Securities and Exchange Commission
Washington D.C. 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the Period Ended March 31, 1999.
[ ] 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 0-22562
<TABLE>
<CAPTION>
CROSSMANN COMMUNITIES, INC.
<S> <C>
INDIANA 35-1880120
- ---------------------------------------- ---------------------------
(State of incorporation) (I.R.S. Identification No.)
9202 NORTH MERIDIAN STREET
INDIANAPOLIS, IN 46260
- ---------------------------------------- ---------------------------
(Address of principal executive offices) (Zip Code)
(317) 843-9514
- ----------------------------------------
(Telephone number)
</TABLE>
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15 (d) of the Securities
ExchangeAct of 1934 during the preceding 12 months (or for such shorter
periods 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
There were 11,557,284 Common shares outstanding as of May 13, 1999.
<PAGE>
CROSSMANN COMMUNITIES, INC.
FORM 10-Q
INDEX
Part I. Financial Information.
Item 1. Financial Statements.
Consolidated balance sheets as of March 31, 1999 (unaudited) and December 31,
1998.
Consolidated unaudited statements of income for the three months ended March
31, 1999 and 1998.
Consolidated unaudited statements of cash flows for the three months ended
March 31, 1999 and 1998.
Notes to consolidated unaudited financial statements for the three months
ended March 31, 1999 and 1998.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Part II. Other Information
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
Signatures.
<PAGE>
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CROSSMANN COMMUNITIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<S> <C> <C>
MARCH 31, 1999 DECEMBER 31, 1998
---------------- ------------------
(UNAUDITED)
----------------
ASSETS
Cash and cash equivalents $ 1,138,958 $ 18,011,456
Retainages 1,926,771 1,115,617
Real estate inventories 232,014,970 214,197,844
Furniture and equipment, net 3,991,899 3,964,369
Investments in joint ventures 18,385,801 17,720,878
Goodwill, net 15,191,407 15,395,896
Other assets 14,020,536 13,387,755
---------------- ------------------
Total assets $ 286,670,342 $ 283,793,815
================ ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 12,075,320 $ 20,734,383
Accrued expenses and other liabilities 10,127,346 11,555,789
Notes payable 110,152,666 101,222,955
---------------- ------------------
Total liabilities 132,355,332 133,513,127
Commitments and contingencies
Shareholders' equity:
Common shares 65,154,710 65,154,710
Retained earnings 89,160,300 85,125,978
---------------- ------------------
Total shareholders' equity 154,315,010 150,280,688
---------------- ------------------
Total liabilities and shareholders' equity $ 286,670,342 $ 283,793,815
================ ==================
<FN>
See accompanying notes.
</TABLE>
<TABLE>
<CAPTION>
CROSSMANN COMMUNITIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31,
<S> <C> <C>
1999 1998
------------ ------------
Sales of residential real estate $90,416,073 $56,323,242
Cost of residential real estate sold 72,316,290 44,527,551
------------ ------------
Gross profit 18,099,783 11,795,691
Selling, general and
administrative 11,466,305 7,858,452
------------ ------------
Income from operations 6,633,478 3,937,239
Other income, net 566,266 518,712
Interest expense (475,600) (216,117)
------------ ------------
90,666 302,595
------------ ------------
Income before income taxes 6,724,144 4,239,834
Income taxes 2,689,822 1,690,633
------------ ------------
Net income $ 4,034,322 $ 2,549,201
============ ============
Weighted average number of
common shares outstanding:
Basic 11,543,781 11,118,066
============ ============
Diluted 11,773,206 11,348,131
============ ============
Net income per common share:
Basic $ .35 $ .23
============ ============
Diluted $ .34 $ .22
============ ============
<FN>
See accompanying notes.
</TABLE>
<TABLE>
<CAPTION>
CROSSMANN COMMUNITIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<S> <C> <C>
THREE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
---------------------------------- ----------------------------------
ENDED MARCH 31, ENDED MARCH 31,
---------------------------------- ----------------------------------
1999 1998
---------------------------------- ----------------------------------
OPERATING ACTIVITIES:
- ------------------------------------------------
Net Income $ 4,034,322 $ 2,549,201
- ------------------------------------------------ ---------------------------------- ----------------------------------
Adjustments to reconcile net income to net cash
- ------------------------------------------------
flows from operating activities:
- ------------------------------------------------
Depreciation 226,861 129,796
- ------------------------------------------------ ---------------------------------- ----------------------------------
Amortization 191,817 57,506
- ------------------------------------------------ ---------------------------------- ----------------------------------
Cash provided (used) by changes in:
- ------------------------------------------------
Retainages (811,154) (540,076)
- ------------------------------------------------ ---------------------------------- ----------------------------------
Real estate inventories (17,817,126) (10,310,110)
- ------------------------------------------------ ---------------------------------- ----------------------------------
Other assets (620,109) (377,611)
- ------------------------------------------------ ---------------------------------- ----------------------------------
Accounts payable (8,659,063) (5,887,594)
- ------------------------------------------------ ---------------------------------- ----------------------------------
Accrued expenses and other liabilities (1,428,443) (523,752)
- ------------------------------------------------ ---------------------------------- ----------------------------------
Net cash flows from operating activities (24,882,895) (14,902,640)
- ------------------------------------------------ ---------------------------------- ----------------------------------
INVESTING ACTIVITIES:
- ------------------------------------------------
Purchases of furniture and equipment (254,391) (175,174)
- ------------------------------------------------ ---------------------------------- ----------------------------------
Investments in joint ventures (664,923) (52,387)
- ------------------------------------------------ ---------------------------------- ----------------------------------
Net cash used by investing activities (919,314) (227,561)
- ------------------------------------------------ ---------------------------------- ----------------------------------
FINANCING ACTIVITIES:
- ------------------------------------------------
Proceeds from bank borrowing 51,782,000 41,855,000
- ------------------------------------------------ ---------------------------------- ----------------------------------
Principal payments on bank borrowing (42,187,000) (29,300,000)
- ------------------------------------------------ ---------------------------------- ----------------------------------
Payments on notes and long-term debt (665,289) (45,081)
- ------------------------------------------------ ---------------------------------- ----------------------------------
Proceeds from sale of common shares -0- 177,619
- ------------------------------------------------ ---------------------------------- ----------------------------------
Net cash provided by financing activities 8,929,711 12,687,538
- ------------------------------------------------ ---------------------------------- ----------------------------------
Net decrease in cash and cash equivalents (16,872,498) (2,442,663)
- ------------------------------------------------ ---------------------------------- ----------------------------------
Cash and cash equivalents at beginning of period 18,011,456 5,526,138
- ------------------------------------------------ ---------------------------------- ----------------------------------
Cash and cash equivalents at end of period $ 1,138,958 $ 3,083,475
- ------------------------------------------------ ---------------------------------- ----------------------------------
<FN>
See accompanying notes.
</TABLE>
CROSSMANN COMMUNITIES, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
Basis of Presentation
Crossmann Communities, Inc. ("Crossmann" or the "Company") is engaged
primarily in the development, construction, marketing and sale of new
single-family homes for first time and first move-up buyers. The Company also
acquires and develops land for construction of such homes and originates
mortgage loans for the buyers. The Company operates in Indianapolis, Ft.
Wayne and Lafayette, Indiana; Cincinnati, Columbus and Dayton, Ohio;
Louisville and Lexington, Kentucky; Memphis and Nashville, Tennessee;
Charlotte, North Carolina; and Myrtle Beach, South Carolina.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, the unaudited consolidated financial statements
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of the Company, all adjustments (consisting of normal recurring
accruals) considered necessary to present fairly the consolidated financial
statements have been included.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS.
The Company's business and the homebuilding industry in general are subject
to changes in economic conditions, including, but not limited to, employment
levels, interest rates, the availability of credit, and consumer confidence.
The Company's success over the past several years has been influenced by a
variety of factors including favorable economic conditions in its principal
markets, the availability of capital for expansion, and low interest rates.
To the extent these conditions do not continue, the Company's operating
results may be adversely affected.
The Company's business is subject to weather-related seasonal factors that
can affect quarter-to-quarter results of operations. The number of sales
contracts signed tends to be higher during the first four months of the year,
creating a backlog that declines during the second half of the year. A home
is included in "backlog" upon execution of a sales contract by the customer,
and sales and cost of sales are recognized when the title is transferred and
the home is delivered to the buyer at "closing." Adverse weather conditions
during the first and second quarters of the year usually restrict site
development work, and construction limitations generally result in fewer
closings during this period. Results of operation during the first half of
the year also may reflect increased costs associated with adverse weather.
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1998.
Results of Operation
Sales for the three months ended March 31, 1999 increased approximately
$34.1 million, or 60.5%, over the same period in 1998. This increase reflects
more homes closed, 773 homes in 1999 as compared to 479 in 1998. Management
attributes the increase in closings in part to stronger operations in its
established markets and in part to the contribution of closings from its newly
acquired operations. Of the 294 additional closings, 167, or 57%, were from
established operations; 127 or 43%, were from Myrtle Beach, Charlotte,
Nashville, and the new division in Memphis. Selling prices were lower
$116,968 per home for the period in 1999 as compared to $117,585 in 1998 due
to the mix of closings from various markets. The average selling price in
Myrtle Beach is approximately $97,900, the lowest of Crossmann's markets. The
Myrtle Beach operation was acquired in May of 1998 and contributed no closings
in the first quarter of that year.
Gross profit increased approximately $6.3 million for the three months ended
March 31, 1999, over the same period the year before. Gross profit as a
percentage of sales decreased from 20.9 in 1998 to 20.0% in 1999. This change
was due principally to higher capitalized field costs incurred to achieve
volume in newer markets, and to costs associated with harsher winter
conditions in some of the Company's markets compared to 1998.
Selling, general and administrative expenses increased $3.6 million during
the three months ended March 31, 1999 compared to the same period in 1998, due
in part to sale commissions on the higher sales and increased overhead related
to the Company's new markets. Selling, general and administrative expenses
decreased as a percentage of sales to 12.7% in 1999 from 14.0% in 1998.
Other income decreased $211,929 for the three months ended March 31, 1999
compared to the same period the year before principally because of higher
interest expense. Trinity Homes LLC, ("Trinity") a homebuilding joint venture
in Indianapolis contributed income to Crossmann of approximately $176,600.
Income before income taxes for the three months ended March 31, 1999
increased $2.5 million, from approximately $4.2 million in 1998 to more than
$6.7 million in 1999, an increase of 58.6%. This increase is due principally
to increased sales volume with stable selling, general and administrative
expenses. Income before income taxes as a percentage of sales decreased to
7.4% of sales in 1999 compared to 7.5% in 1998.
Net income was approximately $1.5 million higher for the first quarter of
1999 than for the first quarter of 1998, an increase of 58.3%. As a
percentage of sales, net income was constant at 4.5% of sales in 1998 and
1999.
Backlog
The Company generally builds only upon the execution of a sales contract by
a customer and after approval of financing, although it also builds a limited
number of homes on speculation. The standard sales contract used by the
Company provides for an earnest money deposit of $1,000. The contract usually
includes a termination provision under which the earnest money is refunded in
the event that mortgage financing is not available on terms specified in the
contract, and may include other contingencies. Cancellations by buyers with
approved financing occur infrequently.
Sales backlog at March 31, 1999 was 2,750 with an aggregate sales value of
approximately $296.7 million, compared to 1,759 homes with an aggregate sales
value of approximately $190.8 million at March 31, 1998, an increase of
approximately 56.3%. This increase reflects a higher year-end backlog 1,744
at December 31, 1998 compared to 1,080 at December 31, 1997 and stronger
sales in the first quarter of 1999 1,779 contracts written in the first
quarter of 1999 compared to 1,158 in 1998, an increase of 53.6%. Half the
increase in orders came from the Company's established markets; half came from
Myrtle Beach, Charlotte, Nashville and the newly acquired division in
Memphis.
Changes in Financial Position
Income from operations and new borrowings on the line of credit were used
primarily to finance real estate inventories, which increased approximately
$17.8 million or 8.3% from their December 31, 1998 level. The expansion in
inventory during the first quarter is a normal seasonal trend. Winter weather
slows closings but does not prevent work on houses under construction from
continuing; therefore, investment in inventory grows.
Retainages increased $811,154 in the first quarter, or 72.7%. This increase
is also seasonal. Mortgage companies retain escrows for the completion of
exterior landscape items. As weather permits, yards will be completed and
retainages will be released to the Company during the second and third
quarters of the year.
Notes payable increased approximately $8.9 million during the first quarter
of 1999 as the line of credit was used to finance inventories.
Year 2000 System Requirements
Crossmann's management believes that the Company's core selling and
construction operations are largely unautomated and would continue
uninterrupted even in the event of Year 2000 problems. As for accounting and
administration, the Company's software is largely not date-dependent. Dates
are carried for informational purposes and are not generally used in
computations.
The manufacturer of the computer on which Crossmann's central accounting and
management information systems resides has certified that its hardware and
operating system software are Year 2000 compliant. The Company's applications
software has been tested in the course of normal maintenance. The Company's
programmers have identified those few instances where dates are compared and
have initiated corrections to handle the date change properly. Equipment and
software peripheral to Crossmann's central system are being tested for Year
2000 compliance. Any replacements or upgrades required are expected to be
complete by mid-1999.
The cost and timing of upgrades to hardware and software corrections are not
deemed to be materially different than normally scheduled upgrades.
Management's contingency plans, which are intended to enable the Company to
continue to operate normally, include performing some procedures manually,
changing suppliers, if necessary, and repairing or obtaining replacement
systems.
Capital Resources and Liquidity
To finance inventory expansion during the first quarter, the Company had
drawn funds on its senior bank line of credit in the amount of $43,486,000 at
March 31, 1999. On April 1, 1999, Crossmann amended its credit agreement with
Bank One, Indiana, NA, to increase the line from $60 million to $80 million,
to reduce its interest rate, to streamline its covenants, and to extend the
maturity of the line to March 31, 2002. The Company also added four new
participating banks to the credit facility, in reaction to the merger of Bank
One and First Chicago/NBD, the previous participant in the line of credit.
The Company also has $16.7 million in senior notes, maturing in 2004 with
interest payable quarterly at 7.625%, and$50.0 million in notes issued in
June of 1998, payable over 10 years at 7.75%, payable quarterly. Annual
principal reductions of $8,333,334 for the $50 million note issue begin June
11, 2003.
Both the note agreements and the bank line of credit require compliance with
certain financial and operating covenants and place certain limitations on the
Company's investments in land and unconsolidated joint ventures. They also
limit payments of cash dividends by the Company.
The Company's financing needs depend on land acquisition, inventory turnover
and sales volume. Historically, the Company has financed operations with the
retention of earnings and borrowings from financial institutions. Management
believes future financing needs will be funded by internally generated
capital, funds available under the existing credit arrangement, and additional
financing to be negotiated.
FUTURE TRENDS
Crossmann's record high backlog of 2,750 sales at the end of March will
require a very high level of production during the balance of the year.
Currently some builders are experiencing nationwide shortages of insulation
and drywall for new construction and delays in delivery. Crossmann is working
to ensure adequate supply so that its construction schedules will not be
interrupted; however, there can be no guarantee that Crossmann's vendors will
have access to sufficient materials to keep pace with management's intended
schedule. The Company may incur additional costs or experience delays during
the balance of 1999.
PART II. OTHER INFORMATION
The following items for which provision is made in the applicable regulations
of the Securities and Exchange Commission are not required under the related
explanations or are inapplicable and therefore have been omitted:
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submissions of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
<TABLE>
<CAPTION>
a) Exhibits
<S> <C>
Exhibit
Number Description of Exhibit
3.1 Amended and restated Articles of Incorporation of Crossmann Communities, Inc.
(Incorporated by reference to Exhibit 3.1 to Form S-1 Registration Statement No.33-
68396.)
3.2 Bylaws of Crossmann Communities, Inc. (Incorporated by reference to Exhibit 3.2
to Form S-1 Registration Statement No. 33-68396.)
4.1 Specimen Share Certificate for Common Shares. (Incorporated by reference to
Exhibit 2.9 to Form S-1 Registration Statement No. 33-68396.)
10.10 1993 Outside Director Stock Option Plan. (Incorporated by reference to Exhibit
10.2 to Form S-1 Registration Statement No. 33-68396.)
10.11 1993 Employee Stock Option Plan. (As amended as of May 22, 1996.)
10.12 Note Agreement dated as of December 19, 1995, $25,000,000 7.625% Senior Notes
due December 9, 2004, by Crossmann Communities, Inc., et al. (Incorporated by
reference to Exhibit 10.37 to From 10-K dated March 18, 1996.)
10.13 7.625% Senior Note due December 19, 2004, issued to Combined Insurance
Company by Crossmann Communities, Inc., et al. (Incorporated by reference to
Exhibit 10.38 to Form 10-K dated March 18, 1996.)
10.14 7.625% Senior Note due December 19, 2004, issued to Minnesota Mutual Life
Insurance company by Crossmann Communities, Inc., et al. (Incorporated by
reference to Exhibit 10.39 to Form 10-K dated March 18, 1996.)
10.15 Form of 7.75% Senior Note due June 11, 2008, issued to various insurance
companies and Note Agreement dated as of June 11, 1998, $50,000,000 7.75%
Senior Notes due June 11, 2008, by Crossmann Communities, Inc. et al.
(Incorporated by reference to Exhibits 10.45 and 10.46 to Form 10-Q dated August
14, 1998.)
10.16 Credit Agreement, dated April 1, 1999 by and between Crossmann Communities,
Inc. and Bank One, Indiana, NA, et. al.
19.1 Lease by and between Pinnacle Properties LLC ("Landlord") and Crossmann
Communities, Inc. ("Tenant"), 9202 North Meridian Street, Suite 300, Indianapolis,
Indiana 46260, executed April 18, 1994. (Incorporated by reference to Exhibit 19.1
to Form 10-Q dated August 12, 1994.)
21.2 Amended subsidiaries of the registrant, dated March 28, 1996. (Incorporated by
reference to Exhibit 21.2 to Form 10-Q dated August 13, 1996.)
27.1 Financial Data Schedule for the quarter ended March 31, 1999.
</TABLE>
(b) Reports on Form 8-K.
No Reports on Form 8-K were filed during the quarter for which this
report is filed.
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities
and Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
CROSSMANN COMMUNITIES, INC.
/s/ Jennifer A. Holihen
Jennifer A. Holihen
Director, Chief Financial Officer;
Treasurer; Secretary;
(Principal Financial and Accounting Officer)
Dated: May 13, 1999
EXHIBIT 10.16
CREDIT AGREEMENT
AMONG
CROSSMANN COMMUNITIES, INC.
AND
BANK ONE, INDIANA, NA
(AS "AGENT")
AND THE LENDERS PARTIES THERETO
DATED AS OF
APRIL 1, 1999
TABLE OF CONTENTS
CREDIT AGREEMENT Page 1
Article I. DEFINITIONS Page 1
Article II. THE REVOLVING LOAN Page 15
2.1 The Revolving Loan Page 15
2.2 Required Payments; Termination Page 15
2.3 Ratable Loans Page 15
2.4 Types of Advances Page 16
2.5 Unused Fee; Reductions in Aggregate Commitment Page 16
2.6 Minimum Amount of Each Advance Page 16
2.7 Optional Principal Payments Page 16
2.8 Method of Selecting Types and Interest Periods for
New Advances Page 16
2.9 Conversion and Continuation of Outstanding Advances Page
17
2.10 Changes in Interest Rate, etc. Page 18
2.11 Rates Applicable After Default Page 18
2.12 Method of Payment Page 18
2.13 Note-less Agreement; Evidence of Indebtedness Page 19
2.14 Telephonic Notices Page 20
2.15 Interest Payment Dates; Interest and Fee Basis Page 20
2.16 Notification of Advances, Interest Rates, Prepayments
and Commitment Reduction Page 20
2.17 Lending Installations Page 20
2.18 Non-Receipt of Funds by the Agent Page 21
2.19 Extension of Facility Termination Date Page 21
2.20 The Letter of Credit Subfacility Page 21
2.20.1 Certain Provisions Relating to Bank One
as Issuing Bank Page 22
(a) Administration Page 22
(b) Indemnification of Bank One by Lenders Page 22
2.21 Participation of Lenders in Letters of Credit Risk Page
23
2.21.1 Payment by Lenders of Account of Unreimbursed Draws
Page 23
2.21.2 Recision Page 23
2.22 Obligations Absolute Page 24
2.23 Swing Line Loan Page 24
2.24 Borrowings to Repay Swing Line Loan Page 25
2.25 Payments of Principal/Several Obligations Page 26
2.26 Increase of Aggregate Commitment Page 26
i
Article III. YIELD PROTECTION; TAXES Page 27
3.1 Yield Protection Page 27
3.2 Changes in Capital Adequacy Regulations Page 28
3.3 Availability of Types of Advances Page 28
3.4 Funding Indemnification Page 28
3.5 Lenders Statements; Survival of Indemnity Page 28
3.6 Taxes Page 29
Article IV. CONDITIONS PRECEDENT Page 31
4.1 Initial Advance Page 31
4.2 Each Advance Page 39
4.3 Documents Required for the Addition of an Entity as
a Current Subsidiary Page 40
Article V. REPRESENTATIONS AND WARRANTIES Page 41
5.1 Existence and Standing Page 41
5.2 Authorization and Validity Page 41
5.3 No Conflict; Government Consent Page 41
5.4 Financial Statements Page 42
5.5 Material Adverse Change Page 42
5.6 Taxes Page 42
5.7 Litigation and Contingent Obligations Page 42
5.8 Subsidiaries Page 42
5.9 ERISA Page 43
5.10 Accuracy of Information Page 43
5.11 Regulation U Page 43
5.12 Material Agreements Page 43
5.13 Compliance with Laws Page 43
5.14 Ownership of Properties Page 43
5.15 Plan Assets; Prohibited Transactions Page 43
5.16 Environmental Matters Page 44
5.17 Investment Company Act Page 44
5.18 Public Utility Holding Company Act Page 44
5.19 Year 2000 Page 44
5.20 Subordinated Indebtedness Page 44
5.21 Insurance Page 44
Article VI. COVENANTS Page 45
6.1 Financial Reporting Page 45
6.2 Use of Proceeds Page 46
6.3 Conduct of Business Page 46
6.4 Taxes Page 47
6.5 Insurance Page 47
ii
6.6 Compliance with Laws Page 47
6.7 Maintenance of Properties Page 47
6.8 Inspection Page 47
6.9 Restricted Payments Page 47
6.10 Debt Page 48
6.11 Loans or Advances and Investments Page 49
6.12 Liens Page 50
6.13 Guaranties Page 52
6.14 Mergers, Consolidations, Sales, Acquisition or
Formation of Subsidiaries Page 52
6.15 Judgments Page 52
6.16 Year 2000 Page 53
6.17 Affiliates Page 53
6.18 Financial Covenants Page 53
6.18.1 Current Ratio Page 53
6.18.2 Consolidated Tangible Net Worth Page 53
6.18.3 Ratio of Total Debt to Total Capitalization Page 53
6.18.4 Fixed Charge Coverage Ratio Page 53
6.18.5 Ratio of Consolidated Land to Consolidated
Tangible Net Worth Page 54
6.18.6 Ratio of Total Debt to the Borrowing Base
Page 54
6.19 Hazardous Substances Page 54
Article VII. DEFAULTS Page 54
Article VIII. ACCELERATION, WAIVERS, AMENDMENTS AND
REMEDIES Page 56
8.1 Acceleration Page 56
8.2 Amendments Page 56
8.3 Preservation of Rights Page 57
Article IX. GENERAL PROVISIONS Page 57
9.1 Survival of Representations Page 58
9.2 Governmental Regulation Page 58
9.3 Headings Page 58
9.4 Entire Agreement Page 58
9.5 Several Obligations; Benefits of this Agreement Page 58
9.6 Expenses; Indemnification Page 58
9.7 Numbers of Documents Page 59
9.8 Accounting Page 59
9.9 Severability of Provisions Page 59
9.10 Non-liability of Lenders Page 59
iii
9.11 Confidentiality Page 59
9.12 Non-reliance Page 60
Article X. THE AGENT Page 60
10.1 Appointment; Nature of Relationship Page 60
10.2 Powers Page 60
10.3 General Immunity Page 61
10.4 No Responsibility for Loans, Recitals, etc Page 61
10.5 Action on Instructions of Lenders Page 61
10.6 Employment of Agents and Counsel Page 61
10.7 Reliance on Documents; Counsel Page 62
10.8 Agent's Reimbursement and Indemnification Page 62
10.9 Notice of Default Page 62
10.10 Rights as a Lender Page 62
10.11 Lender Credit Decision Page 63
10.12 Successor Agent Page 63
10.13 Agents' Fee Page 64
10.14 Delegation to Affiliates Page 64
Article XI. SETOFF; RATABLE PAYMENTS Page 64
11.1 Setoff Page 64
11.2 Ratable Payments Page 64
Article XII. BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS Page 64
12.1 Successors and Assigns Page 65
12.2 Participations Page 65
12.2.1 Permitted Participants; Effect Page 65
12.2.2 Voting Rights Page 65
12.2.3 Benefit of Setoff Page 66
12.3 Assignments Page 66
12.3.1 Permitted Assignments Page 66
12.3.2 Effect; Effective Date Page 66
12.4 Dissemination of Information Page 67
12.5 Tax Treatment Page 67
Article XIII. NOTICES Page 67
13.1 Notices Page 67
13.2 Change of Address Page 67
Article XIV. COUNTERPARTS Page 68
iv
Article XV. CHOICE OF LAW; CONSENT TO JURISDICTION
WAIVER OF JURY TRIAL Page 68
15.1 Choice of Law Page 68
15.2 Consent to Jurisdiction Page 68
15.3 Waiver of Jury Trial Page 68
Exhibit "A" - Borrowing Notice
Exhibit "B" - Promissory Note
Exhibit "C" - Application for Swing Line Loan and Compliance
Certificate
Exhibit "D" - Swing Loan Note
Exhibit "E" - Guaranty Agreement
Exhibit "F" - Compliance Certificate
Exhibit "G" - Current Subsidiary Letter
Exhibit "H" - Assignment Agreement
Schedule 5.7 - Litigation
Schedule 5.8 - Subsidiaries
Schedule 6.10 - Debt
Schedule 6.11 - Loans, Advances, Investments
Schedule 6.12 - Liens
Schedule 6.13 - Guaranties
v
mskdoc\crossmann\restated\credit.4 -
CREDIT AGREEMENT
This Agreement, dated as of April 1, 1999, is among CROSSMANN
COMMUNITIES, INC., an Indiana corporation (the "Borrower"), the Lenders and
BANK ONE, INDIANA, NA, a national banking association, as Agent (the "Agent").
