Execution Counterpart
Ex-10.25
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$60,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
SUNTERRA CORPORATION
(formerly known as Signature Resorts, Inc.)
CERTAIN LENDERS PARTY HERETO,
AND
BANK OF AMERICA, N.A., formerly NationsBank, N.A.,
AS ADMINISTRATIVE AGENT
DECEMBER 31, 1999
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TABLE OF CONTENTS
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Page
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ARTICLE 1 Definitions
Section 1.1 Defined Terms................................................... 1
Section 1.2 Amendments and Renewals......................................... 26
Section 1.3 Construction.................................................... 26
ARTICLE 2 Advances
Section 2.1 The Advances..................................................... 27
Section 2.2 Manner of Borrowing and Disbursement............................. 27
Section 2.3 Interest......................................................... 29
Section 2.4 Fees............................................................. 30
Section 2.5 Prepayments...................................................... 31
Section 2.6 Reduction of Commitment.......................................... 31
Section 2.7 Non-Receipt of Funds by the Administrative Agent................. 32
Section 2.8 Payment of Principal of Advances................................. 32
Section 2.9 Reimbursement.................................................... 32
Section 2.10 Manner of Payment................................................ 33
Section 2.11 LIBOR Lending Offices............................................ 33
Section 2.12 Sharing of Payments.............................................. 34
Section 2.13 Calculation of LIBOR............................................. 34
Section 2.14 Taxes............................................................ 35
Section 2.15 Letters of Credit................................................ 38
ARTICLE 3 Conditions Precedent
Section 3.1 Conditions Precedent to the Initial Advance and
the Initial Issuance of Letters of Credit...................... 43
Section 3.2 Conditions Precedent to All Advances, Letters of
Credit, Conversions and Continuations......................... 45
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ARTICLE 4 Representations and Warranties
Section 4.1 Representations and Warranties.................................. 47
Section 4.2 Survival of Representations and Warranties, etc................. 57
ARTICLE 5 General Covenants
Section 5.1 Preservation of Existence and Similar Matters................... 57
Section 5.2 Business; Compliance with Applicable Law........................ 57
Section 5.3 Maintenance of Properties....................................... 57
Section 5.4 Accounting Methods and Financial Records........................ 58
Section 5.5 Insurance....................................................... 58
Section 5.6 Payment of Taxes and Claims..................................... 58
Section 5.7 Visits and Inspections.......................................... 58
Section 5.8 Use of Proceeds................................................. 59
SECTION 5.9 INDEMNITY....................................................... 59
Section 5.10 Environmental Law Compliance.................................... 61
Section 5.11 Further Assurances.............................................. 62
Section 5.12 Management of Projects.......................................... 62
Section 5.13 Obligations to Purchasers....................................... 62
Section 5.14 Owners Associations............................................. 62
Section 5.15 Note Receivable Information..................................... 63
Section 5.16 Maintenance of Borrowing Base................................... 63
Section 5.17 Time-Share Interest Exchange Network............................ 64
Section 5.18 Maintenance of Projects Attributable to Leasehold Receivables... 64
ARTICLE 6 Information Covenants
Section 6.1 Borrowing Base Report........................................... 65
Section 6.2 Eligible Notes Receivable Report................................ 65
Section 6.3 Quarterly Financial Statements and Information.................. 65
Section 6.4 Annual Financial Statements and Information;
Certificate of No Default..................................... 65
Section 6.5 Compliance Certificate.......................................... 66
Section 6.6 Copies of Other Reports and Notices............................. 66
Section 6.7 Notice of Litigation, Default and Other Matters................. 67
Section 6.8 ERISA Reporting Requirements.................................... 68
ARTICLE 7 Negative Covenants
Section 7.1 Indebtedness.................................................... 69
Section 7.2 Liens........................................................... 69
Section 7.3 Investments..................................................... 69
Section 7.4 Liquidation, Merger............................................. 70
Section 7.5 Sales of Assets................................................. 71
Section 7.6 Acquisitions.................................................... 72
Section 7.7 Capital Expenditures............................................ 72
Section 7.8 Restricted Payments............................................. 72
Section 7.9 Affiliate Transactions.......................................... 72
Section 7.10 Compliance with ERISA........................................... 72
Section 7.11 Minimum Interest Coverage Ratio................................. 73
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Section 7.12 Minimum Adjusted Net Worth...................................... 73
Section 7.13 Maximum Senior Debt to Total Capital............................ 73
Section 7.14 Maximum Total Debt to Total Capital Ratio....................... 73
Section 7.15 Maximum Average Quarterly Charge-Off Rate....................... 73
Section 7.16 Maximum Average Quarterly Default Rate.......................... 73
Section 7.17 Maximum Average Quarterly Delinquency Rate...................... 73
Section 7.18 Sale and Leaseback.............................................. 74
Section 7.19 Business........................................................ 74
Section 7.20 Fiscal Year..................................................... 74
Section 7.21 Amendment of Organizational Documents........................... 74
Section 7.22 Amendments and Waivers of Subordinated Debt..................... 74
Section 7.23 Use of Lenders' Name............................................ 74
Section 7.24 Servicing and Collection Agreement.............................. 74
Section 7.25 Custodial Agreement............................................. 75
Section 7.26 Notes Receivable................................................ 75
ARTICLE 8 Default
Section 8.1 Events of Default............................................... 75
Section 8.2 Remedies........................................................ 78
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ARTICLE 9 Changes in Circumstances
Section 9.1 LIBOR Basis Determination Inadequate......................... 79
Section 9.2 Illegality................................................... 79
Section 9.3 Increased Costs.............................................. 80
Section 9.4 Effect On Reference Rate Advances............................ 81
Section 9.5 Capital Adequacy............................................. 81
Section 9.6 Replacement Lender........................................... 81
ARTICLE 10 Agreement Among Lenders
Section 10.1 Agreement Among Lenders...................................... 82
Section 10.2 Lender Credit Decision....................................... 84
Section 10.3 Benefits of Article.......................................... 85
ARTICLE 11 Miscellaneous
Section 11.1 Notices...................................................... 85
Section 11.2 Expenses..................................................... 85
Section 11.3 Waivers...................................................... 86
Section 11.4 Calculation by the Lenders Conclusive and Binding............ 86
Section 11.5 Set-Off...................................................... 86
Section 11.6 Assignment................................................... 87
Section 11.7 Counterparts................................................. 89
Section 11.8 Severability................................................. 89
Section 11.9 Interest and Charges......................................... 89
Section 11.10 Headings..................................................... 90
Section 11.11 Amendment and Waiver......................................... 90
Section 11.12 Exception to Covenants....................................... 90
Section 11.13 No Liability of Issuing Bank................................. 90
Section 11.14 Confidentiality.............................................. 91
Section 11.15 No Liability of Lenders to Purchasers........................ 91
Section 11.16 Amendment, Restatement, Extension and Renewal................ 91
SECTION 11.17 GOVERNING LAW................................................ 92
SECTION 11.18 WAIVER OF JURY TRIAL......................................... 92
SECTION 11.19 ENTIRE AGREEMENT............................................. 92
Schedules and Exhibits
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Schedule 1: LIBOR Lending Offices, Addresses for Notices
Schedule 2: Existing Liens
Schedule 3: Existing Litigation and Material Liabilities
Schedule 4: Subsidiaries
Schedule 5: Existing Investments
Schedule 6: Existing Indebtedness
Schedule 7: Qualification and Good Standing
Schedule 8: Intellectual Property and Disputes Relating Thereto
Schedule 9: Labor Relations
Exhibit A: Revolving Credit Note
Exhibit B: Security Agreement
Exhibit C: Borrowing Base Report
Exhibit D: Compliance Certificate
Exhibit E: Assignment Agreement
Exhibit F: Subsidiary Guaranty
Exhibit G: Request for Advance/Designation
Exhibit H: Assignment of Pledged Documents
Exhibit I: Form of Subordination Agreement
AMENDED AND RESTATED CREDIT AGREEMENT
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THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of December 31,
1999, among SUNTERRA CORPORATION (formerly known as Signature Resorts, Inc.), a
Maryland corporation (the "Borrower"), the Lenders from time to time party
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hereto, and BANK OF AMERICA, N.A., formerly NationsBank, N.A., a national
banking association, as Administrative Agent for the Lenders.
BACKGROUND
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The Lenders have been requested to provide the Borrower the funds required
to (a) refinance certain existing and future debt of the Borrower and its
Subsidiaries (as hereinafter defined), including, inter alia, the indebtedness
of the Borrower and its Subsidiaries outstanding to the Administrative Agent,
certain of the Lenders and certain other lenders pursuant to the terms of that
certain Credit Agreement, dated as of February 18, 1998, as amended, modified,
supplemented and restated from time to time (the "Existing Credit Agreement"),
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(b) finance acquisitions permitted hereunder, (c) finance eligible mortgage
loans, and (d) finance the ongoing working capital and general corporate
requirements of the Borrower and its Subsidiaries. The Lenders have agreed to
provide such financing, subject to the terms and conditions set forth below.
In consideration of the mutual covenants and agreements contained herein,
and other good and valuable consideration hereby acknowledged, the parties
hereto agree as follows:
ARTICLE 1
Definitions
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Section 1.1 Defined Terms. For purposes of this Agreement:
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"Acquisition" means any transaction pursuant to which the Borrower or any
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of its Subsidiaries, (a) whether by means of a capital contribution or purchase
or other acquisition of Capital Stock, (i) acquires more than 50% of the Capital
Stock in any Person pursuant to a solicitation by the Borrower or such
Subsidiary of tenders of Capital Stock of such Person, or through one or more
negotiated block, market, private or other transactions, or a combination of any
of the foregoing, or (ii) makes any corporation a Subsidiary of the Borrower or
such Subsidiary, or causes any corporation, other than a Subsidiary of the
Borrower or such Subsidiary, to be merged into the Borrower or such Subsidiary
(or agrees to be merged into any other corporation other than a wholly-owned
Subsidiary (excluding directors' qualifying shares) of the Borrower or such
Subsidiary), or (b) purchases all or substantially all of the business or assets
of any Person or of any operating division of any Person.
"Adjusted Net Worth" means the sum of the following for the Borrower and
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the Subsidiaries of the Borrower, on a consolidated basis, determined in
accordance with GAAP, (a) Net Worth
minus (b) any write-up in the book value of assets resulting from revaluation
thereof subsequent to December 31, 1998.
"Administrative Agent" means Bank of America, N.A., formerly NationsBank,
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N.A., a national banking association, as administrative agent for the Lenders,
or such successor administrative agent appointed pursuant to Section 10.1(b)
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hereof.
"Advance" means a Revolving Credit Advance and "Advances" means Revolving
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Credit Advances.
"Affiliate" means, as applied to any Person, any other Person that,
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directly or indirectly, through one or more Persons, Controls or is Controlled
By or Under Common Control with, that Person.
"Aggregated Notes Receivable" means, collectively, all notes receivable
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generated by the Borrower and/or any of the Subsidiaries of the Borrower,
regardless of whether the Borrower or any Subsidiary of the Borrower owns such
note receivable, or any interest therein, as of the relevant date (but excluding
any such note(s) receivable that are not owned, in whole or in part, by the
Borrower or any Subsidiary of the Borrower and as to which neither the Borrower
nor any Subsidiary of the Borrower has access to the information necessary to
make the relevant calculations provided for herein).
"Agreement" means this Amended and Restated Credit Agreement, as amended,
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modified, supplemented or restated from time to time.
"Agreement Date" means the date of this Agreement.
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"Applicable Environmental Laws" means applicable laws pertaining to health
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or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 (as amended from time
to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as
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amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act
amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as
amended from time to time, "RCRA").
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"Applicable Law" means (a) in respect of any Person, all provisions of
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constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person and its properties, including,
without limiting the foregoing, all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a
party, and (b) in respect of contracts relating to interest or finance charges
that are made or performed in the State of California, "Applicable Law" shall
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mean the laws of the United States of America, including without limitation 12
USC (S)(S) 85 and 86(a), as amended from time to time, and any other statute of
the United States of America now or at any time hereafter prescribing the
maximum rates of interest on loans and extensions of credit, and the laws of the
State of California.
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"Applicable LIBOR Margin" means the following per annum percentages,
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applicable in the following situations:
Period of Applicability Percentage
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(a) Agreement Date until, but not including, December
31, 1999 2.00%
(b) December 31, 1999 and thereafter
(1) If the Total Debt to Total Capital Ratio is less 1.50%
than or equal to 0.50 to 1
(2) If the Total Debt to Total Capital Ratio is 1.75%
greater than 0.50 to 1 but less than or equal to
0.65 to 1
(3) If the Total Debt to Total Capital Ratio is 2.00%
greater than 0.65 to 1
The Applicable LIBOR Margin payable by the Borrower on the LIBOR Advances
outstanding hereunder shall be subject to reduction or increase, as applicable
and as set forth in the table above, on a quarterly basis according to the
performance of the Borrower as tested by using the Total Debt to Total Capital
Ratio calculated as of the end of each fiscal quarter ending on or after
December 31, 1999. Each adjustment in the LIBOR Basis shall (i) be determined by
the Administrative Agent in a timely manner based upon the financial statements
required to be delivered pursuant to Section 6.3 or 6.4 hereof, as applicable,
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for each such fiscal quarter, and the corresponding Compliance Certificate
required pursuant to Section 6.5 hereof; provided, however, that if such
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financial statements and Compliance Certificate are not received by the
Administrative Agent by the date required, the Applicable LIBOR Margin shall be
determined as if the Total Debt to Total Capital Ratio is greater than 0.65 to 1
until one Business Day after such financial statements and Compliance
Certificate are received (at which time the LIBOR Basis shall be adjusted,
effective prospectively as of such date, to reflect any decrease in the
Applicable LIBOR Margin, pursuant to the foregoing table, based upon such
financial statements and Compliance Certificate), and (ii) except as set forth
in clause (i) above with respect to the recalculation of the LIBOR Basis, on a
prospective basis following the delinquent receipt of financial statements and
Compliance Certificates, as to all LIBOR Advances, be effective retroactively as
of the last calendar day of the fiscal quarter covered by such financial
statements.
"Assignees" means any assignee of a Lender pursuant to an Assignment
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Agreement and shall have the meaning ascribed thereto in Section 11.6 hereof.
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"Assignment Agreement" has the meaning specified in Section 11.6 hereof.
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"Assignment of Pledged Documents" means an Assignment of Pledged Documents,
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in substantially the form of Exhibit H hereto, pursuant to which the Borrower
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and each Restricted Subsidiary transfers and assigns to the Administrative Agent
(for the benefit of the Lenders), all of the right, title and interest of the
Borrower and each Restricted Subsidiary in and to each Note Receivable and the
other Pledged Documents with respect to each such Note Receivable, free and
clear of all Liens, as security for the Obligations.
"Authorized Signatory" means such senior personnel of the Borrower as may
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be duly authorized and designated in writing by the Borrower to execute
documents, agreements and instruments on behalf of the Borrower, and to request
Advances and Letters of Credit hereunder.
"Average Quarterly Charge-Off Rate" means the ratio (expressed as a
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percentage), calculated as of the last day of each calendar quarter, of (i) the
aggregate outstanding principal balance of the Aggregated Notes Receivable that
have been charged-off during the twelve consecutive calendar months ending on
the effective date of calculation (net of any recoveries with respect thereto
during such period), to (ii) the average monthly aggregate outstanding principal
balance of all of the Aggregated Notes Receivable during the twelve consecutive
calendar months ending on the effective date of such calculation (determined by
averaging the aggregate outstanding principal balances of all of the Aggregated
Notes Receivable as of the beginning and as of the end of each such calendar
month during such period and then averaging such average monthly aggregate
outstanding principal balances for the twelve calendar months included in such
period).
"Average Quarterly Default Rate" means the ratio (expressed as a
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percentage), calculated on a quarterly basis as of the last day of each calendar
quarter with respect to the calendar quarter ending on the date of calculation,
of (i) the aggregate outstanding principal balance, as of the effective date of
such calculation, of the Aggregated Notes Receivable with respect to which any
scheduled payment is 180 or more days past due, to (ii) the aggregate
outstanding principal balance of all of the Aggregated Notes Receivable as of
the effective date of such calculation.
"Average Quarterly Delinquency Rate" means the ratio (expressed as a
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percentage), calculated on a quarterly basis as of the last day of each calendar
quarter with respect to the calendar quarter ending on the date of calculation,
of (i) the aggregate outstanding principal balance, as of the effective date of
such calculation, of the Aggregated Notes Receivable with respect to which any
scheduled payment is more than sixty (60) days past due but less than 180 days
past due, to (ii) the aggregate outstanding principal balance of all of the
Aggregated Notes Receivable as of the effective date of such calculation.
"Bank of America" means Bank of America, N.A., formerly NationsBank, N.A.,
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a national banking association, in its capacity as a Lender hereunder, but not
in its capacity as Administrative Agent hereunder.
"Borrower" has the meaning specified in the introductory provision hereof.
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"Borrowing Base" means, the following amounts (determined in each case as
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of the date of the applicable Borrowing Base calculation), during the following
periods of time and under the following circumstances:
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(a) during the period of time from the Agreement Date through, and
including, May 31, 2000, the Borrowing Base shall be an amount equal to the sum
of the following, without duplication: (i) 85% of the aggregate unpaid principal
balance of Premier Receivables, plus (ii) 75% of the aggregate unpaid principal
balance of Standard Receivables, plus (iii) 65% of the aggregate unpaid
principal balance of Non-Standard Receivables, plus (iv) 65% of the aggregate
unpaid principal balance of Right-To-Use Receivables, plus (v) 65% of the
aggregate unpaid principal balance of Leasehold Receivables; and
(b) after May 31, 2000, the Borrowing Base shall be an amount equal to the
sum of the following, without duplication: (i) 85% of the aggregate unpaid
principal balance of Premier Receivables, plus (ii) 75% of the aggregate unpaid
principal balance of Standard Receivables, plus (iii) 65% of the aggregate
unpaid principal balance of Non-Standard Receivables.
Notwithstanding the foregoing, (i) no more than ten percent (10%) of the
Borrowing Base shall be attributable, at any time, to Right-To-Use Receivables
and Leasehold Receivables, collectively, (ii) no more than fifty percent (50%)
of the Borrowing Base shall be attributable, at any time, to Non-Standard
Receivables, (iii) no more than twenty percent (20%) of the Borrowing Base shall
be attributable, at any time, to Eligible Notes Receivable as to which the
Purchasers are not residents of the United States, Puerto Rico, the United
States Virgin Islands or Canada, (iv) no more than fifteen percent (15%) of the
Borrowing Base shall be attributable, at any time, to Eligible Notes Receivable
having a term of greater than 121 months, (v) no Non-Standard Receivable shall
be included in the calculation of the Borrowing Base to the extent that such
Non-Standard Receivable (x) was originally executed by the applicable Purchaser,
or otherwise arose or was created, prior to June 1, 1999 and (y) was previously
included in the calculation of the Borrowing Base at any time more than one year
prior to the date of calculation of the then-current Borrowing Base, and (vi)
no Non-Standard Receivable shall be included in the calculation of the Borrowing
Base to the extent that (x) such Non-Standard Receivable was originally executed
by the applicable Purchaser, or otherwise arose or was created, on or after June
1, 1999 and (y) more than nine months has elapsed since the date that such Non-
Standard Receivable was originally executed by the applicable Purchaser, or such
Non-Standard Receivable otherwise arose or was created.
"Borrowing Base Report" means a report, signed by an Authorized Signatory,
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in substantially the form of Exhibit C, appropriately completed.
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"Business Day" means a day on which commercial banks are open (a) for the
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transaction of business in Los Angeles, California and in Charlotte, North
Carolina, and, (b) with respect to any LIBOR Advance, for the transaction of
international business (including dealings in U.S. dollar deposits) in London,
England.
"Capital Expenditures" means, for any period, expenditures made by the
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Borrower and the Subsidiaries of the Borrower to acquire or construct fixed
assets, plant and equipment (including renewals, improvements and replacements
during such period and the aggregate amount of items leased or acquired under
Capitalized Lease Obligations at the cost of the item, but excluding capital
expenditures made with insurance proceeds to the extent used to replace or
repair damaged fixed assets, plant and equipment) computed in accordance with
GAAP, consistently applied, provided
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however, that the term "Capital Expenditures" shall not include (i) Investments
permitted hereunder, (ii) Acquisitions permitted hereunder, (iii) expenditures
made by the Borrower or the Subsidiaries of the Borrower to acquire or construct
time-share residential real estate projects that are acquired or constructed for
the purpose of creating, maintaining or enhancing the Borrower's inventory of
Time-Share Interests, or (iv) expenditures of up to $20,000,000, made by the
Borrower to acquire or construct the Borrower's planned new corporate
headquarters in Orlando, Florida.
"Capital Stock" means, as to any Person, the equity interests in such
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Person, including, without limitation, the shares of each class of capital stock
in any Person that is a corporation, and each class of partnership interest
(including, without limitation, general, limited and preference units) in any
Person that is a partnership.
"Capitalized Lease Obligations" means that portion of any obligation of the
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Borrower or any Subsidiary of the Borrower as lessee under a lease which at the
time are recorded as capitalized lease obligations on the balance sheet of the
Borrower or such Subsidiary of the Borrower prepared in accordance with GAAP.
"Cash and Cash Equivalents" means with respect to the Borrower and each
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Subsidiary of the Borrower (a) cash (which, after the occurrence of an Event of
Default, shall exclude any cash proceeds of Accounts), (b) securities issued or
directly and fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof having maturities of not more than six months
from the date of acquisition, (c) certificates of deposit and Eurodollar time
deposits with maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any Lender or with any domestic commercial bank
having capital and surplus in excess of $500,000,000, (d) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (b) and (c) entered into with any financial institution
meeting the qualifications specified in clause (c) above, (e) commercial paper
issued by any Lender or the parent corporation of any Lender, and commercial
paper rated A-1 or the equivalent thereof by Standard & Poor's Ratings Group, a
Division of XxXxxx-Xxxx, Inc., a New York corporation, or P-1 or the equivalent
thereof by Xxxxx'x Investors Service, Inc., and in each case maturing within six
months after the date of acquisition, and (f) a readily redeemable "money market
mutual fund" advised by a bank described in clause (c) hereof, or an investment
advisor registered under Section 203 of the Investment Advisors Act of 1940,
that has and maintains an investment policy limiting its investments primarily
to instruments of the types described in clauses (a) through (e) hereof and
having on the date of such Investment total assets of at least One Hundred
Million Dollars ($100,000,000.00).
"Change of Control" means the occurrence of any of the following events
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after the Agreement Date: (a) any Person or any Persons acting together which
would constitute a "group" (a "Group") for purposes of Section 13(d) of the
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Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
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successor provision thereto, other than the Group whose nominees constituted a
majority of the board of directors of the Borrower as of the close of business
on the Agreement Date, together with any Affiliates or Related Persons thereof,
shall beneficially own (as defined in Rule 13d-3 of the Securities and Exchange
Commission under the Exchange Act or any successor provision thereto) at least
30% of the aggregate voting power of all classes of Capital
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Stock of the Borrower entitled to vote generally in the election of directors of
the Borrower; (b) any Person or Group, other than any Person or Group whose
nominees constituted a majority of the board of directors of the Borrower as of
the close of business on the Agreement Date, together with any Affiliates or
Related Persons thereof, shall succeed in having sufficient of its or their
nominees elected to the Board of Directors of the Borrower, such that such
nominees, when added to any existing director remaining on the Board of
Directors of the Borrower after such election who is an Affiliate or Related
Person of such Group, shall constitute a majority of the Board of Directors of
the Borrower; or (c) any "change of control" or "change in control" or similar
term howsoever defined in any agreement governing any other Indebtedness of the
Borrower or any of its Subsidiaries.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Collateral" means any collateral granted at any time by any Person to the
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Administrative Agent for the benefit of the Lenders to secure the Obligations.
"Collateral Document" means any document under which Collateral is granted
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and any document related thereto.
"Commitment" means $60,000,000, as reduced from time to time pursuant to
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Section 2.6 hereof.
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"Compliance Certificate" means a certificate, signed by an Authorized
----------------------
Signatory, in substantially the form of Exhibit D, appropriately completed.
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"Control" or "Controlled By" or "Under Common Control" means possession,
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directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of voting securities, by contract or
otherwise); provided, however, that in any event any Person which beneficially
owns, directly or indirectly, 10% or more (in number of votes) of the securities
having ordinary voting power for the election of directors of a corporation
shall be conclusively presumed to control such corporation.
"Controlled Group" means as of the applicable date, as to any Person not an
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individual, all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) which are under common control with
such Person and which, together with such Person, are treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code; provided, however,
that the Subsidiaries of the Borrower shall be deemed to be members of the
Borrower's Controlled Group.
"Custodial Agreement" means collectively, one or more agency and custodial
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agreement(s) among the Borrower, each Restricted Subsidiary that owns any of the
Notes Receivable included, from time to time, in the Borrowing Base, the
Administrative Agent and the Custodian(s), providing for the maintenance of the
Pledged Documents, as such agreement(s) may, from time to time, be amended,
modified, supplemented and/or restated with the written consent of the
Administrative Agent.
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"Custodian" means LaSalle National Bank and/or such other or additional
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Person(s) as may be designated from time to time by the Administrative Agent,
following notice thereof to the Borrower, to maintain physical possession of the
Pledged Documents, or any portion(s) thereof.
"Debtor Relief Laws" means any applicable liquidation, conservatorship,
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bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar
debtor relief Laws affecting the rights of creditors generally from time to time
in effect.
"Deed of Trust" means any deed of trust or mortgage executed and delivered
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by a Purchaser, encumbering all the right, title and interest of each such
Purchaser in and to its purchased Time-Share Interest as security for the
Purchaser's obligations under any Note Receivable.
"Default" means an Event of Default and/or any of the events specified in
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Section 8.1, regardless of whether there shall have occurred any passage of time
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or giving of notice that would be necessary in order to constitute such event an
Event of Default.
"Default Rate" means a simple per annum interest rate equal to (a) with
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respect to Reference Rate Advances the lesser of (i) the Highest Lawful Rate or
(ii) the Reference Rate plus 3.00% or (b) with respect to LIBOR Advances, the
lesser of (i) the Highest Lawful Rate or (ii) the LIBOR Basis plus 3.00%.
"Determining Lenders" means, on any date of determination, any combination
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of the Lenders having more than 50% of the aggregate amount of the Advances then
outstanding; provided, however, that if there are no Advances outstanding
hereunder, "Determining Lenders" shall mean any combination of Lenders whose
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Specified Percentages aggregate more than 50%.
"Dividend" means, as to any Person, (a) any declaration or payment of any
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dividend (other than a stock dividend) on, or the making of any distribution on
account of, any shares of Capital Stock of, or other similar interest in, such
Person and (b) any purchase, redemption, or other acquisition or retirement for
value of any shares of Capital Stock of, or similar interest in, such Person.
"Dollar" or "$" means the lawful currency of the United States of America.
------ -
"Domestic Subsidiary" means any Subsidiary of the Borrower other than a
-------------------
Foreign Subsidiary.
"EBIT" means, for any period, determined in accordance with GAAP on a
----
consolidated basis for the Borrower and the Subsidiaries of the Borrower, the
sum of (a) Pretax Net Income (excluding therefrom, to the extent included in
determining Pretax Net Income, any items of extraordinary gain, including net
gains on the sale of assets other than asset sales in the ordinary course of
business, and adding thereto, to the extent included in determining Pretax Net
Income, any items of extraordinary loss, including net losses on the sale of
assets; provided, however, that, for purposes hereof, gains or losses from the
sale of notes receivable shall not be considered to be extraordinary), plus
-8-
(b) interest expense, plus (c) capitalized interest included in costs of goods
sold, plus (d) non-recurring charges incurred as a result of business
combinations utilizing the pooling accounting method to the extent that such
charges would be permitted to be capitalized utilizing the purchase accounting
method.
"EBITDA" means, for any period, determined in accordance with GAAP on a
------
consolidated basis for the Borrower and its Subsidiaries, the sum of (a) EBIT
plus (b) depreciation, amortization and other non-cash charges (to the extent
included in determining EBIT).
"Eligible Notes Receivable" means at the time of any determination thereof,
-------------------------
the Notes Receivable of the Borrower and the Restricted Subsidiaries which are
reasonably acceptable to the Determining Lenders in their discretion for the
purposes of determining the Borrowing Base and as to which the following
requirements have been fulfilled with respect to each Note Receivable:
(a) The Borrower or a Restricted Subsidiary has lawful and absolute title
to such Note Receivable;
(b) The interests of the Borrower or the applicable Restricted
Subsidiary(ies) in such Note Receivable are subject to a first priority security
interest in favor of the Administrative Agent pursuant to the Collateral
Documents, prior to the rights of, and enforceable against, all other Persons,
the original, executed counterpart of such Note Receivable has been delivered to
the applicable Custodian with respect thereto and the applicable Custodian with
respect thereto has delivered to the Administrative Agent a trust receipt, or
other written document, in form and substance acceptable to the Administrative
Agent, evidencing the possession by the Custodian, for the benefit of the
Administrative Agent, of such Note Receivable and the delivery or satisfaction
of all other applicable documentation and other requirements set forth with
respect to such Note Receivable in the Custodial Agreement applicable thereto;
(c) The Note Receivable shall not have a term of greater than one-hundred
eighty one (181) months and the Note Receivable shall be payable in equal
monthly payments in amounts sufficient to repay in full the principal balance
thereof and accrued interest thereon during such term;
(d) The Purchaser in respect of such Note Receivable has made a cash down
payment of at least ten percent (10%) of the aggregate actual purchase price of
all Time-Share Interests purchased by such Purchaser (provided, however, that
with respect to any Note Receivable attributable to an upgrade of a Time-Share
Interest on the part of the applicable Purchaser, such minimum cash down payment
may consist, in whole or in part, of cash payments theretofore made by such
Purchaser on the prior Note Receivable(s) of such Purchaser that are being
replaced thereby), and no part of such cash down payment by such Purchaser has
been made or loaned to the Purchaser by the Borrower or any of its Subsidiaries
or an Affiliate of the Borrower or any of its Subsidiaries;
(e) No installment of such Note Receivable is more than sixty (60) days
past due;
-9-
(f) The Unit in respect of such Note Receivable has been completed,
developed, and furnished pursuant to the specifications provided in the Purchase
Documents, or a certificate of occupancy has been issued with respect thereto by
the applicable Tribunal, or, if no certificate of occupancy is required under
Applicable Law for the occupancy of such Unit, such Unit has been completed and
is available for occupancy in accordance with the requirements of Applicable Law
at the time of the execution of the applicable Purchase Documents with respect
to such Note Receivable;
(g) The Purchaser in respect of such Note Receivable is not an Affiliate
of, related to or employed by, the Borrower or any of its Subsidiaries nor is
the Purchaser in default under any Note Receivable or other obligation of such
Purchaser to the Borrower or to any of the Borrower's Subsidiaries nor is the
Purchaser directly or indirectly involved in any Litigation in which the
interests of such Purchaser are adverse, or are potentially adverse, to the
interests of the Borrower or any of the Borrower's Subsidiaries or the interests
or rights hereunder of the Administrative Agent and/or any of the Lenders;
(h) The Note Receivable is free and clear of all Liens, and subject to no
claims of rescission, invalidity, unenforceability, illegality, defense,
discount, offset or counterclaim;
(i) The Purchaser in respect of such Note Receivable has no right to
rescind the purchase of the Time-Share Interest and such purchase is otherwise
currently effective pursuant to the terms of the applicable Purchase Documents
and otherwise under applicable law;
(j) All sales and financing documents relating to such Note Receivable have
been executed by the Purchaser and any and all other necessary or appropriate
party(ies) and have not been modified from the standard forms of such documents
theretofore approved by legal counsel for the Borrower or the applicable
Restricted Subsidiary in the jurisdiction in which the applicable Unit is
located;
(k) The terms of such Note Receivable and all related instruments comply
with all Laws;
(l) The Time-Share Interest purchased and to which the Note Receivable
relates is not subject to any Lien (other than Liens for ad valorem taxes that
are not yet due and payable, Liens for association assessments that are not yet
due and payable and Liens in favor of the Administrative Agent), and either (i)
the Unit with respect to the Time-Share Interest purchased and to which such
Note Receivable relates is not subject to any Lien (other than Liens for ad
valorem taxes that are not yet due and payable, Liens for association
assessments that are not yet due and payable and Liens in favor of the
Administrative Agent) or (ii) the Time-Share Interest purchased and to which the
Note Receivable relates has been permanently and irrevocably released from any
such Lien (including, without limitation, any after-acquired property provisions
thereof) with respect to such Unit;
(m) Payments under the Note Receivable are to be in legal tender of the
United States;
-10-
(n) The Note Receivable and the other Purchase Documents are valid, genuine
and enforceable against the Purchaser;
(o) The Purchaser in respect of the Note Receivable has not assigned his or
her obligations under such Note Receivable or rights in the applicable Time-
Share Interest, except to the extent that any such Purchaser has assigned its
interest in a Time-Share Interest to such Purchaser's former spouse in
connection with divorce proceedings between such Purchaser and such former
spouse or to a member of such Purchaser's immediate family and, in either case,
such Purchaser remains primarily liable with respect to such Note Receivable;
(p) The payments due under such Note Receivable have been made by the
Purchaser in respect thereof and not by the Borrower or any of its Subsidiaries
or any Affiliate of the Borrower or any of its Subsidiaries on such Purchaser's
behalf;
(q) The Purchaser in respect of such Note Receivable is not subject to any
Debtor Relief Laws and is not an adverse party in any Litigation (and has not
threatened any Litigation) with the Borrower or any of its Subsidiaries or any
Lender; and
(r) The Borrower or the applicable Restricted Subsidiary, as applicable,
has performed all of its obligations to the Purchaser in respect of such Note
Receivable, and there shall be no executory obligations to such Purchaser to be
performed by the Borrower or the applicable Restricted Subsidiary.
