CREDIT AGREEMENT
Between
TRENDWEST RESORTS, INC.,
and
TRENDWEST SOUTH PACIFIC PTY. LTD.,
as the Borrowers,
THE LENDERS NAMED HEREIN,
as the Lenders,
KEYBANK NATIONAL ASSOCIATION,
as Lead Arranger and Administrative Agent for the Lenders
and as Letter of Credit Issuing Lender,
and
BANK ONE NA,
as Syndication Agent for the Lenders and as Australian Lender
Dated as of August 14, 2000
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS............................................................................1
1.1. Definitions............................................................................1
1.2. General Rules of Interpretation.......................................................18
1.3. Accounting Terms......................................................................19
SECTION 2. THE LOANS.............................................................................19
2.1. The Revolving Loans...................................................................19
2.2. Fees..................................................................................27
2.3. Increased Costs.......................................................................28
2.4. Australian Currency Unavailable or BBSY Rate Unascertainable..........................28
2.5. Changes in Law Rendering Australian Advances Unlawful.................................28
2.6. LIBOR Not Ascertainable...............................................................28
2.7. Changes in Law Rendering LIBOR Loans Unlawful.........................................29
2.8. Indemnity.............................................................................29
2.9. Capital Adequacy......................................................................29
2.10. Australian GST........................................................................30
2.11. Survival..............................................................................30
SECTION 3. PAYMENTS..............................................................................30
3.1. Interest..............................................................................30
3.2. Principal.............................................................................31
3.3. Other Payment Matters.................................................................31
3.4. Prepayments...........................................................................32
SECTION 4. REPRESENTATIONS AND WARRANTIES OF
THE BORROWERS.........................................................................34
4.1. Incorporation, Good Standing, and Qualification.......................................34
4.2. Power and Authority...................................................................34
4.3. Authorization.........................................................................34
4.4. Enforceability........................................................................34
4.5. Financial Statements..................................................................34
4.6. Projections...........................................................................34
4.7. Capitalization of Borrowers...........................................................34
4.8. Title to Properties; Patents, Trademarks, Etc.........................................35
4.9. Litigation; Proceedings...............................................................35
4.10. Taxes.................................................................................35
4.11. Absence of Conflicts..................................................................36
4.12. Indebtedness..........................................................................36
4.13. Compliance............................................................................36
4.14. Statements Not Misleading.............................................................36
4.15. Consents or Approvals.................................................................36
4.16. Material Contracts and Commitments....................................................36
i
4.17. Employee Benefit Plans................................................................37
4.18. Licenses and Agreements...............................................................37
4.19. Material Restrictions.................................................................37
4.20. Subsidiaries..........................................................................37
4.21. Investment Company Act................................................................38
4.22. Absence of Material Adverse Changes...................................................38
4.23. Defaults..............................................................................38
4.24. Securities Laws.......................................................................38
4.25. Insurance.............................................................................38
4.26. Labor Matters.........................................................................38
4.27. Notes Receivable......................................................................38
4.28. Inventory.............................................................................38
4.29. Environmental Compliance..............................................................39
SECTION 5. CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE LENDERS...........................................................................40
5.1. Compliance............................................................................40
5.2. Satisfaction of Other Conditions......................................................40
5.3. The Revolving Notes...................................................................40
5.4. Standstill Agreement..................................................................40
5.5. Opinions of Borrowers' Counsel........................................................40
5.6. Statement of Application of Proceeds and Borrowing Notice.............................40
5.7. Insurance Certificates................................................................41
5.8. Corporate Documents...................................................................41
5.9. Fees and Expenses.....................................................................41
5.10. Legal Approval........................................................................41
5.11. Delivery of Closing Documents.........................................................41
5.12. Other Documents.......................................................................41
SECTION 6. AFFIRMATIVE COVENANTS OF THE BORROWERS................................................41
6.1. Use of Proceeds.......................................................................41
6.2. Continued Existence; Maintenance of Rights and Licenses;
Compliance with Law...................................................................42
6.3. Insurance.............................................................................42
6.4. Obligations and Taxes.................................................................42
6.5. Financial Statements and Reports......................................................43
6.6. Notices...............................................................................44
6.7. Maintenance of Property...............................................................45
6.8. Information and Inspection............................................................45
6.9. Title To Property.....................................................................45
6.10. Environmental Compliance and Indemnity................................................45
6.11. Financial Covenants...................................................................46
SECTION 7. NEGATIVE COVENANTS OF THE BORROWERS...................................................46
7.1. Indebtedness..........................................................................46
7.2. Liens.................................................................................46
7.3. Guaranties............................................................................47
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7.4. Conditional Sale Obligations..........................................................47
