Document:

ex101.htm

Exhibit 10.1

 

$350,000,000

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

among

 

STANDARD PACIFIC CORP.,

 

a Delaware corporation,

as Borrower,

 

The Several Lenders from Time to Time Parties Hereto,

 

and

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

with

 

J.P. MORGAN SECURITIES LLC and CITIGROUP GLOBAL MARKETS, INC.,

 

as Joint Lead Arrangers and Joint Bookrunners

and

BANK OF AMERICA, N.A., as Syndication Agent

 

Dated as of October 19, 2012

 

 

  

  

  

    TABLE OF CONTENTS

 

   Page              

	
 

	
TABLE OF CONTENTS

	
 

 

	
SECTION 1.

	
DEFINITIONS

	
1

 

	
  

	
1.1

	
Defined Terms 

	
1

 

	
  

	
1.2

	
Other Definitional Provisions 

	
18

 

	
SECTION 2.

	
AMOUNT AND TERMS OF COMMITMENTS

	
19

 

	
  

	
2.1

	
Commitments 

	
19

 

	
  

	
2.2

	
Procedure for Revolving Loan Borrowing 

	
19

 

	
  

	
2.3

	
Swingline Commitment 

	
19

 

	
  

	
2.4

	
Procedure for Swingline Borrowing; Refunding of Swingline Loans 

	
20

 

	
  

	
2.5

	
Commitment Fees, Etc 

	
21

 

	
  

	
2.6

	
Termination or Reduction of Commitment 

	
21

 

	
  

	
2.7

	
Optional Prepayments 

	
22

 

	
  

	
2.8

	
Mandatory Prepayments 

	
22

 

	
  

	
2.9

	
Conversion and Continuation Options 

	
22

 

	
  

	
2.10

	
Limitations on Eurodollar Tranches

	
23

 

	
  

	
2.11

	
Interest Rates and Payment Dates 

	
23

 

	
  

	
2.12

	
Computation of Interest and Fees 

	
23

 

	
  

	
2.13

	
Inability to Determine Interest Rate

	
24

 

	
 

	
2.14

	
Pro Rata Treatment and Payments 

	
24

 

	
  

	
2.15

	
Requirements of Law 

	
25

 

	
  

	
2.16

	
Taxes 

	
26

 

	
  

	
2.17

	
Indemnity 

	
28

 

	
  

	
2.18

	
Change of Lending Office 

	
28

 

	
  

	
2.19

	
Replacement of Lenders 

	
29

 

	
  

	
2.20

	
Defaulting Lenders 

	
29

 

	
  

	
2.21

	
Increase in Commitments 

	
31

 

	
SECTION 3.

	
LETTERS OF CREDIT

	
32

 

	
  

	
3.1

	
L/C Commitment 

	
32

 

	
  

	
3.2

	
Procedure for Issuance of Letter of Credit 

	
32

 

	
  

	
3.3

	
Fees and Other Charges 

	
33

 

	
  

	
3.4

	
L/C Participations 

	
33

 

	
  

	
3.5

	
Reimbursement Obligation of Borrower 

	
34

 

  

- i -

  

TABLE OF CONTENTS

(continued)

 

Page              

	
  

	
3.6

	
Obligations Absolute 

	
34

 

	
  

	
3.7

	
Letter of Credit Payments 

	
34

 

	
  

	
3.8

	
Applications 

	
35

 

	
  

	
3.9

	
Cash Collateral 

	
35

 

	
SECTION 4.

	
REPRESENTATIONS AND WARRANTIES

	
35

 

	
  

	
4.1

	
Incorporation, Qualification, Powers, and Capital Stock 

	
35

 

	
  

	
4.2

	
Execution, Delivery, and Performance of Loan Documents 

	
35

 

	
  

	
4.3

	
Compliance with Laws and Other Requirements 

	
36

 

	
  

	
4.4

	
Entities Owned 

	
36

 

	
  

	
4.5

	
Financial Statements 

	
37

 

	
  

	
4.6

	
No Material Adverse Change 

	
37

 

	
  

	
4.7

	
Tax Liability 

	
38

 

	
  

	
4.8

	
Litigation 

	
38

 

	
  

	
4.9

	
Pension Plan 

	
38

 

	
  

	
4.10

	
Regulations U and X; Investment Company Act 

	
38

 

	
  

	
4.11

	
No Default 

	
38

 

	
  

	
4.12

	
Environmental Compliance 

	
39

 

	
  

	
4.13

	
Solvent 

	
39

 

	
  

	
4.14

	
Senior Debt 

	
39

 

	
SECTION 5.

	
CONDITIONS PRECEDENT

	
39

 

	
  

	
5.1

	
Conditions to Initial Extension of Credit 

	
39

 

	
  

	
5.2

	
Conditions to Each Extension of Credit 

	
41

 

	
SECTION 6.

	
AFFIRMATIVE COVENANTS

	
41

 

	
  

	
6.1

	
Reporting Requirements 

	
41

 

	
  

	
6.2

	
Payment of Taxes and Other Potential Liens 

	
43

 

	
  

	
6.3

	
Preservation of Existence 

	
43

 

	
  

	
6.4

	
Maintenance of Properties 

	
43

 

	
  

	
6.5

	
Maintenance of Insurance 

	
44

 

	
  

	
6.6

	
Books and Records 

	
44

 

	
  

	
6.7

	
Inspection Rights 

	
44

 

	
  

	
6.8

	
Compliance with Laws and Other Requirements 

	
44

 

	
  

	
6.9

	
Guaranties 

	
44

 

  

- ii -

  

TABLE OF CONTENTS

(continued)

 

Page              

	
  

	
6.10

	
Use of Proceeds 

	
45

 

	
SECTION 7.

	
NEGATIVE COVENANTS

	
45

 

	
  

	
7.1

	
Mergers 

	
45

 

	
  

	
7.2

	
Liens 

	
45

 

	
  

	
7.3

	
Prepayment of Indebtedness 

	
47

 

	
  

	
7.4

	
Change in Nature of Business 

	
47

 

	
  

	
7.5

	
Pension Plan 

	
47

 

	
  

	
7.6

	

Dividends and Subordinated Debt 

	
48

 

	
  

	
7.7

	
Disposition of Properties 

	
48

 

	
  

	
7.8

	
Limitation on Investments 

	
49

 

	
  

	
7.9

	
Transactions with Affiliates 

	
50

 

	
  

	
7.10

	
Consolidated Tangible Net Worth

	
50

 

	
  

	
7.11

	
Consolidated Interest Expense 

	
50

 

	
  

	
7.12

	
Leverage Ratio 

	
50

 

	
  

	
7.13

	
Land Not Under Development to Consolidated Tangible Net Worth Ratio 

	
51

 

	
SECTION 8.

	
EVENTS OF DEFAULT

	
51

 

	
SECTION 9.

	
ADMINISTRATIVE AGENT

	
54

 

	
  

	
9.1

	
Appointment 

	
54

 

	
  

	
9.2

	
Delegation of Duties 

	
54

 

	
  

	
9.3

	
Exculpatory Provisions 

	
54

 

	
  

	
9.4

	

Reliance by Administrative Agent 

	
54

 

	
  

	
9.5

	
Notice of Default 

	
55

 

	
  

	
9.6

	
Non-Reliance on Administrative Agent and Other Lenders 

	
55

 

	
  

	
9.7

	
Indemnification 

	
55

 

	
  

	
9.8

	
Administrative Agent in Its Individual Capacity 

	
56

 

	
  

	
9.9

	
Successor Administrative Agent 

	
56

 

	
SECTION 10.

	
MISCELLANEOUS

	
56

 

	
  

	
10.1

	
Amendments and Waivers 

	
57

 

	
  

	
10.2

	
Notices 

	
57

 

	
  

	
10.3

	

No Waiver; Cumulative Remedies 

	
58

 

	
  

	
10.4

	
Survival of Representations and Warranties 

	
58

 

	
  

	
10.5

	
Payment of Expenses and Taxes 

	
58

 

  

- iii -

  

TABLE OF CONTENTS

(continued)

 

Page              

	
 

	
10.6

	
Successors and Assigns; Participations and Assignments 

	
59

 

	
  

	
10.7

	
Adjustments; Set-off 

	
61

 

	
  

	
10.8

	
Counterparts 

	
61

 

	
  

	
10.9

	
Severability 

	
62

 

	
  

	
10.10

	
Integration 

	
62

 

	
  

	
10.11

	
Governing Law 

	
62

 

	
  

	
10.12

	
Submission to Jurisdiction; Waivers 

	
62

 

	
  

	
10.13

	
Acknowledgements 

	
63

 

	
  

	
10.14

	
Releases of Guarantee Obligations

	
63

 

	
  

	
10.15

	
Confidentiality 

	
63

 

	
  

	
10.16

	
WAIVERS OF JURY TRIAL 

	
63

 

	
  

	
10.17

	
PATRIOT Act 

	
64

 

 

  

- iv -

  

SCHEDULES:

1.1         Commitments

4.4         Subsidiaries and Guarantors

EXHIBITS:

 

A          Form of Guarantee Agreement

B           Form of Compliance Certificate

C           Form of Assignment and Acceptance

D-1       Form of Exemption Certificate

D-2       Form of Exemption Certificate - Partnership

E           Form of New Lender Supplement

F-1        Form of Legal Opinion of Snell & Wilmer L.L.P.

F-2        Form of Legal Opinion of Smith, Gambrell & Russell, LLP

G           Form of Borrowing Base Certificate

 

 

  

i

  

AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”), dated as of October 19, 2012, among STANDARD PACIFIC CORP., a Delaware corporation (the “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “Lenders”), and JPMORGAN CHASE BANK, N.A., as administrative agent.

 

Borrower, various lenders, and JPMorgan Chase Bank, N.A., as administrative agent for such lenders are parties to that certain Credit Agreement, dated as of February 28, 2011 (as amended, supplemented or otherwise modified through the date hereof, the “Original Credit Agreement”).  Administrative Agent, the Lenders and Borrower now desire to amend and restate the Original Credit Agreement in its entirety in accordance with the terms and provisions contained herein.  Accordingly, in consideration of the premises and the mutual agreements, covenants and conditions hereinafter set forth, Borrower, Administrative Agent and each of the Lenders agree as follows:

 

 

SECTION 1.    DEFINITIONS

1.1 Defined Terms.

 

As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

 

“2016 Indenture”:  that certain 10.75% Senior Notes due 2016 Indenture by and between Standard Pacific Escrow LLC (“Initial Issuer”) and The Bank of New York Mellon Trust Company, N.A., as Trustee (“Trustee”), dated as of September 17, 2009, as supplemented by that certain First Supplemental Indenture dated October 8, 2009, among Initial Issuer, the Borrower, the subsidiaries of the Borrower party thereto and Trustee.

 

“ABR”:  for any day, a rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1% and (c) the Eurodollar Rate for a one month Interest Period beginning on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%.  Any change in the ABR due to a change in the Prime Rate, the Federal Funds Effective Rate or the Eurodollar Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate, the Federal Funds Effective Rate or the Eurodollar Rate, respectively.

 

“ABR Loans”:  Loans the rate of interest applicable to which is based upon the ABR.

 

“Additional Lien Limit”:  as defined in Section 7.2(p).

 

“Adjusted Consolidated Tangible Net Worth”:  at any date, the consolidated stockholders equity of Borrower and its Subsidiaries determined in accordance with GAAP, less intangible assets, less minority interests in Consolidated Homebuilding Joint Ventures to the extent included in consolidated stockholders equity of Borrower and its Subsidiaries, less investments in Excluded Subsidiaries in excess of 45% of Consolidated Tangible Net Worth, all determined as of such date.

 

“Administrative Agent”:  JPMorgan Chase Bank, N.A., together with its affiliates, successors and assigns, as Administrative Agent for the Lenders under this Agreement and the other Loan Documents.

 

  

1

  

 

“Affiliate”:  any Person (a) which directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with another Person, or (b) which directly, or indirectly through one or more intermediaries, owns beneficially or of record twenty percent (20%) or more of the Voting Stock of such other Person.  The term “control” means the possession, directly or indirectly, of the power to cause the direction of the management and policies of a Person, whether through the ownership of voting securities or partnership interests, by contract, family relationship, or otherwise.  With respect to the Loan Parties, the term “Affiliate” shall not include (i) MP CA Homes LLC or any direct or indirect parent entity of MP CA Homes LLC (any such entity, a “MP Excluded Entity”) and (ii) taking into account such exclusion of MP Excluded Entities as Affiliates of the Loan Parties, any Affiliate of a MP Excluded Entity that would not otherwise be deemed to be an Affiliate of a Loan Party.

 

“Aggregate Exposure”:  with respect to any Lender at any time, an amount equal to (a) until the Closing Date, the aggregate amount of such Lender’s Commitments at such time and (b) thereafter, the amount of such Lender’s Commitments then in effect or, if the Commitments have been terminated, the amount of such Lender’s Revolving Percentage of the Outstanding Amount.

 

“Aggregate Exposure Percentage”:  with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.

 

“Agreement”:  as defined in the preamble hereto.

 

“Anti-Terrorism Order”: means Executive Order No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by the President of the United States of America (Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism).

 

“Applicable Margin”:  for each Class A Loan and Class B Loan, the rate per annum set forth under the relevant column heading below:

 

	  	
ABR Loans

	
Eurodollar Loans

	
Revolving Loans and

Swingline Loans

	
2.50%

	
3.50%

 

“Application”:  an application, in such form as an Issuing Lender may specify from time to time, requesting such Issuing Lender to open a Letter of Credit.

 

“Assignment and Acceptance”:  an Assignment and Acceptance, substantially in the form of Exhibit C.

 

“Assignor”:  as defined in Section 10.6(c).

 

“Available Commitment”:  as to any Class A Lender, such Lender’s Class A Available Commitment and, as to any Class B Lender, such Lender’s Class B Available Commitment.

 

 

“Basel III”:  the third of the so-called Basel Accords issued by the Basel Committee on Banking Supervision.

 

  

2

  

“Benefitted Lender”:  as defined in Section 10.7(a).

 

“Board”:  the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

“Borrower”:  as defined in the preamble hereto.

 

“Borrowing Base”:  as of any date, an amount calculated as follows:

 

(a)           100% of the amount of Escrow Proceeds Receivable; plus

 

(b)           90% of the book value of Units Under Contract; plus

 

(c)           85% of the book value of Units Under Construction; plus

 

(d)           subject to the limitations set forth below, 85% of the book value of Speculative Units (other than Model Units); plus

 

(e)           subject to the limitations set forth below, 90% of the book value of Model Units; plus

 

(f)           65% of the book value of Finished Lots; plus

 

(g)           65% of the book value of Land Under Development; plus

 

(h)           subject to the limitation set forth below, 50% of the book value of Entitled Land that is not included in the Borrowing Base above.

 

Notwithstanding the foregoing:

 

(i)           the advance rate for Speculative Units (other than Model Units) shall decrease to (A) 75% for any Unit that has been a Speculative Unit for more than 180 days, but less than 360 days and (B) 25% for any Unit that has been a Speculative Unit for 360 days or more;

 

(ii)           Units that have been Speculative Units (other than Model Units) for more than 180 days shall not exceed $50,000,000 of the Borrowing Base;

 

(iii)           the advance rate for Model Units shall decrease to 0% for any Unit that has been a Model Unit for more than 180 days following the sale of the last production Unit in the applicable project relating to such Model Unit; and

 

(iv)           the Borrowing Base shall not include any amount under clause (h) above to the extent that such amount exceeds 20% of the total Borrowing Base.

 

“Borrowing Base Availability”:  as of any date, the lesser of (a) the Commitments and (b) (i) the Borrowing Base calculated in the most recently delivered Borrowing Base Certificate plus (ii) the Overadvance Amount minus (iii) the Borrowing Base Debt on such date; provided, however, if any Consolidated Debt is (A) secured by Model Units or (B) secured by liens that are accounted for by the Borrower as liens that are part of the basket permitted by Section 4.07(o) of the 2016 Indenture, other than liens relating to Cash Collateral provided hereunder (such amounts in clause (A) and (B) hereof, the “Excess Consolidated Debt Amount”), then for purposes of determining the Borrowing Base Availability 

 

  

3

  

 

as of such date, the Overadvance Amount shall be decreased by the Excess Consolidated Debt Amount (rounded up to the nearest $10,000,000 increment, if applicable).

 

“Borrowing Base Certificate”:  a certificate signed by a Responsible Officer of Borrower, substantially in the form of Exhibit G.

 

“Borrowing Base Debt”:  as of any date, Consolidated Debt minus (a) Unrestricted Cash in excess of $5,000,000 minus (b) Subordinated Debt minus (c) any Consolidated Debt that is (i) Non-Recourse Indebtedness to Borrower and its Subsidiaries (other than the Excluded Subsidiaries) or (ii) secured by real property (but including the amount by which such Consolidated Debt exceeds the book value of such real property).

 

“Borrowing Date”:  any Business Day specified by Borrower as a date on which Borrower requests the relevant Lenders to make Loans hereunder.

 

“Business Day”:  a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close, provided, that with respect to notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, such day is also a day for trading by and between banks in Dollar deposits in the interbank Eurodollar market.

 

“Capitalized Lease Obligations”:  any obligations under a lease that are required to be capitalized for financial reporting purposes in accordance with GAAP.

 

“Capital Stock”:  any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of a Person, including any preferred stock, but excluding any debt securities convertible into such equity.

 

“Cash Collateralize”: to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the Issuing Lenders or Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances pursuant to documentation in customary form and substance and reasonably satisfactory to the Administrative Agent and each applicable Issuing Lender.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral.

 

“Change of Control”:  the occurrence of any of the following events:

 

(1)           any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) other than MP CA Homes LLC or its Affiliates is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause such person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of Borrower;

 

(2)           the merger or consolidation of Borrower with or into another Person or the merger of another Person with or into Borrower, or the sale of all or substantially all the assets of Borrower to another Person, other than any such sale to one or more Loan Parties, and in the case of any such merger or consolidation, the securities of Borrower that are outstanding immediately prior to such transaction and which represent 100% of the aggregate voting power of the Voting Stock of Borrower are changed into or exchanged for cash, securities or property, unless pursuant to such transaction such securities are changed into or exchanged for, in addition to any other consideration, securities of the surviving 

 

  

4

  

 

corporation, or a parent corporation that owns all of the Capital Stock of such surviving corporation, that represent immediately after such transaction, at least a majority of the aggregate voting power of the Voting Stock of the surviving corporation or such parent corporation, as the case may be; or

 

(3)           a “Change of Control” occurs under any of Borrower’s outstanding senior public note indebtedness or any other notes issued by Borrower under an indenture or comparable documents to indentures used in jurisdictions outside of the United States.

 

“Class” when used in reference to any Revolving Loan, refers to whether such Revolving Loan is a Class A Revolving Loan or Class B Revolving Loan; when used in reference to any Borrowing, refers to whether the Revolving Loans comprising such Borrowing are Class A Revolving Loans or Class B Revolving Loans; when used in reference to any Commitment, refers to whether such Commitment is a Class A Commitment or Class B Commitment; and, when used in reference to any Lender, refers to whether such Lender is a Class A Lender or a Class B Lender.

 

“Class A Available Commitment”: as to any Class A Lender at any time, an amount equal to the excess, if any, of (a) such Class A Lender’s Commitment then in effect over (b) such Class A Lender’s Revolving Percentage of the Outstanding Amount; provided, that in calculating any Class A Lender’s Revolving Percentage of the Outstanding Amount for the purpose of determining such Class A Lender’s Available Commitment pursuant to Section 2.5(a), the aggregate principal amount of Swingline Loans then outstanding shall be deemed to be zero.

 

 “Class A Commitment”: as to any Class A Lender, the obligation of such Class A Lender, if any, to make Class A Revolving Loans and participate in Swingline Loans and Letters of Credit in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Class A Commitment” opposite such Class A Lender’s name on Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof.

 

“Class A Commitment Period”: the period from and including the Closing Date to the Class A Revolving Facility Termination Date.

 

“Class A Lender”: means any Lender that holds a Class A Commitment.

 

“Class A Revolving Facility Termination Date”:  October 19, 2015, subject, however, to earlier termination of the Total Commitments pursuant of the terms of this Agreement.

 

“Class A Revolving Loan”: each Revolving Loan made by a Class A Lender.

 

“Class B Available Commitment”: as to any Class B Lender at any time, an amount equal to the excess, if any, of (a) such Class B Lender’s Commitment then in effect over (b) such Class B Lender’s Revolving Percentage of the Outstanding Amount; provided, that in calculating any Class B Lender’s Revolving Percentage of the Outstanding Amount for the purpose of determining such Class B Lender’s Available Commitment pursuant to Section 2.5(a), the aggregate principal amount of Swingline Loans then outstanding shall be deemed to be zero.

 

“Class B Commitment”: as to any Class B Lender, the obligation of such Class B Lender, if any, to make Class B Revolving Loans and participate in Swingline Loans and Letters of Credit in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Class B Commitment” opposite such Class B Lender’s name on Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof.

 

  

5

  

 

“Class B Commitment Period”: the period from and including the Closing Date to the Class B Revolving Facility Termination Date.

 

“Class B Lender”: any Lender that holds a Class B Commitment.

 

“Class B Revolving Facility Termination Date”:  February 28, 2014, subject, however, to earlier termination of the Total Commitments pursuant of the terms of this Agreement.

 

“Class B Revolving Loan” means each Revolving Loan made by a Class B Lender.

 

“Closing Date”:  the date on which the conditions precedent set forth in Section 5.1 shall have been satisfied, which date is October 19, 2012.

 

“Code”:  the Internal Revenue Code of 1986, as amended from time to time.

 

“Commitment”: with respect to each Class A Lender, such Class A Lender’s Class A Commitment and with respect to each Class B Lender, such Class B Lender’s Class B Commitment.  As of the date hereof, the amount of the Total Commitments is $350,000,000.

 

“Commitment Fee Rate”:  three-quarters of one percent (0.75%).

 

“Commitment Period”:  as the context may require, the Class A Commitment Period or the Class B Commitment Period.

 

“Competitor”:  as of any date, any Person that (a) is listed on the most recent Builder 100 list published by Builder magazine, ranked by revenues or closings (or if such list is no longer published, identified in such other published list or through such other means as is mutually agreed by Administrative Agent and Borrower) or (b) is an Affiliate of a person described in the preceding clause (a).

 

“Completed Unit”:  a Unit as to which either (or both) of the following has occurred:  (a) a notice of completion has been filed or recorded in the appropriate real estate records; or (b) all necessary or construction has been completed in order to obtain a certificate of occupancy (whether or not such certificate of occupancy has actually been obtained).

 

“Compliance Certificate”:  a certificate duly executed by a Responsible Officer substantially in the form of Exhibit B.

 

“Consolidated Debt”:  at any date, without duplication (a) all funded debt of Borrower and its Subsidiaries determined on a consolidated basis; plus (b) all funded debt with recourse to any limited or general partnership in which Borrower or a Subsidiary is a general partner; plus (c) the sum of (i) all reimbursement obligations with respect to drawn Financial Letters of Credit and drawn Performance Letters of Credit (excluding any portion of the actual or potential obligations that are secured by Cash Collateral) and (ii) the maximum amount available to be drawn under all undrawn Financial Letters of Credit, in each case issued for the account of, or guaranteed by, Borrower or any if its Subsidiaries (excluding any portion of the actual or potential obligations that are secured by Cash Collateral); plus (d) all guarantees or other funded obligations of Borrower or a Subsidiary of funded debt of third parties; provided, however, that in the case of any Contingent Guarantee, only amounts called at the time of determination will be included in the calculation of Consolidated Debt; plus (e) all Hedging Obligations of Borrower and its Subsidiaries; and plus (f) Contingent Guarantees that have been called.  

 

  

6

  

 

“Consolidated Debt” excludes obligations of Excluded Subsidiaries that are not guaranteed by any Loan Party, other than pursuant to a Contingent Guarantee that has been called.

 

“Consolidated EBITDA”:  for any period, (a) the Consolidated Net Income of Borrower and its Subsidiaries (excluding net income from Excluded Subsidiaries), plus (b) cash distributions of income from unconsolidated Homebuilding Joint Ventures and Consolidated Homebuilding Non-Guarantor Entities, and plus (c) to the extent deducted from revenues in determining Consolidated Net Income of Borrower and its Subsidiaries (excluding net income from Excluded Subsidiaries), (i) Consolidated Interest Expense, (ii) expense for income taxes paid or accrued, (iii) depreciation, (iv) amortization, (v) non-cash (including impairment) charges, (vi) extraordinary losses, and (vii) loss (gain) on early extinguishment of indebtedness, minus (d) to the extent added to revenues in determining Consolidated Net Income, non-cash gains and extraordinary gains, and minus (e) income (loss) from unconsolidated Homebuilding Joint Ventures and income (loss) from financial services Subsidiaries.

 

“Consolidated Homebuilding Joint Venture”:  any Homebuilding Joint Venture that is a consolidated Person on Borrower’s financial statements in accordance with GAAP.

 

“Consolidated Homebuilding Non-Guarantor Entity”:  any Person that (a) is a wholly owned Subsidiary of Borrower or a Guarantor, (b) was formed for and is engaged in homebuilding operations and (c) has no indebtedness that is guaranteed by a Loan Party.

 

“Consolidated Interest Expense”:  for any period, the aggregate amount (without duplication and determined in each case in accordance with GAAP) of interest (excluding interest of a Loan Party to another Loan Party and interest paid by any Excluded Subsidiaries and all payments made with respect to the early termination of Hedging Obligations associated with the Borrower’s Term Loan B Facility) incurred, whether such interest was expensed or capitalized, paid, accrued, or scheduled to be paid or accrued by any of the Loan Parties during such period, including (a) the interest portion of all deferred payment obligations, and (b) all commissions, discounts, and other fees and charges (excluding premiums) owed with respect to bankers’ acceptances and letter of credit financings (including, without limitation, letter of credit fees) and interest swap and Hedging Obligations, in each case to the extent attributable to such period.

 

“Consolidated Net Income”:  for any period, the net income (or loss) of Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Tangible Net Worth”:  at any date, the consolidated stockholders equity of Borrower and its Subsidiaries determined in accordance with GAAP, less intangible assets, all determined as of such date.

 

“Consolidated Total Assets”:  at any date, for Borrower and its Subsidiaries determined on a consolidated basis, all assets determined in accordance with GAAP.

 

“Contingent Guarantee”:  as to any Person, any reimbursement, counter-indemnity, guarantee (other than a direct guarantee of funded debt), indemnity, or similar obligation or other agreement given to induce the creation of a separate obligation by another Person that guarantees or in effect guarantees, directly or indirectly, working capital, equity capital, net worth, or solvency of the primary obligor or property, performance, Profit and Participation Agreements, completion or loan to value.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, 

 

  

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rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

 

“Default”:  any event or circumstance that, with the giving of notice or passage of time, or both, would become an Event of Default.

 

“Defaulting Lender”:  subject to Section 2.20(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any Issuing Lender, any Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two (2) Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or any Issuing Lender or Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.20(b)) upon delivery of written notice of such determination to the Borrower, each Issuing Bank, each Swingline Lender and each Lender.

 

“Dollars” and “$”:  dollars in lawful currency of the United States.

 

“Eligible Assignee”:  (a) a Lender; (b) a Lender Affiliate; (c) an Eligible Institution approved by (i) Administrative Agent, and (ii) unless an Event of Default has occurred and is continuing, Borrower (each such approval not to be unreasonably withheld or delayed); or (d) any other Person (other than a natural Person) approved by (i) Administrative Agent, and (ii) unless an Event of Default has occurred and is continuing, Borrower (each such approval to be in their sole discretion); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include Borrower or Borrower’s Affiliates (including, for purposes of this definition, each MP Excluded Entity).

 

  

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“Eligible Institution”:  a commercial bank or other financial institution that has (or, in the case of a bank or financial institution that is a Subsidiary, such bank’s or financial institution’s parent has) (a) a rating of its senior debt obligations of not less than Baa1 by Moody’s or BBB+ by S&P, and (b) total assets in excess of $10,000,000,000.

 

“Entitled Land”:  Qualified Real Property Inventory comprised of land where all requisite zoning requirements and land use requirements have been satisfied, and all requisite approvals have been obtained from all applicable governmental authorities (other than approvals which are simply ministerial and non-discretionary in nature or otherwise not material) in order to develop the land as a residential housing project and construct Units thereon.

 

“Environmental Laws”:  any and all Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment, as now or may at any time hereafter be in effect.

 

“Equity Issuance”:  any issuance or sale of Capital Stock by Borrower or any of its Subsidiaries.

 

“ERISA”:  the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate”:  any trade or business (whether or not incorporated) under common control with Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

“ERISA Event”:  (a) Reportable Event with respect to a Pension Plan; (b) a withdrawal by Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) the termination of any Pension Plan resulting in liability under Section 4064 of ERISA; (d) a complete or partial withdrawal by Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in Reorganization or Insolvency; (e) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan; (f) the imposition of liability on the Borrower or any ERISA Affiliate thereof pursuant to Sections 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (g) the failure by the Borrower or any ERISA Affiliate thereof to make any required contribution to a Pension Plan, or the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 430 of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (h) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered to critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; (i) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (j) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or any ERISA Affiliate; (k) an application for a funding waiver under Section 303 of ERISA or an extension of any amortization period pursuant to Section 412 of the Internal Revenue Code with respect to any Pension Plan; or (l) the imposition of any 

 

  

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lien (or the fulfillment of the conditions for the imposition of any lien) on any of the rights, properties or assets of the Borrower or any ERISA Affiliate thereof, in either case pursuant to Title I or Title IV, including, without limitation, Sections 302(f) or 303(k) of ERISA or to Section 401(a)(29) or 430(k) of the Internal Revenue Code.

 

“ERISA Funding Rules”:  the rules regarding minimum required contributions (including any installment payment thereof) to Pension Plans, as set forth Section 412 of the Code and Section 302 of ERISA, with respect to Plan Years ending prior to the effective date of the Pension Protection Act of 2006, and thereafter, as set forth in Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

 

“Escrow Proceeds Receivable”:  funds due to Borrower or any Guarantor held in escrow follow the sale and conveyance of title of a Unit to a buyer.

 

“Eurocurrency Reserve Requirements”:  for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency reserves) under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribed for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member bank of the Federal Reserve System.

 

“Eurodollar Base Rate”:  with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on the Reuters Screen LIBOR 01 Page as of 11:00 A.M., London time, two (2) Business Days prior to the beginning of such Interest Period.  In the event that such rate does not appear on such page  (or otherwise on such screen), the “Eurodollar Base Rate” shall be determined by reference to such other comparable publicly available service for displaying Eurodollar rates as may be selected by Administrative Agent or, in the absence of such availability, by reference to the rate at which Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York City time, two (2) Business Days prior to the beginning of such Interest Period in the interbank Eurodollar market where its Eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein.

 

“Eurodollar Loans”:  Loans the rate of interest applicable to which is based upon the Eurodollar Rate.

 

“Eurodollar Rate”:  with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%):

 

	
Eurodollar Base Rate

	
1.00 - Eurocurrency Reserve Requirements

 

“Eurodollar Tranche”:  the collective reference to Eurodollar Loans the then-current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

 

“Event of Default”:  any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

  

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“Exchange Act”:  the Securities Exchange Act of 1934, as amended.

 

“Excluded Subsidiaries”:  collectively, (a) Residential Acquisition GP, LLC, HWB Construction, Inc., SPIC NLV 2009, Inc., Talega Associates, LLC, Wolf Creek Development, LLC, Walnut Acquisition Partners, LLC, Talega Constructors, LP, SPIC CPCO, Inc., SPIC CPDB, Inc., SPIC CPRB, Inc., Standard Pacific Mortgage, Inc., SPM Affiliates, Inc., S.P.S. Affiliates, Inc. and SPH Title, Inc. (in each case so long as such Person does not change its current (i) line of business as a title insurance or mortgage company, (ii) status as an entity held for sale or wind up or (iii) status as a cash pledgor for letter of credit facilities, as applicable), (b) BMR Communities, LLC, SPIC Del Sur, LLC and  each Consolidated Homebuilding Non-Guarantor Entity that Borrower designates as an “Excluded Subsidiary” by written notice to Administrative Agent, (c) each Subsidiary that is not a Material Subsidiary and (d) any Homebuilding Joint Venture.

