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EXHIBIT 10.1
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$100,000,000
CREDIT AGREEMENT
AMONG
SIGNATURE RESORTS, INC.,
CERTAIN LENDERS PARTY HERETO,
NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE LENDER,
AND
SOCIETE GENERALE, AS DOCUMENTATION AGENT
FEBRUARY 18, 1998
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TABLE OF CONTENTS
Page
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ARTICLE 1
Definitions
Section 1.1 Defined Terms........................................................................ 1
Section 1.2 Amendments and Renewals.............................................................. 25
Section 1.3 Construction......................................................................... 25
ARTICLE 2
Advances
Section 2.1 The Advances......................................................................... 25
Section 2.2 Manner of Borrowing and Disbursement................................................. 26
Section 2.3 Interest............................................................................. 28
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 Lender.................................... 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................................................................ 34
Section 2.12 Sharing of Payments.................................................................. 34
Section 2.13 Calculation of LIBOR Rate............................................................ 35
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................................................................. 44
Section 3.2 Conditions Precedent to All Advances and Letters of Credit........................... 46
Section 3.3 Conditions Precedent to Conversions and Continuations................................ 48
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ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties....................................................... 48
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......................................................... 60
Section 5.11 Further Assurances................................................................... 61
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
ARTICLE 6
Information Covenants
Section 6.1 Borrowing Base Report................................................................ 64
Section 6.2 Eligible Notes Receivable Report..................................................... 64
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......................................................... 67
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ARTICLE 7
Negative Covenants
Section 7.1 Indebtedness......................................................................... 68
Section 7.2 Liens................................................................................ 69
Section 7.3 Investments.......................................................................... 69
Section 7.4 Liquidation, Merger.................................................................. 70
Section 7.5 Sales of Assets...................................................................... 70
Section 7.6 Acquisitions......................................................................... 70
Section 7.7 Capital Expenditures................................................................. 71
Section 7.8 Restricted Payments.................................................................. 71
Section 7.9 Affiliate Transactions............................................................... 71
Section 7.10 Compliance with ERISA................................................................ 71
Section 7.11 Minimum Interest Coverage Ratio...................................................... 72
Section 7.12 Minimum Tangible Net Worth........................................................... 72
Section 7.13 Maximum Senior Debt to Total Capital................................................. 72
Section 7.14 Maximum Total Debt to Total Capital.................................................. 72
Section 7.15 Sale and Leaseback................................................................... 72
Section 7.16 Business............................................................................. 73
Section 7.17 Fiscal Year.......................................................................... 73
Section 7.18 Amendment of Organizational Documents................................................ 73
Section 7.19 Amendments and Waivers of Subordinated Debt.......................................... 73
Section 7.20 Use of Lenders' Name................................................................. 73
Section 7.21 Servicing and Collection Agreement................................................... 73
Section 7.22 Custodial Agreement.................................................................. 74
Section 7.23 Notes Receivable..................................................................... 74
ARTICLE 8
Default
Section 8.1 Events of Default.................................................................... 74
Section 8.2 Remedies............................................................................. 77
ARTICLE 9
Changes in Circumstances
Section 9.1 LIBOR Basis Determination Inadequate................................................. 78
Section 9.2 Illegality........................................................................... 78
Section 9.3 Increased Costs...................................................................... 79
Section 9.4 Effect On Base Rate Advances......................................................... 80
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Section 9.5 Capital Adequacy..................................................................... 80
Section 9.6 Replacement Lender................................................................... 80
ARTICLE 10
Agreement Among Lenders
Section 10.1 Agreement Among Lenders.............................................................. 81
Section 10.2 Lender Credit Decision............................................................... 84
Section 10.3 Benefits of Article.................................................................. 84
ARTICLE 11
Miscellaneous
Section 11.1 Notices.............................................................................. 84
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.............................................................................. 87
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................................................ 92
SECTION 11.16 GOVERNING LAW........................................................................ 92
SECTION 11.17 WAIVER OF JURY TRIAL................................................................. 92
SECTION 11.18 ENTIRE AGREEMENT..................................................................... 92
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Schedules and Exhibits
Schedule 1: LIBOR Lending Offices
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
Schedule 10: List of Specified Resorts
Exhibit A: Revolving Credit Note
Exhibit B: Swing Line Note
Exhibit C: Security Agreement
Exhibit D: Borrowing Base Report
Exhibit E: Compliance Certificate
Exhibit F: Assignment Agreement
Exhibit G: Subsidiary Guaranty
Exhibit H: Notice of Borrowing
Exhibit I: Assignment of Pledged Documents
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of February 18, 1998, among SIGNATURE
RESORTS, INC., a Maryland corporation (the "Borrower"), the Lenders from time to
time party hereto, NATIONSBANK OF TEXAS, N.A., a national banking association,
as administrative agent for the Lenders, and SOCIETE GENERALE, as documentation
agent for the Lenders.
BACKGROUND
The Lenders have been requested to provide the Borrower the funds
required to (a) refinance certain existing debt of the Borrower and its
Subsidiaries (as hereinafter defined), (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
Section 1.1 Defined Terms. For purposes of this Agreement:
"Acquisition" means any transaction pursuant to which the Borrower or
any 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.
"Administrative Lender" means NationsBank of Texas, N.A., a national
banking association, as administrative agent for Lenders, or such successor
administrative agent appointed pursuant to Section 10.1(b) hereof.
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"Advance" means a Revolving Credit Advance or a Swing Line Advance and
"Advances" means Revolving Credit Advances and Swing Line Advances.
"Affiliate" means, as applied to any Person, any other Person that,
directly or indirectly, through one or more Persons, Controls or is Controlled
By or Under Common Control with, that Person.
"Agreement" means this Credit Agreement, as amended, modified,
supplemented or restated from time to time.
"Agreement Date" means the date of this Agreement.
"Applicable Environmental Laws" means applicable laws pertaining to
health 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
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").
"Applicable Law" means (a) in respect of any Person, all provisions of
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 Texas, "Applicable Law" shall mean
the laws of the United States of America, including without limitation 12 USC
Sections 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 Texas, including, without limitation, Art. 1H, if applicable, and if
Art. 1H is not applicable, Art. 1D and any other statute of the State of Texas
prescribing maximum rates of interest with respect to extensions of credit;
provided that the parties hereto agree that the provisions of Chapter 346 of the
Texas Finance Code, as amended, shall not apply to Advances, this Agreement, the
Notes or any other Loan Documents.
"Applicable LIBOR Rate Margin" means the following per annum
percentages, applicable in the following situations:
Applicability Percentage
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(a) Sum of (i) aggregate outstanding Advances and 1.375%
(ii) aggregate Reimbursement Obligations is greater
than or equal to 75% of Eligible Notes Receivable
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(b) Sum of (i) aggregate outstanding Advances and 1.125%
(ii) aggregate Reimbursement Obligations is greater
than or equal to 65% but less than 75% of Eligible
Notes Receivable
(c) Sum of (i) aggregate outstanding Advances and 0.875%
(ii) aggregate Reimbursement Obligations is less than
65% of Eligible Notes Receivable
The Applicable LIBOR Rate 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 monthly basis, retroactively as of the
first day of each month and for such month, based upon the aggregate outstanding
Advances and Reimbursement Obligations as of the last day of the immediately
preceding month and the Eligible Notes Receivable as of the last day of the
immediately preceding month (as reflected in the Borrowing Base Report, as of
the last day of such month, to be delivered to the Lenders pursuant to Section
6.1 hereof).
"Art. 1D" means Article 5069-1D, Title 79, Revised Civil Statutes of
Texas, 1925, as amended.
"Art. 1H" means Article 5069-1H, Title 79, Revised Civil Statutes of
Texas, 1925, as amended.
"Art. 1.04" means Article 5069-1.04, Title 79, Revised Civil Statutes
of Texas, as amended.
"Assignees" means any assignee of a Lender pursuant to an Assignment
Agreement and shall have the meaning ascribed thereto in Section 11.6 hereof.
"Assignment Agreement" has the meaning specified in Section 11.6
hereof.
"Assignment of Pledged Documents" means an Assignment of Pledged
Documents, in substantially the form of Exhibit I hereto, pursuant to which the
Borrower and each Restricted Subsidiary transfers and assigns to the
Administrative Lender (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 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.
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"Average Quarterly Delinquency Rate" means the ratio (expressed as a
percentage), calculated on a monthly basis as of the last day of each month, of
(i) the aggregate outstanding principal balance, as of the date of calculation,
of all notes receivable of the Borrower and its Subsidiaries generated from, or
attributable to, the Specified Resorts, with respect to which notes receivable
any scheduled payment is more than sixty (60) days past due, to (ii) the
aggregate outstanding principal balance, as of the date of calculation, of all
notes receivable of the Borrower and its Subsidiaries generated from, or
attributable to, the Specified Resorts; provided, however, that notes receivable
of the Borrower or of any Subsidiary that are, at the time of such calculation,
included in any Securitization shall be excluded entirely from the foregoing
calculation.
"Base Rate Advance" means any Advance bearing interest at the Base Rate
Basis.
"Base Rate Basis" 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 Rate on such day. The Base Rate Basis shall be
adjusted automatically without notice as of the opening of business on the
effective date of each change in the Prime Rate or the Federal Funds Rate, as
the case may be, to account for such change.
"Borrower" has the meaning specified in the introductory provision
hereof.
"Borrowing Base" means, the following amounts, during the following
periods of time and under the following circumstances:
(i) during the period of time from the Agreement Date
through, and including, the date of consummation of the first Securitization to
be consummated by the Borrower after the Agreement Date, the Borrowing Base
shall be an amount equal to 85% of the aggregate unpaid principal balance, at
the time in question, of Eligible Notes Receivable;
(ii) during the period of time from the date of
consummation of the first Securitization to be consummated by the Borrower after
the Agreement Date through, and including, the date of consummation of the
second Securitization to be consummated by the Borrower after the Agreement
Date, the Borrowing Base shall be an amount equal to the lesser of (i) 85% of
the aggregate unpaid principal balance, at the time in question, of Eligible
Notes Receivable and (ii) an amount equal to the product of (x) 100%, minus two
(2) times the Credit Enhancement Percentage with respect to such Securitization
and (y) the aggregate unpaid principal amount, at the time in question, of
Eligible Notes Receivable; and
(iii) thereafter, the Borrowing Base shall be an
amount equal to the lesser of (i) 85% of the aggregate unpaid principal balance,
at the time in question, of Eligible Notes Receivable and (ii) an amount equal
to the product of (x) 100%, minus two (2) times the maximum Credit Enhancement
Percentage with respect to the Borrower's two most recent Securitizations and
(y) the aggregate unpaid principal amount, at the time in question, of Eligible
Notes Receivable.
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"Borrowing Base Report" means a report, signed by an Authorized
Signatory, in substantially the form of Exhibit D, appropriately completed.
"Business Day" means a day on which commercial banks are open (a) for
the transaction of business in Dallas, Texas and New York, New York, 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
Borrower and the Restricted Subsidiaries 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 however, that the term "Capital
Expenditures" shall not include (i) Investments permitted hereunder, (ii)
Acquisitions permitted hereunder or (iii) expenditures made by the Borrower or
the Restricted Subsidiaries 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.
"Capital Stock" means, as to any Person, the equity interests in such
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 Borrower or any Restricted Subsidiary as lessee under a lease which at the
time are recorded as capitalized lease obligations on the balance sheet of the
Borrower or such Restricted Subsidiary prepared in accordance with GAAP.
"Cash and Cash Equivalents" means with respect to the Borrower and each
Restricted Subsidiary (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
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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
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
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
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 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.
"Collateral" means any collateral granted at any time by any Person to
the Administrative Lender for the benefit of the Lenders to secure the
Obligations.
"Collateral Document" means any document under which Collateral is
granted and any document related thereto.
"Commitment Fee" has the meaning specified in Section 2.4(a) hereof.
"Commitment" means $100,000,000, as reduced from time to time pursuant
to Section 2.6 hereof.
"Compliance Certificate" means a certificate, signed by an Authorized
Signatory, in substantially the form of Exhibit E, appropriately completed.
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"Control" or "Controlled By" or "Under Common Control" means
possession, 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 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.
"Credit Enhancement Percentage" means, with respect to the
Securitization in question, the highest overall credit enhancement (expressed as
a percentage) that was, or would have been, required in order to attain a "BBB"
rating (or its equivalent) by the applicable rating agency(ies) involved on all
securities issued in connection with such Securitization (assuming that all
securities that were issued in connection therewith were so rated), as such
Credit Enhancement Percentage shall be communicated to the Administrative Lender
by such rating agency(ies); provided, however, that if such Credit Enhancement
Percentage shall, for any reason whatsoever, not be communicated to the
Administrative Lender by such rating agency(ies) with respect to any such
Securitization, the Administrative Lender shall determine such Credit
Enhancement Percentage with respect to such Securitization based upon the
information available to the Administrative Lender at such time.
"Custodial Agreement" means collectively, one or more agency and
custodial 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 Lender and the Custodian, 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 Lender.
"Custodian" means LaSalle National Bank or such other Person(s) as may
be designated from time to time by the Administrative Lender, following notice
thereof to the Borrower, to maintain physical possession of the Pledged
Documents.
"Debtor Relief Laws" means any applicable liquidation, conservatorship,
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 by a Purchaser, encumbering all the right, title and interest of each
such Purchaser in and to its
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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 Section 8.1, regardless of whether there shall have occurred any passage of
time 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
respect to Base Rate Advances the lesser of (i) the Highest Lawful Rate or (ii)
the Prime Rate plus 2.00% or (b) with respect to LIBOR Advances, the lesser of
(i) the Highest Lawful Rate or (ii) the LIBOR Basis plus 2% in excess of the
Applicable Rate Margin then in effect.
"Determining Lenders" means, on any date of determination, any
combination of the Lenders having more than 50% of the aggregate amount of the
Advances (which for purposes of the calculation shall include for each Lender an
amount equal to the product of such Lender's Specified Percentage multiplied by
the aggregate amount of Swing Line Advances outstanding) then outstanding;
provided, however, that if there are no Advances outstanding hereunder,
"Determining Lenders" shall mean any combination of Lenders whose Specified
Percentages aggregate more than 50%.
"Dividend" means, as to any Person, (a) any declaration or payment of
any 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 Restricted Subsidiaries, 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), plus (b) interest expense, plus (c) 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.