7.5. Capital Leases........................................................................47
7.6. Claims................................................................................47
7.7. Notes Receivable......................................................................47
7.8. Capital Distributions.................................................................47
7.9. Disposal of Property; Mergers; Acquisitions; Reorganizations..........................47
7.10. Investments...........................................................................48
7.11. Amendment of Governing Documents......................................................49
7.12. Other Amendments or Waivers...........................................................49
7.13. Management Agreements and Fees........................................................49
7.14. ERISA.................................................................................49
7.15. Affiliates............................................................................49
7.16. Change of Name or Office..............................................................49
7.17. Change in Business....................................................................49
7.18. Regulation U..........................................................................49
SECTION 8. EVENTS OF DEFAULT.....................................................................50
8.1. Non-Payment...........................................................................50
8.2. Failure of Performance with Respect to Other Obligations..............................50
8.3. Breach of Warranty....................................................................50
8.4. Cross-Defaults........................................................................50
8.5. Assignment for Benefit of Creditors...................................................50
8.6. Bankruptcy............................................................................51
8.7. Appointment of Receiver; Liquidation..................................................51
8.8. Judgments.............................................................................51
8.9. Impairment of Obligations.............................................................51
8.10. Termination of Material Agreement.....................................................51
8.11. Change of Control.....................................................................51
8.12. Condemnation..........................................................................51
8.13. Cessation of Operations...............................................................51
SECTION 9. REMEDIES..............................................................................52
9.1. Optional Defaults.....................................................................52
9.2. Automatic Defaults....................................................................52
9.3. Performance by the Lenders............................................................52
9.4. Other Remedies........................................................................52
9.5. Enforcement and Waiver by the Lenders.................................................53
SECTION 10. THE ADMINISTRATIVE AGENT..............................................................53
10.1. Appointment and Authorization.........................................................53
10.2. Powers................................................................................53
10.3. General Immunity......................................................................53
10.4. Action on Instructions of the Lenders.................................................54
10.5. Employment of Agents and Counsel......................................................54
10.6. Reliance on Documents; Counsel........................................................54
10.7. Administrative Agent's Reimbursement and Indemnification..............................54
10.8. Rights as a Lender....................................................................54
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10.9. Lender Credit Decision................................................................55
10.10. Successor Administrative Agent........................................................55
10.11. Ratable Sharing.......................................................................55
10.12. Actions by the Administrative Agent and the Lenders...................................56
10.13. Other Agents..........................................................................56
SECTION 11. MISCELLANEOUS.........................................................................56
11.1. Construction..........................................................................56
11.2. Further Assurance.....................................................................56
11.3. Expenses of the Administrative Agent and the
Lenders; Indemnification..............................................................56
11.4. Notices...............................................................................57
11.5. Waiver and Release by the Borrowers...................................................58
11.6. Right of Set-Off......................................................................58
11.7. Successors and Assigns; Assignments and Participations................................59
11.8. Foreign Lenders.......................................................................61
11.9. Applicable Law........................................................................61
11.10. Binding Effect and Entire Agreement...................................................61
11.11. Counterparts..........................................................................62
11.12. Survival of Agreements................................................................62
11.13. Modification..........................................................................62
11.14. Separability..........................................................................62
11.15. Section Headings......................................................................62
11.16. Enforcement...........................................................................62
11.17. Termination...........................................................................63
11.18. Jury Trial Waiver.....................................................................63
11.19. Confidentiality.......................................................................63
11.20. Joint and Several Liability...........................................................63
11.21. Equal Opportunity to Draft............................................................63
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LIST OF EXHIBITS
Exhibit A Request for Domestic Advance
Exhibit B Request for Australian Advance
Exhibit C Borrowing Base Certificate
Exhibit D Domestic Conversion/Continuation Notice
Exhibit E Australian Continuation Notice
Exhibit F Form of Revolving Note
Exhibit G Projections for June 30, 2000 through December 31, 2003
Exhibit H Capitalization
Exhibit I Litigation
Exhibit J Indebtedness
Exhibit K Consents
Exhibit L Material Contracts and Licenses
Exhibit M Subsidiaries
Exhibit N Environmental Matters
Exhibit O Form of Compliance Certificate
Exhibit P Assignment and Acceptance
Exhibit Q Liens
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CREDIT AGREEMENT
This Credit Agreement (the "Agreement") is entered into as of August 14,
2000, between TRENDWEST RESORTS, INC., an Oregon corporation ("Trendwest"), and
TRENDWEST SOUTH PACIFIC PTY. LTD., a corporation organized and existing under
the laws of the Commonwealth of Australia ("South Pacific"), as borrowers, each
of the financial institutions from time to time listed on Schedule I attached to
this Agreement (each of the foregoing being referred to as a "Lender" and all of
the foregoing being collectively referred to as the "Lenders"), KEYBANK NATIONAL
ASSOCIATION, as Administrative Agent and Issuing Lender, and BANK ONE NA, as
Syndication Agent and Australian Lender.