 

“FATCA”:  Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version) and any current or future regulations or official interpretations thereof.

 

“Federal Funds Effective Rate”:  for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by JPMorgan Chase Bank, N.A. from three federal funds brokers of recognized standing selected by it.

 

“Financial Letter of Credit”:  a Letter of Credit that is not a Performance Letter of Credit.

 

“Finished Lots”:  Entitled Land with respect to which (a) development has been completed to such an extent that permits that allow use and construction including building, sanitary sewer and water, are entitled to be obtained for a Unit on such Entitled Land and (b) start of construction has not occurred.

 

“Fronting Exposure”: at any time there is a Defaulting Lender, (a) with respect to any Issuing Lender, such Defaulting Lender’s Revolving Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuing Lender other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to any Swingline Lender, such Defaulting Lender’s Revolving Percentage of outstanding Swingline Loans made by such Swingline Lender other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.

 

“Funding Office”:  the office of Administrative Agent specified in Section 10.2 or such other office as may be specified from time to time by Administrative Agent as its funding office by written notice to Borrower and the Lenders.

 

“GAAP”:  generally accepted accounting principles in the United States as in effect at the time any determination is made or financial statement is required hereunder as promulgated by the American Institute of Certified Public Accountants, the Accounting Principles Board, the Financial Accounting Standards Board or any other body existing from time to time which is authorized to establish or interpret such principles, applied on a consistent basis throughout any applicable period, subject to any change required by a change in GAAP; provided, however, that if any change in generally accepted accounting principles from those applied in preparing the financial statements referred to in Section 4.5 affects the calculation of any financial covenant contained herein, Borrower, the Lenders and 

 

  

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Administrative Agent hereby agree to make amendments to the effect that each such financial covenant is not more or less restrictive than such covenant as in effect on the date hereof using generally accepted accounting principles consistent with those reflected in such financial statements.

 

“Governmental Authority”:  any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

 

“Guarantee Agreement”:  the Guarantee Agreement to be executed and delivered by each Guarantor, substantially in the form of Exhibit A.

 

“Guarantors”:  the collective reference to all Wholly-Owned Subsidiaries of Borrower, excluding in all cases Excluded Subsidiaries.  The original Guarantors are indicated on Schedule 4.4 to this Agreement.

 

“Hedging Obligations”:  of a Person any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), (a) under any and all agreements, devices or arrangements designed to protect at least one of the parties thereto from the fluctuations of interest rates, commodity prices, exchange rates or forward rates applicable to such party’s assets, liabilities, or exchange transaction, including, but not limited to, Dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any of the foregoing.

 

“Homebuilding Joint Venture”:  any Person that was formed for and is engaged in homebuilding operations in which Borrower or any of its Subsidiaries has less than a one hundred percent (100%) ownership interest.

 

“Increased Facility Closing Date”:  as defined in Section 2.21.

 

“Indemnified Liabilities:”  as defined in Section 10.5.

 

“Indemnitee”:  as defined in Section 10.5.

 

“Insolvency”:  with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

“Interest Coverage Ratio”:  as of any date, for the applicable period, the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense less non-cash interest expense.

 

“Interest Payment Date”:  (a) Two (2) Business Days following the last day of each month, and (b) the final maturity date of any Loan.

 

“Interest Period”:  as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending fourteen (14) days, one (1), two (2), three (3) or six (6) months thereafter, as selected by Borrower in its 

 

  

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notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending fourteen (14) days, one (1), two (2), three (3) or six (6) months thereafter, as selected by Borrower by irrevocable notice to Administrative Agent not less than three (3) Business Days prior to the last day of the then-current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:

 

(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

 

(ii) Borrower may not select an Interest Period that would extend beyond the Class A Revolving Facility Termination Date with respect to Class A Revolving Loans or the Class B Revolving Facility Termination Date with respect to Class B Revolving Loans;

 

(iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and

 

(iv) Borrower shall only select Interest Periods in respect of any Loan that do not extend beyond the date on which Borrower has elected to or intends repay such Loan.

 

“Investment”:  any investment by Borrower or any Subsidiary in any joint venture, partnership, corporation, limited liability company or other entity.  For purposes hereof, the book value of any Investment shall be calculated in accordance with GAAP.

 

“Issuance Date”:  the date of issuance of a Letter of Credit by an Issuing Lender.

 

“Issuing Lender”:  JPMorgan Chase Bank, N.A., in its capacity as issuer of any Letter of Credit, and any other Lender from time to time designated by the Borrower as an Issuing Lender with the consent of such Lender and the Administrative Agent, or any of their respective affiliates, in each case in its capacity as issuer of any Letter of Credit.

 

“Joint Lead Arrangers”:  collectively, J.P. Morgan Securities LLC and Citigroup Global Markets, Inc. as arrangers of the Commitments.

 

“L/C Commitment”:  an amount equal to the Total Commitments.

 

“L/C Fee Payment Date”:  Two (2) Business Days following the last day of each March, June, September and December and until the later of (a) the last day of the Commitment Period or (b) if Letters of Credit remain outstanding after such date pursuant to Section 3.1(a), the latest expiration date of such Letters of Credit.

 

“L/C Obligations”:  at any time, an amount equal to the sum of (a) the aggregate then-undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.5.

 

“L/C Participants”:  the collective reference to all the Lenders other than the relevant Issuing Lender.

 

  

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“Land Not Under Development”:  Qualified Real Property Inventory that is not Land Under Development, Finished Lots, Units Under Construction, Completed Units or Units Under Contract.

 

“Land Under Development”:  Entitled Land where physical site improvement has commenced but which is not a Finished Lot, Unit Under Construction, Completed Unit or Unit Under Contract.

 

“Lenders”:  as defined in the preamble hereto.

 

“Lender Affiliate”:  any Affiliate of any Lender that is engaged in the business of making commercial loans of the type evidenced by this Agreement.

 

“Letters of Credit”:  as defined in Section 3.1(a).

 

“Leverage Ratio”:  the ratio, as of any date, of (a) Consolidated Debt minus Unrestricted Cash in excess of the Required Cash Reserve to (b) Adjusted Consolidated Tangible Net Worth.

 

“Lien”:  any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, charge, encumbrance, lien (statutory or other), preference, priority or other security agreement or similar preferential arrangement of any kind or nature whatsoever (including without limitation any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the authorized filing by or against a Person of any financing statement as debtor under the Uniform Commercial Code or comparable law of any jurisdiction).  For the avoidance of doubt, a restriction, covenant, easement, right of way, or similar encumbrance affecting any interest in real property owned by Borrower and which does not secure an obligation to pay money is not a “Lien”.

 

“Loan”:  any loan made by any Lender pursuant to this Agreement.

 

“Loan Documents”:  this Agreement, the Guarantee Agreement, the Notes and any other documents, agreements or instructions executed or delivered pursuant to this Agreement.

 

“Loan Parties”:  Borrower and each Guarantor.

 

“Mandatory Prepayment Period”: the period following a Test Date on which Borrower has failed to satisfy the required minimum Interest Coverage Ratio in accordance with Section 7.11 and continuing until the next succeeding Test Date on which the Borrower has satisfied the required minimum Interest Coverage Ratio.

 

“Mandatory Prepayment Test Debt”:  as of any date, without duplication, the sum of (a) secured recourse Consolidated Debt plus (b) the Outstanding Amount as of such date plus (c) unsecured Consolidated Debt that (i) contains any financial covenant or test which when not met results in an Event of Default and (ii) has a maturity date occurring on or prior to the Class A Revolving Facility Termination Date.

 

“Material Adverse Effect”:  since the date of the audited financial statements most recently delivered prior to the Closing Date:  (a) a change, event or circumstance that could reasonably be expected to result in a material adverse effect on the operations, business, properties, or condition (financial or otherwise) of Borrower and its Subsidiaries, taken as a whole; (b) a material impairment of the ability of Borrower to perform its payment or other material obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect, or 

 

  

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enforceability against Borrower of any material obligations of Borrower under any Loan Document to which it is a party.

 

“Material Subsidiaries”:  as of any date, each Subsidiary of Borrower that (a) owns assets (other than ownership interests in, or intercompany indebtedness of, other Subsidiaries) having a value determined in accordance with GAAP of $5,000,000 or more as of such date; (b) if the aggregate amount of assets (other than ownership interests in, and intercompany indebtedness of, other Subsidiaries) owned by all Subsidiaries that are not Guarantors (other than Consolidated Homebuilding Non-Guarantor Entities and Homebuilding Joint Ventures) exceeds five percent (5%) of the Consolidated Tangible Net Worth, one or more such Subsidiaries identified by Borrower with assets that, when deducted from the aggregate amount of such assets owned by Subsidiaries that are not Guarantors (other than Consolidated Homebuilding Non-Guarantor Entities, Homebuilding Joint Ventures and the Excluded Subsidiaries listed on Schedule 4.4 as “Cash Pledgors for LC Facilities” and “Mortgage and Title Operations”), reduces the aggregate amount of such assets of Subsidiaries that are not Guarantors (other than Consolidated Homebuilding Non-Guarantor Entities, Homebuilding Joint Ventures and the Excluded Subsidiaries listed on Schedule 4.4 as “Cash Pledgors for LC Facilities” and “Mortgage and Title Operations”) to not more than five percent (5%) of the Consolidated Tangible Net Worth; and (c) executes a guaranty of senior unsecured homebuilding debt (other than the Obligations).

 

“Measurement Period”:  for any determination made under this Agreement, as of any Test Date, the four (4) fiscal quarters of Borrower then ended.

 

“Minimum Collateral Amount”:  at any time, with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 100%  of the Fronting Exposure of all Issuing Lenders with respect to Letters of Credit issued and outstanding at such time.

 

“Model Unit”:  a Completed Unit to be used as a model home in connection with the sale of Units in a residential housing project.

 

“MP Excluded Entity”:  the meaning provided in the definition of “Affiliate.”

 

“Multiemployer Plan”:  any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five (5) plan years, has made or been obligated to make contributions.

“Net Cash Proceeds”:  in connection with any Equity Issuance, the cash proceeds received from such issuance, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith.

 

“New Lender”:  as defined in Section 2.21.

 

“New Lender Supplement:”  as defined in Section 2.21.

 

“Non-Excluded Taxes”:  as defined in Section 2.16(a).

 

“Non-Recourse Indebtedness”:  indebtedness or other obligations secured by a Lien on property to the extent that the liability for such indebtedness or other obligations is limited to the security of the property (or to Persons other than a Loan Party) without liability on the part of any Loan Party (other than, in the case of indebtedness or obligations of a Subsidiary, with respect to the Subsidiary that holds title to such property (if such property constitutes all or substantially all the property of such 

 

  

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Subsidiary) and a pledge of the equity interests of such Subsidiary or its Subsidiaries) for any deficiency; provided that recourse obligations or liabilities of the Loan Parties solely for indemnities, covenants (including, without limitation, performance, completion or similar guarantees or covenants), or breach of any warranty, representation, covenant or other Contingent Guarantee in respect of any indebtedness, including indemnities for and liabilities arising from fraud, misrepresentation, misapplication or non-payment of rents, profits, insurance and condemnation proceeds and other sums actually received by Borrower from secured assets to be paid to the Lenders, waste and mechanics’ liens, will in each case not prevent indebtedness from being classified as “Non-Recourse Indebtedness”.

 

“Non-U.S. Lender”:  as defined in Section 2.16(d).

 

“Notes”:  the collective reference to any promissory note evidencing Loans.

 

“Obligations”:  all advances to, and debts, liabilities and obligations of, Borrower and Guarantors arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against Borrower or any Guarantor or any Affiliate thereof of any proceeding under any bankruptcy or insolvency naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

 

“Original Credit Agreement”: as defined in the preamble hereof.

 

“Other Taxes”:  any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.

 

“Outstanding Amount”:  as of any date, the aggregate principal amount of Loans and Swingline Loans outstanding after giving effect to any borrowings, repayments and prepayments on such date plus the amount of L/C Obligations outstanding on such date after giving effect to any issuance or reimbursements made on such date.

 

“Overadvance Amount”:  from the Closing Date until December, 31, 2014, $300,000,000, and commencing on January 1, 2015 and continuing thereafter, $250,000,000.

 

“Participant”:  as defined in Section 10.6(b).

 

“PBGC”:  the Pension Benefit Guaranty Corporation.

 

“Pension Plan”:  any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by Borrower or any ERISA Affiliate or to which Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five (5) plan years.

 

“Performance Letter of Credit”:  any Letter of Credit issued:  (a) on behalf of a Person in favor of a Governmental Authority, including, without limitation, any utility, water, or sewer authority, or other similar entity, for the purpose of assuring such Governmental Authority that such Person or an Affiliate of such Person will properly and timely complete work it has agreed to perform for the benefit of such Governmental Authority; (b) in lieu of cash deposits to obtain a license, in place of a utility deposit, 

 

  

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or for land option contracts; (c) in lieu of other contract performance, to secure performance warranties payable upon breach, and to secure the performance of labor and materials, including, without limitation, construction, bid, and performance bonds; or (d) to secure refund or advance payments on contractual obligations where default of a performance-related contract has occurred.

 

“Permitted Investments”:  (a) readily marketable, direct, full faith, and credit obligations of the United States, or obligations guaranteed by the full faith and credit of the United States, maturing within not more than one (1) year from the date of acquisition; (b) short term certificates of deposit and time deposits, which mature within one (1) year from the date of issuance and which are maintained with a Lender, a domestic commercial bank having capital and surplus in excess of $100,000,000 or are fully insured by the Federal Deposit Insurance Corporation; (c) commercial paper or master notes maturing in 365 days or less from the date of issuance rated either “P-1” by Moody’s, or “A-1” by S&P); (d) debt instruments of a domestic issuer which mature in one (1) year or less and which are rated “A” or better by Moody’s or S&P on the date of acquisition of such investment; (e) demand deposit accounts which are maintained in the ordinary course of business; (f) short term tax exempt securities including municipal notes, commercial paper, auction rate floaters , and floating rate notes rated either “P-1” by Moody’s or “A-1” by S&P; (g) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within not more than one (1) year from the date of acquisition thereof and, at the time of acquisition, having one (1) of the two (2) highest ratings obtainable from any two of S&P, Moody’s, or Fitch (or, if at any time no two (2) of the foregoing shall be rating such obligations, then from such other nationally recognized rating services acceptable to Administrative Agent ); (h) domestic corporate bonds, other than domestic corporate bonds issued by Borrower or any of its Affiliates, maturing no more than two (2) years after the date of acquisition thereof and, at the time of acquisition, having a rating of at least A or the equivalent from any two (2) of S&P, Moody’s, or Fitch (or, if at any time no two (2) of the foregoing shall be rating such obligations, then from such other nationally recognized rating services acceptable to Administrative Agent); and (i) shares of money market, mutual, or similar funds which invest primarily in securities of the type described in clauses (a) through (h) above.

 

“Permitted Liens”:  each Lien permitted under Section 7.2.

 

“Person”:  an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

“Prime Rate”:  the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City (the “Prime Rate” not being intended to be the lowest rate of interest charged by JPMorgan Chase Bank, N.A. in connection with extensions of credit to Borrower).

 

“Profit and Participation Agreement”:  an agreement, secured by a deed of trust, mortgage, or other Lien against a purchased property or asset, with respect to which the purchaser of any property or asset agrees to pay the seller of such property or asset a profit, price, premium participation, or other similar amount in such property or asset.

 

“Qualified Real Property Inventory”:  as of any date, Real Property Inventory that is not subject to or encumbered by any deed of trust, mortgage, judgment Lien, or any other Lien (other than the Permitted Liens described in Sections 7.2(b), (h), (i), (j) and (o)) and other Liens which have been bonded around so as to remove such Liens as encumbrances against such Real Property Inventory in a matter satisfactory to Administrative Agent and its legal counsel).

 

  

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“Real Property Inventory”:  as of any date, land that is owned by any Loan Party, which land is being developed or held for future development or sale, together with the right, title and interest of the Loan Party in and to the streets, the land lying in the bed of any streets, roads or avenues, open or proposed, in or of, the air space and development rights pertaining thereto and the right to use such air space and development rights, all rights of way, privileges, liberties, tenements, hereditaments and appurtenances belonging in or in any way appertaining thereto, all fixtures, all easements now or hereafter benefiting such land and all royalties and rights appertaining to the use and enjoyment of such land necessary for the residential development of such land, together with all of the buildings and other improvements now or hereafter erected on such land, and any fixtures appurtenant thereto and all related personal property.

 

“Refunded Swingline Loans”:  as defined in Section 2.4(b).

 

“Refunding Date”:  as defined in Section 2.4(c).

 

“Register”:  as defined in Section 10.6(d).

 

“Regulation U”:  Regulation U of the Board as in effect from time to time.

 

“Reimbursement Obligation”:  the obligation of Borrower to reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit.

 

“Reorganization”:  with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

 

“Reportable Event”:  any of the events set forth in Section 4043(b) of ERISA or the regulations thereunder as in effect on the date of this Agreement, the "4043 Regulations" (other than an event in which the thirty (30) day notice period to the PBGC has been waived).  Any changes made to the 4043 Regulations that become effective after the date of this Agreement shall have no impact on the definition of "Reportable Event" used herein.

 

“Required Cash Reserve”:  as of any date, $5,000,000.

 

“Required Lenders”:  at any time, the holders of more than fifty percent (50%) of the Total Commitments then in effect or, if the Commitments have been terminated, the Outstanding Amount then outstanding.

 

“Requirement of Law”:  as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Responsible Officer”:  the chief executive officer, president, senior vice president, vice president, corporate controller, treasurer, assistant treasurer or chief financial officer of Borrower, but in any event, with respect to financial matters, the chief financial officer of Borrower.

 

“Revolving Facility Termination Date”: as the context requires, the Class A Revolving Facility Termination Date or the Class B Revolving Facility Termination Date.

 

“Revolving Loans”:  as defined in Section 2.1(a).

 

  

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“Revolving Percentage”:  as to any Lender at any time, the percentage which such Lender’s Commitment then constitutes of the Total Commitments or, at any time after all of the Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Lender’s Revolving Loans then-outstanding constitutes of the aggregate principal amount of the Revolving Loans then-outstanding, provided, that, in the event that the Revolving Loans are paid in full prior to the reduction to zero of the Outstanding Amount, each Lender’s Revolving Percentage shall be determined in a manner designed to ensure that the remaining Outstanding Amount shall be held by the Lenders on a comparable basis.

 

“SEC”:  the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.

 

“Solvent”:  when used with respect to any Person, means that, as of any date of determination, (a) the aggregate fair market value of such Person’s assets exceeds its liabilities (whether contingent, subordinated, unmatured, unliquidated, or otherwise), (b) such person has not incurred debts beyond such Person’s ability to pay such debts as they mature (taking into account all reasonably anticipated financing and refinancing proceeds), and (c) such Person does not have unreasonably small capital to conduct such Person’s businesses.  In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed as the amount which, in light of all the facts and circumstances existing at such time, represent the amount that can be reasonably be expected to become an actual or matured liability discounted to present value at rates believed to be reasonable by such Person.

 

“Speculative Unit”:  any Completed Unit that is not a Unit Under Contract.

 

“Subordinated Debt”:  such indebtedness, if any, of Borrower that is subordinated to the Obligations (i) that is issued and outstanding on the Closing Date or (ii) pursuant to terms and conditions approved in writing by Administrative Agent as confirming the subordinate status of such indebtedness in relation to the Obligations.

 

“Subsidiary”:  with respect to any Person, corporation, partnership, joint venture, limited liability company, or other business entity (except for Persons which would not be considered Subsidiaries of such Person but for the application of FASB Interpretation No. 46 or EITF 04-5 issued by the Financial Accounting Standards Board and the Emerging Issues Task Force, as such interpretations or pronouncements may be amended or modified from time to time), (a) of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned by such Person, or (b) (i) the management of which is controlled, directly, or indirectly through one or more intermediaries, or both, by such Person, and (ii) the results of operations of which are required under GAAP to be consolidated with the results of such Person.  For purposes of Borrower, the term “Subsidiary” shall not include Homebuilding Joint Ventures other than Consolidated Homebuilding Joint Ventures.

 

“Swingline Commitment”:  the obligation of the Swingline Lender to make Swingline Loans pursuant to Section 2.3 in an aggregate principal amount at any one time outstanding not to exceed $20,000,000.

 

“Swingline Exposure”:  at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender in respect of any Swingline Loan shall be its Revolving Credit Percentage of the principal amount of such Swingline Loan.

 

  

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“Swingline Lender”:  JPMorgan Chase Bank, N.A., in its capacity as the lender of Swingline Loans.

 

“Swingline Loans”:  as defined in Section 2.3(a).

 

“Swingline Participation Amount”:  as defined in Section 2.4(c).

 

“Test Date”:  the last day of each fiscal quarter of Borrower.

 

“Total Commitments”:  at any time, the aggregate amount of all Commitments then in effect.

 

“Transferee”:  any Eligible Assignee or Participant.

 

“Type”:  as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

 

“Uniform Commercial Code”:  the Uniform Commercial Code, as the same may, from time to time, be in effect in the State of New York; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority (but not attachment) and for purposes of definitions related to such provisions.

 

“Unit”:  Qualified Real Property Inventory that is, or is planned to be, comprised of a single family residential housing unit.

 

“United States”:  the United States of America.

 

“Units Under Construction”:  Units where on-site construction has commenced as evidenced by the trenching of foundations for such Units.

 

“Unit Under Contract”:  a Unit as to which Borrower or a Guarantor owning such Unit has entered into a bona fide contract of sale (a) in a form customarily employed by Borrower or such Guarantor, (b) not more than six (6) months after the date of such contract, (c) with a Person who is not a Subsidiary or Affiliate, (d) under which no Defaults then exist and (e) in the case of any Unit the purchase of which is to be financed in whole or in part by a loan insured by the Federal Housing Administration or guaranteed by the Veterans Administration, to Borrower’s or applicable Guarantor’s knowledge, the applicable buyer shall have made, or will be required to make, the minimum down payment required (if any) under the rules of the relevant agency.

 

“Unrestricted Cash”:  all cash that is not restricted cash, as determined in accordance with GAAP and shall include the value of Permitted Investments that are not restricted Permitted Investments.

 

“U.S. Lender”:  as defined in Section 2.16(d).

 

“Voting Stock”:  with respect to any Person, securities of any class of Capital Stock of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of members of the board of directors of such Person.

 

  

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“Wholly Owned Subsidiary”:  as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

 

1.2 Other Definitional Provisions.

 

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

 

(b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to any Loan Party not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP, (ii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, Capital Stock, securities, revenues, accounts, leasehold interests and contract rights, and (v) references to agreements or other Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Obligations as amended, supplemented, restated or otherwise modified from time to time.

 

(c) The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

 

(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

SECTION 2.    AMOUNT AND TERMS OF COMMITMENTS

2.1 Commitments.

 

(a) Subject to the terms and conditions hereof, each Lender severally agrees to make Revolving Loans (“Revolving Loans”) to Borrower from time to time during the Commitment Period in an aggregate principal amount at any one time outstanding which, when added to such Lender’s Revolving Percentage of the sum of (i) the L/C Obligations then-outstanding and (ii) the aggregate principal amount of the Swingline Loans then-outstanding, does not exceed the lesser of (A) the amount of such Lender’s Commitment and (B) such Lender’s Revolving Percentage of the Borrowing Base Availability.  During the Commitment Period, Borrower may use the Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof.  The Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by Borrower and notified to Administrative Agent in accordance with Sections 2.2 and 2.9.

 

(b) Borrower shall repay (i) all outstanding Class A Revolving Loans on the Class A Revolving Facility Termination Date and (ii) all outstanding Class B Revolving Loans on the Class B Revolving Facility Termination Date.  Additionally, on the Class B Revolving Facility Termination Date,  if, after all outstanding Class B Revolving Loans have been repaid, the outstanding Class A Revolving Loans, when added to the sum of (A) the L/C Obligations then-outstanding and (B) the aggregate 

 

  

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principal amount of the Swingline Loans then-outstanding, exceeds the aggregate amount of the Class A Commitments, the Borrower shall repay such portion of the outstanding Class A Revolving Loans as is sufficient to reduce the outstanding principal amount of the Class A Revolving Loans to an amount, when added to the sum of (A) the L/C Obligations then-outstanding and (B) the aggregate principal amount of the Swingline Loans then-outstanding, equal to the aggregate amount of all Class A Commitments.

 

(c) Provided that Borrower has made the payments required pursuant to Section 2.1(b), if any, on the Class B Revolving Facility Termination Date:

 

(i) the Commitments of all Class B Lenders shall terminate, the Commitments of all Class A Lenders shall continue on the terms herein set forth and the Total Commitments shall be reduced to an amount equal to the sum of the Class A Commitments;

 

(ii) the Revolving Percentage of each Class A Lender shall be adjusted to reflect the termination of the Commitments of the Class B Lenders;

 

(iii) subject to clause (ii) above, all Class A Revolving Loans shall be continued outstanding as Class A Revolving Loans held by the Class A Lenders ratably in accordance with their respective Revolving Percentage (after giving effect to the adjustment described in clause (ii) above);

 

(iv) all outstanding Letters of Credit shall continue and the participation interests held by the Class B Lenders shall be deemed transferred in full to the Class A Lenders, with each Class A Lender having a participation interest in each such Letters of Credit equal to Class A Lender’s Revolving Percentage as the same (after giving effect to the adjustment described in clause (ii) above);

 

(v) each Class A Lender shall continue to have an obligation to make Revolving Loans pursuant to Section 2.4(b) and to purchase participation interests in outstanding Swingline Loans pursuant to Section 2.4(c); and

 

(vi) after giving effect to all of the foregoing, any unused Commitments shall continue as Class A Commitments.

 

2.2 Procedure for Revolving Loan Borrowing.

 

Borrower may borrow under the Commitments during the Commitment Period on any Business Day, provided that Borrower shall give Administrative Agent irrevocable notice (which notice must be received by Administrative Agent prior to 2:00 p.m., New York City time, (a) three (3) Business Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or (b) one (1) Business Day prior to the requested Borrowing Date, in the case of ABR Loans), specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor.  Any Revolving Loans made on the Closing Date shall initially be ABR Loans.  Each borrowing under the Commitments shall be in an amount equal to (x) in the case of ABR Loans, $1,000,000 or a whole multiple thereof (or, if the then-aggregate Available Commitments are less than $1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 in excess thereof; provided, that the Swingline Lender may request, on behalf of Borrower, borrowings under the Commitments that are ABR Loans in other amounts pursuant to Section 2.4.  Upon receipt of any such notice from Borrower, Administrative Agent shall promptly notify each Lender 

 

  

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thereof.  Each Lender will make the amount of its Revolving Percentage of each borrowing available to Administrative Agent for the account of Borrower at the Funding Office prior to 2:00 p.m., New York City time, on the Borrowing Date requested by Borrower in funds immediately available to Administrative Agent.  Such borrowing will then be made available to Borrower by Administrative Agent crediting the account designated by Borrower with the aggregate of the amounts made available to Administrative Agent by the Lenders and in like funds as received by Administrative Agent.

 

         2.3 Swingline Commitment.

 

(a) Subject to the terms and conditions hereof, the Swingline Lender agrees to make a portion of the credit otherwise available to Borrower under the Commitments from time to time during the Commitment Period by making swingline loans (“Swingline Loans”) to Borrower; provided that (i) the aggregate principal amount of Swingline Loans outstanding at any time shall not exceed the Swingline Commitment then in effect (notwithstanding that the Swingline Loans outstanding at any time, when aggregated with the Swingline Lender’s other outstanding Revolving Loans, may exceed the Swingline Commitment then in effect), (ii) Borrower shall not request, and the Swingline Lender shall not make, any Swingline Loan if, after giving effect to the making of such Swingline Loan, the aggregate amount of the Available Commitments would be less than zero, and (iii) Borrower shall not request, and the Swingline Lender shall not make, any Swingline Loan if, after giving effect to the making of such Swingline Loan, the Borrowing Base Availability would be less than zero.  During the Commitment Period, Borrower may use the Swingline Commitment by borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof.  Swingline Loans shall be ABR Loans only.

 

(b) Borrower shall repay all outstanding Swingline Loans on the Class A Revolving Facility Termination Date.

 

2.4 Procedure for Swingline Borrowing; Refunding of Swingline Loans.

 

(a) Whenever Borrower desires that the Swingline Lender make Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice confirmed promptly in writing (which telephonic notice must be received by the Swingline Lender not later than 2:00 P.M., New York City time, on the proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date (which shall be a Business Day during the Commitment Period).  Each borrowing under the Swingline Commitment shall be in an amount equal to $500,000 or a whole multiple of $100,000 in excess thereof.  Not later than 4:00 P.M., New York City time, on the Borrowing Date specified in a notice in respect of Swingline Loans, the Swingline Lender shall make available to Administrative Agent at the Funding Office an amount in immediately available funds equal to the amount of the Swingline Loan to be made by the Swingline Lender.  Administrative Agent shall make the proceeds of such Swingline Loan available to Borrower on such Borrowing Date by depositing such proceeds in the account of Borrower designated by Borrower on such Borrowing Date in immediately available funds.

 

(b) The Swingline Lender, at any time and from time to time in its sole and absolute discretion may, on behalf of Borrower (which hereby irrevocably directs the Swingline Lender to act on its behalf), on one (1) Business Day’s notice given by the Swingline Lender no later than 12:00 Noon, New York City time, request each Lender to make, and each Lender hereby agrees to make, a Revolving Loan, in an amount equal to such Lender’s Revolving Percentage of the aggregate amount of the Swingline Loans (the “Refunded Swingline Loans”) outstanding on the date of such notice, to repay the Swingline Lender.  Each Lender shall make the amount of such Revolving Loan available to Administrative Agent at the Funding Office in immediately available funds, not later than 10:00 A.M., New York City time, one (1) Business Day after the date of such notice.  The proceeds of such Revolving Loans shall be immediately made available by Administrative Agent to the Swingline Lender for 

 

  

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application by the Swingline Lender to the repayment of the Refunded Swingline Loans.  Borrower agrees to reimburse Swingline Lender through Administrative Agent if so requested by Administrative Agent on the Business Day next succeeding the Business Day on which such Swingline Lender notifies Borrower of the date and amount to the extent amounts received from the Lenders are not sufficient to repay in full such Refunded Swingline Loan.  If such amount is not so reimbursed on such succeeding Business Day, Borrower irrevocably authorizes the Swingline Lender to charge Borrower’s accounts with Administrative Agent (up to the amount available in each such account) in order to immediately pay such deficiency relating to Refunded Swingline Loans.

 

(c) If prior to the time a Revolving Loan would have otherwise been made pursuant to Section 2.4(b), one of the events described in Section 8(f) shall have occurred and be continuing with respect to Borrower or if for any other reason, as determined by the Swingline Lender in its sole discretion, Revolving Loans may not be made as contemplated by Section 2.4(b), each Lender shall, on the date such Revolving Loan was to have been made pursuant to the notice referred to in Section 2.4(b) (the “Refunding Date”), purchase for cash an undivided participating interest in the then-outstanding Swingline Loans by paying to the Swingline Lender an amount (the “Swingline Participation Amount”) equal to (i) such Lender’s Revolving Percentage times (ii) the sum of the aggregate principal amount of Swingline Loans then-outstanding that were to have been repaid with such Revolving Loans.

 

(d) Whenever, at any time after the Swingline Lender has received from any Lender such Lender’s Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender will distribute to such Lender its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Lender’s pro rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swingline Loans then due); provided, however, that in the event that such payment received by the Swingline Lender is required to be returned, such Lender will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.

 

(e) Each Lender’s obligation to make the Loans referred to in Section 2.4(b) and to purchase participating interests pursuant to Section 2.4(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such Lender or Borrower may have against the Swingline Lender, Borrower or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5; (iii) any adverse change in the condition (financial or otherwise) of Borrower; (iv) any breach of this Agreement or any other Loan Document by Borrower, any other Loan Party or any other Lender; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

2.5 Commitment Fees, Etc.

 

(a) Borrower agrees to pay to Administrative Agent for the account of each Lender a commitment fee for the period from and including the date hereof to the last day of the Commitment Period, computed at the Commitment Fee Rate on the average daily amount of the Available Commitment of such Lender during the period for which payment is made, payable quarterly in arrears two (2) Business days following the last day of each March, June, September and December, and on the Class B Revolving Facility Termination Date with respect to Class B Revolving Loans and on the Class A Revolving Facility Termination Date with respect to Class A Revolving Loans, commencing on the first of such dates to occur after the date hereof; provided, however, pursuant to Section 2.20, Borrower shall not be obligated to pay a commitment fee for the account of any Defaulting Lender.