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"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
(at least 85% of which the Purchasers in respect thereof are residents of the
United States, Puerto Rico, the United States Virgin Islands or Canada) 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 and the Pledged Documents relating
thereto are subject to a first priority security interest in favor of the
Administrative Lender pursuant to the Collateral Documents, prior to the rights
of, and enforceable against, all other Persons;
(c) The Note Receivable shall not have a term of greater than
one-hundred twenty (120) 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; provided,
however, that Notes Receivable having terms greater than one-hundred twenty
(120) months but not greater than one-hundred eighty (180) months may be
included as Eligible Notes Receivable to the extent that such longer term Notes
Receivable otherwise satisfy the criteria for inclusion as Eligible Notes
Receivable and the aggregate outstanding principal balance of such longer term
Notes Receivable does not, at any time, exceed fifteen percent (15%) of the
aggregate outstanding principal balance of all Eligible Note Receivable included
in the Borrowing Base;
(d) The Purchaser in respect of such Note Receivable shall have timely
made at least the first regularly scheduled installment payment due thereon;
(e) 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, all of the Notes
Receivable with respect to such Purchaser qualify as, and are included as,
Eligible Notes Receivable and as Collateral hereunder 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;
(f) The terms of such Note Receivable have not been restructured,
rewritten or otherwise modified in any manner that would reduce the interest
rate with respect thereto, reduce the principal amount thereof, reduce the
amount of any scheduled payment(s) with respect thereto, extend the maturity
date thereof (unless such extension was granted solely for the purpose of
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16
upgrading the applicable Purchaser to a larger Unit and/or an additional
Time-Share Interest in the Project), release or impair any collateral securing
same, release or impair any obligations or duties of any Purchaser with respect
thereto or in any manner that would otherwise result in such Note Receivable not
qualifying as an Eligible Note Receivable hereunder;
(g) No installment of such Note Receivable is more than fifty-nine (59)
days past due;
(h) 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 or a bond insuring the completion
thereof has been posted;
(i) The Purchaser 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;
(j) 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;
(k) The Purchaser in respect of such Note Receivable has no right to
rescind the purchase of the Time-Share Interest;
(l) All sales and financing documents relating to the Note Receivable
have been executed and delivered to the Administrative Lender and have not been
modified from the standard forms theretofore approved by the Administrative
Lender;
(m) The terms of such Note Receivable and all related instruments
comply with all Laws;
(n) The Note Receivable 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 Time-Share Interests, and
such sale is evidenced by Purchase Documents and secured by a first priority
mortgage or deed of trust on the purchased Time-Share Interest, which mortgage
or deed of trust has been assigned of record by the Borrower or the applicable
Restricted Subsidiary to the Administrative Lender;
(o) 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 Lender), 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 Lender) or (ii) the Time-Share Interest purchased and to which
the Note Receivable relates has been permanently and irrevocably released
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17
from any such Lien (including, without limitation, any after-acquired property
provisions thereof) with respect to such Unit;
(p) The Deed of Trust securing the Note Receivable is insured under a
mortgagee title insurance policy in favor of the Administrative Lender
acceptable to the Administrative Lender, subject only to those exceptions to
title as the Administrative Lender approves;
(q) Payments under the Note Receivable are to be in legal tender of the
United States;
(r) The Note Receivable and the other Purchase Documents are valid,
genuine and enforceable against the Purchaser;
(s) 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;
(t) 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;
(u) 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;
(v) The Borrower or the applicable Restricted Subsidiary, as
applicable, has performed all of its obligations to the Purchasers 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; and
(w) The Project containing the Unit subject to such 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.
"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.
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18
"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.
"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 Dallas 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 Lender 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.
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19
"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 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. For purposes of determining the Highest Lawful Rate under the
Applicable Law of the State of Texas, the applicable rate ceiling shall be (a)
the weekly rate ceiling described in and computed in accordance with the
provisions of Art. 1H, or (b) either the quarterly ceiling or the annualized
ceiling computed pursuant to Art. 5069-ID.008, Title 79, Revised Civil Statutes
of Texas, as amended; provided, however, that at any time the weekly rate
ceiling, the quarterly ceiling or the annualized ceiling shall be less than 18%
per annum or more than 24% per annum, the provisions of Art. 5069-1D.009(a) and
(b), Title 79, Revised Civil Statutes of Texas, as amended, shall control for
purposes of such determination, as applicable.
"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
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20
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.
"Intangible Assets" means those assets which are treated as intangible
pursuant to GAAP, and in any event including, without limitation: (a)
obligations, if any, owing by Affiliates to the Borrower or to any Restricted
Subsidiary, (b) accounts, notes or mortgages receivable which are deemed by the
Borrower, any of the Restricted Subsidiaries or the Administrative Lender to be
uncollectible or which should be subject to a reserve for bad debts in
accordance with GAAP or which are subject to claims or set-offs (to the extent
of such claim or set-off); (c) leases and leasehold improvements; (d) any asset
which is intangible or lacks intrinsic and marketable value or collectibility,
including without limitation goodwill, noncompetition agreements, patents,
copyrights, trademarks, franchises or organization or research and development
costs; (e) organizational and experimental expense; and (f) unamortized debt
discount and expense.
"Interest Coverage Ratio" means the ratio of EBITDA to Interest
Expense, calculated for the four consecutive fiscal quarters ending on the date
of calculation.
"Interest Expense" means, for any period, determined in accordance with
GAAP on a consolidated basis for the Borrower and the Restricted Subsidiaries,
interest expense (including interest expense pursuant to Capitalized Lease
Obligations).
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21
"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 NationsBank of Texas, N.A., a national banking
association, in its capacity as issuer of the Letters of Credit.
"Law" means any statute, law, ordinance, regulation, rule, order, writ,
injunction, or decree of any Tribunal.
"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
Lender in its individual capacity), and each Assignee that hereafter becomes a
party hereto pursuant to Section 11.6 hereof, subject to the limitations set
forth therein.
"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.
"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.
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22
"Letter of Credit Facility" has the meaning specified in Section
2.15(a) hereof.
"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 Rate plus the
Applicable LIBOR Rate 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. Once
determined, the LIBOR Basis shall remain unchanged during the applicable
Interest Period.
"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 Lender.
"LIBOR Rate" 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 Rate" 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.
"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 Lender Fee Letter, any Hedge Agreements entered into with any
Lender, the Assignments of Pledged Documents, and any other
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23
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,
financial condition, results of operations, or business prospects 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.
"Maturity Date" means February 17, 2001, 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.
"NationsBank" means NationsBank of Texas, N.A., a national banking
association, in its capacity as a Lender hereunder, but not in its capacity as
Administrative Lender hereunder.
"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
Restricted Subsidiary under, or in connection with, any Securitization, as of
such date of calculation, to the extent that same
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24
constitute liabilities of the Borrower or of such Restricted Subsidiary under
GAAP or would, under GAAP, constitute liabilities of the Borrower or of such
Restricted Subsidiary if such Securitization were treated as an on balance sheet
transaction and (ii) the fair market value of any and all property of the
Borrower or of any Restricted Subsidiary that is pledged or encumbered, or as to
which the interest(s) of the Borrower or any Restricted 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
the Restricted Subsidiaries, on a consolidated basis, determined in accordance
with GAAP, the consolidated total stockholders' equity of the Borrower and the
Restricted Subsidiaries.
"Note Receivable" means a promissory note executed by a Purchaser in
favor of the Borrower or a Restricted Subsidiary which has arisen out of the
sale of a Time-Share Interest to a Purchaser, which note is secured by a Deed of
Trust.
"Notes" means, collectively, the Revolving Credit Notes and the Swing
Line Note.
"Notice of Borrowing" has the meaning specified in Section 2.2(a)
hereof.
"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 Lender
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 the Restricted Subsidiaries.
"Participant" has the meaning specified in Section 11.6(c) hereof.
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25
"Participation" has the meaning specified in Section 11.6(c) hereof.
"Payment Date" means the last day of the Interest Period for any LIBOR
Advance.
"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
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26
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;
(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 Notes Receivable, the
Deeds of Trust and the Purchase Documents.
"Pretax Net Income" means net profit (or loss) before taxes of the
Borrower and the Restricted Subsidiaries, on a consolidated basis, determined in
accordance with GAAP.
"Prime Rate" means, at any time, the prime interest rate announced or
published by the Reference Lender from time to time as its reference rate for
the determination of interest rates for loans of varying maturities in United
States dollars to United States residents of varying degrees of creditworthiness
and being quoted at such time by the Reference Lender as its "prime rate;" it
being understood that such rate may not be the lowest rate of interest charged
by the Reference Lender.
"Projects" means those time-share residential real estate projects
constructed by the Borrower or any of its Subsidiaries in which the Borrower or
any of its Subsidiaries sells Time-
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Share Interests and as to which any of the Notes Receivable generated therefrom
constitute Collateral hereunder.
"Purchase Documents" means any purchase agreement 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 day of each March, June, September and
December, beginning March 31, 1998.
"Reference Lender" means NationsBank; provided that if the commitments
of NationsBank hereunder shall terminate and if NationsBank shall have no
Advances and Letters of Credit outstanding hereunder, NationsBank shall cease to
be the Reference Lender, and Administrative Lender (after consultation with
Borrower) shall, with notice to Borrower and Lenders, designate another Lender
as the Reference Lender.
"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.
"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 Lender 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
Lender, for the benefit of the Lenders, pursuant to documentation acceptable to
the Administrative Lender and (ii) as to which the
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Lenders have received such board resolutions, officer's certificates and
opinions of counsel as the Administrative Lender 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.
"Security Agreement" means any Collateral Transfer of Notes and Liens
(Security Agreement), substantially in the form of Exhibit C 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 Lender.
"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 Lender.
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"Servicing and Collection Agreement" means, collectively, the Servicing
and Collection Agreement(s), in such form as the Administrative Lender shall
prescribe, to be made among the Borrower, each Restricted Subsidiary that owns
any of the Notes Receivable included in the Borrowing Base, the Administrative
Lender and the Servicing Agent, as from time to time modified, replaced or
restated.
"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 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
liabilities 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 Lender 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 its most recent Assignment Agreement.
"Specified Resorts" means, collectively, the time-share residential
real estate projects described or referred to in Schedule 10 attached hereto.
"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 Lender and
the Determining Lenders, with only such changes or amendments as are not
prohibited by Section 7.19 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),
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(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 G hereto, executed and delivered by each Guarantor, as such
guaranty(ies) may be amended, supplemented, modified, renewed or otherwise
restated from time to time.
"Swing Line Advance" means an Advance made pursuant to Section 2.1(b)
hereof.
"Swing Line Bank" means NationsBank of Texas, N.A. and any successors
thereto appointed in accordance with Section 10.1(b) hereof.
"Swing Line Facility" has the meaning specified in Section 2.1(b)
hereof.
"Swing Line Note" means the Swing Line Note of the Borrower payable to
the order of the Swing Line Bank, substantially in the form of Exhibit B hereto,
together with any extensions, renewals or amendments thereof or thereto, and any
substitutions therefor.
"Tangible Net Worth" means the sum of the following for the Borrower
and the Restricted Subsidiaries, on a consolidated basis, determined in
accordance with GAAP, (a) Net Worth minus (b) the sum of the following (without
duplication in respect of items already deducted in arriving at Net Worth):
Intangible Assets, and any write-up in the book value of assets resulting from
revaluation thereof subsequent to December 31, 1996.
"Taxes" has the meaning specified in Section 2.14 hereof.
"Time-Share Interest" means an undivided fee simple ownership interest
as tenants in common with all other Purchasers with respect to any Unit with
respect to the exclusive right to use such Unit and the common areas for the
Project with respect to such Unit for a specified length of time, on an annual
or a biennial basis.
"Total Capital" means, as of any date of determination, the sum of (a)
Total Debt plus (b) Tangible Net Worth.
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"Total Debt" means, as of any date of determination, determined for the
Borrower and the Restricted Subsidiaries on a consolidated basis, 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.
"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 Texas, 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 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 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.
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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 Swing Line Advances 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 Base Rate Advance or a LIBOR
Advance; provided that there shall not be outstanding, at any one time, more
than five LIBOR Advances.
(b) The Swing Line Loans. The Borrower may request Swing Line Bank to
make, and Swing Line Bank agrees to make, on the terms and conditions
hereinafter set forth, advances ("Swing Line Advances") to the Borrower from
time to time on any Business Day during the period from the date hereof until
the Maturity Date in an aggregate amount not to exceed at any time outstanding
the lesser of (i) the Commitment, less the sum of (A) the aggregate principal
amount of Revolving Credit Advances then outstanding plus (B) the aggregate
principal amount of all Reimbursement Obligations then outstanding, and (ii)
$10,000,000 (assuming compliance with all conditions to drawing) (the "Swing
Line Facility"). Each Swing Line Advance shall be in an amount not less than
$100,000 and in multiples thereof. Each Swing Line Advance shall be a Base Rate
Advance. Within the limits of the Swing Line Facility, Swing Line Advances may
be repaid and then reborrowed.
Section 2.2 Manner of Borrowing and Disbursement.
(a) In the case of Base Rate Advances, the Borrower, through an
Authorized Signatory, shall give the Administrative Lender prior to 11:00 a.m.,
Dallas, Texas time, on the date of any proposed Base Rate Advance irrevocable
written notice, or irrevocable telephonic notice followed immediately by written
notice, in substantially the form of Exhibit H hereto (a "Notice of Borrowing")
(provided, however, that the Borrower's failure to confirm any telephonic notice
in writing shall not invalidate any notice so given), of its intention to borrow
a Base Rate Advance hereunder. Such notice of borrowing shall specify the
requested funding date, which shall be a
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Business Day, and the amount of the proposed aggregate Base Rate Advances to be
made by Lenders.
(b) In the case of LIBOR Advances, the Borrower, through an Authorized
Signatory, shall give the Administrative Lender at least three Business Days'
irrevocable written notice, or irrevocable telephonic notice followed
immediately by written notice (provided, however, that the Borrower's failure to
confirm any telephonic notice in writing shall not invalidate any notice so
given) pursuant to a Notice of Borrowing, of its intention to borrow a LIBOR
Advance hereunder. Notice shall be given to the Administrative Lender prior to
11:00 a.m., Dallas, Texas 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 notice of borrowing
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.
(c) In the case of Swing Line Advances, the Borrower, through an
Authorized Signatory, shall give the Swing Line Bank and the Administrative
Lender prior to 12:00 noon, Dallas, Texas time, on the date of any proposed
Swing Line Advance irrevocable written notice or irrevocable telephonic notice
followed immediately by written notice (provided, however, that the Borrower's
failure to confirm any telephonic notice in writing shall not invalidate any
notice so given), of its intention to borrow or reborrow a Swing Line Advance.
Such notice of borrowing shall specify the requested funding date, which shall
be a Business Day, and the amount of the proposed Swing Line Advance.
(d) 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
Base Rate Advances to LIBOR Advances and all or any part of the outstanding
LIBOR Advances to Base 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 Base 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 two Business Days prior to a proposed
conversion/continuation date, the Borrower, through an Authorized Signatory,
shall give the Administrative Lender irrevocable written notice, or irrevocable
telephonic notice followed immediately by written notice (provided, however,
that the Borrower's failure to confirm any telephonic notice in writing shall
not invalidate any notice so given), 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
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a continuation of, a LIBOR Advance, the requested Interest Period, and (iv) in
the case of a conversion of a Base 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(d), the Borrower shall be deemed irrevocably to
have requested that such LIBOR Advance be converted to a Base Rate Advance in
the same principal amount. Notice shall be given to the Administrative Lender
prior to 11:00 a.m., Dallas, Texas time, in order for such Business Day to count
toward the minimum number of Business Days required.
(e) The aggregate amount of Base 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.
(f) The Administrative Lender shall promptly notify the Lenders of each
notice (other than with respect to a Swing Line Advance) received from the
Borrower pursuant to this Section. Each Lender shall, not later than 2:00 p.m.,
Dallas, Texas time, on the date of any Advance, deliver to the Administrative
Lender, at its address set forth herein, such Lender's Specified Percentage of
such Advance in immediately available funds in accordance with the
Administrative Lender's instructions. Prior to 3:00 p.m., Dallas, Texas time, on
the date of any Advance hereunder, the Administrative Lender shall, subject to
satisfaction of the conditions set forth in Article 3, disburse the amounts made
available to the Administrative Lender 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 Lender. All Advances shall be made
by each Lender according to its Specified Percentage.