W I T N E S S E T H:
WHEREAS, Bank One, Indiana, NA, formerly known as Bank One, Indianapolis,
National Association, a national banking association with its principal office
in Indianapolis, Indiana ("Prior Bank") and the Borrower entered into an
Amended and Restated Credit Agreement dated December 21, 1995, as subsequently
amended (collectively, the "Prior Agreement"). The Borrower and the Prior
Bank now wish to enter into a new agreement providing for the direct
participation of the Lenders from time to time parties hereto, and for the
Prior Bank to act as the initial Agent.
NOW, THEREFORE, the Prior Bank and the Borrower hereby amend and restate
the Prior Agreement in its entirety as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as
the most recent transaction in a series of transactions) at least a majority
(in number of votes) of the securities of a corporation which have ordinary
voting power for the election of directors (other than securities having such
power only by reason of the happening of a contingency) or a majority (by
percentage or voting power) of the outstanding ownership interests of a
partnership or limited liability company.
"Advance" means an advance of proceeds of the (i) Revolving Loan, (a)
made by the Lenders on the same Borrowing Date, or (b) converted or continued
by the Lenders, consisting, in either case, of the aggregate amount of the
several Advances of the same Type and, in the case of Eurodollar Advances, for
the same Interest Period, or (ii) Swing Line Loan made by Bank One pursuant to
Section 2.22.
"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 20%
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.
"Agent" means Bank One, Indiana, NA in its capacity as contractual
representative of the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced or reinstated from time to time pursuant to the terms
hereof.
"Agreement" means this Credit Agreement, as it may be amended or modified
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 referred to in Section 5.4.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day, or (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Spread" means that number of percentage points to be taken
into account in determining the per annum rate at which interest will accrue
on the Revolving Loan based on the Eurodollar Base Rate or Alternative Base
Rate determined by reference of the ratio of the Borrower's Total Debt to its
Total Capitalization in accordance with the following table:
Applicable Spread
Ratio of Total Debt to Total Capitalization Alternate Base Rate
Eurodollar Base Rate
Less than .33:1.00 -50 b.p. +130 b.p.
Equal to or greater than .33:1.00 -25 b.p. +145
b.p.
but less than or equal to .50:1.00
Greater than .50:1.00 0 b.p. +160 b.p.
The Applicable Spread shall be determined on the basis of the financial
statements of the Borrower for each fiscal quarter furnished to the Lenders
pursuant to the requirements of Section 6.1(ii) with prospective effect for
the following fiscal quarter. Interest will accrue and be payable in any
fiscal quarter on the basis of Applicable Spread in effect during the
preceding fiscal quarter until an adjustment is made under the terms of this
provision. The Applicable Spread shall be adjusted on the first interest
payment date which follows receipt by the Lenders of the financial statements
upon which such adjustment is based. In the event that the Borrower fails to
deliver the financial statements and compliance certificates required under
Section 6.1(ii) for any month which ends a fiscal quarter, then the Applicable
Spread shall be the largest spread shown on the above table from the date such
financial statements were required to be delivered until the first interest
payment date which follows delivery to the Lenders of such financial
statements. It is noted that the above table provides an Applicable Spread
for a ratio of Total Debt to Total Capitalization greater than that which is
permitted under the terms of Section 6.18.3 hereof. For the avoidance of
doubt, it is agreed that it is the intent of the parties that the Lenders
shall be free to exercise all remedies otherwise provided for in this
Agreement in the event of a violation of the Borrower of the covenants stated
in Section 6.18.3, notwithstanding the accrual of interest upon the Loan at a
rate determined in accordance with this definition. As used herein, "b.p."
means a basis point, which is one one-hundredth of one percent.
"Application for Swing Line Loan" is used as defined in Section 2.23.
"Authorized Officer" means any of the Chief Executive Officer, the Chief
Operating Officer, or the Chief Financial Officer of the Borrower, acting
singly, or any other officer whose authority to perform acts to be performed
only by an Authorized Officer under the terms of this Agreement as evidenced
to the Agent by a certified copy of an appropriate resolution of the Board of
Directors of the Borrower.
"Bank One" means Bank One, Indiana, NA in its individual capacity and its
successors.
"Borrower" means Crossmann Communities, Inc., an Indiana corporation, and
its successors and assigns.
"Borrowing Base" means for the Borrower and the Current Subsidiaries,
determined on a consolidated basis, an amount equal to the sum of: (i) one
hundred percent (100%) of cash and Cash Equivalent Investments; (ii) eighty
percent (80%) of the lesser of the net book value or current market value of
inventory of speculative homes and model homes completed or under
construction, and winter foundations, on land which the Borrower or a Current
Subsidiary owns and with respect to which neither the Borrower nor a Current
Subsidiary has a contract with a third party to build a house; (iii) ninety
percent (90%) of the lesser of the net book value or current market value of
inventory of residential housing completed or under construction on land which
the Borrower or a Current Subsidiary owns and has a contract with a third
party to build a house; (iv) sixty-five percent (65%) of the lesser of the net
book value or current market value of Land Held for Future Development; (v)
sixty-five percent (65%) of the lesser of the net book value or current market
value of Land Under Development and Developed Lots; and (vi) ninety-five
percent (95%) of receivables held in escrow; (provided that, notwithstanding
the foregoing, in no event shall the sum of the amounts attributable to items
(iv) and (v) above exceed the sum of the amounts attributable to items (i) ,
(ii), (iii), and (vi)).
"Borrowing Base Certificate" means a certificate of the Borrower signed
by an appropriate officer indicating the amount of the Borrowing Base as of a
stated date and in such form and showing such detail as the Agent may
reasonably require.
"Borrowing Date" means a date on which an Advance is made hereunder, or a
date on which a Letter of Credit is issued hereunder.
"Borrowing Notice" is defined in Section 2.8.
"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 Indianapolis, Indiana , New York, and
London, England 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
Indianapolis, Indiana for the conduct of substantially all of their commercial
lending activities.
"Capital Expenditures" means, without duplication, any expenditures for
any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with Agreement Accounting Principles
excluding (i) the cost of assets acquired with Capitalized Lease Obligations,
(ii) expenditures of insurance proceeds to rebuild or replace any asset after
a casualty loss and (iii) leasehold improvement expenditures for which the
Borrower or a Subsidiary is reimbursed promptly by the lessor.
"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.
"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody's, (iii) demand deposit
accounts maintained in the ordinary course of business, and (iv) certificates
of deposit issued by and time deposits with commercial banks (whether domestic
or foreign) having capital and surplus in excess of $100,000,000; provided in
each case that the same provides for payment of both principal and interest
(and not principal alone or interest alone) and is not subject to any
contingency regarding the payment of principal or interest.
"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 Loans 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 12.3.2, as such amount may be modified
from time to time pursuant to the terms hereof.
"Consolidated Capital Expenditures" means, with reference to any period,
the Capital Expenditures of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Current Assets" means, as of the date of the determination
thereof, the sum of (i) cash and Cash Equivalents Investments, (ii)
retainages, and (iii) real estate inventories of the Borrower and the Current
Subsidiaries, and (iv) all other assets of the Borrower and the Current
Subsidiaries which would, in accordance with Agreement Accounting Principles,
be classified as current assets, all determined on a consolidated basis in
accordance with Agreement Accounting Principles.
"Consolidated Current Liabilities" means, as of the date of the
determination thereof, all current liabilities of the Borrower and the Current
Subsidiaries, determined on a consolidated basis in accordance with Agreement
Accounting Principles, including, to the extent otherwise not included
therein, the principal amount outstanding under the Revolving Loan, the Swing
Line Loan, and the total amount of all Letters of Credit issued and
outstanding.
"Consolidated EBITDA" means with reference to any period, Consolidated
Net Income plus, to the extent deducted from revenues in determining
Consolidated Net Income, (i) Consolidated Interest Expense, (ii) expense for
taxes paid or accrued, (iii) depreciation, (iv) amortization and (v)
extraordinary losses incurred other than in the ordinary course of business,
minus, to the extent included in Consolidated Net Income, extraordinary gains
realized other than in the ordinary course of business, all calculated for the
Borrower and its Subsidiaries on a consolidated basis.
"Consolidated Interest Expense" means, with reference to any period, the
interest expense of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Land" means, as of the date of the determination thereof,
the sum of Land Under Development, Developed Lots, and Land Held for Future
Development of the Borrower and the Current Subsidiaries determined on a
consolidated basis in accordance with Agreement Accounting Principles.
"Consolidated Net Income" means (i) for any fiscal year, the net income
(or loss) of the Borrower and the Current Subsidiaries for such fiscal year as
determined on a consolidated basis in accordance with Agreement Accounting
Principles certified by the Borrower's independent public accountants and (ii)
for any fiscal quarter (other than the last fiscal quarter in each fiscal
year), the net income (or loss) of the Borrower and the Current Subsidiaries
for such fiscal quarter as determined on a consolidated basis in accordance
with Agreement Accounting Principles certified by an authorized financial
officer of the Borrower, subject to changes resulting from year-end
adjustments.
"Consolidated Tangible Net Worth" means , as of the date of the
determination the consolidated stockholders' equity of the Borrower and its
Current Subsidiaries less any goodwill, patents, trademarks, trade secrets and
any other assets which would be classified as intangible assets in accordance
with Agreement Accounting Principles.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes
or is contingently liable upon, the obligation or liability of any other
Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor of
such other Person against loss, including, without limitation, any comfort
letter, operating agreement, take-or-pay contract or the obligations of any
such Person as general partner of a partnership with respect to the
liabilities of the partnership.
"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 Borrower or
any of its Subsidiaries, are treated as a single employer under Section 414 of
the Code.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Crossmann Partnership" means Crossmann Communities Partnership, an
Indiana general partnership.
"Current Subsidiary" means Deluxe Homes, Inc., an Indiana corporation,
Trimark Homes, Inc., an Indiana corporation, Trimark Development, Inc., an
Indiana corporation, Deluxe Homes of Lafayette, Inc., an Indiana corporation,
Crossmann Partnership, Merit Realty, Inc., an Indiana corporation, Crossmann
Communities of Ohio, Inc. (formerly known as Deluxe Homes of Ohio, Inc.), an
Ohio corporation, Crossmann Mortgage Corporation, an Indiana corporation,
Deluxe Aviation, Inc., an Indiana corporation, Cutter Homes, Ltd., a Kentucky
corporation, Crossmann Communities of Tennessee, LLC, a Tennessee limited
liability company, Crossmann Investments, Inc., an Indiana corporation,
Crossmann Communities of North Carolina, Inc., a North Carolina corporation,
Pendleton Pike Associates, Inc., an Indiana corporation, Pinehurst Builders,
LLC, a South Carolina limited liability company, Beach Vacations, LLC, a South
Carolina limited liability company, Crossmann Management, Inc., an Indiana
corporation, and each entity hereafter becoming a Current Subsidiary in
accordance with the procedures set forth in Section 4.3 of this Agreement.
"Developed Lots" shall mean as of the date of any determination thereof,
land owned by the Borrower and its Current Subsidiaries which satisfies the
requirements for the issuance of a building permit, but on which no
construction has been commenced and in any event shall include, without
duplication, all items recorded in the account "Developed Lots" on the
Borrower's most recent consolidated financial statements.
"Default" means an event described in Article VII.
"Environmental Laws" means any applicable laws (including duties imposed
by common law), rules, regulations, orders, ordinances, judgments, and decrees
of all governmental authorities relating to the environment, including but not
limited to the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended ("CERCLA") (42 U.S.C. Sections 9601, et
seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Section 1801, et seq.), the Federal Water Pollution Control Act, as amended
(33 U.S.C. Sections 1251, et seq.), the Clean Air Act, as amended (42 U.S.C.
Sections 7401, et seq.), the Toxic Substances Control Act, as amended (15
U.S.C. Sections 2601, et seq.), the Clean Water Act, as amended (33 U.S.C.
Sections 1241, et seq.), and similar state and local laws and any regulations
issued in connection with the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise provided
in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant 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 Interest Period, and having a maturity equal to such Interest Period,
provided that, if Dow Jones Markets (Telerate) Page 3750 is not available for
any reason, the applicable Eurodollar Base Rate for the relevant Interest
Period shall instead be the applicable London interbank offered rate for
deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest
Period, and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar
Base Rate applicable to such Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest
Period, plus (ii) the Applicable Spread. The Eurodollar Rate shall be rounded
to the next higher multiple of 1/16 of 1% if the rate is not such a multiple.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, franchise
taxes, and similar taxes (including alternative taxes and gross receipts
taxes) imposed on it, by (i) the jurisdiction under the laws of which such
Lender or the Agent is incorporated or organized or (ii) the jurisdiction in
which the Agent's or such Lender's principal executive office or such Lender's
applicable Lending Installation is located.
"Extension Date" is defined in Section 2.19.
"Extension Request" is defined in Section 2.19.
"Facility Termination Date" means March 31, 2002, 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, 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 Agent
from three Federal funds brokers of recognized standing selected by the Agent
in its sole discretion.
"Fixed Charges" means, for any period, the sum of (i) Consolidated
Interest Expense, (ii) any interest capitalized during such period, and (iii)
rent expense of the Borrower and the Current Subsidiaries determined on a
consolidated basis in accordance with Agreement Accounting Principles.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Spread, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the Floating Rate.
"Guarantor" means each Current Subsidiary, and its successors and
assigns.
"Guaranty" means each of the Guaranty Agreements dated as of even date
herewith, executed by the respective Guarantor in favor of the Agent, for the
ratable benefit of the Lenders, as each may be amended or modified and in
effect from time to time, and in the plural means all of such Guaranty
Agreements.
"Hazardous Substance" means any hazardous or toxic substance regulated by
any Environmental Laws, or by any federal, state, or local governmental
agencies having jurisdiction over the control of any such substance including
but not limited to the United States Environmental Protection Agency.
"Indebtedness" of a Person means 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 or payable out of
the proceeds or production from Property now or hereafter owned or acquired by
such Person, (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 and (vii) reimbursement and all other obligations in connection
with letters of credit including the Letters of Credit, (viii) all guaranties
of such Person of the indebtedness of any other person, and (ix) any other
obligation for borrowed money or other financial accommodation which in
accordance with Agreement Accounting Principles would be shown as a liability
on the consolidated balance sheet of such Person.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the
day which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such 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 Interest Period shall end on
the immediately preceding Business Day.
"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.
"Land Held for Future Development" shall mean, as of the date of any
determination thereof, land owned by the Borrower and the Current Subsidiaries
and with respect to which the Borrower or a Current Subsidiary has not entered
into any contract for the construction of sewers, streets, water or utilities,
and, in any event, shall include, without duplication, all items recorded in
the account "Land Held for Future Development" on the Borrower's most recent
consolidated financial statements.
"Land Under Development" shall mean, as of the date of any determination
thereof, land owned by the Borrower and the Current Subsidiaries and with
respect to which the Borrower or a Current Subsidiary has entered into a
contract for the construction of sewers, streets, water or utilities, and, in
any event, shall include without duplication, all items recorded in the
account "Land Under Development" on the Borrower's most recent consolidated
financial statements.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent listed on
the signature pages hereof or otherwise selected by such Lender or the Agent
pursuant to Section 2.17.
"Letter of Credit" is used as defined in Section 2.20.
"Lien" means any lien (statutory or other), security interest, 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 of the
proceeds of the Revolving Loan made pursuant to Article II, and any conversion
or continuation thereof.
"Loan Documents" means this Agreement, the Notes issued pursuant to
Section 2.13, the Guaranties, all Reimbursement Agreements, the Swing Line
Note, and any other instrument or document which evidences or secures the
Revolving Loan or which expresses an agreement as to terms applicable to the
Revolving Loan.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), or results of
operations of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents,
or (iii) the validity or enforceability of any of the Loan Documents or the
rights or remedies of the Agent or the Lenders thereunder.
"Moody's" means Moody's Investors Service, Inc.
"Multi-Employer 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 to which more than one employer is
obligated to make contributions.
"Note" means any promissory note issued at the request of a Lender
pursuant to Section 2.13 in the form of Exhibit "B."
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Revolving Loan, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the
Lenders or to any Lender, to Bank One with respect to the Letters of Credit
and the Swing Line Loan, the Agent or any indemnified party arising under the
Loan Documents.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of
the lessor) of one year or more.
"Operating Lease Obligations" means, as at any date of determination, the
amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount
rate shall equal the discount rate which would be applied under Agreement
Accounting Principles if such Operating Lease were a Capitalized Lease) from
the date on which each fixed lease payment is due under such Operating Lease
to such date of determination, of all fixed lease payments due under all
Operating Leases of the Borrower and its Subsidiaries.
"Other Taxes" is defined in Section 3.6(ii).
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last Business Day of each calendar month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"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.
"Prime Rate" means a variable per annum interest rate equal at all
times to the rate of interest established and quoted by Bank One as its Prime
Rate, such rate to change contemporaneously with each change in such
established and quoted rate; provided, that it is understood that the Prime
Rate shall not necessarily be representative of the rate of interest actually
charged by Bank One on any loan or class of loans.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal Reserve
System.
"Reimbursement Agreement" is used as defined in Section 2.20.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.
"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, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least
sixty-six and two-thirds percent (66-2/3%) of the Aggregate Commitment or, if
the Aggregate Commitment has been terminated, Lenders in the aggregate holding
at least sixty-six and two-thirds percent (66-2/3%) of the aggregate unpaid
principal amount of the outstanding Advances. For purposes hereof, the
outstanding principal balance of the Swing Line Loan at the time of the
determination of the Required Lenders shall be deemed allocated to the Lenders
ratably in accordance with the relation that each Lender's Commitment bears to
the Aggregate Commitment.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
Eurocurrency liabilities.
"Revolving Loan" is used as defined in Section 2.1.
"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.
"Senior Notes" means the Senior Notes in the original principal amount of
$25,000,000.00 issued pursuant to a Note Agreement dated as of December 19,
1995, and the $50,000,000.00 7.75% Senior Notes issued in 1998 and due on June
11, 2008.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Obligations to
the written satisfaction of the Required Lenders.
"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 of its 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 include a Current Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which (i) represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which
such determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and
its Subsidiaries as reflected in the financial statements referred to in
clause (i) above.
"Swing Line Commitment" is defined in Section 2.23.
"Swing Line Loan" is defined in Section 2.23.
"Swing Line Note" is defined in Section 2.23.
"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.
"Total Assets" means, as of the date of the determination thereof, all
assets of the Borrower and the Current Subsidiaries less depreciation,
amortization and other properly deductible valuation reserves determined on a
consolidated basis in accordance with Agreement Accounting Principles.
"Total Capitalization" means at any time the sum of Total Debt and
Consolidated Tangible Net Worth, each calculated at such time.
