor but shall not constitute a Loan Party hereunder for purposes of
compliance with the representations, warranties and covenants contained
in this Agreement (including without limitation the covenants contained
in Section 7.28) and the provisions of Article VIII. If the Administrative
Agent so elects not to release such Designated Guarantor, it shall so
notify the Borrower and the Lenders, and the Majority Lenders may at
any time direct the Administrative Agent to release such Designated
Guarantor from its Guaranty.
(c) If prior to the release of a Designated Guarantor from its
Guaranty, the Borrower determines and certifies to the Administrative
Agent that the inclusion of such Designated Guarantor as a Loan Party
hereunder for all purposes (including without limitation compliance with
the covenants contained in Section 7.28) would not result in a Default or
Unmatured Default, the Borrower may request the Administrative Agent
to reinstate such Designated Guarantor as a Loan Party hereunder for all
purposes. As a condition of any such reinstatement, the Administrative
Agent may request the Borrower to deliver to the Administrative Agent
evidence in support of the Borrower's certification, including without
limitation (i) a Compliance Certificate with respect to the most recent
fiscal quarter for which financial statements of the Company are
available, reflecting the inclusion of such Designated Guarantor as a
Loan Party and evidencing compliance with the covenants hereunder and
(ii) a projection of the Compliance Certificate for the next fiscal quarter,
also reflecting the inclusion of such Designated Guarantor as a Loan
Party and projecting compliance with the covenants hereunder. Upon the
Administrative Agent's approval of the Borrower's certification and
supporting evidence, the Administrative Agent shall notify the Borrower
and the Lenders that such Designated Guarantor has been so reinstated,
and from and after the delivery of such notice, such Designated
Guarantor shall again be a Loan Party hereunder for all purposes.
(d) At all times after the Borrower has satisfied the conditions of
Conversion of a Designated Guarantor as provided in Section 10.13(a)
but prior to the release of such Designated Guarantor from its Guaranty,
all reports required to be furnished under Section 7.1 hereof or any other
provisions of this Agreement shall exclude such Designated Guarantor as
a Loan Party hereunder unless and until such Designated Guarantor is
reinstated as a Loan Party as provided in Section 10.13(c).
10.14. Non-Funding Lender. Except for matters described in
Section 9.2, a Non-Funding Lender shall not have any voting rights
under this Agreement.
ARTICLE XI
THE ADMINISTRATIVE AGENT
11.1. Appointment; Nature of Relationship. The First National
Bank of Chicago is hereby appointed by each of the Lenders as its
contractual representative (herein referred to as the "Administrative
Agent") hereunder and under each other Loan Document, and each of
the Lenders irrevocably authorizes the Administrative Agent to act as the
contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents. The
Administrative Agent agrees to act as such contractual representative
upon the express conditions contained in this Article XI.
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not
have any fiduciary responsibilities to any Lender by reason of this
Agreement or any other Loan Document and that the Administrative
Agent is merely acting as the contractual representative of the Lenders
with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders' contractual
representative, the Administrative Agent (a) does not hereby assume any
fiduciary duties to any of the Lenders, (b) is a "representative" of the
Lenders within the meaning of Section 9-105 of the Uniform
Commercial Code and (c) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby
agrees to assert no claim against the Administrative Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Lender hereby waives.
11.2. Powers. The Administrative Agent shall have and may
exercise such powers under the Loan Documents as are specifically
delegated to the Administrative Agent by the terms of each thereof,
together with such powers as are reasonably incidental thereto. The
Administrative Agent shall have no implied duties (other than those of
good faith and fair dealing) to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically
provided by the Loan Documents to be taken by the Administrative
Agent. The Administrative Agent shall exercise the same care in its
administration of the Loan Facility as it would exercise in the
administration of a loan facility entirely for its own account.
11.3. General Immunity. Neither the Administrative Agent nor
any of its directors, officers, agents or employees shall be liable to the
Borrower or other Loan Party, the Lenders or any Lender for any action
taken or omitted to be taken by it or them hereunder or under any other
Loan Document or in connection herewith or therewith except to the
extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the
gross negligence or willful misconduct of such Person.
11.4. No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire
into, or verify (a) any statement, warranty or representation made in
connection with any Loan Document or any borrowing hereunder or any
issuance, amendment or extension of a Facility Letter of Credit
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to
each Lender; (c) the satisfaction of any condition specified in Article V,
except receipt of items required to be delivered to the Administrative
Agent; (d) the existence or possible existence of any Default or
Unmatured Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith; (f) the value,
sufficiency, creation, perfection or priority of any Lien in any collateral
security; or (g) the financial condition of the Borrower, the Company or
any other Loan Party or their respective Subsidiaries. The
Administrative Agent shall promptly disclose to the Lenders all
information furnished by the Borrower or the Company pursuant to the
requirements of this Agreement but shall have no duty to disclose to the
Lenders information that is not required to be furnished by the Borrower
or the Company to the Administrative Agent at such time, but that is
voluntarily furnished by the Borrower or the Company to the
Administrative Agent (either in its capacity as Administrative Agent or
in its individual capacity).
11.5. Action on Instructions of Lenders. Except with respect to
matters requiring consent or approval of all Lenders or of particular
affected Lenders, the Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed
by the Required Lenders (or the Majority Lenders to the extent that this
Agreement or any other Loan Document provides therefor), and such
instructions and any action taken or failure to act pursuant thereto shall
be binding on all of the Lenders. The Lenders hereby acknowledge that
the Administrative Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this
Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders (or the Majority Lenders to the
extent that this Agreement or any other Loan Document provides
therefor). The Administrative Agent shall be fully justified in failing or
refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the
Lenders pro rata (in their respective Ratable Shares) against any and all
liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
11.6. Employment of Agents and Counsel. The Administrative
Agent may execute any of its duties as Administrative Agent hereunder
and under any other Loan Document by or through employees, agents,
and attorneys-in-fact and shall not be answerable to the Lenders, except
as to money or securities received by it or its authorized agents, for the
default or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care. The Administrative Agent shall be entitled to
advice of counsel concerning the contractual arrangement between the
Administrative Agent and the Lenders and all matters pertaining to the
Administrative Agent's duties hereunder and under any other Loan
Document.
11.7. Reliance on Documents; Counsel. The Administrative
Agent shall be entitled to rely upon any Note, notice, consent,
certificate, affidavit, letter, telegram, statement, paper or document
believed by it to be genuine and correct and to have been signed or sent
by the proper person or persons, and, in respect to legal matters, upon
the opinion of counsel selected by the Administrative Agent, which
counsel may be employees of the Administrative Agent.
11.8. Administrative Agent's Reimbursement and
Indemnification. The Lenders agree to reimburse and indemnify the
Administrative Agent, solely in its capacity as such, ratably, in their
respective Ratable Shares, (a) for any amounts not reimbursed by the
Borrower for which the Administrative Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (b) for any
other expenses incurred by the Administrative Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including,
without limitation, for any expenses incurred by the Administrative
Agent in connection with any dispute between the Administrative Agent
and any Lender or between two or more of the Lenders) and (c) for any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against
the Administrative Agent in any way relating to or arising out of the
Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby (including, without
limitation, for any such amounts incurred by or asserted against the
Administrative Agent in connection with any dispute between the
Administrative Agent and any Lender or between two or more of the
Lenders), or the enforcement of any of the terms of the Loan Documents
or of any such other documents, provided, however, that no Lender shall
be liable for any of the foregoing to the extent any of the foregoing is
found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful
misconduct of the Administrative Agent. The obligations of the Lenders
under this Section 11.8 shall survive payment of the Obligations and
termination of this Agreement.
11.9. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or
Unmatured Default hereunder unless the Administrative Agent has
received written notice from a Lender or the Borrower referring to this
Agreement describing such Default or Unmatured Default and stating
that such notice is a "notice of default" or that such notice is delivered
pursuant to Section 7.3 hereof. In the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give prompt
notice thereof to the Lenders.
11.10. Rights as a Lender. In the event the Administrative Agent
is a Lender, the Administrative Agent shall have the same rights and
powers hereunder and under any other Loan Document with respect to
its Commitment and its Loans as any Lender and may exercise the same
as though it were not the Administrative Agent, and the term "Lender"
or "Lenders" shall, at any time when the Administrative Agent is a
Lender, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. The Administrative
Agent and its Affiliates, and each of the other Lenders, may accept
deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by
this Agreement or any other Loan Document, with the Borrower, the
Company or any of its Subsidiaries in which the Borrower, the Company
or such Subsidiary is not restricted hereby from engaging with any other
Person.