(g) The Swing Line Bank shall, not later than 1:30 p.m., Dallas, Texas
time, on the date of any Swing Line Advance, deliver to the Administrative
Lender at its address set forth herein, the amount of such Swing Line Advance in
immediately available funds in accordance with the Administrative Lender's
instructions. Prior to 2:00 p.m., Dallas, Texas time, on the date of any Swing
Line Advance, the Administrative Lender shall, subject to the conditions set
forth in Article 3, disburse the amount made available to the Administrative
Lender by the Swing Line Bank by (i) transferring such amounts by wire transfer
pursuant to the Borrower's instruction or (ii) in the absence of such
instructions, crediting such amounts to the account of the Borrower maintained
with the Administrative Lender. Forthwith upon demand by the Swing Line Bank and
in any event upon the making of the request or the granting of the consent
specified by Section 8.2 to authorize the Administrative Lender to declare the
Advances due and payable pursuant to the provisions of Section 8.2, each Lender,
including the Swing Line Bank, notwithstanding the failure of the Borrower at
such time to satisfy each condition specified in Article 3, shall make by 12:00
noon (Dallas, Texas time) on the first Business Day following receipt by such
Lender of
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notice from the Swing Line Bank, a Revolving Credit Advance which is a Base Rate
Advance in an amount equal to the product of (i) the Specified Percentage of
such lender times (ii) the aggregate outstanding principal amount of the Swing
Line Advances. The proceeds of such Revolving Credit Advances shall be applied
by the Administrative Lender to repay the outstanding Swing Line Advances.
Section 2.3 Interest.
(a) On Base Rate Advances.
(i) The Borrower shall pay interest on the outstanding unpaid
principal amount of the Base Rate Advances outstanding from time to
time, until such Base Rate Advances are due (whether at maturity, by
reason of acceleration, by scheduled reduction, or otherwise) and
repaid at a simple interest rate per annum equal to the Base Rate Basis
for the Base Rate Advances as in effect from time to time. If at any
time the Base Rate Basis would exceed the Highest Lawful Rate, interest
payable on the Base Rate Advances shall be limited to the Highest
Lawful Rate, but the Base Rate Basis shall not thereafter be reduced
below the Highest Lawful Rate until the total amount of interest
accrued on the Base Rate Advances equals the amount of interest that
would have accrued if the Base Rate Basis had been in effect at all
times.
(ii) Interest on the Base Rate Advances shall be computed on
the basis of a year of 365 or 366 days, as appropriate, for the actual
number of days elapsed, and shall be payable in arrears on each
Quarterly Date and on the Maturity Date.
(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 Lender, 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 the
applicable Payment Date and on the Maturity Date; provided, however,
that if the Interest Period for such LIBOR Advance exceeds three
months, interest shall also be due and payable in arrears on each
three-month anniversary of the commencement of such Interest Period
during such Interest Period.
(c) On Swing Line Advances.
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(i) The Borrower shall pay interest on the outstanding
principal amount of each Swing Line Advance, from the date each Swing
Line Advance is made until it is due (whether at maturity, by
acceleration or otherwise) or repaid, at a rate per annum equal to the
Base Rate Basis in effect from time to time. If at any time the Base
Rate Basis would exceed the Highest Lawful Rate, interest payable on
the Swing Line Advances shall be limited to the Highest Lawful Rate,
but the Base Rate Basis shall not thereafter be reduced below the
Highest Lawful Rate until the total amount of interest accrued on the
Swing Line Advances equals the amount of interest that would have
accrued if the Base Rate Basis had been in effect at all times.
(ii) Interest on each Swing Line Advance shall be computed on
the basis of a year of 365 or 366 days, as applicable, for the number
of days elapsed, and shall be payable quarterly in arrears on each
Quarterly Date and on the Maturity Date.
(d) 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 Lender 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
Lender 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, (ii) agreement by the Lenders to rescind the charging of interest at
the Default Rate, or (iii) 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) Commitment Fee. Subject to Section 11.9 hereof, the Borrower agrees
to pay to the Administrative Lender, for the ratable account of the Lenders, a
commitment fee (the "Commitment Fee") on the daily average Unused Portion during
the period commencing on the Agreement Date and ending on the Maturity Date, at
the following per annum percentages, applicable in the following situations:
Applicability Percentage
------------- ----------
(a) Sum of (i) aggregate outstanding Advances and 0.375%
(ii) aggregate Reimbursement Obligations is greater than
or equal to 75% of Eligible Notes Receivable
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(b) Sum of (i) aggregate outstanding Advances and 0.250%
(ii) aggregate Reimbursement Obligations is less than
75% of Eligible Notes Receivable
The Commitment Fee shall be subject to reduction or increase, as applicable and
as set forth in the table above, on a monthly basis, retroactively as of the
first day of each month and for such month, based upon the aggregate outstanding
Advances and Reimbursement Obligations as of the last day of the immediately
preceding month and the Eligible Notes Receivable as of the last day of the
immediately preceding month (as reflected in the Borrowing Base Report, as of
the last day of such month, to be delivered to the Lenders pursuant to Section
6.1 hereof). The 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 year of 365 or 366 days, as appropriate, for the
actual number of days elapsed.
(b) Other Fees. Subject to Section 11.9 hereof, the Borrower agrees to
pay to the Administrative Lender, for the account of the Administrative Lender,
the fees on the dates and in the amounts specified in the letter agreement (the
"Fee Letter"), dated as of the Agreement Date, between the Borrower and the
Administrative Lender.
Section 2.5 Prepayments.
(a) Voluntary LIBOR Advance Prepayments. Upon three Business Days'
prior telephonic notice (to be promptly followed by written notice) by an
Authorized Signatory to the Administrative Lender, 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 and
Reimbursement Obligations exceed the Borrowing Base, 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 Base
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.
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(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 Base 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 Base 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. Any voluntary partial payment of a Swing
Line Advance shall be in a principal amount which is at least $100,000 or an
integral multiple thereof.
Section 2.6 Reduction of Commitment.
(a) Voluntary Reduction. The Borrower shall have the right, upon not
less than ten Business Days' notice by an Authorized Signatory to the
Administrative Lender (if telephonic, to be confirmed by telex or in writing on
or before the date of reduction or termination), which shall promptly notify the
Lenders, 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.
(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.
Section 2.7 Non-Receipt of Funds by the Administrative Lender. Unless
the Administrative Lender 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 Lender 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 Lender, the Administrative Lender may assume
that such Lender has made such proceeds available to the Administrative Lender
on such date, and the Administrative Lender 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 Lender by such Lender, the Administrative Lender shall
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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 Lender 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 (inclusive of any such
losses attributable to change(s) in the LIBOR Rate during the applicable
period(s), but exclusive of any losses of any other anticipated profits on the
part of such Lender) 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 30 days after demand by such Lender, an
amount sufficient to compensate such Lender for all such losses (inclusive of
any such losses attributable to change(s) in the LIBOR Rate during the
applicable period(s), but exclusive of any losses of any other anticipated
profits on the part of such Lender) and out-of-pocket expenses, subject to
Section 11.9 hereof. 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
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Loan Document shall be made not later than 12:00 noon (Dallas, Texas time) on
the date specified for payment under this Agreement to the Administrative Lender
at the Administrative Lender'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 Lender, the Administrative Lender shall apply
such amounts in the following order of priority: (i) to the payment of the
Administrative Lender'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 Lender for the
account of the Lenders pro rata in accordance with their respective Specified
Percentages. Each payment by the Borrower in respect of obligations relating to
Swing Line Advances (whether for principal, interest, fees or otherwise) shall
be made to the Administrative Lender for the account of the Swing Line Bank.
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 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
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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 or in
respect of Swing Line Advances) 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 Rate. The provisions of this
Agreement relating to calculation of the LIBOR Rate 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.
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 Lender, (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 Lender
(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 Lender; (ii)
taxes imposed by reason of failure by the Lender or the Administrative Lender 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
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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 Lender, (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 Lender (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
Lender 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
Lender (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 Lender, provided, however, that the Borrower shall have no
obligation to indemnify such Lender or the Administrative Lender unless and
until such Lender or the Administrative Lender 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
incurred by such Lender or the Administrative Lender 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 Lender. This
indemnification shall be made within 30 days from the date such Lender or the
Administrative Lender (as the case may be) makes written demand therefor.
(d) As soon as practicable after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Lender 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:
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(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 Lender, with a copy to the Administrative Lender:
(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 Lender, with a copy
to the Administrative Lender, 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,
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
Lender with a copy to the Administrative Lender, two (2) accurate and
complete original signed copies of Form 4224 or Form 1001 in
replacement for the forms previously delivered by such Lender;
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(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 Lender with respect to payments
to the Administrative Lender 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 Lender 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 Lender 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 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 Lender 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
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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 least 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, and (iii) the Commitment. No Letter of Credit shall
have an expiration date (including all rights of renewal) later than the earlier
of (i) the Maturity Date or (ii) one year after the date of issuance thereof.
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 11:00 a.m. (Dallas, Texas time) on the fourth
Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower 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 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 (a "Notice of Issuance") shall be in writing or by telecopier,
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,
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(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 Base Rate Basis, 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 11:00 a.m. (Dallas, Texas time) on the first Business Day after such
drawing, the Issuing Bank shall promptly notify Administrative Lender and each
other Lender. 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 Lender), which shall bear
interest at the Base Rate Basis, 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 Lender for the account of the Issuing
Bank, by deposit at the Administrative Lender'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 Lender 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,
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 30 days
after demand by the Issuing Bank or such Lender (which
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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 Lender 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 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;
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(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) Credit Fee. Subject to Section 11.9 hereof, the Borrower
shall pay to the Administrative Lender 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 Rate 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 Lender for the account of the
Issuing Bank a fronting fee (which shall be payable in arrears on each
Quarterly Date and on the Maturity Date) in an amount equal to 0.10%
per annum on the average daily amount available for drawing under all
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49
outstanding Letters of Credit, computed, subject to Section 11.9
hereof, on the basis of a 360-day year for the actual number of days
elapsed.
(iii) 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
Lender pursuant to Section 8.2(c), the Borrower will promptly pay to
the Administrative Lender 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 Lender shall be deposited by the Administrative Lender
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 Lender (for the benefit of the Issuing Bank and
Lenders), and creates in the Administrative Lender'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 Lender and the Borrower
shall have no right to withdraw or to cause the Administrative Lender
to withdraw any funds deposited in the L/C Cash Collateral Account. At
any time and from time to time, upon the Administrative Lender'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 Lender'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 Lender 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.
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50
(iv) The Borrower, no more than once in any calendar month,
may direct the Administrative Lender 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
Lender 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 Lender'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 Lender and the Lenders
harmless from any and all such losses and taxes. Administrative Lender
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
Lender) 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 Lender 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, the obligation of the Issuing Bank to issue the
initial Letter of Credit and the obligation of the Swing Line Bank to make the
initial Swing Line Advance are subject to (i) receipt by the Administrative
Lender of the following items which are to be delivered, in form and substance
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51
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:
(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) the duly executed Swing Line Note payable to the order of the Swing
Line Bank, in the principal amount of $10,000,000;
(d) opinions of counsel to each Obligor addressed to the Lenders and in
form and substance reasonably acceptable to the Administrative Lender, 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 Lender, 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 Lender or Special Counsel may reasonably request;
(e) reimbursement for the Administrative Lender for Special Counsel's
reasonable and customary fees (on an hourly basis) and expenses rendered through
the date hereof, to the extent invoiced;
(f) 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 Lender, Special Counsel or any Lender
may reasonably request in connection with such transactions;
(g) any fees or expenses required to be paid on or before the Agreement
Date pursuant to the Fee Letter;
(h) 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 Lender,
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52
as its interest may appear, as loss payee and additional insured and otherwise
in a form required by the Collateral Documents;
(i) the duly executed Servicing and Collection Agreement;
(j) the duly executed Custodial Agreement, 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 Lender, duly executed by the Borrower or the
applicable Restricted Subsidiary owning such Note Receivable and Assignments of
Pledged Documents appropriately completed and duly executed by the Borrower or
the applicable Restricted Subsidiary owning such Pledged Documents;
(k) 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);
(l) copies of the form of Purchase Documents which have been or are
being used in connection with the Projects;
(m) 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, 1996;
(n) each of the Subsidiary Guaranties, duly executed by the Guarantor
party thereto;
(p) a mortgagee title insurance policy [or if such mortgagee title
insurance policy has not been issued, a binding, irrevocable and unconditional
(other than for conditions acceptable to the Administrative Lender) commitment
to issue such mortgagee title insurance policy] in favor of the Administrative
Lender, in form and substance acceptable to the Administrative Lender, covering
each Deed of Trust;
(q) in form and substance reasonably satisfactory to the Lenders and
Special Counsel, such other documents, instruments and certificates as the
Administrative Lender 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; and
(r) The Borrower shall have delivered a Borrowing Base Report
reflecting Eligible Notes Receivable as of a date after December 29, 1997.
Section 3.2 Conditions Precedent to All Advances and Letters of Credit.
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
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53
initial Letter of Credit) and the obligation of the Swing Line Bank to make each
Swing Line Advance (including the initial Swing Line 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;
(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 Lender. 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 or Letter of Credit, is received by the
Administrative Lender from the Borrower prior to the making of such Advance or
issuance of such Letter of Credit;
(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 Letters of Credit, after giving effect
to such proposed Advance or Letter of Credit, 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 or issuing any Letter of Credit;
(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 or
the issuance of the last preceding Letter of Credit (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
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54
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, 1996;
(h) The Borrower shall have delivered a current Borrowing Base Report
evidencing that there is availability under the Commitment after taking into
account the projected Advance or Letter of Credit; and
(i) The Average Quarterly Delinquency Rate shall not exceed eight
percent (8.0%).
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.
Section 3.3 Conditions Precedent to Conversions and Continuations. The
obligation of the Lenders to convert any existing Base Rate Advance into a LIBOR
Advance or to continue any existing LIBOR Advance is subject to the condition
precedent that on the date of such conversion or continuation no Default or
Event of Default shall have occurred and be continuing or would result from the
making of such conversion or continuation. The acceptance of the benefits of
each such conversion and continuation 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
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55
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 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.
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56
(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.
(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
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57
reserves on the books of the Borrower and its Subsidiaries in respect of their
Taxes are, in the reasonable judgment of the Borrower, adequate.
(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, 1996, 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 June 30, 1997, and
the related statements of earnings and statement of cash flows for the
six-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 Section 6.1, 6.2 and
6.3 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, 1996, no event or
circumstance has occurred or arisen which is reasonably likely to have a
Material Adverse Effect.
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58
(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 Lender 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 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
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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 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 G, 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 G, 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
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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.
(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.
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(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 Lender 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 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 Lender 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 Lender 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
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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 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. Borrower and its Subsidiaries
are members and participants, pursuant to validly executed and enforceable
written agreements in Resort Condominiums International, L.L.C. and Interval
International. 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
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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 Lender 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 Lender. 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.
(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.
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.
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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.
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.
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Section 5.5 Insurance. The Borrower shall, and shall cause each
Restricted 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 Lender 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, and shall cause
each Subsidiary of the Borrower to, promptly permit representatives of the
Administrative Lender or any Lender from time to time after reasonable notice by
the Administrative Lender or any Lender to (a) visit and inspect the properties
of the Borrower and its Subsidiaries as often as the Administrative Lender or
any Lender shall reasonably deem advisable, (b) audit, inspect and make extracts
from and copies of the Borrower's and each such Subsidiary's books and records,
and (c) discuss with the Borrower's and each such Subsidiary's appropriate
directors, officers, employees and auditors its business, assets, liabilities,
financial positions, results of operations and business prospects, provided that
such representatives of the Administrative Lender or any Lender 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 expenses
related to up to three (3) such inspections and audits performed by the
Administrative Lender 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 and inspections shall be conducted at any time
requested by the Administrative Lender or any Lender without any requirement for
reasonable notice.
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 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.
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SECTION 5.9 INDEMNITY.