 

  

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(b) Borrower agrees to pay to Administrative Agent the fees in the amounts and on the dates previously agreed to in writing by Borrower and Administrative Agent.

 

2.6 Termination or Reduction of Commitment.

 

(a) Borrower shall have the right, upon not less than three (3) Business Days’ notice to Administrative Agent, to terminate the Commitments or, from time to time, to reduce the amount of the Commitments; provided that no such termination or reduction of Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Loans and Swingline Loans made on the effective date thereof, the Outstanding Amount would exceed the Total Commitments.   Provided that no Event of Default exists, any reduction of the Total Commitments shall be applied to either or both of the Class A Commitments or to the Class B Commitments as the Borrower shall designate; provided further that (x) any such reduction or termination of Commitments shall be applied ratably within each Class thereof and (y) if an Event of Default exists or the Borrower shall fail to designate which Class of Commitment any such reductions or terminations shall apply, such reductions or terminations shall be applied ratably to the Class A Commitments and the Class B Commitments.  Any such reduction shall be in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently the Commitments then in effect.

 

(b) If, for nine (9) consecutive months, (i) the Outstanding Amount is zero and (ii) the Borrowing Base Availability is equal to or less than zero, the Total Commitments shall automatically and immediately terminate.

 

2.7 Optional Prepayments.

 

(a) Borrower may at any time and from time to time prepay the Loans, in whole or in part, without premium or penalty, upon irrevocable notice delivered to Administrative Agent at least three (3) Business Days prior thereto in the case of Eurodollar Loans and at least one (1) Business Day prior thereto in the case of ABR Loans (or on the same Business Day in the case of Swingline Loans), which notice shall specify the date and amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, Borrower shall also pay any amounts owing pursuant to Section 2.17.  Upon receipt of any such notice Administrative Agent shall promptly notify each relevant Lender thereof.  If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein.  Partial prepayments of Revolving Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple thereof.  Partial prepayments of Swingline Loans shall be in an aggregate principal amount of $100,000 or a whole multiple thereof.  The application of any prepayment pursuant to this Section 2.7 shall be made, first, to ABR Loans, and second, to Eurodollar Loans, in each case, pro rata between the Class A Revolving Loans and the Class B Revolving Loans based on each Lender’s Revolving Percentage.

 

(b) Notwithstanding anything to the contrary in this Agreement and without limiting clause (a) of this Section 2.7, Borrower may prepay the Class B Revolving Loans, in whole but not in part, on a date not earlier than seven (7) Business Days prior to the Class B Revolving Facility Termination Date, upon irrevocable notice delivered to Administrative Agent at least ten (10) Business Days prior to the Class B Revolving Facility Termination Date, which prepayment may be made through a borrowing under the Class A Commitments so long as all of the conditions to such borrowing as set forth herein have been satisfied.  Upon any such prepayment under this Section 2.7(b), the Commitments of the Class B Lenders shall terminate and the provisions of Section 2.1(c) shall be applicable.

 

  

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2.8 Mandatory Prepayments.

 

(a) If, on any date on which there is an Outstanding Amount, the Borrowing Base Availability is less than zero, Borrower shall, on such date, reduce the Outstanding Amount or any other Borrowing Base Debt by an amount at least equal to such deficiency.

 

(b) During any Mandatory Prepayment Period, if on any date (i) the Mandatory Prepayment Test Debt exceeds (ii) the sum of (A) $100,000,000 plus (B) 90% of the book value of Model Units, Borrower shall, within ten (10) days following such date, reduce the Outstanding Amount by the amount of such deficiency.

 

(c) Amounts to be applied in connection with prepayments made pursuant to this Section 2.8 shall be applied, first, to the prepayment of Swingline Loans, second, to the prepayment of Revolving Loans, and third, that if the aggregate principal amount of Revolving Loans and Swingline Loans then-outstanding is less than the amount of such prepaid (because L/C Obligations constitute a portion thereof), Borrower shall, to the extent of the balance, replace outstanding Letters of Credit and/or Cash Collateralize such L/C Obligations in an amount not less than the Minimum Collateral Amount.  Mandatory prepayments hereunder shall be applied pro rata between the Class A Revolving Loans and the Class B Revolving Loans based on each Lender’s Revolving Percentage.

 

2.9 Conversion and Continuation Options.

 

(a) Borrower may elect from time to time to convert Eurodollar Loans to ABR Loans by giving Administrative Agent at least two (2) Business Days’ prior irrevocable notice of such election, provided that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto.  Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans by giving Administrative Agent at least three (3) Business Days’ prior irrevocable notice of such election (which notice shall specify the length of the initial Interest Period therefor), provided that no ABR Loan may be converted into a Eurodollar Loan when any Event of Default has occurred and is continuing and Administrative Agent or the Required Lenders have determined in its or their sole discretion not to permit such conversions.  Upon receipt of any such notice Administrative Agent shall promptly notify each relevant Lender thereof.

 

(b) Any Eurodollar Loan may be continued as such upon the expiration of the then-current Interest Period with respect thereto by Borrower giving irrevocable notice to Administrative Agent, in accordance with the applicable provisions of the term “Interest Period” set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans, provided that no Eurodollar Loan may be continued as such when any Event of Default has occurred and is continuing and Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such continuations, and provided, further, that if Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso, such Loans shall be automatically converted to ABR Loans on the last day of such then-expiring Interest Period.  Upon receipt of any such notice, Administrative Agent shall promptly notify each relevant Lender thereof.

 

2.10 Limitations on Eurodollar Tranches.

 

Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole 

 

  

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multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any one time.

 

         2.11 Interest Rates and Payment Dates.

 

(a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

 

(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.

 

(c) (i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement Obligations (whether or not overdue) shall bear interest at a rate per annum equal to (x) in the case of the Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to ABR Loans plus 2%, and (ii) if all or a portion of any interest payable on any Loan or Reimbursement Obligation or any commitment fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to ABR Loans plus 2%, in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (as well after as before judgment).

 

(d) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to Section 2.11(c) shall be payable from time to time on demand.

 

2.12 Computation of Interest and Fees.

 

(a) Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to ABR Loans the rate of interest on which is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed.  Administrative Agent shall as soon as practicable notify Borrower and the relevant Lenders of each determination of a Eurodollar Rate.  Any change in the interest rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective.  Administrative Agent shall as soon as practicable notify Borrower and the relevant Lenders of the effective date and the amount of each such change in interest rate.

 

(b) Each determination of an interest rate by Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on Borrower and the Lenders in the absence of manifest error.  Administrative Agent shall, at the request of Borrower, deliver to Borrower a statement showing the quotations used by Administrative Agent in determining any interest rate pursuant to Section 2.11(a).

 

2.13 Inability to Determine Interest Rate.

 

If prior to the first day of any Interest Period:

 

(a) Administrative Agent shall have determined (which determination shall be conclusive and binding upon Borrower) that, by reason of circumstances affecting the relevant market, 

 

  

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adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or

 

(b) Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period,

 

(c) Administrative Agent shall give telecopy or telephonic notice thereof to Borrower and the relevant Lenders as soon as practicable thereafter.  If such notice is given, (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be converted, on the last day of the then-current Interest Period, to ABR Loans.  Until such notice has been withdrawn by Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall Borrower have the right to convert Loans to Eurodollar Loans.

 

2.14 Pro Rata Treatment and Payments.  Subject to the provisions of Sections 2.1(c), 2.6(a), 2.7(b) and 2.8(c),

 

(a) Each borrowing by Borrower from the Lenders hereunder, each payment by Borrower on account of any commitment fee and any reduction of the Commitments of the Lenders shall be made pro rata according to the respective Revolving Percentages of the Lenders.

 

(b) Each payment (including each prepayment) by Borrower on account of principal of and interest on the Revolving Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Loans then held by the Lenders.

 

(c) All payments (including prepayments) to be made by Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 2:00 p.m., New York City time, on the due date thereof to Administrative Agent, for the account of the Lenders, at the Funding Office, in Dollars and in immediately available funds.  Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received.  If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day.  If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day.  In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then-applicable rate during such extension.

 

(d) Unless Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to Administrative Agent, Administrative Agent may assume that such Lender is making such amount available to Administrative Agent, and Administrative Agent may, in reliance upon such assumption, make available to Borrower a corresponding amount.  If such amount is not made available to Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to Administrative Agent, on demand, such amount with interest thereon at a rate equal to the daily average Federal Funds Effective Rate for the period until such Lender makes such amount immediately available to Administrative Agent.  A certificate of Administrative Agent submitted to any Lender with 

 

  

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respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest error.  If such Lender’s share of such borrowing is not made available to Administrative Agent by such Lender within three (3) Business Days after such Borrowing Date, Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to ABR Loans, on demand, from Borrower.

 

(e) Unless Administrative Agent shall have been notified in writing by Borrower prior to the date of any payment due to be made by Borrower hereunder that Borrower will not make such payment to Administrative Agent, Administrative Agent may assume that Borrower is making such payment, and Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the Lenders their respective pro rata shares of a corresponding amount.  If such payment is not made to Administrative Agent by Borrower within three (3) Business Days after such due date, Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Effective Rate.  Nothing herein shall be deemed to limit the rights of Administrative Agent or any Lender against Borrower.

 

If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.4(b), 2.4(c), 2.14(d), 2.14(e), 3.4(a) or 9.7, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision of this Agreement), apply any amounts thereafter received by the Administrative Agent, the Swingline Lender or the Issuing Lender for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

 

2.15 Requirements of Law.

 

(a) If (i) the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof, (ii) the Dodd-Frank Wall Street Reform and Consumer Protection Act or any requests, rules, guidelines, or directives thereunder or issued in connection therewith, regardless of the date promulgated enacted, adopted or issued, or (iii) any requests, rules, guidelines or directives promulgated by the Bank for International Settlements or the Basel Committee on Banking Supervision (or any successor or similar authority), in each case pursuant to Basel III, regardless of the date actually promulgated, enacted, adopted or issued:

 

(i) shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any Application or any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes covered by Section 2.16 and changes in the rate of tax on the overall net income of such Lender);

 

(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the Eurodollar Rate; or

 

(iii) shall impose on such Lender any other condition;

 

and the result of any of the foregoing is to increase the cost to such Lender by an amount that such Lender reasonably deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans 

 

  

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or issuing or participating in Letters of Credit, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, Borrower shall promptly pay to such Lender, upon its demand accompanied by a customary explanation of the calculation of such increased costs, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable.  If any Lender becomes entitled to claim any additional amounts pursuant to this paragraph, it shall promptly notify Borrower (with a copy to Administrative Agent) of the event by reason of which it has become so entitled.

 

(b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority, including compliance with (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act or any requests, rules, guidelines, or directives thereunder or issued in connection therewith and (ii) any requests, rules, guidelines or directives promulgated by the Bank for International Settlements or the Basel Committee on Banking Supervision (or any successor or similar authority) pursuant to Basel III made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder or under or in respect of any Letter of Credit to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy) by an amount reasonably deemed by such Lender to be material, then from time to time, after submission by such Lender to Borrower (with a copy to Administrative Agent) of a written request therefor accompanied by a customary explanation of the calculation of such reduced rate of return, Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction; provided that Borrower shall not be required to compensate a Lender pursuant to this paragraph for any amounts incurred more than six (6) months prior to the date that such Lender notifies Borrower of such Lender’s intention to claim compensation therefor; and provided further that, no Lender shall be entitled to compensation pursuant to this Section 2.15 if it is not at the time the general policy or practice of such Lender to demand compensation in similar circumstances in similar agreement.

 

(c) A certificate as to any additional amounts payable pursuant to this Section 2.15 submitted by any Lender to Borrower (with a copy to Administrative Agent) shall be conclusive in the absence of manifest error.  The obligations of Borrower pursuant to this Section 2.15 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

2.16 Taxes.

 

(a) All payments made by Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority (including any taxes or withholdings arising under FATCA), excluding taxes imposed on or measured by net income (however denominated) and franchise taxes (imposed in lieu of net income taxes) imposed on Administrative Agent or any Lender as a result of a present or former connection between Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or Other Taxes are required to be withheld from any amounts payable to Administrative Agent or any Lender hereunder, the 

 

  

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amounts so payable to Administrative Agent or such Lender shall be increased to the extent necessary to yield to Administrative Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that Borrower shall not be required to increase any such amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are attributable to such Lender’s failure to comply with the requirements of paragraph (d), (e) or (f) of this Section 2.16 or (ii) that are United States withholding taxes imposed on amounts payable to or for the account of such Lender at the time such Lender becomes a party to this Agreement or such Lender changes its lending office, except to the extent that such Lender’s assignor (if any) or such Lender (in the case of a change in lending office) was entitled, at the time of assignment or immediately before it changed its lending office, to receive additional amounts from Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.

 

(b) In addition, Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by Borrower, as promptly as possible thereafter Borrower shall send to Administrative Agent for its own account or for the account of the relevant Lender, as the case may be, a certified copy of an original official receipt received by Borrower showing payment thereof.  If Borrower fails to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to Administrative Agent the required receipts or other required documentary evidence, Borrower shall indemnify Administrative Agent and the Lenders for any incremental taxes, interest or penalties that may become payable by Administrative Agent or any Lender as a result of any such failure.

 

(d) Each Lender (or Transferee) that is not a “United States Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to Borrower and Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement substantially in the form of Exhibit D and a Form W-8BEN, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from U.S. federal withholding tax on all payments by Borrower under this Agreement and the other Loan Documents.  Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation).  In addition, each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender.  Each Non-U.S. Lender shall promptly notify Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose).  Each Lender (or Transferee) that is a “United States Person” as defined in Section 7701(a)(30) of the Code (a "U.S. Lender") shall deliver to Borrower and Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of U.S. Internal Revenue Service Form W-9, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such U.S. Lender certifying an exemption from U.S. federal backup withholding tax on all payments by Borrower under this Agreement and the other Loan Documents.  Such forms shall be delivered by each U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation).  In addition, each U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such U.S. Lender.  Each U.S. Lender shall promptly notify Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to Borrower (or any other form of certification 

 

  

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adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to deliver.

 

(e) A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to Borrower (with a copy to Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by Borrower, 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, provided that such Lender is legally entitled to complete, execute and deliver such documentation and in such Lender’s judgment such completion, execution or submission would not materially prejudice the legal position of such Lender.

 

(f) If a payment made to a Lender under this Agreement would be subject to U.S. federal withholding tax imposed by FATCA and the rules and regulations promulgated pursuant thereto (in each case as in effect as of the date of this Agreement) if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Administrative Agent, at the time or times prescribed by law and at such time or times reasonably requested by Borrower or Administrative Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower or Administrative Agent as may be necessary for the Administrative Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment.

 

(g) If the Administrative Agent or any Lender determines that it has received a refund of any tax as to which it has been indemnified by Borrower or with respect to which Borrower has paid additional amounts pursuant to this Section 2.16, it shall pay over such refund to Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by Borrower under this Section 2.16 with respect to the tax giving rise to such refund), net of all out-of-pocket expenses of Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to Borrower to Administrative Agent or such Lender in the event Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.  If Borrower or Administrative Agent is required by law to deduct and/or withhold any taxes, levies, imposts, duties, charges, fees, deductions or withholdings other than with respect to Non-Excluded Taxes and Other Taxes and as otherwise expressly provided herein, then any amounts so deducted and paid to the relevant Governmental Authority shall be treated under this Agreement as made to the affected Lender.

 

(h) The agreements in this Section 2.16 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

2.17 Indemnity.

 

Borrower agrees to indemnify each Lender for, and to hold each Lender harmless from, any loss or expense that such Lender may sustain or incur as a consequence of (a) Default by Borrower in 

 

  

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making a borrowing of, conversion into or continuation of Eurodollar Loans after Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) Default by Borrower in making any prepayment of or conversion from Eurodollar Loans after Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto.  Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank Eurodollar market.  A certificate as to any amounts payable pursuant to this Section 2.17 (which certificate shall set forth in reasonable detail the calculation of such amounts) submitted to Borrower by any Lender shall be conclusive in the absence of manifest error.  This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

2.18 Change of Lending Office.

 

Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.15 or 2.16(a) with respect to such Lender, it will, if requested by Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans or Letters of Credit affected by such event with the object of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of Borrower or the rights of any Lender pursuant to Section 2.15 or 2.16(a).

 

2.19 Replacement of Lenders.

 

Borrower shall be permitted to replace any Lender that (a) requests reimbursement for amounts owing pursuant to Section 2.15 or 2.16(a) or 2.16(b), (b) is a Defaulting Lender or (c) is a Lender that refuses to consent to a proposed change, waiver, discharge or termination with respect to this Agreement that has been approved by the Required Lenders as (and to the extent) provided in Section 10.1, with a replacement financial institution; provided that (i) such replacement does not conflict with any Requirement of Law, (ii) no Event of Default shall have occurred and be continuing at the time of such replacement, (iii) prior to any such replacement, such Lender shall not have rescinded its request for payment of amounts owing pursuant to Section 2.15, 2.16(a) or 2.16(b), (iv) the replacement financial institution shall purchase, at par, all Loans and other amounts owing to such replaced Lender on or prior to the date of replacement, (v) Borrower shall be liable to such replaced Lender under Section 2.17 if any Eurodollar Loan owing to such replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto, (vi) the replacement financial institution, if not already a Lender, shall be reasonably satisfactory to Administrative Agent, (vii) the replaced Lender shall be obligated to make such replacement in accordance with the provisions of Section 10.6 (provided that replacement Lender shall be obligated to pay the registration and processing fee referred to therein), (viii) until such time as such replacement shall be consummated, Borrower shall pay all additional amounts (if any) required pursuant to Section 2.15, 2.16(a) or 2.16(b), as the case may be, and (ix) any such replacement shall not be deemed to be a waiver of any rights that Borrower, Administrative Agent or any other Lender shall have against the replaced Lender.

 

  

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2.20 Defaulting Lenders.

 

(a) Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

(i)           Such Defaulting Lender shall not be entitled to vote on any matter requiring the consent or approval of all Lenders or the Required Lenders, and the Commitment of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 10.1), provided that (a) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender differently than other affected Lenders shall require the consent of such Defaulting Lender and (b) the Commitment of such Defaulting Lender may not be increased without the consent of such Defaulting Lender, Administrative Agent and Borrower; provided that any payments made with respect to such increase in such Commitment shall not be subject to Section 10.7 with respect to any Defaulting Lender..

(ii)           Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 8 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.7 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Lender or Swingline Lender hereunder; third, to Cash Collateralize the Issuing Lenders’ Fronting Exposure with respect to such Defaulting Lender in accordance with Section 3.9; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuing Lenders’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 3.9; sixth, to the payment of any amounts owing to the Lenders, the Issuing Lenders or Swingline Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Lenders or Swingline Lenders against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that, notwithstanding anything to the contrary in this Section 2.20(a)(ii), if (x) such payment is a payment of the principal amount of any Loans or L/C Obligations in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 5.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to Section 2.20(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.20 shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

  

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(iii)           (A)           No Defaulting Lender shall be entitled to receive any commitment fee contemplated by Section 2.5(a) for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

(B)           Each Defaulting Lender shall be entitled to receive any fees pursuant to Section 3.3 for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Revolving Percentage of the stated amount of Letters of Credit for which the Defaulting Lender has provided Cash Collateral pursuant to Section 2.20(a)(ii).

 

(C)           With respect to any fees pursuant to Section 3.3  not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to each Issuing Lender and Swingline Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Lender’s or Swingline Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

 

(iv)           All or any part of such Defaulting Lender’s participation in L/C Obligations and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Percentage (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 5.2 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the sum of each Non-Defaulting Lender’s Revolving Percentage of such reallocation plus its Revolving Percentage of the Outstanding Amount to exceed such Non-Defaulting Lender’s Commitment.  No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

(v)           If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first, prepay Swingline Loans in an amount equal to the Swingline Lenders’ Fronting Exposure and (y) second, Cash Collateralize the Issuing Lenders’ Fronting 

 

  

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    Exposure (after giving effect to any partial reallocation pursuant to clause (iv) above) in accordance with the procedures set forth in Section 3.9 for so long as such L/C Obligations are outstanding.

 

        (b)            If the Borrower, the Administrative Agent and each Swingline Lender and Issuing Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with the Commitments (without giving effect to Section 2.20(a)(iv), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

(c)           So long as any Lender is a Defaulting Lender, (i) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and (ii) no Issuing Lender shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

2.21 Increase in Commitments.  Borrower may, at its option, at any time or from time to time prior to the Revolving Facility Termination Date, increase the Total Commitments by up to $200,000,000 to an aggregate principal amount not to exceed $550,000,000 by requesting the existing Lenders or new lenders to commit to any such increase; provided that:  (a) no Lender shall be required to commit to any such increase; (b) no such increase shall become effective unless at the time thereof and after giving effect thereto (i) no Default or Event of Default shall have occurred and be continuing, (ii) each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects, except to the extent such representations and warranties expressly relate to an earlier time, in which case such representations and warranties were true and correct in all material respects as of such earlier time, provided, that, to the extent any such representation and warranty is already qualified by materiality or by reference to Material Adverse Effect, such representation shall be true and correct in all respects, and (iii) Administrative Agent shall have received a certificate from Borrower to the effect of (i) and (ii) of clause (b); and (c) no new lender shall become a Lender pursuant to this Section 2.21 unless Administrative Agent shall have given its prior written consent, which consent shall not be unreasonably withheld.  Borrower shall be entitled to pay upfront or other fees to such lenders who extend credit pursuant to this Section 2.21 as Borrower and such lenders may agree.  Any increase in the Total Commitments shall be a Class A Commitment.  Such increase in the Commitments shall become effective on the date (the “Increased Facility Closing Date”) specified in an activation notice delivered to Administrative Agent no less than five (5) Business Days prior to effective date of such notice specifying the amount of the increase and the effective date thereof.  Each new lender that provides any part of such increase in the Commitments (a “New Lender”) shall execute a New Lender Supplement (each, a “New Lender Supplement”), substantially in the form of Exhibit E, whereupon such New Lender shall become a Lender for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement.  Unless otherwise agreed by Administrative Agent, on each Increased Facility Closing Date, Borrower shall borrow Revolving Loans under the relevant increased Commitments from each Lender participating in 

 

  

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the relevant increase in an amount determined by reference to the amount of each Type of Loan (and, in the case of Eurodollar Loans, of each Eurodollar Tranche) which would then have been outstanding from such Lender if (i) each such Type or Eurodollar Tranche had been borrowed or effected on such Increased Facility Closing Date and (ii) the aggregate amount of each such Type or Eurodollar Tranche requested to be so borrowed or effected had been proportionately increased.  The Eurodollar Base Rate applicable to any Eurodollar Loan borrowed pursuant to the preceding sentence shall equal the rate then applicable to the Eurodollar Loans of the other Lenders in the same Eurodollar Tranche (or, until the expiration of the then-current Interest Period, such other rate as shall be agreed upon between Borrower and the relevant Lender).

 

SECTION 3.    LETTERS OF CREDIT

3.1 L/C Commitment.

 

(a) Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the other Lenders set forth in Section 3.4(a), agrees to issue letters of credit (“Letters of Credit”) for the account of Borrower and any of its Subsidiaries and Homebuilding Joint Ventures on any Business Day during the Commitment Period in such form as may be approved from time to time by such Issuing Lender; provided that no Issuing Lender shall have any obligation to issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C Obligations (exclusive of unreimbursed drawings that are reimbursed on the date of, and prior to the issuance of, such Letter of Credit) would exceed the L/C Commitment, (ii) the aggregate amount of the Available Commitments would be less than zero or (iii) the Borrowing Base Availability would be less than zero.  Each Letter of Credit shall (i) be denominated in Dollars, (ii) have a face amount of at least $5,000 (unless otherwise agreed by the relevant Issuing Lender) and (iii) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date that is 364 days after to the Class A Revolving Facility Termination Date, provided (A) that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above) and (B) at least 90 days prior to the Class A Revolving Facility Termination Date, Borrower shall, to the extent of the balance, replace outstanding Letters of Credit and/or deposit an amount equal to 100% of such balance in cash in a cash collateral account established with Administrative Agent for the benefit of the Lenders on terms and conditions satisfactory to Administrative Agent.

 

(b) No Issuing Lender shall at any time be obligated to issue any Letter of Credit if such issuance would conflict with, or cause the Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.

 

3.2 Procedure for Issuance of Letter of Credit.

 

Borrower may from time to time request that an Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender with a copy to Administrative Agent at its address for notices specified herein an Application therefor, completed to the satisfaction of such Issuing Lender, and such other certificates, documents and other papers and information as such Issuing Lender may request.  Upon receipt of any Application, an Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall any Issuing Lender be required to issue any Letter of Credit earlier than three (3) Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by an Issuing Lender and Borrower.  Each Issuing Lender shall furnish a copy of such Letter of Credit to Borrower promptly following the issuance thereof.  Each Issuing Lender 

 

  

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shall promptly furnish to Administrative Agent, which shall in turn promptly furnish to the Lenders, notice of the issuance of each Letter of Credit (including the amount thereof).

 

3.3 Fees and Other Charges.

 

(a) Borrower will pay a fee on all outstanding Letters of Credit at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans, shared ratably among the Lenders, in accordance with their respective Commitments, and payable quarterly in arrears on each L/C Fee Payment Date after the Issuance Date.  In addition, Borrower shall pay to each Issuing Lender for its own account a fronting fee of 0.125% per annum on the undrawn and unexpired amount of each Letter of Credit issued by such Issuing Lender, payable quarterly in arrears on each L/C Fee Payment Date after the Issuance Date.

 

(b) In addition to the foregoing fees, Borrower shall pay or reimburse each Issuing Lender for such normal and customary costs and expenses as are incurred or charged by such Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit.

 

3.4 L/C Participations.

 

(a) Each Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from such Issuing Lender, on the terms and conditions set forth below, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving Percentage in such Issuing Lender’s obligations and rights under and in respect of each Letter of Credit and the amount of each draft paid by such Issuing Lender thereunder.  Each L/C Participant unconditionally and irrevocably agrees with each Issuing Lender that, if a draft is paid under any Letter of Credit for which such Issuing Lender is not reimbursed in full by Borrower in accordance with the terms of this Agreement, such L/C Participant shall pay to such Issuing Lender upon demand made through Administrative Agent at the Issuing Lender’s address for notices specified herein an amount equal to such L/C Participant’s Revolving Percentage of the amount of such draft, or any part thereof, that is not so reimbursed.

 

(b) If any amount required to be paid by any L/C Participant to an Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment made by such Issuing Lender under any Letter of Credit is paid to such Issuing Lender within three (3) Business Days after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand an amount equal to the product of (i) such amount, times (ii) the daily average Federal Funds Effective Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360.  If any such amount required to be paid by any L/C Participant pursuant to Section 3.4(a) is not made available to an Issuing Lender by such L/C Participant within three (3) Business Days after the date such payment is due, such Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to ABR Loans.  A certificate of an Issuing Lender submitted to any L/C Participant with a copy to the Administrative Agent with respect to any amounts owing under this Section 3.4 shall be conclusive in the absence of manifest error.

 

(c) Whenever, at any time after any Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Section 3.4(a), such Issuing Lender receives any payment related to such Letter of Credit 

 

  

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(whether directly from Borrower or otherwise, including proceeds of collateral applied thereto by such Issuing Lender), or any payment of interest on account thereof, such Issuing Lender will distribute through Administrative Agent to such L/C Participant its pro rata share thereof; provided, however, that in the event that any such payment received by any Issuing Lender shall be required to be returned by such Issuing Lender, such L/C Participant shall return to such Issuing Lender the portion thereof previously distributed by such Issuing Lender to it.

 

(d) Provided that Borrower has made the payments required pursuant to Section 2.1(b), on the Class B Revolving Facility Termination Date, the participation interests held by the Class B Lenders shall be deemed transferred to the Class A Lender L/C Participants, with each Class A Lender L/C Participant having a participation interest in each such Letters of Credit equal to Class A Lender’s Revolving Percentage as the same (after giving effect to the adjustment in such Revolving Percentage described in Section 2.1(c)(ii)).

 

3.5 Reimbursement Obligation of Borrower.

 

Borrower agrees to reimburse each Issuing Lender through Administrative Agent if so requested by Administrative Agent on the Business Day next succeeding the Business Day on which such Issuing Lender notifies Borrower of the date and amount of a draft presented under any Letter of Credit and paid by such Issuing Lender for the amount of (a) such draft so paid and (b) any taxes, fees, charges or other costs or expenses incurred by such Issuing Lender in connection with such payment.  Each such payment shall be made to an Issuing Lender or Administrative Agent at its address for notices referred to herein in Dollars and in immediately available funds.  To the extent that any such amount is not reimbursed to an Issuing Lender by 2 p.m. (New York City time) on the date of payment, interest shall be payable on any such amounts from the date on which the relevant draft is paid until payment in full (i) at the rate set forth in Section 2.11(b) until the Business Day next succeeding the date of the relevant notice, and (ii) thereafter, at the rate set forth in Section 2.11(c).  Each Issuing Lender shall give Borrower written notice of the payment of each draft under a Letter of Credit.

 

3.6 Obligations Absolute.

 

Borrower’s obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that Borrower may have or have had against any Issuing Lender, any beneficiary of a Letter of Credit or any other Person.  Borrower also agrees with each Issuing Lender that such Issuing Lender shall not be responsible for, and Borrower’s Reimbursement Obligations under Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of Borrower against any beneficiary of such Letter of Credit or any such transferee.  No Issuing Lender shall be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Issuing Lender.  Borrower agrees that any action taken or omitted by an Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards of care specified in the Uniform Commercial Code, shall be binding on Borrower and shall not result in any liability of such Issuing Lender to Borrower.

 

  

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3.7 Letter of Credit Payments.

 

If any draft shall be presented for payment under any Letter of Credit, the relevant Issuing Lender shall promptly notify Borrower with a copy to the Administrative Agent of the date and amount thereof.  The responsibility of an Issuing Lender to Borrower in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit.

 

3.8 Applications.

 

To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall apply.

 

3.9 Cash Collateral.  At any time that there shall exist a Defaulting Lender, within three (3) Business Days following the written request of the Administrative Agent or any Issuing Lender (with a copy to the Administrative Agent) the Borrower shall Cash Collateralize the Issuing Lenders’ Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.20(a)(ii) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

 

(a)           The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Lenders, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of L/C Obligations, to be applied pursuant to clause (b) below.  If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent and the Issuing Lenders as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

(b)           Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided by Borrower under this Section 3.9 or provided under Section 2.20(a)(ii) in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

(c)           Cash Collateral (or the appropriate portion thereof) provided to reduce any Issuing Lender’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 3.9 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent and each Issuing Lender that there exists excess Cash Collateral; provided that, subject to Section 2.20 the Person providing Cash Collateral and each Issuing Lender may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations.

 

  

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SECTION 4.    REPRESENTATIONS AND WARRANTIES

 

To induce Administrative Agent and the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, Borrower hereby represents and warrants to Administrative Agent and each Lender that:

 

4.1 Incorporation, Qualification, Powers, and Capital Stock.

 

(a) Borrower is a corporation duly incorporated, validly existing, and in good standing under the laws of the state of Delaware, is duly qualified to do business as, and is in good standing as, a foreign corporation in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties makes such qualification necessary, and has all requisite power and authority to conduct its business and to own and lease its properties (except in each case where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect).  All outstanding shares of Capital Stock of Borrower are duly authorized, validly issued, fully paid, nonassessable, and issued in compliance with all applicable state and federal securities laws except where failure to comply could not reasonably be expected to have a Material Adverse Effect.

 

(b) Each Guarantor is a corporation, limited liability company, partnership or other legal entity duly incorporated or formed, validly existing, and in good standing under the laws of its respective jurisdiction of incorporation or formation, is duly qualified to do business as, and is in good standing as, a foreign legal entity in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties makes such qualification necessary, and has all requisite power and authority to conduct its business and to own and lease its properties (except in each case where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect).

 

4.2 Execution, Delivery, and Performance of Loan Documents.

 

(a) Borrower has all requisite power and authority to execute and deliver, and to perform all of its obligations under, the Loan Documents.