11.11. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Administrative
Agent, the Arranger or any other Lender and based on the financial
statements prepared by the Borrower or the Company and such other
documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other
Loan Documents. Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent, the
Arranger or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement
and the other Loan Documents.
11.12. Successor Administrative Agent. The Administrative
Agent may resign at any time, and shall resign immediately if its
Commitment shall at any time be less than the lesser of (a) ten percent
(10%) of the Aggregate Commitment or (b) $20,000,000, by giving
written notice thereof to the Lenders and the Borrower, such resignation
to be effective upon the appointment of a successor Administrative Agent
or, if no successor Administrative Agent has been appointed, sixty days
after the retiring Administrative Agent gives notice of its intention to
resign. The Administrative Agent may be removed at any time with or
without cause by written notice received by the Administrative Agent
from the Required Lenders, such removal to be effective on the date
specified by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint, on behalf
of the Borrower, the Company and the Lenders, a successor
Administrative Agent subject to the consent of the Borrower, which
consent shall not be unreasonably withheld or delayed; provided,
however, that if a Default has occurred and is continuing, the consent of
the Borrower shall not be required. If no successor Administrative
Agent shall have been so appointed by the Required Lenders within
thirty days after the resigning Administrative Agent's giving notice of its
intention to resign, then the resigning Administrative Agent may appoint,
on behalf of the Borrower, the Company and the Lenders, a successor
Administrative Agent subject to the consent of the Borrower, which
consent shall not be unreasonably withheld or delayed. Notwithstanding
the previous sentence, the Administrative Agent may at any time without
the consent of the Borrower or any Lender, appoint any of its Affiliates
which is a commercial bank as a successor Administrative Agent
hereunder. If the Administrative Agent has resigned or been removed
and no successor Administrative Agent has been appointed, the Lenders
may perform all the duties of the Administrative Agent hereunder and
the Borrower shall make all payments in respect of the Obligations to the
applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Administrative Agent shall be deemed to be
appointed hereunder until such successor Administrative Agent has
accepted (i) the appointment and (ii) unless the successor Administrative
Agent is an Affiliate of the prior Administrative Agent, an assignment of
the Swing Line Commitment. Any such successor Administrative Agent
shall be a commercial bank having capital and retained earnings of at
least $100,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent,
such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
resigning or removed Administrative Agent. Upon the effectiveness of
the resignation or removal of the Administrative Agent, the resigning or
removed Administrative Agent shall be discharged from its duties and
obligations hereunder and under the Loan Documents, except for
liabilities accrued, or arising from its acts or omissions prior to, such
resignation or removal. After the effectiveness of the resignation or
removal of an Administrative Agent, the provisions of this Article XI
shall continue in effect for the benefit of such Administrative Agent in
respect of any actions taken or omitted to be taken by it while it was
acting as the Administrative Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Administrative
Agent by merger, or the Administrative Agent assigns its duties and
obligations to an Affiliate pursuant to this Section 11.12, then the term
"Corporate Base Rate" as used in this Agreement shall mean the prime
rate, base rate or other analogous rate of the new Administrative Agent.
11.13. Administrative Agent's Fee. The Borrower agrees to pay
to the Administrative Agent, for its own account, the fees agreed to by
the Borrower and the Administrative Agent pursuant to the
Administrative Agent's Fee Letter or as otherwise agreed by them from
time to time.
11.14. Delegation to Affiliates. The Borrower, the Company and
the Lenders agree that the Administrative Agent may delegate any of its
duties under this Agreement to any of its Affiliates. Any such Affiliate
(and such Affiliate's directors, officers, agents and employees) which
performs duties in connection with this Agreement shall be entitled to the
same benefits of the indemnification, waiver and other protective
provisions to which the Administrative Agent is entitled under Articles X
and XI.
ARTICLE XII
SETOFF; RATABLE PAYMENTS
12.1. Setoff. In addition to, and without limitation of, any
rights of the Lenders under applicable law, if the Borrower or the
Company becomes insolvent, however evidenced, or any Default occurs,
any and all deposits (including all account balances, whether provisional
or final and whether or not collected or available) and any other
Indebtedness at any time held or owing by any Lender or any Affiliate of
any Lender to or for the credit or account of the Borrower or the
Company may be offset and applied toward the payment of the
Obligations owing to such Lender, whether or not the Obligations, or
any part hereof, shall then be due.
12.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5 or payments made in
respect of Competitive Bid Loans or Swing Line Advances in accordance
with Section 2.10(b)) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a
portion of the Ratable Loans held by the other Lenders so that after such
purchase each Lender will hold its ratable proportion of Ratable Loans.
If any Lender, whether in connection with setoff or amounts which might
be subject to setoff or otherwise, receives collateral or other protection
for its Obligations or such amounts which may be subject to setoff, such
Lender agrees, promptly upon demand, to take such action necessary
such that all Lenders share in the benefits of such collateral ratably in
proportion to their Loans. In case any such payment is disturbed by
legal process, or otherwise, appropriate further adjustments shall be
made.
ARTICLE XIII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1. Successors and Assigns. The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of the
Borrower, the Company and the Lenders and their respective successors
and assigns, except that (a) neither the Borrower nor the Company shall
have the right to assign its rights or obligations under the Loan
Documents and (b) any assignment by any Lender must be made in
compliance with Section 13.3. Notwithstanding clause (b) of this
Section, any Lender may at any time, without the consent of the
Borrower, the Company or the Administrative Agent, assign all or any
portion of its rights under this Agreement and any Note to a Federal
Reserve Bank; provided, however, that no such assignment to a Federal
Reserve Bank shall release the transferor Lender from its obligations
hereunder. The Administrative Agent may treat the Person which made
any Loan or which holds any Note as the owner thereof for all purposes
hereof unless and until such Person complies with Section 13.3 in the
case of an assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with the Administrative Agent. Any
assignee or transferee of the rights to any Loan or any Note agrees by
acceptance of such transfer or assignment 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 owner of the rights to any Loan (whether
or not a Note has been issued in evidence thereof), shall be conclusive
and binding on any subsequent holder, transferee or assignee of the
rights to such Loan.
13.2. Participations.
13.2.1 Permitted Participants; Effect. Any Lender may,
in the ordinary course of its business and in accordance with
applicable law, at any time sell (i) to any Person participating
interests in any Competitive Bid Loan held by such Lender, and (ii)
to another Lender or a Qualified Bank ("Participant") participating
interests in any Ratable Loan owing to such Lender, any Ratable
Note held by such Lender, any Commitment of such Lender or any
other interest of such Lender under the Loan Documents. The
consent of the Borrower and the Administrative Agent shall be
required prior to a sale of a participating interest described in clause
(ii) above becoming effective with respect to a Participant which is
not a Lender or an Affiliate thereof; provided, however, that if a
Default has occurred and is continuing, the consent of the Borrower
shall not be required. Such consents shall not be unreasonably
withheld. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Loans and the
holder of any Note issued to it in evidence thereof for all purposes
under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not
sold such participating interests, and the Borrower, the Company
and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights
and obligations under the Loan Documents.
13.2.2. Voting Rights. Each Lender shall 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 or Commitment in which such Participant has an
interest which forgives principal, interest or fees or reduces the
interest rate or fees payable with respect to any such Loan or
Commitment, extends the Facility Termination Date (except as
provided in Section 2.17), postpones any date fixed for any
regularly-scheduled payment of principal of, or interest or fees on,
any such Loan or Commitment, releases any Guarantor (except for a
release of a Designated Guarantor as provided in Section 10.13) of
any such Loan or releases all or substantially all of the collateral, if
any, securing any such Loan.
13.2.3. Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in
Section 12.1 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 Lender under the
Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 12.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 12.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 12.2 as
if each Participant were a Lender.