(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS
THE ADMINISTRATIVE LENDER, 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 LENDER OR ANY LENDER (OTHER THAN THOSE MATTERS RAISED EXCLUSIVELY
BY A PARTICIPANT OR OTHER LENDER AGAINST THE ADMINISTRATIVE LENDER 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
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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 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 LENDER, 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 Lender
and each Lender harmless from and against, and to reimburse them with respect
to, any and all claims, demands, causes of action,
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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 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 Lender 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 Lender, 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 Lender 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
Lender supplements to Schedules 3 and 4 hereto at the time of delivery of the
financial statements set forth in Sections 6.1 and 6.2 hereof if the information
provided therein is not complete and correct, and (b) update and deliver to the
Administrative Lender Schedule 1 to the Security Agreements 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 Lender; provided, however, that the Borrower
and each Subsidiary of the Borrower shall be deemed to be reasonably
satisfactory to the Administrative Lender 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 Lender.
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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 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 Lender, 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, Swing Line Advances and
Reimbursement Obligations. Without waiving or otherwise modifying the foregoing
requirements of this Section 5.16, 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
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Administrative Lender 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. Without waiving or
otherwise modifying the foregoing requirements of this Section 5.16, 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 Lender 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. Without waiving or
otherwise modifying the foregoing requirements of this Section 5.16, if a Note
Receivable is not past-due or otherwise in default and such Note Receivable
ceases to qualify as an Eligible Note Receivable solely by virtue of (i) the
reduction of the amount of any scheduled payment(s) with respect thereto or (ii)
the extension of the maturity date thereof, a Note Receivable received by the
Borrower or a Restricted Subsidiary in substitution or replacement therefor
shall not fail to qualify as an Eligible Note Receivable solely by virtue of the
fact that the Purchaser in respect of such substitution or replacement Note
Receivable has not made at least the first regularly scheduled payment due
thereon.
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, the Borrowing Base Report setting forth (a) a
certification of Eligible Notes Receivable, (b) calculation of the Borrowing
Base, and (c) an asset portfolio report in form and substance satisfactory to
the Administrative Lender.
Section 6.2 Eligible Notes Receivable Report. Within 30 days after the
second fiscal quarter and the last fiscal quarter of each fiscal year, a report
showing through the end of such fiscal 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, and (g) the nature and status of any
claims asserted or legal action pending with respect to any Eligible Note
Receivable.
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Section 6.3 Quarterly Financial Statements and Information.
(a) Within 45 days after the end of each fiscal quarter of each fiscal
year, the consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as at the end of such fiscal quarter and the related consolidated
and consolidating 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 and consolidating 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.
(b) Within 45 days after the end of each fiscal quarter of each fiscal
year, the consolidated and consolidating balance sheets of the Borrower and the
Restricted Subsidiaries as at the end of such fiscal quarter and the related
consolidated and consolidating 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 and consolidating 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 the Restricted
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.
(a) Within 90 days after the end of each fiscal year, a copy of (i) the
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries, as of the end of the current and prior fiscal years and (ii) the
consolidated and consolidating 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) Within 90 days after the end of each fiscal year, a copy of (i) the
consolidated and consolidating balance sheets of the Borrower and the Restricted
Subsidiaries, as of the end of the current and prior fiscal years and (ii) the
consolidated and consolidating statements of earnings and
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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 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, conform to the presentation of the audited financial
statements to be delivered pursuant to Section 6.4(a) hereof and to 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 the Restricted Subsidiaries as at the end of and for such fiscal year.
(c) As soon as available, but in any event within 30 days after
December 31, 1997 and within 30 days after the end of each fiscal year
thereafter, a copy of the annual consolidated financial projections (including
pro forma income statements, balance sheets and statements of cash flow) of the
Borrower and the Restricted Subsidiaries 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 6.2 hereof, and, if requested by the
Administrative Lender, 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 Lender, other
documents being used in connection with the Projects to the extent different
from those delivered pursuant to Section 3.1(l) hereof;
(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 event, circumstance or condition which could reasonably be expected to be
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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 Lender 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.
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)
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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
(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
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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 Restricted Subsidiary 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
Restricted Subsidiary 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 Restricted Subsidiary to, make any Investment, except that the Borrower and
any Restricted 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;
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(g) Guaranties of Indebtedness (i) of any Person other than the
Borrower or a Restricted Subsidiary to the extent that (x) the aggregate amount
of such Guaranties by the Borrower and the Restricted Subsidiaries does not
exceed ten percent (10%) of the combined total assets of the Borrower and the
Restricted Subsidiaries 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 Subsidiary to the extent that such
Guaranty, and the Indebtedness guaranteed thereby, are permitted by Section 7.1
hereof;
(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 Administrative Lender shall have
received at least 10 Business Days prior to the date of such Investment a
Compliance Certificate setting forth the covenant calculations, both immediately
prior to and after giving effect to the proposed Investment, and (iii) the joint
venture shall be in the business described in Schedule 4.1(d) hereof or other
activities directly related thereto;
(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 Restricted Subsidiaries does not at
any time exceed ten percent (10%) of the combined total assets of the Borrower
and the Restricted Subsidiaries 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 Restricted Subsidiary to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up, except that a Restricted Subsidiary 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 Restricted
Subsidiary and not the Borrower, such Restricted 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 Restricted 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
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reinvested, within 90 days before or after such disposition, in productive
tangible assets of a similar nature of the Borrower and the Restricted
Subsidiaries, (d) asset sales between Obligors, (e) sales of Notes Receivable
(other than Notes Receivable included as Collateral hereunder) to unrelated
third parties for full and fair consideration, (f) other asset sales not to
exceed $5,000,000 in the aggregate amount during any one fiscal year and (g)
other dispositions that constitute grants by the Borrower or a Restricted
Subsidiary of Permitted Liens.
Section 7.6 Acquisitions. The Borrower shall not, and shall not permit
any Restricted Subsidiary 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 Restricted
Subsidiary 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) Lenders
shall have received written notice at least 10 Business Days prior to the date
of such Acquisition, (iii) the Administrative Lender shall have received at
least 10 Business Days prior to the date of such Acquisition a Compliance
Certificate setting forth the covenant calculations both immediately prior to
and after giving effect to the proposed Acquisition, (iv) the assets, property
or business acquired shall be in the business described in Section 4.1(d) hereof
and, (v) 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).
Section 7.7 Capital Expenditures. The Borrower shall not, and shall not
permit any Restricted Subsidiary to, make or commit to make any Capital
Expenditures during any fiscal year in an aggregate amount in excess of
$10,000,000.
Section 7.8 Restricted Payments. The Borrower shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly declare, pay or make
any Restricted Payments except (a) Dividends payable by a Restricted 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 Restricted Subsidiary 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 Restricted Subsidiary 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 Restricted Subsidiary than would be
the case if such transaction had been effected with a non-Affiliate. The
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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 such Affiliate shall (i) be a Restricted Subsidiary, (ii)
subordinate the payment and performance thereof to the Obligations on terms and
conditions and pursuant to documentation satisfactory to the Determining Lenders
or (iii) pledge the applicable Indebtedness to the Administrative Lender
pursuant to documentation acceptable to the Administrative Lender.
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 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 Tangible Net Worth. The Borrower shall not permit
the Tangible Net Worth to be less than an amount equal to the sum of (a)
$155,000,000, plus (b) 50% of cumulative Net Income of the Borrower and the
Restricted Subsidiaries for the period from, but not including, June 30, 1997
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 Restricted Subsidiary for
which Net Income was a negative number), plus (c) 75% of the Net Cash Proceeds
received by the Borrower after June 30, 1997 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 tangible net worth of any Person that becomes a
Restricted Subsidiary or is merged into or consolidated with the Borrower or any
Restricted Subsidiary after June 30, 1997 or substantially all of the assets of
which are acquired by the Borrower or any Restricted Subsidiary after June 30,
1997, (in each case determined as of the date that such Person becomes a
Restricted Subsidiary or is merged into or consolidated with the Borrower or a
Restricted Subsidiary 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.
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Section 7.13 Maximum Senior Debt to Total Capital. The Borrower shall
not permit the ratio of Senior Debt to Total Capital to exceed 0.35 to 1 at the
end of any fiscal quarter.
Section 7.14 Maximum Total Debt to Total Capital. The Borrower shall
not permit the ratio of Total Debt to Total Capital to exceed (a) 0.70 to 1 at
December 31, 1997 and (b) 0.65 to 1 at the end of any fiscal quarter thereafter.
Section 7.15 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 any fiscal year of the Borrower
does not, in the aggregate, exceed $2,000,000.
Section 7.16 Business. Neither the Borrower nor any Restricted
Subsidiary shall conduct any business other than the business described in
Section 4.1(d) hereof.
Section 7.17 Fiscal Year. The Borrower shall not, and shall not permit
any Restricted Subsidiary to, change its fiscal year except to a fiscal year
ending December 31.
Section 7.18 Amendment of Organizational Documents. The Borrower shall
not, and shall not permit any Restricted Subsidiary 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 Lender or any
Lender under any Loan Documents or in respect of any Collateral.
Section 7.19 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
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of the Subordinated Debt that could have, in any material respect, an adverse
effect on the interest of the Lenders.
Section 7.20 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 7.21 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) thereunder may be replaced
with other Person(s) who are reasonably acceptable to the Administrative Lender.
The Servicing and Collection Agreement shall be cancelable by the Administrative
Lender upon the occurrence of an Event of Default.
Section 7.22 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 7.23 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;
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(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 Restricted Subsidiary 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 Restricted Subsidiary 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 Lender thereof or actual notice thereof by the
Borrower or such Restricted Subsidiary;
(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 Lender 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);
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(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 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 Lender, the Administrative Lender 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
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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 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 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 (i) cause any such Indebtedness or
lease obligation to be prepaid or to become due prior to its date of maturity or
(ii) require the Borrower or any Restricted Subsidiary to purchase, prepay or
redeem any such Indebtedness or lease obligation;
(k) Any real property lease where the Borrower or any Restricted
Subsidiary 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;
(l) 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 Lender or any Lender) other than in accordance with its terms, or
any such party (other than the Administrative Lender or any Lender) shall so
assert in writing;
(m) 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
(n) 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 Lender 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
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become due and payable and the Commitments shall forthwith terminate, all
without any action by the Administrative Lender, 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 Lender 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 Lender in same day funds at the office of the
Administrative Lender 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 Lender and the Lenders may exercise all of the
Rights granted to them under the Loan Documents or under Applicable Law.
(e) The Rights of the Administrative Lender 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 Rate 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
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Administrative Lender. 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, 3.2 or 3.3, borrow a Base Rate Advance from such Lender, and such Lender
shall make such Base 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.
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);
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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 30 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 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 Base Rate Advance from the Lender, and the
Lender shall make such Base 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 Base 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 Base 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
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commitment or Advances hereunder and other commitments or advances of such
Lender of this type, then, within 30 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 Lender 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 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 Lender. Each Lender hereby appoints the
Administrative Lender 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
Lender shall have received such requests, the Administrative Lender 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 Lender shall not be required to take any action that exposes
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the Administrative Lender 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 Lender 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 Lender shall
have no fiduciary relationship in respect of any Lender by reason of this
Agreement or any other Loan Document. The Administrative Lender shall have no
duties or responsibilities except those expressly set forth in this Agreement.
The duties of the Administrative Lender are mechanical and administrative in
nature.
(b) Replacement of Administrative Lender. Should the Administrative
Lender or any successor Administrative Lender ever cease to be a Lender
hereunder, or should the Administrative Lender or any successor Administrative
Lender ever resign as Administrative Lender, or should the Administrative Lender
or any successor Administrative Lender ever be removed with cause or without
cause by the action of all Lenders (other than the Administrative Lender), 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 Lender, and the Borrower and the Lenders shall execute such
documents as any Lender may reasonably request to reflect such change. If the
Administrative Lender also then serves in the capacity of the Swing Line Bank or
the Issuing Bank, such resignation or removal shall constitute resignation or
removal of the Swing Line Bank and the Issuing Bank. Any resignation or removal
of the Administrative Lender or any successor Administrative Lender shall become
effective upon the appointment by the Lenders of a successor Administrative
Lender; provided, however, if no successor Administrative Lender shall have been
so appointed and shall have accepted such appointment within 30 days after the
retiring Administrative Lender's giving of notice of resignation or the Lenders'
removal of the retiring Administrative Lender, then the retiring Administrative
Lender may, on behalf of the Lenders, appoint a successor Administrative Lender,
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. Upon the acceptance of any appointment as the
Administrative Lender hereunder by a successor Administrative Lender, such
successor Administrative Lender shall thereupon succeed to and become vested
with all the rights and duties of the retiring Administrative Lender, and the
retiring Administrative Lender shall be discharged from its duties and
obligations under the Loan Documents, provided that if the retiring or removed
Administrative Lender is unable to appoint a successor Administrative Lender,
the Administrative Lender shall, after the expiration of a 60 day period from
the date of notice, be relieved of all obligations as Administrative Lender
hereunder. Notwithstanding any Administrative Lender's resignation or removal
hereunder, the
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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
Lender 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 Lender directly
and solely in connection with any of the Loan Documents if Administrative Lender
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
Lender shall be returned by the Administrative Lender 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 Lender.
(d) Delegation of Duties. The Administrative Lender 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 Lender. The Administrative Lender 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 Lender. The Administrative Lender 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 Lender's Liability. Neither the
Administrative Lender nor any of its officers, directors, employees, attorneys
or agents shall be liable for any action taken or 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 Lender shall be under no duty to enforce any rights with respect
to any of the Advances, or any security therefor. The Administrative Lender
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 Lender 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
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ADMINISTRATIVE LENDER, 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 LENDER (IN SUCH CAPACITY) IN ANY WAY WITH RESPECT TO ANY LOAN
DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE LENDER UNDER THE
LOAN DOCUMENTS (INCLUDING ANY NEGLIGENT ACTION OF THE ADMINISTRATIVE LENDER),
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 LENDER. 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 Lender shall
have the same rights as a Lender and may exercise the same as though it were not
the Administrative Lender, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Lender in its individual
capacity. The Administrative Lender 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 Lender were not the Administrative Lender 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 Lender or any
other Lender and based upon the financial statements referred to in Sections
4.1(j), 6.1, and 6.2 hereof, and such other documents and 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 Lender 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 Lender 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
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manner whatsoever, the failure of the Administrative Lender 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 following addresses:
(i) If to the Borrower, at:
Signature Resorts, Inc.
0000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 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: 000-000-0000
Facsimile: 000-000-0000
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(ii) If to the Administrative Lender, at:
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxx Xxxxx
Senior Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
(iii) If to a Lender, at its address shown below its name
on the signature pages hereof, or if applicable, set
forth in its Assignment Agreement.
(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 Lender
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 Lender in connection with the administration of the
transactions contemplated in this Agreement and the other Loan Documents and the
preparation, negotiation, execution and delivery of any waiver, amendment or
consent by the Administrative Lender 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 Lender 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 Lender and any Lender, and administrative fees for the
Administrative Lender.
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 Lender or any Lender in exercising any right shall operate as
a waiver of such right. The Lenders expressly reserve the
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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 Lender 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 Lender 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 Lender 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 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.
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(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.
(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 Lender 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 Lender and applicable Assignee shall execute and deliver to the
Administrative Lender an Assignment and Acceptance Agreement (an "Assignment
Agreement") in substantially the form of Exhibit F hereto, together with the
Notes subject to such assignment, (iv) the Assignee executing the Assignment,
shall deliver to the Administrative Lender 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
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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 Lender
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.
(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.