"Total Debt" means at any time the Indebtedness of the Borrower and its
Current Subsidiaries calculated on a consolidated basis as of such time.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar 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 which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Year 2000 Issues" means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of the Borrower and
its Subsidiaries and of the Borrower's and its Subsidiaries' material
customers, suppliers and vendors.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE REVOLVING LOAN
2.1. The Revolving Loan. From and including the date of this
Agreement and prior to the Facility Termination Date, each Lender severally
agrees, on the terms and conditions set forth in this Agreement, to make Loans
to the Borrower from time to time in amounts not to exceed in the aggregate at
any one time outstanding the amount of its Commitment (all such loans
hereinafter collectively referred to as the "Revolving Loan"); provided, that
in no event shall the sum of the aggregate outstanding principal amount of the
Revolving Loan plus the aggregate available amount of all issued and
outstanding Letters of Credit and the aggregate outstanding principal amount
of the Swing Line Loan exceed the Aggregate Commitment, and in no event shall
Total Debt exceed the Borrowing Base. Subject to the terms of this Agreement,
the Borrower may borrow, repay and reborrow at any time prior to the Facility
Termination Date. The Commitments to lend hereunder shall expire on the
Facility Termination Date, provided, that the aggregate outstanding principal
amount of the Revolving Loan does not at any time exceed the maximum amount
permitted under Sections 2.1 and 2.2, and provided that all conditions to
lending stated in Section 4.2 of this Agreement have been fulfilled at the
time of each Advance. Proceeds of the Revolving Loan shall be used only for
general working capital purposes.
2.2. Required Payments; Termination. Any outstanding Advances
and all other unpaid Obligations shall be paid in full by the Borrower on the
Facility Termination Date. At any time that the Total Debt of the Borrower
and its Subsidiaries exceeds the Borrowing Base as determined on the basis of
the most recent Borrowing Base Certificate furnished by the Borrower or as
determined by the Agent or the Lenders upon an inspection of the books and
records of the Borrower, the Borrower shall immediately repay that portion of
the Total Debt which is in excess of the Borrowing Base. Such repayment shall
be due without demand and in any event not later than thirty (30) days from
either the effective date of the Borrowing Base Certificate or the date of an
audit completed by the Bank on which such determination is based, as
applicable. Any such repayment of principal of the Revolving Loan will be
applied first to Advances which accrue interest at the Alternate Base Rate and
next to Advances which accrue interest at the Eurodollar Rate or Rates.
2.3. Ratable Loans. Each Advance hereunder shall consist of Loans
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4. Types of Advances. The Advances may be Floating Rate Advances
or Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
2.5. Unused Fee; Reductions in Aggregate Commitment. The Borrower
agrees to pay to the Agent for the account of each Lender an unused fee of
one-fifth percent (1/5%) per annum on the daily unused portion of such
Lender's Commitment from the date hereof to and including the Facility
Termination Date, payable on the last Business Day of each calendar quarter
hereafter and on the Facility Termination Date. The Borrower may permanently
reduce the Aggregate Commitment in whole, or in part ratably among the Lenders
in a minimum amount of $5,000,000.00 and in integral multiples of
$1,000,000.00 in excess thereof, upon at not less than three (3) Business
Days' prior written notice to the Agent, which notice shall specify the amount
of any such reduction; provided, however, that the amount of the Aggregate
Commitment may not be reduced below the aggregate principal amount of the
outstanding Advances. The Borrower may elect to reinstate the amount of the
Aggregate Commitment previously reduced pursuant to this Section 2.5 upon
payment of one-fifth percent (1/5%) of the reinstated amount of the Aggregate
Commitment and at least three (3) Business Days' written notice to the Agent,
which notice shall specify the amount of any such reinstatement; provided,
however, that such reinstated amount may not exceed the amount of any prior
reduction in the Aggregate Commitment, and, provided further, that no
reinstatement shall occur at the time any Default or Unmatured Default has
occurred and is continuing. All accrued unused fees shall be payable on the
effective date of any reduction in the Aggregate Commitment made pursuant
hereto. The unused fee shall be calculated on a 365 day basis and for actual
days elapsed.
2.6. Minimum Amount of Each Advance. Each Eurodollar Advance shall
be in the minimum amount of $1,000,000.00 and in multiples of $100,000.00 if
in excess thereof, and each Floating Rate Advance shall be in the minimum
amount of $50,000.00 and in multiples of $10,000.00 if in excess thereof;
provided, however, that any Floating Rate Advance may be in the amount of the
unused Aggregate Commitment.
2.7. Optional Principal Payments. From time to time the Borrower
may pay, without penalty or premium, all outstanding Floating Rate Advances,
or any portion of the outstanding Floating Rate Advances in a minimum amount
of $10,000.00. From time to time the Borrower may pay, subject to the payment
of any funding indemnification amounts required by Section 3.4 but without
penalty or premium, all outstanding Eurodollar Advances, or any portion of the
outstanding Eurodollar Advances in a minimum amount of $1,000,000.00, upon
three (3) Business Days' prior notice to the Agent.
2.8. Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the case of
each Eurodollar Advance, the Interest Period applicable thereto from time to
time. The Borrower shall give the Agent irrevocable notice in the form of
Exhibit "A" attached hereto (a "Borrowing Notice"), unless otherwise given
as provided in Section 2.14 hereof, not later than 10:00 a.m. (Indianapolis,
Indiana time) on the Borrowing Date, which shall be a Business Day of each
Floating Rate Advance, and not later than 10:00 a.m. (Indianapolis, Indiana
time) three (3) Business Days before the Borrowing Date for each Eurodollar
Advance, specifying:
(i) the Borrowing Date of such Advance, which shall be a Business
Day,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected; provided that the Borrower may
have no more than five (5) Eurodollar Advances outstanding at any one time,
and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
The Agent shall notify each Lender promptly upon receipt of a Borrowing
Notice, and in no event later than 12:00 noon (Indianapolis, Indiana time) on
the Borrowing Date in the case of a Floating Rate Advance and no later than
12:00 noon Indianapolis, Indiana time at least two (2) Business Days prior to
the Borrowing Date, in the case of a Eurodollar Advance of each such Lender's
amount of its Loan or Loans requested to be borrowed by the Borrower on such
day, together with the Type of Advance selected by the Borrower, and in the
case of each Eurodollar Advance, the Interest Period applicable thereto. Not
later than 2:00 p.m. (Indianapolis, Indiana time) on each Borrowing Date, each
Lender shall make available its Loan or Loans in immediately available funds
in Indianapolis, Indiana to the Agent at its address specified pursuant to
Article XIII. The Agent will make the funds so received from the Lenders
available to the Borrower at the Agent's aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this
Section 2.9 or are repaid in accordance with Section 2.7. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Advance
shall be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with Section 2.7 or (y) the
Borrower shall have given the Agent a Conversion/Continuation Notice (as
defined below) requesting that, at the end of such Interest Period, such
Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period. Subject to the terms of Section 2.6, the Borrower may elect
from time to time to convert all or any part of a Floating Rate Advance into a
Eurodollar Advance. The Borrower shall give the Agent irrevocable notice
(each a "Conversion/Continuation Notice") of each conversion of a Floating
Rate Advance into a Eurodollar Advance or continuation of a Eurodollar Advance
not later than 10:00 a.m. (Indianapolis, Indiana time) at least three (3)
Business Days prior to the date of the requested conversion or continuation,
specifying:
(i) the requested date of such conversion or continuation, which
shall be a Business Day,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; provided that the Borrower may have no more than five
(5) Eurodollar Advances outstanding at any one time, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest Period
applicable thereto.
2.10. Changes in Interest Rate, etc. Each Floating Rate Advance
shall accrue 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 Eurodollar Advance into a Floating Rate Advance pursuant to Section
2.9, to but excluding the date it is paid or is converted into a Eurodollar
Advance pursuant to Section 2.9 hereof, at a rate per annum equal to the
Floating Rate for such day. Changes in the rate of interest on that portion
of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate. Each Eurodollar
Advance shall bear interest on the outstanding principal amount thereof from
and including the first day of the Interest Period applicable thereto to (but
not including) the last day of such Interest Period at the interest rate
determined by the Agent as applicable to such Eurodollar Advance based upon
the Borrower's selections under Sections 2.8 and 2.9 and otherwise in
accordance with the terms hereof. No Interest Period may end after the
Facility Termination Date.
2.11. Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.8 or 2.9, during the continuance of a
Default or Unmatured 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 8.2 requiring
unanimous consent of the Lenders to changes in interest rates, declare that no
Advance may be made as, converted into or continued as a Eurodollar 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 8.2 requiring
unanimous consent of the Lenders to changes in interest rates, declare that
(i) each Eurodollar Advance shall bear interest for the remainder of the
applicable Interest Period at the rate otherwise applicable to such Interest
Period plus two percent (2%) per annum and (ii) each Floating Rate Advance
shall bear interest at a rate per annum equal to the Floating Rate in effect
from time to time plus two percent (2%) per annum, provided that, during the
continuance of a Default under Section 7.6 or 7.7, 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 Agent or any Lender.
2.12. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by 12:00 noon (Indianapolis, Indiana
time) on the date when due and shall be applied ratably by the Agent among the
Lenders. Each payment delivered to the Agent for the account of any Lender
shall be delivered promptly by the Agent to such Lender in the same type of
funds that the Agent received at its address specified pursuant to Article
XIII or at any Lending Installation specified in a notice received by the
Agent from such Lender, and in no event later than 5:00 p.m. Indianapolis,
Indiana, time on the date received by the Agent from the Borrower if received
by the Agent on or before 12:00 noon Indianapolis, Indiana time, and not later
than 12:00 noon Indianapolis, Indiana, time on the date following the date
such payment is received by the Agent from the Borrower if received by the
Agent after 12:00 noon Indianapolis, Indiana time. In the event that the
Agent fails to make any proper payment to a Lender pursuant to the terms and
provisions hereof, such amount shall accrue interest payable by the Agent to
such Lender at the Federal Funds Effective Rate from the time such payment is
required to be made hereunder and until actually received by such Lender. The
Agent is hereby authorized to charge the account of the Borrower maintained
with Bank One for each payment of principal, interest and fees as it becomes
due hereunder.
2.13. Note-less Agreement; Evidence of Indebtedness.
(i) 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.
(ii) The Agent shall also maintain accounts in which it will record
(a) the amount of each Loan made hereunder, the Type thereof and the Interest
Period with respect thereto, (b) the amount of any principal or interest due
and payable or to become due and payable from the Borrower to each Lender
hereunder and (c) the amount of any sum received by the Agent hereunder from
the Borrower and each Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the
existence and amounts of the Obligations therein recorded; provided, however,
that the failure of the 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.
(iv) Any Lender may request that its Loans be evidenced by a
promissory note in the form of Exhibit "B" attached hereto (a "Note"). In
such event, the Borrower shall prepare, execute and deliver to such Lender a
Note payable to the order of such Lender in a form supplied by the Agent.
Thereafter, the Loans evidenced by such Note and interest thereon shall at all
times (including after any assignment pursuant to Section 12.3) be represented
by one or more Notes payable to the order of the payee named therein or any
assignee pursuant to Section 12.3, 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 paragraphs (i) and
(ii) above.
2.14. Telephonic Notices. The Borrower hereby authorizes the
Lenders and the Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any Authorized Officer, it being understood that the foregoing
authorization is specifically intended to allow Borrowing Notices and
Conversion/Continuation Notices to be given telephonically. The Borrower
agrees to deliver promptly and by no later than 11:00 a.m. on the date of
borrowing to the Agent a written confirmation of each telephonic notice signed
by an Authorized Officer. If the written confirmation differs in any material
respect from the action taken by the Agent and the Lenders, the records of the
Agent and the Lenders shall govern absent manifest error.
2.15. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof, on any
date on which the Floating Rate Advance is prepaid, whether due to
acceleration or otherwise, and at maturity. Interest accrued on that portion
of the outstanding principal amount of any Floating Rate Advance converted
into a Eurodollar Advance on a day other than a Payment Date shall be payable
on the date of conversion. Interest accrued on each Eurodollar Advance shall
be payable on the last day of its applicable Interest Period, on any date on
which the Eurodollar Advance is prepaid, whether by acceleration or otherwise,
and at maturity. Interest accrued on each Eurodollar Advance having an
Interest Period longer than three months shall also be payable on the last day
of each three-month interval during such Interest Period. Interest shall be
calculated for actual days elapsed on the basis of a 360-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 (local 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.
2.16. Notification of Advances, Interest Rates, Prepayments and
Commitment Reduction. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Aggregate Commitment reinstatement notice, Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
The Agent will notify each Lender of the interest rate applicable to each
Eurodollar Advance promptly upon determination of such interest rate and will
give each Lender prompt notice of each change in the Alternate Base Rate.
2.17. 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 any such Lending
Installation. Each Lender may, by written notice to the Agent and the
Borrower in accordance with Article XIII, designate a replacement Lending
Installation through which Loans will be made by it and for whose account Loan
payments are to be made.
2.18. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it
is scheduled to make payment to the 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 Agent for the account of the Lenders, that
it does not intend to make such payment, the Agent may assume that such
payment has been made. The 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 Agent, the recipient of such payment shall,
on demand by the Agent, repay to the 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 Agent until
the date the 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
for the first three days and, thereafter, the interest rate applicable to the
relevant Loan or (y) in the case of payment by the Borrower, the interest rate
applicable to the relevant Loan.
2.19 Extension of Facility Termination Date. At the request of the
Borrower but at the sole discretion of all Lenders, the Agent and the Lenders
may extend the Facility Termination Date from time to time to such date or
dates as the Lenders and the Agent may elect by notice in writing to the
Borrower, and upon any such extension and upon the execution and delivery by
the Borrower of Notes reflecting the extended Facility Termination Date and
such other documents, instruments, and agreements as the Agent or any Lender
may reasonably request, the date to which the Aggregate Commitment is extended
will then become the "Facility Termination Date" for purposes of this
Agreement.
2.20 The Letter of Credit Subfacility. At any time that the
Borrower is entitled to an Advance of the Loans, Bank One shall, upon the
application of the Borrower, or the Borrower and Crossmann Partnership if the
context so requires, issue for the account of the Borrower or Crossmann
Partnership, as applicable, a standby letter of credit (each a "Letter of
Credit") in an amount not in excess of the maximum Advance that the Borrower
would then be entitled to obtain under the Revolving Loan; provided, that (i)
the total amount of all Letters of Credit which are outstanding at any one
time, plus the aggregate amount of all unreimbursed drawings under all Letters
of Credit shall not exceed $5,000,000.00, (ii) the issuance of any Letter of
Credit with a maturity date beyond the Facility Termination Date shall be
entirely at the discretion of all of the Lenders, (iii) the form of the
requested Letter of Credit shall be satisfactory to Bank One in the reasonable
exercise of Bank One's discretion, and (iv) the Borrower, or the Borrower and
Crossmann Partnership, as the context so requires, shall have executed an
Application and Reimbursement Agreement for the Letter of Credit (a
"Reimbursement Agreement") on Bank One's standard form. While any Letter of
Credit is outstanding, the maximum amount of Advances which may be outstanding
under the Revolving Loan shall be reduced by the maximum available amount to
be drawn under the Letter of Credit. The Borrower shall pay Bank One a
commission for each Letter of Credit issued calculated as a percentage of the
maximum amount available to be drawn under the Letter of Credit in an amount
equal to one and one-half percent (1-1/2%) per annum calculated on the basis
of a 360 day year and the actual number of days in the period during which the
Letter of Credit will be outstanding. The Borrower shall also pay Bank One's
standard transaction fees with respect to any transactions occurring on
account of any Letter of Credit. Commission shall be payable when the
related Letter of Credit is issued and thereafter quarterly in advance on the
first Payment Date of each subsequent three (3) month period from the date of
issuance so long as such Letter of Credit is outstanding, and transaction fees
shall be payable upon completion of the transaction as to which they are
charged. All such commissions and fees may be debited by Bank One from any
deposit account of the Borrower carried with Bank One without further
authority, and, in any event, shall be paid by the Borrower within ten (10)
days following billing.
2.20.1. Certain Provisions Relating to Bank One as Issuing Bank.
(a) Administration. Bank One may rely upon any notice or other
communication of any nature (written or oral, including but not limited to
telephone conversations, whether or not such notice or other communication is
made in a manner permitted or required by this Agreement or any Loan Document)
purportedly made by or on behalf of the proper party or parties with respect
to Letters of Credit, and Bank One shall not have any duty to verify the
identity or authority of any Person giving such notice or other communication.
Bank One may consult with legal counsel, independent public accountants and
any other experts selected by it from time to time, and Bank One shall not be
liable for any action taken or omitted to be taken in good faith in accordance
with advice of such counsel, accountants or experts.
(b) Indemnification of Bank One by Lenders. Each Lender hereby
agrees to reimburse and indemnify Bank One and each of its employees and
agents (to the extent not reimbursed by the Borrower and without limitation of
the obligations of the Borrower to do so), from and against any and all
amounts, losses, liabilities, claims, damages, expenses, obligations,
penalties, action, judgments, suits, costs or disbursements of any kind or
nature (including, without limitation, the fees and disbursements of counsel
for Bank One) in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not Bank One shall be
designated a party thereto that may at any time be imposed on, incurred by or
asserted against Bank One as issuer of the Letters of Credit, in its capacity
as such, as a result of, or arising out of, or in any way related to or by
reason of, this Agreement, any other Loan Document, any transaction from time
to time contemplated hereby or thereby, or any transaction financed in whole
or in part or directly or indirectly with the proceeds of any Letter of
Credit; provided, that no Lender shall be liable for any portion of such
amounts, losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs of disbursements resulting from
the gross negligence or willful misconduct of Bank One or as finally
determined by a court of competent jurisdiction. The Lenders hereby agree
that Bank One shall administer the issuance and administration of the Letters
of Credit in accordance with its customary standards and practices and shall
be indemnified by the Lenders for so doing.
2.21. Participation of Lenders in Letters of Credit Risk. Upon the
issuance by Bank One of each Letter of Credit pursuant to Section 2.20 above,
each Lender shall automatically be deemed to have acquired an undivided pro
rata interest in the reimbursement risk associated with each such Letter of
Credit based on the relation the amount each Lender's Commitment bears to the
Aggregate Commitment. In consideration thereof, each such Lender (other than
Bank One) shall also receive its pro rata share of one and one-quarter
percent (1-1/4%) of the maximum available amount to be drawn under each Letter
of Credit with Bank One retaining for its individual account a portion of the
commission equal to one-quarter (1/4%) of the maximum available amount to be
drawn under the Letter of Credit and also retaining all transaction fees
payable with respect to any transactions occurring on account of any Letter of
Credit. In the event that Bank One is not reimbursed promptly upon any
drawing occurring under any Letter of Credit for which Bank One has made
payment, each Lender shall reimburse Bank One for drawing ratably in
accordance with its pro rata share of the reimbursement risk associated
therewith pursuant hereto.
2.21.1. Payment by Lenders on Account of Unreimbursed Draws. If Bank
One makes payment under any Letter of Credit and is not reimbursed in full
therefore on such payment date in accordance with Section 2.20 hereof, Bank
One will promptly notify the Agent thereof (which notice may be by telephone)
and the Agent shall promptly notify each Lender (which notice may be by
telephone promptly confirmed in writing) thereof. No later than the Agent's
close of business on the date such notice is given, each such Lender shall pay
to the Agent for the account of Bank One in immediately available funds an
amount equal to such Lender's pro ratashare of the unreimbursed portion of
such payment by Bank One. If and to the extent that any Lender fails to make
such payment to Bank One on such date, such Lender shall pay such amount on
demand together with interest while Bank One's own account for each day from
and including the date of Bank One's payment to and including the date of
repayment to Bank One (before and after judgment) at a rate per annum for each
such day set forth in Section 2.18.
2.21.2. Rescission. If any amount received by Bank One on account of
any Letter of Credit reimbursement obligation shall be avoided, rescinded or
otherwise returned or paid over by Bank One for any reason at any time,
whether before or after the termination of this Agreement, or Bank One
believes in good faith that such avoidance, rescission, return or payment is
required, whether or not such matter has been adjudicated, each Lender will
promptly upon notice from the Agent or Bank One, pay over to the Agent for the
account of Bank One its pro rata share of such amount, together with its
pro rata share of any interest or penalties payable with respect thereto.
2.22. Obligations Absolute. The payment obligations of the
Borrower and of the Lenders under Sections 2.20 and 2.21 shall be
unconditional and irrevocable and shall be paid strictly in accordance with
the terms of this Agreement under all circumstances, including without
limitation the following:
(i) Any lack of validity or enforceability of this Agreement, any
Letter of Credit, or any other Loan Document;
(ii) The existence of any claim, setoff, defense, or other right
which the Borrower or any other Person may have at any time against any
beneficiary or transferee of any Letter of Credit (or any Persons for whom any
such beneficiary or transferee may be acting), Bank One as issuing bank, any
Lender, or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or any other unrelated transaction;
(iii) Any draft, certificate, statement, or other document
represented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) Payment by Bank One under any Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit, or payment by Bank One under a Letter of Credit in any
other circumstances in which conditions to payment are not met, except any
such wrongful payment resulting solely from the gross negligence or willful
misconduct of Bank One; or
(vi) Any other event, condition or circumstance whatever, whether or
not similar to any of the foregoing.
The Borrower bears the risk of, and neither Bank One nor any of its directors,
officers, employees, or agents, nor any Lender, shall be liable or responsible
for any of the foregoing matters, the use which may be made of the Letters of
Credit, or acts or omissions of the beneficiaries or any transferee thereof.