13.3. Assignments.
13.3.1. Permitted Assignments. Any Lender may, in the
ordinary course of its business and in accordance with applicable law
(and, in the case of any assignment of the Swing Line Commitment,
in compliance with Section 13.3.3), at any time assign to another
Lender or a Qualified Bank ("Purchaser") all or any part of its rights
and obligations under the Loan Documents. Such assignment shall
be substantially in the form of Exhibit O or in such other form as
may be agreed to by the parties thereto. Except as otherwise
hereinafter provided, the consent of the Borrower and the
Administrative Agent shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a Lender
or an Affiliate thereof; provided, however, that if a Default has
occurred and is continuing, the consent of the Borrower shall not be
required. Unless each of the Administrative Agent and the Borrower
otherwise consents (except that, if a Default has occurred and is
continuing, the consent of the Borrower shall not be required), (a)
each such assignment (other than an assignment of a Competitive Bid
Loan) shall be in an amount not less than $5,000,000 and in integral
multiples of $1,000,000, and (b), except as otherwise hereinafter
provided, no assignment shall be made that would reduce the
Commitment of a Lender and its Affiliates (in the aggregate) to an
amount less than the greater of (i) $10,000,000 or (ii) fifty percent
(50%) of such Lender's Commitment as of the date of this
Agreement or as of any later date on which it first became a Lender
hereunder. Notwithstanding the foregoing, if the Obligations shall
become due and payable, whether at maturity or by acceleration or
otherwise, or any payment of principal or interest hereunder shall
not be paid within 45 days after such payment shall be due, any
Lender may assign all or (subject to the Administrative Agent's
consent to any assignment that does not comply with the limitations
contained in clause (a) above) any part of its rights and obligations
under the Loan Documents to any Person (other than the Borrower,
the Company or any Affiliate of the Borrower or of the Company)
without consent by the Borrower or the Administrative Agent. Any
consents of the Borrower or the Administrative Agent under this
Section 13.3.1 shall not be unreasonably withheld or delayed.
13.3.2. Effect; Effective Date. Upon (i) delivery to the
Administrative Agent of a notice of assignment, substantially in the
form attached as Exhibit I to Exhibit O (a "Notice of Assignment"),
together with any consents required by Section 13.3.1, and (ii)
payment of a $3,500 fee to the Administrative 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
Commitment and 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 Lender
party to this Agreement and any other Loan Document executed by
or on behalf of the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party hereto, and no further consent
or action by any Loan Party, the Lenders or the Administrative
Agent shall be required to release the transferor Lender with respect
to the percentage of the Aggregate Commitment and Loans assigned
to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 13.3.2, the transferor Lender, the
Administrative Agent and the Borrower shall, if the transferor
Lender or the Purchaser desires that its Loans be evidenced by
Notes, make appropriate arrangements so that new Notes or, as
appropriate, replacement Notes are issued to such transferor Lender
and new Notes or, as appropriate, replacement Notes, are issued to
such Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.
13.3.3. Swing Line Commitment. The Swing Line
Commitment may be assigned only to an Affiliate of the
Administrative Agent or to a successor Administrative Agent.
13.4. Dissemination of Information. The Borrower and the
Company authorize each Lender 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 Lender's
possession concerning the creditworthiness of the Borrower, the
Company and its Subsidiaries; provided that each Transferee and
prospective Transferee agrees in writing to be bound by Section 10.11 of
this Agreement.
13.5. 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 Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section
3.5(d).
ARTICLE XIV
NOTICES
14.1. Notices. Except as otherwise permitted by Section 2.12,
all notices, requests and other communications to any party hereunder
shall be in writing (including electronic transmission, facsimile
transmission or similar writing) and shall be given to such party: (x) in
the case of the Borrower, the Company or the Administrative Agent, at
the address(es) or facsimile number(s) set forth on the signature pages
hereof, (y) in the case of any Lender, at its address or facsimile number
set forth in its administrative questionnaire delivered to the
Administrative Agent or (z) in the case of any party, at such other
address or facsimile number as such party may hereafter specify for the
purpose by notice to the Administrative Agent and the Borrower in
accordance with the provisions of this Section 14.1. Each such notice,
request or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in this
Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other
means, when delivered (or, in the case of electronic transmission,
received) at the address specified in this Section; provided that notices to
the Administrative Agent or Swing Line Lender under Article II or an
Issuing Bank or the Administrative Agent under Article IV shall not be
effective until received.
14.2. Change of Address. The Borrower, the Company, the
Administrative Agent and any Lender may each change the address for
service of notice upon it by a notice in writing to the other parties hereto.
ARTICLE XV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one agreement, and any of the
parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been
executed by the Borrower, the Administrative Agent and the Lenders and
each party has notified the Administrative Agent by facsimile
transmission or telephone that it has taken such action.
ARTICLE XVI
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL
16.1. CHOICE OF LAW. THE LOAN DOCUMENTS
(OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS
CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE
LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS.
16.2. CONSENT TO JURISDICTION. THE BORROWER
AND THE COMPANY HEREBY IRREVOCABLY SUBMIT TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS, AND THE BORROWER AND THE COMPANY
HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVE ANY OBJECTION THEY MAY NOW
OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF
THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST THE BORROWER, THE COMPANY
OR ANY OTHER LOAN PARTY IN THE COURTS OF ANY
OTHER JURISDICTION.
16.3. WAIVER OF JURY TRIAL. THE BORROWER,
THE COMPANY AND THE ADMINISTRATIVE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
BORROWER: FIRST HUNTINGDON FINANCE CORP.
By:
Joel H. Rassman, Senior Vice President
COMPANY:
TOLL BROTHERS, INC.
By:
Joel H. Rassman, Senior Vice President
Addresses for the Borrower and the
Company:
Toll Brothers, Inc.
3103 Philmont Avenue
Huntingdon Valley, PA 19006
Attention: Joel Rassman
Telecopy: 215/938-8010
with copies to:
Toll Brothers, Inc.
3103 Philmont Avenue
Huntingdon Valley, PA 19006
Attention: Robert Toll
Telecopy: 215/938-8010
and
Toll Brothers, Inc.
3103 Philmont Avenue
Huntingdon Valley, PA 19006
Attention: Ken Gary
Telecopy: 215/938-8255
and
Ballard Spahr Andrews & Ingersoll,LLP
1735 Market Street
51st Floor
Philadelphia, PA 19103-7599
Attention: Richard Braemer
Telecopy: 215/864-8999
Commitments
$40,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Administrative Agent and
Swing Line Lender
By:
Title:
One First National Plaza
Chicago, Illinois 60670
Attention: Patricia Leung
Telephone: (312) 732-8619
FAX: (312) 732-1117
<PAGE>
$35,000,000.00 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
individually and as Co-Agent
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$35,000,000.00 CORESTATES BANK, N.A., individually and as Co-Agent
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$35,000,000.00 CREDIT LYONNAIS NEW YORK BRANCH, individually and as Co-Agent
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$30,000,000.00 COMERICA BANK
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$30,000,000.00 NATIONSBANK, NATIONAL ASSOCIATION
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$25,000,000.00 FLEET NATIONAL BANK
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$25,000,000.00 GUARANTY FEDERAL BANK, F.S.B.
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$20,000,000.00 MELLON BANK, N.A.
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$15,000,000.00 BANQUE PARIBAS
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$15,000,000.00 KREDIETBANK N.V.
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$15,000,000.00 SUNTRUST BANK, ATLANTA
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$10,000,000.00 THE FUJI BANK LIMITED
By:_____________________________________
Name: ___________________________________
Title: ____________________________________
$10,000,000.00 BANK HAPOALIM B.M.
PHILADELPHIA BRANCH
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
$15,000,000.00 BAYERISCHE VEREINSBANK AG,
NEW YORK BRANCH
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
TOTAL:
$355,000,000.00
AGREEMENT
AGREEMENT made March 5, 1998, by and between TOLL
BROTHERS, INC., a Delaware corporation (the
"Company") and BRUCE E. TOLL ("Bruce"),
W I T N E S S E T H:
Bruce is a member of the Board of Directors, and
is the President, Chief Operating Officer and
Secretary, of the Company. Bruce has expressed an
intention to resign as an officer and employee of the
Company to pursue other business interests. In order
to provide for an orderly transition, the Company and
Bruce have agreed that Bruce's resignation as
President, Secretary and an employee of the Company
will not occur until the end of the Company's fiscal
year ending October 31, 1998 (the "Year End").
NOW, THEREFORE, in consideration of the foregoing
and of the mutual covenants and agreements herein
contained, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. Board of Directors. Bruce shall remain a
member of the Board of Directors (the "Board")
through the end of his term in 1999. It is the
current intention of the Board to renominate Bruce in
1999 for an additional term of three years on the
Board, and it is Bruce's intention to accept such
nomination, although neither the Company (including
the Board) nor Bruce is obligated in this regard.
Effective November 1, 1998 Bruce will become a Vice
Chairman of the Board of the Company, with such
duties as are determined from time to time by the
Board or the Chairman of the Board, and continue to
hold that position if elected to the aforementioned
three year term on the Board.
2. Employment. Bruce will continue as an
employee of the Company, and will continue to serve
the Company as President and Secretary, through Year
End, at which time, by operation of this Agreement,
he will have resigned, ceased to be an employee and
ceased to hold such offices and any other offices of
the Company and its subsidiaries. By operation of
this Agreement, Bruce will cease to be Chief
Operating Officer of the Company effective April 30,
1998. Bruce may continue to use his current office
space for up to one year from the date of this
Agreement, and the Company will continue to provide
him with secretarial services for such period of time
as he uses such space.