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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 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
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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 Swing Line Bank, if it would
alter the rights, duties or obligations of the Swing Line Bank; (c) without the
consent of the Administrative Lender, if it would alter the rights, duties or
obligations of the Administrative Lender; or (d) 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 Lender 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 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
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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
Lender 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 Lender, 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 Lender, (c) to bank examiners,
auditors or accountants of any Lender, (d) to the Administrative Lender 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 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS (WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS) AND THE
UNITED STATES OF AMERICA. THE LOAN DOCUMENTS ARE PERFORMABLE IN DALLAS, TEXAS,
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 LENDER AND EACH LENDER
EACH AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS,
SHALL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION WITH
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99
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 11.17 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE LENDER 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.
SECTION 11.18 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
================================================================================
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100
IN WITNESS WHEREOF, this Credit Agreement is executed as of the date
first set forth above.
BORROWER: SIGNATURE RESORTS, INC.
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------
-------------------------------------
-------------------------------------
ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A., as
Administrative Lender
By: /s/ XXX XXXXX
-------------------------------------
Xxx Xxxxx
Senior Vice President
DOCUMENTATION AGENT: SOCIETE GENERALE, as Documentation Agent
By: /s/ J. XXXXXX XXXXX
-------------------------------------
Name: J. Xxxxxx Xxxxx
------------------------------------
Title: Regional Manager
-----------------------------------
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
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101
LENDERS: NATIONSBANK OF TEXAS, N.A., as a Lender,
Swing Line Bank and Issuing Bank
Specified Percentage:
30.00%
By: /s/ XXX XXXXX
-------------------------------------
Xxx Xxxxx
Senior Vice President
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxx Xxxxx
Senior Vice President
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102
SOCIETE GENERALE, as a Lender
Specified Percentage:
25.00%
By: /s/ J. XXXXXX XXXXX
-------------------------------------
Name: J. Xxxxxx Xxxxx
------------------------------------
Title: Regional Manager
-----------------------------------
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
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103
CREDIT LYONNAIS NEW YORK BRANCH
Specified Percentage:
15.00%
By: /s/ XXXXXXX XXXXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
------------------------------------
Title: Senior vice President
-----------------------------------
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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104
BT COMMERCIAL CORPORATION
Specified Percentage:
15.00%
By: /s/ XXXX XXXXXXX-KESKINYAN
-------------------------------------
Name: Xxxx Xxxxxxx-Keskinyan
------------------------------------
Title: Senior Vice President
-----------------------------------
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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105
BANK OF HAWAII
Specified Percentage:
15.00%
By: /s/ XXXXXX X. XXXXXXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
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106
SCHEDULE 1
LIBOR LENDING OFFICES
NATIONSBANK OF TEXAS, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
CREDIT LYONNAIS NEW YORK BRANCH
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SOCIETE GENERALE
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
BT COMMERCIAL CORPORATION
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
BANK OF HAWAII
000 Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx 00000
SCHEDULE 1 - Page 1
107
SCHEDULE 2
EXISTING LIENS
PROPERTY SUBJECT AMOUNT OF
TO LIEN LIENHOLDER DEBT SECURED MATURITY DATE
108
SCHEDULE 3
EXISTING LITIGATION
AND MATERIAL LIABILITIES
109
SCHEDULE 4
SUBSIDIARIES
State of
Incorporation Percentage
Name or Organization of Ownership Owner
110
SCHEDULE 5
EXISTING INVESTMENTS
111
SCHEDULE 6
EXISTING INDEBTEDNESS
112
SCHEDULE 7
AUTHORIZATION, QUALIFICATION AND GOOD STANDING
113
SCHEDULE 8
INTELLECTUAL PROPERTY AND DISPUTES
RELATING THERETO
114
SCHEDULE 9
LABOR RELATIONS
115
SCHEDULE 10
LIST OF SPECIFIED RESORTS
116
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT to CREDIT AGREEMENT (this "First Amendment"), dated
as of March 30, 1998, is entered into by and among SIGNATURE RESORTS, INC., a
Maryland corporation, (the "Borrower"), ALL SEASONS RESORTS, INC., an Arizona
corporation, ALL SEASONS RESORTS, INC., a Texas corporation, MMG DEVELOPMENT
CORP., a Florida corporation, MMG HOLDING CORP., a Florida corporation, PORT
ROYAL RESORT, L.P., a South Carolina limited partnership, GRAND BEACH RESORT,
LIMITED PARTNERSHIP, a Georgia limited partnership, POWHATAN ASSOCIATES, a
Virginia Joint Venture, GREENSPRINGS ASSOCIATES, a Virginia Joint Venture, LAKE
TAHOE RESORT PARTNERS, LLC, a California limited liability company (the
foregoing parties other than the Borrower being referred to herein singularly as
a "Guarantor" and collectively as the "Guarantors"), each of the financial
institutions that is listed as a signatory party hereto as a "Lender"
(collectively, the "Lenders"), NATIONSBANK OF TEXAS, N.A., in its capacity as
the Administrative Lender under the Credit Agreement (the "Administrative
Lender") and SOCIETE GENERALE, in its capacity as the Documentation Agent under
the Credit Agreement (the "Documentation Agent").
BACKGROUND
A. The Borrower, the Lenders, the Administrative Lender and the
Documentation Agent are parties to a certain Credit Agreement dated as of
February 18, 1998 (said Credit Agreement, as amended, supplemented, modified
and/or restated, being referred to herein as the the "Credit Agreement"); the
terms defined in the Credit Agreement and not otherwise defined herein shall be
used herein as defined in the Credit Agreement and, to the extent appropriate,
as amended hereby.
B. The Guarantors have heretofore guaranteed all of the indebtedness,
obligations and liabilities of the Borrower to the Lenders under, or in
connection with, the Credit Agreement.
C. The Borrower, the Lenders, the Administrative Lender and the
Documentation Agent desire to amend the Credit Agreement and the Guarantors wish
to consent to such amendments.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the Borrower, the
Guarantors, the Lenders, the Administrative Lender and the Documentation Agent
covenant and agree as follows:
1. AMENDMENTS.
1.1 The definition of "Commitment" set forth in Article I of the
Credit Agreement is hereby amended to read as follows:
117
"`Commitment' means $117,500,000, as reduced from time to time
pursuant to Section 2.6 hereof and as increased from time to
time pursuant to Section 1.10 of the First Amendment (provided,
however, that the aggregate amount of the Commitment shall not
be increased to more than $150,000,000 without the prior written
consent of all Lenders)."
1.2 The definition of "Eligible Notes Receivable" set forth in
Article I of the Credit Agreement is hereby amended to read as follows:
"`Eligible Notes Receivable' means at the time of any
determination thereof, the Notes Receivable of the Borrower and
the Restricted Subsidiaries (at least 85% of which the
Purchasers in respect thereof are residents of the United
States, Puerto Rico, the United States Virgin Islands or Canada)
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) (i) 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 Lender pursuant to the Collateral
Documents, prior to the rights of, and enforceable against, all other Persons
and (ii) the interests of the Borrower or the applicable Restricted Subsidiary
in the liens and other rights and agreements relating to such Note Receivable
are subject to a first priority security interest in favor of the Administrative
Lender pursuant to the Collateral Documents, prior to the rights of, and
enforceable against, all other Persons; provided, however, that in the case of
Notes Receivable attributable to Sales of Fee Simple Intervals, the Borrower or
the applicable Restricted Subsidiary shall have a grace period of 60 days from
and after the date of execution of the applicable Note Receivable by the
applicable Purchaser in order to remedy any deficiency under clause (ii) above;
(c) The Note Receivable shall not have a term of greater than
one-hundred twenty (120) 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; provided,
however, that Notes Receivable having terms greater than one-hundred twenty
(120) months but not greater than one-hundred eighty (180) months may be
included as Eligible Notes Receivable to the extent that such longer term Notes
Receivable otherwise satisfy the criteria for inclusion as Eligible Notes
Receivable;
(d) The Purchaser in respect of such Note Receivable shall have timely
made at least the first regularly scheduled installment payment due thereon;
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118
(e) 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, all of the Notes
Receivable with respect to such Purchaser qualify as, and are included as,
Eligible Notes Receivable and as Collateral hereunder 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;
(f) The terms of such Note Receivable have not been restructured,
rewritten or otherwise modified in any manner that would reduce the interest
rate with respect thereto, reduce the principal amount thereof, reduce the
amount of any scheduled payment(s) with respect thereto, extend the maturity
date thereof (unless such extension was granted solely for the purpose of
upgrading the applicable Purchaser to a larger Unit and/or an additional
Time-Share Interest in the Project), release or impair any collateral securing
same, release or impair any obligations or duties of any Purchaser with respect
thereto or in any manner that would otherwise result in such Note Receivable not
qualifying as an Eligible Note Receivable hereunder;
(g) No installment of such Note Receivable is more than fifty-nine (59)
days past due;
(h) 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 or a bond insuring the completion
thereof has been posted;
(i) The Purchaser 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;
(j) 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;
(k) The Purchaser in respect of such Note Receivable has no right to
rescind the purchase of the Time-Share Interest;
(l) All sales and financing documents relating to the Note Receivable
have been executed and delivered to the Administrative Lender and have not been
modified from the standard forms theretofore approved by the Administrative
Lender;
(m) The terms of such Note Receivable and all related instruments comply
with all Laws;
(n) (i) In the case of each Note Receivable attributable to a Sale of
Fee Simple Interval, such Note Receivable 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 Time-Share
Interests, and such sale is evidenced by Purchase Documents and secured by a
first priority mortgage or deed of trust on the purchased Time-Share Interest,
which mortgage or deed of trust has been assigned of record by the Borrower or
the applicable Restricted Subsidiary
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119
to the Administrative Lender; provided, however, that the Borrower or the
applicable Restricted Subsidiary shall have a grace period of 60 days from and
after the date of execution of the applicable Note Receivable by the applicable
Purchaser in order to effectuate the assignment of record to the Administrative
Lender of the mortgage or deed of trust securing such Note Receivable, and
(ii) In the case of each Note Receivable attributable to a Sale
Under Contract For Deed, such Note Receivable 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, and such
sale is evidenced by Purchase Documents pursuant to which the Borrower or the
applicable Restricted Subsidiary has retained record title to the real property
covered thereby, and such real property is subject to a first priority mortgage
or deed of trust from the Borrower or the applicable Restricted Subsidiary in
favor of the Administrative Lender;
(o) 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 Lender), 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 Lender) 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;
(p) (i) In the case of each Note Receivable attributable to a Sale of
Fee Simple Interval, the Note Receivable is secured by a Deed of Trust which is
insured under a mortgagee title insurance policy [or if such mortgagee's title
insurance policy has not been issued, a binding, irrevocable and unconditional
(other than for conditions acceptable to the Administrative Lender) commitment
to issue such mortgagee's title insurance policy] in favor of the Administrative
Lender acceptable to the Administrative Lender, subject only to those exceptions
to title as the Administrative Lender approves, and (ii) in the case of each
Note Receivable attributable to a Sale Under Contract For Deed, the Deed of
Trust granted to the Administrative Lender by the Borrower or the applicable
Restricted Subsidiary in connection therewith is insured under a mortgagee title
insurance policy [or if such mortgagee's title insurance policy has not been
issued, a binding, irrevocable and unconditional (other than for conditions
acceptable to the Administrative Lender) commitment to issue such mortgagee's
title insurance policy] in favor of the Administrative Lender acceptable to the
Administrative Lender, subject only to those exceptions to title as the
Administrative Lender approves; provided, however, that the Borrower or the
applicable Restricted Subsidiary shall have a grace period of 60 days from and
after the date of execution of the applicable Note Receivable by the applicable
Purchaser in order to remedy any deficiency under this clause;
(q) Payments under the Note Receivable are to be in legal tender of the
United States;
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120
(r) The Note Receivable and the other Purchase Documents are valid,
genuine and enforceable against the Purchaser;
(s) 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;
(t) 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;
(u) 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;
(v) The Borrower or the applicable Restricted Subsidiary, as applicable,
has performed all of its obligations to the Purchasers 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; and
(w) The Project containing the Unit subject to such 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.
Notwithstanding anything to the contrary contained herein, (i) the
aggregate outstanding principal balance of Notes Receivable included in the
Borrowing Base and attributable to Sales Under Contracts For Deed shall not, at
any time, exceed ten percent (10%) of the aggregate outstanding principal
balance of all Eligible Notes Receivable included in the Borrowing Base, (ii)
the aggregate outstanding principal balance of Notes Receivable included in the
Borrowing Base and having terms greater than one-hundred twenty (120) months
shall not, at any time, exceed fifteen percent (15%) of the aggregate
outstanding principal balance of all Eligible Note Receivable included in the
Borrowing Base and (iii) the aggregate outstanding principal balance of Notes
Receivable included in the Borrowing Base and with respect to which any grace
period under clause(s) (b),(n) and/or (p) of the foregoing definition of
"Eligible Notes Receivable" remains in effect shall not, at any time, exceed the
lesser of (x) $15,000,000 and (y) fifteen percent (15%) of the aggregate
outstanding principal balance of all Eligible Notes Receivable included in the
Borrowing Base."
1.3 The definition of "Net Exposure Under Securitization" set
forth in Article I of the Credit Agreement is hereby amended to read as
follows:
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121
"`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 Restricted Subsidiary 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 Restricted Subsidiary and
(ii) the fair market value of any and all property of the
Borrower or of any Restricted Subsidiary that is pledged or
encumbered, or as to which the interest(s) of the Borrower or
any Restricted Subsidiary are subordinated or otherwise
impaired, as security for or as a credit enhancement or
otherwise in connection with, any Securitization."
1.4 The definition of "Note Receivable" set forth in Article I
of the Credit Agreement is hereby amended to read as follows:
"`Note Receivable' means a promissory note executed by a
Purchaser in favor of the Borrower or a Restricted Subsidiary
which has arisen out of a Sale of Fee Simple Interval or a Sale
Under Contract For Deed to a Purchaser."
1.5 The definition of "Specified Percentage" set forth in
Article I of the Credit Agreement is hereby amended to read as follows:
"`Specified Percentage' means, as to any Lender, the percentage
indicated beside its name on the signature pages of the First
Amendment, or if applicable, specified in its most recent
Assignment Agreement or the most recent amendment to this
Agreement and, following any increase in the Commitment pursuant
to Section 1.10 of the First Amendment, as to any Lender, (i) if
such Lender has not agreed to increase its portion of the
Commitment, a percentage equal to the quotient of (expressed as
a percentage) (x) such Lender's Specified Percentage immediately
prior to such increase in the Commitment, times the Commitment
immediately prior to such increase divided by (y) the
Commitment, as increased, or (ii) if such Lender has agreed to
increase its portion of the Commitment, a percentage acceptable
to such Lender and the Administrative Lender."
1.6 The definition of "Time Share Interest" set forth in Article
I of the Credit Agreement is hereby amended to read as follows:
"`Time Share Interest' means the property, rights, and interests
acquired by a Purchaser under a Sale of Fee Simple Interval or a
Sale Under Contract For Deed."
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122
1.7 Article I of the Credit Agreement is hereby amended by
adding thereto the following additional defined terms:
"`First Amendment' means that certain First Amendment hereto,
dated as of March 30, 1998."
"`Sale of Fee Simple Interval' means a sale of an undivided fee
simple ownership interest as tenants in common with all other
Purchasers with respect to any Unit with respect to the
exclusive right to use such Unit and the common areas for the
Project with respect to such Unit for a specified length of
time, on an annual or a biennial basis, pursuant to which the
Purchaser acquires record title to such interest
contemporaneously with, or substantially contemporaneously with,
the consummation of such sale."