 

(b) Each Guarantor has all requisite power and authority to execute and deliver, and to perform all of its obligations under, its guaranty.

 

(c) The execution and delivery by Borrower of, and the performance by Borrower of each of its obligations under, each Loan Document to which it is a party, and the execution and delivery by each Guarantor of, and the performance by each Guarantor of each of its obligations under its guaranty, have been duly authorized by all necessary action and do not and will not:

 

(i) require any consent or approval not heretofore obtained of any stockholder, member, partner, security holder or creditor of Borrower, any Subsidiary, or any Guarantor;

 

(ii) violate any provision of the certificate of incorporation or bylaws of Borrower or any provision of the articles or certificate of incorporation, bylaws, or partnership agreement of any Guarantor or any Subsidiary;

 

(iii) result in or require the creation or imposition of any Lien, claim, or encumbrance (except to the extent that any Lien is created under this Agreement) upon or with respect to any property now owned or leased or hereafter acquired by Borrower, any Subsidiary, or any Guarantor;

 

  

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(iv) violate any provision of any law, order, writ, judgment, injunction, decree, determination, or award presently in effect having applicability to Borrower, any Subsidiary (other than an Excluded Subsidiary), or any Guarantor; or

 

(v) result in a material breach of or constitute a material default under, or cause or permit the acceleration of any obligation owed under, any indenture or loan or credit agreement or any other material agreement, lease, or instrument to which Borrower, any Subsidiary (other than an Excluded Subsidiary), or any Guarantor is a party or by which Borrower, any such Subsidiary, or any Guarantor, or any property of Borrower, any such Subsidiary, or any Guarantor, is bound or affected.

 

(d) Borrower, each Subsidiary (other than an Excluded Subsidiary), and each Guarantor are not in default under any law, order, writ, judgment, injunction, decree, determination, award, indenture, agreement, lease, or instrument, where such default could reasonably be expected to have a Material Adverse Effect.

 

(e) No authorization, consent, approval, order, license, permit, or exemption from, or filing, registration, or qualification with, any Governmental Authority not heretofore obtained is or will be required under applicable law to authorize or permit the execution, delivery, and performance by Borrower or any Guarantor of, all of its obligations under, the Loan Documents.

 

(f) Each of the Loan Documents to which Borrower is a party, when executed and delivered, will constitute the legal, valid, and binding obligations of Borrower, and the guaranty, when executed and delivered, will constitute the legal, valid, and binding obligation of each Guarantor, each enforceable against such Person in accordance with its terms, except as enforcement may be limited by debtor relief laws or equitable principles relating to the granting of specific performance or other equitable remedies as a matter of judicial discretion.

 

4.3 Compliance with Laws and Other Requirements.

 

The Loan Parties are in compliance with all laws and other requirements applicable to their businesses and have obtained all material authorizations, consents, approvals, orders, licenses, permits, and exemptions from, and have accomplished all filings, registrations, or qualifications with, any Governmental Authority that is necessary for the transaction of their respective businesses, in each case except where the failure to do so would not reasonably be expected to have a Material Adverse Effect and except for authorizations, consents, approvals, orders, licenses, permits, and exemptions relating to the development, construction, and sale of real property that the Loan Parties are in the process of obtaining or intend to obtain in the ordinary course of business.

 

4.4 Entities Owned.

 

(a) Schedule 4.4 sets forth, updated as of the last day of the most recent quarter, the names and jurisdictions of incorporation or formation of all Subsidiaries, Homebuilding Joint Ventures, and other entities in which Borrower has a direct or indirect ownership interest (but excluding publicly-traded Persons in which Borrower, directly or indirectly, holds less than a five percent (5%) ownership interest).  Except as described in Schedule 4.4, as of the end of the most recent fiscal quarter of Borrower, excluding publicly-traded Persons in which Borrower, directly or indirectly, holds less than a five percent (5%) ownership interest, Borrower does not own any Capital Stock or ownership interest in any Person other than its Subsidiaries and Homebuilding Joint Ventures.  All outstanding shares of Capital Stock or ownership interests, as the case may be, of each Subsidiary (other than an Excluded Subsidiary) and Homebuilding Joint Venture that are owned by Borrower or any Subsidiary are (i) owned of record and 

 

  

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beneficially by Borrower and/or by one (1) or more Subsidiaries, free and clear of all material Liens, claims, encumbrances, and rights of others (other than Liens permitted under this Agreement), and are (ii) duly authorized, validly issued, fully paid, nonassessable (except for capital calls or contribution requirements in connection with ownership interests in Homebuilding Joint Ventures), and issued in compliance with all applicable state and federal securities and other laws, except where the failure to comply could not reasonably be expected to have a Material Adverse Effect.  Borrower may update Schedule 4.4 from time to time by sending written notice to Administrative Agent.

 

(b) Each Subsidiary (other than an Excluded Subsidiary) is a corporation, partnership, or limited liability company duly incorporated or formed, validly existing, and in good standing under the laws of its respective jurisdiction of incorporation or formation, is duly qualified to do business as, and is in good standing as, a foreign corporation, partnership, or limited liability company in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties makes such qualification necessary (except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect), and has all requisite power and authority to conduct its business and to own and lease its properties.

 

(c) Each Subsidiary (other than an Excluded Subsidiary) is in compliance with all laws and other requirements applicable to its business and has obtained all authorizations, consents, approvals, orders, licenses, permits, and exemptions from, and has accomplished all filings, registrations, or qualifications with, any Governmental Authority that is necessary for the transaction of its business, in each case except where the failure to do so could not reasonably be expected to have a Material Adverse Effect and except for consents, approvals, orders, licenses, permits, and exemptions relating to the development, construction, and sale of real property that each such Subsidiary is in the process of obtaining or intends to obtain in the ordinary course of business.

 

4.5 Financial Statements.

 

Borrower has furnished to Lenders that are parties to this Agreement on the Closing Date a copy of the Form 10-K of Borrower and its Subsidiaries for the period ended December 31, 2011, and a copy of the Form 10-Q of Borrower and its Subsidiaries dated as of June 30, 2012, (and with respect to the June 30, 2012 Form 10-Q the other information required by this Agreement was also furnished to Lenders).  The financial statements and the notes thereto included in such Form 10-K and such Form 10-Q fairly present in all material respects the consolidated financial position of Borrower and its Subsidiaries as at the dates specified therein and the consolidated results of operations and cash flows for the periods then ended, all in conformity with GAAP.

 

4.6 No Material Adverse Change.

 

There has been no material adverse change in the financial condition of Borrower and its Subsidiaries (excluding the Excluded Subsidiaries), taken as a whole, since the date of the most recently delivered financial statements, and Borrower and its Subsidiaries (excluding the Excluded Subsidiaries), taken as a whole, do not have any material liability incurred outside of the ordinary course of business or, to the knowledge of the Loan Parties, material contingent liability, not reflected or disclosed in the most recently delivered financial statements or notes thereto, or otherwise disclosed in Borrower’s Exchange Act filings or to Administrative Agent in writing.

 

4.7 Tax Liability.

 

Borrower and each Subsidiary have filed all material tax returns (federal, state, and local) required to be filed by them and have paid all material taxes shown thereon to be due and all property 

 

  

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taxes due, including interest and penalties, if any.  To the knowledge of the Loan Parties, there does not exist any substantial likelihood that any Governmental Authority will successfully assert a tax deficiency against Borrower or any Subsidiary that would reasonably be expected to have a Material Adverse Effect that has not been adequately reserved against in the most recently delivered financial statements.  Borrower and each Subsidiary have established and are maintaining adequate reserves for tax liabilities, if any, sufficient to comply with GAAP.

 

4.8 Litigation.

 

There are no actions, suits, proceedings, claims, or disputes pending or, to the knowledge of the Loan Parties, threatened against Borrower or any of its Subsidiaries, before any governmental authority which would reasonably be expected to have a Material Adverse Effect.

 

4.9 Pension Plan.

 

(a) Neither Borrower nor any Guarantor maintains or contributes to, or within the past six (6) years has maintained or contributed to, any Pension Plan or Multiemployer Plan;

 

(b)           No ERISA Event has occurred or is reasonably expected to occur.

 

(c)           The Borrower and each of its ERISA Affiliates has met all applicable requirements under the ERISA Funding Rules with respect to each Pension Plan, and no waiver of the minimum funding standards under the ERISA Funding Rules has been applied for or obtained; and

 

(d)           As of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is at least 60%, and neither the Borrower not any of its ERISA Affiliates knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage to fall below 60% as of the most recent valuation date.

 

4.10 Regulations U and X; Investment Company Act.

 

Neither Borrower nor any Guarantor is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” within the meanings of Regulation U of the FRB.  No part of the Loans will be used to purchase or carry any margin stock (except for purchases of Borrower’s stock by, or on behalf of, Borrower otherwise permitted hereunder and that is subsequently retired or retained by Borrower as treasury stock), or to extend credit to others for that purpose, or for any purpose that violates the provisions of Regulations U or X of the FRB.  No Loan Party is required to be registered under the Investment Company Act of 1940.

 

4.11 No Default.

 

No event has occurred and is continuing that is a Default or an Event of Default.

 

4.12 Environmental Compliance.

 

In connection with the acquisition of properties, Borrower and its Subsidiaries generally conduct in the ordinary course of business a review of the environmental condition of such properties and any claims alleging potential liability or responsibility for violation of Environmental Laws.  In the course of the operation of their businesses, nothing has come to the attention of any Loan Party causing it to conclude that there are any violations of Environmental Laws or claims alleging potential liability or 

 

  

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responsibility for violation of Environmental Laws that would reasonably be expected to have a Material Adverse Effect.

 

4.13 Solvent.

 

Borrower and its Subsidiaries on a consolidated basis are Solvent.

 

4.14 Senior Debt.

 

All obligations under the Loan Documents to pay principal, interest, fees are senior debt under the terms of any Subordinated Debt of Borrower and its Subsidiaries (other than the Excluded Subsidiaries).

 

4.15 Foreign Asset Control Regulations

 

.  Neither the execution and delivery of the Loan Documents by Borrower or any Loan Party nor the use of the proceeds of any Loan or any extension of credit, will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or the Anti-Terrorism Order or any enabling legislation or executive order relating to any of the same.

 

SECTION 5.    CONDITIONS PRECEDENT

 

5.1 Conditions to Initial Extension of Credit.

 

The agreement of each Lender to make the initial extension of credit requested to be made by it is subject to the satisfaction, prior to or concurrently with the making of such extension of credit on the Closing Date, of the following conditions precedent:

 

(a) Credit Agreement; Guarantee Agreement.  Administrative Agent shall have received (i) this Agreement, executed and delivered by Administrative Agent, and Borrower and each Lender listed on Schedule 1.1 and (ii) the Guarantee Agreement, executed and delivered by each Guarantor.

 

(b) Fees.  The Lenders and Administrative Agent shall have received all fees required to be paid, and all expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the Closing Date.  All such amounts may be paid with proceeds of Loans made on the Closing Date if reflected in the funding instructions given by Borrower to Administrative Agent on or before the Closing Date.

 

(c) Corporate Proceedings.  Administrative Agent shall have received a copy of the resolutions (in form and substance reasonably satisfactory to Administrative Agent) of the board of directors of Borrower authorizing (i) the execution, delivery and performance of this Agreement, (ii) the consummation of the transactions contemplated hereby, (iii) the borrowings herein provided for, and (iv) the execution, delivery and performance of the Notes and the other documents provided for in this Agreement, all certified by a Responsible Officer of Borrower as of the date hereof.  Such certificate shall state that the resolutions set forth therein have not been amended, modified, revoked or rescinded as of the Closing Date.

 

(d) Proceedings of Guarantors.  Administrative Agent shall have received a copy of the respective resolutions (in form and substance reasonably satisfactory to Administrative Agent) of the board of directors, management committee or other governing body of each of the Guarantors (or of 

 

  

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Borrower or another Subsidiary of Borrower as the sole shareholder, sole or managing member or general partner of the applicable Guarantor), each resolution authorizing the execution, delivery and performance of the Guarantee Agreement, all certified by a Responsible Officer of the respective Guarantor (or Borrower or such Subsidiary) as of the Closing Date.  Such certificate shall state that the resolutions set forth therein have not been amended, modified, revoked or rescinded as of the Closing Date.

 

(e) Incumbency Certificate of Borrower.  Administrative Agent shall have received a certificate of a Responsible Officer of Borrower, dated the Closing Date, as to the incumbency and signature of the officer(s) (or other Person(s) in a comparable position) executing this Agreement, the Notes and any certificate or other documents to be delivered pursuant hereto or thereto.

 

(f) Incumbency Certificates of Guarantors.  Administrative Agent shall have received a certificate of a Responsible Officer of each of the Guarantors, dated the Closing Date, as to the incumbency and signatures of the officer(s) (or other Person(s) in a comparable position) executing the Guarantee Agreement.

 

(g) Articles of Incorporation of Borrower.  Administrative Agent shall have received copies of (i) the certificate of incorporation of Borrower, together with all amendments, and a certificate of good standing, all certified by the appropriate governmental officer in its jurisdiction of incorporation and (ii) the bylaws or code of regulations of Borrower certified by a Responsible Officer of Borrower.

 

(h) Organizational Documents of Guarantors.  Administrative Agent shall have received (i) with respect to each Guarantor that is a corporation (A) copies of its articles or certificate of incorporation, including all amendments thereto, and a certificate of good standing or subsistence, all certified by the appropriate governmental officer in its jurisdiction of incorporation and (B) the bylaws or code of regulations of such Guarantor certified by a Responsible Officer of each Guarantor, (ii) with respect to any Guarantor that is a partnership, (A) a true copy of its partnership agreement, including all amendments thereto, certified by an officer of such partnership or of its general partner, together with (in the case of any limited partnership) copies of the certificates of limited partnerships and (B) a certificate of good standing or subsistence, all certified by the appropriate governmental officer in its jurisdiction of organization, and (iii) with respect to each Guarantor that is a limited liability company, (A) a copy of its operating agreement, including all amendments thereto, certified by an officer of such limited liability company or of its managing member, and a copy of its articles or certificate of formation and (B) a certificate of good standing or subsistence, all certified by the appropriate officer of the state of its formation.

 

(i) Legal Opinions.  Administrative Agent shall have received the following executed legal opinions:

 

(i) the legal opinion of Snell & Wilmer L.L.P., counsel to Borrower and its Subsidiaries, substantially in the form of Exhibit F-1;

 

(ii) the legal opinion of Smith, Gambrell & Russell, LLP, Florida counsel of Borrower and its Subsidiaries, substantially in the form of Exhibit F-2;

 

Each such legal opinion shall cover such other matters incident to the transactions contemplated by this Agreement as is customary for transactions of this type that Administrative Agent may reasonably require.

 

  

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(j) Borrowing Base Certificate.  Administrative Agent shall have received a Borrowing Base Certificate, substantially in the form of Exhibit G, as of June 30, 2012 certified by a Responsible Officer of Borrower.

 

(k) Representations and Warranties.  Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of the Closing Date.

 

5.2 Conditions to Each Extension of Credit.

 

The agreement of each Lender to make any extension of credit requested to be made by it on any date (including its initial extension of credit) is subject to the satisfaction of the following conditions precedent:

 

(a) Representations and Warranties.  Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date, except to the extent as such representation or warranty is stated to relate only to an earlier specific date, in which case such representation or warranty shall have been true and correct in all material respects on and as of such earlier specific date.

 

(b) No Default.  No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extensions of credit requested to be made on such date.

 

(c) If, on any date on which there is an Outstanding Amount, the Borrowing Base Availability is less than zero, Borrower shall, on such date, reduce the Outstanding Amount by an amount at least equal to such deficiency.

 

(d) If on any date (i) the Mandatory Prepayment Test Debt exceeds (ii) the sum of (A) $100,000,000 plus (B) 90% of the book value of Model Units, Borrower shall reduce the Outstanding Amount by the amount of such deficiency.

 

Each borrowing by and issuance of a Letter of Credit on behalf of Borrower hereunder shall constitute a representation and warranty by Borrower as of the date of such extension of credit that the conditions contained in this Section 5.2 have been satisfied.

 

SECTION 6.    AFFIRMATIVE COVENANTS

 

Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to any Lender or Administrative Agent hereunder, Borrower shall:

 

6.1 Reporting Requirements.

 

Cause to be delivered to Administrative Agent (for prompt distribution by Administrative Agent to the Lenders):

 

(a) Notification of Events of Default. Within fifteen (15) days after the occurrence of a Default or an Event of Default becomes known to Borrower, a written statement setting forth the 

 

  

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nature of the Default or Event of Default and the action that Borrower proposes to take with respect thereto;

 

(b) Form 10-Q Filing. As soon as required to be filed under applicable law, and in any event within forty-five (45) days after the end of each of the first three (3) quarters of each calendar year, a Form 10-Q of Borrower as of the end of the quarter most recently ended including unaudited consolidated balance sheets, statements of income, stockholders equity, and cash flows of Borrower;

 

(c) Quarterly Projections and Budget Comparisons. Within forty-five (45) days after the end of each calendar quarter the following reports (as historically prepared by Borrower for delivery to its lenders), (i) a residential development summary and a sales summary by community, each substantially in the form previously submitted to Administrative Agent and (ii) reports showing the actual operating results for the calendar quarter most recently ended compared to the budget provided for such period;

 

(d) Form 10-K Filing. As soon as required to be filed under applicable law, and in any event within ninety (90) days after the end of each calendar year, a Form 10-K (including in such filing financial statements audited by, and with the opinion of, Ernst & Young LLP (or its successors), KPMG (or its successors), PricewaterhouseCoopers (or its successors), Deloitte & Touche (or its successors), or any other independent certified public accountants of recognized standing selected by Borrower and reasonably acceptable to Administrative Agent, which opinion shall be unqualified except as to such matters as are acceptable to Administrative Agent in its’ reasonable discretion);

 

(e) Annual Operating Budget. Within ninety (90) days after the end of each calendar year a projected operating budget of Borrower for the succeeding twelve (12) months (including for each of Borrower’s real estate development projects for each quarter), (i) the number of projected closings of Units and (ii) projected revenue (including the aggregate of all amounts projected to be generated from any source in connection with the sale of Units to the public);

 

(f) Annual Guarantor Information.  As soon as available and in any event within ninety (90) days after the end of each such Guarantor’s fiscal year, unaudited condensed balance sheets and statements of income of each Guarantor, all in reasonable detail and duly certified by the chief financial officer, corporate controller, or treasurer of Borrower;

 

(g) Quarterly and Annual Required Default and Covenant Certifications. At the time of the delivery of the items described in clauses (b) and (d) above, a Compliance Certificate of the chief financial officer, corporate controller, the treasurer or an assistant treasurer of Borrower (i) stating that to the knowledge of such officer no Default exists, or if such an event exists, stating the nature thereof and the action that Borrower proposes to take with respect thereto, and (ii) demonstrating in reasonable detail that Borrower was in compliance during the applicable period with the financial covenants contained in this Agreement (including appropriate reconciliations);

 

(h) Litigation Reporting. Promptly upon Borrower learning thereof, notice in writing of any action, suit, or proceeding before any governmental authority which could reasonably be expected to have a Material Adverse Effect;

 

(i) Other Lender Requested Information. Such other information about the business, assets, operation, or condition of any of Borrower or any Subsidiaries, as any Lender (through Administrative Agent) may reasonably request from time to time;

 

  

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(j) Excluded Subsidiary Information. At the time of the delivery of the financial statements described in clauses (b), (d) and (f) above, balance sheets and income statements of Excluded Subsidiaries, a schedule substantially in the form previously provided to the Lenders and such other additional information that any Lender (through Administrative Agent) may reasonably request from time to time, regarding Borrower’s interests and obligations;

 

(k) ERISA Matters.  Promptly after the Borrower has knowledge or becomes aware of any of the following ERISA events affecting the Borrower or any ERISA Affiliate (but in no event more than ten days after such event), together with a copy of any notice with respect to such event that may be required to be filed with a Governmental Authority and any notice delivered by a Governmental Authority to the Borrower or any ERISA Affiliate with respect to such event:  (A) an ERISA Event, (B) the adoption of any amendment to a Pension Plan, if such amendment will result in a material increase in benefits or unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA), or (C) the commencement of contributions by the Borrower or any ERISA Affiliate to any Pension Plan that is subject to Title IV of ERISA or Section 412 of the Internal Revenue Code (D) all notices received by the Borrower or any of its ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event, (E) copies of such other documents or governmental reports or filings relating to any Pension Plan or Multiemployer Plan as the Administrative Agent shall reasonably request; and (F) and, without limiting the generality of the foregoing, such certifications or other evidence of compliance with the provisions of Section 7.5 as the Administrative Agent may from time to time reasonably request; and

 

(l) Borrowing Base Certificates.  Within forty-five (45) days after the end of each calendar quarter, Borrower shall provide Administrative Agent with a Borrowing Base Certificate (and Administrative Agent will promptly forward to each Lender) showing Borrower’s calculations of the components of the Borrowing Base and such data supporting such calculations as the Administrative Agent may reasonably require. The Administrative Agent shall have a period of thirty (30) days following receipt of a Borrowing Base Certificate to notify Borrower of its approval or disapproval thereof.  Failure of the Administrative Agent to so notify Borrower within such thirty (30) day period shall be deemed approval and such Borrowing Base as set forth in such Borrowing Base Certificate shall be effective as of the date approved (or deemed approved) by the Administrative Agent. The amount so approved (or deemed approved) shall constitute the Borrowing Base until such time as the Borrowing Base is redetermined in accordance with this Section 6.1(l).

 

6.2 Payment of Taxes and Other Potential Liens.

 

Borrower shall pay and discharge promptly, and cause each Subsidiary to pay and discharge promptly, all material taxes, assessments, and governmental levies imposed upon them, their property, their income or profits, except for such amounts that are not yet past due or are being actively contested in good faith by appropriate proceedings, so long as adequate reserves have been established and maintained with respect to such amounts and, by reason of nonpayment and, by reason of such failure to pay, a Material Adverse Effect reasonably would be expected to occur.

 

6.3 Preservation of Existence.

 

Except where the failure to do so would not reasonably be expected to have a Material Adverse Effect, Borrower shall preserve and maintain, and cause each Subsidiary to preserve and maintain, its legal existence in the jurisdiction of its organization, as well as all material franchises, privileges, rights, authorizations, approvals, licenses, permits, or exemptions from, or registrations or qualifications with, any Governmental Authority that are necessary for the transaction of its business, and remain qualified to do business as a foreign entity in each jurisdiction in which such qualification 

 

  

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is necessary; provided that Borrower may, so long as no Default or Event of Default exists or would result therefrom, dissolve, liquidate, or merge out of existence any Subsidiary.

 

6.4 Maintenance of Properties.

 

Borrower shall maintain, preserve, and protect, and cause each Subsidiary to maintain, preserve and protect, all of its properties in good order and condition, subject to wear and tear in the ordinary course of business and, in the case of unimproved properties, damage caused by the natural elements and not permit any Subsidiary to permit any waste of its properties, except that neither (a) the failure to maintain, preserve and protect a particular item of property that would not reasonably be expected to have a Material Adverse Effect, nor (b) the failure to maintain, preserve, and protect a particular item of property due to compliance with a written order from a governmental authority, will constitute a violation of this Section 6.4.

 

6.5 Maintenance of Insurance.

 

Borrower shall maintain, and cause each Subsidiary to maintain, (a) insurance with responsible companies in such amounts and against such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general area in which Borrower or any such Subsidiary operates (provided that Borrower and its Subsidiaries may choose to establish a self-insurance program consistent with self-insurance programs maintained by companies in similar businesses and owning similar properties), and (b) insurance required by any Governmental Authority having jurisdiction over Borrower or any Subsidiary.

 

6.6 Books and Records.

 

Borrower shall maintain, and shall cause each Subsidiary to maintain, full and complete books and records reflecting the results of their operations in conformity with GAAP and all applicable requirements of any Governmental Authority having jurisdiction over Borrower or any such Subsidiary or any business or properties of Borrower or any such Subsidiary.

 

6.7 Inspection Rights.

 

At any time during regular business hours and as often as reasonably requested, upon reasonable notice, Borrower shall permit, and cause each Subsidiary to permit Administrative Agent and each Lender or any employee, agent or representative thereof to (i) inspect and make copies and abstracts from the records and books of account of, and to visit and inspect the properties of Borrower and any Subsidiary, and (ii) discuss any affairs, finances, and accounts of Borrower and any Subsidiary with any of their officers.

 

6.8 Compliance with Laws and Other Requirements.

 

(a) Borrower shall comply, and shall cause each Subsidiary to comply, with all applicable laws and the orders of any Governmental Authority, noncompliance with which would reasonably be expected to have a Material Adverse Effect.

 

(b) Borrower shall comply, and shall cause each Subsidiary to comply, with all applicable laws and other requirements relating to the development of each of its projects and the sale of Units therein (where the failure to so comply could reasonably be expected to have a Material Adverse Effect), and shall obtain, and cause each Subsidiary to obtain, all necessary authorizations, consents, 

 

  

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approvals, licenses and permits of any governmental authority with respect thereto (except where failure to so obtain could not reasonably be expected to have a Material Adverse Effect).

 

6.9 Guaranties.

 

The direct and indirect Subsidiaries of Borrower listed on Schedule 4.4 under the heading “Guarantors” shall provide a Guarantee Agreement hereunder on the Closing Date.   Borrower shall cause each Subsidiary (other than an Excluded Subsidiary) that does not provide a Guarantee Agreement hereunder on the Closing Date to provide a Guarantee Agreement hereunder and such other documentation required by Administrative Agent, all in form and substance reasonably acceptable to Administrative Agent within thirty (30) days after the date on which such Subsidiary qualifies as Subsidiary (other than an Excluded Subsidiary); provided that if any Subsidiary that provides or has provided a Guarantee Agreement hereunder (i) is sold or otherwise disposed of in a transaction permitted by this Agreement to a Person other than Borrower or one of the Guarantors, (ii) ceases, at any time, to qualify as a Subsidiary (other than an Excluded Subsidiary) or (iii) is designated an Excluded Subsidiary in accordance with the terms of this Agreement, then, upon the request of Borrower, Administrative Agent shall, so long as no Default or Event of Default exists or would result therefrom, release such Subsidiary from its Guarantee Agreement pursuant to a release in form and substance reasonably acceptable to Administrative Agent and Borrower.

 

6.10 Use of Proceeds.

 

The proceeds of the Loans shall be used only for general corporate purposes, including for acquisitions and to finance the other working capital needs of the Borrower and its Subsidiaries ("Approved Uses").  Letters of Credit will be issued only to support Approved Uses.

 

SECTION 7.    NEGATIVE COVENANTS

 

Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to any Lender or Administrative Agent hereunder:

 

7.1 Mergers.

 

Borrower shall not merge or consolidate, or permit any Subsidiary (other than an Excluded Subsidiary) to merge or consolidate, with or into any Person, except that (a) any Subsidiary may merge into Borrower so long as Borrower is the surviving entity; (b) any Guarantor may merge into any Guarantor, (c) no merger in connection with an acquisition permitted under this Agreement will constitute a violation of this covenant, and (d) no merger in connection with a disposition permitted under this Agreement will constitute a violation of this covenant (provided that, in each instance, the corporate existence of Borrower is continued).

 

7.2 Liens.

 

Borrower shall not create, incur, assume or allow to exist, or permit any Subsidiary (other than an Excluded Subsidiary) to create, incur, assume or allow to exist any Lien upon any property, whether now owned or hereafter acquired, of Borrower or any Subsidiary (other than an Excluded Subsidiary) except:

 

  

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(a) Liens securing indebtedness existing on the date hereof and disclosed in the notes to the financial statements incorporated in the Form 10-Q for the period ending June 30, 2012, but only to the extent of the indebtedness secured thereby and the property subject thereto on the date hereof;

 

(b) pledges, guarantees and deposits under workers’ compensation laws, unemployment insurance laws or similar legislation, good faith deposits under bids, tenders or contracts, deposits to secure public or statutory obligations or appeal or similar bonds, and Liens created by special assessment districts used to finance infrastructure improvements;

 

(c) Liens existing on property or assets of any entity on the date on which the entity becomes a Loan Party, where the indebtedness secured is not incurred in contemplation of such entity becoming a Loan Party;

 

(d) Liens on or leases of Model Units;

 

(e) Liens securing Capitalized Lease Obligations entered into in the ordinary course of business;

 

(f) the replacement of any of the Liens or items set forth in clauses (a) through (e) above; provided, that:

 

(i) the principal amount of the indebtedness secured by any such Liens shall not be increased;

 

(ii) the indebtedness secured by any such Lien, determined as of the date of incurrence, has an average life at least equal to the remaining average life of the indebtedness to be refinanced;

 

(iii) the maturity of indebtedness secured by any such Lien is not earlier than the indebtedness to be refinanced; and

 

(iv) the Liens shall be limited to the property or part thereof which secured the Lien so replaced or property substituted therefor as a result of the destruction, condemnation or damage of such property;

 

(g) [Intentionally Deleted];

 

(h) Liens or priorities incurred in the ordinary course of business such as laborers’, employees’, carriers’, mechanics’, vendors’ and landlords’ Liens or priorities in amounts not in excess of $10,000,000 outstanding in the aggregate at any one time, provided that such $10,000,000 may be exceeded so long as any such excess shall be (i) included in the Additional Lien Limit and (ii) subject to the Additional Lien Limit as provided in clause (p) below;

 

(i) Liens for (i) delinquent taxes in amounts not in excess of $10,000,000 outstanding in the aggregate at any one time, provided that such $10,000,000 may be exceeded so long as any such excess shall be (A) included in the Additional Lien Limit and (B) subject to the Additional Lien Limit as provided in clause (p) below, (ii) taxes not yet delinquent and (iii) customary survey and title exceptions;

 

(j) Liens securing judgments or awards against any Loan Party with respect to which the Loan Party is in good faith prosecuting an appeal or proceeding for review and with respect to which 

 

  

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it has secured a stay of execution pending such appeal or proceeding for review in amounts not in excess of $10,000,000 outstanding in the aggregate at any one time, provided that such $10,000,000 may be exceeded so long as any such excess shall be (i) included in the Additional Lien Limit and (ii) subject to the Additional Lien Limit as provided in clause (p) below;

 

(k) Liens on property owned by any Homebuilding Joint Venture or Excluded Subsidiary;

 

(l) Liens securing surety bonds entered into in the ordinary course of business;

 

(m) Liens securing Non-Recourse Indebtedness;

 

(n) Liens on reimbursement obligations of Performance Letters of Credit;

 

(o) Liens securing obligations of any Loan Party to any third party in connection with (i) Profit and Participation Agreements, (ii) any option or right of first refusal to purchase real property granted to the master developer or the seller of real property that arises as a result of the non-use or non-development of such real property by a Loan Party, (iii) joint development agreements with third parties to perform and/or pay for or reimburse the costs of construction and/or development related to or benefiting any Loan Party’s property and property belonging to such third parties, in each case entered into in the ordinary course of the Loan Party’s business or (iv) any other Lien relating to a Contingent Guarantee;

 

(p) Liens securing other indebtedness that, when aggregated with all other indebtedness and obligations secured by Liens permitted by clauses (h), (i) and (j) of this Section 7.2, do not exceed $50,000,000 in the aggregate (the “Additional Lien Limit”); and

 

(q) Liens on securities, investments and similar brokerage accounts incurred in the ordinary course of business to the extent there are no monetary obligations relating to such Liens.

 

7.3 Prepayment of Indebtedness.

 

If a Default has occurred and is continuing or an acceleration of the indebtedness under this Agreement has occurred, Borrower shall not voluntarily prepay, or permit any Guarantor voluntarily to prepay, the principal amount, in whole or in part, of any indebtedness other than (a) indebtedness owed to each Lender hereunder or under some other agreement between Borrower and such Lender, (b) indebtedness which ranks pari passu with the indebtedness incurred under this Agreement which is or becomes due and owing whether by reason of acceleration or otherwise and (c) indebtedness which is exchanged for, or converted into, Capital Stock (or securities to acquire Capital Stock) of any Loan Party.