3. Compensation. Bruce's salary will continue
at its present rate through Year End. Bruce shall
receive no separate compensation as Vice Chairman,
nor shall he receive an annual or per meeting stipend
or stock options as a Director; however, he will
receive compensation pursuant to the Consulting and
Non-Competition Agreement referred to in Section 5,
herein.
4. Options and Bonus Compensation Payments.
(a) Outstanding Options. The expiration
provisions of each option to acquire stock of the
Company granted to Bruce under the terms of any of
the Company's stock option or stock incentive plans
(an "Option") held by Bruce on the date of this
Agreement are being modified to provide that the
Option shall be exercisable pursuant to the terms of
the plan under which the Option was granted and the
provisions regarding exercisability set forth in any
document applicable to a particular Option as though,
at all times subsequent to the grant of the Option
and until the earlier of Bruce's death or the
exercise of the Option by Bruce, he were continuously
employed by the Company in the same capacity in which
he was employed immediately prior to the date hereof
for the remainder of the maximum term specified in
the respective Option documents. In addition, the
Option to acquire 50,000 shares of common stock
granted on November 1, 1997 under the terms of the
Company's Stock Option and Incentive Stock Plan
(1995) (the "1995 Plan"), is being amended so that
such Option is fully vested and exercisable as of the
date hereof. Schedule A hereto contains a list of
all unexercised Options held by Bruce prior to the
date of this Agreement.
(b) Grants of Options Subsequent to the
Date of this Agreement. Bruce shall not be entitled
to, and hereby waives any rights to, the grant of any
Options at any time after the date of this Agreement,
including (i) any Options under the Company's Stock
Incentive Plan (1998)(the "1998 Plan") and any other
stock option, stock option incentive or bonus plan
whether currently in effect or subsequently adopted
and (ii) any options to which he would be entitled
solely for serving on the Board, but excepting any
Options as specifically provided for in this
Paragraph 4.
The following Options are being granted to Bruce:
(i) An Option to acquire 45,000 shares
of common stock is being granted as of the date
hereof. The Option granted pursuant to the preceding
sentence is on substantially the same terms as the
Option that would have been granted to Bruce as an
Executive Officer (as defined in the 1995 Plan) on or
about the date that is 60 days following the Year End
pursuant to the provisions of Section 8(a)(ii) of the
1995 Plan, except (1) the exercise price per share
shall be equal to the Fair Market Value (as that term
is defined in the 1995 Plan) of a share of Company
stock as of the date of grant, (2) the number of
shares subject to the Option shall be as set forth
herein, (3) the expiration date of the Option shall
be ten years from the date the Option is granted, and
(4) the provisions of the Option relating to an
accelerated termination of the Option upon
termination of employment shall not cause the Option
to terminate solely on account of a change in, or
termination of, Bruce's role as employee or member of
the Company's Board.
(ii) An Option to acquire 47,500 shares
of Company stock is being granted as of the date
hereof. The Option granted pursuant to the preceding
sentence is on substantially the same terms as the
Option that would have been granted to Bruce as an
Executive Officer (as defined in the 1995 Plan) with
respect to the two year period which commenced on
March 1, 1997 and will end on February 28, 1999
pursuant to the provisions of Section 8(a)(iv) of the
1995 Plan, except (1) the exercise price per share
shall be equal to the closing price of the stock on
the New York Stock Exchange on the date of this
Agreement, (2) the number of shares subject to the
Option shall be as set forth herein, (3) the
expiration date of the Option shall be ten years from
the date the Option is granted, and (4) the
provisions of the Option relating to an accelerated
termination of the Option upon termination of
employment shall not cause the Option to terminate
solely on account of a change in, or termination of,
Bruce's role as employee or member of the Company's
Board.
(c) Benefits Under the Cash Bonus Plan.
Bruce shall receive a bonus benefit
under the Company's Cash Bonus Plan (the "Cash Bonus
Plan"), payable in cash rather than stock, which
benefit shall be equal to 50% of the benefit that
would be (i) payable under the Cash Bonus Plan with
respect to the Company's fiscal year ending October
31, 1998 based on an estimate of the Company's Income
Before Taxes (as that term is defined in the Cash
Bonus Plan) for such fiscal year (the "Estimated Full
Year Income") and (ii) converted to a cash amount as
determined below. The Estimated Full Year Income,
for purposes of this paragraph (c), shall be the
estimate of the Company's Income Before Taxes as
presented at the Board meeting of December 17, 1997
or such estimate as is presented at the Board meeting
scheduled to occur on March 5, 1998, whichever
estimate is higher.
The benefit payable to Bruce pursuant
to this paragraph (c) shall be paid to Bruce on or
before April 30, 1998, in cash, in an amount equal to
the aggregate value (based on the closing price of
the common stock on the last trading day prior to the
date of this Agreement) of a number of shares of
common stock determined by dividing the dollar amount
of the benefit (as determined pursuant to the last
preceding paragraph) by the Fair Market Value of a
share of common stock determined as of May 29, 1996.
Other than as provided in this
paragraph (c), Bruce shall not be entitled to any
benefits under the Company's Cash Bonus Plan
subsequent to the date hereof.
(d) Amendments to Plans. Appropriate
amendments to Options held by Bruce, stock option
plans and bonus compensation plans of the Company
(including, but not limited to, the Company's Stock
Option Plan (1986), the 1995 Plan, the 1998 Plan and
the Cash Bonus Plan) have been made, consistent with
the provisions contained in this Agreement.
(e) Adherence to Certain Conditions of Rule
16b-3. The Company agrees that the provisions of
this paragraph 4 (including all acquisitions and
dispositions of Company securities provided for
herein) have been specifically approved in a manner
that satisfies the requirements of Rule 16b-3(d)(1)
and Rule 16b-3(e) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
5. Consulting and Non-Competition Agreement.
Contemporaneous with the signing of this Agreement,
Bruce and the Company have executed and delivered to
each other a Consulting and Non-competition Agreement
relating to the 36 month period following Year End.
6. Registration Rights Agreement.
6.1 "Piggyback" Registration Rights.
(a) If the Company proposes to register an
offering consisting only of its Common Stock (or if
the Company proposes to register an offering pursuant
to which Common Stock only will be offered under a
separate prospectus) on Forms S-1, S-2 or S-3, or any
successor forms, under the Securities Act of 1933
(the "Act"), other than an offering on Form S-3 made
pursuant to Rule 415(a)(1)(x) under the Act covering
only securities to be sold by the Company or a
subsidiary (as defined in Rule 405 under the Act),
the Company shall give prompt written notice to Bruce
(defined, for the purpose of this Section 6 as
including Bruce's Affiliates, as defined in Section
6.8). Upon the written request of Bruce made within
5 days after the receipt of any such notice, which
written request shall specify the number of shares he
desires to be registered, the Company shall use its
best reasonable commercial efforts to cause all such
shares to be registered under the Act to permit the
sale of such shares, provided that the Company may
require that such shares be sold in accordance with
the plan of distribution of the majority of the
Common Stock to be registered by such registration
statement if such plan of distribution involves an
underwritten offering. Notwithstanding anything
contained herein to the contrary, and subject to
Section 6.4(a), herein, (i) the Company shall have
the right to decline to register any shares under
this Section 6.1 in the event its Board or the
managing underwriter of the offering determines in
its reasonable judgment (and communicates in writing
to Bruce such determination) that registration
hereunder is reasonably likely to materially and
adversely affect the offer and sale of Company shares
(provided that this right may be exercised if and
only if, as a result of the exercise of the right,
only the sale of shares by the Company will be
covered by the registration statement) (ii) if the
managing underwriter advises the Company in a writing
(which the Company will provide to Bruce) that
inclusion in such registration of all proposed
securities (including securities being offered by or
on behalf of the Company and Bruce and securities
covered by other requests for registration) would in
its reasonable opinion materially and adversely
affect the marketability of the offering of the
securities proposed to be registered by the Company,
then Bruce shall be entitled to participate pro rata
(based on the number of shares owned by the
respective holders) with any other shareholders
having piggyback registration rights with respect to
such registration to the extent the managing
underwriter determines, in its reasonable judgment,
that such shares may be included without such
material and adverse effect, and (iii) the Company
shall have the right to discontinue any registration
of Bruce's shares at any time prior to the effective
date of such registration if the proposed
registration of Common Stock giving rise to the
Company's notice under this Subsection 6.1(a) is
discontinued.