"`Sale Under Contract For Deed' means a sale of an undivided fee
simple ownership interest as tenants in common with all other
Purchasers with respect to any Unit with respect to the
exclusive right to use such Unit and the common areas for the
Project with respect to such Unit for a specified length of
time, on an annual or a biennial basis, pursuant to which the
Purchaser acquires beneficial title to such interest
contemporaneously with, or substantially contemporaneously with,
the consummation of such sale, but the Purchaser does not
receive record title to such interest until the Purchaser has
satisfied all of the conditions precedent set forth in the
applicable sales documentation (including, without limitation,
the payment in full of the purchase price for such interest)."
1.8 Section 7.13 of the Credit Agreement is hereby deleted in
its entirety and the following is hereby substituted in lieu thereof:
"Section 7.13 Maximum Senior Debt to Total Capital. The Borrower
shall not permit the ratio of Senior Debt to Total Capital to
exceed 0.30 to 1 at the end of any fiscal quarter."
1.9 Section 7.14 of the Credit Agreement is hereby deleted in
its entirety and the following is hereby substituted in lieu thereof:
"Section 7.14 Maximum Total Debt to Total Capital. The Borrower
shall not permit the ratio of Total Debt to Total Capital to
exceed 0.73 to 1 at the end of any fiscal quarter."
1.10 Notwithstanding anything to the contrary contained in the
Credit Agreement, the parties hereto acknowledge and agree that
hereafter, upon request of the
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123
Borrower, the Commitment may, from time to time, be increased to an
aggregate amount of up to $150,000,000 with the consent of only such of
the Lenders as are increasing their respective portion of such
Commitment, it being the express intent and understanding of the parties
hereto that the consent of any Lender shall not be required in
connection with any such increase in the Commitment if, and to the
extent that, the dollar amount of such Lender's portion of the
Commitment is not increased thereby. The Administrative Lender shall use
its best efforts to notify each Lender of any such increase in the
Commitment at least two (2) days prior to the effective date thereof.
2. ADDITIONAL COVENANTS; REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT
OF DEFAULT. By its execution and delivery hereof, the Borrower and each
Guarantor covenants, agrees, represents and warrants that, as of the date hereof
and after giving effect to the amendments contemplated by the foregoing Section
1:
(a) Neither the execution and delivery of this Amendment nor the
consummation of the transactions contemplated hereby shall terminate, limit or
otherwise reduce the obligations and/or liabilities of such Guarantor under, or
in connection with, such Guarantor's guaranty of the Obligations or any other
Loan Document executed by such Guarantor, all of which obligations and
liabilities are hereby ratified and confirmed by each Guarantor;
(b) No event has occurred and is continuing which constitutes a Default
or an Event of Default;
(c) The Borrower has full power and authority to execute and deliver
this First Amendment and this First Amendment, and the Credit Agreement, as
amended hereby, constitute the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law);
(d) Each Guarantor has full power and authority to execute and deliver
this First Amendment and this First Amendment constitutes the legal, valid and
binding obligations of such Guarantor, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law); and
(e) No authorization, approval, consent, or other action by, notice to,
or filing with, any governmental authority or other Person (other than the
consent of the respective Board of Directors of each of the Borrower and each
Guarantor), is required for the execution, delivery or performance by the
Borrower or any Guarantor of this First Amendment.
3. CONDITIONS OF EFFECTIVENESS. This First Amendment shall be effective
as of March 30, 1998, subject to the following:
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124
(a) the Administrative Lender shall have received a counterpart of this
First Amendment executed by each Lender and by the Documentation Agent;
(b) the Administrative Lender shall have received a counterpart of this
First Amendment executed by the Borrower and by each Guarantor;
(c) the Administrative Lender shall have received all of the payments
required to be made by the Borrower as of the date of this Amendment pursuant to
the terms of a certain fee letter agreement, of even date herewith, among the
Borrower and the Administrative Lender;
(d) the Administrative Lender shall have received certified resolutions
of the respective board of directors of each of the Borrower and each Guarantor
authorizing the execution, delivery and performance of this First Amendment; and
(e) the Administrative Lender shall have received, in form and substance
satisfactory to the Administrative Lender, such other documents, certificates
and instruments as the Administrative Lender shall require.
4. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this First Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", "herein", or words of
like import shall mean and be a reference to the Credit Agreement, as affected
and amended hereby.
(b) The Credit Agreement, as amended by the amendments referred to
above, and all other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.
5. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all
reasonable costs and expenses of the Administrative Lender in connection with
the preparation, reproduction, execution and delivery of this First Amendment
and the other instruments and documents to be delivered hereunder (including the
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Lender with respect thereto and with respect to advising the Administrative
Lender as to its rights and responsibilities under the Credit Agreement, as
hereby amended).
6. EXECUTION IN COUNTERPARTS. This First Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
7. GOVERNING LAW; BINDING EFFECT. This First Amendment shall be governed
by and construed in accordance with the laws of the State of Texas and shall be
binding upon the Borrower, each Guarantor, each Lender, the Administrative
Lender and the Documentation Agent and their respective successors and assigns.
- 9 -
125
8. HEADINGS. Section headings in this First Amendment are included
herein for convenience of reference only and shall not constitute a part of this
First Amendment for any other purpose.
9. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS FIRST
AMENDMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the date first above written.
BORROWER: SIGNATURE RESORTS, INC.
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Xxxxx X. Xxxxxxxx
---------------------------------
Vice President
---------------------------------
GUARANTORS: ALL SEASONS RESORTS, INC., an
Arizona corporation
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
------------------------------
ALL SEASONS RESORTS, INC., a Texas
corporation
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------
Title: President
------------------------------
MMG DEVELOPMENT CORP., a Florida
corporation
- 10 -
126
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
------------------------------
MMG HOLDING CORP., a Florida
corporation
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
------------------------------
PORT ROYAL RESORT, L.P., a South
Carolina limited partnership
By: Argosy/KGI Port Royal Partners,
a South Carolina general
partnership, as its general
partner
By: KGI Port Royal, Inc., a
South Carolina corporation,
as its general partner
By: /s/ XXXXX X. XXXXXXXX
-----------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------
Title: Vice President
--------------------------
- 11 -
127
GRAND BEACH RESORT, LIMITED
PARTNERSHIP, a Georgia limited partnership
By: Grand Beach Partners, L.P., a
California limited partnership, as its
general partner
By: Argosy/KGI Grand Beach
Investment Partnership, a
California general partnership,
as its general partner
By: Argosy Grand Beach,
Inc., a Georgia corporation,
as its general partner
By: /s/ XXXXX X. XXXXXXXX
---------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------
Title: Vice President
------------------------
POWHATAN ASSOCIATES, a Virginia Joint Venture
By: Plantation Resort Group, Inc., a Virginia
corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
---------------------------------
By: Williamsburg Vacations, Inc., a Virginia
corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
---------------------------------
- 12 -
128
GREENSPRINGS ASSOCIATES, a Virginia Joint
Venture
By: Plantation Resort Group, Inc., a Virginia
corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
---------------------------------
By: Greensprings Plantation Resort, Inc., a
Virginia corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
---------------------------------
LAKE TAHOE RESORT PARTNERS, LLC, a
California limited liability company
By: AKGI Lake Tahoe Investments, Inc., a
California corporation, as its managing
member
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
---------------------------------
By: KGK Lake Tahoe Development, Inc., a
California corporation, as its member
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------
- 13 -
129
Title: Vice President
---------------------------------
- 14 -
130
ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A., as Administrative
Lender
By: /s/ XXX XXXXX
---------------------------------
Xxx Xxxxx
Senior Vice President
DOCUMENTATION AGENT: SOCIETE GENERALE, as Documentation Agent
By: /s/ J. XXXXXX XXXXX
---------------------------------
Name: J. Xxxxxx Xxxxx
-------------------------------
Title: Regional Manager
------------------------------
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
LENDERS: NATIONSBANK OF TEXAS, N.A., as a Lender, Swing
Line Bank and Issuing Bank
SPECIFIED PERCENTAGE:
31.91489362%
By: /s/ XXX XXXXX
---------------------------------
Xxx Xxxxx
Senior Vice President
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxx Xxxxx
Senior Vice President
- 15 -
131
SOCIETE GENERALE, as a Lender
SPECIFIED PERCENTAGE:
26.59574468%
By: /s/ J. XXXXXX XXXXX
---------------------------------
Name: J. Xxxxxx Xxxxx
-------------------------------
Title: Regional Manager
------------------------------
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
- 16 -
132
BT COMMERCIAL CORPORATION
SPECIFIED PERCENTAGE:
15.95744681%
By: /s/ XXXXXX X. XXXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
-------------------------------
Title: Senior Vice President
------------------------------
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
- 17 -
133
CREDIT LYONNAIS NEW YORK BRANCH
SPECIFIED PERCENTAGE:
12.76595745%
By: /s/ XXX XXXXXXXX
---------------------------------
Name: Xxx Xxxxxxxx
-------------------------------
Title: Vice President
------------------------------
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
- 18 -
134
BANK OF HAWAII
SPECIFIED PERCENTAGE:
12.76595745%
By: /s/ XXXXX X. XXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------
Title: Vice President
------------------------------
------------------------------
------------------------------
- 19 -
135
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT to CREDIT AGREEMENT (this "Second Amendment"),
dated as of May 29, 1998, is entered into by and among SIGNATURE RESORTS, INC.,
a Maryland corporation, (the "Borrower"), ALL SEASONS RESORTS, INC., an Arizona
corporation, ALL SEASONS RESORTS, INC., a Texas corporation, MMG DEVELOPMENT
CORP., a Florida corporation, MMG HOLDING CORP., a Florida corporation, PORT
ROYAL RESORT, L.P., a South Carolina limited partnership, GRAND BEACH RESORT,
LIMITED PARTNERSHIP, a Georgia limited partnership, POWHATAN ASSOCIATES, a
Virginia Joint Venture, GREENSPRINGS ASSOCIATES, a Virginia Joint Venture, LAKE
TAHOE RESORT PARTNERS, LLC, a California limited liability company (the
foregoing parties other than the Borrower being referred to herein singularly as
a "Guarantor" and collectively as the "Guarantors"), each of the financial
institutions that is listed as a signatory party hereto as a "Lender"
(collectively, the "Lenders"), NATIONSBANK, N.A., successor by merger to
NationsBank of Texas, N.A., in its capacity as the Administrative Lender under
the Credit Agreement (the "Administrative Lender") and SOCIETE GENERALE, in its
capacity as the Documentation Agent under the Credit Agreement (the
"Documentation Agent").
BACKGROUND
A. The Borrower, the Lenders, the Administrative Lender and the
Documentation Agent are parties to a certain Credit Agreement dated as of
February 18, 1998 (said Credit Agreement, as amended, supplemented, modified
and/or restated, being referred to herein as the the "Credit Agreement"); the
terms defined in the Credit Agreement and not otherwise defined herein shall be
used herein as defined in the Credit Agreement and, to the extent appropriate,
as amended hereby.
B. The Guarantors have heretofore guaranteed all of the indebtedness,
obligations and liabilities of the Borrower to the Lenders under, or in
connection with, the Credit Agreement.
C. The Borrower, the Lenders, the Administrative Lender and the
Documentation Agent desire to amend the Credit Agreement and the Guarantors wish
to consent to such amendments.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the Borrower, the
Guarantors, the Lenders, the Administrative Lender and the Documentation Agent
covenant and agree as follows:
136
1. AMENDMENTS.
1.1 Article I of the Credit Agreement is hereby amended by
adding thereto the following additional defined term:
"`Adjusted Net Worth' means the sum of the following for the
Borrower and the Restricted Subsidiaries, on a consolidated
basis, determined in accordance with GAAP, (a) Net Worth minus
(b) the sum of the following (without duplication in respect of
items already deducted in arriving at Net Worth): Intangible
Assets, and any write-up in the book value of assets resulting
from revaluation thereof subsequent to December 31, 1996."
1.2 Article I of the Credit Agreement is hereby amended by
deleting the defined term "Tangible Net Worth" therefrom.
1.3 The definition of "Intangible Assets" set forth in Article I
of the Credit Agreement is hereby amended to read as follows:
"`Intangible Assets' means those assets which are treated as
intangible pursuant to GAAP, and in any event including, without
limitation: (a) obligations, if any, owing by Affiliates to the
Borrower or to any Restricted Subsidiary, (b) accounts, notes or
mortgages receivable which are deemed by the Borrower, any of
the Restricted Subsidiaries or the Administrative Lender to be
uncollectible or which should be subject to a reserve for bad
debts in accordance with GAAP or which are subject to claims or
set-offs (to the extent of such claim or set-off); (c) leases
and leasehold improvements; (d) any asset which is intangible or
lacks intrinsic and marketable value or collectibility,
including without limitation noncompetition agreements, patents,
copyrights, trademarks, franchises or organization or research
and development costs; (e) organizational and experimental
expense; and (f) unamortized debt discount and expense;
provided, however, that goodwill shall not be included as an
Intangible Asset for purposes of this Agreement."
1.4 The definition of "Total Capital" set forth in Article I of
the Credit Agreement is hereby amended to read as follows:
"`Total Capital' means, as of any date of determination, the sum
of (a) Total Debt plus (b) Adjusted Net Worth."
2
137
1.5 Section 7.12 of the Credit Agreement is hereby deleted in
its entirety and the following is hereby substituted in lieu thereof:
"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) $155,000,000, plus (b) 50% of cumulative Net
Income of the Borrower and the Restricted Subsidiaries for the
period from, but not including, June 30, 1997 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 Restricted Subsidiary for which Net Income was a negative
number), plus (c) 75% of the Net Cash Proceeds received by the
Borrower after June 30, 1997 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 Restricted Subsidiary or is merged
into or consolidated with the Borrower or any Restricted
Subsidiary after June 30, 1997 or substantially all of the
assets of which are acquired by the Borrower or any Restricted
Subsidiary after June 30, 1997, (in each case determined as of
the date that such Person becomes a Restricted Subsidiary or is
merged into or consolidated with the Borrower or a Restricted
Subsidiary 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."
1.6 Exhibit "E" to the Credit Agreement is hereby deleted in its
entirety and Exhibit "E-1" attached hereto is substituted in lieu
thereof. From and after the effective date of this Second Amendment, any
and all references in the Credit Agreement to "Exhibit 'E'" shall be
deemed to be references to "Exhibit 'E-1'" attached hereto.
2. ADDITIONAL COVENANTS; REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT
OF DEFAULT. By its execution and delivery hereof, the Borrower and each
Guarantor covenants, agrees, represents and warrants that, as of the date hereof
and after giving effect to the amendments contemplated by the foregoing Section
1:
(a) Neither the execution and delivery of this Amendment nor the
consummation of the transactions contemplated hereby shall terminate, limit or
otherwise reduce the obligations and/or liabilities of such Guarantor under, or
in connection with, such Guarantor's guaranty of the Obligations or any other
Loan Document executed by such Guarantor, all of which obligations and
liabilities are hereby ratified and confirmed by each Guarantor;
3
138
(b) No event has occurred and is continuing which constitutes a Default
or an Event of Default;
(c) The Borrower has full power and authority to execute and deliver
this Second Amendment and this Second Amendment, and the Credit Agreement, as
amended hereby, constitute the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law);
(d) Each Guarantor has full power and authority to execute and deliver
this Second Amendment and this Second Amendment constitutes the legal, valid and
binding obligations of such Guarantor, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law); and
(e) No authorization, approval, consent, or other action by, notice to,
or filing with, any governmental authority or other Person (other than the
consent of the respective Board of Directors of each of the Borrower and each
Guarantor), is required for the execution, delivery or performance by the
Borrower or any Guarantor of this Second Amendment.