 

7.4 Change in Nature of Business.

 

Borrower shall not make, or permit any Subsidiary to make, any change in the nature of its or their respective businesses as carried on at the date hereof that is material to Borrower and its Subsidiaries, taken as a whole, which has not been consented to by the Required Lenders.  None of the following will constitute a violation of this covenant:  (a) the engaging by a Subsidiary in or withdrawal from any business related to homebuilding (including, without limitation, title, mortgage, security or pest control, landscaping, homebuilding related technology initiatives); (b) a change in the geographic regions in the United States in which the Subsidiaries operate; and (c) the reorganization of the business of the Subsidiaries among the Subsidiaries.

 

  

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7.5 Pension Plan.

 

Borrower shall not and shall not permit any of its ERISA Affiliates or Guarantors to: (i) enter into, maintain, make contributions to, become liable for or permit any Guarantor or ERISA Affiliate to enter into, maintain, make contributions to or become liable for, directly or indirectly, any Pension Plan or Multiemployer Plan, (ii) terminate any Pension Plan so as to result in any material liability to the Borrower or any ERISA Affiliate, (iii) permit to exist any ERISA Event, or any other event or condition, which presents the material risk of a material liability to the Borrower or any ERISA Affiliate or Guarantor, (iv) make a complete or partial withdrawal (within the meaning of ERISA Section 4201) from any Multiemployer Plan so as to result in any material liability to the Borrower or any ERISA Affiliate, (v) enter into any new Pension Plan or modify any existing Pension Plan so as to increase its obligations thereunder which would reasonably be expected to result in any material liability to any ERISA Affiliate, or (vi) permit the present value of all nonforfeitable accrued benefits under any Pension Plan (using the actuarial assumptions utilized by the PBGC upon termination of a Pension Plan) materially to exceed the fair market value of Pension Plan assets allocable to such benefits, all determined as of the most recent valuation date for each such Pension Plan.

 

7.6 Dividends and Subordinated Debt.

 

Borrower shall not declare or pay any dividend on, or purchase, redeem, retire, or otherwise acquire for value any of its Capital Stock now or hereafter outstanding, return any capital to its stockholders or make any distribution of assets to its stockholders, whether in cash, property, or obligations, or pay, repurchase, or redeem all or any part of any Subordinated Debt, transfer any property in payment of or as security for the payment of all or any part of any Subordinated Debt, or establish any sinking fund, reserve, or like set aside of funds or other property for the redemption, retirement, or repayment of all or any part of any Subordinated Debt, except:

 

(a) Subject to the subordination terms applicable to such Subordinated Debt, Borrower may make regularly scheduled and mandatory payments in respect of any Subordinated Debt as and when due by the terms thereof; provided, further, that Borrower may prepay or repurchase Subordinated Debt at any time from the proceeds of indebtedness issued by Borrower following the Closing Date so long as (i) the maturity date of all such indebtedness is at least one (1) year beyond the Maturity Date, and (ii) no Default exists both before and after giving effect thereto;

 

(b) So long as no Default exists both before and after giving effect to such dividend, the Leverage Ratio is less than 1.50 to 1.00, Borrower may declare and pay dividends;

 

(c) So long as no Default exists both before and after giving effect to such repurchase, the Leverage Ratio is less than 1.50 to 1.00, Borrower may from time to time repurchase shares of its Capital Stock; and

 

(d) Borrower may, at any time, (i) declare or pay dividends on Capital Stock in the form of Capital Stock (or warrants or rights to acquire Capital Stock) of Borrower or through an accretion to the liquidation preference of such Capital Stock, (ii) purchase, redeem, retire or otherwise acquire Capital Stock or Subordinated Debt solely in consideration of Capital Stock (or warrants or rights to acquire Capital Stock) of Borrower, (iii) exchange Capital Stock or Subordinated Debt solely for Capital Stock (or warrants or rights to acquire Capital Stock) of Borrower or (iv) convert Capital Stock or Subordinated Debt solely into Capital Stock (or warrants or rights to acquire Capital Stock) of Borrower, in each case without transfer to the holders of Capital Stock or Subordinated Debt of any cash or other property of Borrower or any of its Subsidiaries in respect thereof.

 

  

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7.7 Disposition of Properties.

 

No Loan Party shall, sell, assign, exchange, transfer, lease, or otherwise dispose of any of their respective properties (whether real or personal), other than:

 

(a) properties sold, assigned, exchanged, transferred, leased, or otherwise disposed of for fair value and in the ordinary course of business (excluding a bulk sale of up to all of the properties held in a geographic region);

 

(b) transfers among the Loan Parties;

 

(c) the ownership interests of any Excluded Subsidiary or Homebuilding Joint Venture; and

 

(d) other properties sold, assigned, exchanged, transferred, leased, or otherwise disposed of for fair value with an aggregate value that does not exceed, in any period of twelve (12) consecutive months, (i) subject to the effect of the following clause (ii), ten percent (10%) of Consolidated Total Assets as of the date of disposition or (ii) if, at least ten (10) business days prior to any such disposition Borrower delivers to Administrative Agent a pro forma balance sheet and calculations evidencing that, after giving effect  to such disposition, the Borrowing Base Debt will not exceed the Borrowing Base, twenty percent (20%) of Consolidated Total Assets as of the date of disposition.

 

7.8 Limitation on Investments.

 

Borrower shall not, nor shall it permit any Subsidiary (other than an Excluded Subsidiary) to, make any Investment or otherwise acquire any interest in any Person, except:

 

(a) (i) Investments by Guarantors in Borrower consisting of loans or other indebtedness or guarantees of indebtedness otherwise permitted hereunder, (ii) Investments in Guarantors (x) existing on the Closing Date, or (y) formed or acquired after the Closing Date and (iii) Investments in Subsidiaries that are not Material Subsidiaries;

 

(b) Investments in a Homebuilding Joint Venture or a Consolidated Homebuilding Non-Guarantor Entity, provided that without the prior written approval of the Required Lenders, Borrower shall not make an Investment in a Homebuilding Joint Venture or a Consolidated Non-Guarantor Entity if as a result of such Investment the aggregate Investment of Borrower and its Subsidiaries in all Homebuilding Joint Ventures and Consolidated Homebuilding Non-Guarantor Entities would exceed thirty-five percent (35%) of Consolidated Tangible Net Worth plus $80,000,000;

 

(c) temporary cash Investments (including Permitted Investments);

 

(d) Investments in Persons engaged in businesses other than homebuilding at any time outstanding not to exceed ten percent (10%) of Consolidated Tangible Net Worth;

 

(e) receivables owing to Borrower or any Guarantor if created or acquired in the ordinary course of business;

 

(f) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers;

 

  

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(g) lease, utility and other similar deposits in the ordinary course of business;

 

(h) Investments made by Borrower or any Guarantor for consideration consisting only of common equity interests;

 

(i) Investments or securities received in settlement of debts owing to Borrower or any Guarantor in the ordinary course of business;

 

(j) other Investments in the aggregate amount not to exceed $25,000,000 at any time outstanding (with each Investment being valued as of the date made without subsequent regard to change in value); and

 

(k) Investments in the entities listed on Schedule 4.4 to this Agreement under the heading “Excluded Subsidiaries—Cash Pledgors for LC Facilities” and any successors thereto.

 

7.9 Transactions with Affiliates.

 

Borrower shall not, and shall not permit any of its Subsidiaries (other than Excluded Subsidiaries) to, enter into any transaction of any kind with any Affiliate (including, for purposes of this Section 7.9, each MP Excluded Entity), whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to Borrower or such Subsidiary as would be obtainable by such Person at the time in a comparable arm’s length transaction with someone other than an Affiliate (including, for purposes of this Section 7.9, each MP Excluded Entity), provided that the foregoing restriction shall not apply to transactions between or among Borrower and any of its Subsidiaries or between and among any Subsidiaries; provided, further, that the foregoing restriction shall not apply to the payment of compensation or benefits to directors and executive officers in the ordinary course of business or transactions, agreements or contracts in existence on the Closing Date between Borrower and an MP Excluded Entity.

 

7.10 Consolidated Tangible Net Worth.

 

As of any Test Date, commencing December 31, 2012, the Consolidated Tangible Net Worth shall not be less than (a) $525,000,000 plus (b) 50% of the cumulative Consolidated Net Income (without deductions for losses sustained during any fiscal quarter) of Borrower and its Subsidiaries for each completed fiscal quarter (commencing with the fiscal quarter ending December 31, 2012) plus (c) 50% of the cumulative Net Cash Proceeds of any Equity Issuances received during each completed fiscal quarter (commencing with the fiscal quarter ending December 31, 2012).

 

7.11 Consolidated Interest Expense.

 

As of the last day of any Measurement Period, commencing with September 30, 2012, Borrower shall comply with the following:

 

(a) Reserved; or

 

(b) Consolidated Interest Expense.  For the Measurement Period ending on such Test Date, Interest Coverage Ratio shall not be less than the ratio set forth opposite such date below;  provided, however, that failure of Borrower to satisfy the required Interest Coverage Ratio shall not constitute a Default or Event of Default but the provisions of Section 2.8(b) shall apply.

 

  

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Date

	
Interest Coverage Ratio

	
December 31, 2012 thru December 31, 2013

	
1.00 to 1.00

	
March 31, 2014 and thereafter

	
1.25 to 1.00

 

7.12 Leverage Ratio.

 

As of any Test Date, commencing with September 30, 2012, the Leverage Ratio shall not be in excess of the ratio set forth opposite such date below:

 

	
Date

	
Leverage Ratio

	
December 31, 2012 thru December 31, 2013

	
2.50 to 1.00

	
March 31, 2014 and thereafter

	
2.25 to 1.00

 

7.13 Land Not Under Development to Consolidated Tangible Net Worth Ratio.

 

As of any Test Date, commencing with September 30, 2012, the ratio of (a) the book value of Land Not Under Development to (b) Consolidated Tangible Net Worth shall not be more than 1.00 to 1.00.

 

7.14 Foreign Assets Control Regulations

 

.  The Borrower shall not use or permit the use the proceeds of any Loan or any extension of credit in any manner that will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or the Anti-Terrorism Order or any enabling legislation or executive order relating to any of the same.  Without limiting the foregoing, neither the Borrowers nor any Loan Party will permit itself nor any of its Subsidiaries to (a) become a blocked person described in Section 1 of the Anti-Terrorism Order or (b) engage in any dealings or transactions or be otherwise associated with any person who is a blocked person

 

SECTION 8.    EVENTS OF DEFAULT

 

If any of the following events shall occur and be continuing:

 

(a) Borrower shall fail to pay any principal of any Loan or Reimbursement Obligation when due in accordance with the terms hereof; or Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation, or any other amount payable hereunder or under any other Loan Document, within three (3) Business Days after any such interest or other amount becomes due in accordance with the terms hereof; or

 

(b) any representation or warranty as to the absence of any change, event, circumstance, impairment or adverse effect that reasonably could have a Material Adverse Effect is made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate on or as of the date made or deemed made; or

 

  

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(c) (i) any Loan Party shall default in the observance or performance of any agreement contained in Section 6.3 (with respect to Borrower only), Section 7.1, 7.3, 7.4, 7.6, 7.8, 7.10, 7.12 or 7.13 of this Agreement or Section 1 of the Guarantee Agreement; or

 

(d) any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this Section 8), and such default shall continue unremedied for a period of thirty (30) days after notice to Borrower from Administrative Agent or the Required Lenders; or

 

(e) any Loan Party shall (i) default in making any payment of any principal of any Consolidated Debt (excluding Non-Recourse Indebtedness and the Loans and Letters of Credit) on the scheduled or original due date with respect thereto beyond the period of grace, if any, provided in the instrument or agreement under which such Consolidated Debt was created; or (ii) default in making any payment of any interest on any such Consolidated Debt (excluding Non-Recourse Indebtedness and the Loans and Letters of Credit) beyond the period of grace, if any, provided in the instrument or agreement under which such Consolidated Debt was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Consolidated Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist beyond the period of grace, if any, provided in the instrument or agreement under which such Consolidated Debt was created, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Consolidated Debt to become due prior to its stated maturity or to become payable; provided, that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $25,000,000; or

 

(f) (i) any Loan Party shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Loan Party shall make a general assignment for the benefit of its creditors; (ii) there shall be commenced against any Loan Party any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; (iii) there shall be commenced against any Loan Party any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or substantially all of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; (iv) any Loan Party is the subject of an order for relief by any bankruptcy court, or is unable or admits in writing its inability to pay its debts as they mature or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, or similar officer for it or for all or any part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, or similar officer is appointed without the application or consent of any Loan Party and the appointment continues undischarged or unstayed for sixty (60) days; or (v) any Loan Party shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

 

  

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(g) Borrower is dissolved or liquidated or all or substantially all of the assets of Borrower are sold or otherwise transferred or encumbered without the prior written consent of each Lender; or

 

(h) Any Guarantor is dissolved or liquidated or all or substantially all of the assets of any Guarantor are sold or otherwise transferred or encumbered in violation of this Agreement without the prior, written consent of the Required Lenders, in each case except to the extent permitted by Sections 6.3, 7.1 and 7.7; or

 

(i) any Guarantor shall reject or disaffirm its Guarantee Agreement (other than as a result of a liquidation or dissolution permitted under Sections 6.3 or 7.7 or a merger or consolidation permitted under Section 7.1 or the termination of a Guarantee Agreement as contemplated by Section 6.9), or otherwise notify Administrative Agent that it does not intend the Guarantee Agreement or its liability thereunder to apply to any one or more future Loans or other Obligations; or

 

(j) any Borrowing Base Certificate proves to have been incorrect in any material respect when delivered to Administrative Agent; provided that, it shall not be an Event of Default under this Section 8(j) if (i) such incorrect Borrowing Base Certificate has been corrected by the delivery of a subsequent Borrowing Base Certificate, and (ii) both the incorrect and corrected Borrowing Base Certificates demonstrate that Borrower is in compliance with Section 7.8; or

 

(k) there is entered against Borrower or any Subsidiary (other than an Excluded Subsidiary) a final unsatisfied judgment or order for the payment of money in an aggregate amount exceeding $10,000,000 (to the extent not covered by insurance as to which the insurer does not dispute coverage or appropriately reserved) and (i) enforcement proceedings are commenced by any creditor upon such judgment or order, or (ii)  there is a period of ten (10) consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

 

(l) (i) One or more ERISA Events occurs with respect to a Pension Plan or Multiemployer Plan which individually or in the aggregate has resulted or could reasonably be expected to result in liability of Borrower under Title IV of ERISA to such Pension Plan or Multiemployer Plan or the PBGC in an aggregate amount in excess of $10,000,000, (ii) Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of $10,000,000; or (iii) there exists, an amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans (excluding for purposes of such computation any Pension Plans with respect to which assets exceed benefit liabilities) which exceeds $10,000,000; or

 

(m) a Change of Control occurs; then, and in any such event, (A) if such event is an Event of Default specified in clause (i), (ii) or (iv) of paragraph (f) above with respect to Borrower, automatically the Commitments shall immediately terminate and the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including all amounts of L/C Obligations, whether or not the beneficiaries of the then-outstanding Letters of Credit shall have presented the documents required thereunder) shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken:  (i) with the consent of the Required Lenders, Administrative Agent may, or upon the request of the Required Lenders, Administrative Agent shall, by notice to Borrower declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, Administrative Agent may, or upon the request of the Required Lenders, Administrative Agent shall, by notice to Borrower, declare the Loans (with accrued interest thereon) and 

 

  

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all other amounts owing under this Agreement and the other Loan Documents (including all amounts of L/C Obligations, whether or not the beneficiaries of the then-outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable.  With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, Borrower shall at such time deposit in a cash collateral account opened by Administrative Agent an amount equal to the aggregate then-undrawn and unexpired amount of such Letters of Credit.  Amounts held in such cash collateral account shall be applied by Administrative Agent to the payment of drafts drawn under such Letters of Credit, if any, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of Borrower hereunder and under the other Loan Documents.  After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of Borrower hereunder and under the other Loan Documents shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to Borrower (or such other Person as may be lawfully entitled thereto).  Except as expressly provided above in this Section 8, presentment, demand, protest and all other notices of any kind are hereby expressly waived by Borrower.

 

SECTION 9.    ADMINISTRATIVE AGENT

 

9.1 Appointment.

 

Each Lender hereby irrevocably designates and appoints Administrative Agent as the agent of such Lender under the Loan Documents, and each such Lender irrevocably authorizes Administrative Agent, in such capacity, to take such action on its behalf under the provisions of the Loan Documents and to exercise such powers and perform such duties as are expressly delegated to Administrative Agent by the terms of the Loan Documents, together with such other powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary elsewhere in this Agreement, Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Administrative Agent.

 

9.2 Delegation of Duties.

 

Administrative Agent may execute any of its duties under the Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys in-fact selected by it with reasonable care.

 

9.3 Exculpatory Provisions.

 

Neither Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with any Loan Document (except to the extent that any of the foregoing are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from its or such Person’s own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by Administrative Agent under or in connection with this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document 

 

  

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or for any failure of any Loan Party a party thereto to perform its obligations hereunder or thereunder.  Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party.

 

9.4 Reliance by Administrative Agent.

 

Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including counsel to Borrower), independent accountants and other experts selected by Administrative Agent.  Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with Administrative Agent.  Administrative Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or, if so specified by this Agreement, all Lenders) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.  Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under the Loan Documents in accordance with a request of the Required Lenders (or, if so specified by this Agreement, all Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans.

 

9.5 Notice of Default.

 

Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless Administrative Agent has received notice from a Lender or Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”.  In the event that Administrative Agent receives such a notice, Administrative Agent shall give notice thereof to the Lenders.  Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders); provided that unless and until Administrative Agent shall have received such directions, Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

 

9.6 Non-Reliance on Administrative Agent and Other Lenders.

 

Each Lender expressly acknowledges that neither Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by Administrative Agent hereafter taken, including any review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any representation or warranty by Administrative Agent to any Lender.  Each Lender represents to Administrative Agent that it has, independently and without reliance upon Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates and made its own decision to make its Loans hereunder and enter into this Agreement.  Each Lender also represents that it will, independently and without reliance upon Administrative 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 analysis, appraisals and decisions in taking or not 

 

  

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taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates.  Except for notices, reports and other documents expressly required to be furnished to the Lenders by Administrative Agent hereunder, Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come into the possession of Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

 

9.7 Indemnification.

 

The Lenders agree to indemnify Administrative Agent in its capacity as such (to the extent not reimbursed by Borrower and without limiting the obligation of Borrower to do so), ratably according to their respective Aggregate Exposure Percentages in effect on the date on which indemnification is sought under this Section 9.7 (or, if indemnification is sought after the date upon which the Revolving Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Aggregate Exposure Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against Administrative Agent in any way relating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from Administrative Agent’s gross negligence or willful misconduct.  The agreements in this Section 9.7 shall survive the payment of the Loans and all other amounts payable hereunder.

 

9.8 Administrative Agent in Its Individual Capacity.

 

Administrative Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Loan Party as though Administrative Agent were not an agent.  With respect to its Loans made or renewed by it and with respect to any Letter of Credit issued or participated in by it, Administrative Agent shall have the same rights and powers under the Loan Documents as any Lender and may exercise the same as though it were not an agent, and the terms “Lender” and “Lenders” shall include Administrative Agent in its individual capacity.

 

9.9 Successor Administrative Agent.

 

Administrative Agent may resign as Administrative Agent upon ten (10) days’ notice to the Lenders and Borrower.  Additionally, if the Lender then acting as Administrative Agent is a Defaulting Lender, then Administrative Agent may be removed by the Required Lenders or Borrower.  If Administrative Agent shall resign or be removed as provided above as Administrative Agent under the Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall (unless an Event of Default under Section 8(a) or 8(f) with respect to Borrower shall have occurred and be continuing) be subject to approval by Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties of Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or 

 

  

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further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans.  If no successor agent has accepted appointment as Administrative Agent by the date that is ten (10) days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective, and the Lenders shall collectively assume and perform all of the duties of Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.  After any removed Administrative Agent's removal, or retiring Administrative Agent’s resignation, as Administrative Agent, the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents.

 

SECTION 10.    MISCELLANEOUS

 

10.1 Amendments and Waivers.

 

Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 10.1.  The Required Lenders and each Loan Party to the relevant Loan Document may, or, with the written consent of the Required Lenders, Administrative Agent and each Loan Party party to the relevant Loan Document may, from time to time, (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) forgive the principal amount or extend the final scheduled date of maturity of all or any portion of any Loan, reduce the stated rate of any interest or fee payable hereunder (except that any amendment or modification of defined terms used in the financial covenants in this Agreement shall not have the effect of constituting a reduction in the rate of interest or fees for purposes of this clause (i)) or extend the scheduled date of any payment thereof, or increase the dollar amount or extend the expiration date of any Lender’s Commitment in each case without the written consent of each Lender directly affected thereby (except that waivers or modifications of conditions precedent, covenants, Defaults or Events of Default or of a mandatory reduction in the Total Commitments shall not be deemed to constitute an increase of the Commitment of any Lender, and that an increase in the available portion of any Commitment of any Lender shall not be deemed to constitute an increase of the Commitment of such Lender); (ii) eliminate or reduce the voting rights of any Lender under this Section 10.1 without the written consent of such Lender; (iii) reduce any percentage specified in the definition of Required Lenders, consent to the assignment or transfer by Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, release all or substantially all of the Guarantors from their obligations under the Guarantee Agreement, in each case without the written consent of all Lenders; (iv) amend, modify or waive any provision of Section 2.14 without the written consent of all of the Lenders; (v) amend, modify or waive any provision of Section 9 without the written consent of Administrative Agent; (vi) amend, modify or waive any provision of Section 2.3 or 2.4 without the written consent of the Swingline Lender and the Borrower; or (viii) amend, modify or waive any provision of Section 3 without the written consent of the Issuing Lender and the Borrower.  Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, Administrative Agent and all future holders of the Loans.  In the case of any waiver, the Loan Parties, the Lenders and Administrative Agent shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be 

 

  

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deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

 

         10.2 Notices.

 

All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three (3) Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed as follows in the case of Borrower and Administrative Agent, and as set forth in an administrative questionnaire delivered to Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto:

 

	
Borrower:

	
15360 Barranca Parkway

Irvine, CA  92618

	  	
Attn:          John P. Babel

    Jeff J. McCall

	  	
Telecopy:

	  	  
	
With a copy (which shall not constitute valid delivery to Borrower) to:

	  	
Snell & Wilmer, L.L.P.

	  	
One Arizona Center

	  	
400 E. Van Buren

	  	
Phoenix, Arizona  85004-2202

	  	
Attn:  Jeff Beck, Esq.

	  	
Telecopy: (602) 382-6070

	  	  
	
1. Administrative Agent:

	
JPMorgan Chase Bank, N.A.

383 Madison Avenue, 24th Floor

New York, NY 10179

Attention:  Mohammad Hasan, Vice President

	  	
Telecopy:  (646) 328-3040

Electronic Mail:  mohammad.s.hasan@jpmorgan.com

Telephone:  (212) 622-8174

	  	  
	  	  

provided that any notice, request or demand to or upon Administrative Agent or the Lenders shall not be effective until received.

 

10.3 No Waiver; Cumulative Remedies.

 

No failure to exercise and no delay in exercising, on the part of Administrative Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

  

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10.4 Survival of Representations and Warranties.

 

All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder.

 

10.5 Payment of Expenses and Taxes.

 

Borrower agrees (a) to pay or reimburse Administrative Agent for all its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the reasonable fees and disbursements of counsel to Administrative Agent and filing and recording fees and expenses, with statements with respect to the foregoing to be submitted to Borrower prior to the Closing Date (in the case of amounts to be paid on the Closing Date) and from time to time thereafter on a quarterly basis or such other periodic basis as Administrative Agent shall deem appropriate, (b) to pay or reimburse the Administrative Agent for all its reasonable costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents, including the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and of one primary outside counsel (other than local or special counsel) to Administrative Agent, (c) to pay, indemnify, and hold each Lender and Administrative Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender and Administrative Agent and their respective officers, directors, employees, affiliates, agents and controlling persons (each, an “Indemnitee”) harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents, including any of the foregoing relating to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of any Loan Party or any of the properties and the reasonable fees and expenses of legal counsel in connection with claims, actions or proceedings by any Indemnitee against any Loan Party under any Loan Document (all the foregoing in this clause (d), collectively, the “Indemnified Liabilities”), provided, that Borrower shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee.  Without limiting the foregoing, and to the extent permitted by applicable law, Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee.  All amounts due under this Section 10.5 shall be payable not later than ten (10) days after written demand therefor.  Statements payable by Borrower pursuant to this Section 10.5 shall be submitted to the address of Borrower set forth in Section 10.2, or to such other Person or address as may be hereafter designated by Borrower in a written notice to 

 

  

65

  

 

Administrative Agent.  The agreements in this Section 10.5 shall survive repayment of the Loans and all other amounts payable hereunder.

 

10.6 Successors and Assigns; Participations and Assignments.

 

(a) This Agreement shall be binding upon and inure to the benefit of Borrower, the Lenders, Administrative Agent, all future holders of the Loans and their respective successors and assigns, except that Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Lender.

 

(b) Any Lender may, without the consent of Borrower, in accordance with applicable law, at any time sell to one or more banks, financial institutions or other entities other than to a Competitor (each, a “Participant”) participating interests in any Loan owing to such Lender, any Commitment of such Lender or any other interest of such Lender hereunder and under the other Loan Documents.  In the event of any such sale by a Lender of a participating interest to a Participant, such Lender’s obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Loan for all purposes under this Agreement and the other Loan Documents, and Borrower and Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents.  In no event shall any Participant under any such participation have any right to approve any amendment or waiver of any provision of any Loan Document, or any consent to any departure by any Loan Party therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Loans or any fees payable hereunder, or postpone the date of the final maturity of the Loans, in each case to the extent subject to such participation.  Borrower agrees that if amounts outstanding under this Agreement and the Loans are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall, to the maximum extent permitted by applicable law, be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement, provided that, in purchasing such participating interest, such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in Section 10.7(a) as fully as if it were a Lender hereunder.  Borrower also agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 with respect to its participation in the Commitments and the Loans outstanding from time to time as if it was a Lender; provided that, in the case of Section 2.16, such Participant shall have complied with the requirements of said Section and provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such Section than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred.

 

(c) Any Lender (an “Assignor”) may, in accordance with applicable law, at any time and from time to time assign to any Lender or any Eligible Assignee all or any part of its rights and obligations under this Agreement and the other Loan Documents pursuant to an Assignment and Acceptance, executed by such Eligible Assignee, such Assignor and any other Person whose consent is required pursuant to this paragraph, and delivered to Administrative Agent for its acceptance and recording in the Register; provided that, unless otherwise agreed by Borrower and Administrative Agent, no such assignment to an Eligible Assignee (other than any Lender or any Lender Affiliate) shall be in an aggregate principal amount of less than $5,000,000, in each case except in the case of an assignment of all of a Lender’s interests under this Agreement.  For purposes of the proviso contained in the preceding sentence, the amount described therein shall be aggregated in respect of each Lender and its Lender Affiliates, if any.  Upon such execution, delivery, acceptance and recording, from and after the effective 

 

  

66

  

 

date determined pursuant to such Assignment and Acceptance, (x) the Eligible Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder with a Commitment and/or Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent provided in such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of an Assignor’s rights and obligations under this Agreement, such Assignor shall cease to be a party hereto).  Notwithstanding any provision of this Section 10.6, the consent of Borrower shall not be required for any assignment that occurs when an Event of Default shall have occurred and be continuing.

 

(d) Administrative Agent shall, on behalf of Borrower, maintain at its address referred to in Section 10.2 a copy of each Assignment and Acceptance delivered to it and a register (the “Register”) for the recordation of the names and addresses of the Lenders and the Commitment of, and the principal amount of the Loans owing to, each Lender from time to time.  The entries in the Register shall be conclusive, in the absence of manifest error, and Borrower, each other Loan Party, Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register as the owner of the Loans and any Notes evidencing the Loans recorded therein for all purposes of this Agreement.  Any assignment of any Loan, whether or not evidenced by a Note, shall be effective only upon appropriate entries with respect thereto being made in the Register (and each Note shall expressly so provide).  Any assignment or transfer of all or part of a Loan evidenced by a Note shall be registered on the Register only upon surrender for registration of assignment or transfer of the Note evidencing such Loan, accompanied by a duly executed Assignment and Acceptance, and thereupon one or more new Notes shall be issued to the designated Eligible Assignee.

 

(e) Upon its receipt of an Assignment and Acceptance executed by an Assignor, an Eligible Assignee and any other Person whose consent is required by Section 10.6(c), together with payment to Administrative Agent of a registration and processing fee of $3,500, Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) record the information contained therein in the Register on the effective date determined pursuant thereto.

 

(f) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of this Section 10.6 concerning assignments relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests, including any pledge or assignment by a Lender to any Federal Reserve Bank in accordance with applicable law.

 

(g) Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in paragraph (f) above.

 

10.7 Adjustments; Set-off.

 

(a) Except to the extent that this Agreement expressly provides for payments to be allocated to a particular Lender or to the Lenders, if any Lender (a “Benefitted Lender”) shall receive any payment of all or part of the Obligations owing to it, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 8(f), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of the Obligations owing to such other Lender or such other Lender's Revolving Percentage, such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in such portion of the Obligations owing to each of the other Lenders, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter 

 

  

67

  

 

recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

 

(b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to Borrower, any such notice being expressly waived by Borrower to the extent permitted by applicable law, upon the occurrence and during the continuance of an Event of Default, to set off and appropriate and apply against the payment of Obligations owing to such Lender any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of Borrower, as the case may be.  Each Lender agrees promptly to notify Borrower and Administrative Agent after any such setoff and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

10.8 Counterparts.

 

This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page of this Agreement by facsimile transmission or electronic transmission (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signed by all the parties shall be lodged with Borrower and Administrative Agent.

 

10.9 Severability.

 

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

10.10 Integration.

 

This Agreement and the other Loan Documents represent the entire agreement of Borrower, Administrative Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

 

10.11 Governing Law.

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

10.12 Submission to Jurisdiction; Waivers.

 

Borrower hereby irrevocably and unconditionally:

 

(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of 

 

  

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any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, County of New York, Borough of Manhattan, the courts of the United States for the Southern District of New York, and appellate courts from any thereof;

 

(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to Borrower, as the case may be at its address set forth in Section 10.2 or at such other address of which Administrative Agent shall have been notified pursuant thereto;

 

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 10.12 any special, exemplary, punitive or consequential damages.

 

10.13 Acknowledgements.

 

Borrower hereby acknowledges that:

 

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

 

(b) neither Administrative Agent nor any Lender has any fiduciary relationship with or duty to Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between Administrative Agent and Lenders, on one hand, and Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among Borrower and the Lenders.

 

10.14 Releases of Guarantee Obligations.

 

Notwithstanding anything to the contrary contained herein or in any other Loan Document, Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 10.1) to take any action requested by Borrower having the effect of releasing any guarantee obligations to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 10.1, provided that releases of Guarantors must comply with Section 6.9 unless otherwise consented to by the Lenders in accordance with Section 10.1.

 

10.15 Confidentiality.

 

Each of Administrative Agent and each Lender and each of their affiliates agrees to keep confidential all non-public information provided to it by any Loan Party pursuant to this Agreement; 

 

  

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provided that nothing herein shall prevent Administrative Agent or any Lender from disclosing any such information (a) to Administrative Agent, any other Lender or any Lender Affiliate, (b) subject to an agreement to comply with the provisions of this Section 10.15, to any actual or prospective Transferee or any direct or indirect counterparty to any Hedging Obligations (or any professional advisor to such counterparty), (c) to its employees, directors, agents, attorneys, accountants and other professional advisors or those of any of its affiliates who need to know such information to further the purpose of this Agreement, (d) upon the request or demand of any Governmental Authority or self-regulatory body having oversight of the Administrative Agent or any Lender, (e) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (f) if requested or required to do so in connection with any litigation or similar proceeding, (g) that has been publicly disclosed, (h) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender, or (i) in connection with the exercise of any remedy hereunder or under any other Loan Document.

 

10.16 WAIVERS OF JURY TRIAL.

 

BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

10.17 PATRIOT Act.

 

Each Lender and Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify, and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow such Lender or Administrative Agent, as applicable, to identify Borrower in accordance with the Act.