(b) Bruce's right to have his shares
included in such registration shall expire 90 days
after he ceases to be an affiliate (within the
meaning of Rule 405 under the Act) of the Company in
the opinion of counsel to the Company (a copy of
which the Company shall provide to Bruce promptly
after receipt by the Company), and shall immediately
be reinstated at such time, if ever, as he later
becomes an affiliate of the Company. Moreover, Bruce
shall be entitled to rely on this paragraph 6.1 on no
more than two occasions, each of which shall involve
at least 500,000 shares.
6.2 Demand Registration Rights: Subject to
Section 6.4(a) herein, at any time upon receipt of a
written request from Bruce, the Company will, with
reasonable promptness but in no event more than 20
business days following receipt of the request,
prepare and file with the Securities and Exchange
Commission under the Act a registration statement in
respect of no fewer than 500,000 shares and use its
best reasonable commercial efforts to cause such
registration statement to become effective promptly
thereafter, provided that the Company shall be
required to prepare and file under the Act no more
than three registration statements pursuant to this
Section 6.2. Without Bruce's consent, no securities
other than the shares subject to Bruce's request
pursuant to this Section 6.2 may be included in the
registration statement. Bruce's rights under this
Section 6.2 shall expire 90 days after he ceases to
be an affiliate (within the meaning of Rule 405 under
the Act) of the Company in the opinion of counsel to
the Company (a copy of which the Company shall
provide to Bruce promptly after receipt by the
Company), and shall immediately be reinstated at such
time, if ever, as he later becomes an affiliate of
the Company.
6.3 Expenses. The Company shall pay all
expenses incident to its performance of or compliance
with the provisions of Sections 6.1 hereof,
including, without limitation, all registration and
filing fees, fees and expenses of compliance with the
Act, printing expenses, messenger and delivery
expenses, "road show" expenses, fees and
disbursements of counsel for the Company (but not
Bruce's legal fees, which shall be paid by Bruce) and
all independent public accountants and other persons
retained by the Company, and any fees and
disbursements of underwriters customarily paid by
issuers or sellers of securities (excluding
underwriting commissions and discounts in respect of
shares sold by Bruce, which shall be paid by Bruce).
The Company shall pay none, and Bruce shall pay all,
of the aforementioned expenses (including, but not
limited to, his legal fees, the cost of a "comfort
letter" as provided in Section 6.4(h) herein, and any
incremental costs to the Company of maintaining
effectiveness of the registration) in the event of
registration under Section 6.2, unless Bruce agrees,
at the request of the Company, to sell his shares in
an underwritten offering, in which case the first
sentence of this Section 6.3 shall be applicable.
6.4 Obligations of Company.
(a) Notwithstanding anything to the
contrary in this Section 6, at any time prior to the
filing of the registration statement, the Company may
postpone its obligations pursuant to this Section 6
for a period not to exceed 90 days if, in the Board's
sole reasonable judgment, communicated to Bruce in
writing, performance of its obligations is reasonably
likely to materially interfere with any business
plans of the Company, including but not limited to
any financings, acquisitions or other transactions,
or any periods in which officers of the Company are
requested or required by the Company (if Bruce is
then an officer or director), in the best interests
of the Company, not to trade in Company securities.
The right of the Company to postpone the offering may
be exercised only once in any 270 day period.
(b) Whenever the Company is required to use
its best reasonable commercial efforts to effect or
cause the registration of any shares under the Act as
provided in Section 6.2, the Company shall as
expeditiously as possible prepare and file with the
SEC such amendments and supplements to such
registration statement and the prospectus used in
connection therewith as may be necessary to keep such
registration statement effective and such prospectus
current for a period not in excess of 18 months (or
24 months with respect to sales of the type referred
to in Section 8(b) hereunder), plus any period in
which Bruce has discontinued the sale of his shares
pursuant to Section 6.4(d), as may be necessary in
accordance with the intended methods of disposition
by Bruce;
(c) The Company will furnish to Bruce such
number of copies of such registration statement and
each such amendment and supplement thereto (in each
case including all exhibits), such number of copies
of the prospectus included in such registration
statement (including each preliminary prospectus) and
each supplement thereto, in conformity with the
requirements of the Act, and such other documents as
Bruce may reasonably request in order to facilitate
the disposition of the shares owned by him and
covered by such registration statement;
(d) The Company will notify Bruce, at any
time when a prospectus relating to a registration of
the sale of Bruce's shares is required to be
delivered under the Act, of the happening of any
event as a result of which the prospectus included in
such registration statement, as then in effect,
includes an untrue statement of a material fact or
omits to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading, and in such event (i) Bruce
will discontinue any sale of shares until he has been
advised that the prospectus has been amended,
supplemented or otherwise no longer contains an
untrue statement of a material fact or omits to state
any material fact required to be stated therein or
necessary to make the statements therein not
misleading, (ii) the Company shall use its best
reasonable commercial efforts to promptly amend and
supplement the prospectus, file such amendment or
supplement with the Securities and Exchange
Commission and (iii) the Company promptly will
prepare and furnish to Bruce, at his request, a
reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of
such securities, such prospectus shall not include an
untrue statement of a material fact or omit to state
a material fact required to be stated therein or
necessary to make the statements therein not
misleading.
(e) Prior to any registered offering of
Bruce's shares, in the event the sale of the shares
is not exempt from the registration provisions of any
state securities or "blue sky" law, the Company shall
use its best reasonable commercial efforts to
register or qualify such shares for offer and sale
under the securities or blue sky laws of such
jurisdictions in which the sale is not so exempt as
Bruce or any underwriter reasonably requests.
(f) The Company shall cause all of Bruce's
shares included in a registration statement covered
by this Section 6 to be listed on each securities
exchange, interdealer quotation system or other
market on which similar securities issued by the
Company are then listed, unless such shares have
previously been so listed.
(g) In the event of any underwritten public
offering pursuant to Section 6.2, the Company shall
enter into and perform its obligations under an
underwriting agreement, usual and customary in form,
with the managing underwriter of such offering and
Bruce; the Company shall take such other actions
(including the inclusion of information in the
registration statement and participation in "road
show" activities similar in scope to those conducted
in an offering of securities by the Company) and
provide such information as the underwriters
reasonably request in order to expedite or facilitate
a disposition of Bruce's shares.
(h) Upon Bruce's request, the Company shall
furnish to Bruce a signed counterpart, addressed to
Bruce, of (i) an opinion of counsel for the Company,
dated the effective date of such registration
statement (or, if such registration includes an
underwritten public offering, dated the date of the
closing under the underwriting agreement), and (ii) a
"comfort" letter, dated the effective date of such
registration statement (and, if such registration
includes an underwritten public offering, dated the
date of the closing under the underwriting
agreement), signed by the independent public
accountants who have certified the Company's
financial statements included or incorporated by
reference in such registration statement, covering
substantially the same matters with respect to such
registration statement (and the prospectus included
therein) and, in the case of such accountants'
letter, with respect to events subsequent to the date
of such financial statements, as are customarily
covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in
underwritten public offerings of securities and, in
the case of the accountants' letter, such other
financial matters as may be covered in such a letter
pursuant to Statement on Auditing Standards No. 72 or
any amendment or supplement to such statement, as the
principal underwriter with respect to such
registration may reasonably request (or, if such
registration does not involve an underwritten
offering, as may reasonably be requested by Bruce).
6.5 Indemnification.
(a) The Company agrees to indemnify and
hold Bruce harmless, to the fullest extent permitted
by law, against all losses, claims, damages,
liabilities, costs (including, without limitation,
reasonable attorney's fees) and expenses caused by
any untrue or alleged untrue statement of a material
fact contained in any registration statement filed
pursuant to this Section 6 (a "Registration
Statement"), any related prospectus ("Prospectus") or
any preliminary prospectus or any amendment or
supplement thereto or any omission or alleged
omission to state therein a material fact required to
be stated therein or necessary to make the statements
therein not misleading, except insofar as the same
are based upon any information furnished in writing
to the Company by Bruce, expressly for use therein,
and shall reimburse Bruce for any legal and any other
expenses reasonably incurred in connection with
investigating or defending any such claims, as such
expenses are incurred. Indemnity under this Section
4(a) shall remain in full force and effect regardless
of any investigation made by or on behalf of any
indemnified party.