PREAMBLE
The Borrowers have requested the credit facilities described in this
Agreement, and the Lenders have agreed to provide such facilities, on the terms
and conditions set forth in this Agreement.
AGREEMENT
Accordingly, the Borrowers, the Lenders, the Administrative Agent, and the
Syndication Agent agree as follows:
SECTION 1. DEFINITIONS.
1.1. Definitions. Capitalized terms used in this Agreement have the
following meanings:
"Adjusted Cash Flow" means, with respect to the four (4) fiscal quarters
ending on the last day of any fiscal quarter of any Fiscal Year, EBITDA minus
Capital Expenditures.
"Administrative Agent" means KeyBank National Association, in its capacity
as lead arranger and administrative agent for the Lenders pursuant to this
Agreement and not in its individual capacity as a Lender, or any successor
administrative agent.
"Administrative Agent-Related Persons" means the Administrative Agent
(including any successor agent), together with its Affiliates and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Affiliate" means, with respect to any Person, (a) any other Person that is
directly or indirectly controlled by, under common control with or controlling
the first specified Person, (b) a Person owning beneficially or controlling 5%
or more of the equity interests in such other Person, (c) any officer, director
or partner of such other Person, or (d) any spouse or relative (by blood,
adoption or marriage) of any such individual Person. The term "control" means
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, partnership interests, by contract or otherwise.
"Agreement" has the meaning assigned to such term in the introductory
paragraph of this agreement.
1
"Aggregate Commitment" means $60,000,000, as such amount may be reduced
pursuant to this Agreement.
"Applicable Margin" with respect to any period of time means the per annum
percentage determined from the following table:
USAGE REVOLVING LOANS LETTERS OF CREDIT
----- --------------- -----------------
LIBOR LOANS
AND BASE
AUSTRALIAN RATE
ADVANCES LOANS
------------ -----
less than or equal
to 33% 1.35% 0.00% 1.35%
greater than 33%
and less than or
equal to 66% 1.50% 0.125% 1.50%
greater than 66% 1.75% 0.25% 1.75%
"Applicable LIBOR Rate" means, for each LIBOR Loan, the per annum rate
(rounded upward, if necessary, to the nearest 1/16 of 1%) determined by the
Administrative Agent to be equal to the quotient of (1) LIBOR for such LIBOR
Loan for the appropriate Interest Period, divided by (2) one minus the
Eurocurrency Reserve Requirement for such Interest Period.
"Asset Sale" means the sale by Trendwest or any Subsidiary to any Person of
(a) any of the stock or other equity interests of any Subsidiary, or (b) any
other assets other than (i) the sale of assets with an aggregate market value
that does not exceed in any Fiscal Year an amount equal to $250,000, and (ii)
the sale in the ordinary course of business of assets held for resale in the
ordinary course of business or the trade in or replacement of assets in the
ordinary course of business or the disposition of any asset that, in the good
faith exercise of its business judgment, Trendwest determines is no longer
useful in the conduct of its business.
"Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit P.
"Australian Advance Limit" means a Dollar Equivalent equal to the lesser of
(a) the Revolving Loan Limit, and (b) $15,000,000.
"Australian Advances" has the meaning assigned to such term in Section
2.1(a).
"Australian Continuation Notice" has the meaning assigned to such term in
Section 2.1(g).
"Australian Currency" means lawful money of the Commonwealth of Australia.
2
"Australian Currency Equivalent" means, in relation to any Australian
Advance, the amount of Australian Currency convertible from the relevant amount
of Dollars at the Australian Lender's spot selling rate (based on market rates
then prevailing) for the exchange of Dollars and Australian Currency at or about
Noon, Chicago time, three Banking Days preceding the date of determination.