 

 

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

 

 

 

	
STANDARD PACIFIC CORP., a Delaware corporation, as Borrower

	
By:

	  /s/ SCOTT D. STOWELL
	
Name:

	  Scott D. Stowell
	
Title:

	  CEO
	 	 
	 By:   	 /s/ JEFF J. MCCALL
	Name:	 Jeff J. McCall
	
Title:

	  CFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

S-1

  

	
JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Class A Lender

	
By:

	  /s/ MOHAMMAD S. HASAN
	
Name:

	  Mohammad S. Hasan
	
Title:

	  Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

S-2

  

 

	
                                                      ,

BANK OF AMERICA, N.A., as a Class A Lender

	
By:

	  /s/ EYAL NAMORDI
	
Name:

	  Eyal Namordi
	
Title:

	  Senior Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

S-3

  

 

	
                                                      ,

BANK OF THE WEST, as a Class A Lender

	
By:

	  /s/ LYNN FOSTER
	
Name:

	  Lynn Foster
	
Title:

	  Senior Vice President
	 	 
	By:	 /s/ CHUCK WEERASOORIYA  
	Name:	 Chuck Weerasooriya
	Title:	 Senior Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

S-4

  

 

	
                                                      ,

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Class A Lender

	
By:

	  /s/ BILL O'DALY
	
Name:

	  Bill O'Daly
	
Title:

	  Director
	 	 
	By:	 /s/ SANJA GAZAHI  
	Name:	 Sanja Gazahi
	Title:	 Associate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

S-5

  

 

	
CITICORP NORTH AMERICA, INC., as a Class A Lender

	
By:

	  /s/ JOHN C. ROWLAND
	
Name:

	  John C. Rowland
	
Title:

	  Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

S-6

  

 

	
COMERICA BANK, as a Class A Lender

	
By:

	  /s/ JONATHAN R. WARD
	
Name:

	  Jonathan R. Ward
	
Title:

	  VP - Western Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

S-7

  

 

	
UNION BANK, N.A., as a Class A Lender

	
By:

	  /s/ ASHLEY RECKTENWALD
	
Name:

	  Ashley Recktenwald
	
Title:

	  Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

S-8

  

 

 

 

 

	

DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Class B Lender

	
By:

	  /s/ OMAYRA LAUCELLA
	
Name:

	  Omayra Laucella
	
Title:

	  Director
	 	 
	 By:	  /s/ MARCUS M. TARKINGTON
	 Name:	   Marcus M. Tarkington
	 Title:	   Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S-9Exhibit 4.3

OMNICOM GROUP INC.,

OMNICOM CAPITAL INC.,

as Issuers

 

 

 

FORM OF INDENTURE

 

Dated as of __________, 2012

 

 

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

as Trustee

 

 

 

Debt Securities

    	 

    	 

    
Table
of Contents

	 	 	Page
	 	 	 
	ARTICLE I 

DEFINITIONS AND INCORPORATION BY REFERENCE
	SECTION 1.1	Definitions	1
	SECTION 1.2	Other Definitions	5
	SECTION 1.3	Incorporation by Reference of Trust Indenture Act	5
	SECTION 1.4	Rules of Construction	5
	ARTICLE II 

THE SECURITIES
	SECTION 2.1	Issuable in Series	6
	SECTION 2.2	Establishment of Terms of Series of Securities	6
	SECTION 2.3	Execution and Authentication	9
	SECTION 2.4	Registrar and Paying Agent	9
	SECTION 2.5	Paying Agent to Hold Money in Trust	10
	SECTION 2.6	Securityholder Lists	10
	SECTION 2.7	Transfer and Exchange	11
	SECTION 2.8	Mutilated, Destroyed, Lost and Stolen Securities	11
	SECTION 2.9	Outstanding Securities	12
	SECTION 2.10	Treasury Securities	12
	SECTION 2.11	Temporary Securities	12
	SECTION 2.12	Cancellation	12
	SECTION 2.13	Defaulted Interest	13
	SECTION 2.14	Global Securities	13
	SECTION 2.15	CUSIP Numbers	14
	ARTICLE III

 REDEMPTION
	SECTION 3.1	Notice to Trustee	15
	SECTION 3.2	Selection of Securities to be Redeemed	15
	SECTION 3.3	Notice of Redemption	15
	SECTION 3.4	Effect of Notice of Redemption	16
	SECTION 3.5	Deposit of Redemption Price	16
	SECTION 3.6	Securities Redeemed in Part	16

 

    	- i -

    	 

    
Table
of Contents

(continued)

	 	 	Page
	 	 	 
	ARTICLE IV

 COVENANTS
	SECTION 4.1	Payment of Principal and Interest	16
	SECTION 4.2	SEC Reports	17
	SECTION 4.3	Compliance Certificate	17
	SECTION 4.4	Stay, Extension and Usury Laws	17
	SECTION 4.5	Corporate Existence	18
	SECTION 4.6	Taxes	18
	ARTICLE V 

SUCCESSORS
	SECTION 5.1	When the Issuers May Merge, Etc	18
	SECTION 5.2	Successor Corporation Substituted	18
	ARTICLE VI 

DEFAULTS AND REMEDIES
	SECTION 6.1	Events of Default	19
	SECTION 6.2	Acceleration of Maturity; Rescission and Annulment	20
	SECTION 6.3	Collection of Indebtedness and Suits for Enforcement by Trustee	21
	SECTION 6.4	Trustee May File Proofs of Claim	22
	SECTION 6.5	Trustee May Enforce Claims Without Possession of Securities	23
	SECTION 6.6	Application of Money Collected	23
	SECTION 6.7	Limitation on Suits	23
	SECTION 6.8	Unconditional Right of Holders to Receive Principal and Interest	24
	SECTION 6.9	Restoration of Rights and Remedies	24
	SECTION 6.10	Rights and Remedies Cumulative	24
	SECTION 6.11	Delay or Omission Not Waiver	24
	SECTION 6.12	Control by Holders	24
	SECTION 6.13	Waiver of Past Defaults	25
	SECTION 6.14	Undertaking for Costs	25
	ARTICLE VII 

TRUSTEE
	SECTION 7.1	Duties of Trustee	25

    	- ii -

    	 

    
Table
of Contents

(continued)

	 	 	Page
	 	 	 
	SECTION 7.2	Rights of Trustee	27
	SECTION 7.3	Individual Rights of Trustee	28
	SECTION 7.4	Trustee’s Disclaimer	28
	SECTION 7.5	Notice of Defaults	28
	SECTION 7.6	Reports by Trustee to Holders	28
	SECTION 7.7	Compensation and Indemnity	28
	SECTION 7.8	Replacement of Trustee	29
	SECTION 7.9	Successor Trustee by Merger, etc	30
	SECTION 7.10	Eligibility; Disqualification	30
	SECTION 7.11	Preferential Collection of Claims Against the Issuers	30
	ARTICLE VIII 

SATISFACTION AND DISCHARGE; DEFEASANCE
	SECTION 8.1	Satisfaction and Discharge of Indenture	30
	SECTION 8.2	Application of Trust Funds; Indemnification	31
	SECTION 8.3	Legal Defeasance of Securities of any Series	32
	SECTION 8.4	Covenant Defeasance	33
	SECTION 8.5	Repayment to the Issuers	34
	SECTION 8.6	Reinstatement	34
	ARTICLE IX 

AMENDMENTS AND WAIVERS
	SECTION 9.1	Without Consent of Holders	35
	SECTION 9.2	With Consent of Holders	35
	SECTION 9.3	Compliance with Trust Indenture Act	37
	SECTION 9.4	Revocation and Effect of Consents	37
	SECTION 9.5	Notation on or Exchange of Securities	37
	SECTION 9.6	Trustee Protected	37
	ARTICLE X 

MISCELLANEOUS
	SECTION 10.1	Trust Indenture Act Controls	38
	SECTION 10.2	Notices	38
	SECTION 10.3	Communication by Holders with Other Holders	39

    	- iii -

    	 

    
Table
of Contents

(continued)

	 	 	Page
	 	 	 
	SECTION 10.4	Certificate and Opinion as to Conditions Precedent	39
	SECTION 10.5	Statements Required in Certificate or Opinion	39
	SECTION 10.6	Rules by Trustee and Agents	39
	SECTION 10.7	Legal Holidays	39
	SECTION 10.8	No Recourse Against Others	40
	SECTION 10.9	Counterparts	40
	SECTION 10.10	Governing Laws	40
	SECTION 10.11	No Adverse Interpretation of Other Agreements	40
	SECTION 10.12	Successors	40
	SECTION 10.13	Severability	40
	SECTION 10.14	Table of Contents, Headings, Etc	40
	SECTION 10.15	USA Patriot Act	40
	SECTION 10.16	Force Majeure	41
	ARTICLE XI 

SINKING FUNDS
	SECTION 11.1	Applicability of Article	41
	SECTION 11.2	Satisfaction of Sinking Fund Payments with Securities	41
	SECTION 11.3	Redemption of Securities for Sinking Fund	42
	EXHIBITS	 	 
	Exhibit A – Form of Debt Security	A-1

    	- iv -

    	 

    

CROSS-REFERENCE TABLE*

 

	Trust Indenture Act Section	Indenture Section

	310	(a)(1)
	7.10
	 	(a)(2)
	7.10
	 	(a)(3) 	Not Applicable
	 	(a)(4) 	Not Applicable
	 	(a)(5)
	7.10
	 	(b)
	7.10
	311	(a)
	7.11
	 	(b)
	7.11
	312	(a)
	2.6
	 	(b)
	10.3
	 	(c)
	10.3
	313	(a)
	7.6
	 	(b)(1)
	7.6
	 	(b)(2)
	7.6
	 	(c)(1)
	7.6
	 	(d)
	7.6
	314	(a)
	4.2, 10.5
	 	(b) 	Not Applicable
	 	(c)(1)
	10.4
	 	(c)(2)
	10.4
	 	(c)(3)  	Not Applicable
	 	(d)
	Not Applicable
	 	(e)
	10.5
	 	(f)
	Not Applicable
	315	(a)
	7.1
	 	(b)
	7.5
	 	(c)
	7.1
	 	(d)
	7.1
	 	(e)
	6.14
	316	(a)
	2.10
	 	(a)(1)(A)
	6.12
	 	(a)(1)(B)
	6.13
	 	(b)
	6.8
	317	(a)(1)
	6.3
	 	(a)(2)
	6.4
	 	(b)
	2.5
	318	(a)
	10.1

 

 

		*	Note: This Cross-Reference Table is not part of the Indenture.

 

    	- v -

    	 

    

INDENTURE dated as of __________, 2012
among OMNICOM GROUP INC., a New York corporation, (the “Company”), Omnicom Capital Inc., a Connecticut corporation,
(“Omnicom Capital,” collectively, the “Issuers,” and each individually, an “Issuer”) and Deutsche
Bank Trust Company Americas, a New York banking corporation, as Trustee (“Trustee”).

The Issuers have duly authorized the execution
and delivery of this Indenture to provide for the issuance from time to time of their debentures, notes or other evidences of indebtedness
to be issued in one or more series (the “Securities”), as herein provided, up to such principal amount as may from
time to time be authorized in or pursuant to one or more resolutions of their Board of Directors or by supplemental indenture.

Each party agrees as follows for the benefit
of the other party and for the equal and ratable benefit of the Holders of the Securities issued under this Indenture.

ARTICLE
I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.1 Definitions.

“Additional Amounts”
means any additional amounts which are required hereby or by any Security, under circumstances specified herein or therein, to
be paid by the Issuers in respect of certain taxes imposed on Holders specified therein and which are owing to such Holders.

“Affiliate” of any specified
person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with
such specified person. For the purposes of this definition, “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”), as used with respect to any person, shall mean the possession,
directly, or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through
the ownership of voting securities or by agreement or otherwise.

“Agent” means any Registrar
or Paying Agent.

“Board of Directors”
means, with respect to any Issuer, either the board of directors of such Issuer or any duly authorized committee of such board.

“Board Resolution” means
a copy of a resolution certified by the Secretary or an Assistant Secretary of an Issuer to have been duly adopted by its Board
of Directors or pursuant to authorization by its Board of Directors and to be in full force and effect on the date of the certificate
(and delivered to the Trustee, if appropriate).

“Business Day” means,
unless otherwise provided by Board Resolution, Officers’ Certificate or supplemental indenture hereto for a particular Series,
any day except a Saturday, Sunday or a legal holiday in The City of New York on which banking institutions are authorized or required
by law, regulation or executive order to close.

     

     

    

“Company” means the
party named as such above until a successor replaces it pursuant to this Indenture and thereafter means the successor.

“Company Request” or
“Company Order” means, with respect to any Issuer, a written request or order signed in the name of such Issuer
by its Chairman of the Board, Chief Financial Officer, a President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.

“Corporate Trust Office”
means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered,
which office at the date hereof is located at 60 Wall Street, 27th Floor, New York, New York 10005,
Attention: Trust & Securities Services, or such other address as the Trustee may designate from time to time by notice to the
Issuers, or the corporate trust office of any successor Trustee (or such other address as a successor Trustee may designate from
time to time by notice to the Issuers).

“Debt” of any person
as of any date means, without duplication, all indebtedness of such person in respect of borrowed money, including all interest,
fees and expenses owed in respect thereto (whether or not the recourse of the lender is to the whole of the assets of such person
or only to a portion thereof), or evidenced by bonds, notes, debentures or similar instruments.

“Default” means any
event which is, or with the passage of time or giving of notice or both would be, an Event of Default.

“Depository” means,
unless otherwise provided in a Board Resolution, a supplemental indenture hereto or an Officers’ Certificate, with respect
to the Securities of any Series issuable or issued in whole or in part in the form of one or more Global Securities, The Depository
Trust Company, New York, New York, or any successor thereto registered under the Exchange Act or other applicable statute or regulation.

“Discount Security”
means any Security that provides for an amount less than the stated principal amount thereof to be due and payable upon declaration
of acceleration of the maturity thereof pursuant to Section 6.2.

“Dollars” means the
currency of The United States of America.

“Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time.

“Global Security” or
“Global Securities” means a Security or Securities, as the case may be, in the form established pursuant to
Section 2.2 evidencing all or part of a Series of Securities, issued to the Depository for such Series or its nominee, and registered
in the name of such Depository or nominee.

“Guarantee” means a
guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect,
in any manner (including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements
in respect thereof), of all or any part of any Debt.

    	- 2 -

    	 	 

    

“Guarantor” means any
person, if any, identified pursuant to Section 2.2.18 of this Indenture as providing a Guarantee of any of the Issuers’ obligations
under this Indenture.

“Holder” or “Securityholder”
means a person in whose name a Security is registered.

“Indenture” means this
Indenture as amended or supplemented from time to time and shall include the form and terms of particular Series of Securities
established as contemplated hereunder.

“interest” with respect
to any Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

“Issuers” means each
of the parties named as such in the preamble to this Indenture until a successor replaces it pursuant to the applicable provisions
of this Indenture and, thereafter, shall mean any such successor. The foregoing sentence shall likewise apply to any subsequent
such successor or successors.

“Maturity,” when used
with respect to any Security or installment of principal thereof, means the date on which the principal of such Security or such
installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration
of acceleration, call for redemption, notice of option to elect repayment or otherwise.

“Officer” means, with
respect to any Issuer, the Chairman of the Board, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial
Officer, any Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of such Issuer.

“Officers’ Certificate”
means, with respect to any Issuer, a certificate signed by two Officers of an Issuer, one of whom must be such Issuer’s principal
executive officer, principal financial officer or principal accounting officer.

“Opinion of Counsel”
means a written opinion of legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company.

“person” means any individual,
corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.

“principal” of a Security
means the principal of the Security plus, when appropriate, the premium, if any, on, and any Additional Amounts in respect of,
the Security.

“Responsible Officer”
means any officer of the Trustee in its Corporate Trust Office having direct responsibility for the administration of this Indenture,
and also means, with respect to a particular corporate trust matter, any other officer to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with a particular subject.

“SEC” means the Securities
and Exchange Commission.

    	- 3 -

    	 	 

    

“Securities” means the
debentures, notes or other debt instruments of the Issuers of any Series authenticated and delivered under this Indenture.

“Securities Act” means
the Securities Act of 1933, as amended from time to time.

“Series” or “Series
of Securities” means each series of debentures, notes or other debt instruments of the Issuers created pursuant to Sections
2.1 and 2.2 hereof.

“Significant Subsidiary”
means (i) any direct or indirect Subsidiary of the Company that would be a “significant subsidiary” as defined in Article
1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the date hereof,
or (ii) any group of direct or indirect Subsidiaries of the Company that, taken together as a group, would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation
is in effect on the date hereof.

“Stated Maturity” when
used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

“Subsidiary” of any
Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding Voting Stock of such Person, (b) the interest in the capital or profits of such limited
liability company, partnership or joint venture or (c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of
such Person’s other Subsidiaries.

“TIA” means the Trust
Indenture Act of 1939 (15 U.S. Code ss. ss. 77aaa-77bbbb), as amended from time to time, and as in effect on the date of this Indenture;
provided, however, that in the event the TIA is amended after such date, “TIA” means, to the extent required by any
such amendment, the Trust Indenture Act as so amended.

“Trustee” means the
person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become
such pursuant to this Indenture, and thereafter “Trustee” shall mean or include each person who is then a Trustee hereunder,
and if at any time there is more than one such person, “Trustee” as used with respect to the Securities of any Series
shall mean the Trustee with respect to Securities of that Series.

“U.S. Government Obligations”
means securities which are (i) direct obligations of the United States of America for the payment of which its full faith and credit
is pledged or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States
of America, and which in the case of (i) and (ii) are not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation
or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account
of the holder of a depository

    	- 4 -

    	 	 

    

receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt
from any amount received by the custodian in respect of the U.S. Government Obligation evidenced by such depository receipt.

SECTION 1.2 Other Definitions.

	Term	Defined in

Section  
	“Bankruptcy Law” 	6.1
	“Custodian” 	6.1
	“Event of Default”	6.1
	“Legal Holiday”	10.7
	“mandatory sinking fund payment” 	11.1
	“optional sinking fund payment”	11.1
	“Paying Agent”	2.4
	“Registrar”	2.4
	“successor person” 	5.1

 

SECTION 1.3 Incorporation by Reference
of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference
in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:

“Commission” means the SEC.

“indenture securities” means
the Securities.

“indenture security holder”
means a Securityholder.

“indenture to be qualified”
means this Indenture.

“indenture trustee” or “institutional
trustee” means the Trustee.

“obligor” on the Securities
means each of the Issuers and any successor obligor upon the Securities.

All other terms used in this Indenture
that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not otherwise
defined herein are used herein as so defined.

SECTION 1.4 Rules of Construction.
Unless the context otherwise requires:

(a)               
a term has the meaning assigned to it;

(b)              
an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting
principles;

    	- 5 -

    	 	 

    

(c)               
references to “generally accepted accounting principles” shall mean generally accepted accounting principles
in effect as of the time when and for the period as to which such accounting principles are to be applied;

(d)              
“or” is not exclusive;

(e)               
words in the singular include the plural, and in the plural include the singular; and

(f)               
provisions apply to successive events and transactions.

ARTICLE
II

THE SECURITIES

SECTION 2.1 Issuable in Series.
The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more Series. All Securities of a Series shall be identical except as may be set forth in a Board Resolution,
a supplemental indenture or an Officers’ Certificate detailing the adoption of the terms thereof pursuant to the authority
granted under a Board Resolution. In the case of Securities of a Series to be issued from time to time, the Board Resolution,
Officers’ Certificate or supplemental indenture may provide for the method by which specified terms (such as interest rate,
maturity date, record date or date from which interest shall accrue) are to be determined. Securities may differ between Series
in respect of any matters, provided that all Series of Securities shall be equally and ratably entitled to the benefits of the
Indenture.

SECTION 2.2 Establishment of Terms
of Series of Securities. At or prior to the issuance of any Securities within a Series, the following shall be established
(as to the Series generally, in the case of Subsection 2.2.1 and either as to such Securities within the Series or as to the Series
generally in the case of Subsections 2.2.2 through 2.2.21) by a Board Resolution, a supplemental indenture or an Officers’
Certificate pursuant to authority granted under a Board Resolution:

2.2.1 the title of the Series (which shall
distinguish the Securities of that particular Series from the Securities of any other Series);

2.2.2 the price or prices (expressed as
a percentage of the principal amount thereof) at which the Securities of the Series will be issued;

2.2.3 any limit upon the aggregate principal
amount of the Securities of the Series which may be authenticated and delivered under this Indenture (except for Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the Series pursuant to Section
2.7, 2.8, 2.11, 3.6 or 9.5);

2.2.4 the date or dates on which the principal
of the Securities of the Series is payable;

    	- 6 -

    	 	 

    

2.2.5 the rate or rates (which may be fixed
or variable) per annum or, if applicable, the method used to determine such rate or rates (including, but not limited to, any commodity,
commodity index, stock exchange index or financial index) at which the Securities of the Series shall bear interest, if any, the
date or dates from which such interest, if any, shall accrue, the date or dates on which such interest, if any, shall commence
and be payable and any regular record date for the interest payable on any interest payment date;

2.2.6 the place or places where the principal
of and interest, if any, on the Securities of the Series shall be payable, or the method of such payment, if by wire transfer,
mail or other means;

2.2.7 if applicable, the period or periods
within which, the price or prices at which and the terms and conditions upon which the Securities of the Series may be redeemed,
in whole or in part, at the option of the Issuers;

2.2.8 the obligation, if any, of the Issuers
to redeem, purchase or repay the Securities of the Series pursuant to any sinking fund or analogous provisions or at the option
of a Holder thereof upon the happening of any event and the period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the Series shall be redeemed, purchased or repaid, in whole or in part, pursuant
to such obligation;

2.2.9 the dates, if any, on which and the
price or prices at which the Securities of the Series will be repurchased by the Issuers at the option of the Holders thereof and
other detailed terms and conditions of such repurchase obligations;

2.2.10 if other than denominations of $1,000
and any integral multiple thereof, the denominations in which the Securities of the Series shall be issuable;

2.2.11 whether the Securities will be issuable
as Global Securities, the terms and conditions, if any, upon which such Global Security may be exchanged in whole or in part for
other individual Securities of such Series in definitive registered form, the Depository for such Global Security and the form
of any legend or legends to be borne by any such Global Security in addition to or in lieu of the Global Securities Legend;

2.2.12 if other than the principal amount
thereof, the portion of the principal amount of the Securities of the Series that shall be payable upon declaration of acceleration
of the maturity thereof pursuant to Section 6.2;

2.2.13 the manner in which the amounts
of payment of principal of or interest, if any, on the Securities of the Series will be determined, if such amounts may be determined
by reference to an index based on a currency or currencies or by reference to a commodity, commodity index, stock exchange index
or financial index;

2.2.14 any addition to or change in the
Events of Default which applies to any Securities of the Series and any change in the right of the Trustee or the requisite Holders
of such Securities to declare the principal amount thereof due and payable pursuant to Section 6.2;

    	- 7 -

    	 	 

    

2.2.15 any addition to or change in the
covenants set forth in Articles IV or V which applies to Securities of the Series;

2.2.16 any other terms of the Securities
of the Series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 9.1,
but which may modify or delete any provision of this Indenture insofar as it applies to such Series);

2.2.17 any depositories, interest rate
calculation agents, or other agents with respect to Securities of such Series if other than those appointed herein;

2.2.18 the form and terms of any Guarantee
of the Securities and the terms and conditions, if any, upon which any Guarantees thereof shall be subordinated in right of payment
to other indebtedness of the Issuers or any Guarantor;

2.2.19 the provisions relating to any security
provided for the Securities of the Series;

2.2.20 the subordination, if any, of the
Securities of the Series pursuant to this Indenture and any changes or additions to the provisions of this Indenture then in effect;
and

2.2.21 if and as applicable, the terms
and conditions of any right to exchange for or convert Securities of the Series into shares of common stock or preferred stock
of the Company.

All Securities of any one Series need not
be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by
or pursuant to the Board Resolution, supplemental indenture or Officers’ Certificate referred to above, and the authorized
principal amount of any Series may not be increased to provide for issuances of additional Securities of such Series, unless otherwise
provided in such Board Resolution, supplemental indenture or Officers’ Certificate.

The Securities of each Series shall be
in substantially the form set forth in Exhibit A to this Indenture, or in such other form as shall be established by or pursuant
to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities
exchange or as may, consistent herewith, be determined by the officers executing such Securities, as evidenced by their execution
of the Securities. If the form of Securities of any Series is established by action taken pursuant to a Board Resolution, a copy
of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Issuers and delivered
to the Trustee at or prior to the delivery of the Company Order contemplated by Section 2.3 for the authentication and delivery
of such Securities.

The definitive Securities shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Officers executing
such Securities, as evidenced by their execution of such Securities.

    	- 8 -

    	 	 

    

SECTION 2.3 Execution and Authentication.
Two Officers shall sign the Securities for each of the Issuers by manual or facsimile signature.

If an Officer whose signature is on a Security
no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.

A Security shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent. The signature shall be conclusive evidence that the Security
has been authenticated under this Indenture.

The Trustee shall at any time, and from
time to time, authenticate Securities for original issue in the principal amount provided in the Board Resolution, supplemental
indenture hereto or Officers’ Certificate, upon receipt by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to electronic instructions in writing from the Issuers or their duly authorized agent or agents.
Each Security shall be dated the date of its authentication unless otherwise provided by a Board Resolution, a supplemental indenture
hereto or an Officers’ Certificate.

The aggregate principal amount of Securities
of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the
Board Resolution, supplemental indenture hereto or Officers’ Certificate delivered pursuant to Section 2.2, except as provided
in Section 2.8.

Prior to the issuance of Securities of
any Series, the Trustee shall have received and (subject to Section 7.1) shall be fully protected in relying on: (a) the Board
Resolution, supplemental indenture hereto or Officers’ Certificate establishing the form of the Securities of that Series
or of Securities within that Series and the terms of the Securities of that Series or of Securities within that Series, (b) an
Officers’ Certificate complying with Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.

The Trustee shall have the right to decline
to authenticate and deliver any Securities of such Series: (a) if the Trustee, being advised by counsel, determines that such action
may not lawfully be taken; or (b) if the Trustee in good faith by its board of directors or trustees, executive committee or a
trust committee of directors and/or vice-presidents shall determine that such action would expose the Trustee to personal liability
to Holders of any then outstanding Series of Securities.

The Trustee may appoint an authenticating
agent acceptable to the Issuers to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating
agent has the same rights as an Agent to deal with the Issuers or an Affiliate.

SECTION 2.4 Registrar and Paying Agent.
The Issuers shall maintain, with respect to each Series of Securities, at the place or places specified with respect to such Series
pursuant to Section 2.2, an office or agency where Securities of such Series may be presented or surrendered for payment (“Paying
Agent”) and where Securities of such Series may be surrendered for registration of transfer or exchange (“Registrar”).
The Registrar shall keep a

    	- 9 -

    	 	 

    

register with respect to each Series of Securities and to their
transfer and exchange. The Issuers will give prompt written notice to the Trustee of the name and address, and any change in the
name or address, of each Registrar or Paying Agent. If at any time the Issuers shall fail to maintain any such required Registrar
or Paying Agent or shall fail to furnish the Trustee with the name and address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the Trustee, and the Issuers hereby appoint the Trustee as their
agent to receive all such presentations, surrenders, notices and demands.

 

The Issuers may also from time to time
designate one or more co-registrars or additional paying agents and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the Issuers of their obligations to maintain a Registrar
and Paying Agent in each place so specified pursuant to Section 2.2 for Securities of any Series for such purposes. The Issuers
will give prompt written notice to the Trustee of any such designation or rescission and of any change in the name or address of
any such co-registrar or additional paying agent. The term “Registrar” includes any co-registrar and the term “Paying
Agent” includes any additional paying agent.

The Issuers hereby appoint the Trustee
as the initial Registrar, Paying Agent and custodian of Global Securities for the Depository
for each Series unless another Registrar, Paying Agent or custodian of Global Securities for the Depository,
as the case may be, is appointed prior to the time Securities of that Series are first issued.

SECTION 2.5 Paying Agent to Hold Money
in Trust. The Issuers shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will
hold in trust, for the benefit of Securityholders of any Series of Securities, or the Trustee, all money held by the Paying Agent
for the payment of principal of or interest on the Series of Securities, and will notify the Trustee of any default by the Issuers
in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by
it to the Trustee.

The Issuers at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuers
or a Subsidiary) shall have no further liability for the money. If the Issuers or a Subsidiary acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of Securityholders of any Series of Securities all money held by it as Paying
Agent.

SECTION 2.6 Securityholder Lists.

The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders of each
Series of Securities and shall otherwise comply with TIA ss. 312(a). If the Trustee is not the Registrar, the Issuers shall furnish
to the Trustee at least ten days before each interest payment date and at such other times as the Trustee may request in writing
a list, in such form and as of such date as the Trustee may reasonably require, of the names and addresses of Securityholders of
each Series of Securities.

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SECTION 2.7 Transfer and Exchange.
Where Securities of a Series are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange
them for an equal principal amount of Securities of the same Series, the Registrar shall register the transfer or make the exchange
if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Trustee shall authenticate
Securities at the Registrar’s request. No service charge shall be made for any registration of transfer or exchange (except
as otherwise expressly permitted herein), but the Issuers may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable
upon exchanges pursuant to Sections 2.11, 3.6 or 9.5).

Neither the Issuers nor the Registrar shall
be required (a) to issue, register the transfer of, or exchange Securities of any Series for the period beginning at the opening
of business fifteen days immediately preceding the mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or (b) to register the transfer of or exchange Securities
of any Series selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected,
called or being called for redemption in part.

SECTION 2.8 Mutilated, Destroyed, Lost
and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Issuers shall execute and the Trustee
shall authenticate and deliver in exchange therefor a new Security of the same Series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

If there shall be delivered to the Issuers
and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or
indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice
to the Issuers or the Trustee that such Security has been acquired by a protected purchaser, the Issuers shall execute and upon
its request the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security,
a new Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed,
lost or stolen Security has become or is about to become due and payable, the Issuers in their discretion may, instead of issuing
a new Security, pay such Security.

Upon the issuance of any new Security under
this Section, the Issuers may require the payment of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security of any Series issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual
obligation of the Issuers, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that Series
duly issued hereunder.

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The provisions of this Section are exclusive
and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.

SECTION 2.9 Outstanding Securities.
The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation, those reductions in the interest on a Global Security effected by the Trustee in accordance
with the provisions hereof and those described in this Section as not outstanding.

If a Security is replaced pursuant to Section
2.8, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security is held by a protected
purchaser. Additionally, if a Security is paid pursuant to Section 2.8, it ceases to be outstanding.

If the Paying Agent (other than the Issuers,
a Subsidiary or an Affiliate of any thereof) holds on the Maturity of Securities of a Series money sufficient to pay such Securities
payable on that date, then on and after that date such Securities of the Series cease to be outstanding and interest on them ceases
to accrue unless otherwise provided by a Board Resolution, a supplemental indenture or an Officers’ Certificate with respect
to any Series.

A Security does not cease to be outstanding
because the Issuers or an Affiliate holds the Security.

In determining whether the Holders of the
requisite principal amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, the principal amount of a Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of
acceleration of the Maturity thereof pursuant to Section 6.2.

SECTION 2.10 Treasury Securities.
In determining whether the Holders of the required principal amount of Securities of a Series have concurred in any request, demand,
authorization, direction, notice, consent or waiver Securities of a Series owned by the Issuers or an Affiliate shall be disregarded,
except that for the purposes of determining whether the Trustee shall be protected in relying on any such request, demand, authorization,
direction, notice, consent or waiver only Securities of a Series that a responsible officer in the Corporate Trust Office of the
Trustee knows are so owned shall be so disregarded.

SECTION 2.11 Temporary Securities.
Until definitive Securities are ready for delivery, the Issuers may prepare and the Trustee shall authenticate temporary Securities
upon a Company Order. Temporary Securities shall be substantially in the form of definitive Securities but may have variations
that the Issuers consider appropriate for temporary Securities. Without unreasonable delay, the Issuers shall prepare and the
Trustee upon request shall authenticate definitive Securities of the same Series and date of maturity in exchange for temporary
Securities. Until so exchanged, temporary Securities shall have the same rights under this Indenture as the definitive Securities.