2.23. Swing Line Loan. From and including the date of this
Agreement and until the Facility Termination Date, in order to facilitate
Loans and repayments of Loans under the Revolving Loan, Bank One agrees to
make Advances (collectively, the "Swing Line Loan") under a revolving line of
credit from time to time to the Borrower of amounts not exceeding in the
aggregate at any time outstanding the lesser of Ten Million Dollars
($10,000,000.00) (the "Swing Line Commitment") or the remainder of the
Aggregate Commitment minus the aggregate outstanding principal amount of the
Revolving Loan and minus the amount of all issued Letters of Credit and the
amount of all drawn and unreimbursed amounts of all Letters of Credit;
provided that no Default or Unmatured Default has occurred and is continuing
at the time of such borrowing. In addition, upon the request of the Borrower
to the Agent for a Floating Rate Advance not exceeding $2,500,000.00, the
Agent may request Bank One to make a Swing Line Loan in the amount of such
Advance provided that the making of such Advance does not exceed the maximum
available amount available to the Borrower under the Swing Line Loan as
provided herein, and that no Default or Unmatured Default has occurred and is
continuing at the time of such borrowing. Proceeds of the Swing Line Loan
shall be used solely to facilitate the funding by the Agent of the Revolving
Loan and for no other purpose. The obligation of the Borrower to repay the
Swing Line Loan shall be evidenced by a promissory note of the Borrower in the
form Exhibit "D" attached hereto (the "Swing Line Note"). So long as no
Default or Unmatured Default, shall have occurred and be continuing and until
the Facility Termination Date, the Borrower may borrow, repay and reborrow
under the Swing Line Note on any Business Day, provided that no borrowing may
cause the principal balance of the Swing Line Loan to exceed the maximum
amount available hereunder. The outstanding aggregate principal amount of
the Swing Line Loan together with all accrued and unpaid interest thereon
shall be due and payable on the Facility Termination Date. Each Advance of
the Swing Line Loan shall be conditioned upon the receipt by Bank One from the
Borrower of an Application for Swing Line Loan and a Compliance Certificate in
the form of Exhibit "C" attached hereto (each an "Application for Swing Line
Loan"); provided, that the Borrower may give Bank One notice by telephone or
telephone facsimile ("fax") machine, or by any other form of written
electronic communication, of any proposed borrowing under this Section 2.23;
provided, that such notice shall be promptly confirmed in writing by the
delivery of Application for Swing Line Loan to Bank One prior to or promptly
after the giving of such informal notice upon request by Bank One. Bank One
shall not incur any liability to the Borrower in acting upon any informal
notice referred to herein which Bank One believes in good faith to have been
given by an Authorized Officer or other Person authorized to borrow on behalf
of the Borrower. Prior to maturity the principal amount of the Swing Line
Loan outstanding from time to time shall bear interest until maturity of the
Swing Line Note at a rate per annum equal to the Floating Rate calculated on a
360 days and actual days elapsed. After default, and until paid in full, the
Swing Line Loan shall bear interest at a per annum rate equal to the Floating
Rate plus three percent (3%) per annum. Accrued interest under the Swing Line
Loan shall be due and payable monthly on each Payment Date and at maturity.
2.24. Borrowings to Repay Swing Line Loan. Bank One may, at its
option, exercisable at any time for any reason whatsoever, including at the
time of the existence of any Default or Unmatured Default, require that the
Lenders make an Advance of the Revolving Loan in repayment of the aggregate
outstanding principal amount of the Swing Line Loan , plus accrued interest
thereon (to the extent not otherwise paid by the Borrower), and Bank One shall
on the last Banking Day of each calendar week require that the Lenders make an
Advance of the Revolving Loan in repayment of the aggregate outstanding
principal amount of the Swing Line Loan, and each of the Lenders agrees to
make such Advances under the Revolving Loan and to apply the proceeds of such
Advances to the immediate repayment of the aggregate outstanding principal
amount of the Swing Line Loan; provided, that no Lender shall be obligated in
any event to make a Loan under this Section 2.24 in excess of its Commitment.
All Advances made pursuant to this Section 2.24 shall be Floating Rate
Advances and shall be deemed to have been requested in accordance with Section
2.8 hereof without regard to any of the requirements of that provision. Each
Lender shall be unconditionally obligated to fund its Loan under the Revolving
Loan whether or not the conditions precedent set forth in Section 4.2 hereof
have first been satisfied, on the same Business Day as such Lender receives
such notice before 12:00 noon on such Business Day, or on the immediately
succeeding Business Day if received thereafter.
2.25. Payments of Principal/Several Obligations. Each Lenders's
obligation to make Loans hereunder is and shall be several and not joint. No
Lender shall be responsible for the failure of any other Lender to make
available its proportionate share of Loans to the Borrower or of Bank One's
failure to make available the proceeds of the Swing Line Loan to the Borrower
or issue any Letters of Credit, and the failure of any Lender to make any Loan
shall not relieve the other Lenders of their obligations to make their
proportionate share of Loans to the Borrower. All payments of principal,
interest, and fees hereunder shall be applied as follows: (i) first to accrued
but unpaid fees, expenses, and costs (including, without limitation,
reasonable attorneys'fees) incurred by the Agent on account of the actions
taken in accordance with this Agreement in its capacity as Agent for the
Lenders; (ii) to accrued but unpaid fees, expenses, and costs incurred by the
Lenders (including without limitation any Unused Fees provided under Section
2.5 hereof); (iii) to accrued but unpaid interest payable with respect to the
Swing Line Loan; (iv) to accrued but unpaid interest payable with respect to
any Floating Rate Advance; (v) to any accrued but unpaid interest payable with
respect to any Eurodollar Advance; (vi) to payment of the aggregate
outstanding principal amount of the Swing Line Loan; (vii) to payment of the
aggregate outstanding principal amount of all Floating Rate Advances; and
(viii) to payment of the aggregate outstanding principal amount of all
Eurodollar Advances.
2.26. Increase of Aggregate Commitment. The Borrower may, by
notice in writing to the Agent, request an increase in the Aggregate
Commitment up to an amount not exceeding One Hundred Million Dollars
($100,000,000.00), provided that: (i) no Default or Unmatured Default exists
at the time of the request and on the effective date of such increase; (ii)
the Borrowing Base equals or exceeds One Hundred Million Dollars
($100,000,000.00); (iii) the requested increase is at least $10,000,000.00 and
in minimum multiples of $1,000,000.00 in excess thereof; and (iv) the Borrower
shall execute and enter into any and all Loan Documents deemed reasonably
necessary by the Agent and Lenders in order to evidence 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, increase the
amount of their respective Commitment. No Lender shall be required to
increase its own Commitment without its prior written consent. The Agent
shall communicate such request in writing to the Lenders within two (2)
Business Days of receipt of the request of the Borrower, indicating as to each
Lender the dollar amount of the proposed increase in its Commitment which
shall be determined on a pro rata basis among all Lenders. Each Lender
shall then provide a response to the Agent within ten (10) Business Days of
the receipt of such request. In the event that any Lender chooses either not
to increase its Commitment or chooses not to increase its Commitment by the
amount requested, the Agent may, with the consent of the Borrower: (i) offer
the other existing Lenders an opportunity to increase their respective
Commitments on a pro rata basis in the amount by which any such Lender
shall decline; or (ii) add one or more new Lenders to provide that portion of
the requested increase in Commitment not provided by the existing Lenders.
The Commitment of any new Lender shall be in an amount not less than
$5,000,000.00.
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 any Lender or any applicable Lending Installation to any
Taxes, or changes the basis of taxation of payments (other than with respect
to Excluded Taxes) to any Lender in respect of its Eurodollar 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, any
Lender or any applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest rate applicable to
Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of making,
funding or maintaining its Eurodollar Loans or reduces any amount receivable
by any Lender or any applicable Lending Installation in connection with its
Eurodollar Loans, or requires any Lender or any applicable Lending
Installation to make any payment calculated by reference to the amount of
Eurodollar Loans held or interest received by it, by an amount deemed material
by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender
or applicable Lending Installation of making or maintaining its Eurodollar
Loans or Commitment or to reduce the return received by such Lender or
applicable Lending Installation in connection with such Eurodollar Loans or
Commitment, then, within 15 days of demand by such Lender, the Borrower shall
pay such Lender such additional amount or amounts as will compensate such
Lender for such increased cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporation controlling
such Lender is increased as a result of a Change, then, within 15 days of
demand by such Lender, the Borrower shall pay such Lender (or pay the Agent
for the account of such Lender) the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital which
such Lender reasonably determines is attributable to this Agreement, its Loans
or its Commitment to make Loans hereunder (after taking into account such
Lender's 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 Types of Advances. If any Lender determines
that maintenance of its Eurodollar Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or
not having the force of law, or if the Required Lenders determine that (i)
deposits of a type and maturity appropriate to match fund Eurodollar Advances
are not available or (ii) the interest rate applicable to Eurodollar Advances
does not accurately reflect the cost of making or maintaining Eurodollar
Advances, then the Agent shall suspend the availability of Eurodollar Advances
and require any affected Eurodollar Advances to be repaid or converted to
Floating Rate Advances, subject to the payment of any funding indemnification
amounts required by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar
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
Eurodollar Advance is not made 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 incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain such Eurodollar Advance.
3.5. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of
the Borrower to such Lender under Sections 3.1, 3.2 and 3.6 or to avoid the
unavailability of Eurodollar Advances under Section 3.3, so long as such
designation is not, in the reasonable judgment of such Lender, disadvantageous
to such Lender. Each Lender shall deliver a written statement of such Lender
to the Borrower (with a copy to the Agent) as to the amount due, if any, under
Section 3.1, 3.2, 3.4 or 3.6. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such
amount and shall be final, conclusive and binding on the Borrower in the
absence of manifest error. Determination of amounts payable under such
Sections in connection with a Eurodollar Loan shall be calculated as though
each Lender funded its Eurodollar Loan through the purchase of a deposit of
the type and maturity corresponding to the deposit used as a reference in
determining the Eurodollar 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 on demand after receipt
by the Borrower of such written statement. The obligations of the Borrower
under Sections 3.1, 3.2, 3.4 and 3.6 shall survive payment of the Obligations
and termination of this Agreement.
3.6. Taxes.
(i) All payments by the Borrower to or for the account of any Lender or
the Agent hereunder or under any Note shall be made free and clear of and
without deduction for any and all Taxes. If the Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, (a) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.6) such Lender or the Agent (as
the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (b) the Borrower shall make such deductions,
(c) the Borrower shall pay the full amount deducted to the relevant authority
in accordance with applicable law and (d) the Borrower shall furnish to the
Agent the original copy of a receipt evidencing payment thereof within 30 days
after such payment is made.
(ii) In addition, 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").
(iii) The Borrower hereby agrees to indemnify the Agent and each
Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.6) paid by the Agent or such Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
Payments due under this indemnification shall be made within 30 days of the
date the Agent or such Lender makes demand therefor pursuant to Section 3.5.
(iv) 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 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.
(v) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political
subdivision thereof asserts a claim that the Agent did not properly withhold
tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or properly completed, because such Lender
failed to notify the Agent of a change in circumstances which rendered its
exemption from withholding ineffective, or for any other reason), such Lender
shall indemnify the Agent fully for all amounts paid, directly or indirectly,
by the Agent as tax, withholding therefor, or otherwise, including penalties
and interest, and including taxes imposed by any jurisdiction on amounts
payable to the Agent under this subsection, together with all costs and
expenses related thereto (including attorneys fees and time charges of
attorneys for the Agent, which attorneys may be employees of the Agent). The
obligations of the Lenders under this Section 3.6(vii) shall survive the
payment of the Obligations and termination of this Agreement.
(vi) 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, not less than ten Business Days after the date of this Agreement, (i)
deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, certifying in either
case that such 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 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
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 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 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 Agent that it is not capable of
receiving payments without any deduction or withholding of United States
federal income tax.
(vii) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to clause (vi), above
(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 3.6 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 clause (vi),
above, 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;
provided that such Non-U.S. Lender shall pay all expenses of Borrower incurred
in connection therewith.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall make the initial Advance
hereunder if there shall be no Default or Unmatured Default on such date and
if the Borrower has furnished to the Agent with sufficient copies for the
Lenders:
(i) Copies of the Articles of Incorporation and Certificate of
Incorporation of the Borrower, together with all amendments, certified by the
Indiana Secretary of State, and a Certificate of Existence for the Borrower
issued as of a recent day by the Indiana Secretary of State.
(ii) Copies certified by the Secretary or Assistant Secretary of the
Borrower, of its ByLaws and of its Board of Directors' resolutions authorizing
the execution of the Loan Documents to which the Borrower is a party.
(iii) An Incumbency Certificate executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by name and title
and bear the signatures of the Authorized Officers and any other officers of
the Borrower authorized to sign the Loan Documents to which the Borrower is a
party, upon which Certificate the Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the Borrower.
(iv) Copies of the Articles of Incorporation and the Certificate of
Incorporation of Deluxe Homes, Inc., an Indiana corporation, together with all
amendments certified by the Indiana Secretary of State, and a Certificate of
Existence for Deluxe Homes, Inc. issued as of a recent date by the Indiana
Secretary of State.
(v) Copies certified by the Secretary or Assistant Secretary of
Deluxe Homes, Inc. of its ByLaws and of its Board of Directors' resolutions
authorizing the execution of its Guaranty Agreement and any other document to
which Deluxe Homes, Inc. is a party.
(vi) An Incumbency Certificate executed by the Secretary or Assistant
Secretary of Deluxe Homes, Inc. which shall identify by name and title and
bear the signatures of the Authorized Officers and any other officers of
Deluxe Homes, Inc. authorized to sign its Guaranty Agreement and any other
document to which Deluxe Homes, Inc. is a party, upon which Certificate the
Agent and the Lenders shall be entitled to rely until informed of any change
in writing by the Borrower.
(vii) Copies of the Articles of Incorporation and the Certificate of
Incorporation of Trimark Homes, Inc., an Indiana corporation, together with
all amendments certified by the Indiana Secretary of State, and a Certificate
of Existence for Trimark Homes, Inc. issued as of a recent date by the Indiana
Secretary of State.
(viii) Copies certified by the Secretary or Assistant Secretary of
Trimark Homes, Inc. of its ByLaws and of its Board of Directors' resolutions
authorizing the execution of its Guaranty Agreement and any other document to
which Trimark Homes, Inc. is a party.
(ix) An Incumbency Certificate executed by the Secretary or Assistant
Secretary of Trimark Homes, Inc. which shall identify by name and title and
bear the signatures of the Authorized Officers and any other officers of
Trimark Homes, Inc. authorized to sign its Guaranty Agreement and any other
document to which Trimark Homes, Inc. is a party, upon which Certificate the
Agent and the Lenders shall be entitled to rely until informed of any change
in writing by the Borrower.
(x) Copies of the Articles of Incorporation and the Certificate of
Incorporation of Trimark Development, Inc., an Indiana corporation, together
with all amendments certified by the Indiana Secretary of State, and a
Certificate of Existence for Trimark Development, Inc. issued as of a recent
date by the Indiana Secretary of State.
(xi) Copies certified by the Secretary or Assistant Secretary of
Trimark Development, Inc. of its ByLaws and of its Board of Directors'
resolutions authorizing the execution of its Guaranty Agreement and any other
document to which Trimark Development, Inc. is a party.
(xii) An Incumbency Certificate executed by the Secretary or
Assistant Secretary of Trimark Development, Inc. which shall identify by name
and title and bear the signatures of the Authorized Officers and any other
officers of Trimark Development, Inc. authorized to sign its Guaranty
Agreement and any other document to which Trimark Development, Inc. is a
party, upon which Certificate the Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the Borrower.
(xiii) Copies of the Articles of Incorporation and the Certificate of
Incorporation of Deluxe Homes of Lafayette, Inc., an Indiana corporation,
together with all amendments certified by the Indiana Secretary of State, and
a Certificate of Existence for Deluxe Homes of Lafayette, Inc. issued as of a
recent date by the Indiana Secretary of State.
(xiv) Copies certified by the Secretary or Assistant Secretary of
Deluxe Homes of Lafayette, Inc. of its ByLaws and of its Board of Directors'
resolutions authorizing the execution of its Guaranty Agreement and any other
document to which Deluxe Homes of Lafayette, Inc. is a party.
(xv) An Incumbency Certificate executed by the Secretary or Assistant
Secretary of Deluxe Homes of Lafayette, Inc. which shall identify by name and
title and bear the signatures of the Authorized Officers and any other
officers of Deluxe Homes of Lafayette, Inc. authorized to sign its Guaranty
Agreement and any other document to which Deluxe Homes of Lafayette, Inc. is a
party, upon which Certificate the Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the Borrower.
(xvi) Copies of the Partnership Agreement of Crossmann Communities
Partnership, an Indiana general partnership, together with all amendments,
certified as complete by a general partner.
(xvii) Copies certified by a general partner of Crossmann Communities
Partnership, of resolutions of its general partners and of any other body
authorizing the execution of its Guaranty Agreement, and any other document to
which Crossmann Communities Partnership is a party.
(xviii) An Incumbency Certificate, executed by a general partner of
Crossmann Communities Partnership, which shall identify by name and title and
bear the signatures of the Authorized Officers and any other officers of
Crossmann Communities Partnership authorized to sign its Guaranty Agreement
and any other document to which Crossmann Communities Partnership is a party,
upon which certificate the Agent and the Lenders shall be entitled to rely
until informed of any change in writing by the Borrower.
(xix) Copies of the Articles of Incorporation and the Certificate of
Incorporation of Merit Realty, Inc., an Indiana corporation, together with all
amendments certified by the Indiana Secretary of State, and a Certificate of
Existence for Merit Realty, Inc. issued as of a recent date by the Indiana
Secretary of State.
(xx) Copies certified by the Secretary or Assistant Secretary of
Merit Realty, Inc. of its ByLaws and of its Board of Directors' resolutions
authorizing the execution of its Guaranty Agreement and any other document to
which Merit Realty, Inc. is a party.
(xxi) An Incumbency Certificate executed by the Secretary or
Assistant Secretary of Merit Realty, Inc. which shall identify by name and
title and bear the signatures of the Authorized Officers and any other
officers of Merit Realty, Inc. authorized to sign its Guaranty Agreement and
any other document to which Merit Realty, Inc. is a party, upon which
Certificate the Agent and the Lenders shall be entitled to rely until informed
of any change in writing by the Borrower.
(xxii) Copies of the Articles of Incorporation and the Certificate of
Incorporation of Crossmann Communities of Ohio, Inc. (formerly known as Deluxe
Homes of Ohio, Inc.), an Ohio corporation, together with all amendments
certified by the Ohio Secretary of State, and a Certificate of Existence for
Crossmann Communities of Ohio, Inc. issued as of a recent date by the Ohio
Secretary of State.
(xxiii) Copies certified by the Secretary or Assistant Secretary of
Crossmann Communities of Ohio, Inc. of its ByLaws and of its Board of
Directors' resolutions authorizing the execution of its Guaranty Agreement and
any other document to which Crossmann Communities of Ohio, Inc. is a party.
(xxiv) An Incumbency Certificate executed by the Secretary or
Assistant Secretary of Crossmann Communities of Ohio, Inc. which shall
identify by name and title and bear the signatures of the Authorized Officers
and any other officers of Crossmann Communities of Ohio, Inc. authorized to
sign its Guaranty Agreement and any other document to which Crossmann
Communities of Ohio, Inc. is a party, upon which Certificate the Agent and the
Lenders shall be entitled to rely until informed of any change in writing by
the Borrower.
(xxv) Copies of the Articles of Incorporation and the Certificate of
Incorporation of Crossmann Mortgage Corporation, an Indiana corporation,
together with all amendments certified by the Indiana Secretary of State, and
a Certificate of Existence for Crossmann Mortgage Corporation issued as of a
recent date by the Indiana Secretary of State.
(xxvi) Copies certified by the Secretary or Assistant Secretary of
Crossmann Mortgage Corporation of its ByLaws and of its Board of Directors'
resolutions authorizing the execution of its Guaranty Agreement and any other
document to which Crossmann Mortgage Corporation is a party.
(xxvii) An Incumbency Certificate executed by the Secretary or
Assistant Secretary of Crossmann Mortgage Corporation which shall identify by
name and title and bear the signatures of the Authorized Officers and any
other officers of Crossmann Mortgage Corporation authorized to sign its
Guaranty Agreement and any other document to which Crossmann Mortgage
Corporation is a party, upon which Certificate the Agent and the Lenders shall
be entitled to rely until informed of any change in writing by the Borrower.
(xxviii) Copies of the Articles of Incorporation and the
Certificate of Incorporation of Deluxe Aviation, Inc., an Indiana corporation,
together with all amendments certified by the Indiana Secretary of State, and
a Certificate of Existence for Deluxe Aviation, Inc. issued as of a recent
date by the Indiana Secretary of State.
(xxix) Copies certified by the Secretary or Assistant Secretary of
Deluxe Aviation, Inc. of its ByLaws and of its Board of Directors' resolutions
authorizing the execution of its Guaranty Agreement and any other document to
which Deluxe Aviation, Inc. is a party.
(xxx) An Incumbency Certificate executed by the Secretary or
Assistant Secretary of Deluxe Aviation, Inc. which shall identify by name and
title and bear the signatures of the Authorized Officers and any other
officers of Deluxe Aviation, Inc. authorized to sign its Guaranty Agreement
and any other document to which Deluxe Aviation, Inc. is a party, upon which
Certificate the Agent and the Lenders shall be entitled to rely until informed
of any change in writing by the Borrower.
(xxxi) Copies of the Articles of Incorporation and Certificate of
Incorporation of Cutter Homes, Ltd., a Kentucky corporation, together with all
amendments certified by the Kentucky Secretary of State, and a Certificate of
Good Standing for Cutter Homes, Ltd. issued as of a recent date by the
Kentucky Secretary of State.
(xxxii) Copies certified by the Secretary or Assistant Secretary
of Cutter Homes, Ltd., of its ByLaws and of its Board of Directors'
resolutions authorizing the execution of its Guaranty Agreement, and any other
document to which Cutter Homes, Ltd. is a party.
(xxxiii) An Incumbency Certificate executed by the Secretary or
Assistant Secretary of Cutter Homes, Ltd. which shall identify by name and
title and bear the signatures of the Authorized Officers and any other
officers of Cutter Homes, Ltd. authorized to sign Guaranty Agreement and any
other document to which Cutter Homes, Ltd. is a party, upon which Certificate
the Agent and the Lenders shall be entitled to rely until informed of any
change in writing by the Borrower.
(xxxiv) Copies of the Articles of Organization and the
Certificate of Organization of Crossmann Communities of Tennessee, LLC, a
Tennessee limited liability company, together with all amendments certified by
the Tennessee Secretary of State, and a Certificate of Good Standing for
Crossmann Communities of Tennessee, LLC issued as of a recent date by the
Tennessee Secretary of State.
(xxxv) Copies certified by the Managing Member of Crossmann
Communities of Tennessee, LLC, of its operating or other management agreement
and of resolutions of its members and of any other body authorizing the
execution of its Guaranty Agreement, and any other document to which Crossmann
Communities of Tennessee, LLC is a party.
(xxxvi) An Incumbency Certificate, executed by the Managing
Member of Crossmann Communities of Tennessee, LLC, which shall identify by
name and title and bear the signatures of the Authorized Officers and any
other officers of Crossmann Communities of Tennessee, LLC authorized to sign
Guaranty Agreement and any other document to which Crossmann Communities of
Tennessee, LLC is a party, upon which Certificate the Agent and the Lenders
shall be entitled to rely until informed of any change in writing by the
Borrower.
(xxxvii) Copies of the Articles of Incorporation and the
Certificate of Incorporation of Crossmann Investments, Inc., an Indiana
corporation, together with all amendments certified by the Indiana Secretary
of State, and a Certificate of Existence for Crossmann Investments, Inc.
issued as of a recent date by the Indiana Secretary of State.
(xxxviii) Copies certified by the Secretary or Assistant Secretary
of Crossmann Investments, Inc. of its ByLaws and of its Board of Directors'
resolutions authorizing the execution of its Guaranty Agreement and any other
document to which Crossmann Investments, Inc. is a party.