"Australian Lender" means Bank One NA, and its successor and assigns.
"BBSY Rate" with respect to the first day of any Interest Period of an
Australian Advance means (a) the BBSY Index Rate for such Interest Period, if
such rate is determinable, and (b) if the BBSY Index Rate cannot be determined
for such day or Interest Period, then such rate as is agreed between the
Australian Lender and Trendwest having due regard for comparable indices then
available and in the absence of any such agreement shall be the rate stipulated
by the Australian Lender having due regard for such comparable indices.
"BBSY Index Rate" with respect to the first day of any Interest Period of
an Australian Advance means the rate per annum calculated by taking the rates
quoted on the page numbered "BBSY" of the Reuters Monitor System at or about
10:00 a.m. (Eastern Time) on such day for each Reference Bank appearing on that
page (or a successor page) and so quoting (being not less than 5) as being the
rate for a Xxxx with a tenor equal to the Interest Period, as specified in the
Borrowing Notice with respect to such Australian Advance, eliminating the
highest and the lowest rates and taking the average of the remaining rates and
then (if necessary) rounding the resultant figure upwards to 4 decimal places;
provided, however, that if the BBSY Rate for such day cannot be determined
because fewer than 5 Reference Banks have quoted rates on the page numbered
"BBSY" (or a successor page) of the Reuters Monitor System, the BBSY Rate shall
be calculated as above by taking the rates otherwise quoted by 5 of the
Reference Banks on application by the Australian Lender for a Xxxx of the same
tenor.
"Banking Day" means any day except a Saturday, Sunday, or other day on
which commercial banks in Seattle, Washington, are authorized or required to
close under applicable law; provided, however, that in the case of notices and
determinations with respect to, and payments of principal of and interest on,
Australian Advances, "Banking Day" means any day except a Saturday, Sunday, or
other day on which (a) commercial banks in Seattle, Washington, are authorized
or required to close under applicable law, or (b) Australian trading banks are
open for a full range of banking business in the metropolitan area of Adelaide,
South Australia, Melbourne, Victoria and Sydney, New South Wales.
"Base Rate" means the higher of (1) the Reference Rate, or (2) the sum of
the Federal Funds Rate plus 0.5% per annum.
"Base Rate Loan" means any Revolving Loan that bears interest with
reference to the Base Rate.
"Benefit Arrangement" means any pension, profit-sharing, thrift, or other
retirement plan, medical, hospitalization, vision, dental, life, disability or
other insurance or benefit plan, deferred compensation, stock ownership, stock
purchase, stock option, performance share, bonus, fringe benefit, savings or
other incentive plan, severance plan or other similar plan, agreement,
arrangement or understanding, to which either of the Borrowers or any member of
the Controlled Group is, or in the preceding six years was, required to
contribute on behalf of its employees or directors, whether or not such plan,
agreement, arrangement or understanding is subject to ERISA.
3
"Xxxx" has the same meaning as in the Australian Bills of Exchange Act 1909
(but does not include a cheque as defined therein).
"Borrowers" means Trendwest and South Pacific, collectively, and "Borrower"
means Trendwest or South Pacific, as the context requires.
"Borrowing Base Certificate" means a borrowing base certificate
substantially in the form of Exhibit C.
"Borrowing Date" means the proposed date of a Revolving Loan, as specified
in the Borrowing Notice with respect to such Revolving Loan.
"Borrowing Notice" has the meaning assigned to such term in Section
2.1(e)(ii).
"Capital Distribution" means any payment or distribution made, liability
incurred, or other consideration given for the purchase, acquisition, redemption
or retirement of any stock or other equity interest of Trendwest as a dividend,
return of capital or other payment or distribution of any kind to a shareholder
of Trendwest with respect to Trendwest's capital stock.
"Capital Expenditures" means, for any period, the aggregate dollar amount
(whether paid in cash or accrued as a liability) that would, in accordance with
GAAP, be included on the consolidated statement of cash flows of Trendwest and
its Subsidiaries for such period as additions to property, plant or equipment,
without regard to the manner in which such amounts or the instrument pursuant to
which they are made are characterized by Trendwest or any other Person;
provided, however, that "Capital Expenditures" shall not include any such
amounts (a) for replacements of or substitutions for capital assets to the
extent paid with the proceeds of insurance, or (b) that are paid in connection
with a Permitted Acquisition.