"Equity" means shares of capital stock or partnership, profits, capital or
------
member interest, or options, warrants or any other right to subscribe for or
otherwise acquire capital stock or a partnership, profits, capital or member
interest, of the Borrower or any Subsidiary of the Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and any regulation promulgated thereunder.
"ERISA Event" means, with respect to the Borrower and its Subsidiaries, (a)
-----------
a Reportable Event (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC pursuant to regulations issued under Section 4043
of ERISA), (b) the withdrawal of any such Person or any member of its Controlled
Group from a Plan subject to Title IV of ERISA during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate under Section 4041(c) of ERISA, (d)
the institution of proceedings to terminate a Plan by the PBGC, (e) the failure
to make required contributions which could result in the imposition of a lien
under Section 412 of the Code or Section 302 of ERISA, or (f) any other event or
condition which might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan or the imposition of any liability under Title IV of ERISA
other than PBGC premiums due but not delinquent under Section 4007 of ERISA.
"Event of Default" means any of the events specified in Section 8.1,
---------------- -----------
provided that any requirement for notice or lapse of time has been satisfied.
-11-
"Existing Credit Agreement" has the meaning specified in the Background
-------------------------
provision hereof.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
------------------
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of Los Angeles, California on the
Business Day next succeeding such day, provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average of the quotations for the day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Fee Letter" has the meaning specified in Section 2.4(b) hereof.
---------- --------------
"Foreign Subsidiary" means any Subsidiary of the Borrower which is not
------------------
organized under the laws of any state of the United States of America, the
District of Columbia or the United States Virgin Islands.
"GAAP" means generally accepted accounting principles applied on a
----
consistent basis, set forth in the Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants, or their successors
which are applicable in the circumstances as of the date in question. The
requirement that such principles be applied on a consistent basis shall mean
that the accounting principles applied in a current period are comparable in all
material respects to those applied in a preceding period.
"Guarantor" means each direct and indirect Restricted Domestic Subsidiary
---------
of the Borrower and each direct and indirect Restricted Foreign Subsidiary of
the Borrower which has executed a Subsidiary Guaranty.
"Guaranty" or "Guaranteed", means (a) as applied to an obligation of
-------- ----------
another Person, (i) a guaranty, direct or indirect, in any manner, of any part
or all of such obligation, and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of nonperformance) of any
part or all of such obligation, including, without limiting the foregoing, any
reimbursement obligations with respect to amounts which may be drawn by
beneficiaries of outstanding letters of credit and (b) an agreement, direct or
indirect, contingent or otherwise, to maintain the net worth, working capital,
earnings or other financial performance of another Person; provided, however,
Guaranty does not mean (y) the endorsement of instruments for collection or
deposit in the ordinary course of business and (z) customary indemnities given
in connection with asset sales in the ordinary course of business.
"Hedge Agreements" means any and all agreements, devices or arrangements
----------------
designed to protect at least one of the parties thereto from the fluctuations of
interest rates, exchange rates or forward rates applicable to such party's
assets, liabilities or exchange transactions, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency
-12-
exchange agreements, interest rate cap, swap or collar protection agreements,
and forward rate currency or interest rate options, as the same may be amended
or modified and in effect from time to time, and any and all cancellations, buy
backs, reversals, terminations or assignments of any of the foregoing.
"Highest Lawful Amount" means at the particular time in question the
---------------------
maximum amount of interest which, under Applicable Law, the Lenders are then
permitted to charge on the Obligations at the Highest Lawful Rate.
"Highest Lawful Rate" means at the particular time in question the maximum
-------------------
rate of interest which, under Applicable Law, the Lenders are then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, the Lenders are permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower.
"Indebtedness" means, with respect to any Person, without duplication, (a)
------------
all obligations for borrowed money, (b) all obligations evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations under conditional
sale or other title retention agreements relating to property or assets
purchased by such Person, (d) all obligations issued or assumed as the deferred
purchase price of property or services, (e) all obligations secured by any Lien
on any property or asset owned by such Person (other than accounts payable
arising in the ordinary course of business), whether or not the obligation
secured thereby shall have been assumed (provided that, unless such obligations
shall have been assumed, for purposes of this definition the amount of such
Indebtedness at any time shall be deemed to equal the fair market value of such
property or asset at such time), (f) the principal portion of all obligations of
such Person under any synthetic lease, tax retention operating lease, off-
balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an Operating Lease in accordance with GAAP, (g) to the extent not
otherwise included, all Capitalized Lease Obligations of such Person, all
obligations of any general partnership, joint venture or other Person to the
extent that the Person in question is liable, whether contractually, as a matter
of applicable law or otherwise, for such obligations, all obligations in respect
of letters of credit, bankers' acceptances and similar instruments, all
obligations under Hedge Agreements, and all obligations in respect of payment,
performance and similar bonds, (h) the Net Exposure Under Securitizations, (i)
an amount equal to eight times the annual rental payment(s) under, or in
connection with, any Operating Lease entered into as part of, or in connection
with, any sale and leaseback transaction and (j) any Guaranty of such Person of
any obligation of another Person constituting obligations of a type set forth
above.
"Indemnified Matters" has the meaning specified in Section 5.9(a) hereof.
------------------- --------------
"Indemnitees" has the meaning specified in Section 5.9(a) hereof.
----------- --------------
"Interest Coverage Ratio" means the ratio of EBITDA to Interest Expense,
-----------------------
calculated for the four consecutive fiscal quarters ending on the date of
calculation.
-13-
"Interest Differential" means an amount, if any, as of the date of any
---------------------
prepayment of a LIBOR Advance by which (a) the amount of interest that would
have accrued on such LIBOR Advance for the remainder of the applicable Interest
Period exceeds (b) the amount of interest that would have accrued on such LIBOR
Advance for the period from the date of prepayment of such LIBOR Advance to the
last day of the applicable Interest Period for such LIBOR Advance if the LIBOR
applicable to such LIBOR Advance (the "Applicable Rate") were determined two (2)
---------------
Business Days prior to the date of prepayment of such LIBOR Advance. The period
commencing on the date of such prepayment and ending on the last day of the
applicable Interest Period shall be deemed to be the "Interest Period" for
determination of such Applicable Rate. The calculation of the Interest
Differential by the Administrative Agent shall be conclusive in the absence of
manifest or demonstrable error.
"Interest Expense" means, collectively but without duplication, for any
----------------
period, determined in accordance with GAAP on a consolidated basis for the
Borrower and the Subsidiaries of the Borrower, (i) interest expense, as
presented on the Borrower's and its Subsidiaries' income statement, including
accrued but unpaid interest and interest expense pursuant to Capitalized Lease
Obligations, plus (ii) capitalized interest to the extent that such capitalized
interest reduces interest expense as presented on the Borrower's and its
Subsidiaries' income statement.
"Interest Period" means the period beginning on the day any LIBOR Advance
---------------
is made and ending one, two, three or six months thereafter (as the Borrower
shall select); provided, however, that all of the foregoing provisions are
-------- -------
subject to the following:
(a) if any Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless, with respect to a LIBOR Advance, the result of such
extension would be to extend such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately preceding
Business Day;
(b) any Interest Period with respect to a LIBOR Advance 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
(c) the Borrower may not select any Interest Period which ends after the
Maturity Date.
"Investment" means any acquisition of all or substantially all assets of
----------
any Person, or any direct or indirect purchase or other acquisition of, or
beneficial interest in, capital stock or other securities of any other Person,
or any direct or indirect loan, advance (other than loans or advances to
employees for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution to, or
investment in any other Person, including without limitation the purchase of
accounts receivable of any other Person.
"Issuing Bank" means Bank of America, N.A., formerly NationsBank, N.A., a
------------
national banking association, in its capacity as issuer of the Letters of
Credit.
-14-
"L/C Cash Collateral Account" has the meaning specified in Section 2.15(g)
--------------------------- ---------------
hereof.
"L/C Related Documents" has the meaning specified in Section 2.15(e)
--------------------- ---------------
hereof.
"Law" means any statute, law, ordinance, regulation, rule, order, writ,
---
injunction, or decree of any Tribunal.
"Leasehold Receivables" means at the time of any determination thereof, the
---------------------
Eligible Notes Receivable of AKGI-St. Maarten N.V. which are reasonably
acceptable to the Determining Lenders in their discretion for the purposes of
determining the Borrowing Base and as to which the following requirements have
been fulfilled with respect to each such Eligible Note Receivable:
(a) The Eligible Note Receivable is evidenced by a promissory note payable
to AKGI-St. Maarten N.V., the transaction from which such Eligible Note
Receivable arose is recognized on the books of AKGI-St. Maarten N.V. as a bona
fide lease that entitles the Purchaser thereunder to the utilization of a Unit
or Units for intermittent periods of time on a recurring basis, such lease
transaction is evidenced by Purchase Documents and the Eligible Note Receivable
is secured by a first priority security interest covering the property, rights
and interests of the Purchaser under such lease and the other Purchase Documents
in connection therewith. For purposes of this definition, the reference to a
"security interest" securing an Eligible Note Receivable shall include a valid,
binding and enforceable contractual right on the part of AKGI-St. Maarten N.V.
to terminate the Purchaser's occupancy rights under the applicable Purchase
Documents upon the failure of the Purchaser to make the required payments under
the respective Eligible Note Receivable; and
(b) The Project containing the Unit subject to such Eligible Note
Receivable is located in St. Maarten, Netherlands Antilles.
"Lender" means each financial institution shown on the signature pages
------
hereof so long as such financial institution maintains a portion of the
Commitment or is owed any part of the Obligations (including the Administrative
Agent in its individual capacity), each Assignee that hereafter becomes a party
hereto pursuant to Section 11.6 hereof, subject to the limitations set forth
------------
therein.
"Letter of Credit" has the meaning specified in Section 2.15(a) hereof.
---------------- ---------------
"Letter of Credit Agreement" has the meaning specified in Section 2.15(b)
-------------------------- ---------------
hereof.
"Letter of Credit Facility" has the meaning specified in Section 2.15(a)
------------------------- ---------------
hereof.
"LIBOR" means, for any LIBOR Advance for any Interest Period therefor, the
-----
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR"
-----
-15-
shall mean, for any LIBOR Advance for any Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.
"LIBOR Advance" means an Advance which the Borrower requests to be made as
-------------
a LIBOR Advance or which is reborrowed as a LIBOR Advance, in accordance with
the provisions of Section 2.2 hereof.
-----------
"LIBOR Basis" means a simple per annum interest rate equal to the lesser of
-----------
(a) the Highest Lawful Rate, or (b) the sum of the LIBOR plus the Applicable
LIBOR Margin. The LIBOR Basis shall, with respect to LIBOR Advances subject to
reserve or deposit requirements, be subject to premiums for such reserve or
deposit requirements assessed by each Lender to the extent incurred by such
Lender, which are payable directly to each Lender.
"LIBOR Lending Office" means, with respect to a Lender, the office
--------------------
designated as its LIBOR Lending Office on Schedule 1 attached hereto, and such
----------
other office of the Lender or any of its Affiliates hereafter designated by
notice to the Borrower and the Administrative Agent.
"Lien" means, with respect to any property, any mortgage, lien, pledge,
----
collateral assignment, hypothecation, charge, security interest, title retention
agreement, levy, execution, seizure, attachment, garnishment or other similar
encumbrance of any kind in respect of such property, whether or not xxxxxx,
vested or perfected.
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
----------
investigation by or before any Tribunal, including, without limitation,
proceedings, claims, lawsuits, and/or investigations under or pursuant to any
environmental, occupational, safety and health, antitrust, unfair competition,
securities, Tax or other Law, or under or pursuant to any contract, agreement or
other instrument.
"Loan Documents" means this Agreement, the Notes, the Security Agreements,
--------------
any other Collateral Document, the Subsidiary Guaranty, the Administrative Agent
Fee Letter, any Hedge Agreements entered into with any Lender, the Assignments
of Pledged Documents, and any other document or agreement executed or delivered
from time to time by the Borrower, any Subsidiary of the Borrower or any other
Person in connection herewith or as security for the Obligations.
"Material Adverse Effect" means any act or circumstance or event that (a)
-----------------------
could reasonably be expected to be material and adverse to the business
condition (financial or otherwise), operations, properties, business prospects
or ability to repay the Obligations in accordance with the terms of the Loan
Documents of the Borrower and its Restricted Subsidiaries taken as a whole, or
(b) in any manner whatsoever does or could reasonably be expected to materially
and adversely affect the validity or enforceability of any Loan Document.
-16-
"Maturity Date" means December31, 2002, or the earlier date of termination
-------------
in whole of the Commitment pursuant to Section 2.6 or 8.2 hereof.
----------- ---
"Multiemployer Plan" means, as to any Person, at any time, a "multiemployer
------------------
plan" within the meaning of Section 4001(a)(3) of ERISA and to which such Person
or any member of its Controlled Group is making, or is obligated to make
contributions or has made, or been obligated to make, contributions within the
past five (5) years.
"Necessary Authorization" means any right, franchise, license, permit,
-----------------------
consent, approval or authorization from, or any filing or registration with, any
Tribunal or any Person necessary or appropriate to enable the Borrower or any
Subsidiary of the Borrower to maintain and operate its business and properties.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
-----------------
other disposition of any asset by any Person, the amount of cash received by
such Person in connection with such transaction (including cash proceeds of any
property received in consideration of any such sale, lease, transfer or other
disposition) after deducting therefrom the aggregate, without duplication, of
the following amounts to the extent properly attributable to such transaction or
to the asset that is the subject thereof: (i) reasonable brokerage commissions,
legal fees, finder's fees, financial advisory fees, accounting fees,
underwriting fees, investment banking fees and other similar commissions and
fees, in each case, to the extent paid or payable by such Person; (ii) filing,
recording or registration fees or charges or similar fees or charges paid by
such Person; (iii) taxes paid or payable by such Person or any shareholder,
partner or member of such Person to governmental taxing authorities as a result
of such sale or other disposition; and (iv) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness that is
secured by a Lien on the asset in question and that is required to be repaid
under the terms thereof as a result of such asset sale.
"Net Exposure Under Securitization" means, for any date of calculation, the
---------------------------------
sum of (i) any and all obligations and liabilities of the Borrower or any
Subsidiary of the Borrower under, or in connection with, any Securitization, as
of such date of calculation, to the extent that same constitute recourse
liabilities of the Borrower or of such Subsidiary and (ii) the fair market value
of any and all property of the Borrower or of any Subsidiary of the Borrower
that is pledged or encumbered, or as to which the interest(s) of the Borrower or
any such Subsidiary are subordinated or otherwise impaired, as security for or
as a credit enhancement or otherwise in connection with, any Securitization.
"Net Income" means, with respect to any Person for any period, the net
----------
income (loss) of such Person, after provisions for taxes and extraordinary
items, determined in accordance with GAAP.
"Net Worth" means, as of any date of calculation, for the Borrower and its
---------
Subsidiaries, on a consolidated basis, determined in accordance with GAAP, the
consolidated total stockholders' equity of the Borrower and its Subsidiaries.
-17-
"Non-Standard Receivables" means at the time of any determination thereof,
------------------------
the Eligible Notes Receivable of the Borrower and the Restricted Subsidiaries
which are reasonably acceptable to the Determining Lenders in their discretion
for the purposes of determining the Borrowing Base and as to which the following
requirements have been fulfilled with respect to each such Eligible Note
Receivable:
(a) The Eligible Note Receivable is evidenced by a promissory note payable
to the Borrower or to the applicable Restricted Subsidiary, the transaction from
which such Eligible Note Receivable arose is recognized on the books of the
Borrower or the applicable Restricted Subsidiary, as applicable, as a bona fide
sale of a fee simple interest time-share estate in one or more Units, such sale
is evidenced by Purchase Documents and such Eligible Note Receivable is secured
by a first priority Deed of Trust covering the purchased interest in the
applicable Unit(s); and
(b) The Project containing the Unit subject to such Eligible Note
Receivable is located in the United States of America or in such other
jurisdiction(s) as may, from time to time, be designated in writing by the
Determining Lenders.
"Note Receivable" means a promissory note, or other written agreement
---------------
containing a legally binding obligation on the part of a Purchaser to pay a sum
certain, executed and delivered by a Purchaser in favor of the Borrower or a
Restricted Subsidiary and as to which there exist no unsatisfied conditions
precedent to the validity and enforceability thereof under the terms of the
applicable Purchase Documents, at law or otherwise.
"Notes" means, collectively, the Revolving Credit Notes.
-----
"Notice of Issuance" has the meaning specified in Section 2.15(b) hereof.
------------------ ---------------
"Obligations" means (a) all obligations of any nature (whether matured or
-----------
unmatured, fixed or contingent, including the Reimbursement Obligations) of the
Borrower or any other Obligor to any Lender or the Administrative Agent under
any of the Loan Documents as they may be amended from time to time, and (b) all
obligations of the Borrower or any other Obligor for losses, damages, expenses
or any other liabilities of any kind that any Lender may suffer by reason of a
breach by the Borrower or any other Obligor of any obligation, covenant or
undertaking with respect to any Loan Document payable by the Borrower or any
other Obligor under any Loan Document.
"Obligor" means the Borrower and each Guarantor.
-------
"Operating Lease" means any operating lease, as defined in the Financial
---------------
Accounting Standard Board Statement of Financial Accounting Standards No. 13,
dated November, 1976 or otherwise in accordance with GAAP, of the Borrower
and/or any of its Subsidiaries.
"Participant" has the meaning specified in Section 11.6(c) hereof.
----------- ---------------
"Participation" has the meaning specified in Section 11.6(c) hereof.
------------- ---------------
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"Payment Date" means the first Business Day of each calendar month.
------------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means, as applied to any Person:
---------------
(a) Any Lien in favor of the Lenders to secure the Obligations hereunder;
(b) (i) Liens on real estate for ad valorem taxes not yet delinquent, and
(ii) Liens for taxes, assessments, governmental charges, levies, homeowners'
association dues or other claims that are not yet delinquent or that are being
diligently contested in good faith by appropriate proceedings in accordance with
Section 5.6 hereof and for which adequate reserves shall have been set aside on
-----------
such Person's books, but only so long as no foreclosure, restraint, sale or
similar proceedings have been commenced with respect thereto;
(c) Liens of carriers, landlords, warehousemen, mechanics, laborers and
materialmen incurred in the ordinary course of business for sums not yet due or
being contested in good faith, if such reserve or appropriate provision, if any,
as shall be required by GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of business in connection with
worker's compensation, unemployment insurance or similar legislation;
(e) Easements, right-of-way, restrictions and other similar encumbrances on
the use of real property which do not interfere in any material respect with the
ordinary conduct of the business of such Person;
(f) Liens in respect of judgments or awards for which appeals or
proceedings for review are being prosecuted and in respect of which a stay of
execution upon any such appeal or proceeding for review shall have been secured,
provided that (i) such Person shall have established adequate reserves for such
judgments or awards, (ii) such judgments or awards shall be fully insured
(subject to customary deductibles) and the insurer shall not have denied
coverage, or (iii) such judgments or awards shall have been bonded to the
satisfaction of the Determining Lenders;
(g) Any Liens which secure Indebtedness that is permitted by Section 7.1
-----------
(b) hereof; provided, however, that (i) none of such Liens shall cover or apply
---
to any of the Collateral, (ii) the fair market value of the property covered by
any such Lien shall not, at the time of the grant or creation of such Lien,
exceed, in the case of property other than notes receivable or accounts
receivable, 200% of the principal amount of the Indebtedness secured by such
Lien and (iii) none of such Liens shall secure any Subordinated Debt;
(h) Liens arising from filing Uniform Commercial Code financing statements
for precautionary purposes relating solely to true leases of personal property
permitted by this Agreement under which the Borrower or any of its Subsidiaries
is a lessee;
-19-
(i) Any zoning or similar law or right reserved to or vested in any
Tribunal to control or regulate the use of any real property;
(j) Any Lien in favor of any Lender to secure any obligations owed to such
Lender in respect of any Hedge Agreement;
(k) Liens incurred or deposits made to secure the performance of bids,
trade contracts (other than for Indebtedness), statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business; and
(l) any replacements or renewals of Liens (but no increases in the
Indebtedness secured thereby) permitted by clauses (h) and (i) hereof.
"Person" means an individual, corporation, partnership, trust or
------
unincorporated organization, or a government or any agency or political
subdivision thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA
----
(including a Multiemployer Plan) pursuant to which any employees of the
Borrower, its Subsidiaries or any member of their Controlled Group participate.
"Pledged Documents" means, collectively, the Eligible Notes Receivable, the
-----------------
Deeds of Trust and the Purchase Documents.
"Premier Receivables" means at the time of any determination thereof, the
-------------------
Eligible Notes Receivable of the Borrower and the Restricted Subsidiaries which
are reasonably acceptable to the Determining Lenders in their discretion for the
purposes of determining the Borrowing Base and as to which the following
requirements have been fulfilled with respect to each such Eligible Note
Receivable:
(a) The Eligible Note Receivable is evidenced by a promissory note payable
to the Borrower or to the applicable Restricted Subsidiary, the transaction from
which such Eligible Note Receivable arose is recognized on the books of the
Borrower or the applicable Restricted Subsidiary, as applicable, as a bona fide
sale of a fee simple interest time-share estate in one or more Units, such sale
is evidenced by Purchase Documents and such Eligible Note Receivable is secured
by a first priority Deed of Trust covering the purchased interest in the
applicable Unit(s), which Deed of Trust has been assigned of record by the
Borrower or the applicable Restricted Subsidiary to the Administrative Agent;
(b) The Deed of Trust securing such Eligible Note Receivable is insured
under a mortgagee title insurance policy in favor of the Borrower or the
applicable Restricted Subsidiary, as applicable (with applicable endorsement(s)
thereto in favor of the Administrative Agent, as assignee of the Borrower or the
applicable Restricted Subsidiary, as applicable), and such title insurance
policy and such endorsements (i) are in form and substance acceptable to the
Administrative Agent, subject only to those exceptions to title as the
Administrative Agent has approved, and (ii) have been delivered to the
Custodian with respect to such Eligible Note Receivable;
-20-
(c) The original recorded counterparts of the following documents
(evidencing recordation thereof in the appropriate real property records of the
relevant jurisdictions(s) in which the applicable Project containing the Unit
subject to such Eligible Note Receivable is located) have been delivered to the
applicable Custodian with respect to such Eligible Note Receivable: (i) the Deed
of Trust securing such Eligible Note Receivable, and (ii) the collateral
assignment of such Deed of Trust to the Administrative Agent;
(d) The Project containing the Unit subject to such Eligible Note
Receivable is located in the United States of America or in such other
jurisdiction(s) as may, from time to time, be designated in writing by the
Determining Lenders; and
(e) The Purchaser in respect of such Eligible Note Receivable shall have
timely made at least the first regularly scheduled installment payment due
thereon.
"Pretax Net Income" means net profit (or loss) before taxes of the Borrower
-----------------
and the Subsidiaries of the Borrower, on a consolidated basis, determined in
accordance with GAAP.
"Projects" means those time-share residential real estate projects in which
--------
the Borrower or any of its Subsidiaries sells Time-Share Interests and as to
which any of the Notes Receivable generated therefrom constitute Collateral
hereunder.
"Purchase Documents" means any purchase agreement, lease and related sale
------------------
and escrow documents executed and delivered by a Purchaser to the Borrower or
any of its Subsidiaries with respect to the purchase of a Time-Share Interest.
"Purchaser" means a Person who purchases a Time-Share Interest in a Project
---------
from the Borrower or any of its Subsidiaries or any other obligor in respect of
the Note Receivable executed in connection therewith.
"Quarterly Date" means the last calendar day of each March, June, September
--------------
and December, beginning December 31, 1999.
"Reference Rate Advance" means any Advance bearing interest at the
----------------------
Reference Rate.
"Reference Rate" means, for any day, a per annum interest rate equal to the
--------------
higher of (a) the sum of (i) 0.50% plus (ii) the Federal Funds Rate on such day
or (b) the prime or reference rate of the Administrative Agent, which prime or
reference rate is the floating commercial rate of the Administrative Agent, as
announced from time to time by the Administrative Agent as its "prime rate" or
"reference rate," as the case may be, set by the Administrative Agent based
upon various factors, including the Administrative Agent's costs and desired
return, general economic conditions and other factors, and used as a reference
point for pricing some loans, which may be priced at, above or below such
announced rate, provided that any change in the Reference Rate announced by the
Administrative Agent shall take effect at the opening of business on the day
specified in the public announcement of such change.
-21-
"Reimbursement Obligations" means, in respect of any Letter of Credit as at
-------------------------
any date of determination, the sum of (a) the maximum aggregate amount which is
then available to be drawn under such Letter of Credit plus (b) the aggregate
amount of all drawings under such Letter of Credit not theretofore reimbursed by
the Borrower.
"Related Person" means (a) any Affiliate of the Borrower, (b) any
--------------
individual or entity who directly or indirectly holds 10% or more of any class
of Capital Stock of the Borrower, (c) any relative of such individual by blood,
marriage or adoption not more remote than first cousin and (d) any officer or
director of the Borrower.
"Release Date" means the date on which the Notes have been paid, all other
------------
Obligations due and owing have been paid and performed in full, and the
Commitments have been terminated.
"Reportable Event" has the meaning set forth in Section 4043(b) of ERISA.
----------------
"Request for Advance/Designation" has the meaning specified in Section
------------------------------- -------
2.2(a) hereof.
------
"Restricted Domestic Subsidiary" means each Domestic Subsidiary which has
------------------------------
executed a Subsidiary Guaranty and has delivered to the Lenders such board
resolutions, officer's certificates and opinions of counsel as the
Administrative Agent shall have reasonably requested.
"Restricted Foreign Subsidiary" means each Foreign Subsidiary (i) which
-----------------------------
either has executed and delivered a Subsidiary Guaranty or with respect to which
at least 65% of whose Capital Stock has been pledged to the Administrative
Agent, for the benefit of the Lenders, pursuant to documentation acceptable to
the Administrative Agent and (ii) as to which the Lenders have received such
board resolutions, officer's certificates and opinions of counsel as the
Administrative Agent shall have reasonably requested.
"Restricted Payments" means, collectively, (i) Dividends and (ii) any (A)
-------------------
payment or prepayment of principal, premium or penalty on any Subordinated Debt
of the Borrower or any Subsidiary of the Borrower or any defeasance, redemption,
purchase, repurchase or other acquisition or retirement for value, in whole or
in part, of any Subordinated Debt (including, without limitation, the setting
aside of assets or the deposit of funds therefor) and (B) prepayment of interest
on any Subordinated Debt.
"Restricted Subsidiary" means any Restricted Domestic Subsidiary or any
---------------------
Restricted Foreign Subsidiary.
"Revolving Credit Advance" means an Advance made pursuant to Section 2.1(a)
------------------------ --------------
hereof.
"Revolving Credit Notes" means the promissory notes of the Borrower
----------------------
evidencing Revolving Credit Advances, substantially in the form of Exhibit A
---------
hereto, together with any extensions, renewals or amendments thereof or thereto,
and any substitutions therefor.
"Rights" means rights, remedies, powers and privileges.
------
-22-
"Right-To-Use Receivables" means at the time of any determination thereof,
------------------------
the Eligible Notes Receivable of Sunterra Pacific, Inc. (i) which are reasonably
acceptable to the Determining Lenders in their discretion for the purposes of
determining the Borrowing Base, (ii) which are evidenced by Purchase Documents,
(iii) as to which the transaction from which such Eligible Note Receivable arose
is recognized on the books of Sunterra Pacific, Inc. as a bona fide sale of
points or other contractual rights that entitles the Purchaser with respect
thereto to the utilization of Units for intermittent periods of time on a
recurring basis, and (iv) which are secured by a first priority security
interest covering the property, rights and interests of the Purchaser under such
Purchase Documents. For purposes of this definition, the reference to a
"security interest" securing an Eligible Note Receivable shall include a valid,
binding and enforceable contractual right on the part of Sunterra Pacific, Inc.
to terminate the Purchaser's occupancy rights under the applicable Purchase
Documents upon the failure of the Purchaser to make the required payments under
the respective Eligible Note Receivable.
"Security Agreement" means any Collateral Transfer of Notes and Liens
------------------
(Security Agreement), substantially in the form of Exhibit B hereto, as amended,
---------
modified, renewed, supplemented or restated from time to time.
"Securitization" means a sale or hypothecation of Notes Receivable by the
--------------
Borrower in which the proceeds thereof are utilized to repay in full all
outstanding Advances attributable to such Notes Receivable pursuant to
documentation reasonably acceptable to the Administrative Agent.
"Securitization Subsidiary" means any subsidiary of the Borrower which is
-------------------------
organized for the sole purpose of facilitating a Securitization and which
performs no business and has no other assets outside of those necessary to
consummate a Securitization.
"Senior Debt" means, as of the date of any determination, the remainder of
-----------
(a) Total Debt minus (b) Subordinated Debt.
"Servicing Agent" means, collectively, the Person(s) that are initially
---------------
named as the servicer(s) under the Servicing and Collection Agreement, or,
should such Person(s) cease to act as Servicing Agent under the Servicing and
Collection Agreement, such other entity as the Borrower and each Restricted
Subsidiary that is a party to the Servicing and Collection Agreement may appoint
with the prior written consent of the Administrative Agent.
"Servicing and Collection Agreement" means, collectively, the contract(s)
----------------------------------
and agreement(s), in form and substance reasonably acceptable to the
Administrative Agent, among the Borrower, each Restricted Subsidiary that owns
any of the Notes Receivable included in the Borrowing Base and the Servicing
Agent, as from time to time modified, replaced or restated, relating to the
servicing and/or collection of the Eligible Notes Receivable included, from time
to time, in the calculation of the Borrowing Base.
"Solvent" means, with respect to any Person, that the fair value of the
-------
assets of such Person (both at fair valuation and at present fair saleable
value) is, on the date of determination, greater than
-23-
the total amount of liabilities (including contingent and unliquidated
liabilities) of such Person as of such date and that, as of such date, such
Person is able to pay all liabilties of such Person as such liabilities mature
and such Person does not have unreasonably small capital with which to carry on
its business. In computing the amount of contingent or unliquidated liabilities
at any time, such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability
discounted to present value at rates believed to be reasonable by such Person.