(xxxix) An Incumbency Certificate executed by the Secretary or
Assistant Secretary of Crossmann Investments, Inc. which shall identify by
name and title and bear the signatures of the Authorized Officers and any
other officers of Crossmann Investments, Inc. authorized to sign its Guaranty
Agreement and any other document to which Crossmann Investments, Inc. is a
party, upon which Certificate the Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the Borrower.
(xl) Copies of the Articles of Incorporation and the Certificate of
Incorporation of Crossmann Communities of North Carolina, Inc., a North
Carolina corporation, together with all amendments certified by the North
Carolina Secretary of State, and a Certificate of Good Standing for Crossmann
Communities of North Carolina, Inc. issued as of a recent date by the North
Carolina Secretary of State.
(xli) Copies certified by the Secretary or Assistant Secretary of
Crossmann Communities of North Carolina, Inc. of its ByLaws and of its Board
of Directors' resolutions authorizing the execution of its Guaranty Agreement
and any other document to which Crossmann Communities of North Carolina, Inc.
is a party.
(xlii) An Incumbency Certificate executed by the Secretary or
Assistant Secretary of Crossmann Communities of North Carolina, Inc. which
shall identify by name and title and bear the signatures of the Authorized
Officers and any other officers of Crossman Communities of North Carolina,
Inc. authorized to sign its Guaranty Agreement and any other document to which
Crossmann Communities of North Carolina, Inc. is a party, upon which
Certificate the Agent and the Lenders shall be entitled to rely until informed
of any change in writing by the Borrower.
(xliii) Copies of the Articles of Incorporation and the Certificate
of Incorporation of Pendleton Pike Associates, Inc., an Indiana corporation,
together with all amendments certified by the Indiana Secretary of State, and
a Certificate of Existence for Pendleton Pike Associates, Inc. issued as of a
recent date by the Indiana Secretary of State.
(xliv) Copies certified by the Secretary or Assistant Secretary of
Pendleton Pike Associates, Inc. of its ByLaws and of its Board of Directors'
resolutions authorizing the execution of its Guaranty Agreement and any other
document to which Pendleton Pile Associates, Inc. is a party.
(xlv) An Incumbency Certificate executed by the Secretary or
Assistant Secretary of Pendleton Pike Associates, Inc. which shall identify by
name and title and bear the signatures of the Authorized Officers and any
other officers of Pendleton Pike Associates, Inc. authorized to sign its
Guaranty Agreement and any other document to which Pendleton Pike Associates,
Inc. is a party, upon which Certificate the Agent and the Lenders shall be
entitled to rely until informed of any change in writing by the Borrower.
(xlvi) Copies of the Articles of Organization and the Certificate of
Organization of Pinehurst Builders, LLC, a South Carolina limited liability
company, together with all amendments certified by the North Carolina
Secretary of State, and a Certificate of Good Standing for Pinehurst Builders,
LLC issued as of a recent date by the North Carolina Secretary of State.
(xlvii) Copies certified by the Managing Member of Pinehurst
Builders, LLC, of its operating or other management agreement and of
resolutions of its members and of any other body authorizing the execution of
its Guaranty Agreement, and any other document to which Pinehurst Builders,
LLC is a party.
(xlviii) An Incumbency Certificate, executed by the Managing
Member of Pinehurst Builders, LLC, which shall identify by name and title and
bear the signatures of the Authorized Officers and any other officers of
Pinehurst Builders, LLC authorized to sign Guaranty Agreement and any other
document to which Pinehurst Builders, LLC is a party, upon which Certificate
the Agent and the Lenders shall be entitled to rely until informed of any
change in writing by the Borrower.
(xlix) Copies of the Articles of Organization and the Certificate of
Organization of Beach Vacations, LLC, a South Carolina limited liability
company, together with all amendments certified by the North Carolina
Secretary of State, and a Certificate of Good Standing for Beach Vacations,
LLC issued as of a recent date by the North Carolina Secretary of State.
(l) Copies certified by the Managing Member of Beach Vacations, LLC,
of its operating or other management agreement and of resolutions of its
members and of any other body authorizing the execution of its Guaranty
Agreement, and any other document to which Beach Vacations, LLC is a party.
(li) An Incumbency Certificate, executed by the Managing Member
of Beach Vacations, LLC, which shall identify by name and title and bear the
signatures of the Authorized Officers and any other officers of Beach
Vacations, LLC authorized to sign Guaranty Agreement and any other document to
which Beach Vacations, LLC is a party, upon which Certificate the Agent and
the Lenders shall be entitled to rely until informed of any change in writing
by the Borrower.
(lii) Copies of the Articles of Incorporation and the Certificate of
Incorporation of Crossmann Management, Inc., an Indiana corporation, together
with all amendments certified by the Indiana Secretary of State, and a
Certificate of Existence for Crossmann Management, Inc. issued as of a recent
date by the Indiana Secretary of State.
(liii) Copies certified by the Secretary or Assistant Secretary of
Crossmann Management, Inc. of its ByLaws and of its Board of Directors'
resolutions authorizing the execution of its Guaranty Agreement and any other
document to which Crossmann Management, Inc. is a party.
(liv) An Incumbency Certificate executed by the Secretary or
Assistant Secretary of Crossmann Management, Inc. which shall identify by name
and title and bear the signatures of the Authorized Officers and any other
officers of Crossman Management, Inc. authorized to sign its Guaranty
Agreement and any other document to which Crossmann Management, Inc. is a
party, upon which Certificate the Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the Borrower.
(lv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Borrowing Date no Default or Unmatured
Default has occurred and is continuing.
(lvi) A written opinion of the Borrower's counsel, addressed to the
Agent and the Lenders opining as to the matters set forth in Section 5.1, 5.2,
5.3, 5.8, 5.9, 5.11, 5.13, 5.15, 5.17, and 5.18, in form and substance
acceptable to the Agent and its counsel.
(lvii) A form of the Promissory Note to be used by the Lenders in
connection with the loans from the Lenders in the form attached hereto as
Exhibit "B."
(lviii) The Promissory Note to be used by Bank One in connection with
the Swing Line Loan in the form attached hereto as Exhibit "D."
(lix) A Guaranty Agreement from each Current Subsidiary in the form
of Exhibit "E" attached hereto, duly completed for each such Current
Subsidiary.
(lx) Evidence of the existence of insurance as required under Section
6.5 hereof.
(lxi) A Borrowing Base Certificate duly completed by the Borrower.
(lxii) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2. Each Advance. The Lenders, with respect to the Revolving
Loan, and Bank One, with respect to the Swing Line Loan, shall not be required
to make any Advance, and Bank One shall not be obligated to issue any Letter
of Credit, unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are
true and correct as of such Borrowing 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 on
and as of such earlier date.
(iii) All legal matters incident to the making of such Advance or the
issuance of the Letter of Credit, as the case may be, shall be satisfactory to
the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance shall constitute
a representation and warranty by the Borrower that the conditions contained in
Sections 4.2(i) and (ii) have been satisfied. Any Lender may require a duly
completed compliance certificate in substantially the form of Exhibit "F" as
a condition to making an Advance.
4.3 Documents Required for the Addition of an Entity as a Current
Subsidiary. With the prior written consent of the Agent and without the
necessity of the consent of the Lenders, with the consent of the Agent
evidenced as provided in Section 4.3(iii) below, and receipt by the Agent of
each of the following documents executed, dated, and in form and substance
satisfactory to the Agent, the Borrower may add an entity as a Current
Subsidiary that will be subject to the terms and conditions of this Agreement:
(i) A duly completed Compliance Certificate in the form of Exhibit
"F" attached hereto.
(ii) A Guaranty of the proposed Current Subsidiary in the form of
Exhibit "E" attached hereto.
(iii) A letter executed by the Borrower, the proposed Current
Subsidiary, and the Agent, in the form of Exhibit "G" attached hereto.
(iv) Articles of Incorporation, Articles of Organization, or
Partnership Agreement, of the proposed Current Subsidiary, as applicable,
certified by the Secretary of State of the State of the proposed Current
Subsidiary's organization, together with resolutions of the appropriate
governing body of the proposed Current Subsidiary, a Certificate of Existence
or Good Standing issued by the Secretary of State of the State of the
proposed Current Subsidiary's organization, and a Certificate of Incumbency
issued by the Secretary of the proposed Current Subsidiary's Board of
Directors, Managing Member, or General Partner, as the case may be.
(v) Such other documents as the Agent may reasonably require.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation, partnership (in the case of Subsidiaries only)
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.
5.2. Authorization and Validity. The Borrower and each Current
Subsidiary 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 the Borrower and by each Current
Subsidiary of the Loan Documents to which it is a party and the performance of
its obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents to which the Borrower and each Current
Subsidiary is a party constitute legal, valid and binding obligations of the
Borrower and each Current Subsidiary enforceable against the Borrower and each
Current Subsidiary in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors'rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower and each Current Subsidiary of the Loan Documents to
which it is a party, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (i) any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any of its Subsidiaries or (ii) the Borrower's or
any Subsidiary's articles or certificate of incorporation, partnership
agreement, certificate of partnership, articles or certificate of
organization, bylaws, or operating or other management agreement, as the case
may be, or (iii) the provisions of any indenture, instrument or agreement to
which the Borrower or any of its Subsidiaries 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 the Borrower or a Subsidiary pursuant to the
terms of any such indenture, instrument or agreement. 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 governmental or public body or authority, or any subdivision thereof,
which has not been obtained by the Borrower or any of its Subsidiaries, is
required to be obtained by the Borrower or any of its Subsidiaries in
connection with the execution and delivery of the Loan Documents, the
borrowings under this Agreement, the payment and performance by the Borrower
of the Obligations or the legality, validity, binding effect or enforceability
of any of the Loan Documents.
5.4. Financial Statements. The Borrower has delivered to the
Lenders its financial statements contained in the Form 10-Q filed with the
Securities and Exchange Commission on September 30, 1998, and has delivered to
the Lenders it's financial statements dated as of December 31, 1998, and for
the fiscal year then ended. Such statements, when combined with the financial
statement of the Borrower and certain Current Subsidiaries has described in
such Form 10-Q, have been prepared in accordance with generally accepted
accounting principles consistently applied. Such statements present fairly
the combined financial position of the Borrower and such Current Subsidiaries
as of the date thereof and the results of their respective operations for the
periods covered and since December 31, 1998, there has been no material
adverse change in the financial position of the Borrower or of any Current
Subsidiary or in the results of any of their respective operations.
5.5. Material Adverse Change. Since December 31, 1998, there has
been no change in the business, Property, condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries 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 the Borrower or any of its Subsidiaries, 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 and as to which no Lien exists. No tax liens have been filed and
no claims are being asserted with respect to any such taxes. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of any taxes or other governmental charges are adequate. The
Subsidiaries which are limited liability companies qualify for partnership tax
treatment under United States federal tax law.
5.7. Litigation and Contingent Obligations. Except as set forth on
Schedule 5.7, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect or which seeks
to prevent, enjoin or delay the making of any Loans. Other than any liability
incident to any litigation, arbitration or proceeding which (i) could not
reasonably be expected to have a Material Adverse Effect or (ii) is set forth
on Schedule 5.7, the Borrower has no material Contingent Obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
5.8. Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower 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 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 nonassessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans
do not in the aggregate exceed $____________. Neither the Borrower nor any
other member of the Controlled Group has incurred, or is reasonably expected
to incur, any withdrawal liability to Multi-employer Plans in excess of
$_____________ in the aggregate. Each Plan complies in all material respects
with all applicable requirements of law and regulations, no Reportable Event
has occurred with respect to any Plan, neither the Borrower nor any other
member of the Controlled Group has withdrawn from any Plan or initiated steps
to do so, and no steps have been taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender 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.
5.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12. Material Agreements. Neither the Borrower nor any
Subsidiary is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in (i) any agreement to
which it is a party, which default could reasonably be expected to have a
Material Adverse Effect or (ii) any agreement or instrument evidencing or
governing Indebtedness.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property except for any
failure to comply with any of the foregoing which could not reasonably be
expected to have a Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on Schedule
6.12, on the date of this Agreement, the Borrower and its Subsidiaries will
have good title, free of all Liens other than those permitted by Section 6.12,
to all of the Property and assets reflected in the Borrower's most recent
consolidated financial statements provided to the Agent as owned by the
Borrower and its Subsidiaries.
5.15. Plan Assets; Prohibited Transactions. Neither the Borrower
nor any Subsidiary 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 hereunder gives rise to a prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975 of the
Code.
5.16. Environmental Matters. In the ordinary course of its
business, the officers of the Borrower consider the effect of Environmental
Laws on the business of the Borrower and its Subsidiaries, in the course of
which they identify and evaluate potential risks and liabilities accruing to
the Borrower due to Environmental Laws. On the basis of this consideration,
the Borrower has concluded that Environmental Laws cannot reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any
Subsidiary has received any notice to the effect that its operations are not
in material compliance with any of the requirements of applicable
Environmental Laws or are the subject of any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of
any Hazardous Substance into the environment, which noncompliance or remedial
action could reasonably be expected to have a Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
5.18. Public Utility Holding Company Act. Neither the Borrower nor
any Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
5.19. Year 2000. The Borrower has made an assessment of its Year
2000 Issues. Based on such assessment, the Borrower does not reasonably
anticipate that Year 2000 Issues will have a Material Adverse Effect.
5.20. Subordinated Indebtedness. The Obligations constitute senior
indebtedness which is entitled to the benefits of the subordination provisions
of all outstanding Subordinated Indebtedness.
5.21. Insurance. The certificate signed by the President or Chief
Financial Officer of the Borrower that attests to the existence and adequacy
of, and summarizes, the property and casualty insurance program carried by the
Borrower with respect to itself and its Subsidiaries and that has been
furnished by the Borrower to the Agent and the Lenders, is complete and
accurate. This summary includes the insurer's or insurers' name(s), policy
number(s), expiration date(s), amount(s) of coverage, type(s) of coverage,
exclusion(s), and deductibles. This summary also includes similar
information, and describes any reserves, relating to any self-insurance
program that is in effect.
ARTICLE VI
COVENANTS
During the term of this Agreement and until all Obligations of the
Borrower terminate or are paid and satisfied in full, and so long as the
Commitment, the Swing Loan Commitment or any Letter of Credit is outstanding,
unless the Required Lenders shall otherwise consent in writing:
6.1. Financial Reporting. The Borrower 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) Within one hundred twenty (120) days after the close of each of
its fiscal years, an unqualified audit report certified by DeLoitte Touche,
LLP or other nationally recognized accounting firm chosen by the Borrower and
approved by the Required Lenders, prepared in accordance with Agreement
Accounting Principles on a consolidated and consolidating basis (consolidating
statements need not be certified by such accountants) for itself and its
Subsidiaries, including balance sheets as of the end of such period, related
profit and loss and reconciliation of surplus statements, and a statement of
cash flows, accompanied a certificate of said accountants that, in the course
of their examination necessary for their certification of the foregoing, they
have obtained no knowledge of any Default or Unmatured Default, or if, in the
opinion of such accountants, any Default or Unmatured Default shall exist,
stating the nature and status thereof. The Borrower shall furnish to the
Lenders any management letter prepared by the accountant in connection with
their audit of the Borrower within forty-five (45) days of the issuance of
said letter.
(ii) Within forty-five (45) days after the close of the first three
quarterly periods of each of its fiscal years, for itself and its
Subsidiaries, consolidated unaudited balance sheets as at the close of each
such period and consolidated profit and loss and reconciliation of surplus
statements and a statement of cash flows for the period from the beginning of
such fiscal year to the end of such quarter, all certified by its chief
financial officer.
(iii) Together with the financial statements required under Sections
6.1(i) and (ii), a compliance certificate in substantially the form of
Exhibit "F" signed by its chief financial officer 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.
(iv) Immediately upon learning of the occurrence of a Default of
Unmatured Default, or the institution of, or any adverse determination in any
litigation, arbitration proceeding, or governmental proceeding which is
material to the Borrower or any Subsidiary, or the occurrence of any event
which could have a Material Adverse Effect upon the Borrower or any
Subsidiary, written notice thereof describing the same and the steps being
taken with respect thereto.
(v) Within thirty (30) days after the end of each month, a Borrowing
Base Certificate as of that month-end and promptly as of such other dates as
the Lenders may reasonably require and in such form as the Lenders may
reasonably require.
(vi) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with respect to any
Plan, a statement, signed by the chief financial officer of the Borrower,
describing said Reportable Event and the action which the Borrower proposes to
take with respect thereto.
(vii) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim to the effect that
the Borrower or any of its Subsidiaries is or may be liable to any Person as a
result of the release by the Borrower, any of its Subsidiaries, or any other
Person of any toxic or Hazardous 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 the Borrower or any of its Subsidiaries,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.
(viii) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports and proxy statements
so furnished.
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which the
Borrower or any of its Subsidiaries files with the Securities and Exchange
Commission.
(x) Such other information (including nonfinancial information) as
the Agent or any Lender may from time to time reasonably request.
6.2. Use of Proceeds. The Borrower will use the proceeds of the
Advances and the Letter of Credit for general corporate purposes. The
Borrower will not, nor will it permit any Subsidiary to, use any of the
proceeds of the Advances to purchase or carry any "margin stock"(as defined in
Regulation U).
6.3. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and 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.
6.4. Taxes. The Borrower will, and will cause each Subsidiary to,
timely file 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. At the time any
of the Borrower's Subsidiaries is organized as a limited liability company,
each such limited liability company will qualify for partnership tax treatment
under United States federal tax law.
6.5. Insurance. The Borrower will, and will cause each Subsidiary
to, maintain with financially sound and reputable insurance companies
insurance on all their 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.
6.6. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject
including, without limitation, all Environmental Laws.
6.7. Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, do all things necessary to maintain, preserve, protect and
keep its Property in good repair, working order and condition, 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.
6.8. Inspection. The Borrower will, and will cause each Subsidiary
to, permit the Agent and the Lenders, by their respective representatives and
agents, and during normal business hours or as agreed by the Agent and the
Borrower, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and
to discuss the affairs, finances and accounts of the Borrower and each
Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Agent or any Lender may
designate.
6.9. Restricted Payments. Except as hereinafter provided, the
Borrower shall not, and shall not permit any Current Subsidiary to: (i)
declare or pay any dividends, either in cash or property, on any shares of its
capital stock of any class, except dividends or distributions payable (a)
solely in shares of capital stock of the Borrower, or (b) by a Current
Subsidiary to the Borrower or to another Current Subsidiary; (ii) directly or
indirectly purchase, redeem or retire any shares of its capital stock of any
class or any warrants, rights, or options to purchase or acquire any shares of
its capital stock, other than (a) the lapse or cancellation of stock warrants,
rights, or options for which no direct or indirect consideration was paid by
the Borrower or any Current Subsidiary, or (b) in exchange for or out of the
net cash proceeds of the Borrower from the substantially concurrent issue or
sale of other shares of capital stock of the Borrower or warrants, rights or
options to purchase or acquire any shares of its capital stock; (iii)
purchase, redeem, or retire, or otherwise make any payment or distribution,
either directly or indirectly, in respect of any of its subordinated
indebtedness; or (iv) make any other payment or distribution, either directly
or indirectly, in respect of its capital stock (such declarations or payments
of dividends, purchases, redemptions or retirements of capital stock and
warrants, rights or options and all such other payments or distributions being
herein collectively referred to in this Section 6.9 as "Restricted Payments"),
if after giving effect thereto any Default of Unmatured Default shall have
occurred and be continuing, or if the sum of the aggregate amount of any such
Restricted Payments made from and after June 30, 1995, to and including the
date of the making of the Restricted Payment in question would exceed the sum
of (A) $2,000,000.00 plus (B) fifty percent (50%) of Consolidated Net Income
for such period, computed on a cumulative basis for said entire period (or if
such Consolidated Net Income is a deficit figure, then minus one hundred
percent (100%) of such deficit). The Borrower shall not declare any dividend
which constitutes a Restricted Payment payable more than sixty (60) days after
the date of the declaration thereof. For purposes hereof, the amount of any
Restricted Payment declared, paid or distributed in property shall be deemed
to be the greater of the book value or fair market value as determined in good
faith by the Board of Directors of the borrower of such property at the time
of the making of the Restricted Payment in question.
6.10. Debt. Neither the Borrower nor any Current Subsidiary shall
incur nor permit to exist any Indebtedness in excess of $100,000.00, in the
aggregate, except:
(i) to the Lenders under this Agreement;
(ii) to the holders of the Senior Notes;
(iii) for standby letters of credit issued by affiliate national
banking associations of the Lenders pursuant to the requirements of local
municipalities for development projects outside of Indianapolis, Indiana;
(iv) for seller financing of the future acquisition of unimproved
real estate by the Borrower or by a Current Subsidiary, provided that no
Default or Unmatured Default exists and that such financing is unsecured or is
secured only by the real estate to which it relates and is subordinated to the
Obligations and has received the Required Lenders' prior written consent,
which shall not be unreasonably withheld;
(v) indebtedness related to mortgages assumed by the Borrower or a
Current Subsidiary on residential real estate acquired from its customers in
the ordinary course of business contemporaneously with the sale of a new
residence by the Borrower or such Current Subsidiary to such customer,
provided that no Default or Unmatured Default exists and that the assumption
of such indebtedness shall not result in a Default or an Unmatured Default;
and
(vi) for those existing obligations disclosed on the Schedule
attached hereto as Schedule 6.10;
provided, however, that the amount of any such indebtedness described in
paragraphs (iv), (v), and (vi) of this Section 6.10 in the aggregate shall at
no time exceed five percent (5%) of Total Capitalization. For purposes of
this covenant, the phrase "indebtedness for borrowed money" shall be construed
to include capital lease obligations.
6.11. Loans or Advances and Investments. Neither the Borrower nor
any Current Subsidiary shall make or permit to exist any loans or advances to
any other person or entity or make any investments, except for:
(i) extensions of credit or credit accommodations to customers or
vendors made by the Borrower or such Current Subsidiary in the ordinary course
of its business as now conducted;
(ii) loans or advances between the Borrower and any Current
Subsidiary or between two Current Subsidiaries;
(iii) reasonable salary advances to non-executive employees, and
other advances to agents and employees for anticipated expenses to be incurred
on behalf of the Borrower or such Current Subsidiary in the course of
discharging their assigned duties;
(iv) Investments in certificates of deposit maturing within one (1)
year from the date of issuance thereof, issued by a Bank or trust company
organized under the laws of the United States or any State thereof, having
capital, surplus and undivided profits aggregating at least $150,000,000.00
and whose long-term certificates of deposit are, at the time of acquisition
thereof by the Borrower or Current Subsidiary, rated A or better by either
Standard & Poor's Ratings Group or Moody's Investors Services, Inc.;
(v) Investments in direct obligations maturing within one (1) year
or less from the date of acquisition thereof of any municipality organized
under the laws of any state or the United States or any agency or
instrumentality of such municipality which, at the time of acquisition by the
Borrower or Current Subsidiary, are rated BBB or higher by Standard & Poor's
Corporation, or Baa or higher by Moody's Investors Services, Inc., or similar
rating by any other nationally recognized credit rating agency of similar
standing;
(vi) Investments in commercial paper maturing in 270 days or less
from the date of issuance which, at the time of acquisition by the Borrower or
Current Subsidiary, is accorded the highest rating by Standard & Poor's
Ratings Group, Moody's Investors Services, Inc. or other nationally recognized
credit rating agency of similar standing;
(vii) Investments in non-consolidated joint venture partnerships formed
to engage principally in single-family land development provided such
investments do not exceed twenty-five percent (25%) of the Borrower's
Consolidated Tangible Net Worth;
(viii) other Investments (in addition to those permitted by the
foregoing paragraphs (iv), (v), (vi), and (vii)) provided that such other
investments (A) are not outside the Borrower's general line of business, (B)
in the aggregate do not at any time exceed fifteen percent (15%) of the Total
Capitalization, and (C) after giving effect to such other investments, no
Default or Unmatured Default shall have occurred and be continuing; and
(ix) the specific items listed in the Schedule attached hereto as
Schedule 6.11.