(b) The Company agrees to indemnify and
hold harmless, to the fullest extent permitted by
law, each underwriter, if any (including any broker
or dealer which may be deemed an underwriter) and
each person who controls any underwriter of Bruce's
Shares against all losses, claims, damages,
liabilities, costs (including, without limitation,
reasonable attorney's fees) and expenses caused by
any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, any
Prospectus or any preliminary prospectus or any
amendment or supplement thereto or any omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statements therein not misleading, except insofar
as the same are based upon any information furnished
in writing to the Company by such underwriters,
expressly for use therein or insofar as such loss,
claim, damage, liability, expense or action arises
out of or is based upon any untrue statement or
omission in any preliminary prospectus which was
identified to such Underwriter in writing and was
corrected in the Prospectus and it shall have been
established that the Underwriter seeking
indemnification fails to deliver a copy of the
Prospectus to the person to whom liability has been
incurred at or prior to confirmation of the sales of
Bruce's shares to such person in any case where such
delivery is required by the Act and such delivery
would have cured the defect giving rise to the
liability hereunder, and shall reimburse each such
person for any legal and any other expenses
reasonably incurred in connection with investigating
or defending any such claims, as such expenses are
incurred. Indemnity under this Section 4(b) shall
remain in full force and effect regardless of any
investigation made by or on behalf of any indemnified
party.
(c) In connection with any registration
pursuant to this Section 6, Bruce will furnish to the
Company in writing such information as the Company
reasonably requests concerning Bruce or the proposed
manner of distribution for use in connection with any
Registration Statement or Prospectus and Bruce agrees
to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors and
officers and each person who controls the Company
(within the meaning of the Act) against any losses,
claims, damages, liabilities and expense resulting
from any untrue statement of a material fact or any
omission of a material fact required to be stated in
the Registration Statement or Prospectus or
preliminary prospectus or necessary to make the
statements therein not misleading, to the extent, but
only to the extent, that such untrue statement or
omission is contained in any information furnished in
writing by Bruce to the Company specifically for
inclusion in such Registration Statement or
Prospectus and that such information was
substantially relied upon by the Company in
preparation of the Registration Statement or
Prospectus or any amendment or supplement thereto.
In no event shall the liability of Bruce hereunder be
greater in amount than the dollar amount of the
proceeds (net of all expense paid by Bruce and the
amount of any damages Bruce has otherwise been
required to pay by reason of such untrue statement or
omission) received by Bruce upon the sale of shares
by Bruce giving rise to such indemnification
obligation.
(d) Any person entitled to indemnification
hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which
it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such
claim with counsel reasonably satisfactory to the
indemnified party; provided that any person entitled
to indemnification hereunder shall have the right to
employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of
such counsel shall be at the expense of such person
unless (a) the indemnifying party has agreed to pay
such fees or expenses, (b) the indemnifying party
shall have failed to assume the defense of such claim
and employ counsel reasonably satisfactory to such
person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a
conflict of interest may exist between such person
and the indemnifying party with respect to such
claims (in which case, if the person notifies the
indemnifying party in writing that such person elects
to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not
have the right to assume the defense of such claim on
behalf of such person); and provided, further, that
the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying
party of its obligations hereunder, except to the
extent that such failure to give notice shall
materially adversely affect the indemnifying party in
the defense of any such claim or litigation. It is
understood that the indemnifying party shall not, in
connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more
than one separate firm of attorneys (in addition to
local counsel) at any time for all such indemnified
parties. Nothing contained herein shall be deemed to
deny Bruce the right to be indemnified hereunder for
the fees and expenses of one separate firm of
attorneys (in addition to local counsel) in the event
the Company enters into other indemnification
arrangements with indemnified parties other than
Bruce. No indemnifying party will, except with the
consent of the indemnified party, consent to entry of
any judgment or enter into any settlement that does
not include as an unconditional term thereof the
giving by the claimant or plaintiff to such
indemnified party of a release from all liability in
respect to such claim or litigation.
(e) If for any reason the indemnification
provided for in the preceding clauses (a),(b) and (c)
is unavailable to an indemnified party or
insufficient to hold it harmless, other than as
expressly specified therein, then the indemnifying
party shall contribute to the amount paid or payable
by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the
indemnified party and the indemnifying party, as well
as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the 1933 Act shall be
entitled to contribution from any person not guilty
of such fraudulent misrepresentation. In no event
shall the contribution obligation of Bruce be greater
in amount than the dollar amount of the proceeds (net
of all expenses paid by Bruce and the amount of any
damages Bruce has otherwise been required to pay by
reason of such untrue or alleged untrue statement or
omission or alleged omission) received by Bruce upon
the sale of Bruce's Shares giving rise to such
contribution obligation.
6.6 No Acknowledgment of Affiliation.
Nothing in this Agreement shall be deemed to be
an acknowledgment by the Company or Bruce that he is
an "affiliate" of the Company within the meaning of
Rule 405 under the Act.
6.7 Rule 144 Sales.
Subject to Section 8(a) hereunder, the Company
agrees that it shall fully cooperate with Bruce in
facilitating the sale of his shares pursuant to Rule
144 under the Act (including, as applicable, Rule
144(k)) and the prompt transfer of such shares
following such sale, including without limitation,
instructing the Company's transfer agent to remove
any legends on Bruce's share certificates (including
any legend referenced in Section 9(k)), and shall
instruct counsel to the Company to deliver such
opinion as is required by the transfer agent to
permit such transfer.
6.8 Bruce's Affiliates. Bruce's Affiliates
shall consist of his wife, lineal descendants, trusts
and other entities for the principal benefit of any
of the foregoing, heirs, executors or personal
representatives of his estate. Any notices required
in this Section 6 shall be sent to or from Bruce E.
Toll on behalf of any such persons and any
obligations of Bruce under this Section 6 shall be
obligations of Bruce E. Toll. Following Bruce's
death, Bruce's Affiliates shall have, collectively as
a group, acting by written consent of the holders of
a majority of the shares then held by Bruce's
Affiliates acquired by such Affiliates by sale, gift
or otherwise, directly or indirectly from Bruce,
Bruce's rights under this Section 6, and shall be
bound, jointly and severally, by Bruce's obligations
under this Section 6; except that the indemnification
and contribution obligations of Bruce's Affiliates
under this Section 6 shall be several and not joint.
7. Standstill Agreement.
For a period of time consisting of the
longer of (i) Bruce's tenure on the Board and the
five years immediately thereafter and (ii) in the
event of termination of Bruce's membership on the
Board by reason of his death or resignation, nine
years after the date of this Agreement, Bruce shall
not, directly or indirectly, without the prior
written consent of the Board: (a) in any manner
acquire, agree to acquire or make any proposal to
acquire, directly or indirectly, any equity
securities, or more than 5% of any class of
non-convertible debt securities outstanding at any
time, of the Company or any of its affiliates, (b)
propose to enter into, directly or indirectly, any
merger, consolidation, business combination, asset
purchase or other similar transaction involving the
Company or any of its affiliates, (c) make, or in any
way participate in any solicitation of proxies to
vote, execute any consent as a Company shareholder,
act to call a meeting of the Company stockholders,
make a proposal to be acted upon by the Company
stockholders or seek to advise or influence any
person with respect to the voting or not voting of
any securities of the Company, (d) form, join or in
any way participate in a partnership, syndicate,
joint venture or other "group" (as defined under
Section 13(d)(3) of the Exchange Act) with respect to
any voting securities of the Company or transfer his
voting rights with respect to any Company securities
(by voting trust or otherwise), except to the extent
required by this Agreement, (e) otherwise act, alone
or in concert with others, to seek to control or
influence the management or Board of the Company or
seek a position on the Board, other than pursuant to
this Agreement or consistent with the performance of
his duties as a director of the Company, (f) disclose
any intention, plan or arrangement inconsistent with
the foregoing, (g) induce or attempt to induce any
person who is then an employee, customer or supplier
of the Company to terminate a then existing
relationship with the Company, (h) employ or attempt
to employ any person who had been an employee of the
Company within the six months preceding the time in
question (with the exception of Bruce's secretary),
or (i) advise, assist or encourage any other persons
in connection with any of the foregoing. During the
period commencing the date hereof and expiring on the
date that Bruce no longer serves on the Board (or
March 15, 2002 in the event Bruce dies, resigns from
or does not seek election to the Board before
March 15, 2002), Bruce agrees that all shares of
Company stock beneficially owned or controlled
directly or indirectly by him will be voted as
recommended by the Company's management and that he
will execute any form of proxy or consent solicited
on behalf of the Company's management or its Board of
Directors and no other form of proxy or consent,
provided that this shall not apply to any proposal
that would have the effect of nullifying, restricting
or disparately reducing the per share voting rights
of the Shares held by Bruce. Notwithstanding
anything to the contrary in this Section 7, this
Section 7 shall no longer apply after the occurrence
of a Change of Control; for purposes hereof, a
"Change of Control" shall have occurred at such time
as (x) a transaction or related series of
transactions has been completed whereby more than 50%
of the Company's outstanding voting securities are
owned by a third party or an affiliated group (other
than Robert I. Toll, his wife and children and trusts
or other entities principally for their benefit), or
(y) a merger, consolidation or similar transaction
has occurred pursuant to which members of the
Company's management (including, for this purpose,
Bruce), their spouses and children, and trusts and
other entities principally for their benefit,
directly or indirectly, collectively and in the
aggregate, cease to own more voting stock of the
Company than any third party or affiliated group
(other than institutional investors listed in Rule
13d-1(b)(1) filing S.E.C. Schedule 13G with respect
to their ownership of voting stock of the Company).