3. CONDITIONS OF EFFECTIVENESS. This Second Amendment shall be effective
as of May 29, 1998, subject to the following:
(a) the Administrative Lender shall have received a counterpart of this
Second Amendment executed by each Lender and by the Documentation Agent;
(b) the Administrative Lender shall have received a counterpart of this
Second Amendment executed by the Borrower and by each Guarantor;
(c) the Administrative Lender shall have received certified resolutions
of the respective board of directors of each of the Borrower and each Guarantor
authorizing the execution, delivery and performance of this Second Amendment;
and
(d) the Administrative Lender shall have received, in form and substance
satisfactory to the Administrative Lender, such other documents, certificates
and instruments as the Administrative Lender shall require.
4
139
4. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Second Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", "herein", or words of
like import shall mean and be a reference to the Credit Agreement, as affected
and amended hereby.
(b) The Credit Agreement, as amended by the amendments referred to
above, and all other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.
5. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all
reasonable costs and expenses of the Administrative Lender in connection with
the preparation, reproduction, execution and delivery of this Second Amendment
and the other instruments and documents to be delivered hereunder (including the
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Lender with respect thereto and with respect to advising the Administrative
Lender as to its rights and responsibilities under the Credit Agreement, as
hereby amended).
6. EXECUTION IN COUNTERPARTS. This Second Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
7. GOVERNING LAW; BINDING EFFECT. This Second Amendment shall be
governed by and construed in accordance with the laws of the State of Texas and
shall be binding upon the Borrower, each Guarantor, each Lender, the
Administrative Lender and the Documentation Agent and their respective
successors and assigns.
8. HEADINGS. Section headings in this Second Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Second Amendment for any other purpose.
9. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS SECOND
AMENDMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
5
140
10. IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the date first above written.
BORROWER: SIGNATURE RESORTS, INC.
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
GUARANTORS: ALL SEASONS RESORTS, INC., an Arizona
corporation
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
ALL SEASONS RESORTS, INC., a Texas
corporation
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
MMG DEVELOPMENT CORP., a Florida
corporation
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
6
141
MMG HOLDING CORP., a Florida
corporation
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
PORT ROYAL RESORT, L.P., a South
Carolina limited partnership
By: Argosy/KGI Port Royal Partners, a
-------------------------------------------
South Carolina general partnership,
as its general partner
By: KGI Port Royal, Inc., a South
----------------------------------------
Carolina corporation, as its
general partner
By: /s/ XXXXX X. XXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
GRAND BEACH RESORT, LIMITED
PARTNERSHIP, a Georgia limited partnership
By: Grand Beach Partners, L.P., a
California limited partnership, as its
general partner
By: Argosy/KGI Grand Beach Investment
Partnership, a California general
partnership, as its general partner
By: Argosy Grand Beach, Inc., a
Georgia corporation, as its
general partner
By: /s/ XXXXX X. XXXXXXXX
-------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
7
142
POWHATAN ASSOCIATES, a Virginia Joint Venture
By: Plantation Resort Group, Inc., a Virginia
corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
--------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
By: Williamsburg Vacations, Inc., a Virginia
corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
--------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
GREENSPRINGS ASSOCIATES, a Virginia Joint
Venture
By: Plantation Resort Group, Inc., a Virginia
corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
By: Greensprings Plantation Resort, Inc., a
Virginia corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
8
143
LAKE TAHOE RESORT PARTNERS, LLC, a
California limited liability company
By: AKGI Lake Tahoe Investments, Inc., a
California corporation, as its managing
member
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
By: KGK Lake Tahoe Development, Inc., a
California corporation, as its member
By:
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
ADMINISTRATIVE LENDER: NATIONSBANK, N.A., successor by merger to
NationsBank of Texas, N.A., as Administrative
Lender
By: /s/ XXX XXXXX
-------------------------------------------
Xxx Xxxxx
Senior Vice President
DOCUMENTATION AGENT: SOCIETE GENERALE, as Documentation Agent
By: /s/ J. XXXXXX XXXXX
Name: J. Xxxxxx Xxxxx
Title: Managing Director
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
9
144
LENDERS: NATIONSBANK, N.A., successor by merger to
NationsBank of Texas, N.A., as a Lender, Swing
Line Bank and Issuing Bank
SPECIFIED PERCENTAGE:
31.91489362%
By: /s/ XXX XXXXX
-------------------------------------------
Xxx Xxxxx
Senior Vice President
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxx Xxxxx
Senior Vice President
10
145
SOCIETE GENERALE, as a Lender
SPECIFIED PERCENTAGE:
26.59574468%
By: /s/ J. XXXXXX XXXXX
-------------------------------------------
Name: J. Xxxxxx Xxxxx
-----------------------------------------
Title: Managing Director
----------------------------------------
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
11
146
BANKERS TRUST COMPANY
SPECIFIED PERCENTAGE:
15.95744681%
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
12
147
CREDIT LYONNAIS NEW YORK BRANCH
SPECIFIED PERCENTAGE:
12.76595745%
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
13
148
BANK OF HAWAII
SPECIFIED PERCENTAGE:
12.76595745%
By: /s/ XXXXXX X. XXXXXXX III
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx III
-----------------------------------------
Title: Vice President
----------------------------------------
14
149
EXHIBIT "E-1"
COMPLIANCE CERTIFICATE
________,______
NationsBank, N.A.,
as Administrative Lender
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx, Senior Vice President
This Compliance Certificate is made as of _______, ____. The undersigned
certifies that the calculations set forth herein are true, accurate, and
complete, and are made in accordance with the provisions of the Credit Agreement
among Signature Resorts, Inc., NationsBank, N.A., successor by merger to
NationsBank of Texas, N.A., as Administrative Lender, Societe Generale, as
Documentation Agent and Lenders, dated as of February 18, 1998 (as amended,
modified or supplemented, "Credit Agreement"). All defined terms used herein but
not specifically defined shall have the meanings set forth in the Credit
Agreement.
1. Covenant Calculations.
D. Section 7.3(g). Guaranties of Indebtedness
1. Maximum aggregate amount - 10% of combined total assets of $__________
the Borrower and the Restricted Subsidiaries
2. Actual $__________
3. Difference [(1) - (2)] $__________
E. Section 7.3(i). Investments in any Person other than the Borrower or a
Restricted Subsidiary
1. Maximum aggregate amount - 10% of combined total assets of $__________
the Borrower and the Restricted Subsidiaries
2. Actual $__________
3. Difference [(1) - (2)] $__________
F. Section 7.3(j). Other Investments
1. Maximum in aggregate amount outstanding at any time $7,500,000
2. Actual $__________
EXHIBIT "E-1" - PAGE 1
150
3. Difference [(1) - (2)] $__________
G. Section 7.5(f). Other Asset Sales
1. Maximum in aggregate amount during any one fiscal year $5,000,000
2. Actual $__________
3. Difference [(1) - (2)] $__________
H. Section 7.7. Capital Expenditures
1. Maximum during any fiscal year in aggregate amount $10,000,000
2. Actual $__________
3. Difference [(1) - (2)] $__________
I. Section 7.8(c). Dividends payable by the Borrower in respect of its
Capital Stock
1. Maximum in aggregate amount during any fiscal year
a. 50% of Net Income of the Borrower (excluding from $__________
calculation any Net Income attributable to any
Subsidiary of the Borrower other than the Restricted
Subsidiaries) during the immediately preceding fiscal
year of the Borrower
b. Maximum [(a) + $10,000,000] $__________
2. Actual $__________
3. Difference [(1) - (2)] $__________
J. Section 7.11. Minimum Interest Coverage Ratio
1. Minimum at the end of any fiscal quarter 2.50 to 1
2. Actual, calculated for the four consecutive fiscal quarters
ending on the date of calculation
a. EBITDA, calculated on a consolidated basis for the
Borrower and its Subsidiaries
(1) 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)
(2) Interest expense $__________
EXHIBIT "E-1" - PAGE 2
151
(3) 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
(4) Depreciation $__________
(5) Amortization $__________
(6) Other non-cash charges (to the extent included $__________
in determining EBIT)
(7) EBITDA [(1) + (2) + (3) + (4) + (5) + (6)] $__________
b. Interest Expense (including interest expense pursuant to $__________
Capitalized Lease Obligations)
c. Interest Coverage Ratio [(a) to (b)] _________ to 1
K. Section 7.12. Minimum Adjusted Net Worth
1. Minimum
a. 50% of cumulative Net Income of the Borrower and $__________
the Restricted Subsidiaries for the period from, but not
including, June 30, 1997 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 Restricted Subsidiary for which
Net Income was a negative number)
b. 75% of the Net Cash Proceeds received by the $__________
Borrower after June 30, 1997 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
c. 75% of the Adjusted Net Worth of any Person that $__________
becomes a Restricted Subsidiary or is merged into or
consolidated with the Borrower or any Restricted
Subsidiary after June 30, 1997 or substantially all of
the assets of which are acquired by the Borrower or
any Restricted Subsidiary after June 30, 1997 (in each
case determined as of the date that such Person
becomes a Restricted Subsidiary or is merged into or
consolidated with the Borrower or a Restricted
Subsidiary 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
EXHIBIT "E-1" - PAGE 3
152
d. Minimum Adjusted Net Worth [(a) + (b) + (c) + $
$155,000,000]
2. Actual (for Borrower and the Restricted Subsidiaries, on a
consolidated basis)
a. Net Worth $__________
b. Intangible Assets (exclusive of goodwill)
(1) Obligations, if any, owing by Affiliates to the $__________
Borrower or to any Restricted Subsidiary
(2) Accounts, notes or mortgages receivable which $__________
are deemed by the Borrower, any of the
Restricted Subsidiaries or the
Administrative Lender to be uncollectible or
which should be subject to a reserve for bad
debts in accordance with GAAP or which are
subject to claims or set-offs (to the extent
of such claim or set-off)
(3) Leases and leasehold improvements $__________
(4) Any asset which is intangible or lacks intrinsic $__________
and marketable value or collectibility,
including without limitation noncompetition
agreements, patents, copyrights, trademarks,
franchises or organization or research and
development costs
(5) Organizational and experimental expense $__________
(6) Unamortized debt discount and expense $__________
(7) Intangible Assets [(1) + (2) + (3) + (4) + $__________
(5) + (6)]
c. Any write-up in the book value of assets resulting from $__________
revaluation thereof subsequent to December 31, 1996
d. Actual Adjusted Net Worth [(a) - (b) - (c)] $__________
3. Difference [(2) - (1)] $__________
L. Section 7.13. Maximum Senior Debt to Total Capital
1. Maximum at the end of any fiscal quarter 0.30 to 1
2. Actual
a. Senior Debt
(1) Total Debt
(a) Indebtedness for borrowed money $__________
EXHIBIT "E-1" - PAGE 4
153
(b) Obligations evidenced by bonds, $__________
debentures, notes or other similar
instruments
(c) Obligations to pay the deferred $__________
purchase price of property or services
other than trade payables incurred in
the ordinary course of business
(d) Obligations in respect of letters of $__________
credit, banker's acceptances and
similar instruments
(e) Obligations under Hedge Agreements $__________
(f) Capitalized Lease Obligations $__________
(g) Obligations in respect of payment, $__________
performance and similar bonds
(h) Net Exposure Under Securitization $__________
(i) Total Debt [(a) + (b) + (c) + (d) + $__________
(e) + (f) + (g) + (h)]
(2) Subordinated Debt
(a) 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
(b) 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
(c) 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 Lender and the
Determining Lenders, with only such
changes or amendments as are not
prohibited by Section 7.19 of the
Credit Agreement
(d) Subordinated Debt [(a) + (b) +(c)] $__________
(3) Senior Debt [(1) - (2)] $__________
EXHIBIT "E-1" - PAGE 5
154
b. Total Capital
(1) Total Debt (I.2.a.(1)(i) above) $__________
(2) Adjusted Net Worth (H.2.d. above) $__________
(3) Total Capital [(1) + (2)] $__________
c. Actual Senior Debt to Total Capital [(a) to (b)] to 1
--------
M. Section 7.14. Maximum Total Debt to Total Capital
1. Maximum at the end of any fiscal quarter after December 31, 0.73 to 1
1997
2. Actual
a. Total Debt (I.2.a.(1)(i) above) $__________
b. Total Capital (I.2.b.(3) above) $__________
c. Actual Total Debt to Total Capital [(a) to (b)] to 1
--------
N. Section 7.15. Sale and Leaseback
1. Maximum aggregate amount during any fiscal year $2,000,000
2. Actual $__________
3. Difference [(1) - (2)] $__________
The undersigned hereby further certifies to the following as of the date
of this Certificate:
1. The undersigned has reviewed the relevant terms of this Certificate
and has made, or caused to be made, under his/her supervision, a review of the
transactions and condition of the Borrower from the beginning of the accounting
period covered by the financial statements being delivered herewith to the date
of this Certificate and that such review has not disclosed the existence during
such period of any condition or event which constitutes a Default or Event of
Default.
2. The Borrower is in compliance in all material respects with all of
the terms and conditions of the Credit Agreement and other Loan Documents.
EXHIBIT "E-1" - PAGE 6
155
3. The financial statements delivered to Administrative Lender have been
prepared according to GAAP applied on a consistent basis in all material
respects with those previously delivered.
SIGNATURE RESORTS, INC.
By:
---------------------------------
Name:
Title:
EXHIBIT "E-1" - PAGE 7
156
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT to CREDIT AGREEMENT (this "Amendment"), dated as of
August 13, 1998, is entered into by and among SUNTERRA CORPORATION (formerly
known as Signature Resorts, Inc.), a Maryland corporation, (the "Borrower"), ALL
SEASONS RESORTS, INC., an Arizona corporation, ALL SEASONS RESORTS, INC., a
Texas corporation, MMG DEVELOPMENT CORP., a Florida corporation, MMG HOLDING
CORP., a Florida corporation, PORT ROYAL RESORT, L.P., a South Carolina limited
partnership, GRAND BEACH RESORT, LIMITED PARTNERSHIP, a Georgia limited
partnership, POWHATAN ASSOCIATES, a Virginia Joint Venture, GREENSPRINGS
ASSOCIATES, a Virginia Joint Venture, LAKE TAHOE RESORT PARTNERS, LLC, a
California limited liability company, (the foregoing parties other than the
Borrower being referred to herein singularly as a "Guarantor" and collectively
as the "Guarantors"), each of the financial institutions that is listed as a
signatory party hereto as a "Lender" (collectively, the "Lenders"), NATIONSBANK,
N.A., successor by merger to NationsBank of Texas, N.A., in its capacity as the
Administrative Lender under the Credit Agreement (the "Administrative Lender")
and SOCIETE GENERALE, in its capacity as the Documentation Agent under the
Credit Agreement (the "Documentation Agent").
BACKGROUND
A. The Borrower, the Lenders, the Administrative Lender and the
Documentation Agent are parties to a certain Credit Agreement dated as of
February 18, 1998 (said Credit Agreement, as amended, supplemented, modified
and/or restated, being referred to herein as the the "Credit Agreement"); the
terms defined in the Credit Agreement and not otherwise defined herein shall be
used herein as defined in the Credit Agreement and, to the extent appropriate,
as amended hereby.
B. The Guarantors have heretofore guaranteed all of the indebtedness,
obligations and liabilities of the Borrower to the Lenders under, or in
connection with, the Credit Agreement.
C. The Borrower, the Lenders, the Administrative Lender and the
Documentation Agent desire to amend the Credit Agreement and the Guarantors wish
to consent to such amendments.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the Borrower, the
Guarantors, the Lenders, the Administrative Lender and the Documentation Agent
covenant and agree as follows:
157
1. AMENDMENTS.
1.1 The definition of "Adjusted Net Worth" set forth in Article
I of the Credit Agreement is hereby amended to read as follows:
"`Adjusted Net Worth' means the sum of the following for the
Borrower and the Restricted Subsidiaries, 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, 1996."