6.12. Liens. Neither the Borrower nor any Current Subsidiary
shall create or permit to exist any mortgage, pledge, title retention lien or
other lien, encumbrance or security interest (all of which are hereafter
referred to in this subsection as a "lien" or "liens") which respect to any
property or assets now owned or hereafter acquired except:
(i) liens in favor of the Lenders created pursuant to the requirements of
this Agreement or otherwise;
(ii) any lien or deposit with any governmental agency required or
permitted to qualify the Borrower or such Current Subsidiary to conduct
business or exercise any privilege, franchise or license, or to maintain
self-insurance or to obtain the benefits of or secure obligations under any
law pertaining to workmen's compensation, unemployment insurance, old age
pensions, social security or similar matters, or to obtain any stay or
discharge in any legal or administrative proceedings, or any similar lien or
deposit arising in the ordinary course of business;
(iii) any mechanic's, workmen's, repairmen's, carrier's,
warehousemen's or other like liens arising in the ordinary course of business
for amount not yet due and for the payment of which adequate reserves have
been established, or deposits made to obtain the release of such liens;
(iv) easements, licenses, minor irregularities in title or minor
encumbrances on or over any real property existing for more than thirty (30)
days after the Borrower or such Current Subsidiary first becomes aware of any
such time, which do not, in the reasonable judgment of the Lenders, materially
detract from the value of such property or its marketability or its usefulness
in the business of the Borrower or such Current Subsidiary;
(v) liens for taxes and governmental charges which are not yet due or
which are being contested in good faith and by appropriate proceedings and for
which appropriate reserves have been established;
(vi) liens created by or resulting from any litigation or legal
proceeding which is being contested in good faith and by appropriate
proceedings for which appropriate reserves have been established;
(vii) liens created after the date of this Agreement to secure seller
financing of the future acquisition of unimproved real estate by the Borrower
or by a Current Subsidiary, which financing has received the Required Lenders'
prior written consent pursuant to Section 6.10 of this Agreement, and which
liens are limited to the real estate acquired with the proceeds of such
financing;
(viii) liens assumed by the Borrower or a Current Subsidiary on
residential real estate acquired from its customers in the ordinary course of
its business as now conducted contemporaneously with the sale of a new
residence by the Borrower or such Current Subsidiary to such customer;
(ix) liens on specific property related to capital lease financing;
and
(x) those specific liens now existing described on the Schedule
attached hereto as Schedule 6.12;
provided, however, that the liens described in paragraphs (vii), (viii), and
(ix) of this Section 6.12 shall be subject to the following:
(A) such a lien shall attach solely to the property acquired and
with respect to any single purchase, acquisition, or capitalized lease
transaction, shall not be in excess of eighty percent (80%) of the total
appraised value, purchase price, or capitalized cost (as applicable) of such
property; and
(B) the amount remaining unpaid on the purchase price, the
assumed obligations secured by such liens, and/or the lease payments in the
aggregate shall at not time exceed five percent (5%) of Total Capitalization.
6.13. Guaranties. Neither the Borrower nor any Current Subsidiary
shall be a guarantor or surety of, or otherwise be responsible in any manner
with respect to any undertaking of any other person or entity, whether by
guaranty agreement or by agreement to purchase any obligations, stock, assets,
goods or services, or to supply or advance any funds, assets, goods or
services, or otherwise, except for:
(i) guaranties in favor of the Lenders;
(ii) the several obligations of the Borrower and the Current
Subsidiaries, as "co-obligors," to the holders of the Senior Notes;
(iii) guaranties by endorsement of instruments for deposit made in
the ordinary course of business; and
(iv) those specific existing guaranties listed in the Schedule
attached hereto as Schedule 6.13.
6.14. Mergers, Consolidations, Sales, Acquisition or Formation of
Subsidiaries. Neither the Borrower nor any Current Subsidiary shall (i) be a
party to any consolidation or to any merger or purchase the capital stock of
or otherwise acquire any equity interest in any other business entity, except
for investment purposes only in readily marketable securities where the
aggregate amount of equity interest held is less than ten percent (10%) of
the voting power of the acquired party; (ii) acquire any material part of the
assets of any other business entity, except in the ordinary course of
business; (iii) except in the ordinary course of business, sell, transfer,
convey, lease or otherwise dispose of all or any substantial part of the
assets of the Borrower and the Current Subsidiaries; or (iv) sell or assign
with or without recourse any receivable; provided, however, that the Borrower
may consolidate or merge with any other corporation if the surviving or
continuing corporation shall be the Borrower and at the time of such
consolidation or merger and after giving effect thereto no Default or
Unmatured Default shall have occurred or be continuing. For purposes of the
preceding sentence, a sale, lease or other disposition of assets shall be
deemed to be a "substantial part" of the assets of the Borrower and the
Current Subsidiaries if the book value of such assets, when added to the book
value of all other assets sold, leased or otherwise disposed by the Borrower
and/or a Current Subsidiary (other than in the ordinary course of business),
during the 12-month period ending with the date of such sale, lease or other
disposition, exceeds five percent (5%) of Total Assets. The Borrower shall
not cause to be created or otherwise acquire any Subsidiaries unless within
thirty (30) calendar days after such Subsidiary is formed or acquired by the
Borrower it becomes a Current Subsidiary for all purposes of this Agreement
pursuant to Section 4.3 hereof.
6.15. Judgments. Neither the Borrower nor any Current Subsidiary
shall permit any uninsured judgment or monetary penalty rendered against it in
any judicial or administrative proceeding to remain unsatisfied for a period
in excess of forty-five (45) days, if such judgment or penalty together with
all other such judgments and penalties are in an aggregate amount in excess of
$50,000.00 or unless such judgment or penalty is being contested in good faith
by appropriate proceedings and execution upon such judgment has been stayed,
and unless an appropriate reserve has been established with respect thereto.
6.16. Year 2000. The Borrower will take and will cause each of
its Subsidiaries to take all such actions as are reasonably necessary to
assure that Year 2000 Issues will not have a Material Adverse Effect.
6.17. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower
or such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction.
6.18. Financial Covenants.
6.18.1. Current Ratio. The Borrower shall maintain as of the end of
each fiscal quarter the ratio of Consolidated Current Assets to Consolidated
Current Liabilities at a level not less than 1.50 to 1.00.
6.18.2. Consolidated Tangible Net Worth. The Borrower shall
maintain at all times its Consolidated Tangible Net Worth at a level not less
than an amount equal to the sum of (i) One Hundred Ten Million and 00/100
Dollars ($110,000,000.00) plus (ii) fifty percent (50%) of Consolidated Net
Income determined on a cumulative basis for each fiscal quarter ending on and
after December 31, 1998; provided, that for the purposes of the foregoing
calculation, in the event that Consolidated Net Income is a deficit figure
for any such fiscal quarter, Consolidated Net Income for such fiscal quarter
shall be deemed to be zero and, accordingly, shall not reduce the amount of
Consolidated Tangible Net Worth required to be maintained pursuant to this
Section, plus (iii) one hundred percent (100%) of the net proceeds received by
the Borrower from any capital stock issued after December 31, 1998.
6.18.3. Ratio of Total Debt to Total Capitalization. The Borrower
shall maintain at all times the ratio of its Total Debt to its Total
Capitalization at a level not greater than .60 to 1.00.
6.18.4. Fixed Charge Coverage Ratio. For each period of four (4)
consecutive fiscal quarters commencing with the fiscal quarter ending on June
30, 1999, the Borrower shall maintain the ratio of the sum of Consolidated Net
Income plus Fixed Charges and taxes over Fixed Charges at a level not less
than 2.00 to 1.00.
6.18.5. Ratio of Consolidated Land to Consolidated Tangible Net
Worth. The Borrower shall maintain at all times the ratio of its
Consolidated Land to its Consolidated Tangible Net Worth at a level not
greater than 1.25 to 1.00.
6.18.6. Ratio of Total Debt to the Borrowing Base. The Company
shall maintain at all times the ratio of its Total Debt to the Borrowing Base
at a level not greater than 1.00 to 1.00. Notwithstanding the provisions to
the contrary set forth in Section 7.3 hereof, in the event that the Borrower
is not in compliance with this covenant at any time, the Borrower shall have
thirty (30) days from either the effective date of the Borrowing Base
Certificate demonstrating such non-compliance or the date of an audit
completed by the Agent on which such determination is founded to cure the
imbalance before such non-compliance shall be considered a Default hereunder.
6.19 . Hazardous Substances. The Borrower shall not nor shall any
Current Subsidiary allow or permit to continue the release or threatened
release of any Hazardous Substance in any reportable quantities on any
premises owned or occupied or under lease by the Borrower or any Current
Subsidiary.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the 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 materially false on the date as of which made.
7.2. Failure of the Borrower to pay any principal, interest, or fees
of the Revolving Loan or the Swing Line Loan within two (2) Business Days
after the date due, or the failure of the borrower to reimburse Bank One for
any drawing under a Letter of Credit when paid thereunder or to pay when due
any fees due in connection with any Letter of Credit or the failure of the
Borrower to pay when due any other obligations under any of the Loan Documents
within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, 6.9, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18, or
6.19.
7.4. The breach by the Borrower (other than a breach which
constitutes a Default under another Section of this Article VII) of any of the
terms or provisions of this Agreement which is not remedied within thirty (30)
calendar days after written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Current Subsidiaries or
any Guarantor to pay when due any Indebtedness in excess of $1,000,000.00
("Material Indebtedness"); or the default by the Borrower or any of its
Subsidiaries in the performance (beyond the applicable grace period with
respect thereto, if any) of any term, provision or condition contained in any
agreement 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 Indebtedness to become due prior to its
stated maturity; or any Material Indebtedness of the Borrower or any of its
Subsidiaries or any Guarantor 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 the Borrower or any of its
Subsidiaries or any Guarantor shall not pay, or admit in writing its inability
to pay, its debts generally as they become due.
7.6. The Borrower or any of its Current Subsidiaries 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 or partnership
action to authorize or effect any of the foregoing actions set forth in this
Section 7.6 or (vi) fail to contest in good faith any appointment or
proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or
any of its Current Subsidiaries, a receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any of its Current
Subsidiaries or any Substantial Portion of its Property, or a proceeding
described in Section 7.6(iv) shall be instituted against the Borrower or any
of its Current Subsidiaries and such appointment continues undischarged or
such proceeding continues undismissed or unstayed for a period of thirty (30)
consecutive calendar days.
7.8. 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 the Borrower and of its Current Subsidiaries which,
when taken together with all other Property of the Borrower or the Current
Subsidiary so condemned, seized, appropriated, or taken custody or control of,
during the twelve month period ending with the month in which any such action
occurs, constitutes a Substantial Portion.
7.9. The Borrower or any of its Current Subsidiaries shall (i) be the
subject of any proceeding or investigation pertaining to the release by the
Borrower, any of its Current Subsidiaries or any other Person of any toxic or
hazardous waste or substance into the environment, or (ii) violate any
Environmental Law, which, in the case of an event described in clause (i) or
clause (ii), could reasonably be expected to have a Material Adverse Effect.
7.10. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach
continues beyond any period of grace therein provided
7.11. Any Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Guaranty, or any Guarantor shall fail to comply with
any of the terms or provisions of any Guaranty to which it is a party, or any
Guarantor shall deny that it has any further liability under any Guaranty to
which it is a party, or shall give notice to such effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate, the obligation of Bank One to
issue Letters of Credit and to make Advances under the Swing Line Loan shall
automatically terminate, and the Obligations shall immediately become due and
payable without any election or action on the part of the Agent or any Lender.
If any other Default occurs, the Required Lenders (or the Agent with the
consent of the Required Lenders) may terminate or suspend the obligations of
the Lenders to make Loans hereunder, Bank One may elect in its sole discretion
or the Required Lenders may elect to terminate or suspend the obligation to
issue Letters of Credit or to make Advances under the Swing Line Loan, or the
Required Lenders may declare the Obligations to be due and payable, or all of
the foregoing, 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. Notwithstanding any other
provision to the contrary herein, any Lender who fails to fund an Advance, or
to reimburse Bank One with respect to an unreimbursed drawing under a Letter
of Credit, or to make any other payment required pursuant to Article II
hereof, shall not be permitted to vote in connection with any action or remedy
taken, or waiver granted in connection with a Default until such Lender is
once again in compliance with Article II, and for purposes of determining the
requisite vote of Required Lenders under such circumstances, the Aggregate
Commitment shall be deemed reduced by the amount of such Lender's Commitment
until such Lender is again entitled to vote.
8.2. Amendments. Subject to the provisions of this Article VIII,
the Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto 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 supplemental
agreement shall, without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan, or of the Swing Line Loan,
or postpone any regularly scheduled payment of principal of any Loan or of the
Swing Line Loan, or forgive all or any portion of the principal amount
thereof, or reduce the rate or extend the time of payment of interest or fees
thereon.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Facility Termination Date, or reduce the amount or
extend the payment date for, the mandatory payments required under Section
2.2, or increase the amount of the Aggregate Commitment or of the Commitment
of any Lender hereunder, or permit the Borrower to assign its rights under
this Agreement.
(iv) Amend this Section 8.2.
(v) Release any Guarantor of any Advance.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive
payment of the fee required under Section 12.3.2 without obtaining the consent
of any other party to this Agreement. No amendment of any provision of this
Agreement relating to the Swing Line Loan or to Letters of Credit shall be
effective without the written consent of Bank One.
8.3. Preservation of Rights. No delay or omission of the Lenders,
Bank One or the 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 an Advance, or a Loan or the issuance
of a Letter of Credit notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Loan
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 8.2, 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 Agent and
the Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive the
making of the credit facilities herein contemplated.
9.2. 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.
9.3. 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.
9.4. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent and the Lenders and
supersede all prior agreements and understandings among the Borrower, the
Agent and the Lenders relating to the subject matter thereof other than the
fee letter described in Section 10.13.
9.5. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and
no Lender shall be the partner or agent of any other (except to the extent to
which the 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.
9.6. Expenses; Indemnification.
(i) The Borrower shall reimburse the Agent for any costs, internal charges
and out-of-pocket expenses (including attorneys' fees and time charges of
attorneys for the Agent, which attorneys may be employees of the Agent) paid
or incurred by the Agent in connection with the preparation, negotiation,
execution, delivery, syndication, review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees to reimburse
the Agent and the Lenders for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of attorneys for the
Agent and the Lenders, which attorneys may be employees of the Agent or the
Lenders) paid or incurred by the Agent or any Lender in connection with the
collection and enforcement of the Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the Agent, Bank
One as issuer of Letters of Credit, 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 Agent, Bank One as
issuer of Letters of Credit, 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 credit facility
provided 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 9.6
shall survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.8. 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, except that any calculation or determination which is to be made
on a consolidated basis shall be made for the Borrower and all its Current
Subsidiaries, including those Current Subsidiaries, if any, which are
unconsolidated on the Borrower's audited financial statements.
9.9. 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.
9.10. Non-liability of Lenders. The relationship between the
Borrower on the one hand and the Lenders and the Agent on the other hand shall
be solely that of borrower and lender. Neither the Agent nor any Lender shall
have any fiduciary responsibilities to the Borrower. Neither the Agent nor
any Lender undertakes any responsibility to the Borrower to review or inform
the Borrower of any matter in connection with any phase of the Borrower's
business or operations. The Borrower agrees that neither the Agent nor any
Lender shall have liability to the Borrower (whether sounding in tort,
contract or otherwise) for losses suffered by the Borrower 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 Agent nor any Lender shall have any
liability with respect to, and the Borrower hereby waives, releases and agrees
not to sue for, any special, indirect or consequential damages suffered by the
Borrower in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby.
9.11. 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 such 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 such Lender is a party, (vi) to such
Lender's direct or indirect contractual counterparties in swap agreements or
to legal counsel, accountants and other professional advisors to such
counterparties, and (vii) permitted by Section 12.4. Notwithstanding the
foregoing, in the event that a Lender is requested or becomes legally
compelled or obligated to disclose any of the Borrower's confidential
information, such Lender will provide the Borrower with prompt written notice
of such request so that the Borrower may seek an appropriate protective order
or other appropriate remedy only if such disclosure to the Borrower is not
prohibited by law or by the order requesting such confidential information.
9.12. Non-reliance. 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.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, Indiana, NA
is hereby appointed by each of the Lenders as its contractual representative
(herein referred to as the "Agent") hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the 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 Agent agrees
to act as such contractual representative upon the express conditions
contained in this Article X. Notwithstanding the use of the defined term
"Agent," it is expressly understood and agreed that the Agent shall not have
any fiduciary responsibilities to any Lender by reason of this Agreement or
any other Loan Document and that the 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 Agent (i) does not hereby assume any
fiduciary duties to any of the Lenders, (ii) is a "representative" of the
Lenders as secured parties within the meaning of Section 9-105 of the Uniform
Commercial Code and (iii) 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 Agent on any agency theory or any other theory of liability
for breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the
terms of each thereof, together with such powers as are reasonably incidental
thereto. The Agent shall have no implied duties 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 Agent.
10.3. General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, 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.
10.4. No Responsibility for Loans, Recitals, etc. Neither the 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; (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 IV,
except receipt of items required to be delivered solely to the 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 or any guarantor of any of the Obligations or of any of the
Borrower's or any such guarantor's respective Subsidiaries. The Agent shall
have no duty to disclose to the Lenders information that is not required to be
furnished by the Borrower to the Agent at such time, but is voluntarily
furnished by the Borrower to the Agent (either in its capacity as Agent or in
its individual capacity).
10.5. Action on Instructions of Lenders. The 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, 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 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. The 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 against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any
of its duties as 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 Agent shall be
entitled to advice of counsel concerning the contractual arrangement between
the Agent and the Lenders and all matters pertaining to the Agent's duties
hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The 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
Agent, which counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to
their Commitments immediately prior to such termination) (i) for any amounts
not reimbursed by the Borrower for which the Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the 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 Agent in connection with any dispute between the Agent and any Lender or
between two or more of the Lenders) and (iii) 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 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
Agent in connection with any dispute between the 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 that (i) 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 Agent
and (ii) any indemnification required pursuant to Section 3.6(vii) shall,
notwithstanding the provisions of this Section 10.8, be paid by the relevant
Lender in accordance with the provisions thereof. The obligations of the
Lenders under this Section 10.8 shall survive payment of the Obligations and
termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the 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". In the event
that the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
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 Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent
and its Affiliates 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 or any of its Subsidiaries in which the Borrower or such Subsidiary
is not restricted hereby from engaging with any other Person.
10.11. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent, or any other Lender
and based on the financial statements prepared by the Borrower 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 Agent, or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five (45) days after the retiring Agent gives notice
of its intention to resign. Upon any such resignation , the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders within thirty days after the resigning Agent's giving notice
of its intention to resign, then the resigning Agent may appoint, on behalf of
the Borrower and the Lenders, a successor Agent. Notwithstanding the previous
sentence, the 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 Agent hereunder. If the Agent has resigned and no successor Agent
has been appointed, the Lenders may perform all the duties of the 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 Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the resigning Agent. Upon the effectiveness of the resignation of
the Agent, the resigning Agent shall be discharged from its duties and
obligations hereunder and under the Loan Documents. After the effectiveness
of the resignation of an Agent, the provisions of this Article X shall
continue in effect for the benefit of such Agent in respect of any actions
taken or omitted to be taken by it while it was acting as the Agent hereunder
and under the other Loan Documents. In the event that there is a successor to
the Agent by merger, or the Agent assigns its duties and obligations to an
Affiliate pursuant to this Section 10.12, then the term " Prime Rate" as used
in this Agreement shall mean the prime rate, base rate or other analogous rate
of the new Agent.
10.13. Agent's Fee. The Borrower agrees to pay to the Agent, for
its own account, the fees agreed to by the Borrower and the Agent pursuant to
that certain letter agreement dated as of even date herewith, or as otherwise
agreed from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders
agree that the 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 Agent is entitled under
Articles IX and X.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any
rights of the Lenders under applicable law, if the Borrower 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
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.
11.2. 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) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Loans held by the other Lenders so that after such
purchase each Lender will hold its ratable proportion of 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. If an amount to be
setoff is to be applied to Indebtedness of the Borrower to a Lender other than
Indebtedness comprised of Loans made by such Lender, such amount shall be
applied ratably to such other Indebtedness and to the Indebtedness comprised
of such Loans.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under
the Loan Documents and (ii) any assignment by any Lender must be made in
compliance with Section 12.3. Notwithstanding clause (ii) of this Section,
any Lender may at any time, without the consent of the Borrower or the 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 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 12.3 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 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.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. 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 and the Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under the
Loan Documents.
12.2.2. 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, 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 of any such Loan or
releases all or substantially all of the collateral, if any, securing any such
Loan.
12.2.3. Benefit of Setoff. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section 11.1 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 11.1 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 11.1, 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 11.2 as if each
Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time assign to
one or more banks or other entities ("Purchasers") all or any part of its
rights and obligations under the Loan Documents. Such assignment shall be
substantially in the form of Exhibit "H" or in such other form as may be
agreed to by the parties thereto. The consent of the Borrower and the 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. Such consents shall not be unreasonably withheld or
delayed. Each such assignment with respect to a Purchaser which is not a
Lender or an Affiliate thereof shall (unless each of the Borrower and the
Agent otherwise consents) be in an amount not less than the lesser of (i)
$5,000,000.00, or (ii) the remaining amount of the assigning Lender's
Commitment (calculated as at the date of such assignment) or outstanding Loans
(if the applicable Commitment has been terminated).
12.3.2. Effect; Effective Date. Upon (i) delivery to the Agent of an
assignment, together with any consents required by Section 12.3.1, and (ii)
payment of a $4,000 fee to the Agent for processing such assignment (unless
such fee is waived by the Agent), such assignment shall become effective on
the effective date specified in such assignment. The 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 constitutes "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 the Borrower, the Lenders or the 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 12.3.2,
the transferor Lender, the 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.