SECTION 2.12 Cancellation. The
Issuers at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to
the Trustee

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any Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee shall cancel all Securities surrendered for registration of transfer, exchange, payment, replacement
or cancellation and shall destroy such canceled Securities in accordance with its customary procedures (subject to the record retention
requirement of the Exchange Act) and upon written instruction from the Issuers deliver a certificate of such destruction to the
Issuers, unless the Issuers otherwise direct. The Issuers may not issue new Securities to replace Securities that it has paid or
delivered to the Trustee for cancellation.

 

SECTION 2.13 Defaulted Interest.
If the Issuers default in a payment of interest on a Series of Securities, they shall pay the defaulted interest, plus, to the
extent permitted by law, any interest payable on the defaulted interest, to the persons who are Securityholders of the Series
on a subsequent special record date. The Issuers shall fix the record date and payment date. At least 30 days before the record
date, the Issuers shall mail to the Trustee and to each Securityholder of the Series a notice that states the record date, the
payment date and the amount of interest to be paid. The Issuers may pay defaulted interest in any other lawful manner.

SECTION 2.14 Global Securities.

2.14.1 Terms of Securities. A Board
Resolution, a supplemental indenture hereto or an Officers’ Certificate shall establish whether the Securities of a Series
shall be issued in whole or in part in the form of one or more Global Securities and the Depository for such Global Security or
Securities.

2.14.2 Transfer and Exchange. Notwithstanding
any provisions to the contrary contained in Section 2.7 of the Indenture and in addition thereto, any Global Security shall be
exchangeable pursuant to Section 2.7 of the Indenture for Securities registered in the names of Holders other than the Depository
for such Security or its nominee only if (i) such Depository notifies the Issuers that it is unwilling or unable to continue as
Depository for such Global Security or if at any time such Depository ceases to be a clearing agency registered under the Exchange
Act, and, in either case, the Issuers fail to appoint a successor Depository within 90 days of such event, (ii) the Issuers execute
and deliver to the Trustee an Officers’ Certificate to the effect that such Global Security shall be so exchangeable or (iii)
an Event of Default with respect to the Securities represented by such Global Security shall have happened and be continuing. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Securities registered in such
names as the Depository shall direct in writing in an aggregate principal amount equal to the principal amount of the Global Security
with like tenor and terms.

Except as provided in this Section 2.14.2,
a Global Security may not be transferred except as a whole by the Depository with respect to such Global Security to a nominee
of such Depository, by a nominee of such Depository to such Depository or another nominee of such Depository or by the Depository
or any such nominee to a successor Depository or a nominee of such a successor Depository.

The Trustee shall have no obligation or
duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in any Security other than to require delivery of

    	- 13 -

    	 	 

    

such certificates and other documentation
or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine
the same to determine substantial compliance as to form with the express requirements hereof.

Neither the Trustee nor any Agent shall
have any responsibility or liability for any actions taken or not taken by the Depository.

2.14.3 Legend. Any Global Security
issued hereunder shall bear a legend in substantially the following form:

“This Security is a Global Security within the
meaning of the Indenture hereinafter referred to and is registered in the name of the Depository or a nominee of the Depository.
This Security is exchangeable for Securities registered in the name of a person other than the Depository or its nominee only in
the limited circumstances described in the Indenture, and may not be transferred except
as a whole by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository.”

2.14.4 Acts of Holders. The Depository,
as a Holder, may appoint agents and otherwise authorize participants to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action which a Holder is entitled to give or take under the Indenture.

2.14.5 Payments. Notwithstanding
the other provisions of this Indenture, unless otherwise specified as contemplated by Section 2.2, payment of the principal of
and interest, if any, on any Global Security shall be made to the Holder thereof.

2.14.6 Consents, Declaration and Directions.
Except as provided in Section 2.14.4, the Issuers, the Trustee and any Agent shall treat a person as the Holder of such principal
amount of outstanding Securities of such Series represented by a Global Security as shall be specified in a written statement of
the Depository with respect to such Global Security, for purposes of obtaining any consents, declarations, waivers or directions
required to be given by the Holders pursuant to this Indenture. Notwithstanding the foregoing, prior to the due presentation for
registration of transfer of any Security, the Issuers, the Trustee and the Agents may deem and treat the person in whose name a
Security is registered as the owner of such Security for the purpose of receiving payment of principal of, premium, if any, and
interest on such Security and for all other purposes whatsoever (except for purposes of obtaining any consents, declarations, waivers
or directions) including the transfer or exchange of such Security, whether or not such Security is overdue, and none of the Issuers,
the Trustee or the Agents shall be affected by notice to the contrary.

SECTION 2.15 CUSIP Numbers. The
Issuers in issuing the Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall
use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as printed on the

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Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other elements of identification printed on the Securities, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Issuers shall promptly notify the Trustee in writing of any change
in the “CUSIP” numbers.

 

ARTICLE
III

REDEMPTION

SECTION 3.1 Notice to Trustee.
The Issuers may, with respect to any Series of Securities, reserve the right to redeem and pay the Series of Securities or may
covenant to redeem and pay the Series of Securities or any part thereof prior to the Stated Maturity thereof at such time and
on such terms as provided for in such Securities. If a Series of Securities is redeemable and the Issuers want or are obligated
to redeem prior to the Stated Maturity thereof all or part of the Series of Securities pursuant to the terms of such Securities,
they shall notify the Trustee of the redemption date and the principal amount of Series of Securities to be redeemed. The Issuers
shall give the notice at least 45 days before the redemption date (or such shorter notice as may be acceptable to the Trustee).

SECTION 3.2 Selection of Securities
to be Redeemed. Unless otherwise indicated for a particular Series by a Board Resolution, a supplemental indenture or an Officers’
Certificate, if less than all the Securities of a Series are to be redeemed, the Trustee shall select the Securities of the Series
to be redeemed in any manner in accordance with the procedures of the Depository. The Trustee shall make the selection from Securities
of the Series outstanding not previously called for redemption. The Trustee may select for redemption portions of the principal
of Securities of the Series that have denominations larger than $1,000. Securities of the Series and portions of them it selects
shall be in amounts of $1,000 or whole multiples of $1,000 or, with respect to Securities of any Series issuable in other denominations
pursuant to Section 2.2.10, the minimum principal denomination for each Series and integral multiples thereof. Provisions of this
Indenture that apply to Securities of a Series called for redemption also apply to portions of Securities of that Series called
for redemption.

SECTION 3.3 Notice of Redemption.
Unless otherwise indicated for a particular Series by Board Resolution, a supplemental indenture hereto or an Officers’
Certificate, at least 30 days but not more than 60 days before a redemption date, the Issuers shall mail a notice of redemption
by first-class mail to each Holder whose Securities are to be redeemed.

The notice shall identify the Securities
of the Series to be redeemed and shall state:

(a)               
the redemption date;

(b)              
the redemption price;

(c)               
if any Security is being redeemed in part, the portion of the principal amount of such Security to be redeemed and that,
after the redemption date upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed
portion shall be issued upon cancellation of the original Security;

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(d)              
the name and address of the Paying Agent;

(e)               
that Securities of the Series called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(f)               
that interest on Securities of the Series called for redemption ceases to accrue on and after the redemption date;

(g)              
the CUSIP or ISIN number, if any, printed on the Securities being redeemed; and

(h)              
any other information as may be required by the terms of the particular Series or the Securities of a Series being redeemed.

At the Issuers’ request, the Trustee
shall give the notice of redemption in the Issuers’ name and at their expense.

SECTION 3.4 Effect of Notice of Redemption.
Once notice of redemption is mailed as provided in Section 3.3, Securities of a Series called for redemption become due and payable
on the redemption date and at the redemption price. A notice of redemption may not be conditional. Upon surrender to the Paying
Agent, such Securities shall be paid at the redemption price plus accrued interest to the redemption date. On and after the redemption
date, interest will cease to accrue on the Securities or any portion of the Securities called for redemption (unless the Issuers
default in the payment of the redemption price and accrued interest).

SECTION 3.5 Deposit of Redemption Price.
On or before 10:00 a.m. New York City time on the redemption date, the Company or Omnicom Capital shall deposit with the Paying
Agent money sufficient to pay the redemption price of and accrued interest, if any, on all Securities to be redeemed on that date.

SECTION 3.6 Securities Redeemed in
Part. Upon surrender of a certificated Security that is redeemed in part, the Trustee shall authenticate for the Holder a
new certificated Security of the same Series and the same maturity equal in principal amount to the unredeemed portion of the
certificated Security surrendered.

ARTICLE
IV

COVENANTS

SECTION 4.1 Payment of Principal
and Interest. The Issuers covenant and agree for the benefit of the Holders of each Series of Securities that the Company
or any other Issuer will duly and punctually pay the principal of and interest, if any, on the Securities of that Series in accordance
with the terms of such Securities and this Indenture. Any amounts to be given to the Trustee or Paying Agent, shall be deposited
with the Trustee or Paying Agent by 10:00 a.m., New York City time, by the Issuers. Such payments shall be considered made on
the date due if on such date the Trustee or the Paying Agent holds, in accordance with this Indenture, money sufficient to make
all payments with respect to such Securities then due and the Trustee or the

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Paying Agent, as the case may be, is not prohibited from paying
such money to the Holders on that date pursuant to the terms of this Indenture.

 

SECTION 4.2 SEC Reports.
The Company shall deliver to the Trustee within 15 days after it files them with the SEC copies of the annual reports and of the
information, documents, and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Issuers
also shall comply with the other provisions of TIA ss. 314(a). For the avoidance of doubt, the Company
will be deemed to have furnished such reports referred to above to the Trustee and the Holders if the Company, as applicable,
has filed such reports with the SEC via its Electronic Data Gathering, Analysis and Retrieval System filing system and such reports
are publicly available. The Company will notify the Trustee of the filing by email or otherwise.

Delivery of such reports, information and
documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive
notice of any information contained therein or determinable from information contained therein, including the Issuers’ compliance
with any of their covenants hereunder (as to which the Trustee is entitled to conclusively rely exclusively on an Officers’
Certificate).

SECTION 4.3 Compliance Certificate.
The Issuers shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Issuers, an Officers’
Certificate signed by one of the principal executive, financial or accounting officers of each of the Issuers, stating that a
review of the activities of the Issuers and their Subsidiaries during the preceding fiscal year has been made under the supervision
of the signing Officers with a view to determining whether the Issuers have kept, observed, performed and fulfilled their obligations
under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge
the Issuers have kept, observed, performed and fulfilled each and every covenant contained in this Indenture and are not in default
in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall
have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge).

The Issuers will, so long as any of the
Securities are outstanding, deliver to the Trustee, within 10 Business Days after becoming aware of any Default or Event of Default,
an Officers’ Certificate specifying such Default or Event of Default and what action the Issuers are taking or propose to
take with respect thereto.

SECTION 4.4 Stay, Extension
and Usury Laws. The Issuers covenant (to the extent that they may lawfully do so) that they will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture or the Securities;
and the Issuers (to the extent they may lawfully do so) hereby expressly waive all benefit or advantage of any such law and covenant
that they will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee,
but will suffer and permit the execution of every such power as though no such law has been enacted.

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SECTION 4.5 Corporate Existence.
Subject to Article V, the Issuers will do or cause to be done all things necessary to preserve and keep in full force and effect
their corporate existence and the corporate, partnership or other existence of each Significant Subsidiary in accordance with
the respective organizational documents of each Significant Subsidiary and the rights (charter and statutory), licenses and franchises
of the Issuers and their Significant Subsidiaries; provided, however, that the Issuers shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of any Significant Subsidiary, if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuers and their Subsidiaries
taken as a whole and that the loss thereof is not adverse in any material respect to the Holders.

SECTION 4.6 Taxes. The Issuers
shall, and the Company shall cause, its Significant Subsidiaries to, pay prior to delinquency all taxes, assessments and governmental
levies, except as contested in good faith and by appropriate proceedings.

ARTICLE
V

SUCCESSORS

SECTION 5.1 When the Issuers
May Merge, Etc. An Issuer shall not consolidate with or merge into, or convey, transfer or lease all or substantially all
of its properties and assets to, any person (a “successor person”), except in the case of Omnicom Capital Inc. with,
into or to the Company, each other or any other Subsidiary of the Company, unless:

(a)               
the successor person (if any) is a corporation, partnership, trust or other entity organized and validly existing under
the laws of any U.S. domestic jurisdiction and expressly assumes the Issuer’s obligations on the Securities and under this
Indenture and

(b)              
immediately after giving effect to the transaction, no Default or Event of Default, shall have occurred and be continuing.

Such Issuer shall deliver to the Trustee
prior to the consummation of the proposed transaction an Officers’ Certificate to the foregoing effect and an Opinion of
Counsel stating that the proposed transaction and such supplemental indenture comply with this Indenture.

For purposes of the foregoing, the conveyance,
transfer or lease of the properties and assets of one or more Subsidiaries of an Issuer (other than to the Company or another Subsidiary
of any of the Issuers), which, if such assets were owned by such Issuer, would constitute all or substantially all of the properties
and assets of such Issuer, shall be deemed to be the transfer of all or substantially all of the properties and assets of such
Issuer, but a bona fide pledge or hypothecation will be deemed not to be prohibited by this Indenture.

SECTION 5.2 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets
of such Issuer in accordance with Section 5.1, the successor corporation formed by such consolidation or into or with which such
Issuer is merged or to which such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such

    	- 18 -

    	 	 

    

successor person has been named as the Issuer herein; provided,
however, that the predecessor Issuer in the case of a sale, lease, conveyance or other disposition shall not be released from the
obligation to pay the principal of and interest, if any, on the Securities. Such Issuer, the Trustee and the successor person shall
enter into a supplemental indenture to evidence the succession and substitution of such successor person and such discharge and
release of such Issuer.

 

ARTICLE
VI

DEFAULTS AND REMEDIES

SECTION 6.1 Events of Default.

“Event of Default,” wherever
used herein with respect to Securities of any Series, means any one of the following events, unless in the establishing Board Resolution,
supplemental indenture or Officers’ Certificate, it is provided that such Series shall not have the benefit of said Event
of Default:

(a)               
default in the payment of any interest on any Security of that Series when it becomes due and payable, and continuance of
such default for a period of 30 days (unless the entire amount of such payment is deposited by the Issuers with the Trustee or
with a Paying Agent prior to the expiration of such period of 30 days); or

(b)              
default in the payment of the principal, other than a scheduled installment payment, or premium, if any, of any Security
of that Series when such payment becomes due and payable, at its Maturity, upon redemption, by acceleration or otherwise; or

(c)               
default in the deposit of any sinking fund payment, when as due in respect of any Security of that Series; or

(d)              
default in the performance or breach of any covenant or warranty of the Issuers in this Indenture (other than a covenant
or warranty that has been included in this Indenture solely for the benefit of a Series of Securities other than that Series),
which default continues uncured for a period of 60 days after there has been given, by registered or certified mail, to the Issuers
by the Trustee or to the Issuers and the Trustee by the Holders of at least 25% in aggregate principal amount of the outstanding
Securities of that Series a written notice specifying such default or breach and requiring it to be remedied and stating that such
notice is a “Notice of Default” hereunder; or

(e)               
(A) the Issuers’ failure to make any payment by the end of any applicable grace period after maturity of their respective
indebtedness, which term as used in the indenture means obligations (other than nonrecourse obligations) of the Issuers for borrowed
money or evidenced by bonds, debentures, notes or similar instruments in an amount (taken together with amounts in (B)) in excess
of $100 million and continuance of such failure, or (B) the acceleration of their respective indebtedness in an amount (taken together
with the amounts in (A)) in excess of $100 million because of a default with respect to such indebtedness without such indebtedness
having been discharged or such acceleration having been cured, waived, rescinded or annulled in case of (A) or (B) above, for a
period of 30 days after written notice to the Issuers by the Trustee or to the

    	- 19 -

    	 	 

    

Issuers and the Trustee by the holders of not less than 25% in aggregate
principal amount of the notes then outstanding; however, if any such failure or acceleration referred to in (A) or (B) above shall
cease or be cured or be waived, rescinded or annulled in accordance with the terms of the applicable debt security, then the event
of default by reason thereof shall be deemed not to have occurred;

(f)               
an Issuer or any of its Significant Subsidiaries pursuant to or within the meaning of any Bankruptcy Law:

(i)                
commences a voluntary case,

(ii)              
consents to the entry of an order for relief against it in an involuntary case,

(iii)            
consents to the appointment of a Custodian of it or for all or substantially all of its property, or

(iv)            
makes a general assignment for the benefit of its creditors;

(g)              
a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i)                
is for relief against an Issuer or any of its Significant Subsidiaries in an involuntary case,

(ii)              
appoints a Custodian of an Issuer or any of its Significant Subsidiaries or for all or substantially all of its property,
or

(iii)            
orders the liquidation of an Issuer or any of its Significant Subsidiaries, and the order or decree remains unstayed and
in effect for 60 days; or

(h)              
any other Event of Default provided with respect to Securities of that Series, which is specified in a Board Resolution,
a supplemental indenture hereto or an Officers’ Certificate, in accordance with Section 2.2.14.

The term “Bankruptcy Law” means
Title 11, U.S. Code or any similar Federal or State law for the relief of debtors. The term “Custodian” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.

SECTION 6.2 Acceleration of Maturity;
Rescission and Annulment. If an Event of Default with respect to Securities of any Series at the time outstanding occurs and
is continuing (other than an Event of Default as to an Issuer referred to in Section 6.1(f) or (g)) then in every such case the
Trustee or the Holders of not less than 25% in aggregate principal amount of the outstanding Securities of that Series may declare
the principal amount (or, if any Securities of that Series are Discount Securities, such portion of the principal amount as may
be specified in the terms of such Securities) of and accrued and unpaid interest, if any, on all of the Securities of that Series
to be due and payable immediately, by a notice in writing to the Issuers (and to the

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Trustee if given by Holders), and upon any such declaration such
principal amount (or specified amount) and accrued and unpaid interest, if any, shall become immediately due and payable. If an
Event of Default specified in Section 6.1(f) or (g) shall occur as to an Issuer, the principal amount (or specified amount) of
and accrued and unpaid interest, if any, on all outstanding Securities shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.

 

At any time after such a declaration of
acceleration with respect to any Series has been made and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the outstanding Securities
of that Series, by written notice to the Issuers and the Trustee, may rescind and annul such declaration and its consequences if:

(a)               
the Issuers have paid or deposited with the Trustee a sum sufficient to pay

(i)                
all overdue interest, if any, on all Securities that Series,

(ii)              
the principal of any Securities of that Series have become due otherwise than by such declaration of and interest thereon
at the rate or rates therefor in such Securities,

(iii)            
to the extent that payment of such interest is, interest upon any overdue principal and overdue at the rate or rates prescribed
therefor in such, and

(iv)            
all sums paid or advanced by the Trustee and the reasonable compensation, expenses, and advances of the Trustee, its agents
and counsel; and

(b)              
all Events of Default with respect to Securities of that Series, other than the non-payment of the principal of Securities
of that Series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section
6.13.

No such rescission shall affect any subsequent
Default or impair any right consequent thereon.

SECTION 6.3 Collection of Indebtedness
and Suits for Enforcement by Trustee. The Issuers covenant that if:

(a)               
default is made in the payment of any interest on any Security when such interest becomes due and payable and such default
for a period of 30 days, or

(b)              
default is made in the payment of principal of any Security at the Maturity thereof, or

(c)               
default is made in the deposit of any sinking fund payment when and as due by the terms of a Security,

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then, the Issuers will, upon demand of the Trustee, pay to
them, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal
and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal or
any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.

If the Issuers fail to pay such amounts
forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding
for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the
same against any Issuer or any other obligor upon such Securities and collect the moneys adjudged or deemed to be payable in the
manner provided by law out of the property of any Issuer or any other obligor upon such Securities, wherever situated.

If an Event of Default with respect to
any Securities of any Series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights
and the rights of the Holders of Securities of such Series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture
or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

SECTION 6.4 Trustee May File
Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to an Issuer or any other obligor upon the Securities or the property
of an Issuer or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Issuers for the payment of overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,

(a)               
to file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Securities to
file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, indemnity, disbursements and advances of the Trustee, its agents and counsel)
and of the Holders allowed in such judicial proceeding, and

(b)              
to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7.

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Nothing herein contained shall be deemed
to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.

SECTION 6.5 Trustee May Enforce Claims
Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted
and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment
has been recovered.

SECTION 6.6 Application of Money
Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or interest, upon presentation
of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

First: To the payment of all amounts
due the Trustee under Section 7.7; and

Second: To the payment of the amounts
then due and unpaid for principal of and interest on the Securities in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities
for principal and interest, respectively; and

Third: To the Issuers.

SECTION 6.7 Limitation on Suits.
No Holder of any Security of any Series shall have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

(a)               
such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities
of that Series;

(b)              
the Holders of not less than 25% in principal amount of the outstanding Securities of that Series shall have made written
request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(c)               
such Holder or Holders have offered to the Trustee indemnity or security satisfactory to it against the costs, expenses
and liabilities to be incurred in compliance with such request;

(d)              
the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such
proceeding; and

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(e)               
no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the outstanding Securities of that Series; it being understood and intended that no one or
more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture
to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal
and ratable benefit of all such Holders.

SECTION 6.8 Unconditional Right of
Holders to Receive Principal and Interest. Notwithstanding any other provision in this Indenture, the Holder of any Security
shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such
Security on the Stated Maturity or Stated Maturities expressed in such Security (or, in the case of redemption, on the redemption
date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent
of such Holder.

SECTION 6.9 Restoration of Rights
and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such
Holder, then and in every such case, subject to any determination in such proceeding, the Issuers, the Trustee and the Holders
shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been instituted.

SECTION 6.10 Rights and Remedies
Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities in Section 2.8, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to
be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment
of any other appropriate right or remedy.

SECTION 6.11 Delay or Omission
Not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

SECTION 6.12 Control by Holders.
The Holders of a majority in principal amount of the outstanding Securities of any Series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee, with respect to the Securities of such Series, provided that

    	- 24 -

    	 	 

    

(a)               
such direction shall not be in conflict with any rule of law or with this Indenture,

(b)              
the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and

(c)               
subject to the provisions of Section 7.1, the Trustee shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer of the Trustee, determine that the proceeding so directed would involve the
Trustee in personal liability.

SECTION 6.13 Waiver of Past Defaults.
Subject to Section 6.2, the Holders of not less than a majority in principal amount of the outstanding Securities of any Series
may on behalf of the Holders of all the Securities of such Series waive any past Default hereunder with respect to such Series
and its consequences, except a Default in the payment of the principal of or interest on any Security of such Series (provided,
however, that the Holders of a majority in principal amount of the outstanding Securities of any Series may rescind an acceleration
and its consequences, including any related payment default that resulted from such acceleration). Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

SECTION 6.14 Undertaking for
Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted
by an Issuer, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the outstanding Securities of any Series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of or interest on any Security on or after the Stated Maturity or Stated maturities
expressed in such Security (or, in the case of redemption, on the redemption date).

ARTICLE
VII

TRUSTEE

SECTION 7.1 Duties of Trustee.

(a)               
If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.

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(b)              
Except during the continuance of an Event of Default:

(i)                
The Trustee need perform only those duties that are specifically set forth in this Indenture and no others and no implied
duties shall be read into this Indenture against the Trustee.

(ii)              
In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon Officers’ Certificates or Opinions of Counsel furnished to the Trustee and conforming
to the requirements of this Indenture; however, in the case of any such Officers’ Certificates or Opinions of Counsel which
by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such Officers’
Certificates and Opinions of Counsel to determine whether or not they conform to the requirements of this Indenture.

(c)               
The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:

(i)                
This paragraph does not limit the effect of paragraph (b) of this Section.

(ii)              
The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.

(iii)            
The Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it with respect to
Securities of any Series in good faith in accordance with the direction of the Holders of a majority in principal amount of the
outstanding Securities of such Series relating to the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities
of such Series.

(d)              
Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section.

(e)               
The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it
against any loss, liability or expense.

(f)               
The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with
the Issuers. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

(g)              
No provision of this Indenture shall require the Trustee to risk its own funds or otherwise incur any financial liability
in the performance of any of its duties, or in the exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such risk is not reasonably assured to it.

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(h)              
The Paying Agent, the Registrar and any authenticating agent shall be entitled to the protections, immunities and subject
to the standard of care as are set forth in paragraphs (b), (c), (f) and (g) of this Section with respect to the Trustee.

SECTION 7.2 Rights of Trustee.

(a)               
The Trustee may rely on and shall be protected in acting or refraining from acting upon any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in
the document.

(b)              
Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel.
The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate
or Opinion of Counsel.

(c)               
The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed
with due care. No Depository shall be deemed an agent of the Trustee and the Trustee shall not be responsible for any act or omission
by any Depository.

(d)              
The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized
or within its rights or powers.

(e)               
The Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

(f)               
The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders of Securities unless such Holders shall have offered to the Trustee security or indemnity satisfactory
to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

(g)              
The Trustee shall not be charged with knowledge of any default or Event of Default with respect to the Securities, unless
either (1) a Responsible Officer shall have actual knowledge of such default or Event of Default or (2) written notice of such
default or Event of Default shall have been received by the Trustee at the Corporate Trust Office.

(h)              
The permissive rights of the Trustee enumerated herein shall not be construed as duties.

(i)                
In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of
any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.

(j)                
The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right
to be indemnified, are extended to, and shall be

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enforceable by, the Trustee in each of its capacities hereunder,
and each Agent and any other Person employed to act hereunder.

 

SECTION 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with
the Issuers or an Affiliate with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights.
The Trustee is also subject to Sections 7.10 and 7.11.

SECTION 7.4 Trustee’s
Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall
not be accountable for the Issuers’ use of the proceeds from the Securities, and it shall not be responsible for any statement
in the Securities other than its authentication.

SECTION 7.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing with respect to the Securities of any Series and if it is actually known
to a Responsible Officer of the Trustee, the Trustee shall mail to each Securityholder of the Securities of that Series notice
of a Default or Event of Default within 90 days after it occurs or, if later, after a Responsible Officer of the Trustee has knowledge
of such Default or Event of Default. Except in the case of a Default or Event of Default in payment of principal of or interest
on any Security of any Series, the Trustee may withhold the notice if and so long as its corporate trust committee or a committee
of its Responsible Officers in good faith determines that withholding the notice is in the interests of Securityholders of that
Series.

SECTION 7.6 Reports by Trustee
to Holders. Within 60 days after May 15 in each year, the Trustee shall transmit by mail to all Securityholders, as their
names and addresses appear on the register kept by the Registrar, a brief report dated as of such May 15, in accordance with,
and to the extent required under, TIA ss. 313.

A copy of each report at the time of its
mailing to Securityholders of any Series shall be filed with the SEC and each stock exchange on which the Securities of that Series
are listed. The Issuers shall promptly notify the Trustee when Securities of any Series are listed on any stock exchange.

SECTION 7.7 Compensation and
Indemnity. The Issuers shall, jointly and severally, pay to the Trustee compensation as agreed to in writing between the Issuers
and the Trustee from time to time. The Trustee’s compensation shall not be limited by any law on compensation of a trustee
of an express trust. The Issuers shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by
it. Such expenses shall include the reasonable compensation and expenses of the Trustee’s agents and counsel.

The Issuers shall, jointly and severally,
indemnify the Trustee, in each of its capacities hereunder, (including the cost of defending itself) against any claims, loss,
liability or expense incurred by it except as set forth in the next paragraph in the performance of its duties under this Indenture
as Trustee or Agent. The Trustee shall notify the Issuers promptly of any claim for which it may seek indemnity. The Issuers shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Issuers shall pay
the reasonable fees and expenses of such counsel. The Issuers need not pay for any settlement made

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without its consent, which consent shall
not be unreasonably withheld. This indemnification shall apply to officers, directors, employees, shareholders and agents of the
Trustee.

The Issuers need not reimburse any expense
or indemnify against any loss or liability incurred by the Trustee or by any officer, director, employee or agent of the Trustee
through negligence or bad faith.

To secure the Issuers’ payment obligations
in this Section, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on particular Securities of that Series.

When the Trustee incurs expenses or renders
services after an Event of Default specified in Section 6.1(f) or (g) occurs, the expenses and the compensation for the services
are intended to constitute expenses of administration under any Bankruptcy Law.

The provisions of this Section shall survive
the termination of this Indenture and the resignation or removal of the Trustee.

SECTION 7.8 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor
Trustee’s acceptance of appointment as provided in this Section.

The Trustee may resign with respect to
the Securities of one or more Series by so notifying the Issuers. The Holders of a majority in principal amount of the Securities
of any Series may remove the Trustee with respect to that Series by so notifying the Trustee and the Issuers. The Issuers may remove
the Trustee with respect to Securities of one or more Series if:

(a)               
the Trustee fails to comply with Section 7.10;

(b)              
the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;

(c)               
a Custodian or public officer takes charge of the Trustee or its property; or

(d)              
the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or
if a vacancy exists in the office of Trustee for any reason, the Issuers shall promptly appoint a successor Trustee. Within one
year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities
may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers.

If a successor Trustee with respect to
the Securities of any one or more Series does not take office within 60 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Issuers or the Holders of at least 10% in principal amount of the Securities of the applicable Series
may, at the expense of the Issuers, petition any court of competent jurisdiction for the appointment of a successor Trustee.

    	- 29 -

    	 	 

    

If the Trustee with respect to the Securities
of any one or more Series fails to comply with Section 7.10, any Securityholder of the applicable Series may petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the Issuers. Immediately after that, the retiring Trustee shall transfer
all property held by it as Trustee to the successor Trustee subject to the lien provided for in Section 7.7, the resignation or
removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties
of the Trustee with respect to each Series of Securities for which it is acting as Trustee under this Indenture. A successor Trustee
shall mail a notice of its succession to each Securityholder of each such Series. Notwithstanding replacement of the Trustee pursuant
to this Section 7.8, the Issuers’ obligations under Section 7.7 hereof shall continue for the benefit of the retiring trustee
with respect to expenses and liabilities incurred by it prior to such replacement.

SECTION 7.9 Successor Trustee
by Merger, etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

SECTION 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements of TIA ss.ss. 310(a) (1), (2) and (5). The Trustee shall
always have a combined capital and surplus of at least $25,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA ss.ss. 310(b).

SECTION 7.11 Preferential Collection
of Claims Against the Issuers. The Trustee is subject to TIA ss. 311(a), excluding any creditor relationship listed in TIA
ss. 311(b). A Trustee who has resigned or been removed shall be subject to TIA ss. 311(a) to the extent indicated.

ARTICLE
VIII

SATISFACTION AND DISCHARGE; DEFEASANCE

SECTION 8.1 Satisfaction and Discharge
of Indenture. This Indenture shall upon Company Order cease to be of further effect (except as hereinafter provided in this
Section 8.1), and the Trustee, at the expense of the Issuers, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

(a)               
either

(i)                
all Securities theretofore authenticated and delivered (other than Securities that have been destroyed, lost or stolen and
that have been replaced or paid) have been delivered to the Trustee for cancellation; or

(ii)              
all such Securities not theretofore delivered to the Trustee for cancellation

    	- 30 -

    	 	 

    

(1)              
have become due and payable, or

(2)              
will become due and payable at their Stated Maturity within one year, or

(3)              
are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Issuers, or

(4)              
are deemed paid and discharged pursuant to Section 8.3, as applicable;

and the Issuers, in the case of (1), (2) or (3) above, have
deposited or caused to be deposited with the Trustee as trust funds in trust an amount sufficient for the purpose of paying and
discharging the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal
and interest to the date of such deposit (in the case of Securities which have become due and payable on or prior to the date of
such deposit) or to the Stated Maturity or redemption date, as the case may be;

(b)              
the Issuers have paid or caused to be paid all other sums payable hereunder by the Issuers; and

(c)               
the Issuers have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge
of this Indenture, the obligations of the Issuers to the Trustee under Section 7.7, and, if money shall have been deposited with
the Trustee pursuant to clause (a) of this Section, the provisions of Sections 2.4, 2.7, 2.8, 8.1, 8.2 and 8.5 shall survive.

SECTION 8.2 Application of Trust
Funds; Indemnification.