"Special Counsel" means the law firm of Xxxxxxx, Xxxxxxx & Xxxxxxx, P.C.,
---------------
or such other legal counsel as the Administrative Agent may select.
"Specified Percentage" means, as to any Lender, the percentage indicated
--------------------
beside its name on the signature pages hereof, or, if applicable, specified in
the most recent Assignment Agreement applicable to such Lender.
"Standard Receivables" means at the time of any determination thereof, the
--------------------
Eligible Notes Receivable of the Borrower and the Restricted Subsidiaries which
are reasonably acceptable to the Determining Lenders in their discretion for the
purposes of determining the Borrowing Base and as to which the following
requirements have been fulfilled with respect to each such Eligible Note
Receivable:
(a) The Eligible Note Receivable is evidenced by a promissory note payable
to the Borrower or to the applicable Restricted Subsidiary, the transaction from
which such Eligible Note Receivable arose is recognized on the books of the
Borrower or the applicable Restricted Subsidiary, as applicable, as a bona fide
sale of a fee simple interest time-share estate in one or more Units, such sale
is evidenced by Purchase Documents and such Eligible Note Receivable is secured
by a first priority Deed of Trust covering the purchased interest in the
applicable Unit(s), which Deed of Trust has been assigned of record by the
Borrower or the applicable Restricted Subsidiary to the Administrative Agent;
(b) Within 90 days after the execution of the Eligible Note Receivable by
the Purchaser with respect thereto, the Deed of Trust securing such Eligible
Note Receivable is insured under a mortgagee title insurance policy in favor of
the Borrower or the applicable Restricted Subsidiary, as applicable (with
applicable endorsement(s) thereto in favor of the Administrative Agent, as
assignee of the Borrower or the applicable Restricted Subsidiary, as
applicable), with such title insurance policy and such endorsements to be in
form and substance acceptable to the Administrative Agent, to be subject only to
those exceptions to title as the Administrative Agent approves and to be
delivered, within such 90-day period, to the Custodian with respect to such
Eligible Note Receivable;
(c) Within 180 days after the execution of the Eligible Note Receivable by
the Purchaser with respect thereto, the original recorded counterparts of the
following documents (evidencing recordation thereof in the appropriate real
property records of the relevant jurisdictions(s) in which the applicable
Project containing the Unit subject to such Eligible Note Receivable is located)
have
-24-
been delivered to the Custodian: (i) the Deed of Trust securing such Eligible
Note Receivable, and (ii) the collateral assignment of such Deed of Trust to the
Administrative Agent; and
(d) The Project containing the Unit subject to such Eligible Note
Receivable is located in the United States of America or in such other
jurisdiction(s) as may, from time to time, be designated in writing by the
Determining Lenders.
"Subordinated Debt" means, collectively, (i) the 5.75% Convertible
-----------------
Subordinated Notes, issued by the Borrower as of January 15, 1997, in the
aggregate original principal amount of $138,000,000, due in 2007, (ii) the 9.75%
Senior Subordinated Notes, issued by the Borrower as of August 1, 1997, in the
aggregate original principal amount of $200,000,000, due October 1, 2007 and
(iii) any other Indebtedness of the Borrower or any Subsidiary of the Borrower
having maturities and terms, and which is subordinated to payment of the
Obligations in a manner, approved in writing by the Administrative Agent and the
Determining Lenders, with only such changes or amendments as are not prohibited
by Section 7.22 hereof.
------------
"Subsidiary" of any Person means any corporation, partnership, joint
----------
venture, trust or estate or other Person of which (or in which) more than 50%
of:
(a) the outstanding capital stock having voting power to elect a majority
of the Board of Directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership or joint
venture,
(c) the beneficial interest of such trust or estate, or
(d) the equity interest of such other Person,
is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries;
provided, however, that (i) no Person shall be deemed to be a Subsidiary of the
Borrower solely by virtue of the fact that certain shares of the stock of such
Person have been pledged to the Borrower and (ii) the Securitization Subsidiary
shall not be deemed to be a Subsidiary for purposes of this Agreement.
"Subsidiary Guaranty" means a guaranty, substantially in the form of
-------------------
Exhibit F hereto, executed and delivered by each Guarantor, as such
---------
guaranty(ies) may be amended, supplemented, modified, renewed or otherwise
restated from time to time.
"Taxes" has the meaning specified in Section 2.14 hereof.
----- ------------
"Time-Share Interest" means the property, rights and interests acquired by
-------------------
a Purchaser in connection with a Standard Receivable, a Non-Standard Receivable,
a Leasehold Receivable or a Right-To-Use Receivable and which entitles such
Purchaser to utilize a specific Unit, or a type or class of Unit, for a
specified period of time on a recurring basis.
-25-
"Total Capital" means, as of any date of determination, the sum of (a)
-------------
Total Debt plus (b) Adjusted Net Worth.
"Total Debt" means, as of any date of determination, determined for the
----------
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP,
without duplication, (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services other
than trade payables incurred in the ordinary course of business, (iv)
obligations in respect of letters of credit, banker's acceptances and similar
instruments, (v) obligations under Hedge Agreements, (vi) Capitalized Lease
Obligations, (vii) obligations in respect of payment, performance and similar
bonds, and (viii) Net Exposure Under Securitization; provided, however, that the
outstanding balance with respect to the Borrower's 1998-A on-balance sheet
securitization, in the original amount of $100,300,000, (and having an
outstanding balance of $87,600,000 as of December 31, 1998), shall not be
included as Total Debt hereunder.
"Total Debt to Total Capital Ratio" means the ratio of Total Debt to Total
---------------------------------
Capital, calculated at the end of each fiscal quarter.
"Tribunal" means any state, commonwealth, federal, foreign, territorial, or
--------
other court or government body, subdivision, agency, department, commission,
board, bureau, or instrumentality of a governmental or other regulatory or
public body or authority.
"UCC" means the Uniform Commercial Code of California, as amended from time
---
to time, and the Uniform Commercial Code applicable in such other states as any
Collateral may be located.
"Unit" means a residential unit in a Project as shown on the recorded
----
condominium plat therefor or other evidence thereof, as required or permitted
under applicable Law.
"Unused Fee" has the meaning specified in Section 2.4(a) hereof.
---------- --------------
"Unused Portion" means an amount equal to the result of (a) the Commitment
--------------
minus (b) the sum of (i) the outstanding Revolving Credit Advances plus (ii) the
outstanding Reimbursement Obligations in respect of the Letters of Credit.
Section 1.2 Amendments and Renewals. Each definition of an agreement in
-----------------------
this Article 1 shall include such agreement as amended to date, and as amended
---------
or renewed from time to time in accordance with its terms, but only with the
prior written consent of the Determining Lenders or all the Lenders as required
pursuant to Section 11.11 hereof.
-------------
Section 1.3 Construction. The terms defined in this Article 1 (except
------------
as otherwise expressly provided in this Agreement) for all purposes shall have
the meanings set forth in Section 1.1 hereof, and the singular shall include the
-----------
plural, and vice versa, unless otherwise specifically required by the context.
All accounting terms used in this Agreement which are not
-26-
otherwise defined herein shall be construed in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, unless otherwise
expressly stated herein.
ARTICLE 2
Advances
--------
Section 2.1 The Advances.
------------
(a) Revolving Credit Advances. Each Lender severally agrees, upon the
-------------------------
terms and subject to the conditions of this Agreement, to make Revolving Credit
Advances to the Borrower from time to time until the Maturity Date in an
aggregate amount not to exceed its Specified Percentage of the Commitment less
its Specified Percentage of the aggregate amount of all Reimbursement
Obligations then outstanding (assuming compliance with all conditions to
drawing), for the purposes set forth in Section 5.8 hereof. Subject to Section
----------- -------
2.9 hereof, Revolving Credit Advances may be repaid and then reborrowed.
---
Notwithstanding any provision in any Loan Document to the contrary, in no event
shall the principal amount of all outstanding Revolving Credit Advances exceed
the lesser of (i) the result of (A) the Borrowing Base minus (B) the aggregate
outstanding Reimbursement Obligations and (ii) the Commitment. Any Revolving
Credit Advance shall, at the option of the Borrower as provided in Section 2.2
-----------
hereof (and, in the case of LIBOR Advances, subject to the provisions of Article
-------
9 hereof), be made as a Reference Rate Advance or a LIBOR Advance; provided that
-
there shall not be outstanding, at any one time, more than five LIBOR Advances.
Section 2.2 Manner of Borrowing and Disbursement.
------------------------------------
(a) In the case of Reference Rate Advances, the Borrower, through an
Authorized Signatory, shall give the Administrative Agent prior to 9:00 a.m.,
Los Angeles, California time, on the date of any proposed Reference Rate Advance
irrevocable written notice, in substantially the form of Exhibit G hereto (a
---------
"Request for Advance/Designation") of its intention to borrow a Reference Rate
--------------------------------
Advance hereunder. Such Request for Advance/Designation shall specify the
requested funding date, which shall be a Business Day, and the amount of the
proposed aggregate Reference Rate Advances to be made by Lenders.
(b) In the case of LIBOR Advances, the Borrower, through an Authorized
Signatory, shall give the Administrative Agent at least three Business Days'
irrevocable written notice pursuant to a Request for Advance/Designation, of its
intention to borrow a LIBOR Advance hereunder. Notice shall be given to the
Administrative Agent prior to 9:00 a.m., Los Angeles, California time, in order
for such Business Day to count toward the minimum number of Business Days
required. LIBOR Advances shall in all cases be subject to Article 9 hereof. For
---------
LIBOR Advances, the Request for Advance/Designation shall specify the requested
funding date, which shall be a Business Day, the amount of the proposed
aggregate LIBOR Advances to be made by Lenders and the Interest Period selected
by the Borrower, provided that no such Interest Period shall extend past the
Maturity Date, or prohibit or impair the Borrower's ability to comply with
Section 2.5 or 2.8 hereof. Prior to
----------- ---
-27-
9:30 a.m., Los Angeles, California time, two Business Days' prior to
the date of the requested LIBOR Advance, the Administrative Agent shall
determine the LIBOR Basis with respect to such requested LIBOR Advance (which
determination shall be conclusive in the absence of manifest error), and the
Administrative Agent shall promptly give notice of same to the Borrower by
telephone (confirmed in writing), telecopier or telex.
(c) Subject to Sections 2.1 and 2.9 hereof, the Borrower shall have the
------------ ---
option (i) to convert at any time all or any part (subject to the requirements
contained herein as to the minimum amounts of LIBOR Advances) of the outstanding
Reference Rate Advances to LIBOR Advances and all or any part of the outstanding
LIBOR Advances to Reference Rate Advances or (ii) upon expiration of any
Interest Period applicable to a LIBOR Advance, to continue all or any portion of
such LIBOR Advance equal to $5,000,000 and integral multiples of $1,000,000 in
excess of that amount as a LIBOR Advance and the succeeding Interest Period(s)
of such continued LIBOR Advance shall commence on the last day of the Interest
Period of the LIBOR Advance to be continued; provided, however, (A) LIBOR
Advances may only be converted into Reference Rate Advances on the expiration
date of the Interest Period applicable thereto and (B) notwithstanding anything
in this Agreement to the contrary, no outstanding Advance may be continued as,
or converted into, a LIBOR Advance when any Default or Event of Default has
occurred and is continuing. At least three Business Days prior to a proposed
conversion/continuation date, the Borrower, through an Authorized Signatory,
shall give the Administrative Agent irrevocable written notice stating (i) the
proposed conversion/continuation date (which shall be a Business Day), (ii) the
amount of the Advance to be converted/continued, (iii) in the case of a
conversion to, or a continuation of, a LIBOR Advance, the requested Interest
Period, and (iv) in the case of a conversion of a Reference Rate Advance to a
LIBOR Advance or continuation of a LIBOR Advance, stating that no Default or
Event of Default has occurred and is continuing. If the Borrower shall fail to
give any notice in accordance with this Section 2.2(c), the Borrower shall be
--------------
deemed irrevocably to have requested that such LIBOR Advance be converted to a
Reference Rate Advance in the same principal amount. Notice shall be given to
the Administrative Agent prior to 9:00 a.m., Los Angeles, California time, in
order for such Business Day to count toward the minimum number of Business Days
required. Prior to 9:30 a.m., Los Angeles, California time, two Business Days'
prior to the date of the requested conversion/continuation of a LIBOR Advance,
the Administrative Agent shall determine the LIBOR Basis with respect to such
requested conversion/continuation of such LIBOR Advance (which determination
shall be conclusive in the absence of manifest error), and the Administrative
Agent shall promptly give notice of same to the Borrower by telephone (confirmed
in writing), telecopier or telex.
(d) The aggregate amount of Reference Rate Advances to be made by the
Lenders on any day shall be in a principal amount which is at least $2,000,000
and which is an integral multiple of $500,000; provided, however, that such
amount may equal the unused amount of the applicable Commitment. The aggregate
amount of LIBOR Advances having the same Interest Period and to be made by the
Lenders on any day shall be in a principal amount which is at least $5,000,000
and which is an integral multiple of $1,000,000. The Borrower shall not request,
and, other than any Advances pursuant to Section 2.15(c) hereof, the Lenders
---------------
shall have no obligation to make, more than five (5) Advances to the Borrower
during any calendar month.
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(e) As soon as practical following receipt by the Administrative Agent of a
Request for Advance /Designation with respect to a requested LIBOR Advance, the
Administrative Agent shall give written notice to each Lender stating (i) the
effective date of the requested LIBOR Advance, (ii) the amount of the requested
LIBOR Advance, and (iii) the applicable LIBOR Basis with respect to such
requested LIBOR Advance. Each Lender shall, not later than 12:00 noon, Los
Angeles, California time, on the date of any Advance, deliver to the
Administrative Agent, at its address set forth herein, such Lender's Specified
Percentage of such Advance in immediately available funds in accordance with the
Administrative Agent's instructions. All funds received by the Administrative
Agent from any Lender after 12:00 noon, Los Angeles, California time, on any
Business Day shall be deemed to have been received by the Administrative Agent
on the next succeeding Business Day. Upon receipt by the Administrative Agent of
the applicable funds from the Lenders, the Administrative Agent shall, subject
to satisfaction of the conditions set forth in Article 3, disburse the amounts
---------
made available to the Administrative Agent by the Lenders by (i) transferring
such amounts by wire transfer pursuant to the Borrower's instructions, or (ii)
in the absence of such instructions, crediting such amounts to the account of
the Borrower maintained with the Administrative Agent. All Advances shall be
made by each Lender according to its Specified Percentage.
Section 2.3 Interest.
--------
(a) On Reference Rate Advances.
--------------------------
(i) The Borrower shall pay interest on the outstanding unpaid
principal amount of the Reference Rate Advances outstanding from time to
time, until such Reference Rate Advances are due (whether at the Maturity
Date, by reason of acceleration, by scheduled reduction, or otherwise) and
repaid at a simple interest rate per annum equal to the Reference Rate for
the Reference Rate Advances as in effect from time to time. If at any time
the Reference Rate would exceed the Highest Lawful Rate, interest payable
on the Reference Rate Advances shall be limited to the Highest Lawful Rate,
but the Reference Rate shall not thereafter be reduced below the Highest
Lawful Rate until the total amount of interest accrued on the Reference
Rate Advances equals the amount of interest that would have accrued if the
Reference Rate had been in effect at all times.
(ii) Interest on the Reference Rate Advances shall be computed on the
basis of a 360-day year for the actual number of days elapsed, and shall be
payable monthly in arrears on each Payment Date and on the Maturity Date.
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(b) On LIBOR Advances.
-----------------
(i) The Borrower shall pay interest on the unpaid principal amount of
each LIBOR Advance, from the date such Advance is made until it is due
(whether at maturity, by reason of acceleration, by scheduled reduction, or
otherwise) and repaid, at a rate per annum equal to the LIBOR Basis for
such LIBOR Advance. The Administrative Agent, whose determination shall be
controlling in the absence of manifest error, shall determine the LIBOR
Basis on the second Business Day prior to the applicable funding date and
shall notify the Borrower and the Lenders of such LIBOR Basis.
(ii) Subject to Section 11.9 hereof, interest on each LIBOR Advance
------------
shall be computed on the basis of a 360-day year for the actual number of
days elapsed, and shall be payable in arrears on each Payment Date and on
the Maturity Date.
(c) Interest After an Event of Default. (i) After an Event of Default
----------------------------------
(other than an Event of Default specified in Section 8.1(f) or (g) hereof) and
-------------- ---
during any continuance thereof, at the option of Determining Lenders and
provided that the Administrative Agent has given notice to the Borrower of the
decision to charge interest at the Default Rate, and (ii) after an Event of
Default specified in Section 8.1(f) or (g) hereof and during any continuance
-------------- ---
thereof, automatically and without any action or notice by the Administrative
Agent or any Lender, the Obligations shall bear interest at a rate per annum
equal to the Default Rate. Such interest shall be payable on the earlier of
demand or the Maturity Date, and shall accrue until the earlier of (i) waiver or
cure (to the satisfaction of the Determining Lenders) of the applicable Event of
Default, or (ii) payment in full of the Obligations. The Lenders shall not be
required to accelerate the maturity of the Advances, to exercise any other
rights or remedies under the Loan Documents, or to give notice to the Borrower
of the decision to charge interest at the Default Rate.
Section 2.4 Fees.
----
(a) Unused Fee. Subject to Section 11.9 hereof, the Borrower agrees to pay
---------- ------------
to the Administrative Agent, for the ratable account of the Lenders, a fee (the
"Unused Fee") at the rate of 0.30% per annum on the daily average Unused Portion
----------
during the period commencing on the Agreement Date and ending on the Maturity
Date. The Unused Fee shall be (i) payable in arrears on each Quarterly Date and
on the Maturity Date, (ii) fully earned when due and, subject to Section 11.9
------------
hereof, nonrefundable when paid and (iii) subject to Section 11.9 hereof,
------------
computed on the basis of a 360-day year for the actual number of days elapsed.
(b) Other Fees. Subject to Section 11.9 hereof, the Borrower agrees to pay
---------- ------------
to the Administrative Agent, for the account of the Administrative Agent, the
fees on the dates and in the amounts specified in the letter agreement (the "Fee
---
Letter"), dated as of November 26, 1999, between the Borrower and the
------
Administrative Agent.
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Section 2.5 Prepayments.
-----------
(a) Voluntary LIBOR Advance Prepayments. Upon three Business Days' prior
-----------------------------------
written notice by an Authorized Signatory to the Administrative Agent, LIBOR
Advances may be voluntarily prepaid but only so long as the Borrower
concurrently reimburses the Lenders in accordance with Section 2.9 hereof. Any
-----------
notice of prepayment shall be irrevocable.
(b) Mandatory Prepayment. On or before the date of any reduction of the
--------------------
Commitment, the Borrower shall prepay applicable outstanding Advances in an
amount necessary to reduce the sum of outstanding Advances and Reimbursement
Obligations to an amount less than or equal to the Commitment as so reduced. On
any date that the aggregate principal amount of outstanding Advances exceeds (x)
the Borrowing Base, minus (y) the aggregate amount of the Reimbursement
Obligations with respect to outstanding Letters of Credit, the Borrower shall
immediately prepay Advances in an amount equal to such excess amount and all
interest attributable to such excess amount. To the extent required by the
immediately preceding two sentences, the Borrower shall first prepay all
Reference Rate Advances and shall thereafter prepay LIBOR Advances. To the
extent that any prepayment requires that a LIBOR Advance be repaid on a date
other than the last day of its Interest Period, the Borrower shall reimburse
each Lender in accordance with Section 2.9 hereof. To the extent that
-----------
outstanding Advances exceed the Commitment after any reduction thereof, the
Borrower shall repay any such excess amount and all accrued interest
attributable to such excess Advances on the date of such reduction.
(c) Payments, Generally. Any prepayment of any LIBOR Advance shall be
-------------------
accompanied by interest accrued on the principal amount being prepaid. Any
voluntary partial payment of a Reference Rate Advance shall be in a principal
amount which is at least $2,000,000 and which is an integral multiple of
$500,000 (unless constituting a payment of all outstanding Reference Rate
Advances). Any voluntary partial payment of a LIBOR Advance shall be in a
principal amount which is at least $5,000,000 and which is an integral multiple
of $1,000,000 (unless constituting a payment of all outstanding LIBOR Advances),
and to the extent that any prepayment of a LIBOR Advance is made on a date other
than the last day of its Interest Period, the Borrower shall reimburse each
Lender in accordance with Section 2.9 hereof.
-----------
Section 2.6 Reduction of Commitment.
-----------------------
(a) Voluntary Reduction. Subject to the limitations set forth herein, the
-------------------
Borrower shall have the right, upon not less than ten Business Days' prior
written notice by an Authorized Signatory to the Administrative Agent (with the
Administrative Agent to promptly notify the Lenders thereof), to terminate or
reduce the Commitment, in whole or in part, without premium or penalty except as
provided in the next sentence. Each partial termination shall be in an
aggregate amount which is at least $5,000,000 and which is an integral multiple
of $1,000,000, and no voluntary reduction of the Commitment shall cause any
LIBOR Advance to be repaid prior to the last day of its Interest Period unless
the Borrower shall reimburse each Lender in accordance with Section 2.9 hereof.
-----------
(b) Mandatory Reduction. The Commitment shall be automatically reduced to
-------------------
zero on the Maturity Date.
-31-
(c) General Requirements. Upon any reduction of the Commitment pursuant to
--------------------
this Section, the Borrower shall immediately make a repayment of applicable
Advances in accordance with Section 2.5(b) hereof. The Borrower shall reimburse
--------------
each Lender in connection with any such payment in accordance with Section 2.9
-----------
hereof to the extent applicable. The Borrower shall not have any right to
rescind any termination or reduction. Once reduced, the Commitment may not be
increased or reinstated. The Borrower shall not be entitled to voluntarily
reduce the Commitment to an amount that is less than the aggregate amount of
Reimbursement Obligations with respect to Letters of Credit that are outstanding
at such time.
Section 2.7 Non-Receipt of Funds by the Administrative Agent. Unless
------------------------------------------------
the Administrative Agent shall have been notified by a Lender no later than the
date that such Lender receives notice of a proposed Revolving Credit Advance
from the Administrative Agent pursuant to Section 2.2(e) hereof that such Lender
--------------
does not intend to make the proceeds of such Revolving Credit Advance available
to the Administrative Agent, the Administrative Agent may assume that such
Lender has made such proceeds available to the Administrative Agent on such
date, and the Administrative Agent may in reliance upon such assumption (but
shall not be required to) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Administrative
Agent by such Lender, the Administrative Agent shall be entitled to recover such
amount on demand from such Lender (or, if such Lender fails to pay such amount
forthwith upon such demand, from the Borrower) together with interest thereon in
respect of each day during the period commencing on the date such amount was
available to the Borrower and ending on (but excluding) the date the
Administrative Agent receives such amount from (a) the Lender, at a per annum
rate equal to the lesser of (i) the Highest Lawful Rate or (ii) the Federal
Funds Rate or (b) the Borrower, at the per annum rate applicable at the time to
such Revolving Credit Advance. Notwithstanding Section 10.1(f), no Lender shall
---------------
be liable for any other Lender's failure to fund a Revolving Credit Advance
hereunder.
Section 2.8 Payment of Principal of Advances. To the extent not
--------------------------------
otherwise required to be paid earlier as provided herein, the principal amount
of the Advances, all accrued interest and fees thereon, and all other
Obligations related thereto, shall be due and payable in full on the Maturity
Date.
Section 2.9 Reimbursement. Whenever any Lender shall sustain or incur
-------------
(other than through a default by that Lender) any losses (including, but not
limited to, any Interest Differential) or reasonable out-of-pocket expenses
actually incurred in connection with (a) failure by the Borrower to borrow
(including any failure to continue or convert into) any LIBOR Advance after
having given notice of its intention to borrow (or to continue or convert) in
accordance with Section 2.2 hereof (whether by reason of the Borrower's election
-----------
not to proceed or the non-fulfillment of any of the conditions set forth in
Article 3 hereof) or (b) any prepayment for any reason of any LIBOR Advance in
whole or in part (including a prepayment pursuant to Section 9.3(b) hereof) on
--------------
other than the last day of an Interest Period applicable to such LIBOR Advance,
the Borrower agrees to pay to any such Lender, within 5 Business Days after
demand by such Lender, an amount sufficient to compensate such Lender for all
such losses (including, but not limited to, any Interest Differential) and out-
of-pocket expenses, subject to Section 11.9 hereof.
------------
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Such losses shall include, without limiting the generality of the foregoing,
reasonable expenses incurred by such Lender in connection with the re-employment
of funds prepaid, repaid, converted or not borrowed, converted or paid, as the
case may be. A certificate as to any amounts payable to any Lender under this
Section 2.9 submitted to the Borrower by such Lender shall certify that such
-----------
amounts were actually incurred by such Lender and shall show in reasonable
detail an accounting of the amount payable and the calculations used to
determine in good faith such amount and shall be conclusive absent manifest or
demonstrable error. Nothing in this Section 2.9 shall provide the Borrower or
-----------
any Subsidiary of the Borrower the right to inspect the records, files or books
of any Lender.
Section 2.10 Manner of Payment.
-----------------
(a) Each payment (including prepayments) by the Borrower of the principal
of or interest on the Advances, fees, and any other amount owed under this
Agreement or any other Loan Document shall be made not later than 1:00 p.m., Los
Angeles, California time, on the date specified for payment under this Agreement
to the Administrative Agent at the Administrative Agent's office, in lawful
money of the United States of America constituting immediately available funds.
(b) If any payment under this Agreement or any other Loan Document shall be
specified to be made upon a day which is not a Business Day, it shall be made on
the next succeeding day which is a Business Day, unless, with respect to a
payment due in respect of a LIBOR Advance, such Business Day falls in another
calendar month, in which case payment shall be made on the preceding Business
Day. Any extension of time shall in such case be included in computing interest
and fees, if any, in connection with such payment.
(c) Without waiving any other rights or recourse that the Borrower may
otherwise have against any Lender for such Lender's breach of its obligations
hereunder, the Borrower agrees to pay principal, interest, fees and all other
amounts due under the Loan Documents without deduction for set-off or
counterclaim or any deduction whatsoever.
(d) If some but less than all amounts due from the Borrower are received by
the Administrative Agent, the Administrative Agent shall apply such amounts in
the following order of priority: (i) to the payment of the Administrative
Agent's reasonable expenses incurred on behalf of the Lenders then due and
payable, if any; (ii) to the payment of all other fees then due and payable;
(iii) to the payment of interest then due and payable on the Advances; (iv) to
the payment of all other amounts not otherwise referred to in this clause (d)
then due and payable under the Loan Documents; and (v) to the payment of
principal then due and payable on the Advances.
(e) Each payment by the Borrower in respect of obligations relating to the
Revolving Credit Advances and the Letters of Credit (whether for principal,
interest, fees or otherwise) shall be made to the Administrative Agent for the
account of the Lenders pro rata in accordance with their respective Specified
Percentages.
Section 2.11 LIBOR Lending Offices. Each Lender's initial LIBOR Lending
---------------------
Office is set forth opposite its name in Schedule 1 attached hereto. Each
----------
Lender shall have the right at any time
-33-
and from time to time to designate a different office of itself or of any
Affiliate of such Lender as such Lender's LIBOR Lending Office, and to transfer
any outstanding LIBOR Advance to such LIBOR Lending Office. No such designation
or transfer shall result in any liability on the part of the Borrower for
increased costs or expenses resulting solely from such designation or transfer
(except any such transfer which is made by a Lender pursuant to Section 9.2 or
-----------
9.3 hereof, or otherwise for the purpose of complying with Applicable Law, to
---
the extent that Applicable Law, or any relevant construction or interpretation
thereof, changes after the Agreement Date). Increased costs for expenses
resulting from a change in law occurring subsequent to any such designation or
transfer shall be deemed not to result solely from such designation or transfer.
Section 2.12 Sharing of Payments. Any Lender obtaining a payment
-------------------
(whether voluntary or involuntary, due to the exercise of any right of set-off,
or otherwise) on account of its Advances or its participation in the Letters of
Credit (other than pursuant to Sections 2.4(b), 2.14, 2.15(d), 9.3 or 9.5) in
--------------- ---- ------- --- ---
excess of its Specified Percentage of all payments made by the Borrower with
respect to Advances and the Letters of Credit shall purchase from each other
Lender such participation in the Advances made by such other Lender or its
participation in the Letters of Credit as shall be necessary to cause such
purchasing Lender to share the excess payment pro rata according to Specified
Percentages with each other Lender; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section, to the fullest extent permitted by law, may exercise all its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation.
Section 2.13 Calculation of LIBOR. The provisions of this Agreement
--------------------
relating to calculation of the LIBOR are included only for the purpose of
determining the rate of interest or other amounts to be paid hereunder that are
based upon such rate, it being understood that each Lender shall be entitled to
fund and maintain its funding of all or any part of a LIBOR Advance as it sees
fit.
-34-
Section 2.14 Taxes.
-----
(a) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.10, free and clear of and without deduction for any
------------
and all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, excluding, in the case
---------
of each Lender and the Administrative Agent, (i) taxes imposed on, based upon or
measured by its overall net income, net worth or capital, and franchise taxes,
doing business taxes or minimum taxes imposed on it, (A) by the jurisdiction
under the laws of which such Lender or the Administrative Agent (as the case may
be) is organized or in which it has its applicable lending office or any
political subdivision thereof; or (B) by any other jurisdiction, or any
political subdivision thereof, other than those imposed solely by reason of (1)
an asserted relation of such jurisdiction to the transactions contemplated by
this Agreement, (2) the activities of the Borrower in such jurisdiction or (3)
the activities in connection with the transactions contemplated by this
Agreement of a Lender or the Administrative Agent; (ii) taxes imposed by reason
of failure by the Lender or the Administrative Agent to comply with the
requirements of paragraph (e) of this Section 2.14; and (iii) in the case of any
------------
Lender, any Taxes in the nature of transfer, stamp, recording or documentary
taxes resulting from a transfer (other than as a result of foreclosure) by such
Lender of all or any portion of its interest in this Agreement, the Notes or any
other Loan Documents; (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
-----
If the Borrower shall be required by Law to deduct or withhold any Taxes from or
in respect of any sum payable hereunder to any Lender or the Administrative
Agent, (x) the sum payable shall be increased as may be necessary so that after
making all required deductions for Taxes (including deductions applicable to
additional sums payable under this Section 2.14) such Lender or the
------------
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (y) the Borrower shall
make such deductions and (z) the Borrower shall pay the full amount of Taxes
deducted to the relevant taxation authority or other authority in accordance
with Applicable Law.
(b) In addition, the Borrower agrees to pay any and all stamp and
documentary taxes and any and all other excise and property taxes, charges and
similar levies (other than Taxes described in clause (iii) of the first sentence
of Section 2.14(a)) that arise from any payment made hereunder or from the
---------------
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
-----------
(c) The Borrower will indemnify each Lender and the Administrative Agent
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.14) paid by such Lender or the Administrative Agent (as the case may
------------
be) and all liabilities (including penalties, additions to tax, interest and
reasonable expenses) arising therefrom or with respect thereto whether or not
such Taxes or Other Taxes were correctly or legally asserted, other than
penalties, additions to tax, interest and expenses arising as a result of gross
negligence or wilful misconduct on the part of such Lender or the Administrative
Agent, provided, however, that the Borrower shall have no obligation to
-------- -------
indemnify such Lender or the Administrative Agent unless and until such Lender
or the Administrative Agent shall have delivered to the Borrower a certificate
certifying that such Taxes or Other Taxes (and/or penalties, additions to tax,
interest and reasonable expenses) were actually
-35-
incurred by such Lender or the Administrative Agent and showing in reasonable
detail an accounting of the amount payable and the calculations used to
determine in good faith such amount, which certificate shall be conclusive
absent manifest or demonstrable error. Nothing in this Section 2.14 shall
------------
provide the Borrower or any Subsidiary of the Borrower the right to inspect the
records, files or books of any Lender or the Administrative Agent. This
indemnification shall be made upon written demand therefor by such Lender or the
Administrative Agent (as the case may be).