12.4. Dissemination of Information. The Borrower authorizes 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 and its
Subsidiaries, including without limitation any information contained in any
Reports; provided that each Transferee and prospective Transferee agrees to be
bound by Section 9.11 of this Agreement.
12.5. 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 3.6(vi).
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, 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 or the Agent, at its address or facsimile
number set forth on the signature pages hereof, (y) in the case of any Lender,
at its address or facsimile number set forth below its signature hereto 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 Agent and the
Borrower in accordance with the provisions of this Section 13.1. 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 Agent under
Article II shall not be effective until received.
13.2. Change of Address. The Borrower, the 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 XIV
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
Agent and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. 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 OF THE STATE OF INDIANA, BUT GIVING EFFECT
TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
INDIANA STATE COURT SITTING IN MARION COUNTY, INDIANA IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT 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 AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR
ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN MARION COUNTY,
INDIANA.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE 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.
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
CROSSMANN COMMUNITIES, INC., an Indiana corporation
By: /s/Jennifer A. Holihen
Jennifer A. Holihen, Chief Financial
Officer, Treasurer and Secretary
9202 North Meridian Street
Suite 300
Indianapolis, Indiana 46260
Attention: Jennifer A. Holihen, Chief
Financial Officer, Treasurer and
Secretary
Telephone: (317) 843-9514
Telecopy: (317) 571-2210
E-mail: ___________________________
<PAGE>
Commitments
$20,000,000.00 BANK ONE, INDIANA, NA, a national
banking association, by itself and as Agent
By: /s/ Patrick D. Lease
Patrick D. Lease, Vice President
c/o NBD COMMERCIAL REAL ESTATE GROUP
One Indiana Square, 14th Floor
Mail Suite 7025
Indianapolis, Indiana 46266
Attention: Patrick D. Lease, Vice
President
Telephone: (317) 266-5752
Telecopy: (317) 266-7477
E-mail: [email protected]
$15,000,000.00 HUNTINGTON NATIONAL BANK OF INDIANA
By: /s/ Linda Zappia
Linda Zappia, Executive Vice President
Capital Center, Suite 1800
201 North Illinois Street
Indianapolis, Indiana 46204
Attention: Russell Swan, Vice President
Telephone: (317) 237-2547
Telecopy: (317) 237-2505
E-mail: __________________________
<PAGE>
$15,000,000.00 FIFTH THIRD BANK, INDIANA
By: ________________________________
Erik Miner, Vice President
Capital Center, North Tower
251 North Illinois Street, Suite 1000
Indianapolis, Indiana 4604
Attention: Erik Miner, Vice President
Telephone: (317) 383-2392
Telecopy: (317) 383-2427
E-mail: __________________________
$15,000,000.00 PNC BANK, N.A.
By: _________________________________
James A. Harmann, Vice President
201 East Fifth Street
Commercial Real Estate, Suite 800
Cincinnati, Ohio 45201-1198
Attention: James A. Harmann, Vice
President
Telephone: (513) 651-8988
Telecopy: (513) 651-8931
E-mail: [email protected]
<PAGE>
$15,000,000.00 KEYBANK NATIONAL ASSOCIATION
By: /s/ Jeffrey K. Lockhart
Jeffrey K. Lockhart, Vice President
10 West Market Street
Indianapolis, Indiana 46204
Attention: Jeffrey K. Lockhart, Vice
President
Telephone: (317) 464-8320
Telecopy: (317) 464-8301
E-Mail: ___________________________
<PAGE>
SCHEDULE OF EXHIBITS
Exhibit "A" - Borrowing Notice
Exhibit "B" - Promissory Note
Exhibit "C" - Application for Swing Line Loan and Compliance
Certificate
Exhibit "D" - Swing Loan Note
Exhibit "E" - Guaranty Agreement
Exhibit "F" - Compliance Certificate
Exhibit "G" - Current Subsidiary Letter
Exhibit "H" - Assignment Agreement
<PAGE>
SCHEDULES
Schedule 5.7 - Litigation
Schedule 5.8 - Subsidiaries
Schedule 6.10 - Debt
Schedule 6.11 - Loans, Advances, Investments
Schedule 6.12 - Liens
Schedule 6.13 - Guaranties
BORROWING NOTICE
TO: Bank One, Indiana, NA (as "Agent")
FROM: Crossmann Communities, Inc. (the "Borrower")
RE: $80,000,000 Revolving Credit
Requests for Advances and Repayments
DATE: _________________________
This Borrowing Notice (the "Notice") is delivered to the Agent pursuant
to Section 2.8 of that certain Credit Agreement among the Borrower, the Agent,
and the Lenders parties thereto dated as of April 1, 1999. All terms used
herein with their initial letters capitalized are used as defined in the
Credit Agreement unless otherwise defined herein.
The Borrower hereby requests the Lenders to:
I. _____ Make the following advance(s):
_____ Floating Rate Advance.
Amount to be advanced: $_____________.
_____ Eurodollar Advance(s).
Interest Period(s): _____ months (select 1, 2, 3, or 6
months).
Amount(s): $____________.
II. _____ Make the following Conversion(s):
1. Floating Rate Advance(s) in the amount(s) of
$____________ should be converted to Eurodollar Advance(s) with Interest
Period(s) of _____ months (select 1, 2, 3, or 6 months).
2. Eurodollar Advance(s) maturing on ____________________,
in the amount(s) of $____________ should be converted to:
(i) a Floating Rate Advance in the amount of
$____________; or
(ii) a Eurodollar Advance (or Advances) with
the following details:
Interest Period(s): _____ select (1, 2, 3, or 6
months).
Amount(s): $_____________.
III. _____ Make the following Repayments:
1. Floating Rate Advance:
Amount to be repaid $____________.
Effective date of repayment ___________________.
2. Eurodollar Advances:
Maturing ____________________.
Amount to be repaid: $____________.
The undersigned officer of the Borrower certifies and acknowledges that :
(a) Each of the representations and warranties contained in the
Credit Agreement, as originally stated or as modified in writing from time to
time by the Borrower, are true and correct in all material respects on and as
of the date hereof to the same extent as though made on and as of the date
hereof;
(b) No event has occurred and is continuing under the Credit
Agreement, or will result from the disbursement of the Revolving Loan
requested pursuant to this Request, which would constitute Default or
Unmatured Default;
(c) The Borrower has performed all of its obligations in all material
respects and has satisfied all conditions specified in the Credit Agreement;
(d) Borrower's Total Debt is not greater than the Borrowing Base as
of the date hereof;
(e) No injunction or other restraining order has been issued and no
hearing to cause an injunction or other restraining order to be issued is
pending or noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of the Credit Agreement or the
making of the Revolving Loan thereunder; and
(f) No material adverse change has occurred in the condition of the
Borrower or any consolidated Subsidiary, financial or otherwise, or in the
earnings, affairs, or business prospects of the Borrower or any consolidated
Subsidiary, since the date of the Credit Agreement.
Dated: ________________________ ________________________________
________________________________
(Printed name and title)
of CROSSMANN COMMUNITIES, INC., an
Indiana corporation
PROMISSORY NOTE
(REVOLVING LOAN)
Indianapolis, Indiana
$ Dated: April 1, 1999
Final Maturity: March 31, 2002
On or before March 31, 2002 ("Final Maturity"), CROSSMANN COMMUNITIES,
INC., an Indiana corporation (the "Maker") promises to pay to the order of
___________________________, a(n) __________________________ (the "Bank") at
the principal office of BANK ONE, INDIANA, NA, a national banking association
(the "Agent") in Indianapolis, Indiana, the principal sum of Dollars ($) or
so much of the principal amount of the Loan represented by this Note as may be
disbursed by the Bank under the terms of the Credit Agreement described below,
and to pay interest on the unpaid principal balance outstanding from time to
time as provided in this Note.
This Note evidences indebtedness (the "Loan") incurred or to be incurred
by the Maker under a revolving line of credit extended to the Maker by the
Bank under a Credit Agreement dated the date of this Note entered into by and
among the Maker, the Bank, the Agent, and the other lenders from time to time
parties thereto. All references in this Note to the Credit Agreement shall be
construed as references to that Agreement as it may be amended from time to
time. The Loan is referred to in the Credit Agreement as the "Revolving
Loan." Subject to the terms and conditions of the Credit Agreement, the
proceeds of the Loan may be advanced and repaid and re-advanced until Final
Maturity. The principal amount of the Loan outstanding from time to time
shall be determined by reference to the books and records of the Bank on which
all Advances under the Loan and all payments by the Maker on account of the
Loan shall be recorded. Such books and records shall be deemed prima
facie to be correct as to such matters.
The terms "Advance" and "Business Day" are used in this Note as defined
in the Credit Agreement.
Interest on the unpaid principal balance of the Loan outstanding from
time to time prior to and after maturity will accrue at the rate or rates
provided in the Credit Agreement. Prior to maturity, accrued interest shall
be due and payable on the last Business Day of each month commencing on the
last Business Day of the month in which this Note is executed. After
maturity, interest shall be due and payable as accrued and without demand.
Interest will be calculated by applying the ratio of the annual interest rate
over a year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding.
The entire outstanding principal balance of this Note shall be due and
payable, together with accrued interest, at Final Maturity. Reference is made
to the Credit Agreement for provisions requiring prepayment of principal under
certain circumstances. Principal may be prepaid, but only as provided in the
Credit Agreement.
If any installment of interest due under the terms of this Note is not
paid within two (2) Business Days when due, then the Bank or any subsequent
holder of this Note may, subject to the terms of the Credit Agreement, at its
option and without notice, declare the entire principal amount of the Note and
all accrued interest immediately due and payable. Reference is made to the
Credit Agreement which provides for acceleration of the maturity of this Note
upon the happening of other "Defaults" as defined therein.
All payments on account of this Note shall be applied as provided in the
Credit Agreement.
The Maker and any endorsers severally waive demand, presentment for
payment and notice of nonpayment of this Note, and each of them consents to
any renewals or extensions of the time of payment of this Note without notice.
All amounts payable under the terms of this Note shall be payable with
expenses of collection, including attorneys' fees, and without relief from
valuation and appraisement laws.
This Note is made under and will be governed in all cases by the
substantive laws of the State of Indiana, notwithstanding the fact that
Indiana conflicts of law rules might otherwise require the substantive rules
of law of another jurisdiction to apply.
CROSSMANN COMMUNITIES, INC., an Indiana
corporation
By:
Jennifer A. Holihen, Chief Financial Officer, Treasurer and Secretary
APPLICATION FOR SWING LINE LOAN AND COMPLIANCE CERTIFICATE
TO: Bank One, Indiana, NA (the "Agent")
FROM: Crossmann Communities, Inc. (the "Borrower")
RE: $10,000,000 Swing Line Loan
Requests for Advances and Repayments
DATE: _________________________
This Application for Swing Line Loan and Compliance Certificate is
delivered to the Agent pursuant to Section 2.23 of that certain Credit
Agreement among the Borrower, the Agent, and the Lenders parties thereto dated
as of April 1, 1999. All terms used herein with their initial letters
capitalized are used as defined in the Credit Agreement unless otherwise
defined herein.
The Borrower hereby requests to Bank One, Indiana, NA (the "Swing Line
Bank") to:
I. _____ Make the following Swing Line Loan:
Amount to be advanced: $_____________.
II. _____ Make the following Conversion(s):
1. Swing Line Loan(s) in the amount(s) of $____________
should be converted to Eurodollar Advance(s) with Interest Period(s) of _____
months (select 1, 2, 3, or 6 months).
2. Eurodollar Advance(s) maturing on ____________________,
in the amount(s) of $____________ should be converted to a Swing Line Loan in
the amount of $_____________________.
III. _____ Make the following Repayments:
Amount to be repaid $____________.
The undersigned officer of the Borrower certifies and acknowledges that :
(a) Each of the representations and warranties contained in the
Credit Agreement, as originally stated or as modified in writing from time to
time by the Borrower, are true and correct in all material respects on and as
of the date hereof to the same extent as though made on and as of the date
hereof;
(b) No event has occurred and is continuing under the Credit
Agreement, or will result from the disbursement of the Swing Line Loan
requested pursuant to this request, which would constitute Default or
Unmatured Default;
(c) The Borrower has performed all of its obligations in all material
respects and has satisfied all conditions specified in the Credit Agreement;
(d) Borrower's Total Debt is not greater than the Borrowing Base as
of the date hereof;
(e) No injunction or other restraining order has been issued and no
hearing to cause an injunction or other restraining order to be issued is
pending or noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of the Credit Agreement or the
making of the Swing Line Loan thereunder; and
(f) No material adverse change has occurred in the condition of the
Borrower or any consolidated Subsidiary, financial or otherwise, or in the
earnings, affairs, or business prospects of the Borrower or any consolidated
Subsidiary, since the date of the Credit Agreement.
Dated: ________________________ ________________________________
________________________________
(Printed name and title)
of CROSSMANN COMMUNITIES, INC., an
Indiana corporation
PROMISSORY NOTE
(SWING LINE LOAN)
Indianapolis, Indiana
$10,000,000.00 Dated: April 1, 1999
Final Maturity: March 31, 2002
On or before March 31, 2002 ("Final Maturity"), CROSSMANN COMMUNITIES,
INC., an Indiana corporation (the "Maker") promises to pay to the order of
BANK ONE, INDIANA, NA, a national banking association (the "Bank") at the
principal office of the Bank at Indianapolis, Indiana, the principal sum of
Ten Million and 00/100 Dollars ($10,000,000.00) or so much of the principal
amount of the Loan represented by this Note as may be disbursed by the Bank
under the terms of the Credit Agreement described below, and to pay interest
on the unpaid principal balance outstanding from time to time as provided in
this Note.
This Note evidences indebtedness (the "Loan") incurred or to be incurred
by the Maker under a revolving line of credit extended to the Maker by the
Bank under a Credit Agreement dated the date of this Note and entered into by
and among the Maker, Bank One, Indiana, NA as Agent and individually as a
Lender, and the other Lenders from time to time party thereto. All references
in this Note to the Credit Agreement shall be construed as references to that
Agreement as it may be amended from time to time. The Loan is referred to in
the Credit Agreement as the "Swing Line Loan." Subject to the terms and
conditions of the Credit Agreement, the proceeds of the Loan may be advanced
and repaid and re-advanced until Final Maturity. The principal amount of the
Loan outstanding from time to time shall be determined by reference to the
books and records of the Bank on which all Advances under the Loan and all
payments by the Maker on account of the Loan shall be recorded. Such books
and records shall be deemed prima facie to be correct as to such matters.
The terms "Advance" and "Business Day" are used in this Note as defined
in the Credit Agreement.
Interest on the unpaid principal balance of the Loan outstanding from
time to time prior to and after maturity will accrue at the rate or rates
provided in the Credit Agreement. Prior to maturity, accrued interest shall
be due and payable on the last Business Day of each month commencing on the
last Business Day of the month in which this Note is executed. After
maturity, interest shall be due and payable as accrued and without demand.
Interest will be calculated by applying the ratio of the annual interest rate
over a year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding.
The entire outstanding principal balance of this Note shall be due and
payable, together with accrued interest, at Final Maturity. Reference is made
to the Credit Agreement for provisions requiring prepayment of principal under
certain circumstances. Principal may be prepaid, but only as provided in the
Credit Agreement.
If any installment of interest due under the terms of this Note is not
paid within two (2) Business Days of when due, then the Bank or any subsequent
holder of this Note may, subject to the terms of the Credit Agreement, at its
option and without notice, declare the entire principal amount of the Note and
all accrued interest immediately due and payable. Reference is made to the
Credit Agreement which provides for acceleration of the maturity of this Note
upon the happening of other "Defaults" as defined therein.
All payments on account of this Note shall be applied first to expenses
of collection, next to any late payment fees which are due and payable, next
to interest which is due and payable, and only after satisfaction of all such
expenses, fees and interest, to principal.
The Maker and any endorsers severally waive demand, presentment for
payment and notice of nonpayment of this Note, and each of them consents to
any renewals or extensions of the time of payment of this Note without notice.
All amounts payable under the terms of this Note shall be payable with
expenses of collection, including attorneys' fees, and without relief from
valuation and appraisement laws.
This Note is made under and will be governed in all cases by the
substantive laws of the State of Indiana, notwithstanding the fact that
Indiana conflicts of law rules might otherwise require the substantive rules
of law of another jurisdiction to apply.
CROSSMANN COMMUNITIES, INC., an Indiana
corporation
By:
Jennifer A. Holihen, Chief Financial Officer, Treasurer and Secretary
GUARANTY AGREEMENT
This undertaking and agreement (this "Guaranty") is made by, a(n)
_______________________ (the "Guarantor"), in favor of BANK ONE, INDIANA, NA,
a national banking association, in its capacity as Agent (the "Agent") for
the ratable benefit of the Lenders ("Lenders") from time to time parties to
that certain Credit Agreement described below in consideration of the loans
and other credit facilities described in this Guaranty made or to be made to
or on behalf of CROSSMANN COMMUNITIES, INC., an Indiana corporation (the
"Borrower") by the Lenders under the Credit Agreement. This Guaranty is on
the following terms:
1. BACKGROUND OF THIS GUARANTY -- CERTAIN DEFINITIONS. The
Lenders, the Agent, and the Borrower are parties to a Credit Agreement dated
the date of this Guaranty (as may be amended, collectively, the "Credit
Agreement") under the terms of which the Lenders have agreed to extend a
revolving line of credit (referred to in the Credit Agreement as the
"Revolving Loan") to the Borrower, to issue letters of credit (the "Letters of
Credit") for the account of the Borrower, and to whom Bank One, Indiana, NA
has agreed individually to extend a revolving line of credit (the "Swing Line
Loan"), subject to the fulfillment of certain conditions, one of which is the
execution and delivery by the Guarantor of this Guaranty. This Guaranty is
made by the Guarantor in consideration of the agreement of the Lenders to make
the Revolving Loan (the "Loan"), to issue the Letters of Credit, and for Bank
One, Indiana, NA to make the Swing Line Loan.. In addition to the terms
"Revolving Loan," "Loan," "Letters of Credit," and "Swing Line Loan," the
terms "Advances," "Aggregate Commitment," "Facility Termination Date" and
"Loan Document" are used in this Guaranty as defined in the Credit Agreement.
The term "Obligations" as used in this Guaranty means all of the obligations
of the Borrower in favor of the Agent and the Lenders of every type and
description, direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, including but not limited to the Borrower's
obligation to repay the principal of, interest on and expenses of collection
of the Revolving Loan and the Swing Line Loan as provided in the Credit
Agreement and the other Loan Documents, including any Advances under the
Revolving Loan or Swing Line Loan made after this date and after the initial
Facility Termination Date pursuant to any extension or extensions of the
Facility Termination Date, to reimburse the Lenders for all drawings made
under the Letters of Credit and to pay all fees associated therewith, and all
other obligations incurred pursuant to the terms of the Credit Agreement and
any other Loan Document including any obligations arising on account of any
amendment to or extension of the Credit Agreement or any other Loan Document.
The term "Default" means a "Default" as defined in the Credit Agreement.
2. THE GUARANTY. The Guarantor guarantees the full and prompt
payment of all of the Obligations when due, whether at scheduled maturity or
at maturity by virtue of acceleration on account of a Default. The Guarantor
further agrees to pay to the Lenders an amount equal to all expenses,
including reasonable attorneys' fees, paid or incurred by the Lenders after
Default in endeavoring to enforce this Guaranty. Notwithstanding any other
provision of this Guaranty, the Guarantor's liability hereunder shall be
limited to the lesser of the following amounts minus, in either case, One
Dollar ($1.00):
a. the lowest amount which would render this Guaranty a fraudulent
transfer under Section 548 of the Bankruptcy Code of 1978, as amended, or
b. if this Guaranty is subject to the Uniform Fraudulent Transfer Act
(the "UFTA") or the Uniform Fraudulent Conveyance Act (the "UFCA") or any
similar or analogous statute or rule of law, then the lowest amount which
would render this Guaranty a fraudulent conveyance under the UFTA, the UFCA,
or any such similar or analogous statute or rule of law.
The amount of the limitation imposed upon the Guarantor's liability under the
terms of the preceding sentence shall be subject to redetermination as of each
date a "transfer" is deemed to have been made on account of this Guaranty
under applicable law. The Guarantor acknowledges that information concerning
the Guarantor's financial condition is under the control of the Guarantor and
is more readily available to the Guarantor than to the Lenders, and for that
reason the Guarantor agrees that should the Guarantor claim that the amount of
its liability under this Guaranty is less than the full amount of the
Obligations because of the provisions of this paragraph, then the burden of
proving the facts which would result in such limitation shall be upon the
Guarantor.
3. FINANCIAL INFORMATION. As long as this Guaranty is in effect
the Guarantor shall furnish to the Lenders the following:
a. Annual Statements. As soon as available and in any event within
120 days after the close of each fiscal year, the consolidated and
consolidating financial statements of the Guarantor for such fiscal year,
which may the financial statements required under Article VI of the Credit
Agreement, prepared and presented in accordance with generally accepted
accounting principles, in each case setting forth in comparative form
corresponding figures for the preceding fiscal year, together with the audit
report, unqualified as to scope, of independent certified public accountants
approved by the Lenders, which approval shall not be unreasonably withheld.
b. Certificates Regarding Solvency. At such times as the Lenders
may reasonably require, a "Certificate Regarding Solvency" in the form
attached "Annex."
c. Other Information. Such other information relating to the
financial condition of the Guarantor as the Lenders may reasonably require.
Each set of annual financial statements required to be delivered by the
Guarantor to the Lenders shall be accompanied by the written representation of
the chief financial officer of the Guarantor that such financial statements
have been prepared in accordance with generally accepted accounting principles
(except that the interim statements need not include a statement of cash flows
and footnotes and need not reflect adjustments normally made at year end, if
such adjustments are not material in amount), consistently applied, (except
for changes in which the independent accountants of the Guarantor concur) and
present fairly the financial position of the Guarantor and the results of its
operation as of the dates of such statements and for the fiscal periods then
ended.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS IN CREDIT AGREEMENT.
To induce the Lenders to accept this Guaranty, the Guarantor makes each of the
representations and warranties stated in Article V of the Credit Agreement to
the Lenders, to the extent that each such representation and each such
warranty refers to a Current Subsidiary (as such term is defined in the Credit
Agreement). The Guarantor also agrees to strictly observe each of the
covenants stated in Section VI of the Credit Agreement, to the extent that
each such covenant is to be observed by a Current Subsidiary, unless the
Lenders and the Agent shall otherwise expressly consent in writing. Each of
such representations and warranties and covenants stated in the Credit
Agreement shall be incorporated by reference herein and shall be made a part
of this Guaranty.