"Capitalized Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under leases of, or other agreements
conveying the right to use real or personal property, which obligations are
required to be classified and accounted for as capital leases on a balance sheet
of such Person, prepared in accordance with GAAP.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
"CERCLIS" means the Comprehensive Environmental Response and Liability
Information System, as provided for by 12 C.F.R.ss.300.5.
"Change of Control" means, with respect to any Person, an event or series
of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit
plan of such Person or its subsidiaries, or any Person acting in its capacity as
trustee, Administrative Agent or other fiduciary or administrator of any such
plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Securities Exchange Act of 1934, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 50% or more of the ownership interests of
such Person; or
(b) during any period of 12 consecutive months, a majority of the members
of the board of directors or other equivalent governing body of such Person
cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body.
4
"Closing" means the satisfaction of the conditions set forth in Section 5
and the making of the initial Revolving Loans under this Agreement.
"Closing Date" means the date on which the initial Revolving Loans are made
by the Lenders.
"Closing Threshold" has the meaning assigned to such term in Section
6.11(c).
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Commitment" has the meaning assigned to such term in Section 2.1(a).
"Commitment Fee" with respect to any calendar quarter (or partial calendar
quarter in the case of the period beginning on July 1, 2003 and ending on the
Revolving Termination Date) means a fee equal to the Dollar amount obtained by
multiplying the average daily Revolving Commitment during such calendar quarter
(or such partial period) by the applicable per annum percentage set forth under
the "Commitment Fee" heading in the following table:
COMMITMENT
USAGE FEE
----- ---------
less than or equal
to 33% 0.25%
greater than 33%
and less than or equal
to 66% 0.30%
greater than 66% 0.35%
"Compliance Certificate" has the meaning assigned to such term in Section
6.5(c).
"Consolidated Net Worth" means, as of any date of determination, the
shareholders' equity of Trendwest (on a GAAP basis) on such date.
"Construction-in-Process" means all construction costs required by GAAP to
be capitalized on Trendwest's balance sheet, excluding all construction relating
to MountainStar.
"Controlled Group" means a controlled group of entities that, together with
Trendwest or any Subsidiary, are treated as a single employer under Sections
414(b), 414(c) or 414(m) of the Code.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable jurisdictions from time to time in effect affecting the rights
of creditors generally.
"Default Interest Rate" with respect to any Revolving Loan means a per
annum rate of interest equal to the sum of the otherwise applicable per annum
interest rate plus 2% per annum.
5
"Defaulted Amount" has the meaning assigned to such term in Section
2.1(e)(ii)(F).
"Delinquent Notes" means Notes Receivable with respect to which a payment
is delinquent for a period in excess of 90 days following the due date of such
payment.
"Designating Lender" has the meaning assigned to such term in Section
11.7(f)(i).
"Discount Rate" means, with respect to a prepayment or conversion of an
Australian Advance on a date other than the last day of its Interest Period, a
rate equal to the interest rate (as of the date of prepayment) on United States
Treasury obligations in a like amount as such Australian Advance and with a
maturity approximately equal to the period between the prepayment or conversion
date and the last day of the Interest Period of such Australian Advance, as
determined by the Australian Lender.
"Dollar Equivalent" means, in relation to any Australian Advance, the
amount of Dollars convertible from the relevant amount of Australian Currency at
the Australian Lender's spot selling rate (based on market rates then
prevailing) for the exchange of Australian Currency and Dollars at or about
Noon, Chicago time, three Banking Days preceding the date of determination.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Domestic Advances" has the meaning assigned to such term in Section
2.1(a).
"Domestic Conversion/Continuation Notice" has the meaning assigned to such
term in Section 2.1(f).