1.2 Article I of the Credit Agreement is hereby amended by
deleting the defined term "Intangible Assets" therefrom.
1.3 Section 7.7 of the Credit Agreement is hereby deleted in its
entirety and the following is hereby substituted in lieu thereof:
"Section 7.7 Capital Expenditures. The Borrower shall not, and
shall not permit any Restricted Subsidiary to, make or commit to
make any Capital Expenditures (i) in an aggregate amount in
excess of $30,000,000 during the fiscal year ending December 31,
1998, or (ii) in an aggregate amount in excess of $25,000,000
during any fiscal year thereafter."
1.4 Section 7.13 of the Credit Agreement is hereby deleted in
its entirety and the following is hereby substituted in lieu thereof:
"Section 7.13 Maximum Senior Debt to Total Capital. The Borrower
shall not permit the ratio of Senior Debt to Total Capital to
exceed (i) 0.30 to 1 at the end of any fiscal quarter (other
than the fiscal quarter ending December 31, 1998) or (ii) 0.35
to 1 at the end of the fiscal quarter ending December 31, 1998."
1.5 Exhibit "E" to the Credit Agreement is hereby deleted in its
entirety and Exhibit "E-2" attached hereto is substituted in lieu
thereof. From and after the effective date of this Amendment, any and
all references in the Credit Agreement to "Exhibit 'E'" shall be deemed
to be references to "Exhibit 'E-2'" attached hereto.
2. ADDITIONAL COVENANTS; REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT
OF DEFAULT. By its execution and delivery hereof, the Borrower and each
Guarantor covenants, agrees, represents and warrants that, as of the date hereof
and after giving effect to the amendments contemplated by the foregoing Section
1:
2
158
(a) Neither the execution and delivery of this Amendment nor the
consummation of the transactions contemplated hereby shall terminate, limit or
otherwise reduce the obligations and/or liabilities of such Guarantor under, or
in connection with, such Guarantor's guaranty of the Obligations or any other
Loan Document executed by such Guarantor, all of which obligations and
liabilities are hereby ratified and confirmed by each Guarantor;
(b) No event has occurred and is continuing which constitutes a Default
or an Event of Default;
(c) The Borrower has full power and authority to execute and deliver
this Amendment and this Amendment, and the Credit Agreement, as amended hereby,
constitute the legal, valid and binding obligations of the Borrower, enforceable
in accordance with their respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(d) Each Guarantor has full power and authority to execute and deliver
this Amendment and this Amendment constitutes the legal, valid and binding
obligations of such Guarantor, enforceable in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law); and
(e) No authorization, approval, consent, or other action by, notice to,
or filing with, any governmental authority or other Person (other than the
consent of the respective Board of Directors of each of the Borrower and each
Guarantor), is required for the execution, delivery or performance by the
Borrower or any Guarantor of this Amendment.
3. CONDITIONS OF EFFECTIVENESS. This Amendment shall be effective as of
June 29, 1998, subject to the following:
(a) the Administrative Lender shall have received a counterpart of this
Amendment executed by the Determining Lenders;
(b) the Administrative Lender shall have received a counterpart of this
Amendment executed by the Borrower and by each Guarantor;
(c) the Administrative Lender shall have received certified resolutions
of the respective board of directors of each of the Borrower and each Guarantor
authorizing the execution, delivery and performance of this Amendment; and
3
159
(d) the Administrative Lender shall have received, in form and substance
satisfactory to the Administrative Lender, such other documents, certificates
and instruments as the Administrative Lender shall require.
4. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this Agreement", "hereunder", "herein", or words of like
import shall mean and be a reference to the Credit Agreement, as affected and
amended hereby.
(b) The Credit Agreement, as amended by the amendments referred to
above, and all other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.
5. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all
reasonable costs and expenses of the Administrative Lender in connection with
the preparation, reproduction, execution and delivery of this Amendment and the
other instruments and documents to be delivered hereunder (including the
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Lender with respect thereto and with respect to advising the Administrative
Lender as to its rights and responsibilities under the Credit Agreement, as
hereby amended).
6. EXECUTION IN COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.
7. GOVERNING LAW; BINDING EFFECT. This Amendment shall be governed by
and construed in accordance with the laws of the State of Texas and shall be
binding upon the Borrower, each Guarantor, each Lender, the Administrative
Lender and the Documentation Agent and their respective successors and assigns.
8. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS AMENDMENT,
THE NOTES AND THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS OF THE PARTIES.
4
160
10. IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first above written.
BORROWER: SUNTERRA CORPORATION (formerly known as
Signature Resorts, Inc.), a Maryland
corporation
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
GUARANTORS: ALL SEASONS RESORTS, INC., an Arizona
corporation
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
ALL SEASONS RESORTS, INC., a Texas
corporation
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
MMG DEVELOPMENT CORP., a Florida
corporation
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
5
161
MMG HOLDING CORP., a Florida
corporation
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
PORT ROYAL RESORT, L.P., a South
Carolina limited partnership
By: Argosy/KGI Port Royal Partners, a
South Carolina general partnership,
as its general partner
By: KGI Port Royal, Inc., a South
Carolina corporation, as its
general partner
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
GRAND BEACH RESORT, LIMITED
PARTNERSHIP, a Georgia limited partnership
By: Grand Beach Partners, L.P., a
California limited partnership, as its
general partner
By: Argosy/KGI Grand Beach Investment
Partnership, a California general
partnership, as its general partner
By: Argosy Grand Beach, Inc., a
Georgia corporation, as its
general partner
By: /s/ XXXXX X. XXXXXXXX
-------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
6
162
POWHATAN ASSOCIATES, a Virginia Joint Venture
By: Plantation Resort Group, Inc., a Virginia
corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
By: Williamsburg Vacations, Inc., a
Virginia corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
GREENSPRINGS ASSOCIATES, a Virginia Joint
Venture
By: Plantation Resort Group, Inc., a Virginia
corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
By: Greensprings Plantation Resort, Inc., a
Virginia corporation, Joint Venturer
By: /s/ XXXXX X. XXXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
7
163
LAKE TAHOE RESORT PARTNERS, LLC, a
California limited liability company
By: AKGI Lake Tahoe Investments, Inc., a
California corporation, as its managing
member
By: /s/ XXXXX X. XXXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
By: KGK Lake Tahoe Development, Inc., a
California corporation, as its member
By: /s/ XXXXX X. XXXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Treasurer
8
164
ADMINISTRATIVE LENDER: NATIONSBANK, N.A., successor by merger to
NationsBank of Texas, N.A., as Administrative
Lender
By: /s/ XXX XXXXX
-------------------------------------------
Xxx Xxxxx
Senior Vice President
9
165
DOCUMENTATION AGENT: SOCIETE GENERALE, as Documentation Agent
By: /s/ XXXXXX X. XXXXXXXX
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-----------------------------------------
Title: Managing Director
----------------------------------------
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
10
166
LENDERS: NATIONSBANK, N.A., successor by merger to
NationsBank of Texas, N.A., as a Lender, Swing
Line Bank and Issuing Bank
SPECIFIED PERCENTAGE:
31.91489362%
By: /s/ XXX XXXXX
-------------------------------------------
Xxx Xxxxx
Senior Vice President
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxx Xxxxx
Senior Vice President
11
167
SOCIETE GENERALE, as a Lender
SPECIFIED PERCENTAGE:
26.59574468%
By: /s/ XXXXXX X. XXXXXXXX
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-----------------------------------------
Title: Managing Director
----------------------------------------
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
12
168
BANKERS TRUST COMPANY
SPECIFIED PERCENTAGE:
15.95744681%
By: /s/ XXXXX X. XXXXXXX
-------------------------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------------------
Title: Principal
----------------------------------------
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
13
169
CREDIT LYONNAIS NEW YORK BRANCH
SPECIFIED PERCENTAGE:
12.76595745%
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
14
170
BANK OF HAWAII
SPECIFIED PERCENTAGE:
12.76595745%
By: /s/ XXXXX X. XXXX
-------------------------------------------
Name: Xxxxx X. Xxxx
-----------------------------------------
Title: Officer
----------------------------------------
----------------------------------------
----------------------------------------
15
171
EXHIBIT "E-2"
COMPLIANCE CERTIFICATE
________, _____
NationsBank, N.A.,
as Administrative Lender
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx, Senior Vice President
This Compliance Certificate is made as of , . The undersigned certifies
that the calculations set forth herein are true, accurate, and complete, and are
made in accordance with the provisions of the Credit Agreement among Sunterra
Corporation (formerly known as Signature Resorts, Inc.), NationsBank, N.A.,
successor by merger to NationsBank of Texas, N.A., as Administrative Lender,
Societe Generale, as Documentation Agent and Lenders, dated as of February 18,
1998 (as amended, modified or supplemented, "Credit Agreement"). All defined
terms used herein but not specifically defined shall have the meanings set forth
in the Credit Agreement.
1. Covenant Calculations.
D. Section 7.3(g). Guaranties of Indebtedness
1. Maximum aggregate amount - 10% of combined total assets of $__________
the Borrower and the Restricted Subsidiaries
2. Actual $__________
3. Difference [(1) - (2)] $__________
E. Section 7.3(i). Investments in any Person other than the Borrower or a
Restricted Subsidiary
1. Maximum aggregate amount - 10% of combined total assets of $__________
the Borrower and the Restricted Subsidiaries
2. Actual $__________
3. Difference [(1) - (2)] $__________
F. Section 7.3(j). Other Investments
1. Maximum in aggregate amount outstanding at any time $7,500,000
2. Actual $__________
EXHIBIT "E-2" - PAGE 1
172
3. Difference [(1) - (2)] $__________
G. Section 7.5(f). Other Asset Sales
1. Maximum in aggregate amount during any one fiscal year $5,000,000
2. Actual $__________
3. Difference [(1) - (2)] $__________
H. Section 7.7. Capital Expenditures
1. Maximum during any fiscal year in aggregate amount ($30MM $__________
during FYE 12/31/98; $25MM during any fiscal year
thereafter)
2. Actual $__________
3. Difference [(1) - (2)] $__________
I. Section 7.8(c). Dividends payable by the Borrower in respect of its
Capital Stock
1. Maximum in aggregate amount during any fiscal year
a. 50% of Net Income of the Borrower (excluding from $__________
calculation any Net Income attributable to any
Subsidiary of the Borrower other than the Restricted
Subsidiaries) during the immediately preceding fiscal
year of the Borrower
b. Maximum [(a) + $10,000,000] $__________
2. Actual $__________
3. Difference [(1) - (2)] $__________
J. Section 7.11. Minimum Interest Coverage Ratio
1. Minimum at the end of any fiscal quarter 2.50 to 1
2. Actual, calculated for the four consecutive fiscal quarters
ending on the date of calculation
a. EBITDA, calculated on a consolidated basis for the
Borrower and its Subsidiaries
(1) 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)
EXHIBIT "E-2" - PAGE 2
173
(2) Interest expense $__________
(3) 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
(4) Depreciation $__________
(5) Amortization $__________
(6) Other non-cash charges (to the extent included $__________
in determining EBIT)
(7) EBITDA [(1) + (2) + (3) + (4) + (5) + (6)] $__________
b. Interest Expense (including interest expense pursuant to $__________
Capitalized Lease Obligations)
c. Interest Coverage Ratio [(a) to (b)] __________to 1
K. Section 7.12. Minimum Adjusted Net Worth
1. Minimum
a. 50% of cumulative Net Income of the Borrower and $__________
the Restricted Subsidiaries for the period from, but not
including, June 30, 1997 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 Restricted Subsidiary for which
Net Income was a negative number)
b. 75% of the Net Cash Proceeds received by the $__________
Borrower after June 30, 1997 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
EXHIBIT "E-2" - PAGE 3
174
c. 75% of the Adjusted Net Worth of any Person that $__________
becomes a Restricted Subsidiary or is merged into or
consolidated with the Borrower or any Restricted
Subsidiary after June 30, 1997 or substantially all of
the assets of which are acquired by the Borrower or
any Restricted Subsidiary after June 30, 1997 (in each
case determined as of the date that such Person
becomes a Restricted Subsidiary or is merged into or
consolidated with the Borrower or a Restricted
Subsidiary 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
d. Minimum Adjusted Net Worth [(a) + (b) + (c) + $__________
$155,000,000]
2. Actual (for Borrower and the Restricted Subsidiaries, on a
consolidated basis)
a. Net Worth $__________
b. Any write-up in the book value of assets resulting from $__________
revaluation thereof subsequent to December 31, 1966
c. Actual Adjusted Net Worth [(a) - (b)] $__________
3. Difference [(2) - (1)] $__________
L. Section 7.13. Maximum Senior Debt to Total Capital
1. Maximum at the end of applicable fiscal quarter (0.35 to 1 for 0.__ to 1
the fiscal quarter ending 12/31/98 and 0.30 to 1 for any other
fiscal quarter)
2. Actual
a. Senior Debt
(1) Total Debt
(a) Indebtedness for borrowed money $__________
(b) Obligations evidenced by bonds, $__________
debentures, notes or other similar
instruments
(c) Obligations to pay the deferred $__________
purchase price of property or services
other than trade payables incurred in
the ordinary course of business
EXHIBIT "E-2" - PAGE 4
175
(d) Obligations in respect of letters of $__________
credit, banker's acceptances and
similar instruments
(e) Obligations under Hedge Agreements $__________
(f) Capitalized Lease Obligations $__________
(g) Obligations in respect of payment, $__________
performance and similar bonds
(h) Net Exposure Under Securitization $__________
(i) Total Debt [(a) + (b) + (c) + (d) + $__________
(e) + (f) + (g) + (h)]
(2) Subordinated Debt
(a) 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
(b) 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
(c) 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 Lender and the
Determining Lenders, with only such
changes or amendments as are not
prohibited by Section 7.19 of the
Credit Agreement
(d) Subordinated Debt [(a) + (b) +(c)] $__________
(3) Senior Debt [(1) - (2)] $__________
b. Total Capital
(1) Total Debt (I.2.a.(1)(i) above) $__________
(2) Adjusted Net Worth (K.2.c. above) $__________
(3) Total Capital [(1) + (2)] $__________
c. Actual Senior Debt to Total Capital [(a) to (b)] _________ to 1
EXHIBIT "E-2" - PAGE 5
176
M. Section 7.14. Maximum Total Debt to Total Capital
1. Maximum at the end of any fiscal quarter after December 31, 0.73 to 1
1997
2. Actual
a. Total Debt (I.2.a.(1)(i) above) $__________
b. Total Capital (I.2.b.(3) above) $__________
c. Actual Total Debt to Total Capital [(a) to (b)] __________ to 1
N. Section 7.15. Sale and Leaseback
1. Maximum aggregate amount during any fiscal year $2,000,000
2. Actual $__________
3. Difference [(1) - (2)] $__________
The undersigned hereby further certifies to the following as of the date
of this Certificate:
1. The undersigned has reviewed the relevant terms of this Certificate
and has made, or caused to be made, under his/her supervision, a review of the
transactions and condition of the Borrower from the beginning of the accounting
period covered by the financial statements being delivered herewith to the date
of this Certificate and that such review has not disclosed the existence during
such period of any condition or event which constitutes a Default or Event of
Default.
2. The Borrower is in compliance in all material respects with all of
the terms and conditions of the Credit Agreement and other Loan Documents.
3. The financial statements delivered to Administrative Lender have been
prepared according to GAAP applied on a consistent basis in all material
respects with those previously delivered.
SUNTERRA CORPORATION (formerly known
as Signature Resorts, Inc.), a
Maryland corporation
By:
---------------------------------
Name:
-----------------------------
Title:
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EXHIBIT "E-2" - PAGE 6