Bruce shall take all steps necessary to ensure
that Bruce's Affiliates are bound by the provisions
of this Section 7 in the same manner as Bruce with
respect to any Company Common Stock acquired by such
Affiliates, by sale, gifts or otherwise, directly or
indirectly from Bruce after the date of this
Agreement.
8. Right of First Refusal on
Certain Stock Sales by Bruce.
Until such time, if any, that Bruce owns fewer
than 500,000 shares of the Company common stock,
Bruce shall, on each occasion that he desires to sell
any of his shares, first offer in writing such shares
to the Company for purchase. The Company shall have
two business days after receipt of such notice
("Response Period") within which to advise Bruce
whether it will purchase such shares, in which event
all such shares so offered shall be purchased by the
Company for cash at the closing market price of the
Company's common stock on the New York Stock Exchange
on the last business day immediately preceding the
date of receipt of the notice. Prior to such
purchase, the Company shall have obtained such
approval of Bruce's sale to the Company as is
necessary to satisfy the conditions of Rule 16b-3(e)
under the Exchange Act, if Bruce is then an officer
or director of the Company. Payment shall be made
upon delivery of the certificates representing such
shares, which delivery shall be no later than two
business days after the Company advised Bruce that it
will purchase such shares. In the event the Company
elects not to purchase such shares and Bruce fails to
sell such shares within fifteen business days after
the aforementioned two business day period (or, in
case Bruce offers the shares to the Company in
connection with his intention to sell his shares in
an underwritten public offering, within 15 business
days following the effectiveness of the registration
statement, except that shares subject to an
underwriter's overallotment option may be sold within
65 days following such effectiveness), Bruce may not
sell any shares of Company stock for three months
after such fifteen business day (or in the case of an
underwritten offering, such respective 15 business
day) period (the "No-Sale Term").
Notwithstanding anything to the contrary
hereinabove, Bruce shall not be required to offer to
the Company his shares, and shall not be prohibited
from selling shares during the No-Sale Term, in
connection with:
(a) transactions effected in accordance with
Rule 144 under the Act, or pursuant to an effective
registration statement under the Act provided,
however, that cumulative transactions pursuant to
this exception shall not exceed 300,000 shares in any
calendar quarter;
(b) sales made by a reputable bank or insurance
company or other similar institution pursuant to an
agreement with Bruce in which Bruce has placed any of
his shares as collateral or in pledge in connection
with a bona fide loan obligation (but which agreement
shall not relate to a derivative or forward sale
securities transaction), provided, however, that such
institution is otherwise entitled to sell such shares
in compliance with the Act, and
(c) a sale of shares which were intended to be
sold by Bruce under circumstances wherein (i) Bruce
has received a bona fide written offer from a third
party to purchase shares of Company common stock from
Bruce (a copy of which Bruce shall provide to the
Company with his initial notice), (ii) the Company
determines not to purchase such shares pursuant to
this Section 8, and (iii) such sale to the offeror is
not completed within fifteen business days promptly
after expiration of the Company's right to purchase
under this Section 8; provided that this subparagraph
(c) does not apply to any more than one such offer
during any three (3) month calendar period that does
not result in a sale by Bruce to the offeror of the
affected shares.
(d) Bruce shall take all steps necessary to
ensure that Bruce's Affiliates are bound by the
provisions of this Section 8 in the same manner as
Bruce with respect to any Company Common Stock
acquired by such Affiliates, by sale, gifts or
otherwise, directly or indirectly from Bruce after
the date of this Agreement.
9. Miscellaneous.
(a) Indulgences, Etc. Neither the failure
nor any delay on the part of either party to exercise
any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right,
remedy, power or privilege preclude any other or
further exercise of the same or of any other right,
remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such
right, remedy, power or privilege with respect to any
other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party
asserted to have granted such waiver.
(b) Controlling Law. This Agreement and
all questions relating to its validity,
interpretation, performance and enforcement
(including, without limitation, provisions concerning
limitations of actions), shall be governed by and
construed in accordance with the laws of the
Commonwealth of Pennsylvania, notwithstanding any
conflict-of-laws doctrines of such state or any other
jurisdiction to the contrary, and without the aid of any
canon, custom or rule of law requiring construction against
the draftsman.
(c) Notices. All notices, requests,
demands and other communications required or
permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and
received only (i) when personally delivered, or (ii)
on the day specified for delivery when deposited with
an overnight courier service such as Federal Express
for delivery to the intended addressee, or (iii) two
days following the day when deposited in the United
States mails, registered or certified mail, postage
prepaid, return receipt requested, addressed as set
forth below:
(i) If to the Company:
Toll Brothers, Inc.
3103 Philmont Avenue
Huntingdon Valley, PA 19006
Attention: Chairman of the Board
With a copy to:
Kenneth J. Gary, General Counsel
Toll Brothers, Inc.
3103 Philmont Avenue
Huntingdon Valley, PA 19006
(ii) If to Bruce:
Mr. Bruce E. Toll
1477 Rydal Road
Rydal, PA 19046
With a copy to:
Michael Banks, Esquire
Morgan Lewis and Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
In addition, notice by mail shall be by
air mail if posted outside of the continental United
States.
Either party may alter the address to
which communications or copies are to be sent by
giving notice of such change of address in conformity
with the provisions of this paragraph for the giving
of notice.
(d) Binding Nature of Agreement; No
Assignment. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective
heirs, personal representatives, successors and
assigns, except that neither party may assign or
transfer its rights or obligations under this
Agreement without the prior written consent of the
other party hereto; provided, however, that the
Company may, without the consent of Bruce, assign its
rights and obligations under this Agreement to any
person in conjunction with an acquisition or a merger
with the Company or the acquisition of a majority of
the Company's business.
(e) Execution in Counterparts. This
Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original as against any party whose signature appears
thereon, and all of which shall together constitute
one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof,
individually or taken together, shall bear the
signatures of both of the parties reflected hereon as
the signatories.
(f) Provisions Separable. The provisions
of this Agreement are independent of and separable
from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the
fact that for any reason any other or others of them
may be invalid or unenforceable in whole or in part.
(g) Paragraph Headings. The paragraph
headings in this Agreement are for convenience only;
they form no part of this Agreement and shall not
affect its interpretation.
(h) Words Words used herein, regardless
of the number and gender specifically used, shall be
deemed and construed to include any other number,
singular or plural, and any other gender, masculine,
feminine or neuter, as the context indicates is
appropriate.
(i) Number of Days. Except as otherwise
specifically provided in this Agreement, in computing
the number of days for purposes of this Agreement,
all days shall be counted, including Saturdays,
Sundays and holidays; provided, however, that if the
final day of any time period falls on a Saturday,
Sunday or holiday on which Federal banks are or may
elect to be closed, then the final day shall be
deemed to be the next day which is not a Saturday,
Sunday or such holiday.
(j) Information. So long as Bruce remains
President or a Vice Chairman of the Company, he will
be entitled to receive Company information of the
following type: Weekly Deposit and Traffic Analyses,
Sunday Night Sales Reports, Weekly Cash Analyses and
Price List Changes. Moreover, as long as he elects
to receive such information pursuant to this
Agreement, Bruce shall preclear any sales of the
Company's (or any affiliate's) securities in the same
manner as an employee is required under the Company's
policies and procedures relating to trading of
securities.
(k) Legended Certificates. Bruce agrees that
all of the certificates for shares of common stock of
the Company currently owned by him, his wife and
children and trusts or other entities for the benefit
of any such persons shall be submitted to the Company
for the placement of a legend thereon which states as
follows: "The shares represented by this certificate
are subject to the terms of an Agreement dated March
5, 1998 between the Company and Bruce E. Toll."