(d) As soon as practicable after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent the original or a certified
copy of a receipt evidencing payment thereof. For purposes of this Section 2.14
------------
the terms "United States" and "United States Person" shall have the meanings set
------------- --------------------
forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby agrees that:
(i) it shall, no later than the Agreement Date (or, in the case of a
Lender which becomes a party hereto pursuant to Section 11.6 after the
------------
Agreement Date, the date upon which such Lender becomes a party hereto) and
at such times as necessary in the reasonable determination of the Borrower,
deliver to the Borrower through the Administrative Agent, with a copy to
the Administrative Agent:
(A) if any lending office is located in the United States of America,
two (2) accurate and complete signed originals of Internal
Revenue Service Form 4224 or any successor thereto ("Form 4224"),
---------
(B) if any lending office is located outside the United States of
America, two (2) accurate and complete signed originals of
Internal Revenue Service Form 1001 or any successor thereto
("Form 1001"),
---------
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such lending office or lending offices under this Agreement free
from withholding of United States Federal income tax;
(ii) if at any time such Lender changes its lending office or lending
offices or selects an additional lending office it shall, at the same time
or reasonably promptly thereafter but only to the extent the forms
previously delivered by it hereunder are no longer effective, deliver to
the Borrower through the Administrative Agent, with a copy to the
Administrative Agent, in replacement for the forms previously delivered by
it hereunder:
(A) if such changed or additional lending office is located in the
United States of America, two (2) accurate and complete signed
originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed originals of Form
1001,
-36-
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such changed or additional lending office under this Agreement
free from withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in clause
(ii) above) requiring a change in the most recent Form 4224 or Form 1001
previously delivered by such Lender and if the delivery of the same be
lawful, deliver to the Borrower through the Administrative Agent with a
copy to the Administrative Agent, two (2) accurate and complete original
signed copies of Form 4224 or Form 1001 in replacement for the forms
previously delivered by such Lender;
(iv) it shall, promptly upon the request of the Borrower to that
effect, deliver to the Borrower such other forms or similar documentation
as may be required from time to time by any applicable law, treaty, rule or
regulation in order to establish such Lender's tax status for withholding
purposes; and
(v) it shall notify the Borrower after any event (including an
amendment to, or a change in any applicable law or regulation or in the
written interpretation thereof by any regulatory authority or any judicial
authority, or by ruling applicable to such Lender of any governmental
authority charged with the interpretation or administration of any law)
shall occur that results in such Lender no longer being capable of
receiving payments under this Agreement without any deduction or
withholding of United States federal income tax.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.14 shall survive the payment in full of principal and interest
------------
hereunder.
(g) Each Lender (and the Administrative Agent with respect to payments to
the Administrative Agent for its own account) agrees that (i) it will take all
reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding taxes (whether available by
treaty, existing administrative waiver or by virtue of the location of any
Lender's lending office), (ii) it will use reasonable best efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its lending office, if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the reasonable judgment of such Lender, be
materially disadvantageous to such Lender, and (iii) otherwise cooperate with
the Borrower to minimize amounts payable by the Borrower under this Section
-------
2.14; provided, however, the Lenders and the Administrative Agent shall not be
-------- -------
obligated by reason of this Section 2.14(g) to contest the payment of any Taxes
---------------
or Other Taxes or to disclose any information regarding its tax affairs or tax
computations or reorder its tax or other affairs or tax or other planning.
Subject to the foregoing, to the extent the Borrower pays sums pursuant to this
Section 2.14 and the Lender or the Administrative Agent receives a refund of any
------------
or all of such sums, such refund shall be applied to reduce any amounts then due
and owing under this Agreement or, to the extent that no amounts are due and
owing under this Agreement at the time such refunds are received, the party
receiving such
-37-
refund shall promptly pay over all such refunded sums to the Borrower, provided
that (i) no Event of Default is in existence at such time or (ii) all of the
Obligations have been fully and finally paid or satisfied. At such time, if any,
that such Default or Event of Default is cured or waived, the party receiving
such refund shall promptly pay over all such refunded sums to the Borrower.
(h) If the Borrower becomes obligated to pay additional amounts described
in this Section 2.14 to any Lender, the Borrower may designate a financial
------------
institution reasonably acceptable to the Administrative Agent to replace such
Lender by purchasing for cash and receiving an assignment of such Lender's pro
rata share of the Commitment and the Rights of such Lender under the Loan
Documents without recourse to or warranty by, or expense to, such Lender, for a
purchase price equal to the outstanding amounts owed to such Lender (including
such additional amounts owing to such Lender pursuant to this Section 2.14).
------------
Upon execution of an Assignment Agreement, such other financial institution
shall be deemed to be a "Lender" for all purposes of this Agreement as set forth
in Section 11.6 hereof.
------------
Section 2.15 Letters of Credit.
-----------------
(a) The Letter of Credit Facility. The Borrower may request the Issuing
-----------------------------
Bank, on the terms and conditions hereinafter set forth, to issue, and the
Issuing Bank shall, if so requested, issue, letters of credit (the "Letters of
----------
Credit") for the account of the Borrower or any other Obligor from time to time
------
on any Business Day from the date of the initial Advance until the Maturity Date
in an aggregate maximum amount (assuming compliance with all conditions to
drawing) not to exceed, at any time outstanding, the lesser of (i) $20,000,000
(the "Letter of Credit Facility"), (ii) the remainder of the Borrowing Base
-------------------------
minus the aggregate principal amount of Advances then outstanding and the
aggregate amount of all drawings under Letter(s) of Credit not theretofore
reimbursed by the Borrower, or (iii) the Commitment. No Letter of Credit shall
have a term of less than three months, a term (including all rights of renewal)
of greater than one year, or an expiration date (including all rights of
renewal) later than the Maturity Date. Immediately upon the issuance of each
Letter of Credit, the Issuing Bank shall be deemed to have sold and transferred
to each Lender, and each Lender shall be deemed to have purchased and received
from the Issuing Bank, in each case irrevocably and without any further action
by any party, an undivided interest and participation in such Letter of Credit,
each drawing thereunder and the obligations of the Borrower under this Agreement
in respect thereof in an amount equal to the product of (x) such Lender's
Specified Percentage times (y) the maximum amount available to be drawn under
such Letter of Credit (assuming compliance with all conditions to drawing).
Within the limits of the Letter of Credit Facility, and subject to the limits
referred to above, the Borrower may request the issuance of Letters of Credit
under this Section 2.15(a), repay any Advances resulting from drawings
---------------
thereunder pursuant to Section 2.15(c) and request the issuance of additional
---------------
Letters of Credit under this Section 2.15(a).
---------------
(b) Request for Issuance. Each Letter of Credit shall be issued upon
--------------------
notice, given not later than 9:00 a.m., Los Angeles California time, on the
fourth Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower, through an Authorized Signatory, to the Issuing Bank.
Each Letter of Credit shall be issued upon notice given in accordance with the
terms of any separate agreement between the Borrower and the Issuing Bank in
form and substance
-38-
reasonably satisfactory to the Borrower and the Issuing Bank providing for the
issuance of Letters of Credit pursuant to this Agreement and containing terms
and conditions not inconsistent with this Agreement (a "Letter of Credit
----------------
Agreement"), provided that if any such terms and conditions are inconsistent
--------- --------
with this Agreement, this Agreement shall control. Each such notice of issuance
of a Letter of Credit by the Borrower, through an Authorized Signatory (a
"Notice of Issuance") shall be in writing, specifying therein, in the case of a
------------------
Letter of Credit, the requested (A) date of such issuance (which shall be a
Business Day), (B) maximum amount of such Letter of Credit, (C) expiration date
of such Letter of Credit, (D) name and address of the beneficiary of such Letter
of Credit, and (E) form of such Letter of Credit and specifying such other
information as shall be required pursuant to the relevant Letter of Credit
Agreement. If the requested terms of such Letter of Credit are acceptable to the
Issuing Bank in its reasonable discretion, the Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Article 3 hereof, make
---------
such Letter of Credit available to the Borrower at its office referred to in
Section 11.1 or as otherwise agreed with the Borrower in connection with such
------------
issuance.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a draft
-------------------------
drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of an Advance, which shall bear
interest at the Reference Rate, in the amount of such draft (but without any
requirement for compliance with the conditions set forth in Article 3 hereof).
---------
In the event that a drawing under any Letter of Credit is not reimbursed by the
Borrower by 9:00 a.m., Los Angeles, California time, on the first Business Day
after such drawing, the Issuing Bank shall promptly notify Administrative Agent
thereof and the Administrative Agent shall promptly notify each Lender thereof.
Each such Lender shall, on the first Business Day following such notification,
make a Revolving Credit Advance (or if, as a result of any Debtor Relief Law,
the Lenders are prohibited from making a Revolving Credit Advance, each Lender
shall fund its participation purchased pursuant to Section 2.15(a) by making
---------------
such amount available to the Administrative Agent), which shall bear interest at
the Reference Rate, and shall be used to repay the applicable portion of the
Issuing Bank's Advance with respect to such Letter of Credit, in an amount equal
to the amount of its participation in such drawing for application to reimburse
the Issuing Bank (but without any requirement for compliance with the applicable
conditions set forth in Article 3 hereof) and shall make available to the
---------
Administrative Agent for the account of the Issuing Bank, by deposit at the
Administrative Agent's office, in same day funds, the amount of such Revolving
Credit Advance (or such participation). In the event that any Lender fails to
make available to the Administrative Agent for the account of the Issuing Bank
the amount of such Revolving Credit Advance (or such participation), the Issuing
Bank shall be entitled to recover such amount on demand from such Lender
together with interest thereon at a rate per annum equal to the lesser of (i)
the Highest Lawful Rate or (ii) the Federal Funds Rate.
(d) Increased Costs. If after the Agreement Date any change in any Law or
---------------
in the interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against letters of credit or guarantees issued by, or assets held by, or
deposits in or for the account of, the Issuing Bank or any Lender or any
corporation controlling the Issuing Bank or any Lender or (ii) impose on the
Issuing Bank or any Lender or any corporation controlling the Issuing Bank or
any Lender any other condition regarding this Agreement or any Letter of Credit,
-39-
and the result of any event referred to in the preceding clause (i) or (ii)
shall be to increase the cost to the Issuing Bank or any corporation controlling
the Issuing Bank of issuing or maintaining any Letter of Credit or to any Lender
or any corporation controlling such Lender of purchasing any participation
therein or making any Advance pursuant to Section 2.15(c), then, within 5
---------------
Business Days after demand by the Issuing Bank or such Lender (which demand
shall be made not later than one year after the Issuing Bank or applicable
Lender receives notice of the relevant change), the Borrower shall, subject to
Section 11.9 hereof, pay to the Issuing Bank or such Lender, from time to time
------------
as specified by the Issuing Bank or such Lender, additional amounts that shall
be sufficient to compensate the Issuing Bank or such Lender or any corporation
controlling such Lender for such increased cost. A certificate as to the amount
of such increased cost, submitted to the Borrower by the Issuing Bank or such
Lender, shall certify that such increased costs were actually incurred by the
Issuing Bank or such Lender and shall show in reasonable detail an accounting of
the amount payable and the calculation used to determine in good faith such
amount and shall be conclusive absent manifest or demonstrable error. In
determining such amount, the Issuing Bank or such Lender may use any reasonable
averaging or attribution method. Nothing in this Section 2.15(d) shall provide
---------------
the Borrower or any Subsidiary of the Borrower the right to inspect the records,
files or books of the Issuing Bank or any Lender. If the Borrower becomes
obligated to pay additional amounts described in this Section 2.15(d) to any
---------------
Lender, the Borrower may designate a financial institution reasonably acceptable
to the Administrative Agent to replace such Lender by purchasing for cash and
receiving an assignment of such Lender's pro rata share of the Commitments and
the Rights of such Lender under the Loan Documents without recourse to or
warranty by, or expenses to, such Lender, for a purchase price equal to the
outstanding amounts owing to such Lender (including such additional amounts
owing to such Lender pursuant to this Section 2.15(d). Upon execution of an
---------------
Assignment Agreement, such other financial institution shall be deemed to be a
"Lender" for all purposes of this Agreement as set forth in Section 11.6 hereof.
------------
The obligations of the Borrower under this Section 2.15(d) shall survive
---------------
termination of this Agreement. The Issuing Bank or any Lender claiming any
additional compensation under this Section 2.15(d) shall use reasonable efforts
---------------
(consistent with legal and regulatory restrictions) to reduce or eliminate any
such additional compensation which may thereafter accrue and which efforts would
not, in the reasonable judgment of the Issuing Bank or such Lender, be otherwise
disadvantageous.
(e) Obligations Absolute. The obligations of the Borrower under this
--------------------
Agreement with respect to any Letter of Credit, any Letter of Credit Agreement
and any other agreement or instrument relating to any Letter of Credit or any
Advance pursuant to Section 2.15(c) shall be unconditional and irrevocable, and
---------------
shall be paid strictly in accordance with the terms of this Agreement, such
Letter of Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement, any
other Loan Document, any Letter of Credit Agreement, any Letter of Credit
or any other agreement or instrument relating thereto (collectively, the
"L/C Related Documents");
----------------------
(ii) (A) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations of the Borrower in respect
of the Letters of Credit or
-40-
any Advance pursuant to Section 2.15(c) or (B) any other amendment or
--------------
waiver of or any consent to departure from all or any of the L/C Related
Documents;
(iii) the existence of any claim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank, any
Lender or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the L/C Related Documents or any
unrelated transaction;
(iv) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect,
except to the extent finally determined by a court of competent
jurisdiction to be the result of the gross negligence or willful misconduct
of the Issuing Bank in connection therewith;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not comply with the terms
of the Letter of Credit, except to the extent finally determined by a court
of competent jurisdiction to be the result of the gross negligence or
willful misconduct of the Issuing Bank in connection therewith;
(vi) any exchange, release or non-perfection of any Collateral, or
any release or amendment or waiver of or consent to departure from any
guarantee, for all or any of the Obligations of the Borrower in respect of
the Letters of Credit or any Advance pursuant to Section 2.15(c); or
---------------
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor, except to the extent finally
determined by a court of competent jurisdiction to be the result of the
gross negligence or willful misconduct of the Issuing Bank in connection
therewith.
(f) Compensation for Letters of Credit.
----------------------------------
(i) Letter of Credit Fee. Subject to Section 11.9 hereof, the
-------------------- ------------
Borrower shall pay to the Administrative Agent, for the ratable account of
each Lender, a fee (which shall be payable quarterly in arrears on each
Quarterly Date and on the Maturity Date) equal to a rate per annum equal to
the product of the Applicable LIBOR Margin in effect from time to time
multiplied by the average daily amount available for drawing under all
outstanding Letters of Credit. Subject to Section 11.9 hereof, such fee
------------
shall be computed on the basis of a 360-day year for the actual number of
days elapsed.
(ii) Fronting Fee. Subject to Section 11.9 hereof, the Borrower
------------ ------------
shall pay to the Administrative Agent, for the account of the Issuing Bank,
a fronting fee (which shall be payable in advance of the issuance, renewal
or extension of each Letter of Credit) in an
-41-
amount equal to 0.10% per annum on the maximum amount available for drawing
under such Letter of Credit, computed, subject to Section 11.9 hereof, on
------------
the basis of a 360-day year for the actual number of days from, and
including, the date of issuance of such Letter of Credit to the expiration
date of such Letter of Credit.
(ii) Other Fees. Subject to Section 11.9 hereof, the Borrower shall
---------- ------------
pay, with respect to each amendment, renewal or transfer of each Letter of
Credit and each drawing made thereunder, reasonable documentary and
processing charges in accordance with the Issuing Bank's standard schedule
for such charges in effect at the time of such amendment, renewal, transfer
or drawing, as the case may be.
(g) L/C Cash Collateral Account.
---------------------------
(i) Upon the Maturity Date or the occurrence, and during the
continuance, of an Event of Default and demand by the Administrative Agent
pursuant to Section 8.2(c), the Borrower will promptly pay to the
--------------
Administrative Agent in immediately available funds an amount equal to the
maximum amount then available to be drawn under the Letters of Credit then
outstanding. Any amounts so received by the Administrative Agent shall be
deposited by the Administrative Agent in a deposit account maintained by
the Issuing Bank (the "L/C Cash Collateral Account").
---------------------------
(ii) As security for the payment of all Reimbursement Obligations and
for any other Obligations, the Borrower hereby grants, conveys, assigns,
pledges, sets over and transfers to the Administrative Agent (for the
benefit of the Issuing Bank and Lenders), and creates in the Administrative
Agent's favor (for the benefit of the Issuing Bank and Lenders) a Lien in,
all money, instruments and securities at any time held in or acquired in
connection with the L/C Cash Collateral Account, together with all proceeds
thereof. The L/C Cash Collateral Account shall be under the sole dominion
and control of the Administrative Agent and the Borrower shall have no
right to withdraw or to cause the Administrative Agent to withdraw any
funds deposited in the L/C Cash Collateral Account. At any time and from
time to time, upon the Administrative Agent's request, the Borrower
promptly shall execute and deliver any and all such further instruments and
documents, including UCC financing statements, as may be necessary,
appropriate or desirable in the Administrative Agent's judgment to obtain
the full benefits (including perfection and priority) of the security
interest created or intended to be created by this paragraph (ii) and of
the rights and powers herein granted. The Borrower shall not create or
suffer to exist any Lien on any amounts or investments held in the L/C Cash
Collateral Account other than the Lien granted under this paragraph (ii).
(iii) The Administrative Agent shall (A) apply any funds in the L/C
Cash Collateral Account on account of Reimbursement Obligations when the
same become due and payable, (B) after the Maturity Date, apply any
proceeds remaining in the L/C Cash Collateral Account first to pay any
-----
unpaid Obligations then outstanding hereunder and then to refund any
----
remaining amount to the Borrower.
-42-
(iv) The Borrower, no more than once in any calendar month, may direct
the Administrative Agent to invest the funds held in the L/C Cash
Collateral Account (so long as the aggregate amount of such funds exceeds
any relevant minimum investment requirement) in (A) Cash and Cash
Equivalents or direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof and (B) one or more other types of investments permitted by the
Determining Lenders, in each case with such maturities as the Borrower,
with the consent of the Determining Lenders, may specify, pending
application of such funds on account of Reimbursement Obligations or on
account of other Obligations, as the case may be. In the absence of any
such direction from the Borrower, the Administrative Agent shall invest the
funds held in the L/C Cash Collateral Account (so long as the aggregate
amount of such funds exceeds any relevant minimum investment requirement)
in one or more types of investments with the consent of the Determining
Lenders with such maturities as the Borrower, with the consent of the
Determining Lenders, may specify, pending application of such funds on
account of Reimbursement Obligations or on account of other Obligations, as
the case may be. All such investments shall be made in the Administrative
Agent's name for the account of the Lenders, subject to the ownership
interest therein of the Borrower. The Borrower recognizes that any losses
or taxes with respect to such investments shall be borne solely by the
Borrower, and the Borrower agrees to hold the Administrative Agent and the
Lenders harmless from any and all such losses and taxes. Administrative
Agent may liquidate any investment held in the L/C Cash Collateral Account
in order to apply the proceeds of such investment on account of the
Reimbursement Obligations as provided in Section 2.15(g)(iii) hereof (or on
--------------------
account of any other Obligation then due and payable, as the case may be)
without regard to whether such investment has matured and without liability
for any penalty or other fee incurred (with respect to which the Borrower
hereby agrees to reimburse the Administrative Agent) as a result of such
application.
(v) After the establishment of the L/C Cash Collateral Account
pursuant to Section 2.15(g)(i) hereof, the Borrower shall pay to the
------------------
Administrative Agent the fees customarily charged by the Issuing Bank with
respect to the maintenance of accounts similar to the L/C Cash Collateral
Account.
ARTICLE 3
Conditions Precedent
--------------------
Section 3.1 Conditions Precedent to the Initial Advance and the Initial
-----------------------------------------------------------
Issuance of Letters of Credit. The obligation of each Lender to make the
-----------------------------
initial Revolving Credit Advance and the obligation of the Issuing Bank to issue
the initial Letter of Credit are subject to (i) receipt by the Administrative
Agent of the following items which are to be delivered, in form and substance
satisfactory to each Lender, with a copy (except for the Notes and this
Agreement) for each Lender, and (ii) satisfaction of the following conditions
which are to be satisfied:
-43-
(a) A loan certificate of each Obligor certifying as to the accuracy of its
representations and warranties in the Loan Documents with respect to such
Obligor, and including a certificate of incumbency with respect to each
Authorized Signatory, and including (i) a copy of the articles or certificate of
incorporation or similar organizational documents of such Obligor, certified to
be true, complete and correct by the secretary of state of its state of
organization, (ii) a copy of the true, complete and correct Bylaws or similar
governance documents of such Obligor, and (iv) a copy of a certificate of good
standing and a certificate of existence for its state of organization and each
state in which the nature of its business requires it to be qualified;
(b) a duly executed Revolving Credit Note payable to the order of each
Lender and in an amount for each Lender equal to its Specified Percentage of the
Commitment;
(c) opinions of counsel to each Obligor addressed to the Lenders and in
form and substance reasonably acceptable to the Administrative Agent, dated the
Agreement Date, and addressing the matters set forth in Sections 4.1(a), (b),
--------------- ---
(c), (e), (f), (h), (m), (n), (o) and (p), as deemed appropriate by the
--- --- --- --- --- --- --- ---
Administrative Agent, and if the Projects have not been registered under the
Federal Interstate Land Sales Full Disclosure Act, stating that the Projects do
not fall within the purview of the Federal Interstate Land Sales Full Disclosure
Act, and covering such other matters incident to the transactions contemplated
hereby as the Administrative Agent or Special Counsel may reasonably request;
(d) reimbursement for the Administrative Agent for Special Counsel's
reasonable and customary fees (on an hourly basis) and expenses rendered through
the date hereof, to the extent invoiced;
(e) evidence that all proceedings of each Obligor taken in connection with
the transactions contemplated by this Agreement and the other Loan Documents
shall be reasonably satisfactory in form and substance to the Lenders and
Special Counsel; and the Lenders shall have received copies of all documents or
other evidence which the Administrative Agent, Special Counsel or any Lender may
reasonably request in connection with such transactions;
(f) any fees or expenses required to be paid on or before the Agreement
Date pursuant to the Fee Letter;
(g) Security Agreements, appropriately completed and duly executed by each
of the Obligors, dated as of the Agreement Date, granting a Lien in all
Collateral covered thereby, together with related financing statements, and
insurance certificates listing Administrative Agent, as its interest may appear,
as loss payee and additional insured and otherwise in a form required by the
Collateral Documents;
(h) the duly executed Custodial Agreement(s), together with evidence of
delivery to the Custodian of the original counterpart of each Note Receivable
included in the Borrowing Base, together with allonges, in form and substance
acceptable to the Administrative Agent, duly executed by the Borrower or the
applicable Restricted Subsidiary owning such Note Receivable and
-44-
Assignments of Pledged Documents appropriately completed and duly executed by
the Borrower or the applicable Restricted Subsidiary owning such Pledged
Documents;
(i) simultaneously with the making of the initial Revolving Credit Advance,
executed UCC-3 Termination Statements to be filed in appropriate jurisdictions
to terminate all Liens against the Collateral, or any portion thereof (other
than Permitted Liens, if any);
(j) there shall have occurred no material adverse change in the business,
assets or financial condition of the Borrower and its Subsidiaries, taken as a
whole, since December 31, 1998;
(k) each of the Subsidiary Guaranties, duly executed by the Guarantor party
thereto;
(l) in form and substance reasonably satisfactory to the Lenders and
Special Counsel, such other documents, instruments and certificates as the
Administrative Agent or any Lender may reasonably require in connection with the
transactions contemplated hereby, including without limitation, evidence of the
status, organization or authority of the Borrower or any Subsidiary of the
Borrower, and the enforceability of the Obligations;
(m) The Borrower shall have delivered to the Administrative Agent any and
all Request(s) for Advance/Designation and/or Notice(s) of Issuance with respect
to such initial Revolving Credit Advance and such initial Letter of Credit, as
required by the terms of this Agreement; and
(n) The Borrower shall have delivered a Borrowing Base Report reflecting
Eligible Notes Receivable as of December 31, 1999.
Section 3.2 Conditions Precedent to All Advances, Letters of Credit,
--------------------------------------------------------
Conversions and Continuations. The obligation of each Lender to make each
-----------------------------
Revolving Credit Advance hereunder (including the initial Revolving Credit
Advance), the obligation of the Issuing Bank to issue each Letter of Credit
(including the initial Letter of Credit), the obligation of each Lender to
convert any existing Reference Rate Advance into a LIBOR Advance and the
obligation of each Lender to continue any existing LIBOR Advance are subject to
fulfillment of the following conditions immediately prior to or
contemporaneously with each such Advance or issuance:
(a) With respect to each Advance and each issuance of a Letter of Credit,
all of the representations and warranties of each Obligor under the Loan
Documents, which, pursuant to Section 4.2 hereof, are made at and as of the time
-----------
of each such Advance or issuance, shall be true and correct at such time in all
material respects, both before and after giving effect to the application of the
proceeds of the Advance or Letter of Credit;
-45-
(b) The incumbency of the Authorized Signatories shall be as stated in the
certificate of incumbency delivered in the Borrower's loan certificate pursuant
to Section 3.1(a) or as subsequently modified and reflected in a certificate of
--------------
incumbency delivered to the Administrative Agent. The Lenders may, without
waiving this condition, consider it fulfilled and a representation by the
Borrower made to such effect if no written notice to the contrary, dated on or
before the date of such Advance, Letter of Credit, conversion, or continuation,
is received by the Administrative Agent from the Borrower prior to the making of
such Advance, the issuance of such Letter of Credit, such conversion or such
continuation;
(c) There shall not exist a Default or Event of Default hereunder that has
not been waived or cured to the satisfaction of the Determining Lenders or all
Lenders, as required pursuant to Section 11.11 hereof;
-------------
(d) The aggregate Advances and Reimbursement Obligations, after giving
effect to such proposed Advance, Letter of Credit, conversion and/or
continuation shall not exceed the maximum principal amount then permitted to be
outstanding hereunder;
(e) No order, judgment, injunction or decree of any Tribunal shall purport
to enjoin or restrain any Lender or the Issuing Bank from making any Advance,
issuing any Letter of Credit, or converting or continuing such LIBOR Advance;
(f) (i) There shall not be pending, or to the knowledge of the Borrower,
threatened any Litigation against or affecting the Borrower or any Subsidiary of
the Borrower or any property of the Borrower or any Subsidiary of the Borrower
that has not been disclosed in writing by the Borrower pursuant to Section
-------
4.1(h) or 6.7(a) prior to the making of the last preceding Advance, the issuance
------ ------
of the last preceding Letter of Credit or the last preceding conversion or
continuation of a LIBOR Advance (or in the case of the initial Advances and
Letters of Credit, prior to the Agreement Date) that could reasonably be
expected to have a Material Adverse Effect, (ii) there shall not be pending, or
to the knowledge of the Borrower, threatened any Litigation against or affecting
the Borrower or any Subsidiary of the Borrower or any property of the Borrower
or any Subsidiary of the Borrower that (x) was disclosed by the Borrower only
after the Agreement Date, (y) was disclosed by the Borrower as threatened
Litigation prior to the Agreement Date but subsequently became pending
Litigation or (z) was not disclosed by the Borrower, that could reasonably be
expected to have a Material Adverse Effect and (iii) there shall have occurred
no development in any Litigation against or affecting the Borrower or any
Subsidiary of the Borrower or any property of the Borrower or any Subsidiary of
the Borrower that could reasonably be expected to have a Material Adverse
Effect;
(g) There shall have occurred no material adverse change in the business,
assets, financial condition, results of operations or business prospects of the
Borrower and its Subsidiaries, taken as a whole, since December 31, 1998;
(h) The Borrower shall have delivered to the Administrative Agent any and
all Request(s) for Advance/Designation and/or Notice(s) of Issuance with respect
to the applicable
-46-
Revolving Credit Advance(s), Letter(s) of Credit, conversion and/or
continuation, as required by the terms of this Agreement;
(i) The Borrower shall have delivered a current Borrowing Base Report, as
required by Section 6.1 hereof, evidencing that there is availability under the
-----------
Commitment after taking into account the projected Advance, Letter of Credit,
conversion or continuation; and
(j) The Borrower shall have delivered to the Administrative Agent any and
all appropriate financing statements and other appropriate security documents,
current and appropriate financing statement searches and other lien searches,
any and all necessary or appropriate lien releases, termination statements,
subordination agreements and/or other intercreditor documents, legal opinions,
Custodial Agreements, and trust receipts (in each case, executed by all
necessary third parties and other Persons) and such other or additional
documentation and/or evidence, in form and substance acceptable to the
Administrative Agent, as the Administrative Agent shall reasonably require with
respect to the satisfaction of all requirements hereunder or under the other
Loan Documents for inclusion of any Notes Receivable in the Borrowing Base.
Notwithstanding anything herein to the contrary, the obligation of each
Lender to make a Revolving Credit Advance pursuant to Section 2.15(c) (or to
---------------
fund its participation in respect of Letters of Credit pursuant to Section
-------
2.15(c)) shall be absolute and unconditional and shall not be affected by any
-------
circumstances, including, without limitation, (i) the occurrence of any Default
or Event of Default, (ii) the failure of the Borrower to satisfy any condition
set forth in this Section 3.2 or (iii) any other circumstance, happening or
-----------
event whatsoever.
The acceptance of the benefits of each conversion and continuation with
respect to a LIBOR Advance shall constitute a representation and warranty by the
Borrower to each of the Lenders that no Default or Event of Default shall have
occurred and be continuing or would result from the making of such conversion or
continuation.
ARTICLE 4
Representations and Warranties
------------------------------
Section 4.1 Representations and Warranties. The Borrower hereby
------------------------------
represents and warrants to each Lender as follows:
(a) Organization; Power; Qualification. The respective jurisdiction of
----------------------------------
organization or incorporation and percentage ownership by the Borrower of the
Subsidiaries listed on Schedule 4 are true and correct as of the Agreement Date.
----------
Schedule 4 is a complete and accurate listing as of the Agreement Date, showing
----------
with respect to the Borrower and each Subsidiary of the Borrower (a) its mailing
address, which is its principal place of business, (b) the classes of its
Capital Stock and the number and amount of its Capital Stock authorized and
outstanding, (c) each record and beneficial owner of 5% or more of the
outstanding Capital Stock of each Restricted Subsidiary, and (d) all outstanding
options, rights, rights of conversion, redemption, purchase or repurchase,
rights of first refusal and similar rights relating to the Capital Stock of the
Restricted Subsidiaries. All of
-47-
the outstanding Capital Stock of the Borrower and each Subsidiary of the
Borrower is validly issued, fully paid and non-assessable. Each of the Borrower
and its Subsidiaries is a corporation or other legal Person duly organized,
validly existing and in good standing under the laws of its state of
incorporation or organization. Each of the Borrower and its Subsidiaries has the
legal power and authority to own its properties and to carry on its business as
now being and hereafter proposed to be conducted. Each of the Borrower and its
Subsidiaries is authorized to do business, duly qualified and in good standing
as set forth in Schedule 7 and no qualification or authorization is necessary in
----------
any other jurisdictions in which the character of its properties or the nature
of its business requires such qualification or authorization, except where the
failure to be so qualified or authorized could not reasonably be expected to
have a Material Adverse Effect.
(b) Authorization. The Borrower has legal power and has taken all
-------------
necessary legal action to authorize it to borrow and request Letters of Credit
hereunder. Each of the Borrower and its Subsidiaries has legal power and has
taken all necessary legal action to execute, deliver and perform the Loan
Documents to which it is party in accordance with the terms thereof, and to
consummate the transactions contemplated thereby. Each Loan Document has been
duly executed and delivered by the Borrower or the Subsidiary of the Borrower
executing it. Each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party is a legal, valid and binding obligation of the Borrower
or such Subsidiary, as applicable, enforceable in accordance with its terms,
subject, to enforcement of remedies, to the following qualifications: (i)
equitable principles generally, and (ii) Debtor Relief Laws (insofar as any such
law relates to the bankruptcy, insolvency or similar event of the Borrower or
any Subsidiary of the Borrower).