(a)               
Subject to the provisions of Section 8.5, all money deposited with the Trustee pursuant to Section 8.1, all money and U.S.
Government Obligations deposited with the Trustee pursuant to Section 8.3 or 8.4 and all money received by the Trustee in respect
of U.S. Government Obligations deposited with the Trustee pursuant to Section 8.3 or 8.4, shall be held in trust and applied by
it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying
Agent (including the Issuers acting as its own Paying Agent) as the Trustee may determine, to the persons entitled thereto, of
the principal and interest for whose payment such money has been deposited with or received by the Trustee or to make mandatory
sinking fund payments or analogous payments as contemplated by Sections 8.3 or 8.4.

(b)              
The Issuers shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against
U.S. Government Obligations deposited pursuant

    	- 31 -

    	 	 

    

to Sections 8.3 or 8.4 or the interest and principal received in
respect of such obligations other than any payable by or on behalf of Holders.

 

(c)               
The Trustee shall deliver or pay to the Issuers from time to time upon Company Request any U.S. Government Obligations or
money held by it as provided in Sections 8.3 or 8.4 which, in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof delivered to the Trustee, are then in excess of the amount thereof
which then would have been required to be deposited for the purpose for which such U.S. Government Obligations or money were deposited
or received. This provision shall not authorize the sale by the Trustee of any U.S. Government Obligations held under this Indenture.

SECTION 8.3 Legal Defeasance
of Securities of any Series. Unless this Section 8.3 is otherwise specified, pursuant to Section 2.2.16, to be inapplicable
to Securities of any Series, the Issuers shall be deemed to have paid and discharged the entire indebtedness on all the outstanding
Securities of such Series on the 91st day after the date of the deposit referred to in subparagraph (d) hereof, and the provisions
of this Indenture, as it relates to such outstanding Securities of such Series, shall no longer be in effect (and the Trustee,
at the expense of the Issuers, shall, at Company Request, execute proper instruments acknowledging the same), except as to:

(a)               
the rights of Holders of Securities of such Series to receive, from the trust funds described in subparagraph (d) hereof,
(i) payment of the principal of and each installment of principal of and interest on the outstanding Securities of such Series
on the Stated Maturity of such principal or installment of principal or interest and (ii) the benefit of any mandatory sinking
fund payments applicable to the Securities of such Series on the day on which such payments are due and payable in accordance with
the terms of this Indenture and the Securities of such Series;

(b)              
the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and

(c)               
the rights, powers, trust and immunities of the Trustee hereunder;

provided that, the following conditions shall have been satisfied:

(d)              
the Issuers shall have deposited or caused to be deposited irrevocable with the Trustee as trust funds in trust for making
the purpose of the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders
of such Securities cash in Dollars (or such other money or currencies as shall then be legal tender in the United States) and/or
U.S. Government Obligations, which through the payment of interest, premium, if any, and principal in respect thereof, in accordance
with their terms, will provide (and without reinvestment and assuming no tax liability will be imposed on such Trustee), not later
than one day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge
each installment of principal (including mandatory

    	- 32 -

    	 	 

    

sinking fund or analogous payments) of, premium, if any, and interest,
if any, on all the Securities of such Series on the dates such installments of interest or principal are due;

(e)               
such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement
or installment to which the Issuers are a party or by which they are bound;

(f)               
no Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the
date of such deposit;

(g)              
the Issuers shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel to the effect that
(i) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date
of execution of this Indenture, there has been a change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the Securities of such Series will not recognize
income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject
to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred;

(h)              
the Issuers shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by
the Issuers with the intent of preferring the Holders of the Securities of such Series over any other creditors of the company
or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuers;

(i)                
such deposit shall not result in the trust arising from such deposit constituting an investment company (as defined in the
Investment Company Act of 1940, as amended), or such trust shall be qualified under such Act or exempt from regulation thereunder;
and

(j)                
the Issuers shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for relating to the defeasance by this Section have been complied with.

SECTION 8.4 Covenant Defeasance.

Unless this Section 8.4 is otherwise specified
pursuant to Section 2.2.16 to be inapplicable to Securities of any Series, on and after the 91st day after the date of the deposit
referred to in subparagraph (a) hereof, the Issuers may omit to comply with any term, provision or condition set forth under Sections
4.2, 4.3, 4.4, 4.5, 4.6, and 5.1 as well as any additional covenants contained in a supplemental indenture hereto for a particular
Series of Securities or a Board Resolution or an Officers’ Certificate delivered pursuant to Section 2.2.16 (and the failure
to comply with any such covenants shall not constitute a Default or Event of Default under Section 6.1), with respect to the Securities
of such Series, provided that the following conditions shall have been satisfied:

    	- 33 -

    	 	 

    

(a)               
With reference to this Section 8.4, the Issuers have deposited or caused to be irrevocably deposited (except as provided
in Section 8.2(c)) with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of such Securities cash in Dollars (or such other money or currencies as shall then be legal tender in the
United States) and/or U.S. Government Obligations, which through the payment of interest, principal and premium, if any, in respect
thereof, in accordance with their terms, will provide (and without reinvestment and assuming no tax liability will be imposed on
such Trustee), not later than one day before the due date of any payment of money, an amount in cash, sufficient, in the opinion
of a nationally recognized firm of independent certified public accountants expressed in a written certification thereof delivered
to the Trustee, to pay principal and interest, if any, on and any mandatory sinking fund in respect of the Securities of such Series
on the dates such installments of interest or principal are due;

(b)              
Such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement
or instrument to which the Issuers are a party or by which they are bound;

(c)               
No Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the
date of such deposit or during the period ending on the 91st day after such date;

(d)              
the Issuers shall have delivered to the Trustee an Opinion of Counsel confirming that Holders of the Securities of such
Series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will
be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred;

(e)               
the Issuers shall have delivered to the Trustee an Officers’ Certificate stating the deposit was not made by the Issuers
with the intent of preferring the Holders of the Securities of such Series over any other creditors of the Issuers or with the
intent of defeating, hindering, delaying or defrauding any other creditors of the Issuers; and

(f)               
The Issuers shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
all conditions precedent herein provided for relating to the defeasance contemplated by this Section 8.4 have been complied with.

SECTION 8.5 Repayment to the Issuers.
The Trustee and the Paying Agent shall pay to the Issuers upon request any money held by them for the payment of principal and
interest that remains unclaimed for two years. After that, Securityholders entitled to the money must look to the Issuers for
payment as general creditors unless an applicable abandoned property law designates another person.

SECTION 8.6 Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in accordance with Section 8.2 by reason of any legal proceeding
or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers’ obligations under this Indenture and the

    	- 34 -

    	 	 

    

Holders of Securities shall be revived and reinstated as though
no deposit had occurred pursuant to Section 8.1 until such time as the Trustee or such Paying Agent is permitted to apply all such
money in accordance with Section 8.2.

 

ARTICLE
IX

AMENDMENTS AND WAIVERS

SECTION 9.1 Without Consent
of Holders. The Issuers and the Trustee may amend or supplement this Indenture or the Securities of one or more Series without
the consent of any Securityholder:

(a)               
to cure any ambiguity, defect or inconsistency;

(b)              
to comply with Article V;

(c)               
to provide for uncertificated Securities in addition to or in place of certificated Securities;

(d)              
to make any change that does not materially adversely affect in any material respect the legal rights of any Securityholder;

(e)               
to provide for the issuance of and establish the form and terms and conditions of Securities of any Series as permitted
by this Indenture;

(f)               
in the case of subordinated Securities, to make any change in the provisions of this Indenture or any supplemental indenture
relating to subordination that would limit or terminate the benefits available to any holder of senior Debt under such provisions
(but only if each such holder of senior Debt consents to such change);

(g)              
to add to, change or eliminate any of the provisions of this Indenture with respect to Securities of a Series; although
no such addition, change or elimination may apply to Securities of any Series created prior to the execution of such amendment
and entitled to the benefit of such provision, nor may any such amendment modify the rights of a Holder of any Security with respect
to such provision, unless the amendment becomes effective only when there is no outstanding Security of any Series created prior
to such amendment and entitled to the benefit of such provision;

(h)              
to secure the Issuers’ obligations under the Securities and this Indenture;

(i)                
to add to the Issuers’ covenants or obligations under this Indenture for the protection of the Holders or surrender
any right, power or option conferred by this Indenture on the Issuers;

(j)                
to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities
of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee; or

    	- 35 -

    	 	 

    

(k)              
to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA.

SECTION 9.2 With Consent of
Holders. (a) The Company and the Trustee may enter into a supplemental indenture with the written consent of the Holders of
at least a majority in principal amount of the outstanding Securities of each Series affected by such supplemental indenture (including
consents obtained in connection with a tender offer or exchange offer for the Securities of such Series), for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture
or of modifying in any manner the rights of the Securityholders of each such Series. Except as provided in Section 6.13, the Holders
of at least a majority in principal amount of the outstanding Securities of each Series affected by such waiver by notice to the
Trustee (including consents obtained in connection with a tender offer or exchange offer for the Securities of such Series) may
waive compliance by the Company with any provision of this Indenture or the Securities with respect to such Series.

It shall not be necessary for the consent
of the Holders of Securities under this Section 9.2 to approve the particular form of any proposed supplemental indenture or waiver,
but it shall be sufficient if such consent approves the substance thereof. After a supplemental indenture or waiver under this
section becomes effective, the Company shall mail to the Holders of Securities affected thereby, a notice briefly describing the
supplemental indenture or waiver. Any failure by the Company to mail or publish such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental indenture or waiver.

(b)              
Without the consent of each Securityholder affected, an amendment or waiver may not be made to that, as to any non-consenting
Securityholder:

(a)               
reduce the percentage of principal amount of outstanding Securities whose Holders must consent to an amendment, supplement
or waiver;

(b)              
reduce the rate of or change the time for payment of interest (including default interest) on any Security;

(c)               
reduce the principal amount of or the premium, if any, on any Security or change the Stated Maturity of any Security or
reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation;

(d)              
in the case of any subordinated Securities, or coupons appertaining thereto, make any change in the provisions of this Indenture
relating to subordination that adversely affects the rights of any Holder under such provisions;

(e)               
reduce the principal amount of Discount Securities payable upon acceleration of the maturity thereof;

(f)               
waive a Default or Event of Default in the payment of the principal of, premium, if any, or interest, if any, on any Security
(except a rescission of acceleration of the Securities of any Series by the Holders of at least a majority in principal amount
of

    	- 36 -

    	 	 

    

the outstanding Securities of such Series and a waiver of the payment
default that resulted from such acceleration);

(g)              
make the principal of or interest, if any, on any Security payable in any currency other than that stated in the Security;

(h)              
make any change in Sections 6.8, 6.13 or 9.2; or

(i)                
waive a redemption payment with respect to any Security or change any of the provisions with respect to the redemption of
any Securities.

SECTION 9.3 Compliance with
Trust Indenture Act. Every amendment to this Indenture or the Securities of one or more Series shall be set forth in a supplemental
indenture hereto that complies with the TIA as then in effect.

SECTION 9.4 Revocation and Effect
of Consents. Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent
by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting
Holder’s Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder
may revoke the consent as to his Security or portion of a Security if the Trustee receives the notice of revocation before the
date the amendment or waiver becomes effective.

Any amendment or waiver once effective
shall bind every Securityholder of each Series affected by such amendment or waiver unless it is of the type described in any of
clauses (a) through (i) of Section 9.2. In that case, the amendment or waiver shall bind each Holder of a Security who has consented
to it and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s
Security.

SECTION 9.5 Notation on or Exchange
of Securities. The Trustee may place an appropriate notation about an amendment or waiver on any Security of any Series thereafter
authenticated. The Issuers in exchange for Securities of that Series may issue and the Trustee shall authenticate upon request
new Securities of that Series that reflect the amendment or waiver.

SECTION 9.6 Trustee Protected.
In executing, or accepting the additional trusts created by any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 7.1) shall
be fully protected in relying upon, in addition to the documents required by Section 10.4, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee shall sign all supplemental
indentures, except that the Trustee need not sign any supplemental indenture that adversely affects its rights, duties, liabilities
or immunities.

    	- 37 -

    	 	 

    

ARTICLE
X

MISCELLANEOUS

SECTION 10.1 Trust Indenture
Act Controls. If any provision of this Indenture limits, qualifies, or conflicts with another provision which is required
or deemed to be included in this Indenture by the TIA, such required or deemed provision shall control.

SECTION 10.2 Notices. Any
notice or communication by the Issuers or the Trustee to the other is duly given if in writing and delivered in person or mailed
by first-class mail:

if to the Issuers:

Omnicom Group Inc.

437 Madison Avenue

New York, New York 10022

Attention: General Counsel

if to the Trustee:

Deutsche Bank Trust Company Americas

60 Wall Street, 27th Floor

MS: NYC60-2710

New York, NY 10005

Attention: Trust & Securities Services

			Fax: 732-578-4635

 

			copy to:

 

			Deutsche Bank National Trust Company

100 Plaza One, MS JCY03-0699

Jersey City, NJ 07311

			Attention: Trust & Securities Services

			Fax: 732-578-4636

The Issuers or the Trustee by notice to
the other may designate additional or different addresses for subsequent notices or communications.

Any notice or communication to a Securityholder
shall be mailed by first-class mail to his address shown on the register kept by the Registrar. Failure to mail a notice or communication
to a Securityholder of any Series or any defect in it shall not affect its sufficiency with respect to other Securityholders of
that or any other Series.

If a notice or communication is mailed
or published in the manner provided above, within the time prescribed, it is duly given, whether or not the Securityholder receives
it.

    	- 38 -

    	 	 

    

If the Issuers mail a notice or communication
to Securityholders, they shall mail a copy to the Trustee and each Agent at the same time.

SECTION 10.3 Communication by
Holders with Other Holders. Securityholders of any Series may communicate pursuant to TIA ss. 312(b) with other Securityholders
of that Series or any other Series with respect to their rights under this Indenture or the Securities of that Series or all Series.
The Issuers, the Trustee, the Registrar and anyone else shall have the protection of TIA ss. 312(c).

SECTION 10.4 Certificate and
Opinion as to Conditions Precedent. Upon any request or application by the Issuers to the Trustee to take any action under
this Indenture, the Issuers shall furnish to the Trustee:

(a)               
an Officers’ Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for
in this Indenture relating to the proposed action have been complied with; and

(b)              
an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

SECTION 10.5 Statements Required
in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for
in this Indenture (other than a certificate provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:

(a)               
a statement that the person making such certificate or opinion has read such covenant or condition;

(b)              
a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based;

(c)               
a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d)              
a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

SECTION 10.6 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of Securityholders of one or more Series. Any Agent may make
reasonable rules and set reasonable requirements for its functions.

SECTION 10.7 Legal Holidays.
Unless otherwise provided by Board Resolution, Officer’s Certificate or supplemental indenture for a particular Series,
a “Legal Holiday” is any day that is not a Business Day. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.

    	- 39 -

    	 	 

    

SECTION 10.8 No Recourse Against
Others. A director, officer, employee or stockholder, as such, of the Issuers shall not have any liability for any obligations
of the Issuers under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations
or their creation. Each Securityholder by accepting a Security waives and releases all such liability.

The waiver and release are part of the
consideration for the issue of the Securities.

SECTION 10.9 Counterparts.
This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution
and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures
of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

SECTION 10.10 Governing Laws. THIS
INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

SECTION 10.11 No Adverse Interpretation
of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Issuers
or a Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

SECTION 10.12 Successors.
All agreements of the Issuers in this Indenture and the Securities shall bind their successor. All agreements of the Trustee in
this Indenture shall bind its successor.

SECTION 10.13 Severability.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 10.14 Table of Contents, Headings,
Etc. The Table of Contents, Cross-Reference Table, and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms
or provisions hereof.

SECTION 10.15 USA
Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the USA
Patriot Act the Trustee, like all financial institutions, is required to obtain, verify, and record information that identifies
each person or legal entity that establishes a relationship or opens an account with Deutsche Bank Trust Company Americas. The
parties to this Indenture agree that they will provide the Agents with such information as it may request in order for the Trustee
to satisfy the requirements of the USA Patriot Act.

    	- 40 -

    	 	 

    

SECTION 10.16 Force
Majeure. The Trustee and the Agents shall not incur any liability for not performing any
act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of the Trustee
or any Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority,
any act of God or war, civil unrest, local or national disturbance or disaster, any act of terrorism, or the unavailability of
the Federal Reserve Bank wire or facsimile or other wire or communication facility); provided that nothing in this Section 10.16
shall alter the Trustee’s standard of care under the TIA; and provided further that the Trustee shall use reasonable efforts
which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

ARTICLE
XI

SINKING FUNDS

SECTION 11.1 Applicability of
Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of the Securities of a
Series, except as otherwise permitted or required by any form of Security of such Series issued pursuant to this Indenture.

The minimum amount of any sinking fund
payment provided for by the terms of the Securities of any Series is herein referred to as a “mandatory sinking fund payment”
and any other amount provided for by the terms of Securities of such Series is herein referred to as an “optional sinking
fund payment.” If provided for by the terms of Securities of any Series, the cash amount of any sinking fund payment may
be subject to reduction as provided in Section 11.2. Each sinking fund payment shall be applied to the redemption of Securities
of any Series as provided for by the terms of the Securities of such Series.

SECTION 11.2 Satisfaction of Sinking
Fund Payments with Securities. The Issuers may, in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of any Series to be made pursuant to the terms of such Securities (1) deliver outstanding Securities of such
Series to which such sinking fund payment is applicable (other than any of such Securities previously called for mandatory sinking
fund redemption) and (2) apply as credit Securities of such Series to which such sinking fund payment is applicable and which
have been redeemed either at the election of the Issuers pursuant to the terms of such Series of Securities (except pursuant to
any mandatory sinking fund) or through the application of permitted optional sinking fund payments or other optional redemptions
pursuant to the terms of such Securities, provided that such Securities have not been previously so credited. Such Securities
shall be received by the Trustee, together with an Officers’ Certificate with respect thereto, not later than 15 days prior
to the date on which the Trustee begins the process of selecting Securities for redemption, and shall be credited for such purpose
by the Trustee at the price specified in such Securities for redemption through operation of the sinking fund and the amount of
such sinking fund payment shall be reduced accordingly. If as a result of the delivery or credit of Securities in lieu of cash
payments pursuant to this Section 11.2, the principal amount of Securities of such Series to be redeemed in order to exhaust the
aforesaid cash payment shall be less than $100,000, the Trustee need not call Securities of such Series for redemption, except
upon receipt of a Company Order that such action be taken, and such cash payment shall be held by the Trustee or a Paying Agent
and applied to the next succeeding

    	- 41 -

    	 	 

    

sinking fund payment, provided, however, that the Trustee or such
Paying Agent shall from time to time upon receipt of a Company Order pay over and deliver to the Issuers any cash payment so being
held by the Trustee or such Paying Agent upon delivery by the Issuers to the Trustee of Securities of that Series purchased by
the Issuers having an unpaid principal amount equal to the cash payment required to be released to the Issuers.

 

SECTION 11.3 Redemption of Securities
for Sinking Fund. Not less than 45 days (unless otherwise indicated in the Board Resolution, supplemental indenture hereto
or Officers’ Certificate in respect of a particular Series of Securities) prior to each sinking fund payment date for any
Series of Securities, the Issuers will deliver to the Trustee an Officers’ Certificate specifying the amount of the next
ensuing mandatory sinking fund payment for that Series pursuant to the terms of that Series, the portion thereof, if any, which
is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 11.2, and the optional amount, if any, to be added in cash to the next ensuing mandatory
sinking fund payment, and the Issuers shall thereupon be obligated to pay the amount therein specified.

Not less than 30 days (unless otherwise
indicated in the Board Resolution, Officers’ Certificate or supplemental indenture in respect of a particular Series of Securities)
before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment
date in the manner specified in Section 3.2 and cause notice of the redemption thereof to be given in the name of and at the expense
of the Issuers in the manner provided in Section 3.3. Such notice having been duly given, the redemption of such Securities shall
be made upon the terms and in the manner stated in Sections 3.4, 3.5 and 3.6.

    	- 42 -

    	 	 

    

 

IN WITNESS WHEREOF, the parties hereto
have caused this Indenture to be duly executed as of the day and year first above written.

	OMNICOM GROUP INC.
	 
	 
	By:	 
	 	Name:
	 	Title:
	 	 
	 	 
	OMNICOM CAPITAL INC.
	 
	 
	By:	 
	 	Name:
	 	Title:
	 	 
	 	 
	DEUTSCHE BANK TRUST COMPANY AMERICAS, 

as Trustee
	 
	 
	By:	 
	 	Name:
	 	Title:
	 	 
	 	 
	By:	 
	 	Name:
	 	Title:

    	 

    	 	 

    

EXHIBIT A Debt Security

Form of Face of Security

[Title of Series]

UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS, IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN ARTICLE 2 OF THE SUPPLEMENTAL INDENTURE AND THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Insert any legend required by the Internal
Revenue Code and the regulations thereunder.]

[CUSIP] No. _____

$_______________

OMNICOM GROUP INC., a New York corporation
and OMNICOM CAPITAL INC., a Connecticut corporation (herein collectively referred to as the “Issuers,” which term includes
any successor person to any of them under the Indenture hereinafter referred to), for value received, hereby promises to pay to
__________, or registered assigns, the principal sum of __________ Dollars on __________, ____ [if the Security is to bear interest
prior to Maturity, insert - and to pay interest thereon from __________ or from the most recent interest payment date to which
interest has been paid] or duly provided for, [semi-annually on __________ and in each year] [If other than semi-annual payments,
insert frequency of payments and payment dates], commencing __________, at [If the Security is to bear interest at a fixed rate,
insert - the rate of _____% per annum, set forth below] [If the Security is to bear interest at a variable or floating rate and
if determined with reference to an index, refer to description of index below] until the principal hereof is paid or made available
for payment [If applicable, insert - and (to the extent that the payment of such interest shall be legally enforceable) at the
rate of ____% per annum on any overdue principal and premium and on any overdue installment of interest]. The interest so payable,
and punctually paid or duly provided for, on any interest payment date will, as provided in such Indenture, be paid to the person
in whose name this Security (or one or more predecessor securities) is registered at the close of business on the [regular] record
date for such interest, which shall be the __________ or __________ (whether or not a Business Day), as the case may

    	A-1

    	 	 

    

be, next preceding such interest payment
date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such [regular]
record date and may either be paid to the person in whose name this Security (or one or more predecessor securities) is registered
at the close of business on a [special] record date for the payment of such defaulted interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this Series not less than 10 days prior to such [special] record date, or be
paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities
of this Series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture).

[If the Securities are floating or adjustable
rate securities with respect to which the principal of or any premium or interest may be determined with reference to an index,
insert the text of the floating or adjustable rate provision.]

[If the Security is not to bear interest
prior to Maturity, insert - The principal of this Security shall not bear interest except in the case of a default in payment of
principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal of this Security shall
bear interest at the rate of ____% per annum (to the extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such default in payment to the date payment of such principal has been made or duly provided for.
Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of ____% per annum (to the extent that the payment of such interest shall be legally enforceable),
which shall accrue from the date of such demand for payment to the date payment of such interest has been made or duly provided
for, and such interest shall also be payable on demand.]

Payment of the principal of (and premium,
if any) and [if applicable, insert - any such] interest on this Security will be made at the office or agency of the Issuers maintained
for that purpose in __________, in accordance with the terms of the Indenture referred to or the reverse hereof in such coin or
currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Issuers payment of interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Security register).

Reference is hereby made to the further
provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect
as if set forth at this place.

This Security shall be deemed to be a
contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with and governed
by the laws of said state.

Unless the certificate of authentication
hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

    	A-2

    	 	 

    

IN WITNESS WHEREOF, the Issuers have
caused this instrument to be duly executed.

 

	Dated: 	OMNICOM GROUP INC.
	 	 
	 	By:	 
	 	 	 
	 	By:	 
	 	 	 
	 	OMNICOM CAPITAL INC.
	 	 
	 	By:	 
	 	 	 
	 	By:	 

 

    	A-3

    	 	 

    

Form of Trustee’s Certificate of
Authentication.

The Trustee’s certificate of authentication
shall be in substantially the following form:

This is one of the Securities of the
Series designated therein referred to in the within-mentioned Indenture.

 

	Deutsche Bank Trust Company Americas, as 
 Trustee
	 	 
	By:	 
	 	Authorized Signatory

    	A-4

    	 	 

    

Form of Reverse of Security.

OMNICOM GROUP INC.

OMNICOM CAPITAL INC.

[Title of Series]

This Security is one of a duly authorized
issue of securities of the Issuers, designated as their __________ due __________ (herein called the “Securities”),
issued and to be issued in one or more Series under an Indenture, dated as of __________ (herein called the “Indenture”),
between the Issuers and __________, as Trustee (herein called the “Trustee,” which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of the Issuers, the Trustee and the Holders of the Securities
and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate principal amount to $__________]. Capitalized terms used in this Security
and not defined herein have the meaning ascribed thereto in the Indenture.

__________, the Trustee under the Indenture
has been appointed by the Issuers as paying agent, registrar, [conversion agent] and [custodian] with regard to the Securities.

In case an Event of Default shall have
occurred and be continuing, the principal of and accrued interest on all Securities may be declared, and upon said declaration,
shall become due and payable, in the manner, with the effect and subject to the conditions provided for in the Indenture.

[If applicable, insert - The Securities
of this Series are subject to redemption upon not less than 30 days’ nor more than 60 days’ notice by mail, [if applicable,
insert - (1) on __________ in any year commencing with the year __________ and ending with the year __________ through operation
of the sinking fund for this series at a redemption price equal to 100% of the principal amount, and (2)] at any time [on or after
__________, _____], as a whole or in part, at the election of the Issuers, at the following redemption prices (expressed as percentages
of the principal amount): If redeemed [on or before __________, _____% and if redeemed] during the 12-month period beginning of
the years indicated,

	
        RedemptionYear
	
        Price
	
        Redemption
        Year
	
        Price

	 	 	 	 
	 	 	 	 
	 	 	 	 

 

and thereafter at a redemption price equal to __________
of the principal amount, together in the case of any such redemption [if applicable, insert - (whether through operation of the
sinking fund or otherwise)] with accrued interest to the redemption date, but interest installments whose stated Maturity is on
or prior to such redemption date will be payable to the Holders of such

    	A-5

    	 	 

    

Securities, or one or more predecessor securities, of record
at the close of business on the relevant record dates referred to on the face hereof, all as provided in the Indenture.]

[If applicable, insert - The Securities of this Series are
subject to redemption upon not less than 30 days’ nor more than 60 days’ notice by mail, (1) on __________ in any year
commencing with the year _____ and ending with the year _____ through operation of the sinking fund for this Series at the redemption
prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the
table below, and (2) at any time [on or after __________], as a whole or in part, at the election of the Issuers, at the redemption
prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set
forth in the table below: If redeemed during the 12-month period beginning __________ of the years indicated,

	
        Redemption
        Price

        For Redemption

        Through Operation of the

        Sinking Fund
	
        Redemption
        Price

        For Redemption

        Otherwise Than

        Through Operation Year
	
        Sinking
        Fund

	 	 	 
	 	 	 
	 	 	 

 

and thereafter at a redemption price equal to _____% of the
principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with
accrued interest to the redemption date, but interest installments whose Stated Maturity in on or prior to such redemption date
will be payable to the Holders of such Securities, or one or more predecessor securities, of record at the close of business on
the relevant record dates referred to on the face hereof, all as provided in the Indenture.]

[The sinking fund for this Series provides
for the redemption on __________ in each year beginning with the year __________ and ending with the year __________ of [not less
than $__________ (“mandatory sinking fund”) and not more than] $__________ aggregate principal amount of Securities
of this Series. Securities of this Series acquired or redeemed by the Issuers otherwise than through [mandatory] sinking fund payments
may be credited against subsequent [mandatory] sinking fund payments otherwise required to be made [in the inverse order in which
they become due).]

[If the Security is subject to redemption,
insert - In the event of redemption of this Security in part only, a new Security or Securities of this Series and of like tenor
for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]

The Indenture contains provisions that
permit the Issuers to elect either (1) to defease and be discharged from the entire indebtedness of this Security or (2) to be
released from their obligations under certain restrictive covenants and Events of Default with respect to this Security, in each
case upon payment in full of the Securities and compliance with certain conditions set forth in the Indenture.

    	A-6

    	 	 

    

[If the Security is convertible into
or exchangeable for common stock of the Company, insert appropriate provisions and specify the conversion features and the form
of conversion notice pursuant to the Form of Conversion Notice set forth herein.]

[If the Security is convertible into
or exchangeable for other securities or property, specify the conversion features and the form of conversion notice pursuant to
the Form of Conversion Notice set forth herein.]

[If the Security is not an Original Issue
Discount Security, insert - If an Event of Default with respect to Securities of this Series shall occur and be continuing, the
principal of the Securities of this Series may be declared due and payable in the manner and with the effect provided in the Indenture.]

[If the Security is an Original Issue-Discount
Security, insert - If an Event of Default with respect to Securities of this Series shall occur and be continuing, an amount of
principal of the Securities of this Series may be declared due and payable in the manner and with the effect provided in the Indenture.
Such amount shall be equal to - Insert formula for determining the amount. Upon payment (i) of the amount of principal so declared
due and payable and (ii) of interest on any overdue principal and overdue interest (in each case to the extent that the payment
of such interest shall be legally enforceable), all of the Issuers’ obligations in respect of the payment of the principal
of and interest, if any, on the Securities of this Series shall terminate.]

[If Security is subordinate Debt, insert
- The Issuers and each Holder of the Securities of this Series, by accepting such Securities, agree that the payment of the principal,
premium, if any, and interest on such Securities is subordinated, to the extent and in the manner provided in the applicable [supplemental
indenture][Officers’ Certificate] creating this Series, to the prior payment in full of all present and future Senior Debt,
as defined in the applicable [supplemental indenture][Officers’ Certificate] and that the subordination provisions in the
applicable [supplemental indenture][Officers’ Certificate] relating to this Series of Securities are for the benefit of the
holders of Senior Debt. Each Holder of a Security by his or her acceptance thereof authorizes and directs the Trustee in his or
her behalf to take such action as may be necessary or appropriate to effectuate the subordination provided for in the Indenture
and appoints the Trustee his or her attorney-in-fact for any and all such purposes.]

The Indenture permits the amendment thereof
and the modification of the rights and obligations of the Issuers and the rights of the Holders of the Securities of each Series
to be affected under the Indenture at any time by the Issuers and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time outstanding of each Series to be affected, with certain exceptions as therein provided
with respect to certain modifications or amendments which may not be made without the consent of each Holder of such Security affected
thereby. The Indenture also permits certain amendments and modifications thereto from time to time by the Issuers and the Trustee
without the consent of the Holders of any Series of the Securities to be affected thereby for certain specified purposes, including
curing ambiguities, defects or inconsistencies and making any such change that does not adversely affect the legal rights of any
Holder of such series of the Securities, as provided therein.

    	A-7

    	 	 

    

The Indenture contains provisions permitting
the Holders of specified percentages in principal amount of the Securities of each Series at the time outstanding, on behalf of
the Holders of all Securities of such Series, to waive compliance by the Issuers with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

No reference herein to the Indenture
and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuers, which is absolute and
unconditional, to pay the principal of and any premium and Interest on this Security at the times, place and [rate(s)], and in
the coin or currency, herein prescribed.

As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Security is registrable in the security register, upon surrender
of this Security for registration of transfer at the office or agency of the Issuers in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuers and the security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Securities of this Series and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

The Securities of this Series are issuable
only in registered form without coupons in denominations of $__________ and any integral multiple thereof. As provided in the Indenture
and subject to certain limitations therein set forth, Securities of this Series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering
the same.

No service charge shall be made for any
such registration of transfer or exchange, but the Issuers may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

Prior to due presentment of this Security
for registration of transfer, the Issuers, the Trustee and any agent of the Issuers or the Trustee may treat the person in whose
name this Security is registered as the owner hereof for all purposes, whether or not this Security is overdue, and neither the
Issuers, the Trustee nor any such agent shall be affected by notice to the contrary.

No recourse shall be had for the payment
of the principal of (and premium, if any) or interest on this Security, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder,
officer or director, as such, past, present or future, of the Issuers or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

    	A-8

    	 	 

    

All terms used in this Security which
are defined in the Indenture shall have the meanings assigned to them in the Indenture.

    	A-9

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