(l) Effective Date. This Agreement shall not
become effective unless and until it is approved by
the Board and unless and until the Board has approved
all amendments to Options under the 1995 Plan and to
the Cash Bonus Plan required by this Agreement in a
manner that satisfies the conditions of Rules
16b-3(d)(1) and 16b-3(e) promulgated under the
Exchange Act.
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement in Philadelphia,
Pennsylvania on the date first above written.
TOLL BROTHERS, INC.
By:___________________________
Bruce E. Toll<PAGE>
SCHEDULE A
[OUTSTANDING OPTIONS]
CONSULTING AND NON-COMPETITION AGREEMENT
This Consulting and Non-Competition Agreement (hereinafter
sometimes referred to as "Consulting Agreement"), made March 5,
1998, is by and between Toll Brothers, Inc. (hereinafter "Company") and
Bruce E. Toll (hereinafter "Consultant").
WHEREAS, Consultant has been employed by the Company as its
President, Chief Operating Officer and Secretary, and in various
capacities with respect to the Company's subsidiaries; and
WHEREAS, Consultant and the Company have agreed that,
following a transition period commencing April 30, 1998 and ending October
31, 1998, Consultant will leave his employment with the Company to
pursue other business opportunities; and
WHEREAS, Consultant has accumulated during his many years of
service with the Company in an executive capacity specialized,
proprietary and confidential knowledge and information concerning the
Company's business and operations; and
WHEREAS, the Company desires to have the knowledge and
expertise of Consultant available to the Company following
termination of his employment relationship,
NOW THEREFORE, in consideration of the mutual obligations
and promises contained herein, and intending to be legally bound,
Company and Consultant hereby agree as follows:
1. The foregoing recitals are hereby incorporated by
reference as if set forth fully herein.
2. Consultant's employment with the Company will
terminate October 31, 1998. After October 31, 1998, the only benefit (other
than benefits provided elsewhere in this Consulting Agreement) to which
Consultant will be entitled during the term of this consulting
Agreement shall be group health insurance of a type and amount then being
provided to Company executives. To the fullest extent permitted under the
Company's medical benefit plans, Consultant's group health insurance
under this Consulting Agreement shall be provided by the Company
to Consultant and his beneficiaries, and to any other of his children who
are currently participants in said medical plans. The Company shall
provide such coverage for Bruce and his beneficiaries during such period
without charge, and shall provide such coverage for each of Bruce's children
who are currently participants provided the premium costs that the
Company is permitted to charge under COBRA for such coverage of Bruce's
participant children is paid by Bruce or such children. To the extent medical
coverage is required to be provided to Consultant or his beneficiaries or
children that cannot be provided under the provisions of COBRA, the Company
shall have the option to arrange for substantially similar coverage to be
provided by a medical insurer on an individual basis. Termination of
Consultant's employee benefits will not affect Consultant's right to receive
previously vested benefits or Consultant's right to exercise stock options in
accordance with the terms of the options.
3. During a three-year term commencing November 1, 1998
and ending on October 31, 2001 (hereinafter "Consulting Term"), Consultant
agrees to make himself available to the Company on a reasonable
basis at reasonable times and places so as not to interfere with his other
business interests to consult with the Company concerning matters within his
knowledge or expertise.
4. In consideration of Consultant's availability to the
Company, and in further consideration of Consultant's agreement not to compete
with the Company as set forth in paragraph 5 below, the Company agrees to
pay Consultant the sum of $500,000 during each year of the Consulting
Term, payable in accordance with the Company's regular pay schedule
(which is currently every two weeks).
5. During the longer of (i) the Consulting Term and for a
period of three years thereafter, and (ii) the term of Consultant's service as a
Vice Chairman of the Company, Consultant shall not, without the written
consent of the Company, engage in any of the following prohibited
activities (which shall be in addition to any restrictions or prohibitions
contained in any other agreement between Bruce E. Toll and the
Company):
(a) Consultant shall not (as an individual, principal, agent,
employee, consultant or otherwise) directly or indirectly, engage in
activities relating to or render services:
(i) to any firm or business in the homebuilding business, or
(ii) so long as Consultant (including any immediate family
members, trusts or other entities for the benefit of any such persons)
is an officer, director, partner or limited partner of, or otherwise actively,
directly or indirectly, engaged in the operation or activities of, a real estate
investment trust (or related operating partnership) formed or sponsored by
the Company, to any real estate investment trust (whether in corporate, trust
or partnership form) or operating partnership (or other similar entity)
affiliated with a real estate investment trust; provided that Consultant
shall not be deemed to be an officer, director, partner or limited partner of
a real estate investment trust or related operating partnership by reason of
his status or conduct as a shareholder or a director of the Company.
(iii) so long as Dulles Greene, L.P. (or its property), or its
general partner, continues to be controlled or jointly controlled by
Consultant, to any real estate investment trust (whether in corporate,
trust or partnership form) or operating partnership (or other similar
entity) affiliated with a real estate investment trust.
These restrictions shall not prohibit Consultant from holding an
interest in any public corporation or real estate investment trust in an
amount less than 1% of any class of any such entity's outstanding
equity securities.
(b) Consultant shall not solicit, induce or encourage any
employee, independent contractor or consultant to the Company to
terminate his or her employment or other relationship with the
Company;
(c) Consultant shall not solicit, induce or encourage any
customer or vendor of the Company to terminate its relationship with the
Company, to cease doing business with the Company or to refrain from
giving new business or additional business to the Company.
Given the breadth of Consultant's responsibilities, these restrictions
shall apply (i) in all foreign countries in which the Company owned
property or engaged in business during Consultant's service, and (ii)
in any geographical area of the United States.
Consultant further acknowledges that these restrictions, in view of
his long history of employment with the Company and the nature of the
business in which the Company is engaged, are reasonable and
necessary in order to protect the legitimate interest of the Company,
and that any violation thereof would result in irreparable injuries to
the Company, as to which the Company has no adequate remedy at law.
Consultant therefore acknowledges that in the event of his violation
of any of these restrictions, the Company shall be entitled to obtain
from any court of competent jurisdiction preliminary and permanent
injunctive relief to restrain any such violation, plus reasonable
legal fees, costs and expenses, incurred in connection with any such
action which rights shall be cumulative to and in addition to any
other rights or remedies to which the Company may be entitled to the
extent permissible by the laws of the Commonwealth of Pennsylvania.
6. Consultant shall not either during the term of the
Consulting Agreement or at any time thereafter use for his own
personal benefit, or disclose, communicate or divulge or use for the
direct or indirect benefit of any person, firm, association or
company other than the Company, any confidential information regarding
the business methods, business policies procedures, techniques, research
or development projects or results, trade secrets or other confidential
knowledge or confidential processes or information of or developed by
the Company, any confidential information furnished to the Company by
customers or clients or any names and addresses of customers or clients
or any data on or relating to past, present or prospective customers or
clients or any other confidential information relating to or dealing
with the business operations or activities of the Company made known
to Consultant or learned or acquired by him either while in the employ
of the Company or during the term of the Consulting Agreement.
7. Consultant shall have no authority during the
Consulting Term to enter into binding obligations on behalf of the
Company without the express written consent of the Company, and shall
not represent to any to any third party that he has such authority.
8. Consultant shall not in any personal or business venture with
which he is associated use the name "Toll Brothers" or "Toll" in
connection with any business name, nor shall he conduct any business
in a manner that may cause confusion with the Company name or business,
provided that this paragraph will not prohibit Consultant from
conducting personal or business ventures using the name Bruce Toll,
Bruce E. Toll or Toll Management.
9. This Agreement shall terminate upon the death of Consultant.
10. Consultant's duties under this Consulting Agreement are not
delegable by Consultant. This Consulting Agreement may be
assigned by the Company to any successor in ownership of all or any
part of the Company's business.
11. (a) Neither the failure nor any delay on the part of either
party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy,
power or privilege, nor shall any waiver of any right, remedy, power
or privilege with respect to any occurrence be construed as a waiver
of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.
(b) This Agreement and all questions relating to its validity,
interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed
by and construed in accordance with the laws of the Commonwealth of
Pennsylvania.
(c) The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or
rendered invalid or unenforceable by virtue of the fact that for any reason any
other or others of them may be invalid or unenforceable in whole or in part.
(d) This Agreement; in addition to a separate agreement between
the parties executed on the date hereof, contains the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede
any course of performance of the trade and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified
or amended other than by an agreement in writing.
WHEREFORE, with the intention of being legally bound,
Consultant and Company hereby execute this Consulting Agreement as set forth
below.
TOLL BROTHERS, INC.
By:______________________________
_________________________________
BRUCE E. TOLL
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<NAME> TOLL BROTHERS, INC.
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