(c) Compliance with Other Loan Documents and Contemplated Transactions.
------------------------------------------------------------------
The execution, delivery and performance by the Borrower and its Subsidiaries of
the Loan Documents to which they are respectively a party, and the consummation
of the transactions contemplated thereby, do not and will not (i) require any
consent or approval necessary on or prior to the Agreement Date not already
obtained, except to the extent that the failure to obtain any such consent or
approval could not reasonably be expected to have a Material Adverse Effect,
(ii) violate any Applicable Law, (iii) conflict with, result in a breach of, or
constitute a default under the certificate of incorporation, by-laws or other
similar organizational or governance document of the Borrower or any Subsidiary
of the Borrower, (iv) conflict with, result in a breach of, or constitute a
default under any Necessary Authorization, indenture, agreement or other
instrument, to which the Borrower or any Subsidiary of the Borrower is a party
or by which they or their respective properties may be bound, the result of
which could reasonably be expected to have a Material Adverse Effect, or (v)
result in or require the creation or imposition of any Lien (other than Liens in
favor of the Lenders to secure the Obligations hereunder) upon or with respect
to any property now owned or hereafter acquired by the Borrower or any
Subsidiary of the Borrower.
(d) Business. The Borrower and its Subsidiaries are engaged primarily in
--------
the business of acquiring, developing and operating time share resorts and other
time-share activities, providing financing for the purchase of Units or other
interests in its time-share resorts and other leisure activities (exclusive of
gaming) and activities directly related to the foregoing.
-48-
(e) Licenses, etc. All Necessary Authorizations have been duly obtained,
--------------
and are in full force and effect without any known conflict with the rights of
others and free from any unduly burdensome restrictions, unless the failure to
obtain or have in effect such Necessary Authorizations could not reasonably be
expected to result in a Material Adverse Effect. The Borrower and its
Subsidiaries are and will continue to be in compliance in all material respects
with all provisions thereof. No circumstance exists which could reasonably be
expected to impair the utility of the Necessary Authorization or the right to
renew such Necessary Authorization the effect of which could reasonably be
expected to have a Material Adverse Effect. No Necessary Authorization is the
subject of any pending or, to the best of the Borrower's knowledge, threatened
challenge, suspension, cancellation or revocation, the effect of which could
reasonably be expected to have a Material Adverse Effect.
(f) Compliance with Law. The Borrower and its Subsidiaries are in
-------------------
compliance in all respects with all Applicable Laws, except where the failure to
so comply could not reasonably be expected to have a Material Adverse Effect.
(g) Title to Properties. The Borrower and its Restricted Subsidiaries have
-------------------
good and indefeasible title to, or a valid leasehold interest in, all of their
material assets. None of their assets is subject to any Liens, except Permitted
Liens. No financing statement or other Lien filing (except relating to
Permitted Liens) is on file in any state or jurisdiction that names the Borrower
or any of its Restricted Subsidiaries as debtor or covers (or purports to cover)
any assets of the Borrower or any of its Restricted Subsidiaries. The Borrower
and its Restricted Subsidiaries have not signed any such financing statement or
filing, nor any security agreement authorizing any Person to file any such
financing statement or filing (except relating to Permitted Liens).
(h) Litigation. Except as reflected on Schedule 3 hereto, as of the
---------- ----------
Agreement Date there is no Litigation pending against, or, to the Borrower's
current actual knowledge, threatened against the Borrower, or in any other
manner relating directly and adversely to the Borrower or any of its
Subsidiaries, or any of their respective properties, in any court or before any
arbitrator of any kind or before or by any governmental body in which the amount
claimed (in excess of applicable insurance) exceeds $500,000.
(i) Taxes. All material federal, state and other tax returns of the
-----
Borrower and its Subsidiaries required by law to be filed have been duly filed
or extensions have been timely filed, and all material federal, state and other
Taxes upon the Borrower, its Subsidiaries or any of their properties, income,
profits and assets, which are due and payable, have been paid, unless the same
are being diligently contested in accordance with Section 5.6 hereof. The
-----------
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of their Taxes are, in the reasonable judgment of the Borrower,
adequate.
-49-
(j) Financial Statements; Material Liabilities.
------------------------------------------
(i) The Borrower has heretofore delivered to Lenders (a) the
audited consolidated balance sheets of the Borrower and its Subsidiaries as
at December 31, 1998, and the related statements of earnings and changes in
investment and statement of cash flows for the twelve-month period then
ended, and (b) unaudited consolidated balance sheets of the Borrower and
its Subsidiaries as at March 31, 1999, and the related statements of
earnings and statement of cash flows for the three-month period then ended.
Such financial statements were prepared in conformity with GAAP (except for
the absence of footnotes) and fairly present, in all material respects, the
financial position of the Borrower and its Subsidiaries as at the date
thereof and the combined results of operations and cash flows for the
period covered thereby.
(ii) The projected financial statements of the Borrower and its
Subsidiaries delivered to the Lenders prior to or on the Agreement Date
were prepared in good faith and management of the Borrower believes them to
be based on reasonable assumptions (which assumptions have been included in
the most recent projections furnished to the Lenders prior to the Agreement
Date) and to fairly present in all material respects the projected
financial condition of the Borrower and its Subsidiaries and the projected
results of operations as of the dates and for the periods shown for the
Borrower and its Subsidiaries, it being recognized by the Lenders that such
projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections
may differ from the projected results.
(iii) The financial statements of the Borrower and its Subsidiaries
delivered to the Lenders pursuant to Sections 6.3 and 6.4 hereof fairly
------------ ---
present in all material respects their respective financial condition and
their respective results of operations as of the dates and for the periods
shown, all in accordance with GAAP, subject to normal year-end adjustments.
The latest of such financial statements reflects all material liabilities,
direct and contingent, of the Borrower and each Subsidiary of the Borrower
that are required to be disclosed in accordance with GAAP. As of the date
of the latest of such financial statements, there were no Guaranties,
liabilities for Taxes, forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are substantial in
amount that are required to be reflected but that are not reflected on such
financial statements or the footnotes thereto.
(k) No Adverse Change. Since December 31, 1998, no event or circumstance
-----------------
has occurred or arisen which is reasonably likely to have a Material Adverse
Effect.
(l) ERISA. None of the Borrower or its Controlled Group maintains or
-----
contributes to any Plan subject to Title IV of ERISA other than those disclosed
to the Administrative Agent in writing. Each such Plan (other than any
Multiemployer Plan) is in compliance in all material respects with the
applicable provisions of ERISA, the Code, and any other applicable Law, except
to the extent that failure to so comply would not reasonably be expected to have
a Material Adverse Effect. With respect to each Plan (other than any
Multiemployer Plan) of the Borrower and each
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member of its Controlled Group, all reports required under ERISA or any other
Applicable Law to be filed with any Tribunal, the failure of which to file could
reasonably be expected to result in liability of the Borrower or any member of
its Controlled Group in excess of $100,000, have been duly filed. All such
reports are true and correct in all material respects as of the date given. No
Plan of the Borrower or any member of its Controlled Group has been terminated
under Section 4041(c) of ERISA nor has any accumulated funding deficiency (as
defined in Section 412(a) of the Code) been incurred (without regard to any
waiver granted under Section 412 of the Code), nor has any funding waiver from
the Internal Revenue Service been received or requested the result of which
could reasonably be expected to have a Material Adverse Effect. None of the
Borrower or any member of its Controlled Group has failed to make any
contribution or pay any amount due or owing as required under the terms of any
such Plan, or by Section 412 of the Code or Section 302 of ERISA by the due date
under Section 412 of the Code and Section 302 of ERISA, the result of which
could reasonably be expected to have a Material Adverse Effect. There has been
no ERISA Event or any event requiring disclosure under Section 4041(c)(3)(C) or
4063(a) of ERISA with respect to any Plan (other than any Multiemployer Plan) or
its related trust of the Borrower or any member of its Controlled Group since
the effective date of ERISA. The present value of the benefit liabilities, as
defined in Title IV of ERISA, of each Plan subject to Title IV of ERISA (other
than a Multiemployer Plan) of the Borrower and each member of its Controlled
Group does not exceed by more than $500,000 the present value of the assets of
each such Plan as of the most recent valuation date using each such Plan's
actuarial assumptions at such date. There are no pending, or to the Borrower's
knowledge threatened, claims, lawsuits or actions (other than routine claims for
benefits in the ordinary course) asserted or instituted against, and neither the
Borrower nor any member of its Controlled Group has knowledge of any threatened
litigation or claims against, the assets of any Plan or its related trust or
against any fiduciary of a Plan with respect to the operation of such Plan, the
result of which could reasonably be expected to have a Material Adverse Effect.
None of the Borrower or, to the Borrower's knowledge, any member of its
Controlled Group has engaged in any prohibited transactions, within the meaning
of Section 406 of ERISA or Section 4975 of the Code, in connection with any Plan
the result of which could reasonably be expected to have a Material Adverse
Effect. None of the Borrower or any member of its Controlled Group has incurred
or reasonably expects to incur (A) any liability under Title IV of ERISA (other
than premiums due under Section 4007 of ERISA to the PBGC), (B) any withdrawal
liability (and no event has occurred which with the giving of notice under
Section 4219 of ERISA would result in such liability) under Section 4201 of
ERISA as a result of a complete or partial withdrawal (within the meaning of
Section 4203 or 4205 of ERISA) from a Multiemployer Plan, as defined in Section
1.1 of this Agreement but without regard to the five-year limitation provided
therein or (C) any liability under Section 4062 of ERISA to the PBGC or to a
trustee appointed under Section 4042 of ERISA. None of the Borrower, any member
of its Controlled Group, or any organization to which the Borrower or any member
of its Controlled Group is a successor or parent corporation within the meaning
of ERISA Section 4069(b), has engaged in a transaction within the meaning of
ERISA Section 4069, the result of which could reasonably be expected to have a
Material Adverse Effect. None of the Borrower or any member of its Controlled
Group maintains or has established any Plan, which is a welfare benefit plan
within the meaning of Section 3(1) of ERISA and which provides for continuing
benefits or coverage for any participant or any beneficiary of any participant
after such participant's termination of employment, except as may be required by
any Applicable Law, the result of which could reasonably be expected to have a
Material Adverse Effect. Each of Borrower
-51-
and its Controlled Group which maintains a Plan which is a welfare benefit plan
within the meaning of Section 3(1) of ERISA has complied in all material
respects with any applicable notice and continuation requirements of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the
regulations thereunder. None of the Borrower or any member of its Controlled
Group maintains, has established, or has ever participated in a multiemployer
welfare benefit arrangement within the meaning of Section 3(40)(A) of ERISA.
(m) Compliance with Regulations T, U and X. The Borrower is not 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
meaning of Regulations T, U and X of the Board of Governors of the Federal
Reserve System, and no part of the proceeds of the Advances or Letters of Credit
will be used to purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any margin stock. No more than 25% of
the assets of the Borrower and its Subsidiaries are margin stock. None of the
Borrower and its Subsidiaries nor any agent acting on their behalf, has taken or
will knowingly take any action which would cause this Agreement or any other
Loan Documents to violate any regulation of the Board of Governors of the
Federal Reserve System or to violate the Securities Exchange Act of 1934, in
each case as in effect now or as the same may hereafter be in effect.
(n) Authorization. The Borrower and its Subsidiaries are not required to
-------------
obtain any Necessary Authorization on or prior to the Agreement Date that has
not already been obtained from, or effect any material filing or registration
that has not already been effected with, any Tribunal or any other Person in
connection with the execution and delivery of this Agreement or any other Loan
Document, or the performance thereof, in accordance with their respective terms,
including any borrowings hereunder, except for the filing of financing
statements (and other similar notices) containing a description of the
Collateral with certain Tribunals.
(o) Absence of Default. The Borrower and its Subsidiaries are in
------------------
compliance in all material respects with all of the provisions of their
certificate of incorporation and by-laws (or similar organizational and
governance documents), and no event has occurred or failed to occur, which has
not been remedied or waived, the occurrence or non-occurrence of which
constitutes, or which with the passage of time or giving of notice or both would
constitute, (i) an Event of Default or (ii) a default by the Borrower or any of
its Subsidiaries under any indenture, agreement or other instrument, or any
judgment, decree or order to which the Borrower or any of its Subsidiaries or by
which they or any of their respective properties is bound, except to the extent
that such default could not reasonably be expected to have a Material Adverse
Effect.
(p) Governmental Regulation. Neither the Borrower nor any of its
-----------------------
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940. Neither the entering into or performance by the
Borrower of this Agreement nor the issuance of the Notes violates any provision
of such act or requires any consent, approval, or authorization of, or
registration with, the Securities and Exchange Commission or any other Tribunal
pursuant to any provisions of such act.
-52-
(q) Environmental Matters. Neither the Borrower nor any Subsidiary has any
---------------------
current actual knowledge that any substance deemed hazardous by any Applicable
Environmental Law, has been installed (i) on any real property fee title to
which is now owned by the Borrower or any of its Subsidiaries or (ii) by
Borrower or any of its Subsidiaries on any real property leased by the Borrower
or any of its Subsidiaries, in either case in a manner which does not comply
with Applicable Environmental Laws, except to the extent that the failure to so
comply could not reasonably be expected to have a Material Adverse Effect. The
Borrower and its Subsidiaries are not in violation of or subject to any
existing, pending or, to the best of the Borrower's knowledge, threatened
investigation or inquiry by any Tribunal or to any remedial obligations under
any Applicable Environmental Laws, the effect of which could reasonably be
expected to have a Material Adverse Effect. The Borrower and its Subsidiaries
have not obtained and are not required to obtain any permits, licenses or
similar authorizations other than certificates of occupancy and building permits
and other authorizations that have been obtained to construct, occupy, operate
or use any buildings, improvements, fixtures, and equipment forming a part of
any real property owned or leased by the Borrower or any Subsidiary of the
Borrower by reason of any Applicable Environmental Laws, except to the extent
that the failure to so obtain could not reasonably be expected to have a
Material Adverse Effect. The Borrower and its Subsidiaries undertook, at the
time of acquisition of fee title to any real property, reasonable inquiry into
the previous ownership and uses of such real property consistent with good
commercial or customary practice. The Borrower and its Subsidiaries have taken
reasonable steps to determine, and the Borrower and its Subsidiaries have no
current actual knowledge, that any hazardous substances or solid wastes have
been disposed of or otherwise released (i) on or to the real property fee title
to which is owned by the Borrower or any of its Subsidiaries or (ii) by Borrower
or any of its Subsidiaries on or to any real property leased by Borrower or any
of its Subsidiaries, all within the meaning of the Applicable Environmental
Laws, the effect of which could reasonably be expected to have a Material
Adverse Effect. To the extent required to do so by any Applicable Environmental
Laws, the Borrower and its Subsidiaries have disposed of all hazardous
substances and solid wastes (if any), all within the meaning of the Applicable
Environmental Laws, generated in their respective businesses in compliance with
all Applicable Environmental Laws, except to the extent that the failure to so
comply could not reasonably be expected to have a Material Adverse Effect.
(r) Certain Fees. No broker's, finder's or other fee or commission will be
------------
payable by the Borrower (other than to the Lenders hereunder) with respect to
the making of the Commitments or the Advances hereunder. The Borrower agrees to
indemnify and hold harmless the Administrative Agent and each Lender from and
against any claims, demand, liability, proceedings, costs or expenses asserted
with respect to or arising in connection with any such fees or commissions
payable by the Borrower.
(s) Patents, Etc. Except as reflected on Schedule 8 hereto, the Borrower
------------ ----------
and its Subsidiaries have collectively obtained or applied for all patents,
trademarks, service marks, trade names, copyrights, licenses and other rights,
free from burdensome restrictions, that are necessary for the operation of their
business as presently conducted and as proposed to be conducted, except to the
extent that the failure to so obtain or apply could not reasonably be expected
to have a Material Adverse Effect. Except as reflected on Schedule 8 hereto,
----------
nothing has come to the current actual knowledge of the Borrower or any of its
Subsidiaries to the effect that (i) any process, method, part
-53-
or other material presently contemplated to be employed by the Borrower or any
Subsidiary of the Borrower may infringe any patent, trademark, service xxxx,
trade name, copyright, license or other right owned by any other Person, or (ii)
there is pending or overtly threatened any claim or litigation against or
affecting the Borrower or any Subsidiary of the Borrower contesting its right to
sell or use any such process, method, part or other material, which could
reasonably be expected to have a Material Adverse Effect.
(t) Disclosure. All factual information furnished by the Borrower or any
----------
of its Subsidiaries in writing to the Administrative Agent or any Lender in
connection with this Agreement, the other Loan Documents or any transaction
contemplated herein or therein is, and all other factual information hereafter
furnished by or on behalf of the Borrower or any of its Subsidiaries in writing
to the Administrative Agent or any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided. There is no fact known
to the Borrower and not known to the public generally that could reasonably be
expected to have a Material Adverse Effect, which has not been set forth in this
Agreement or in the documents, certificates and statements furnished to the
Lenders by or on behalf of the Borrower prior to the date hereof in connection
with the transaction contemplated hereby.
(u) Solvency. The Borrower is, and Borrower and its Subsidiaries on a
--------
consolidated basis are, Solvent.
(v) Labor Relations. Except as provided on Schedule 9, neither the
--------------- ----------
Borrower nor any Subsidiary is a party to a collective bargaining agreement or
similar agreement, and the Borrower and each Subsidiary is in compliance in all
material respects with all Laws respecting employment and employment practices,
terms and conditions of employment, wages and hours and other laws related to
the employment of its employees, except where the failure to comply could not
reasonably be expected to result in a Material Adverse Effect, and there are no
arrears in the payment of wages, withholding or social security taxes,
unemployment insurance premiums or other similar obligations of the Borrower or
any Subsidiary or for which the Borrower or any Subsidiary may be responsible
other than in the ordinary course of business, except for such unpaid or
unwithheld arrears which could not reasonably be expected to result in a
Material Adverse Effect. There is no strike, work stoppage or labor dispute
with any union or group of employees pending or overtly threatened involving
Borrower or any Subsidiary that could reasonably be expected to have a Material
Adverse Effect.
(w) Consolidated Business Entity. The Borrower and its Subsidiaries are
----------------------------
engaged in the business of developing and operating time-share resorts and other
leisure activities (exclusive of gaming). These operations require financing on
a basis such that the credit supplied can be made available from time to time to
the Borrower and various of its Subsidiaries, as required for the continued
successful operation by the Borrower and its Subsidiaries as a whole. The
Borrower and its Subsidiaries expect to derive benefit (and the board of
directors of the Borrower and its Subsidiaries have determined that the Borrower
and its Subsidiaries may reasonably be expected to derive benefit), directly or
indirectly, from the credit extended by the Lenders hereunder, both in
-54-
their separate capacities and as members of the group of companies, since the
successful operation and condition of the Borrower and its Subsidiaries is
dependent on the continued successful performance of the functions of the group
as a whole.
(x) Time-Share Interest Exchange Network. All of the Projects are members
------------------------------------
and participants, pursuant to validly executed and enforceable written
agreements, in Resort Condominiums International, L.L.C. and/or Interval
International. The Borrower and its Subsidiaries have paid all fees and other
amounts due and owing under such agreements and are not otherwise in default in
any material respect thereunder.
(y) Time-Share Interests. The sale, offering of sale, and financing of
--------------------
Time-Share Interests in the Projects (i) do not constitute the sale, or the
offering of sale, of securities subject to registration requirements of the
Securities Act of 1933, as amended, or any state or foreign securities Law, (ii)
except to the extent that any such violation(s), either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
do not violate any time-sharing or other Law of any state or foreign country in
which sales or solicitation of Time-Share Interests occur, and (iii) except to
the extent that any such violation(s), either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect, do not
violate any consumer credit or usury Laws of any state or foreign country in
which sales or solicitation of Time-Share Interests occur. Except to the extent
that any such failure(s), either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, the Borrower and its
Subsidiaries have not failed to make or cause to be made any registrations or
declarations with any Tribunal necessary to the ownership of the Projects or to
the conduct of its business, including, without limitation, the operation of the
Projects and the sale, or offering for sale, of Time-Share Interests therein.
Except to the extent that any such noncompliance(s), either individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect, Borrower and its Subsidiaries have, to the extent required by its
activities and businesses, fully complied with (i) all of the applicable
provisions of (A) the Consumer Credit Protection Act, as amended, (B) the
Federal Trade Commission Act, as amended, (C) the Federal Interstate Land Sales
Full Disclosure Act, as amended, (D) any other Laws of any Tribunal otherwise
applicable, and (E) all rules and regulations promulgated under any of the
foregoing. True and complete copies of the Purchase Documents and other
documents requested by the Administrative Agent which have been and are being
used by the Borrower and its Subsidiaries in connection with the Projects and
the sale or offering for sale of Time-Share Interests therein have been
delivered to the Administrative Agent. Other than the Time-Share Interests
attributable to Right-To-Use Receivables, the Time-Share Interests in the
Projects constitute undivided interests in real property under the Laws of the
jurisdictions in which the applicable Units are located.
(z) Common Areas. To the extent that the Borrower or any of its
------------
Subsidiaries are legally obligated to construct same, the common areas and
amenities appurtenant to sold Time-Share Interests, and the streets and other
off-site improvements contained within the Projects have been completed or a
bond insuring the completion thereof has been obtained and such interests in
such common areas are free and clear of all Liens except Permitted Liens.
-55-
(aa) Subordinated Debt. The terms, provisions, covenants and requirements
-----------------
contained in the documents, instruments and agreements relating to the
Subordinated Debt are not more restrictive than the comparable terms,
provisions, covenants and requirements contained in this Agreement and the other
Loan Documents. All of the Obligations constitute senior indebtedness under the
documents, instruments and agreements evidencing or relating to the Subordinated
Debt and, as such, all of the Obligations are expressly superior in right of
payment to the Subordinated Debt.
(bb) Year 2000 Compliance. The Borrower and the Subsidiaries of the
--------------------
Borrower have developed and budgeted for a comprehensive program to address the
"Year 2000" problem (that is, the inability of computers, as well as embedded
microchips in non-computing devices, to perform properly date-sensitive
functions with respect to certain dates prior to and after December 31, 1999).
The Borrower and the Subsidiaries of the Borrower have implemented that program
substantially in accordance with its timetable and budget and the Borrower
reasonably anticipates that the Borrower and the Subsidiaries of the Borrower
will substantially avoid the Year 2000 problem as to all computers, as well as
embedded microchips in non-computing devices, that are material to the
business(es), property(ies) and operations of the Borrower and/or the
Subsidiaries of the Borrower. The Borrower and the Subsidiaries of the Borrower
have developed feasible contingency plans adequately to ensure uninterrupted and
unimpaired business operations in the event of failure of the systems or
equipment of the Borrower, the Subsidiaries of the Borrower and/or third parties
due to the Year 2000 problem, including those of vendors, customers and
suppliers, as well as a general failure of, or interruption in, the
communications and/or delivery infrastructure of the Borrower and/or the
Subsidiaries of the Borrower.
(cc) Non-Standard Receivables. With respect to each Non-Standard
------------------------
Receivable that was originally executed by the applicable Purchaser, or that
otherwise arose or was created, prior to June 1, 1999 and that is, at any time,
included in the calculation of the Borrowing Base, the Borrower is diligently
taking all necessary or appropriate actions and diligently doing all necessary
or appropriate things in order for such Non-Standard Receivable to satisfy the
criteria set forth herein for inclusion in the Borrowing Base as a Standard
Receivable within one year from the date that such Non-Standard Receivable was
first included in the calculation of the Borrowing Base as a Non-Standard
Receivable.
With respect to each Non-Standard Receivable that was originally executed
by the applicable Purchaser, or that otherwise arose or was created, on or after
June 1, 1999 and that is, at any time, included in the calculation of the
Borrowing Base, (i) such Non-Standard Receivable is undergoing normal processing
by the Borrower in order for such Non-Standard Receivable to satisfy the
criteria set forth herein for inclusion in the Borrowing Base as a Standard
Receivable within nine months from the date that such Non-Standard Receivable
was originally executed by the applicable Purchaser, or the date that such Non-
Standard Receivable otherwise arose or was created (whichever date is the
earliest), and (ii) the Borrower believes and expects that such Non-Standard
Receivable will satisfy the criteria set forth herein for inclusion in the
Borrowing Base as a Standard Receivable within the time frame set forth in
clause (i) above.
-56-
Section 4.2 Survival of Representations and Warranties, etc. All
-----------------------------------------------
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made at and as of the Agreement Date and at and
as of the date of each Advance and the date of issuance of each Letter of
Credit, and each shall be true and correct in all material respects when made,
except to the extent (a) previously fulfilled in accordance with the terms
hereof or (b) previously waived in writing by the Determining Lenders with
respect to any particular factual circumstance or permitted by the terms of this
Agreement. All such representations and warranties shall survive, and not be
waived by, the execution hereof by any Lender, any investigation or inquiry by
any Lender, or by the making of any Advance or the issuance of any Letter of
Credit under this Agreement.
ARTICLE 5
General Covenants
-----------------
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled):
Section 5.1 Preservation of Existence and Similar Matters. The Borrower
---------------------------------------------
shall, and shall cause each Subsidiary of the Borrower to:
(a) except as otherwise permitted pursuant to Section 7.4 hereof, preserve
-----------
and maintain, or timely obtain and thereafter preserve and maintain, its
existence, rights, franchises, licenses, authorizations, consents, privileges
and all other Necessary Authorizations from any Tribunal, the loss of which
could reasonably be expected to have a Material Adverse Effect; and
(b) except as otherwise permitted pursuant to Section 7.4 hereof, qualify
-----------
and remain qualified and authorized to do business in each jurisdiction in which
the character of its properties or the nature of its business requires such
qualification or authorization, unless the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The Borrower and
----------------------------------------
its Subsidiaries shall (a) engage primarily in the businesses set forth in
Section 4.1(d) hereof, and (b) comply in all respects with the requirements of
--------------
all Applicable Law, except where the failure to so comply could not reasonably
be expected to have a Material Adverse Effect.
Section 5.3 Maintenance of Properties. To the maximum extent that the
-------------------------
Borrower and/or any Subsidiary of the Borrower has the right, power or authority
(whether as a matter of contract, at law or otherwise) to do so, the Borrower
shall, and shall cause each Subsidiary of the Borrower to, maintain or cause to
be maintained all its properties (whether owned or held under lease) in
reasonably good repair, working order and condition, taken as a whole, and from
time to time make or cause to be made all appropriate (in the reasonable
judgment of the Borrower) repairs, renewals, replacements, additions,
betterments and improvements thereto, except where the failure to so maintain,
repair, renew, replace or improve could not reasonably be expected to have a
Material Adverse Effect.
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Section 5.4 Accounting Methods and Financial Records. The Borrower
----------------------------------------
shall, and shall cause each Subsidiary of the Borrower to, maintain a system of
accounting established and administered in accordance with GAAP, keep adequate
records and books of account in which complete entries will be made and all
transactions reflected in accordance with GAAP, and keep accurate and complete
records of its respective assets. The Borrower and each of its Subsidiaries
shall maintain its fiscal year in the manner in existence on the Agreement Date.
Section 5.5 Insurance. The Borrower shall, and shall cause each
---------
Subsidiary of the Borrower to, maintain insurance from responsible companies in
such amounts and against such risks as shall be customary and usual in the
industry for companies of similar size and capability. Each insurance policy
shall (a) provide for at least 30 days' prior notice to the Administrative Agent
of any proposed termination or cancellation of such policy, whether on account
of default or otherwise and (b) otherwise contain the requirements for insurance
set forth in the Security Agreements.
Section 5.6 Payment of Taxes and Claims. The Borrower shall, and shall
---------------------------
cause each Subsidiary of the Borrower to, pay and discharge all material Taxes
to which they are subject prior to the date on which penalties attach thereto,
and all lawful material claims for labor, materials and supplies which, if
unpaid, might become a Lien upon any of its properties; except that no such Tax
or claim need be paid which is being diligently contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on the appropriate books, but only so long as no Lien shall attach with
respect thereto and no foreclosure, distraint, sale or similar proceedings shall
have been commenced. The Borrower shall, and shall cause each Subsidiary of the
Borrower to, timely file all information returns (or extensions of such filing
deadlines) required by federal, state or local tax authorities.
Section 5.7 Visits and Inspections. The Borrower shall, shall cause
----------------------
each Subsidiary of the Borrower to, and shall use its best efforts to cause each
Custodian and each Servicing Agent to, promptly permit representatives of the
Administrative Agent or any Lender (and third party consultants and auditors
retained by the Administrative Agent) from time to time after reasonable notice
by the Administrative Agent or any Lender to (a) visit and inspect the
properties of the Borrower, the Subsidiaries of the Borrower, each Custodian and
each Servicing Agent as often as the Administrative Agent or any Lender shall
reasonably deem advisable, (b) audit, inspect and make extracts from and copies
of the books and records of the Borrower, each Subsidiary of the Borrower, each
Custodian and each Servicing Agent, and (c) discuss with the appropriate
directors, officers, employees and auditors of the Borrower, each Subsidiary of
the Borrower, each Custodian and each Servicing Agent the business, assets,
liabilities, financial positions, results of operations and business prospects
of the Borrower and each Subsidiary of the Borrower, provided that such
--------
representatives of the Administrative Agent or any Lender and such third party
consultants and auditors shall keep confidential all information obtained
pursuant to this Section 5.7 to the extent required by Section 11.14. The
----------- -------------
Borrower shall pay the reasonable fees, costs and expenses related to up to
three (3) such inspections and audits performed by, or on behalf of, the
Administrative Agent per twelve-month period. Prior to the occurrence of an
Event of Default, all such visits and inspections shall be conducted during
normal business hours. Following the occurrence and during the continuance of
an Event of Default, such visits, inspections and audits shall be conducted at
any time requested by the Administrative Agent or any Lender without any
requirement for reasonable notice.
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Section 5.8 Use of Proceeds. The proceeds of the Advances and the
---------------
Letters of Credit shall be used by the Borrower (a) to refinance certain
existing and future debt of the Borrower and its Subsidiaries, (b) to finance
Acquisitions permitted under Section 7.6 hereof, (c) to finance eligible
-----------
mortgage loans, (d) to finance the ongoing working capital and general corporate
requirements of the Borrower and its Subsidiaries, and (e) for other legitimate
corporate purposes not otherwise prohibited hereunder.
SECTION 5.9 INDEMNITY.