5. GUARANTY ABSOLUTE. This Guaranty shall be absolute, continuing
and unconditional, irrespective of the irregularity, invalidity or
unenforceability of any other Loan Document and shall not be affected or
impaired by any failure, negligence or omission on the part of the Lenders to
realize upon and protect any collateral for any of the Obligations. This
Guaranty shall remain in full force and effect until all of the Obligations
have been satisfied in full and the Commitment of the Lenders to make Advances
under the Revolving Loan and the Swing Line Loan and to issue Letters of
Credit has expired. The Lenders may from time to time, without notice to the
Guarantor and without affecting the Guarantor's liability under this Guaranty:
a. obtain a security interest in any property to secure any of the
Obligations;
b. obtain the primary or secondary liability of any party or parties
in addition to the Borrower and the Guarantor with respect to any of the
Obligations;
c. extend or renew any of the Obligations for any period beyond their
original due dates;
d. release or compromise the liability of any other party or parties
which are now or may hereafter become primarily or secondarily liable with
respect to any of the Obligations;
e. release any security interest which the Lenders now has or may
hereafter obtain in any property securing any of the Obligations and permit
any substitution or exchange of any such property;
f. proceed against the Guarantor for payment of the Obligations,
whether or not the Lenders shall have resorted to any property securing any of
the Obligations or shall have proceeded against the Borrower or any other
party primarily or secondarily liable with respect to any of the Obligations;
g. amend the terms of the Credit Agreement from time to time in any
particulars, or
h. extend loans and other credit accommodations to the Borrower in
addition to the Revolving Loan, the Swing Line Loan, and the Letters of
Credit, and increase the maximum amount which may be lent to the Borrower
under the Revolving Loan or the Swing Line Loan.
6. ASSIGNMENT AND PARTICIPATIONS. The Lenders may, without notice
to the Borrower or the Guarantor, sell or otherwise assign all or any portion
of the Obligations and any participations therein, all pursuant to the terms
and provisions of the Credit Agreement, and upon any such sale or assignment,
the transferee shall have the right to enforce this Guaranty to the extent of
the transferee's interest directly against the Guarantor as fully as if the
transferee were specifically named in the Guaranty as the holder of such
interest, but the Lenders shall have the unimpaired right to enforce this
Guaranty for the benefit of the Lenders and for the benefit of any participant
in respect of whose participation the Lenders has retained such right.
7. SUBROGATION WAIVER. In order to induce the Lenders to make the
Revolving Loan and Swing Line Loan and to issue Letters of Credit for the
account of the Borrower, in reliance, in part, upon this Guaranty,
notwithstanding the fact that the Guarantor is an "insider" with respect to
the Borrower, as the term "insider" is defined in the Bankruptcy Code, the
Guarantor waives for itself, its legal representatives and assigns any right
of indemnity, reimbursement or contribution from the Borrower or any other
person obligated with respect to any of the Obligations (any such other person
being referred to hereafter in this paragraph as a "Co-Obligor") or from the
property of the Borrower or from the property of any Co-Obligor, and the
Guarantor further waives any right of subrogation to the rights of the Lenders
or the Agent against the Borrower or any Co-Obligor or the property of the
Borrower or any Co-Obligor which would otherwise arise by virtue of any
payment made by the Guarantor to the Lenders on account of this Guaranty,
whether any such right of indemnity, reimbursement, contribution or
subrogation would otherwise arise by virtue of contract, whether express or
implied, with any person or as a matter of law or equity, and the Guarantor
undertakes on behalf of itself, its legal representatives and assigns that
neither the Guarantor nor the Guarantor's legal representatives or assigns
will attempt to exercise or accept the benefits of any such right and should
the Guarantor or the Guarantor's legal representative or assigns receive any
payment or distribution of money or other property on account of such right
notwithstanding the provisions of this paragraph, such money or other property
shall be held in trust by the recipient for the Lenders and the Agent and
shall immediately be delivered to the Agent for application to the Obligations
in the same form as received, with the addition only of such endorsements or
assignments as may be necessary to perfect the title of the Agent and the
Lenders thereto.
8. OTHER WAIVERS. The Guarantor waives: (i) notice of the
acceptance of this Guaranty, (ii) notice of the existence and creation of all
or any of the Obligations, (iii) notice of nonpayment of any of the
Obligations and (iv) diligence by the Lenders in collection of the Obligations
and the protection of or realization upon any collateral for the Obligations.
9. REINSTATEMENT. If any amount which is paid to the Agent or the
Lenders by the Borrower or any other party and which is applied by the Agent
or the Lenders to the satisfaction of any of the Obligations, is returned by
the Agent or the Lenders to the Borrower or such other party or a trustee in
Bankruptcy or other legal representative of the Borrower or such other party
by virtue of a claim that such payment constituted a voidable preference under
the Bankruptcy Code or under any state insolvency law, whether such amount is
returned under court order or pursuant to settlement of the claim of
preference, then this Guaranty shall be reinstated as to such amount as though
such payment to the Agent or the Lenders had never been made and
notwithstanding any intervening return or cancellation of any note or other
instrument or agreement evidencing the reinstated Obligations.
10. MISCELLANEOUS. This Guaranty shall be binding upon the
Guarantor, upon the Guarantor's legal representatives, successors and assigns.
If any provision of this Guaranty is determined to be illegal or
unenforceable, such provision shall be deemed to be severable from the balance
of the provisions of this Guaranty and the remaining provisions shall be
enforceable in accordance with their terms.
11. CHOICE OF LAW. This Guaranty is made under and will be
governed in all cases by the substantive laws of the State of Indiana,
notwithstanding the fact that Indiana conflicts of law rules might otherwise
require the substantive rules of law of another jurisdiction to apply.
12. AUTHORITY. In order to induce the Agent and the Lenders to
accept this Guaranty and to make the Loan to the Borrower, the Guarantor
represents and warrants to the Agent and the Lenders that: (i) the Guarantor
is a[ corporation][limited liability company][partnership] organized, existing
and in good standing under the laws of the State of; (ii) execution and
delivery of this Guaranty are within the Guarantor's [corporate] powers, have
been duly authorized by all necessary corporate action and do not contravene
or conflict with any provision of law or of the [Articles of Incorporation or
By-laws][Articles of Organization or Operating Agreement][Partnership
Agreement or Certificate of Partnership] of the Guarantor or of any agreement
binding upon the Guarantor or its properties, and (iii) this Guaranty is the
legal, valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms.
13. GOVERNING LAW -- JURISDICTION. Except as may otherwise be
expressly provided in any other Loan Document, this Agreement and all other
Loan Documents are made under and will be governed in all cases by the
substantive laws of the State of Indiana, notwithstanding the fact that
Indiana conflicts of law rules might otherwise require the substantive rules
of law of another jurisdiction to apply.
14. CONSENT TO JURISDICTION. THE GUARANTOR HEREBY IRREVOCABLY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
INDIANA STATE COURT SITTING IN MARION COUNTY, INDIANA IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE GUARANTOR
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT 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 AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST THE GUARANTOR IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE GUARANTOR AGAINST THE AGENT OR
ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN MARION COUNTY,
INDIANA.
15. WAIVER OF JURY TRIAL. THE GUARANTOR, THE 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.
Dated as of April 1, 1999.
(Name of
Guarantor)
By:
(Printed name and title or capacity)
Address: ___________________________
___________________________
__________________________
STATE OF _____________ )
) SS:
COUNTY OF ___________ )
Before me the undersigned, a Notary Public in and for said County and State,
personally appeared, the of, a(n), who as such authorized officer
acknowledged the execution of the foregoing Guaranty Agreement on behalf of
said this day of April, 1999.
Notary Public
(Printed Name)
My Commission Expires:________________
County of Residence:________________
<PAGE>
ANNEX
CERTIFICATE REGARDING SOLVENCY
, a(n) _____________________ (the "Guarantor"), by its duly authorized
officer, makes the following representations to BANK ONE, INDIANA, NA, a
national banking association, in its capacity as agent (the "Agent") for the
Lenders (the "Lenders") from time to time parties to that certain Credit
Agreement identified below, and acknowledges that the Agent is entitled to
rely and will rely upon these representations, in providing certain financial
accommodations to CROSSMANN COMMUNITIES, INC., an Indiana corporation (the
"Borrower"), pursuant to a certain Credit Agreement entered into by and among
the Agent, the Borrower, and the Lenders dated April 1, 1999 (the "Credit
Agreement").
1. The assets of the Guarantor at a "fair valuation" within the meaning of
the Bankruptcy Code of 1978, as amended, (the "Code") are worth approximately
$as of this date.
2. The liabilities of the Guarantor, including without limitation
contingent liabilities to the extent appropriate for consideration in
determining whether the Guarantor is "insolvent", within the meaning of the
Code, but excluding the Guarantor's contingent liability under the Guaranty
Agreement (the "Guaranty") required to be given by the Guarantor under the
terms of the Credit Agreement, total approximately $ as of, 19, the end of
the last fiscal quarter of the Guarantor.
3. The Guarantor is not insolvent within the meaning of the Code, after
taking into account its contingent liability under the Guaranty.
4. After taking into account its contingent liability under the Guaranty,
the Guarantor has sufficient capital for the operation of its business as
presently conducted and at the level of operations contemplated for the
foreseeable future. The minimum amount of capital required to support the
Guarantor's operations at the level planned for the foreseeable future is $.
5. The Guarantor is currently paying its debts as they become due in the
ordinary course of its business. After taking into account its contingent
liability under the Guaranty, the Guarantor believes that it will be able to
continue to pay its debts as they become due in the ordinary course of its
business.
Dated as of, 199.
By:
(printed name and title)
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain Credit
Agreement dated as of April 1, 1999 (as amended, modified, renewed or extended
from time to time, the "Agreement"), among the CROSSMANN COMMUNITIES, INC., an
Indiana corporation (the "Borrower"), the lenders party thereto and BANK ONE,
INDIANA, NA, a national banking association, as Agent for the Lenders. Unless
otherwise defined herein, capitalized terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected Chief Financial Officer, Treasurer and
Secretary of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting
period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which
constitutes a Default or Unmatured Default during or at the end of the
accounting period covered by the attached financial statements or as of the
date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrower's compliance with certain covenants of the Agreement,
all of which data and computations are true, complete and correct.
**[5. Schedule II hereto sets forth the determination of the interest
rates to be paid for Advances and the commitment fee rates commencing on the
fifth day following the delivery hereof.]**
**[6. Schedule III attached hereto sets forth the various reports and
deliveries which are required at this time under the Credit Agreement, the
Security Agreement and the other Loan Documents and the status of
compliance.]**
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
.
The foregoing certifications, together with the computations set forth in
Schedule I **[and Schedule II]** hereto and the financial statements delivered
with this Certificate in support hereof, are made and delivered as of this 1st
day of April 1, 1999.
CROSSMANN COMMUNITIES, INC., an Indiana
corporation
By: _______________________________
Jennifer A. Holihen, Chief Financial
Officer, Treasurer and Secretary
<PAGE>
SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ with
Provisions of ______ and ______ of
the Agreement
<PAGE>
SCHEDULE II TO COMPLIANCE CERTIFICATE
Borrower's Applicable Spread Calculation
<PAGE>
SCHEDULE III TO COMPLIANCE CERTIFICATE
Reports and Deliveries Currently Due
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain Credit
Agreement dated as of April 1, 1999 (as amended, modified, renewed or extended
from time to time, the "Agreement"), among the CROSSMANN COMMUNITIES, INC., an
Indiana corporation (the "Borrower"), the lenders party thereto and BANK ONE,
INDIANA, NA, a national banking association, as Agent for the Lenders. Unless
otherwise defined herein, capitalized terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected Chief Financial Officer, Treasurer and
Secretary of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting
period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which
constitutes a Default or Unmatured Default during or at the end of the
accounting period covered by the attached financial statements or as of the
date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrower's compliance with certain covenants of the Agreement,
all of which data and computations are true, complete and correct.
**[5. Schedule II hereto sets forth the determination of the interest
rates to be paid for Advances and the commitment fee rates commencing on the
fifth day following the delivery hereof.]**
**[6. Schedule III attached hereto sets forth the various reports and
deliveries which are required at this time under the Credit Agreement, the
Security Agreement and the other Loan Documents and the status of
compliance.]**
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
.
The foregoing certifications, together with the computations set forth in
Schedule I **[and Schedule II]** hereto and the financial statements delivered
with this Certificate in support hereof, are made and delivered as of this 1st
day of April 1, 1999.
CROSSMANN COMMUNITIES, INC., an Indiana
corporation
By: _______________________________
Jennifer A. Holihen, Chief Financial
Officer, Treasurer and Secretary
<PAGE>
SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ with
Provisions of ______ and ______ of
the Agreement
<PAGE>
SCHEDULE II TO COMPLIANCE CERTIFICATE
Borrower's Applicable Spread Calculation
<PAGE>
SCHEDULE III TO COMPLIANCE CERTIFICATE
Reports and Deliveries Currently Due
_________________________, _______
BANK ONE, INDIANA, NA, as Agent
One Indiana Square
14th Floor
Mail Suite 7025
Indianapolis, Indiana 46266
Attention: Manager, Real Estate Department
Re: Credit Agreement dated as of April 1, 1999, among Crossmann
Communities, Inc., Bank One, Indiana, NA, as Agent, and the lenders party
thereto (the "Credit Agreement")
Gentlemen:
Pursuant to Section 4.3 of the above-referenced Credit Agreement, we
hereby request that you consent to the addition of
_______________________________, a __________________, as a Current
Subsidiary for all purposes under the Credit Agreement. Enclosed are all of
the original executed documents required by Section 4.3 to add this entity as
a Current Subsidiary.
Please signify your consent to adding ______________________________ as a
Current Subsidiary by executing this letter in the space provided below.
Sincerely,
CROSSMANN COMMUNITIES, INC.
By: ___________________________
___________________________
(Printed name and title)
<PAGE>
BANK ONE, INDIANA, NA, a national banking association, as Agent, by its
duly authorized officer, hereby consents to the addition of
_______________________ as a Current Subsidiary for all purposes of the Credit
Agreement.
Dated as of ______________________, _______.
BANK ONE, INDIANA, NA, as Agent
By: ___________________________
___________________________
(Printed name and title)
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
________________ (the "Assignor") and ______________________ (the "Assignee")
is dated as of _____________, 19___. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit
Agreement (which, as it may be amended, modified, renewed or extended from
time to time is herein called the "Credit Agreement") described in Item 1 of
Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used herein and
not otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under
the Credit Agreement and the other Loan Documents, such that after giving
effect to such assignment the Assignee shall have purchased pursuant to this
Assignment Agreement the percentage interest specified in Item 3 of Schedule 1
of all outstanding rights and obligations under the Credit Agreement and the
other Loan Documents relating to the facilities listed in Item 3 of Schedule
1. The aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4 of
Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement
(the "Effective Date") shall be the later of the date specified in Item 5 of
Schedule 1 or two (2) Business Days (or such shorter period agreed to by the
Agent) after this Assignment Agreement, together with any consents required
under the Credit Agreement, are delivered to the Agent. In no event will the
Effective Date occur if the payments required to be made by the Assignee to
the Assignor on the Effective Date are not made on the proposed Effective
Date.
4. PAYMENT OBLIGATIONS. In consideration for the sale and
assignment of Loans hereunder, the Assignee shall pay the Assignor, on the
Effective Date, the amount agreed to by the Assignor and the Assignee. On and
after the Effective Date, the Assignee shall be entitled to receive from the
Agent all payments of principal, interest and fees with respect to the
interest assigned hereby. The Assignee will promptly remit to the Assignor
any interest on Loans and fees received from the Agent which relate to the
portion of the Commitment or Loans assigned to the Assignee hereunder for
periods prior to the Effective Date and not previously paid by the Assignee to
the Assignor. In the event that either party hereto receives any payment to
which the other party hereto is entitled under this Assignment Agreement, then
the party receiving such amount shall promptly remit it to the other party
hereto.
5. RECORDATION FEE. The Assignor and Assignee each agree to pay
one-half of the recordation fee required to be paid to the Agent in connection
with this Assignment Agreement unless otherwise specified in Item 6 of
Schedule 1.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor
is duly authorized. It is understood and agreed that the assignment and
assumption hereunder are made without recourse to the Assignor and that the
Assignor makes no other representation or warranty of any kind to the
Assignee. Neither the Assignor nor any of its officers, directors, employees,
agents or attorneys shall be responsible for (i) the due execution, legality,
validity, enforceability, genuineness, sufficiency or collectability of any
Loan Document, including without limitation, documents granting the Assignor
and the other Lenders a security interest in assets of the Borrower or any
guarantor, (ii) any representation, warranty or statement made in or in
connection with any of the Loan Documents, (iii) the financial condition or
creditworthiness of the Borrower or any guarantor, (iv) the performance of or
compliance with any of the terms or provisions of any of the Loan Documents,
(v) inspecting any of the property, books or records of the Borrower, (vi) the
validity, enforceability, perfection, priority, condition, value or
sufficiency of any collateral securing or purporting to secure the Loans or
(vii) any mistake, error of judgment, or action taken or omitted to be taken
in connection with the Loans or the Loan Documents.
7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee
(i) confirms that it has received a copy of the Credit Agreement, together
with copies of the financial statements requested by the Assignee and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment Agreement, (ii)
agrees that it will, independently and without reliance upon the Agent, the
Assignor or any other Lender and based on such documents and information at it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Documents, (iii) appoints and
authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto, (iv) confirms that the execution and delivery of this Assignment
Agreement by the Assignee is duly authorized, (v) agrees that it will perform
in accordance with their terms all of the obligations which by the terms of
the Loan Documents are required to be performed by it as a Lender, (vi) agrees
that its payment instructions and notice instructions are as set forth in the
attachment to Schedule 1, (vii) confirms that none of the funds, monies,
assets or other consideration being used to make the purchase and assumption
hereunder are "plan assets" as defined under ERISA and that its rights,
benefits and interests in and under the Loan Documents will not be "plan
assets" under ERISA, (viii) agrees to indemnify and hold the Assignor harmless
against all losses, costs and expenses (including, without limitation,
reasonable attorneys' fees) and liabilities incurred by the Assignor in
connection with or arising in any manner from the Assignee's nonperformance of
the obligations assumed under this Assignment Agreement, and (ix) if
applicable, attaches the forms prescribed by the Internal Revenue Service of
the United States certifying that the Assignee is entitled to receive payments
under the Loan Documents without deduction or withholding of any United States
federal income taxes.
8. GOVERNING LAW. This Assignment Agreement shall be governed by
the internal law, and not the law of conflicts, of the State of Indiana.
9. NOTICES. Notices shall be given under this Assignment Agreement
in the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall
be the address set forth in the attachment to Schedule 1.
10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement
may be executed in counterparts. Transmission by facsimile of an executed
counterpart of this Assignment Agreement shall be deemed to constitute due and
sufficient delivery of such counterpart and such facsimile shall be deemed to
be an original counterpart of this Assignment Agreement.
IN WITNESS WHEREOF, the duly authorized officers of the parties hereto
have executed this Assignment Agreement by executing Schedule 1 hereto as of
the date first above written.
______________________________, ("Assignor")
By: ___________________________
__________________________
(Printed name and title)
______________________________, ("Assignee")
By: ___________________________
__________________________
(Printed name and title)
Agreed and Accepted: CROSSMANN COMMUNITIES, INC., an
Indiana corporation
By: ___________________________
__________________________
(Printed name and title)
Agreed and Accepted: BANK ONE, INDIANA, NA, a national
banking association, as Agent
By: ___________________________
__________________________
(Printed name and title)
<PAGE>
SCHEDULE 1
TO ASSIGNMENT AGREEMENT
1. Credit Agreement entered into as of April 1, 1999, by and among
Crossmann Communities, Inc., an Indiana corporation, Bank One, Indiana, NA,
individually and as Lender, and the Lenders from time to time party thereto.
2. Date of Assignment Agreement: ______________, 19___.
3. Amounts (As of Date of Item 2 above):
a. Assignee's percentage of Revolving Loan Facility purchased under
the Assignment Agreement ____%.
b. Dollar Amount of Revolving Loan Facility purchased under the
Assignment Agreement $_______.
4. Assignee's Commitment (or Loans with respect to terminated Commitments)
purchased
hereunder: $___________.
5. Proposed Effective Date: ______________________
6. Non-standard Recordation Fee
Arrangement N/A***
[Assignor/Assignee
to pay 100% of fee]
[Fee waived by Agent]
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: __________________________ By:
______________________________
Title: __________________________ Title:
_______________________________
<PAGE>
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
Attach Assignor's Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
CONTACT:
Name: ___________________________ Telephone No.:
__________________
Fax No.: ___________________________ Telex No.:
_________________ Answerback:
_____________________
PAYMENT INFORMATION:
Name & ABA # of Destination Bank:
__________________________________________
Account Name & Number for Wire Transfer:
_____________________________________
___________________________________
Other Instructions:
____________________________________________________________
ADDRESS FOR NOTICES FOR ASSIGNOR:
________________________________________________
_________________________________________________
_____________________________________________
ASSIGNEE INFORMATION
CREDIT CONTACT:
Name: ___________________________ Telephone No.:
__________________
Fax No.: ___________________________ Telex No.:
_________________ Answerback:
_____________________
KEY OPERATIONS CONTACTS:
Booking Installation: _____________________ Booking Installation:
__________________
Name: _____________________ Name: __________________
Telephone No.: _____________________ Telephone No.:
__________________
Fax No.: _____________________ Fax No.:
__________________
Telex No.: _____________________ Telex No.:
___________________
Answerback: _____________________ Answerback:
___________________
PAYMENT INFORMATION:
Name & ABA # of Destination Bank:
__________________________________________
Account Name & Number for Wire Transfer:
_____________________________________
___________________________________
Other Instructions:
____________________________________________________________
ADDRESS FOR NOTICES FOR ASSIGNOR:
________________________________________________
_________________________________________________
________________________________________________
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Crossmann Communities, Inc.
Exhibit 27.1
Article 5 Financial Data Schedule for 1999 1st Quarter 10-Q
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 1138958
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 232014970
<CURRENT-ASSETS> 0
<PP&E> 7552082
<DEPRECIATION> 3560183
<TOTAL-ASSETS> 286670342
<CURRENT-LIABILITIES> 0
<BONDS> 110152666
0
0
<COMMON> 65154710
<OTHER-SE> 89160300
<TOTAL-LIABILITY-AND-EQUITY> 286670342
<SALES> 90416073
<TOTAL-REVENUES> 90416073
<CGS> 72316290
<TOTAL-COSTS> 72316290
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 475600
<INCOME-PRETAX> 6724144
<INCOME-TAX> 2689822
<INCOME-CONTINUING> 4034322
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4034322
<EPS-PRIMARY> .35
<EPS-DILUTED> .34
</TABLE>