"EBITDA" means, with respect to the four (4) fiscal quarters ending on the
last day of any fiscal quarter of any Fiscal Year, (a) Trendwest's net income
after provision for income taxes, as determined in accordance with GAAP and
reported on Trendwest's financial statements, plus (b) the sum of Trendwest's
(i) Interest Expense, (ii) income tax expense, (iii) depreciation and
amortization (including amortization of any goodwill or other intangibles,
whether pursuant to FASB 109 or otherwise), (iv) amortization of residual
interest in Notes Receivable sold, (v) unrealized loss on residual interest in
Notes Receivable sold, (vi) contract servicing liability arising from the sale
of Notes Receivable, and (vii) losses considered to be extraordinary losses in
accordance with GAAP, so long as such losses arise from non-cash expenses, minus
(c) all of the following: (i) gain arising from Trendwest's sale of any capital
asset, (ii) gain arising from any write-up in the book value of any asset of
Trendwest, (iii) earnings of any corporation, substantially all of the assets of
which have been acquired by Trendwest in any manner, to the extent realized by
such other corporation prior to the date of acquisition, (iv) earnings of any
business entity in which Trendwest has an ownership interest (other than its
Subsidiaries) unless (and only to the extent) such earnings shall actually have
been received by Trendwest in the form of cash distributions, (v) earnings of
any Person to which assets of Trendwest have been sold, transferred or disposed
of, or into which Trendwest has merged, or which has been a party with Trendwest
to any consolidation or other form of reorganization, prior to the date of such
transaction, (vi) gain arising from the acquisition of Indebtedness or equity
securities of Trendwest or from cancellation or forgiveness of Indebtedness,
(vii) amortization of contract servicing liability, (viii) unrealized gain on
residual interest in Notes Receivable sold, and (ix) residual interest in Notes
Receivable sold.
"Eligible Assignee" means (a) a financial institution organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (b) a commercial bank organized 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, and
6
having a combined capital and surplus of at least $100,000,000, provided that
such bank is acting through a branch or agency located in the United States; (c)
a Person that is primarily engaged in the business of commercial banking and
that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a
Lender is a Subsidiary, or (iii) a Person of which a Lender is a Subsidiary; (d)
another Lender; (e) any other entity that extends credit or buys loans as one of
its businesses and has a net worth of at least $100,000,000, including but not
limited to, insurance companies, mutual funds and lease financing companies; or
(f) other lenders or institutional investors consented to in writing in advance
by the Administrative Agent and Trendwest. No Affiliate of Trendwest and no
Affiliate of an Affiliate of Trendwest shall be an Eligible Assignee.
"Eligible Inventory" means all of Trendwest's Inventory, valued at the
lower of cost or net realizable value, except:
(a) Inventory that is not owned by Trendwest free and clear of all security
interests, liens, encumbrances, and claims of third parties; and
(b) Construction-in-Process with respect to MountainStar.
"Eligible Inventory Amount" as of any date during any Fiscal Year means the
lesser of (a) 50% of the aggregate amount of Eligible Inventory or (b) Thirty
Million Dollars ($30,000,000).
"Eligible Investments" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (b)
commercial paper maturing no more than one year from the date issued and, at the
time of acquisition, having a rate of at least A-1 from Standard & Poor's
Ratings Group or at least P-1 from Xxxxx'x Investors Service, Inc.; and (c)
certificates of deposit or bankers' acceptances maturing within one year from
the date of issuance thereof issued by, or overnight reverse repurchase
agreements from any, commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $100,000,000; (d) time deposits
maturing no more than thirty (30) days from the date of creation thereof and
demand deposits with commercial banks having membership in the Federal Deposit
Insurance Corporation in amounts not exceeding the lesser of $100,000 or the
maximum amount of insurance applicable to the aggregate amount of Trendwest's
deposits at such institution; and (e) deposits or investments in mutual or
similar funds offered or sponsored by brokerage or other companies having
membership in the Securities Investor Protector Corporation investing only in
obligations described in clauses (a) through (d) above.
"Eligible Receivables" means all of Trendwest's Notes Receivable that
contain terms and conditions acceptable to the Administrative Agent. Unless
otherwise agreed to by the Administrative Agent in writing, Eligible Receivables
do not include:
(a) Notes Receivable with respect to which (i) the Note Maker files or has
filed against it any petition seeking relief under Debtor Relief Laws, (ii) all
or any portion of the amount due thereunder is 180 or more days delinquent, or
(iii) all or any portion of the amount due thereunder is written off by
Trendwest or Trendwest should, in accordance either with GAAP or its internal
collection policies, either write off or add an amount to its allowance for
doubtful accounts based on the amount past due thereunder;
(b) Notes Receivable with respect to which the Note Maker is an officer,
director, employee or agent of either of the Borrowers unless such Notes
Receivable have arisen in connection with the sale of Vacation Credits or
Fractional Ownership Interests to any such officer, director, employee or agent;
7
(c) Notes Receivable with respect to which the Note Maker is a Subsidiary
of or affiliated with or related to Trendwest or its shareholders, officer, or
directors;
(d) Notes Receivable with respect to which payment by the Note Maker may be
conditional;
(e) Notes Receivable with respect to which the Note Maker is not a resident
of the United States, except (i) Notes Receivable that are supported by
insurance, bonds or other assurances satisfactory to the Administrative Agent,
(ii) Notes Receivable with respect to which the Note Maker is a resident of
Canada, provided that the aggregate principal amount of all such Notes
Receivable does not exceed $15,000,000, and (iii) Notes Receivable denominated
in Australian Currency with respect to which the Note Maker is a resident of
Australia, provided that the aggregate principal amount of all such Notes
Receivable does not exceed the Australian Advance Limit.