---------
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(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS THE
ADMINISTRATIVE AGENT, EACH LENDER, EACH OF THEIR RESPECTIVE AFFILIATES, AND EACH
OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, ATTORNEYS, SHAREHOLDERS AND CONSULTANTS (INCLUDING, WITHOUT LIMITATION,
THOSE RETAINED IN CONNECTION WITH THE SATISFACTION OR ATTEMPTED SATISFACTION OF
ANY OF THE CONDITIONS SET FORTH HEREIN) OF EACH OF THE FOREGOING (COLLECTIVELY,
"INDEMNITEES") FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
-----------
DAMAGES, PENALTIES, ACTIONS, PROCEEDINGS (WHETHER CIVIL OR CRIMINAL), JUDGMENTS,
SUITS, CLAIMS, REASONABLE COSTS, REASONABLE EXPENSES AND REASONABLE
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION,
THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH INDEMNITEES IN
CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING,
WHETHER OR NOT SUCH INDEMNITEES SHALL BE DESIGNATED A PARTY THERETO), IMPOSED
ON, INCURRED BY, OR ASSERTED AGAINST SUCH INDEMNITEES (WHETHER DIRECT, INDIRECT
OR CONSEQUENTIAL AND WHETHER BASED ON ANY FEDERAL, STATE, OR LOCAL LAWS AND
REGULATIONS, UNDER COMMON LAW OR AT EQUITABLE CAUSE, OR ON CONTRACT, TORT OR
OTHERWISE, ARISING FROM OR CONNECTED WITH THE PAST, PRESENT OR FUTURE OPERATIONS
OF THE BORROWER, ITS SUBSIDIARIES OR THEIR RESPECTIVE PREDECESSORS IN INTEREST,
OR THE PAST, PRESENT OR FUTURE ENVIRONMENTAL CONDITION OF PROPERTY OF THE
BORROWER OR ITS SUBSIDIARIES), RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR ANY ACT, EVENT OR TRANSACTION OR ALLEGED ACT, EVENT OR
TRANSACTION RELATING OR ATTENDANT THERETO, THE MANAGEMENT OF THE ADVANCES OR
LETTERS OF CREDIT, INCLUDING IN CONNECTION WITH, OR AS A RESULT, IN WHOLE OR IN
PART, OF ANY ORDINARY OR MERE NEGLIGENCE OF ADMINISTRATIVE AGENT OR ANY LENDER
(OTHER THAN THOSE MATTERS RAISED EXCLUSIVELY BY A PARTICIPANT OR OTHER LENDER
AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER AND NOT THE BORROWER OR ANY OF
ITS SUBSIDIARIES), OR THE USE OR INTENDED USE OF THE PROCEEDS OF THE ADVANCES OR
LETTERS OF CREDIT HEREUNDER, OR IN CONNECTION WITH ANY INVESTIGATION OF ANY
POTENTIAL MATTER COVERED HEREBY, OR THE PROJECTS, OR ANY LENDER'S STATUS BY
VIRTUE OF THE ASSIGNMENT OF PLEDGED DOCUMENTS, OR ANY ACT OR OMISSION BY THE
BORROWER, ANY OF ITS SUBSIDIARIES, THE CUSTODIAN OR THE SERVICING AGENT, OR THE
EMPLOYEES OR AGENTS OF ANY OF THEM, OR ANY ACT OR OMISSION BY ALL BROKERS,
AGENTS OR OTHER SALESMEN OF TIME-SHARE INTERESTS, BUT EXCLUDING (i) ANY CLAIM OR
LIABILITY THAT ARISES AS THE RESULT OF THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT
OF ANY INDEMNITEE, AS FINALLY JUDICIALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION, AND (ii) MATTERS RAISED BY ONE LENDER OR PARTICIPANT AGAINST
ANOTHER LENDER OR PARTICIPANT OR BY ANY SHAREHOLDERS OF
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A LENDER OR A PARTICIPANT AGAINST A LENDER OR A PARTICIPANT OR THE RESPECTIVE
MANAGEMENT OF SUCH LENDER OR PARTICIPANT (COLLECTIVELY, "INDEMNIFIED MATTERS").
-------------------
TO THE EXTENT THAT ANY INDEMNIFIED MATTER INVOLVES ONE OR MORE INDEMNITEES, SUCH
INDEMNITEES SHALL USE THE SAME LEGAL COUNSEL UNLESS ANY INDEMNITEE IN ITS
REASONABLE DISCRETION DETERMINES THAT CONFLICTS EXIST OR MAY ARISE IN CONNECTION
WITH SUCH REPRESENTATION.
(b) WITHOUT DUPLICATION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST,
REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL REASONABLE
EXPENSES (INCLUDING THE REASONABLE COST OF ANY INVESTIGATION AND PREPARATION)
INCURRED IN CONNECTION WITH ANY INDEMNIFIED MATTER. THE REIMBURSEMENT,
INDEMNITY AND CONTRIBUTION OBLIGATIONS UNDER THIS SECTION SHALL BE IN ADDITION
TO ANY LIABILITY WHICH THE BORROWER MAY OTHERWISE HAVE, SHALL EXTEND UPON THE
SAME TERMS AND CONDITIONS TO EACH INDEMNITEE, AND SHALL BE BINDING UPON AND
INURE TO THE BENEFIT OF ANY SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL
REPRESENTATIVES OF THE BORROWER, THE ADMINISTRATIVE AGENT, THE LENDERS AND ALL
OTHER INDEMNITEES. THIS SECTION SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT
AND PAYMENT OF THE OBLIGATIONS.
Section 5.10 Environmental Law Compliance. The use which the Borrower or
----------------------------
any Subsidiary of the Borrower intends to make of any real property which is
owned or leased by it will not result in the disposal or other release of any
hazardous substance or solid waste on or to such real property which is in
violation of Applicable Environmental Laws, the effect of which could reasonably
be expected to have a Material Adverse Effect. As used herein, the terms
"hazardous substance" and "release" as used in this Section shall have the
meanings specified in CERCLA (as defined in the definition of Applicable
Environmental Laws), and the terms "solid waste" and "disposal" shall have the
meanings specified in RCRA (as defined in the definition of Applicable
Environmental Laws); provided, however, that if CERCLA or RCRA is amended so as
to broaden or lessen the meaning of any term defined thereby, such broader or
lesser meaning shall apply subsequent to the effective date of such amendment;
and provided further, to the extent that any other law applicable to the
Borrower, any Subsidiary or any of their respective properties establishes (to
the exclusion of the applicability of CERCLA and RCRA) a meaning for "hazardous
substance," "release," "solid waste," or "disposal" which is broader or lesser
than that specified in either CERCLA or RCRA, such broader or lesser meaning
shall apply. The Borrower agrees to indemnify and hold the Administrative Agent
and each Lender harmless from and against, and to reimburse them with respect
to, any and all claims, demands, causes of action, loss, damage, liabilities,
reasonable costs and reasonable expenses (including reasonable attorneys' fees
and courts costs) of any kind or character, known or unknown, fixed or
contingent, asserted against or incurred by any of them at any time and from
time to time by reason of or arising out of (a) the failure of the Borrower or
any Subsidiary to perform any of their obligations hereunder regarding asbestos
or Applicable Environmental Laws, (b) any violation on or before the Release
Date of any Applicable Environmental Law in effect on or before the Release
Date, and (c) any act, omission, event or
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circumstance existing or occurring on or prior to the Release Date (including
without limitation the presence on such real property or release from such real
property of hazardous substances or solid wastes disposed of or otherwise
released on or prior to the Release Date), resulting from or in connection with
the ownership of the real property, regardless of whether the act, omission,
event or circumstance constituted a violation of any Applicable Environmental
Law at the time of its existence or occurrence; provided that, the Borrower
shall not be under any obligation to indemnify the Administrative Agent or any
Lender to the extent that any such liability arises as the result of the gross
negligence or wilful misconduct of such Person, as finally judicially determined
by a court of competent jurisdiction. The provisions of this paragraph shall
survive the Release Date and shall continue thereafter in full force and effect.
Section 5.11 Further Assurances. At any time or from time to time upon
------------------
request by the Administrative Agent, the Borrower or any Subsidiary of the
Borrower shall execute and deliver such further documents and do such other acts
and things as the Administrative Agent may reasonably request in order to effect
fully the purposes of this Agreement and the other Loan Documents and to provide
for payment of the Obligations in accordance with the terms of this Agreement
and the other Loan Documents. Without limiting the generality of the foregoing,
the Borrower agrees to (a) update and deliver to the Administrative Agent
supplements to Schedules 3 and 4 hereto at the time of delivery of the financial
----------- -
statements set forth in Sections 6.3 and 6.4 hereof if the information provided
------------ ---
therein is not complete and correct, and (b) update and deliver to the
Administrative Agent modified Security Agreements, together with updated
exhibits and schedules thereto, promptly upon discovery that the information
provided therein is not complete and correct.
Section 5.12 Management of Projects. To the maximum extent that the
----------------------
Borrower and/or any Subsidiary of the Borrower has the right, power or authority
(whether as a matter of contract, at law or otherwise) to do so, the Borrower
shall, and shall cause each of its Subsidiaries to, maintain managers and
management contracts with respect to each Project which are reasonably
satisfactory to the Administrative Agent; provided, however, that the Borrower
and each Subsidiary of the Borrower shall be deemed to be reasonably
satisfactory to the Administrative Agent as managers of the Projects for
purposes of this Section 5.12. The Borrower shall not change the manager of any
------------
Project (except to the extent that the Borrower replaces the existing manager
with a manager that is a Subsidiary of the Borrower) or materially amend, modify
or waive any provision of or terminate the management contract for any Project
without the prior written consent of the Administrative Agent.
Section 5.13 Obligations to Purchasers. The Borrower shall, and shall
-------------------------
cause each of its Subsidiaries to, fulfill all obligations to the Purchasers
under Eligible Notes Receivable which are used in making the Borrowing Base
computations or otherwise constitute part of the Collateral.
Section 5.14 Owners Associations. The Borrower shall, and shall cause
-------------------
each of its Subsidiaries to, cause each Purchaser to automatically be a member
of each Project's owners association or associations, if any, and shall be
entitled to vote on the affairs thereof (subject, however, to any preferential
voting rights in favor of the Borrower or any of its Subsidiaries as permitted
under applicable time-share Laws). Each such owners association shall have the
authority
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to fix and levy pro rata upon each Purchaser annual assessments to cover the
costs of maintaining and operating such Project (including, without limitation,
taxes and assessments not levied by the appropriate taxing authority directly
against owners of Time-Share Interests) and to establish a reasonable reserve
for improvements, the replacement of property and furnishings, and
contingencies. If the Borrower or any of its Subsidiaries controls an owners
association, the Borrower or any of its Subsidiaries will while it controls such
association: (i) cause such owners association to discharge timely and
completely its obligations under such Project's governing documents and maintain
the reserve described above and (ii) to the extent requested to do so by the
Administrative Agent, pay or loan to such owners association, not less often
than is necessary to provide sufficient funding for such owners association in
order to maintain, preserve and maximize the ownership, quality, safety,
marketability, value and appearance of the applicable Project, the difference
between (A) the cumulative total amount of the maintenance and operating
expenses incurred by such association, together with the amount of any
installment of real property taxes currently due and payable with respect to
such Project not directly levied against owners of Time-Share Interests, through
the end of the calendar month preceding the month in which such payment or loan
is made and (B) the cumulative total amount of assessments (less amounts thereof
allocated to reserve expenses) payable to the association by Time-Share Interest
owners other than the Borrower or its Subsidiaries, as appropriate, through the
end of the calendar month preceding the month in which such payment or loan is
made.
Section 5.15 Note Receivable Information. The Borrower shall, and shall
---------------------------
cause each of its Subsidiaries to, maintain accurate and complete files relating
to the Notes Receivable with respect to the Projects and other Collateral, and
such files will contain copies of each Note Receivable, copies of all relevant
credit memoranda relating to such Notes Receivable and all collection
information and correspondence related thereto.
Section 5.16 Maintenance of Borrowing Base. The Borrower shall, and
-----------------------------
shall cause each of its Restricted Subsidiaries to, at all times maintain the
Borrowing Base at an amount equal to or greater than the aggregate principal
amount of all outstanding Revolving Credit Advances and Reimbursement
Obligations. Without waiving or otherwise modifying the foregoing requirements
of this Section 5.16:
------------
(a) if any Note Receivable is included in the Borrowing Base as an Eligible
Note Receivable and such Note Receivable thereafter fails to meet the criteria
for inclusion as an Eligible Note Receivable, the Borrower shall have the right
to obtain a release of the nonqualifying Note Receivable from the Liens
hereunder in favor of the Administrative Agent and the Lenders if immediately
prior to, and after giving effect to, such proposed release, (i) the Borrower is
in compliance with the requirements of this Section 5.16, and (ii) no Default or
------------
Event of Default exists hereunder or under any of the other Loan Documents;
(b) if any Note Receivable is included as Collateral hereunder and such
Note Receivable is thereafter included in a Securitization, the Borrower shall
have the right to obtain a release of such Note Receivable from the Liens
hereunder in favor of the Administrative Agent and the Lenders if (i)
immediately prior to, and after giving effect to, such proposed release, (x) the
Borrower is in compliance with the requirements of this Section 5.16, and (y) no
------------
Default or Event of Default exists hereunder or under any of the other Loan
Documents, and (ii) prior to any such release by the
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Administrative Agent, the Borrower has delivered to the Administrative Agent a
Borrowing Base Report evidencing the Borrower's compliance with the requirements
of clauses (x) and (y) above; and
(c) not more often than two (2) times per calendar quarter, the Borrower
shall have the right, by making a written request therefor to the Administrative
Agent, to obtain a release of Notes Receivable from the Liens hereunder in favor
of the Administrative Agent and the Lenders if (i) immediately prior to, and
after giving effect to, such proposed release, (x) the Borrower is in compliance
with the requirements of this Section 5.16, (y) no Default or Event of Default
------------
exists hereunder or under any of the other Loan Documents, and (z) the Borrower
pays the Administrative Agent a fee of $1,000 in connection with each such
release request, and (ii) prior to any such release by the Administrative Agent,
the Borrower has delivered to the Administrative Agent a Borrowing Base Report
evidencing the Borrower's compliance with the requirements of clauses (x) and
(y) above. Subject to the satisfaction by the Borrower of the requirements of
this Section 5.16(c), the Administrative Agent shall execute appropriate release
---------------
documentation, and shall deliver same to the Borrower for recordation or filing,
as applicable, within a reasonable period of time after the Borrower furnishes
such documentation to the Administrative Agent.
Section 5.17 Time-Share Interest Exchange Network. Each of the Projects
------------------------------------
shall continue to be members and participants, pursuant to validly executed and
enforceable written agreements, in Resort Condominiums International, L.L.C.
and/or Interval International. Borrower and its Subsidiaries shall pay, in a
timely manner, all fees and other amounts due and owing under such agreements
and shall not otherwise take any action, or fail to take any action, the result
of which would be to create any default in any material respect thereunder.
Section 5.18 Maintenance of Projects Attributable to Leasehold
-------------------------------------------------
Receivables. Without limiting the obligations of the Borrower and the
-----------
Borrower's Subsidiaries under Section 5.14 hereof or otherwise, to the extent
------------
that, and during any period of time that, any Leasehold Receivables are included
in the calculation of the Borrowing Base hereunder, the Borrower shall satisfy
and discharge, either directly or by means of loans or advances to the
applicable owners association(s) for such purposes, any deficiency(ies) between
(i) the aggregate amount of the costs and expenses of maintaining and operating
each Project to which any such Leasehold Receivables relate (including, without
limitation, taxes and assessments not levied by the appropriate taxing authority
directly against owners of Time-Share Interests in such Project) and the
aggregate amount of reasonable reserves for improvements, the replacement of
property and furnishings, and contingencies with respect to such Project, and
(ii) the aggregate amount of such costs, expenses and reserves as may have been
paid by owners of Time-Share Interests with respect to such Project, and as may
be available for, such purposes. Such costs, expenses and reserves shall be
determined by the Borrower, and the Borrower shall fund any deficiency with
respect thereto, at such times (but not less often than annually) as shall be
necessary to provide sufficient funding in order to maintain, preserve and
maximize the ownership, quality, safety, marketability, value and appearance of
the applicable Project.
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ARTICLE 6
Information Covenants
---------------------
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled), the Borrower shall furnish or cause to be furnished to
each Lender or shall notify each Lender of the following events:
Section 6.1 Borrowing Base Report. Within 15 days after the end of each
---------------------
month of each fiscal year, a Borrowing Base Report (with the information set
forth therein being as of the end of such month), in form and substance
satisfactory to the Administrative Agent. Prior to the last day of each month of
each fiscal year, a Borrowing Base Report (with the information set forth
therein being as of the 15th day of such month), in form and substance
satisfactory to the Administrative Agent.
Section 6.2 Eligible Notes Receivable Report. Within 30 days after the
--------------------------------
end of each calendar quarter, a report showing through the end of such calendar
quarter, (a) the opening and closing balances on each Eligible Note Receivable,
(b) all payments received on each Eligible Note Receivable allocated to
interest, principal, late charges, taxes or the like, (c) the average rate of
interest for all Eligible Notes Receivable, (d) an itemization of delinquencies,
prepayments and any other adjustments for each Eligible Note Receivable, (e) the
average down payment received with respect to all Eligible Notes Receivable, (f)
the nature and status of any claims asserted or legal action pending with
respect to any Eligible Note Receivable, and (g) with respect to each Eligible
Note Receivable that was included in the calculation of the Borrowing Base as a
Standard Receivable as of the end of such calendar quarter, the compliance of
such Eligible Note Receivable with the requirements of clauses (b) and (c) of
the definition herein of the term "Standard Receivables".
Section 6.3 Quarterly Financial Statements and Information. Within 45
----------------------------------------------
days after the end of each of the first three fiscal quarters of each fiscal
year, the consolidated balance sheets of the Borrower and its Subsidiaries as at
the end of such fiscal quarter and the related consolidated statements of income
for such fiscal quarter and for the elapsed portion of the year ended with the
last day of such fiscal quarter, and consolidated statements of cash flow for
the elapsed portion of the year ended with the last day of such fiscal quarter,
all of which shall be certified by the president, chief financial officer or
treasurer of the Borrower, to, in his or her opinion acting solely in his or her
capacity as an officer of the Borrower, present fairly in all material respects,
in accordance with GAAP (except for the absence of footnotes), the financial
position and results of operations of the Borrower and its Subsidiaries as at
the end of and for such fiscal quarter, and for the elapsed portion of the year
ended with the last day of such fiscal quarter, subject only to normal year-end
adjustments.
Section 6.4 Annual Financial Statements and Information; Certificate of
-----------------------------------------------------------
No Default.
----------
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(a) Within 90 days after the end of each fiscal year, a copy of (i) the
consolidated balance sheets of the Borrower and its Subsidiaries, as of the end
of the current and prior fiscal years and (ii) the consolidated statements of
earnings and consolidated statements of changes in shareholders' equity, and
statements of cash flow as of and through the end of such fiscal year, all of
which are prepared in accordance with GAAP, and certified by independent
certified public accountants reasonably acceptable to the Lenders (provided,
however, any former big six public accounting firm shall be acceptable to the
Lenders), whose opinion shall be in scope and substance in accordance with
generally accepted auditing standards and shall be unqualified as to scope of
audit and going concern.
(b) As soon as available, but in any event within 30 days after December
31, 1999 and within 30 days after the end of each fiscal year thereafter, a copy
of the annual consolidated financial projections (containing such information as
may be requested by the Administrative Agent, including, but not limited to, pro
forma income statements, balance sheets and statements of cash flow) of the
Borrower and the Subsidiaries of the Borrower for the succeeding fiscal year.
Section 6.5 Compliance Certificate. At the time financial statements
----------------------
are furnished pursuant to Sections 6.3 and 6.4 hereof, the Compliance
------------ ---
Certificate, completed as provided therein, executed by the president, the chief
financial officer, or treasurer of the Borrower.
Section 6.6 Copies of Other Reports and Notices.
-----------------------------------
(a) Promptly upon their becoming available, a copy of (i) all material
final reports or letters submitted to the Borrower or any Subsidiary of the
Borrower by accountants in connection with any annual, interim or special audit,
including without limitation any final report prepared in connection with the
annual audit referred to in Section 6.4 hereof, and, if requested by the
-----------
Administrative Agent, any other comment letter submitted to management in
connection with any such audit, (ii) each financial statement, report, notice or
proxy statement sent by the Borrower to stockholders generally, (iii) each
regular, periodic or other report and any registration statement (other than
statements on Form S-8) or prospectus (or material written communication in
respect of any thereof) filed by the Borrower or any Subsidiary of the Borrower
with any securities exchange, with the Securities and Exchange Commission or any
successor agency, (iv) all press releases concerning material financial aspects
of the Borrower or any Subsidiary of the Borrower, and (v) forms of Purchase
Documents and, to the extent requested by the Administrative Agent, other
documents being used in connection with the Projects to the extent different
from those previously furnished to the Administrative Agent;
(b) Promptly upon becoming aware (i) that the holder(s) of any note(s) or
other evidence of indebtedness or other security of the Borrower or any
Subsidiary of the Borrower in excess of $500,000 in the aggregate has given
notice or taken any action with respect to a breach, failure to perform, claimed
default or event of default thereunder, (ii) of the occurrence or non-occurrence
of any event which constitutes or which with the passage of time or giving of
notice or both could constitute a material breach by the Borrower or any
Subsidiary of the Borrower under any material agreement or instrument other than
this Agreement to which the Borrower or any Subsidiary of the Borrower is a
party or by which any of their respective properties may be bound, or (iii) of
any
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event, circumstance or condition which could reasonably be expected to be
classified as a Material Adverse Effect, a written notice specifying the details
thereof (or the nature of any claimed default or event of default) and what
action is being taken or is proposed to be taken with respect thereto;
(c) Promptly upon becoming aware that any party to any Capitalized Lease
Obligations or Operating Lease, in each case, in excess of $500,000, has given
notice or taken any action with respect to a breach, failure to perform, claimed
default or event of default thereunder, a written notice specifying the details
thereof (or the nature of any claimed default or event of default) and what
action is being taken or is proposed to be taken with respect thereto;
(d) Promptly upon receipt thereof, information with respect to and copies
of any notices received from any Tribunal relating to any order, ruling, law,
information or policy that relates to a breach of or noncompliance with any Law,
or could reasonably be expected to result in the payment of money by the
Borrower or any Subsidiary of the Borrower in an amount of $500,000 or more in
the aggregate, or otherwise have a Material Adverse Effect, or result in the
loss or suspension of any Necessary Authorization where such loss could
reasonably be expected to have a Material Adverse Effect; and
(e) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents or further information regarding
the assets, business, liabilities, financial position, projections, results of
operations or business prospects of the Borrower and its Subsidiaries, as the
Administrative Agent or any Lender may reasonably request.
Section 6.7 Notice of Litigation, Default and Other Matters. Prompt
-----------------------------------------------
notice of the following events after the Borrower has knowledge or notice
thereof:
(a) The commencement of all Litigation and investigations by or before any
Tribunal, and all actions and proceedings in any court or before any arbitrator
involving claims (i) for damages (including punitive damages) in excess of
$500,000 (after deducting the amount with respect to the Borrower or any
Subsidiary of the Borrower is insured), against or in any other way relating
directly to the Borrower, any Subsidiary of the Borrower, or any of their
respective properties or businesses or (ii) which otherwise could affect any
Collateral and which could reasonably be expected to have a Material Adverse
Effect; and
(b) Promptly upon the happening of any condition or event of which the
Borrower has current actual knowledge which constitutes a Default, a written
notice specifying the nature and period of existence thereof and what action is
being taken or is proposed to be taken with respect thereto.
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Section 6.8 ERISA Reporting Requirements.
----------------------------
(a) Promptly and in any event (i) within 30 days after the Borrower or any
member of its Controlled Group has current actual knowledge that any ERISA Event
described in clause (a) of the definition of ERISA Event or any event described
in Section 4063(a) of ERISA with respect to any Plan of the Borrower or any
member of its Controlled Group has occurred, and (ii) within 10 days after the
Borrower or any member of its Controlled Group has current actual knowledge that
any other ERISA Event with respect to any Plan of the Borrower or any member of
its Controlled Group has occurred or a request for a minimum funding waiver
under Section 412 of the Code has been made with respect to any Plan of the
Borrower or any member of its Controlled Group, a written notice describing such
event and describing what action is being taken or is proposed to be taken with
respect thereto, together with a copy of any notice of such event that is given
to the PBGC;
(b) Promptly and in any event within three Business Days after receipt
thereof by the Borrower or any member of its Controlled Group from the PBGC,
copies of each notice received by the Borrower or any member of its Controlled
Group of the PBGC's intention to terminate any Plan or to have a trustee
appointed to administer any Plan;
(c) Promptly and in any event within 30 days after the filing thereof by
the Borrower or any member of its Controlled Group with the United States
Department of Labor or the Internal Revenue Service, copies of each annual
report (including Schedule B thereto, if applicable) with respect to each Plan
subject to Title IV of ERISA of which Borrower or any member of its Controlled
Group is the "plan sponsor";
(d) Promptly, and in any event within 10 Business Days after receipt
thereof, a copy of any correspondence the Borrower or any member of its
Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief
financial officer of the Borrower or such member of its Controlled Group setting
forth details as to the events giving rise to such potential withdrawal
liability and the action which the Borrower or such member of its Controlled
Group is taking or proposes to take with respect thereto;
(e) Notification within 30 days of any material increases in the benefits
provided under any existing Plan which is not a Multiemployer Plan, or the
establishment of any new Plans, or the commencement of contributions to any Plan
to which the Borrower or any member of its Controlled Group was not previously
contributing, which could reasonably be expected in any such case to result in
an additional material liability to the Borrower;
(f) Notification within three Business Days after the Borrower or any
member of its Controlled Group knows that the Borrower or any such member of its
Controlled Group has filed or intends to file a notice of intent to terminate
any Plan under a distress termination within the meaning of Section 4041(c) of
ERISA and a copy of such notice; and
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(g) Within three Business Days after receipt of written notice of
commencement thereof, notice of all actions, suits and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower or any member of
its Controlled Group with respect to any Plan, except those which, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
ARTICLE 7
Negative Covenants
------------------
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled):
Section 7.1 Indebtedness. The Borrower shall not, and shall not permit
------------
any Subsidiary of the Borrower to, create, assume, incur or otherwise become or
remain obligated in respect of, or permit to be outstanding, or suffer to exist
any Indebtedness, except:
(a) Indebtedness under the Loan Documents; and
(b) Other Indebtedness, if, and only to the extent that, immediately prior
to, and after giving effect to, the incurrence of such Indebtedness, no Default
or Event of Default exists.
Section 7.2 Liens. The Borrower shall not, and shall not permit any
-----
Subsidiary of the Borrower to, create, assume, incur, permit or suffer to exist,
directly or indirectly, any Lien on any of its assets, whether now owned or
hereafter acquired, except Permitted Liens.
Section 7.3 Investments. The Borrower shall not, and shall not permit
-----------
any Subsidiary of the Borrower to, make any Investment, except that the Borrower
and any such Subsidiary may purchase or otherwise acquire and own:
(a) Cash and Cash Equivalents;
(b) Accounts receivable that arise in the ordinary course of business and
are payable on standard terms;
(c) Investments in existence on the Agreement Date which are described on
Schedule 5 hereto;
----------
(d) Investments which are Acquisitions permitted pursuant to Section 7.6
-----------
hereof;
(e) Investments in the form of Hedge Agreements entered into with any
Lender;
(f) Investments in Subsidiaries of the Borrower which are Restricted
Subsidiaries; provided, however, that the aggregate amount of Investments made
or incurred after the Agreement
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Date by the Borrower and/or Subsidiaries in, or with respect to, Foreign
Subsidiaries shall not exceed $20,000,000;
(g) Guaranties of Indebtedness (i) of any Person other than the Borrower or
a Restricted Domestic Subsidiary to the extent that (x) the aggregate amount of
such Guaranties by the Borrower and the Subsidiaries of the Borrower does not
exceed ten percent (10%) of the combined total assets of the Borrower and the
Subsidiaries of the Borrower, and (y) immediately prior to and after giving
effect to any such proposed Guaranty there shall not exist a Default or Event of
Default and (ii) of the Borrower or of a Restricted Domestic Subsidiary to the
extent that such Guaranty, and the Indebtedness guaranteed thereby, are
permitted by Section 7.1 hereof. For purposes of determining the amount of
-----------
Guaranties for purposes of clause (x) above, the amount of any Guaranty shall be
deemed to be the lower of (a) an amount equal to the stated amount (or, if there
is no stated amount, the amount that is readily subject to calculation) of the
primary obligation in respect of which such Guaranty is made and (b) the maximum
amount for which such guaranteeing Person may be liable pursuant to the terms of
the agreement(s) or instrument(s) embodying or evidencing such Guaranty, unless
such primary obligation and the maximum amount for which such guaranteeing
Person may be liable are not stated or readily subject to calculation, in which
case the amount of such Guaranty shall be such guaranteeing Person's maximum
reasonably anticipated liability in respect thereof, as reasonably determined by
the Borrower in good faith;
(h) Investments in joint ventures provided that (i) immediately prior to
and after giving effect to any such proposed Investment there shall not exist a
Default or Event of Default, (ii) the joint venture shall be in the business
described in Schedule 4.1(d) hereof or other activities directly related
---------------
thereto, and (iii) if, immediately before or immediately after the making of
such Investment (and after taking into account any and all contemporaneous or
substantially contemporaneous Investments in such joint venture by other
Persons), the joint venture as to which such Investment is made has assets with
a fair market value in excess of $10,000,000, the Borrower shall, not later than
10 Business Days after the date of such Investment, deliver to the
Administrative Agent a Compliance Certificate setting forth the covenant
calculations, both immediately prior to and after giving effect to such
Investment;
(i) Investments in, or with respect to, any Person other than the Borrower
or a Restricted Subsidiary to the extent that (i) the aggregate amount of such
Investments by the Borrower and the Subsidiaries of the Borrower does not at any
time exceed ten percent (10%) of the combined total assets of the Borrower and
the Subsidiaries of the Borrower, and (ii) immediately prior to and after
giving effect to any such proposed Investment there shall not exist a Default or
Event of Default; and
(j) Other Investments not to exceed $7,500,000 in the aggregate amount
outstanding at any time.
Section 7.4 Liquidation, Merger. The Borrower shall not, and shall not
-------------------
permit any Subsidiary of the Borrower to, at any time:
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(a) liquidate or dissolve itself (or suffer any liquidation or dissolution)
or otherwise wind up, except that a Subsidiary of the Borrower may liquidate or
dissolve into the Borrower or a Restricted Subsidiary; or
(b) enter into any merger or consolidation unless (i) with respect to a
merger or consolidation involving the Borrower, the Borrower shall be the
surviving corporation, or if the merger or consolidation involves a Subsidiary
of the Borrower and not the Borrower, such Subsidiary shall be the surviving
corporation, (ii) such transaction shall not be utilized to circumvent
compliance with any term or provision herein and (iii) no Default or Event of
Default shall then be in existence or occur as a result of such transaction.
Section 7.5 Sales of Assets. The Borrower shall not, and shall not
---------------
permit any Subsidiary to, sell, lease, transfer or otherwise dispose of, any of
its assets except (a) inventory and Time-Share Interests in the ordinary course
of business, (b) obsolete or worn-out assets, (c) sales of tangible assets in
which the Net Cash Proceeds from the disposition thereof are reinvested, within
90 days before or after such disposition, in productive tangible assets of a
similar nature of the Borrower and the Subsidiaries of the Borrower, (d) asset
sales between Obligors, (e) sales of Notes Receivable (other than Notes
Receivable included as Collateral hereunder, unless such Notes Receivable are to
be released as Collateral hereunder contemporaneously with the consummation of
such sale) to unrelated third parties for full and fair consideration, (f)
transfers of Notes Receivable (other than Notes Receivable included as
Collateral hereunder, unless such Notes Receivable are to be released as
Collateral hereunder contemporaneously with the consummation of such transfer)
to related third parties for full and fair consideration, or as a capital
contribution, dividend or distribution to the transferee, in order to consummate
a Securitization, (g) other asset sales to unrelated third parties for full and
fair consideration not to exceed, in the aggregate amount during any fiscal
year, ten percent (10.0%) of the real estate and development costs of the
Borrower and its Subsidiaries, on a consolidated basis, for the immediately
preceding fiscal year, as reflected on the financial statements delivered to the
Lenders pursuant to the requirements of Section 6.4 hereof, (h) other
-----------
dispositions that constitute grants by the Borrower or a Subsidiary of the
Borrower of Permitted Liens, and (i) the sale by the Borrower of its corporate
headquarters building located at 0000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxx.
Section 7.6 Acquisitions. The Borrower shall not, and shall not permit
------------
any Subsidiary of the Borrower to, make any Acquisitions; provided, however, if
immediately prior to and after giving effect to the proposed Acquisition there
shall not exist a Default or Event of Default, the Borrower or any Subsidiary of
the Borrower may make Acquisitions so long as (i) such Acquisition shall not be
opposed by the board of the directors of the Person being acquired, (ii) the
assets, property or business acquired shall be in the business described in
Section 4.1(d) hereof, (iii) either (x) contemporaneously with the consummation
--------------
of such Acquisition, the Person being acquired shall become a Restricted
Subsidiary or (y) such Acquisition would be permitted as an Investment under
Section 7.3(i), and (iv) if the Person(s) acquired in any single Acquisition
owns or has property with, or if the asset(s), business(es) or other property
acquired in any single Acquisition has, an aggregate fair market value in excess
of $10,000,000, the Borrower shall, not later than 10 Business Days after the
date of such Acquisition, deliver to the Administrative Agent a Compliance
Certificate setting forth the covenant calculations, both immediately prior to
and after giving effect to such Acquisition.
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Section 7.7 Capital Expenditures. The Borrower shall not, and shall not
--------------------
permit any Subsidiary of the Borrower to, make or commit to make any Capital
Expenditures during any period of four consecutive calendar quarters in an
aggregate amount, with respect to the Borrower and all of the Subsidiaries, in
excess of $25,000,000.
Section 7.8 Restricted Payments. The Borrower shall not, and shall not
-------------------
permit any Subsidiary of the Borrower to, directly or indirectly declare, pay or
make any Restricted Payments except (a) Dividends payable by a Subsidiary to the
Borrower or to a Guarantor, (b) scheduled payments of principal and interest on
the Subordinated Debt; provided, however, the Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, declare, pay or make any Restricted
Payments permitted by clauses (a) and/or (b) of this Section 7.8 unless there
-----------
shall exist no Default or Event of Default prior to or after giving effect to
any such proposed Restricted Payment, and (c) Dividends payable by the Borrower
in respect of its Capital Stock, if, and to the extent that, (i) no Default or
Event of Default shall exist prior to or after giving effect to the declaration
and/or payment of any such Dividend(s) and (ii) the aggregate amount of all such
Dividends declared and/or paid by the Borrower during any fiscal year of the
Borrower does not exceed the sum of (x) $10,000,000, plus (y) 50% of the Net
Income of the Borrower (excluding from the calculation thereof any Net Income
attributable to any Subsidiary of the Borrower other than the Restricted
Subsidiaries) for the immediately preceding fiscal year of the Borrower.
Section 7.9 Affiliate Transactions. The Borrower shall not, and shall
----------------------
not permit any Subsidiary of the Borrower to, at any time engage in any
transaction with an Affiliate other than in the ordinary course of business and
on terms no less advantageous to the Borrower or such Subsidiary than would be
the case if such transaction had been effected with a non-Affiliate. The
Borrower shall not, and shall not permit any Restricted Subsidiary to, incur or
suffer to exist any Indebtedness, or any Guaranty of any such Indebtedness, to
any Affiliate, unless (i) such Affiliate shall be a Restricted Subsidiary, (ii)
the maker and the payee with respect to such Indebtedness shall execute and
deliver to the Administrative Agent a subordination agreement (in substantially
the form of Exhibit "I" hereto, with only such modifications thereto as shall be
-----------
acceptable to the Administrative Agent), or (iii) such Affiliate shall pledge
the applicable Indebtedness to the Administrative Agent pursuant to
documentation acceptable to the Administrative Agent.
Section 7.10 Compliance with ERISA. The Borrower shall not, and shall
---------------------
not permit any Subsidiary to, directly or indirectly, or permit any member of
its Controlled Group to directly or indirectly, (a) terminate any Plan so as
likely to result in any material (in the reasonable opinion of the Determining
Lenders) liability to the Borrower or any member of its Controlled Group taken
as a whole, (b) permit to exist any ERISA Event, or any other event or condition
with respect to a Plan which could reasonably be expected to have a Material
Adverse Effect, (c) make a complete or partial withdrawal (within the meaning of
Section 4201 of ERISA) from any Multiemployer Plan so as likely to result in any
material (in the reasonable opinion of the Determining Lenders) liability to the
Borrower or any member of its Controlled Group taken as a whole, (d) enter into
any new Plan or modify any existing Plan so as to increase its obligations
thereunder which could reasonably be expected to have a Material Adverse Effect,
or (e) permit the present value of all benefit liabilities, as defined in Title
IV of ERISA, under any Plan (other than a Multiemployer Plan) of the Borrower
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or any member of its Controlled Group that is subject to Title IV of ERISA
(using the actuarial assumptions utilized by each such Plan) to exceed the fair
market value of Plan assets allocable to such benefits by more than $200,000,
all determined as of the most recent valuation date for such Plan.
Section 7.11 Minimum Interest Coverage Ratio. The Borrower shall not
-------------------------------
permit the Interest Coverage Ratio to be less than 2.50 to 1 at the end of any
fiscal quarter.
Section 7.12 Minimum Adjusted Net Worth. The Borrower shall not permit
--------------------------
the Adjusted Net Worth to be less than an amount equal to the sum of (a)
$200,000,000, plus (b) 50% of cumulative Net Income of the Borrower and the
Subsidiaries of the Borrower for the period from, but not including, December
31, 1998 through the date of calculation (but excluding from the calculation of
such cumulative Net Income the effect, if any, of any fiscal quarter (or portion
of a fiscal quarter not then ended) of the Borrower or any such Subsidiary for
which Net Income was a negative number), plus (c) 75% of the Net Cash Proceeds
received by the Borrower after December 31, 1998 as a result of any offering of
Equity or pursuant to any conversion or exchange of convertible Indebtedness or
preferred Capital Stock into common Capital Stock of the Borrower, plus (d) an
amount equal to 75% of the Adjusted Net Worth, calculated with respect to such
Person, of any Person that becomes a Subsidiary of the Borrower or is merged
into or consolidated with the Borrower or any Subsidiary of the Borrower after
December 31, 1998 or substantially all of the assets of which are acquired by
the Borrower or any Subsidiary of the Borrower after December 31, 1998, (in each
case determined as of the date that such Person becomes a Subsidiary of the
Borrower or is merged into or consolidated with the Borrower or a Subsidiary of
the Borrower or that such assets are so acquired), provided that the purchase
price paid therefor is paid in equity securities of the Borrower or any
Subsidiary of the Borrower.
Section 7.13 Maximum Senior Debt to Total Capital. The Borrower shall
------------------------------------
not permit the ratio of Senior Debt to Total Capital to exceed (a) 0.35 to 1 at
the end of any fiscal quarter ending on or before December 31, 1999, or (b) 0.30
to 1 at the end of any fiscal quarter ending after December 31, 1999.
Section 7.14 Maximum Total Debt to Total Capital Ratio. The Borrower
-----------------------------------------
shall not permit the Total Debt to Total Capital Ratio to exceed (a) 0.73 to 1
at the end of any fiscal quarter ending on or before December 31, 1999, or (b)
0.70 to 1 at the end of any fiscal quarter ending after December 31, 1999.
Section 7.15 Maximum Average Quarterly Charge-Off Rate. The Borrower
-----------------------------------------
shall not permit the Average Quarterly Charge-Off Rate to exceed 3.0% at the
end of any calendar quarter.
Section 7.16 Maximum Average Quarterly Default Rate. The Borrower shall
--------------------------------------
not permit the Average Quarterly Default Rate to exceed 4.5% at the end of any
calendar quarter.
Section 7.17 Maximum Average Quarterly Delinquency Rate. The Borrower
------------------------------------------
shall not permit the Average Quarterly Delinquency Rate to exceed 7.5% at the
end of any calendar quarter.
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Section 7.18 Sale and Leaseback. The Borrower shall not, and shall not
------------------
permit any Subsidiary of the Borrower to, enter into any arrangement whereby it
sells or transfers any of its assets, and thereafter rents or leases such
assets, except to the extent that the fair market value of the asset(s) covered
by all such arrangements entered into during the any period of four consecutive
calendar quarters does not, in the aggregate, exceed $2,000,000.
Section 7.19 Business. Neither the Borrower nor any Subsidiary of the
--------
Borrower shall conduct any business other than the business described in Section
-------
4.1(d) hereof.
------
Section 7.20 Fiscal Year. The Borrower shall not, and shall not permit
-----------
any Subsidiary of the Borrower to, change its fiscal year except to a fiscal
year ending December 31.
Section 7.21 Amendment of Organizational Documents. The Borrower shall
-------------------------------------
not, and shall not permit any Subsidiary of the Borrower to, amend its articles
of incorporation or bylaws (or similar organizational or governance documents)
in any manner that could reasonably be expected to (a) result in a Material
Adverse Effect or (b) impair or affect the Rights of the Administrative Agent or
any Lender under any Loan Documents or in respect of any Collateral.
Section 7.22 Amendments and Waivers of Subordinated Debt. The Borrower
-------------------------------------------
shall not, and shall not permit any Restricted Subsidiary to, change or amend
(or take any action or fail to take any action the result of which is an
effective amendment or change) or accept any waiver or consent with respect to,
any document, instrument or agreement relating to any Subordinated Debt that
would result in (a) an increase in the principal, interest, overdue interest,
fees or other amounts payable under the Subordinated Debt, (b) an acceleration
in any date fixed for payment or prepayment of principal, interest, fees or
other amounts payable under the Subordinated Debt (including, without
limitation, as a result of any redemption), (c) a reduction in any percentage of
holders of the Subordinated Debt required under the terms of the Subordinated
Debt to take (or refrain from taking) any action under the Subordinated Debt,
(d) a change in any financial covenant under the Subordinated Debt making such
financial covenant more restrictive, (e) a change in any default or event of
default (however designated) under the Subordinated Debt which makes such
default or event of default more restrictive, (f) a change in the definition of
"Change of Control" as provided in the Subordinated Debt which would result in
such definition being more restrictive than such definition in this Agreement,
(g) a change in any of the subordination provisions of the Subordinated Debt,
(h) a change in any covenant, term or provision in the Subordinated Debt which
would result in such term or provision being more restrictive than the terms of
this Agreement and the other Loan Documents or (i) a change in any term or
provision of the Subordinated Debt that could have, in any material respect, an
adverse effect on the interest of the Lenders.
Section 7.23 Use of Lenders' Name. The Borrower shall not, and shall
--------------------
not permit any Subsidiary to, use the name of any Lender or any Affiliate of any
Lender in connection with any of their respective businesses or activities,
except in connection with internal business matters, administration of any of
the Advances and as required in dealings with any Tribunal.
Section 7.24 Servicing and Collection Agreement. The Borrower shall
----------------------------------
not, and shall not permit any Restricted Subsidiary to, amend, modify or
terminate the Servicing and Collection Agreement; provided, however, that the
Person(s) serving as servicer(s) and/or collector(s)
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thereunder may be replaced with other Person(s) who are reasonably acceptable to
the Administrative Agent. The Servicing and Collection Agreement shall be
cancelable by the Administrative Agent upon the occurrence of an Event of
Default.
Section 7.25 Custodial Agreement. The Borrower shall not, and shall not
-------------------
permit any Restricted Subsidiary to, (a) amend, modify or terminate the
Custodial Agreement or (b) interfere with the Custodian's performance of its
duties under the Custodial Agreement or take any action that would be
inconsistent with the Custodial Agreement.
Section 7.26 Notes Receivable. The Borrower shall not, and shall not
----------------
permit any Restricted Subsidiary to, amend, modify or waive any terms of any
Note Receivable included in the Borrowing Base or permit any departure from the
obligations thereunder unless, and only to the extent that, (a) at the time of
any such amendment, modification or waiver, no default, event of default or
breach (howsoever designated) exists under, or with respect to, the applicable
Note Receivable, and (b) either (x) such amendment, modification or waiver does
not, and could not reasonably be expected to, result in such Note Receivable not
constituting an Eligible Note Receivable hereunder or (y) such amendment,
modification or waiver is evidenced by a replacement Note Receivable that is an
Eligible Note Receivable.
ARTICLE 8
Default
-------
Section 8.1 Events of Default. Each of the following shall constitute
-----------------
an Event of Default, whatever the reason for such event, and whether voluntary,
involuntary, or effected by operation of law or pursuant to any judgment or
order of any court or any order, rule or regulation of any governmental or non-
governmental body:
(a) Any representation or warranty made under any Loan Document shall prove
to have been incorrect or misleading in any material respect when made;
(b) The Borrower shall fail to pay any (i) principal under any Note when
due or (ii) interest under any Note or any fees payable hereunder or any other
costs, fees, expenses or other amounts payable hereunder or under any other Loan
Document within two Business Days after the date due;
(c) The Borrower or any Subsidiary of the Borrower shall default in the
performance or observance of any agreement or covenant contained in Section 5.1
-----------
or Article 7;
---------
(d) The Borrower or any Subsidiary of the Borrower shall default in the
performance or observance of any other agreement or covenant contained in this
Agreement not specifically referred to elsewhere in this Section 8.1, and such
-----------
default shall not be cured within a period of fifteen days after the earlier of
notice from the Administrative Agent thereof or actual notice thereof by the
Borrower or such Subsidiary;
-75-
(e) There shall occur any default or breach in the performance or
observance of any agreement or covenant in any of the Loan Documents (other than
this Agreement) and such default shall not be cured within a period of thirty
days after the earlier of notice from the Administrative Agent thereof or actual
notice thereof by an officer of any Obligor;
(f) There shall be commenced an involuntary proceeding or an involuntary
petition shall be filed in a court having competent jurisdiction seeking (i)
relief in respect of any Obligor or any Subsidiary of the Borrower, or a
substantial part of the property or the assets of such Obligor or Subsidiary of
the Borrower, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable Federal, state or foreign bankruptcy
law or other similar law, (ii) the appointment of a receiver, liquidator,
assignee, trustee, custodian, sequestrator or similar official of any Obligor or
any Subsidiary of the Borrower, or of any substantial part of their respective
properties, or (iii) the winding-up or liquidation of the affairs of any Obligor
or any Subsidiary of the Borrower, and any such proceeding or petition shall
continue unstayed and in effect for a period of forty-five days;
(g) Any Obligor or any Subsidiary of the Borrower shall (i) file a
petition, answer or consent seeking relief under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other applicable Federal,
state or foreign bankruptcy law or other similar law, (ii) consent to the
institution of proceedings thereunder or to the filing of any such petition or
to the appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of any Obligor or any
Subsidiary of the Borrower or of substantially all of its properties, (iii) file
an answer admitting the material allegations filed against it in any such
proceeding, (iv) make a general assignment for the benefit of creditors, (v)
become unable, admit in writing its ability or fail generally to pay its debts
as they become due, or (vi) any Obligor or any Subsidiary of the Borrower shall
take any corporate action in furtherance of any of the actions described in this
Section 8.1(g);
--------------
(h) A final judgment or judgments shall be entered by any court against any
Obligor for the payment of money which exceeds $500,000 in the aggregate for all
Obligors, or a warrant of attachment or execution or similar process shall be
issued or levied against property of any Obligor which, together with all other
such property of the Borrower and its Subsidiaries subject to any such process,
exceeds in value $500,000 in the aggregate, and if such judgment or award is not
insured or, within 30 days after the entry, issue or levy thereof, such
judgment, warrant or process shall not have been paid or discharged or stayed
pending appeal, or if, after the expiration of any such stay, such judgment,
warrant or process shall not have been paid or discharged;
(i) With respect to any Plan of the Borrower or any member of its
Controlled Group: (i) the Borrower, any such member, or any other party-in-
interest or disqualified person (other than any Lender) shall engage in
transactions which in the aggregate would reasonably be expected to result in a
direct or indirect liability to the Borrower or any member of its Controlled
Group under Section 409 or 502 of ERISA or Section 4975 of the Code; (ii) the
Borrower or any member of its Controlled Group shall incur any accumulated
funding deficiency, as defined in Section 412 of the Code, or request a funding
waiver from the Internal Revenue Service for contributions; (iii) the Borrower
or any member of its Controlled Group shall incur any withdrawal liability as a
result of
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a complete or partial withdrawal within the meaning of Section 4203 or 4205 of
ERISA, or any other liability with respect to a Plan, unless the amount of such
liability has been funded within the Plan or pursuant to one or more insurance
contracts; (iv) a termination of a Multiemployer Plan, as defined in Section 1.1
hereof but without regard to the five-year limitation set forth therein, shall
occur pursuant to Section 4041A of ERISA; (v) the Borrower or any member of its
Controlled Group shall fail to make a required contribution by the due date
under Section 412 of the Code or Section 302 of ERISA which would result in the
imposition of a lien under Section 412 of the Code or Section 302 of ERISA; (vi)
the Borrower, any member of its Controlled Group or any Plan sponsor shall
notify the PBGC of an intent to terminate, or the PBGC shall institute
proceedings to terminate, any Plan (other than a Multiemployer Plan) subject to
Title IV of ERISA; (vii) a Reportable Event shall occur with respect to a Plan
(other than a Multiemployer Plan) subject to Title IV of ERISA, and within 15
days after the reporting of such Reportable Event to the Administrative Agent,
the Administrative Agent shall have notified the Borrower in writing that the
Determining Lenders have made a determination that, on the basis of such
Reportable Event, there are reasonable grounds for the termination of such Plan
by the PBGC or for the appointment by the appropriate United States District
Court of a trustee to administer such Plan and as a result thereof an Event of
Default shall have occurred hereunder; (viii) a trustee shall be appointed by a
court of competent jurisdiction to administer any Plan (other than a
Multiemployer Plan) or the assets thereof; or (ix) any ERISA Event with respect
to a Plan (other than a Multiemployer Plan) subject to Title IV of ERISA shall
have occurred, and 30 days thereafter (A) such ERISA Event, other than such
event described in clause (f) of the definition of ERISA Event herein, (if
correctable) shall not have been corrected and (B) the then present value of
such Plan's benefit liabilities, as defined in Title IV of ERISA, shall exceed
the then current value of assets accumulated in such Plan; provided, however,
-------- -------
that the events listed in subsections (i) - (ix) above shall constitute Events
of Default only if the maximum aggregate liability which the Borrower or any
member of its Controlled Group has a reasonable likelihood of incurring under
the applicable provisions of ERISA resulting from an event or events exceeds
$500,000.
(j) The Borrower or any Restricted Subsidiary shall (i) default in the
payment of any Indebtedness or any lease obligations in an aggregate amount of
$500,000 or more beyond any grace period provided with respect thereto, or (ii)
any other event or condition shall exist under any agreement or instrument under
which any such Indebtedness or lease obligation is created or evidenced beyond
any applicable grace period, if the effect of such event or condition is to
permit or cause the holder of such Indebtedness or lease obligation (or a
trustee on behalf of any such holder) to (x) cause any such Indebtedness or
lease obligation to be prepaid or to become due prior to its date of maturity or
(y) require the Borrower or any Restricted Subsidiary to purchase, prepay or
redeem any such Indebtedness or lease obligation;
(k) Any Subsidiary of the Borrower other than a Restricted Subsidiary shall
default in the payment of any Indebtedness or any lease obligations in an
aggregate amount of $500,000 or more beyond any grace period provided with
respect thereto, or any other event or condition shall exist under any agreement
or instrument under which any such Indebtedness or lease obligation is created
or evidenced beyond any applicable grace period, if the effect of such default,
event or condition is to cause the holder of such Indebtedness or lease
obligation (or a trustee on behalf of any such holder) to (x) cause any such
Indebtedness or lease obligation to be prepaid or to become
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due prior to its date of maturity or (y) require the Borrower or any Subsidiary
of the Borrower to purchase, prepay or redeem any such Indebtedness or lease
obligation;
(l) Any real property lease where the Borrower or any Subsidiary of the
Borrower is the lessee shall terminate or cease to be effective, and termination
or cessation thereof, together with all other leases, if any, which have been
terminated or cease to be effective, could reasonably be expected to have a
Material Adverse Effect; provided, however, that termination or cessation of a
lease shall not constitute an Event of Default if another lease reasonably
satisfactory to the Determining Lenders is contemporaneously substituted
therefor;
(m) Any provision of any Loan Document shall for any reason cease to be
valid and binding on or enforceable against any party to it (other than the
Administrative Agent or any Lender) other than in accordance with its terms, or
any such party (other than the Administrative Agent or any Lender) shall so
assert in writing;
(n) Any Collateral Document shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority Lien in
any Collateral subject thereto; or
(o) A Change of Control shall occur.
Section 8.2 Remedies. If an Event of Default shall have occurred and
--------
shall be continuing:
(a) With the exception of an Event of Default specified in Section 8.1(f)
--------------
or (g) hereof, the Administrative Agent shall, upon the direction of the
---
Determining Lenders, terminate the Commitments and/or declare the principal of
and interest on the Advances and all Obligations and other amounts owed under
the Loan Documents to be forthwith due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived,
anything in the Loan Documents to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default specified in Section 8.1(f)
--------------
or (g) hereof, such principal, interest and other amounts shall thereupon and
---
concurrently therewith become due and payable and the Commitments shall
forthwith terminate, all without any action by the Administrative Agent, any
Lender or any holders of the Notes and without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in the
Loan Documents to the contrary notwithstanding.
(c) If any Letter of Credit shall be then outstanding, the Administrative
Agent may, and upon the direction of the Determining Lenders shall, demand upon
the Borrower to, and forthwith upon such demand, the Borrower shall, pay to the
Administrative Agent in same day funds at the office of the Administrative Agent
for deposit in the L/C Cash Collateral Account, an amount equal to the maximum
amount available to be drawn under the Letters of Credit then outstanding.
(d) The Administrative Agent and the Lenders may exercise all of the Rights
granted to them under the Loan Documents or under Applicable Law.
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(e) The Rights of the Administrative Agent and the Lenders hereunder shall
be cumulative, and not exclusive.
ARTICLE 9
Changes in Circumstances
------------------------
Section 9.1 LIBOR Basis Determination Inadequate. If with respect to
------------------------------------
any proposed LIBOR Advance for any Interest Period, (i) any Lender determines
that deposits in dollars (in the applicable amount) are not being offered to
that Lender in the relevant market for such Interest Period or (ii) the
Determining Lenders determine that the LIBOR for such proposed LIBOR Advance
does not adequately cover the cost to any Lender(s) of making and maintaining
such proposed LIBOR Advance for such Interest Period, such Lender or Determining
Lenders, as the case may be, shall forthwith give notice thereof to the
Borrower, whereupon until such Lender or Determining Lenders, as the case may
be, notify the Borrower that the circumstances giving rise to such situation no
longer exist, the obligation of the applicable Lender(s) to make LIBOR Advances
shall be suspended; provided, however, such Lender or the Determining Lenders,
-------- -------
as the case may be, shall promptly notify the Borrower if the circumstances
giving rise to such situation no longer exist.
Section 9.2 Illegality. If any change in applicable law, rule or
----------
regulation, or adoption thereof, or any change in any interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its LIBOR Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency, shall make it unlawful or impossible for such Lender (or its
LIBOR Lending Office) to make, maintain or fund its LIBOR Advances, such Lender
shall so notify the Borrower and the Administrative Agent. Before giving any
notice to the Borrower pursuant to this Section, the notifying Lender shall
designate a different LIBOR Lending Office or other lending office if such
designation will avoid the need for giving such notice and will not, in the sole
judgment of the Lender, be materially disadvantageous to the Lender. Upon
receipt of such notice, notwithstanding anything contained in Article 2 hereof,
---------
the Borrower shall repay in full the then outstanding principal amount of each
LIBOR Advance owing to the notifying Lender, together with accrued interest
thereon and any reimbursement required under Section 2.9 hereof, on either (a)
-----------
the last day of the Interest Period applicable to such Advance, if the Lender
may lawfully continue to maintain and fund such Advance to such day, or (b)
immediately, if the Lender may not lawfully continue to fund and maintain such
Advance to such day or if the Borrower so elects. Concurrently with repaying
each affected LIBOR Advance owing to such Lender if the Borrower does not
terminate this Agreement, notwithstanding anything contained in Article 2
---------
hereof, the Borrower may, without any requirement to satisfy the conditions
precedent set forth in Section 3.1, or 3.2, borrow a Reference Rate Advance from
----------- ---
such Lender, and such Lender shall make such Reference Rate Advance, in an
amount such that the outstanding principal amount of the Advances owing to such
Lender shall equal the outstanding principal amount of the Advances owing
immediately prior to such repayment.
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Section 9.3 Increased Costs.
---------------
(a) If after the Agreement Date any change in or adoption of any law, rule
or regulation, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by any Lender (or its
LIBOR Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or compatible agency:
(i) shall subject a Lender (or its LIBOR Lending Office) to any Tax
(net of any tax benefit engendered thereby) with respect to its LIBOR
Advances or its obligation to make such Advances, or shall change the basis
of taxation of payments to a Lender (or to its LIBOR Lending Office) of the
principal of or interest on its LIBOR Advances or in respect of any other
amounts due under this Agreement, as the case may be, or its obligation to
make such Advances (except for changes in the rate of tax on the overall
net income, net worth or capital of the Lender and franchise taxes, doing
business taxes or minimum taxes imposed upon such Lender); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, a Lender's
LIBOR Lending Office or shall impose on the Lender (or its LIBOR Lending
Office) or on the London interbank market any other condition affecting its
LIBOR Advances or its obligation to make such Advances (but excluding any
reserves or deposits that are included in the calculation of LIBOR Basis);
and the result of any of the foregoing is to increase the cost to a Lender (or
its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or to
reduce the amount of any sum received or receivable by a Lender (or its LIBOR
Lending Office) with respect thereto, by an amount deemed by a Lender to be
material, then, within 5 Business Days after demand by a Lender, the Borrower
agrees to pay to such Lender such additional amount as will compensate such
Lender for such increased costs or reduced amounts, subject to Section 11.9
------------
hereof. The affected Lender will as soon as practicable notify the Borrower of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will designate
a different LIBOR Lending Office or other lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the reasonable judgment of the affected Lender made in good faith, be
disadvantageous to such Lender.
(b) A certificate of any Lender claiming compensation under this Section
and setting forth the additional amounts to be paid to it hereunder shall
certify that such amounts or costs were actually incurred by such Lender and
shall show in reasonable detail an accounting of the amount payable and the
calculations used to determine in good faith such amount and shall be conclusive
absent manifest or demonstrable error. In determining such amount, a Lender may
use any reasonable averaging and attribution methods. Nothing in this Section
-------
9.3 shall provide the Borrower or any Subsidiary of the Borrower the right to
---
inspect the records, files or books of any Lender. If a Lender demands
compensation under this Section, the Borrower may at any time, upon
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at least five Business Days' prior notice to the Lender, after reimbursement to
the Lender by the Borrower in accordance with this Section of all costs
incurred, prepay in full the then outstanding LIBOR Advances of the Lender,
together with accrued interest thereon to the date of prepayment, along with any
reimbursement required under Section 2.9 hereof. Concurrently with prepaying
-----------
such LIBOR Advances, the Borrower may borrow a Reference Rate Advance from the
Lender, and the Lender shall make such Reference Rate Advance, in an amount such
that the outstanding principal amount of the Advances owing to such Lender shall
equal the outstanding principal amount of the Advances owing immediately prior
to such prepayment.
Section 9.4 Effect On Reference Rate Advances. If notice has been given
---------------------------------
pursuant to Section 9.1, 9.2 or 9.3 hereof suspending the obligation of a Lender
----------- --- ---
to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be repaid or
prepaid, then, unless and until the Lender notifies the Borrower that the
circumstances giving rise to such repayment no longer apply, all Advances which
would otherwise be made by such Lender as LIBOR Advances shall be made instead
as Reference Rate Advances.
Section 9.5 Capital Adequacy. If after the Agreement Date, (a) the
----------------
introduction of or any change in or in the interpretation of any law, rule or
regulation or (b) compliance by a Lender with any law, rule or regulation or any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) adopted or promulgated after the
Agreement Date affects or would affect the amount of capital required or
expected to be maintained by a Lender or any corporation controlling such
Lender, and such Lender determines that the amount of such capital is increased
by or based upon the existence of such Lender's commitment or Advances hereunder
and other commitments or advances of such Lender of this type, then, within 5
Business Days after demand by such Lender, subject to Section 11.9, the Borrower
------------
shall immediately pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender with respect to
such circumstances, to the extent that such Lender reasonably determines in good
faith such increase in capital to be allocable to the existence of such Lender's
Commitments hereunder. A certificate as to any additional amounts payable to
any Lender under this Section 9.5 submitted to the Borrower by such Lender shall
-----------
certify that such amounts were actually incurred by such Lender or corporation
controlling such Lender and shall show in reasonable detail an accounting of the
amount payable and the calculations used to determine in good faith such amount
and shall be conclusive absent manifest or demonstrable error. In determining
such amount, such Lender or a corporation controlling such Lender may use any
reasonable averaging and attribution methods. Notwithstanding the foregoing,
nothing in this Section 9.5 shall provide the Borrower or any Subsidiary of the
-----------
Borrower the right to inspect the records, files or books of any Lender or any
corporation controlling such Lender.
Section 9.6 Replacement Lender. If (i) any Lender is unable or
------------------
unwilling to make, maintain or fund any LIBOR Advance pursuant to Section 9.1 or
-----------
9.2 or (ii) the Borrower becomes obligated to pay additional amounts to any
---
Lender described in Section 9.3 or 9.5, the Borrower may designate a financial
----------- ---
institution reasonably acceptable to the Administrative Agent to replace such
Lender by purchasing for cash and receiving an assignment of such Lender's pro
rata share of such Lender's Commitment and the Rights of such Lender under the
Loan Documents without recourse to or warranty by, or expense to, such Lender,
for a purchase price equal to the outstanding amounts
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owing to such Lender (including such additional amounts owing to such Lender
pursuant to Section 9.2, 9.3 or 9.5). Upon execution of an Assignment Agreement,
----------- --- ---
such other financial institution shall be deemed to be a "Lender" for all
purposes of this Agreement as set forth in Section 11.6 hereof.
------------
ARTICLE 10
Agreement Among Lenders
-----------------------
Section 10.1 Agreement Among Lenders. The Lenders agree among themselves
-----------------------
that:
(a) Administrative Agent. Each Lender hereby appoints the Administrative
--------------------
Agent as its nominee in its name and on its behalf, to receive all documents and
items to be furnished hereunder; to act as nominee for and on behalf of all
Lenders under the Loan Documents; to, except as otherwise expressly set forth
herein, take such action as may be requested by the Determining Lenders,
provided that, (i) unless and until the Administrative Agent shall have received
such requests, the Administrative Agent may take such administrative action, or
refrain from taking such administrative action, as it may deem advisable and in
the best interests of the Lenders, and (ii) the Administrative Agent shall not
be required to take any action that exposes the Administrative Agent to personal
liability or that is contrary to any Loan Document or Applicable Law; to arrange
the means whereby the proceeds of the Advances of the Lenders are to be made
available to the Borrower; to distribute promptly to each Lender information,
requests and documents received from the Borrower hereunder and not otherwise
provided to such Lender by the Borrower or any other Person, and each payment
(in like funds received) with respect to any of such Lender's Advances, or the
ratable amount of fees or other amounts; and to deliver to the Borrower
requests, demands, approvals and consents received from the Lenders.
Administrative Agent agrees to promptly distribute to each Lender, at such
Lender's address set forth below information, requests, documents and payments
received from the Borrower and not otherwise provided to such Lender by the
Borrower or any other Person. The Administrative Agent shall have no fiduciary
relationship in respect of any Lender by reason of this Agreement or any other
Loan Document. The Administrative Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement. The duties
of the Administrative Agent are mechanical and administrative in nature.
(b) Replacement of Administrative Agent. Should the Administrative Agent
-----------------------------------
or any successor Administrative Agent ever cease to be a Lender hereunder, or
should the Administrative Agent or any successor Administrative Agent ever
resign as Administrative Agent, or should the Administrative Agent or any
successor Administrative Agent ever be removed with cause or without cause by
the action of all Lenders (other than the Administrative Agent), then the Lender
appointed by the other Lenders (with the consent of the Borrower, which consent
shall not be unreasonably withheld) shall forthwith become the Administrative
Agent, and the Borrower and the Lenders shall execute such documents as any
Lender may reasonably request to reflect such change. If the Administrative
Agent also then serves in the capacity of the Issuing Bank, such resignation or
removal shall constitute resignation or removal of the Issuing Bank. Any
resignation or removal of the Administrative Agent or any successor
Administrative Agent shall become effective upon (i) the
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appointment by the Lenders of a successor Administrative Agent; provided,
however, if no successor Administrative Agent shall have been so appointed and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Lenders' removal
of the retiring Administrative Agent, then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent, which
shall be a commercial bank organized under the Laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $500,000,000, and (ii) to the extent that the Administrative Agent also
then serves in the capacity of the Issuing Bank, the termination, to the
reasonable satisfaction of the Administrative Agent, of any and all obligations
and liabilities of the Administrative Agent, in its capacity as the Issuing
Bank, under, or in connection with, this Agreement and the other Loan Documents.