(f) Notes Receivable that are subject to dispute, counterclaim, or setoff;
(g) Notes Receivable with respect to which the Administrative Agent, in its
sole and absolute discretion, deems the creditworthiness or financial condition
of the Note Maker to be unsatisfactory;
(h) Notes Receivable that have been repurchased by Trendwest from a Special
Purpose Funding Corporation.
(i) Notes Receivable with respect to which the Note Maker has filed or has
had filed against it a petition in bankruptcy or an application for relief under
any provision of any state or federal bankruptcy, insolvency, or
debtor-in-relief acts, or who has had appointed a trustee, custodian, or
receiver for the assets of such Note Maker, or who has made an assignment for
the benefit of creditors or has become insolvent or fails generally to pay its
debts (including its payrolls) as such debts become due; and
(j) Notes Receivable with respect to which the Note Maker is a governmental
entity.
"Environmental Claim" means, with respect to any Person, any written or
oral notice, claim, demand, request for information, citation, summons, order or
other communication (each, a "claim") by any other Person or governmental
authority alleging or asserting the liability of the recipient of such claim for
costs associated with investigations, enforcement, cleanup, removal,
governmental response or remedial actions, damages to natural resources or other
Property, or health, personal injuries, fines or penalties arising out of, based
on or resulting from (a) the presence, or Release, of any Hazardous Material at
or from any location, whether or not owned by such Person, or (b) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law, including any claim by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
the presence or Release of Hazardous Materials or arising from alleged injury or
threat of injury to health, safety or the environment.
"Environmental Laws" means all provisions of law, statutes, ordinances,
rules, regulations, permits, licenses, judgments, writs, injunctions, decrees,
orders, awards and standards promulgated by the government of the United States
of America or by any other domestic or foreign jurisdiction in which Trendwest
or any of its Subsidiaries conducts business, or by any court, agency,
instrumentality, regulatory authority or commission of any of the foregoing,
concerning health, safety and protection of, or regulation of the emission,
release or discharge of substances into, the environment.
8
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and all regulations promulgated under such statute.
"Eurocurrency Reserve Requirement" means, with respect to any LIBOR Loan or
Australian Advance for any Interest Period, the daily average of the stated
maximum rate (expressed as a decimal) at which reserves (including any marginal,
supplemental, or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the Federal Reserve System
in Chicago with deposits exceeding one billion Dollars against "Eurocurrency
Liabilities" (as such term is used in Regulation D) but without benefit or
credit of proration, exemptions, or offsets that might otherwise be available
from time to time under Regulation D. Without limiting the effect of the
foregoing, the Eurocurrency Reserve Requirement shall reflect any other reserves
required to be maintained against (a) any category of liabilities that includes
deposits by reference to which (i) the BBSY Rate is to be determined, in the
case of Australian Advances, or (ii) LIBOR is to be determined, in the case of
Domestic Advances, or (b) any category of extension of credit or other assets
that include Australian Advances or Domestic Advances, as the case may be.
"Event of Default" means any of the events specified in Section 8.
"Extension of Credit" means (a) a Revolving Loan and (b) a Letter of Credit
Action in which a new Letter of Credit is issued or that has the effect of
increasing the amount of, extending the maturity of, or making a material
modification to an outstanding Letter of Credit or the reimbursement of drawings
with respect to such Letter of Credit.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) 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 on the Banking Day next succeeding such day; provided that
(a) if such day is not a Banking Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Banking Day as so
published on the next succeeding Banking Day, and (b) if no such rate is so
published on such next succeeding Banking Day, the Federal Funds Rate for such
day shall be the average rate charged to KeyBank on such day on such
transactions as determined by the Administrative Agent.
"Fees" means, collectively, the fees described in Section 2.2.
"Financial Statements" has the meaning assigned to such term in Section
4.5.
"Fiscal Year" means the fiscal year of Trendwest.
"Fixed Charge Coverage Ratio" means the ratio of Adjusted Cash Flow to
Fixed Charges.