Without limiting the requirements of the immediately preceding sentence, upon
the acceptance of any appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under the Loan Documents, provided
that if the retiring or removed Administrative Agent is unable to appoint a
successor Administrative Agent, the Administrative Agent shall, after the
expiration of a 60 day period from the date of notice, be relieved of all
obligations as Administrative Agent hereunder. Notwithstanding any
Administrative Agent's resignation or removal hereunder, the provisions of this
Article shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Agreement.
(c) Expenses. Each Lender shall pay its pro rata share, based on its
--------
Specified Percentage, of any expenses paid by the Administrative Agent directly
and solely in connection with any of the Loan Documents if Administrative Agent
does not receive reimbursement therefor from other sources within 60 days after
the date incurred. Any amount so paid by the Lenders to the Administrative
Agent shall be returned by the Administrative Agent pro rata to each paying
Lender to the extent later paid by the Borrower or any other Person on the
Borrower's behalf to the Administrative Agent.
(d) Delegation of Duties. The Administrative Agent may execute any of its
--------------------
duties hereunder by or through officers, directors, employees, attorneys or
agents, and shall be entitled to (and shall be protected in relying upon) advice
of counsel concerning all matters pertaining to its duties hereunder.
(e) Reliance by Administrative Agent. The Administrative Agent and its
--------------------------------
officers, directors, employees, attorneys and agents shall be entitled to rely
and shall be fully protected in relying on any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telex or teletype
message, statement, order, or other document or conversation reasonably believed
by it or them in good faith to be genuine and correct and to have been signed or
made by the proper Person and, with respect to legal matters, upon opinions of
counsel selected by the Administrative Agent. The Administrative Agent may, in
its reasonable judgment, deem and treat the payee of any Note as the owner
thereof for all purposes hereof.
(f) Limitation of Administrative Agent's Liability. Neither the
----------------------------------------------
Administrative Agent nor any of its officers, directors, employees, attorneys or
agents shall be liable for any action taken or
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omitted to be taken by it or them hereunder in good faith and believed by it or
them to be within the discretion or power conferred to it or them by the Loan
Documents or be responsible for the consequences of any error of judgment,
except for its or their own gross negligence or wilful misconduct. Except as
aforesaid, the Administrative Agent shall be under no duty to enforce any rights
with respect to any of the Advances, or any security therefor. The
Administrative Agent shall not be compelled to do any act hereunder or to take
any action towards the execution or enforcement of the powers hereby created or
to prosecute or defend any suit in respect hereof, unless indemnified to its
reasonable satisfaction against loss, cost, liability and expense unless
expressly provided to the contrary herein. The Administrative Agent shall not be
responsible in any manner to any Lender for the effectiveness, enforceability,
genuineness, validity or due execution of any of the Loan Documents, or for any
representation, warranty, document, certificate, report or statement made herein
or furnished in connection with any Loan Documents, or be under any obligation
to any Lender to ascertain or to inquire as to the performance or observation of
any of the terms, covenants or conditions of any Loan Documents on the part of
the Borrower. TO THE EXTENT NOT REIMBURSED BY THE BORROWER, EACH LENDER HEREBY
SEVERALLY INDEMNIFIES AND HOLDS HARMLESS THE ADMINISTRATIVE AGENT, PRO RATA
ACCORDING TO ITS SPECIFIED PERCENTAGE, FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES AND/OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE
IMPOSED ON, ASSERTED AGAINST, OR INCURRED BY THE ADMINISTRATIVE AGENT (IN SUCH
CAPACITY) IN ANY WAY WITH RESPECT TO ANY LOAN DOCUMENTS OR ANY ACTION TAKEN OR
OMITTED BY THE ADMINISTRATIVE AGENT UNDER THE LOAN DOCUMENTS (INCLUDING ANY
NEGLIGENT ACTION OF THE ADMINISTRATIVE AGENT), EXCEPT TO THE EXTENT THE SAME ARE
FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION TO RESULT FROM GROSS
NEGLIGENCE OR WILFUL MISCONDUCT BY THE ADMINISTRATIVE AGENT. THE INDEMNITY
PROVIDED IN THIS SECTION 10.1(f) SHALL SURVIVE TERMINATION OF THIS
---------------
AGREEMENT.
(g) Liability Among Lenders. No Lender shall incur any liability (other
-----------------------
than the sharing of expenses and other matters specifically set forth herein and
in the other Loan Documents) to any other Lender, except for acts or omissions
in bad faith.
(h) Rights as Lender. With respect to its commitment hereunder, the
----------------
Advances made by it and the Notes issued to it, the Administrative Agent shall
have the same rights as a Lender and may exercise the same as though it were not
the Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent or any Lender may accept deposits from, act
as trustee under indentures of, and generally engage in any kind of business
with, the Borrower and any of its Affiliates, and any Person who may do business
with or own securities of the Borrower or any of its Affiliates, all as if the
Administrative Agent were not the Administrative Agent hereunder and without any
duty to account therefor to the Lenders.
Section 10.2 Lender Credit Decision. Each Lender acknowledges that it
----------------------
has, independently and without reliance upon the Administrative Agent or any
other Lender and based upon the financial statements referred to in Sections
--------
4.1(j), 6.3, and 6.4 hereof, and such other documents and
------ --- ---
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information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents. Each Lender
also acknowledges that its decision to fund the initial Revolving Credit
Advances shall constitute evidence to the Administrative Agent that such Lender
has deemed all of the conditions set forth in Section 3.1 to have been
satisfied.
Section 10.3 Benefits of Article. None of the provisions of this
-------------------
Article shall inure to the benefit of any Person other than Lenders and, with
respect to Section 10.1(b), the Borrower; consequently, no such other Person
---------------
shall be entitled to rely upon, or to raise as a defense, in any manner
whatsoever, the failure of the Administrative Agent or any Lender to comply with
such provisions.
ARTICLE 11
Miscellaneous
-------------
Section 11.1 Notices.
-------
(a) All notices and other communications under this Agreement shall be in
writing (except in those cases where giving notice by telephone is expressly
permitted) and shall be deemed to have been given on the date personally
delivered or sent by telecopy (answerback received) or by facsimile
transmission, or three days after deposit in the mail, designated as certified
mail, return receipt requested, postage-prepaid, or one day after being
entrusted to a reputable commercial overnight delivery service, addressed to the
party to which such notice is directed at its address determined as provided in
this Section. All notices and other communications under this Agreement shall
be given to the parties hereto at the respective address(es) set forth in
Schedule 1 attached hereto.
----------
(b) Any party hereto may change the address to which notices shall be
directed by giving 10 days' written notice of such change to the other parties.
Section 11.2 Expenses. The Borrower shall promptly pay:
--------
(a) all reasonable out-of-pocket expenses of the Administrative Agent in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents, the transactions contemplated hereunder
and thereunder, and the making of Advances hereunder, including without
limitation the reasonable fees and disbursements of Special Counsel;
(b) all reasonable out-of-pocket expenses and reasonable attorneys' fees of
the Administrative Agent in connection with the administration of the
transactions contemplated in this Agreement and the other Loan Documents and the
preparation, negotiation, execution and delivery
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of any waiver, amendment or consent by the Administrative Agent relating to this
Agreement or the other Loan Documents; and
(c) all reasonable costs, out-of-pocket expenses and reasonable attorneys'
fees of the Administrative Agent and each Lender incurred for enforcement,
collection, restructuring, refinancing and "work-out", or otherwise incurred in
obtaining performance under the Loan Documents, which in each case shall include
without limitation fees and expenses of consultants, counsel for the
Administrative Agent and any Lender, and administrative fees for the
Administrative Agent.
Section 11.3 Waivers. The rights and remedies of the Lenders under this
-------
Agreement and the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies which they would otherwise have. No failure or delay by
the Administrative Agent or any Lender in exercising any right shall operate as
a waiver of such right. The Lenders expressly reserve the right to require
strict compliance with the terms of this Agreement in connection with any
funding of a request for an Advance or issuance of a Letter of Credit. In the
event that any Lender decides to fund an Advance at a time when the Borrower is
not in strict compliance with the terms of this Agreement, such decision by such
Lender shall not be deemed to constitute an undertaking by the Lender to fund
any further requests for Advances or preclude the Lenders from exercising any
rights available under the Loan Documents or at law or equity. Any waiver or
indulgence granted by the Lenders shall not constitute a modification of this
Agreement, except to the extent expressly provided in such waiver or indulgence,
or constitute a course of dealing by the Lenders at variance with the terms of
the Agreement such as to require further notice by the Lenders of the Lenders'
intent to require strict adherence to the terms of the Agreement in the future.
Any such actions shall not in any way affect the ability of the Administrative
Agent or the Lenders, in their discretion, to exercise any rights available to
them under this Agreement or under any other agreement, whether or not the
Administrative Agent or any of the Lenders are a party thereto, relating to the
Borrower.
Section 11.4 Calculation by the Lenders Conclusive and Binding. Any
-------------------------------------------------
mathematical calculation required or expressly permitted to be made by the
Administrative Agent or any Lender under this Agreement shall be made in its
reasonable judgment and in good faith, and shall when made, absent manifest
error, be controlling.
Section 11.5 Set-Off. In addition to any rights now or hereafter granted
-------
under Applicable Law and not by way of limitation of any such rights, upon the
occurrence and during the continuation of an Event of Default, each Lender and
any subsequent holder of any Note, and any assignee of any Note is hereby
authorized by the Borrower at any time or from time to time, without notice to
the Borrower or any other Person, any such notice being hereby expressly waived,
to set-off, appropriate and apply any deposits (general or special (except trust
and escrow accounts), time or demand, including without limitation Indebtedness
evidenced by certificates of deposit, in each case whether matured or unmatured)
and any other Indebtedness at any time held or owing by such Lender or holder to
or for the credit or the account of the Borrower, against and on account of the
Obligations and other liabilities of the Borrower to such Lender or holder,
irrespective of whether or not (a) the Lender or holder shall have made any
demand hereunder, or (b) the Lender or holder shall have declared the principal
of and interest on the Advances and other amounts due hereunder to be due and
payable as permitted by Section 8.2. Any sums obtained by any Lender or by any
-----------
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assignee or subsequent holder of any Note shall be subject to pro rata treatment
of all Obligations and other liabilities hereunder. Any Lender exercising any
Rights under this Section 11.5 shall give the Borrower prompt notice thereof
------------
after such exercise.
Section 11.6 Assignment.
----------
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under the other Loan Documents without the prior
written consent of the Lenders.
(b) No Lender shall be entitled to assign or grant a participation in its
interest in this Agreement, its Notes or its Advances, except as set forth in
this Agreement.
(c) Without the consent of the Borrower, any Lender may at any time sell
participations in all or any part of its Advances and Reimbursement Obligations
(collectively, "Participations") to any banks or other financial institutions
--------------
("Participants") provided that neither such Participation nor any agreement
--------------
relating thereto shall confer on any Person (other than the parties hereto) any
right to vote on, approve or sign amendments or waivers, or any other
independent benefit or any legal or equitable right, remedy or other claim under
this Agreement or any other Loan Documents, other than the right to vote on,
approve, or sign amendments or waivers or consents with respect to items that
would result in (i) any increase in the commitment of any Participant; or
(ii)(A) the extension of the date of maturity of, or (B) the extension of the
due date for any payment of principal, interest or fees respecting, or (C) the
reduction of the amount of any installment of principal or interest on or the
change or reduction of any mandatory reduction required hereunder, or (D) a
reduction of the rate of interest on, the Advances, the Letters of Credit, or
the Reimbursement Obligations to which such Participant is entitled; or (iii)
the release of security for the Obligations, including without limitation any
guarantee, except pursuant to this Agreement or the other Loan Documents; or
(iv) the reduction of any fees payable hereunder to which such Participant is
entitled. Notwithstanding the foregoing, the Borrower agrees that the
Participants shall be entitled to the benefits of Article 9 hereof as though
---------
they were Lenders and the Lenders may, subject to Section 11.14 hereof, provide
-------------
copies of all financial information received from the Borrower to such
Participants.
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(d) Each Lender may assign to one or more financial institutions organized
under the laws of the United States, or any state thereof, or under the laws of
any other country that is a member of the Organization for Economic Cooperation
and Development, or a political subdivision of any such country, which is
engaged in making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business (each, an "Assignee") its rights and obligations
--------
under this Agreement and the other Loan Documents; provided, however, that (i)
-------- -------
each such assignment shall be subject to the prior written consent of the
Administrative Agent and Borrower, which consent shall not be unreasonably
withheld (provided, however, notwithstanding anything herein to the contrary, no
-------- -------
consent of the Borrower is required for any assignment during any time that an
Event of Default has occurred and is continuing or for any assignment at any
time by a Lender to any Affiliate of such Lender or to any other Lender), (ii)
no such assignment shall be in an amount of Commitments less than $10,000,000
unless such lesser amount represents the entirety of the Commitments of the
applicable Lender, (iii) the applicable Lender, Administrative Agent and
applicable Assignee shall execute and deliver to the Administrative Agent an
Assignment and Acceptance Agreement (an "Assignment Agreement") in substantially
--------------------
the form of Exhibit E hereto, together with the Notes subject to such
---------
assignment, (iv) the Assignee executing the Assignment, shall deliver to the
Administrative Agent a processing fee of $3,500 and (v) each such assignment
shall be a constant, not a varying, percentage of the assigning Lender's Rights
and obligations in respect of the Advances. Upon such execution, delivery and
acceptance from and after the effective date specified in each Assignment, which
effective date shall be at least three Business Days after the execution
thereof, (A) the Assignee thereunder shall be party hereto and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to such
Assignment, have the rights and obligations of a Lender hereunder and (B) the
applicable Lender shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment, relinquish such rights
(excluding any rights to indemnity which would have survived the termination of
this Agreement, which rights of indemnity shall apply to both the assigning
Lender and the Assignee) and be released from such obligations under this
Agreement.
(e) Notwithstanding anything in clause (d) above to the contrary, any
Lender may assign and pledge all or any portion of its Advances and Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of F.R.S.
Board and any Operating Circular issued by such Federal Reserve Bank; provided,
however, that no such assignment under this clause (e) shall release the
assignor Lender from its obligations hereunder.
(f) Upon its receipt of an Assignment Agreement executed by a Lender and an
Assignee, and any Note or Notes subject to such assignment, the Borrower shall,
within five Business Days after its receipt of such Assignment Agreement, at no
expense to the Borrower, execute and deliver to the Administrative Agent in
exchange for the surrendered Notes new Notes to the order of such Assignee in an
amount equal to the portion of the Advances and Commitments assigned to it
pursuant to such Assignment Agreement and new Notes to the order of the assignor
Lender in an amount equal to the portion of the Advances and Commitments
retained by it hereunder. Such new Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Notes, shall
be dated the effective date of such Assignment Agreement and shall otherwise be
in substantially the form of Exhibit A.
---------
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(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 11.6, disclose to
------------
the assignee or Participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower, provided such Person agrees in writing to handle such information in
accordance with the standards set forth in Section 11.14 hereof.
-------------
(h) Except as specifically set forth in this Section 11.6, nothing in this
------------
Agreement or any other Loan Documents, expressed or implied, is intended to or
shall confer on any Person other than the respective parties hereto and thereto
and their successors and assignees permitted hereunder and thereunder any
benefit or any legal or equitable right, remedy or other claim under this
Agreement or any other Loan Documents.
(i) Notwithstanding anything in this Section 11.6 to the contrary, no
------------
Assignee or Participant (nor the assigning or participating Lender) shall be
entitled to receive (whether individually or collectively) any greater payment
under Section 2.14 or Section 9.3 or Section 9.5 than such assigning or
------------ ----------- -----------
participating Lender would have been entitled to receive with respect to the
interest assigned or participated to such Assignee or Participant.
Section 11.7 Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 11.8 Severability. Any provision of this Agreement which is for
------------
any reason prohibited or found or held invalid or unenforceable by any court or
governmental agency shall be ineffective to the extent of such prohibition or
invalidity or unenforceability without invalidating the remaining provisions
hereof in such jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 11.9 Interest and Charges. It is not the intention of any
--------------------
parties to this Agreement to make an agreement in violation of the laws of any
applicable jurisdiction relating to usury. Regardless of any provision in any
Loan Documents, no Lender shall ever be entitled to receive, collect or apply,
as interest on the Obligations, any amount in excess of the Highest Lawful
Amount. If any Lender or participant ever receives, collects or applies, as
interest, any such excess, such amount which would be excessive interest shall
be deemed a partial repayment of principal and treated hereunder as such; and if
principal is paid in full, any remaining excess shall be paid to the Borrower.
In determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Highest Lawful Amount, the Borrower and the Lenders
shall, to the maximum extent permitted under Applicable Law, (a) characterize
any nonprincipal payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effect thereof, and (c) amortize,
prorate, allocate and spread in equal parts, the total amount of interest
throughout the entire contemplated term of the Obligations so that the interest
rate is uniform throughout the entire term of the Obligations; provided,
however, that if the Obligations are paid and performed in full prior to the end
of the full contemplated term thereof, and if the interest received for the
actual period of existence thereof exceeds the Highest Lawful Amount, the
Lenders shall refund to the Borrower the amount of such excess or credit the
amount of such excess against the
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total principal amount of the Obligations owing, and, in such event, the Lenders
shall not be subject to any penalties provided by any laws for contracting for,
charging or receiving interest in excess of the Highest Lawful Amount or the
Highest Lawful Rate. This Section shall control every other provision of all
agreements pertaining to the transactions contemplated by or contained in the
Loan Documents.
Section 11.10 Headings. Headings used in this Agreement are for
--------
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 11.11 Amendment and Waiver. The provisions of this Agreement may
--------------------
not be amended, modified or waived except by the written agreement of the
Borrower and the Determining Lenders; provided, however, that no such amendment,
modification or waiver shall be made (a) without the consent of all Lenders, if
it would (i) increase the Specified Percentage or commitment of any Lender, or
(ii) extend or postpone the date of maturity of, extend the due date for any
payment of principal or interest on, reduce the amount of any installment of
principal or interest on, or reduce the rate of interest on, any Revolving
Credit Advance, the Reimbursement Obligations or other amount owing under any
Loan Documents to which such Lender is entitled, or (iii) release any security
for or guaranty of the Obligations (except pursuant to this Agreement or the
other Loan Documents), or (iv) reduce the fees payable hereunder to which such
Lender is entitled, or (v) revise this Section 11.11, or (vi) waive the date for
-------------
payment of any principal, interest or fees hereunder or (vii) amend the
definition of Determining Lenders; (b) without the consent of the Administrative
Agent, if it would alter the rights, duties or obligations of the Administrative
Agent; or (c) without the consent of the Issuing Bank, if it would alter the
rights, duties or obligations of the Issuing Bank. Neither this Agreement nor
any term hereof may be amended orally, nor may any provision hereof be waived
orally but only by an instrument in writing signed by the Administrative Agent
and, in the case of an amendment, by the Borrower.
Section 11.12 Exception to Covenants. Neither the Borrower nor any
----------------------
Subsidiary of the Borrower shall be deemed to be permitted to take any action or
fail to take any action which is permitted as an exception to any of the
covenants contained herein or which is within the permissible limits of any of
the covenants contained herein if such action or omission would result in the
breach of any other covenant contained herein.
Section 11.13 No Liability of Issuing Bank. The Borrower assumes all
----------------------------
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. NEITHER THE ISSUING
BANK NOR ANY LENDER NOR ANY OF THEIR RESPECTIVE OFFICERS OR DIRECTORS SHALL BE
LIABLE OR RESPONSIBLE FOR: (A) THE USE THAT MAY BE MADE OF ANY LETTER OF CREDIT
OR ANY ACTS OR OMISSIONS OF ANY BENEFICIARY OR TRANSFEREE IN CONNECTION
THEREWITH; (B) THE VALIDITY, SUFFICIENCY OR GENUINENESS OF DOCUMENTS, OR OF ANY
ENDORSEMENT THEREON, EVEN IF SUCH DOCUMENTS SHOULD PROVE TO BE IN ANY OR ALL
RESPECTS INVALID, INSUFFICIENT, FRAUDULENT OR FORGED; (C) PAYMENT BY THE ISSUING
BANK AGAINST PRESENTATION OF DOCUMENTS THAT DO NOT COMPLY WITH THE TERMS OF A
LETTER OF CREDIT, INCLUDING FAILURE OF ANY DOCUMENTS TO
-90-
BEAR ANY REFERENCE OR ADEQUATE REFERENCE TO THE LETTER OF CREDIT, EXCEPT FOR ANY
PAYMENT MADE UPON THE ISSUING BANK'S GROSS NEGLIGENCE OR WILFUL MISCONDUCT; OR
(D) ANY OTHER CIRCUMSTANCES WHATSOEVER IN MAKING OR FAILING TO MAKE PAYMENT
UNDER ANY LETTER OF CREDIT, INCLUDING, WITHOUT LIMITATION, ANY SUCH
CIRCUMSTANCES INVOLVING THE SIMPLE OR MERE NEGLIGENCE OF THE ISSUING BANK EXCEPT
------
THAT THE BORROWER SHALL HAVE A CLAIM AGAINST THE ISSUING BANK, AND THE ISSUING
BANK SHALL BE LIABLE TO THE BORROWER, TO THE EXTENT OF ANY DIRECT, BUT NOT
CONSEQUENTIAL, DAMAGES SUFFERED BY THE BORROWER THAT A COURT OF COMPETENT
JURISDICTION DETERMINES WERE CAUSED BY (I) THE ISSUING BANK'S WILFUL MISCONDUCT
OR GROSS NEGLIGENCE OR (II) THE ISSUING BANK'S WILFUL FAILURE TO MAKE LAWFUL
PAYMENT UNDER A LETTER OF CREDIT AFTER THE PRESENTATION TO IT OF A DRAFT AND
CERTIFICATES STRICTLY COMPLYING WITH THE TERMS AND CONDITIONS OF THE LETTER OF
CREDIT. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 11.14 Confidentiality. Each Lender and the Administrative Agent
---------------
agrees (on behalf of itself and each of its directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with customary procedures for handling confidential information of
this nature and in accordance with safe and sound banking practices, any non-
public information supplied to it by the Borrower pursuant to this Agreement
which is identified by the Borrower as being confidential at the time the same
is delivered to the Lenders or the Administrative Agent, provided that nothing
herein shall limit the disclosure of any such information (a) to the extent
required by statute, rule, regulation or judicial process, (b) to counsel for
any Lender or the Administrative Agent, (c) to bank examiners, auditors or
accountants of any Lender, (d) to the Administrative Agent or any other Lender,
(e) in connection with any Litigation to which any one or more of Lenders is a
party, provided, further, that, unless specifically prohibited by Applicable Law
or court order, each Lender shall, prior to disclosure thereof, notify Borrower
of any request for disclosure of any such non-public information (i) by any
Tribunal or representative thereof (other than any such request in connection
with an examination of such Lender's financial condition by such governmental
agency) or (ii) pursuant to legal process, or (f) to any Assignee or Participant
(or prospective Assignee or Participant) so long as such Assignee or Participant
(or prospective Assignee or Participant) agrees in writing to handle such
information in accordance with the provisions of this Section 11.14.
-------------
Section 11.15 No Liability of Lenders to Purchasers. The Lenders do not
-------------------------------------
assume and shall have no responsibility, obligation or liability to the
Purchasers, the Lenders' relationship being solely that of a creditor who has
taken, as security for Indebtedness owed to it, an Assignment of Pledged
Documents.
Section 11.16 Amendment, Restatement, Extension and Renewal. This
---------------------------------------------
Agreement is a renewal, extension, amendment and restatement of the Existing
Credit Agreement, and is not a novation of the "Obligations" (as defined in the
Existing Credit Agreement) thereunder. On the
-91-
Agreement Date, the "Revolving Credit Notes" (as such term is defined in the
Existing Credit Agreement), all of the outstanding indebtedness of the Borrower
under the Existing Credit Agreement and all of the liens, security interests and
other rights and interests of each of the lenders under the Existing Credit
Agreement and of Bank of America, N.A., formerly NationsBank, N.A., as
Administrative Lender thereunder, and under the other Loan Documents (as defined
in the Existing Credit Agreement) shall be acquired by the Administrative Agent
hereunder for the ratable benefit of the Lenders hereunder in their respective
Specified Percentages. On the Agreement Date, the outstanding indebtedness of
the Borrower under the Revolving Credit Notes (as such term is defined in the
Existing Credit Agreement) shall be renewed, extended, modified and restated by
the Revolving Credit Notes hereunder. The Borrower hereby consents to the
acquisition by the Administrative Agent of the indebtedness, rights and
interests described above. All terms and provisions of this Agreement supersede
in their entirety the Existing Credit Agreement. Except insofar as any of same
may have heretofore been, or may contemporaneously herewith or hereafter be,
released pursuant to written release documentation executed and delivered by the
Administrative Agent, all Liens covering the Collateral, or any part thereof,
under the collateral documents executed in connection with the Existing Credit
Agreement shall remain valid, binding and enforceable Liens against the Persons
which granted such Liens, as security for the Obligations hereunder.
SECTION 11.17 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
-------------
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
CALIFORNIA (WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS) AND THE
UNITED STATES OF AMERICA. THE LOAN DOCUMENTS ARE PERFORMABLE IN LOS ANGELES,
CALIFORNIA, AND BORROWER AND EACH SURETY, GUARANTOR, ENDORSER AND ANY OTHER
PARTY EVER LIABLE FOR PAYMENT OF ANY MONEY PAYABLE WITH RESPECT TO THE LOAN
DOCUMENTS, JOINTLY AND SEVERALLY WAIVE THE RIGHT TO BE SUED ELSEWHERE. WITHOUT
EXCLUDING ANY OTHER JURISDICTION, THE BORROWER, THE ADMINISTRATIVE AGENT AND
EACH LENDER EACH AGREES THAT THE STATE AND FEDERAL COURTS OF CALIFORNIA LOCATED
IN LOS ANGELES, CALIFORNIA, SHALL HAVE JURISDICTION OVER PROCEEDINGS IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND HEREBY SUBMITS
WITH RESPECT TO ITSELF AND ITS PROPERTY TO THE JURISDICTION OF ANY SUCH COURT
FOR THE PURPOSE OF ANY SUIT, ACTION, PROCEEDING OR JUDGMENT RELATING TO OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
SECTION 11.18 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
--------------------
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY KNOWINGLY VOLUNTARILY, IRREVOCABLY
AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS
PROVISION IS A MATERIAL INDUCEMENT TO EACH LENDER ENTERING INTO THIS AGREEMENT
AND MAKING ANY ADVANCES HEREUNDER.
-92-
SECTION 11.19 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH THE
----------------
OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
REGARDING THE SUBJECT MATTER HEREIN AND THEREIN AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES
HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
============================================
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
============================================
-93-
IN WITNESS WHEREOF, this Amended and Restated Credit Agreement is executed
as of the date first set forth above.
BORROWER: SUNTERRA CORPORATION
By: /s/ [ILLEGIBLE]
----------------------------------------
Treasurer and Vice President
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A., formerly NationsBank,
N.A., as Administrative Agent
By: /s/ Xxxx Xxxxxx-Xxxxxx
---------------------------------------
Xxxx Xxxxxx-Xxxxxx
Principal
LENDERS: BANK OF AMERICA, N.A., formerly NationsBank,
N.A., as a Lender and Issuing Bank
Specified Percentage:
33.33333334%
By: /s/ Xxxx Xxxxxx-Xxxxxx
---------------------------------------
Xxxx Xxxxxx-Xxxxxx
Principal
UNION BANK OF CALIFORNIA, N.A., as a Lender
Specified Percentage:
25.00000000%
By: /s/ Xxxx X. Xxxxx
--------------------------------------
Name: Xxxx X. Xxxxx
Title: Assistant Vice President
BANK OF HAWAII, as a Lender
Specified Percentage:
25.00000000%
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
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SOCIETE GENERALE, as a Lender
Specified Percentage:
16.66666666%
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
-95-
SCHEDULE 1
----------
LIBOR LENDING OFFICES, ADDRESSES FOR NOTICES
(i) BORROWER:
Sunterra Corporation
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer, Treasurer
and General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to:
Xxx Xxxx III
Xxxxxxxxx, Xxxxxxx & Xxxxx, LLP
The Xxxxxxx Building, 16th Floor
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Telephone: 404-681-3450
Facsimile: 404-681-1046
(ii) ADMINISTRATIVE AGENT:
Credit Notices and Communications:
Bank of America, N.A.
Real Estate Structured Debt
555 South Flower, CA9-706-06-02
Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxx-Xxxxxx
Principal
Telephone: 000-000-0000
Facsimile: 213-228-3421
Administrative, Operational, Funding, Conversion and Other Notices and
Communications:
Bank of America, N.A.
Real Estate Structured Debt
SDG-Homebuilding/Irvine
0 Xxxx Xxxxx, Xxxxx 000, XX0-000-00-00
Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxxxx X. Xxx
Relationship Administrator
Telephone: 000-000-0000
Facsimile: 000-000-0000
(iii) BANK OF AMERICA, N.A., as a Lender:
Credit Notices and Communications:
Bank of America, N.A.
Real Estate Structured Debt
555 South Flower, CA9-706-06-02
Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxx-Xxxxxx
Principal
Telephone: 000-000-0000
Facsimile: 213-228-3421
LIBOR Lending Office:
Bank of America, N.A.
Real Estate Structured Debt
SDG-Homebuilding/Irvine
0 Xxxx Xxxxx, Xxxxx 000, XX0-000-00-00
Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxxxx X. Xxx
Relationship Administrator
Telephone: 000-000-0000
Facsimile: 000-000-0000
2
Administrative, Operational, Funding, Conversion and Other Notices and
Communications:
Bank of America, N.A.
Real Estate Structured Debt
SDG-Homebuilding/Irvine
0 Xxxx Xxxxx, Xxxxx 000, XX0-000-00-00
Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxxxx X. Xxx
Relationship Administrator
Telephone: 000-000-0000
Facsimile: 000-000-0000
(iv) UNION BANK OF CALIFORNIA, N.A., as a Lender:
All Notices and Other Communications:
Union Bank of California, N.A.
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Assistant Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
LIBOR Lending Office:
Union Bank of California, N.A.
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxx-Xx
3
Telephone: 000-000-0000
Facsimile: 000-000-0000
(v) BANK OF HAWAII, as a Lender:
All Notices and Other Communications:
Bank of Hawaii
0000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
LIBOR Lending Office:
Bank of Hawaii
00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
(vi) SOCIETE GENERALE, as a Lender:
All Notices and Other Communications:
Societe Generale
Xxxxxxxx Xxxx Center, Suite 4800
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
4
Telephone: 000-000-0000
Facsimile: 000-000-0000
LIBOR Lending Office:
Societe Generale
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx XxXxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
5
SCHEDULE 2
----------
EXISTING LIENS
PROPERTY SUBJECT AMOUNT OF
TO LIEN LIENHOLDER DEBT SECURED MATURITY DATE
------- ---------- ------------ -------------
SCHEDULE 3
----------
EXISTING LITIGATION
AND MATERIAL LIABILITIES
SCHEDULE 4
----------
SUBSIDIARIES
State of
Incorporation Percentage
Name or Organization of Ownership Owner
------ --------------- ------------ -----
SCHEDULE 5
----------
EXISTING INVESTMENTS
SCHEDULE 6
----------
EXISTING INDEBTEDNESS
SCHEDULE 7
----------
AUTHORIZATION, QUALIFICATION AND GOOD STANDING
SCHEDULE 8
----------
INTELLECTUAL PROPERTY AND DISPUTES
RELATING THERETO
SCHEDULE 9
----------
LABOR RELATIONS