"Fixed Charges" means, with respect to the four (4) fiscal quarters ending
on the last day of any fiscal quarter of any Fiscal Year, the sum of (a)
mandatory principal payments required to be made on Indebtedness of Trendwest
(exclusive of mandatory prepayments made pursuant to Section 3.4(b)), (b)
Interest Expense, and (c) cash taxes paid by Trendwest.
"Fractional Ownership Interests" means deeded fixed intervals in timeshare
condominiums that are developed by Trendwest and not transferred to WorldMark,
The Club.
"Funding Notification" has the meaning assigned to such term in Section
2.1(e)(ii)(D).
9
"GAAP" means generally accepted accounting principles in effect from time
to time in the United States, consistently applied.
"GST" means a goods and services or similar tax imposed in the Commonwealth
of Australia, together with any related interest, penalties, fines or other
charges.
"Guaranty Obligations" means, with respect to any Person, all obligations
of such Person as a result of a pledge of its credit or property in any manner,
or any agreement by such Person to become responsible for the payment or other
performance of the indebtedness, contract or other obligation of another Person,
including obligations incurred as (a) guarantor (of payment or of collection),
(b) surety, (c) co-maker, (d) endorser, (e) one who agrees conditionally or
otherwise to make any purchase, loan or investment in order thereby to enable
another to prevent or correct a default of any kind, (f) one who has endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted with recourse, or agreed (contingently or otherwise) to purchase or
repurchase or otherwise acquire or become liable for, any Indebtedness, or (g)
one who has entered into any agreement for the purchase or other acquisition of
any product, materials or supplies, or for the making of shipments, or for the
payment for services, if in any such case payment is to be made regardless of
the nondelivery of the product, materials or supplies or the non-furnishing of
the services.
"Hazardous Materials" means, collectively, (a) any petroleum or petroleum
products, flammable materials, explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, and transformers or other equipment that contain
polychlorinated biphenyls, (b) any chemicals or other materials or substances
that are now or hereafter become defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants," "pollutants" or words of similar import under any
Environmental Law, and (c) any other chemical or other material or substance,
exposure to which is now or hereafter prohibited, limited or regulated under any
Environmental Law.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
assets purchased by such Person, (e) all obligations of such Person issued or
assumed as the deferred purchase price of property or services (excluding trade
accounts payable and accrued expenses arising in the ordinary course of
business), (f) all indebtedness of others secured by (or for which the holder of
such indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
obligations secured by such property have been assumed by such Person, (g) all
Guaranty Obligations of such Person, including any recourse indebtedness of any
partnership in which such Person is a general partner, (h) all Capitalized Lease
Obligations of such Person, (i) all rate hedging obligations of such Person and
all obligations of such Person under foreign currency exchange agreements or
other exchange rate hedging arrangements, and (j) all obligations of such Person
as an account party to reimburse any bank or any other Person with respect to
letters of credit or bankers' acceptances; provided, however, that (i)
Indebtedness shall not include sales of Notes Receivable sold to Special Purpose
Funding Corporations pursuant to Note Purchase Facilities and indemnification,
recourse or repurchase obligations thereunder, and (ii) the Indebtedness of any
Person shall include all recourse Indebtedness of any partnership or joint
venture in which such Person is a general partner or a joint venturer.
"Indemnified Persons" has the meaning assigned to such term in Section
11.3(b).
10
"Interest Expense" means, with respect to the four (4) fiscal quarters
ending on the last day of any fiscal quarter of any Fiscal Year, the cash
interest expense of Trendwest (including all fees payable under Section 2.2) and
any other fees, charges, commissions and discounts.
"Interest Payment Date" means (a) in the case of Base Rate Loans, the first
Banking Day of each calendar quarter, commencing on October 1, 2000, and (b) in
the case of LIBOR Loans and Australian Advances, the last day of the applicable
Interest Period, except in the case of 6-month Interest Periods, in which case
the Interest Payment Dates shall be the ninetieth (90th) day, and the last day,
of such 6-month Interest Period.
"Interest Period" means, with respect to any LIBOR Loan or Australian
Advance, the period commencing on the day on which such Revolving Loan is made,
continued or converted and ending on the date one, two, three, or six months
thereafter, as the applicable Borrower may elect pursuant to Section 2.1(e)(ii);
provided, however, that (a) any Interest Period that commences on the last
Banking Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Banking Day of the appropriate subsequent calendar month, (b) each Interest
Period that would otherwise end on a day that is not a Banking Day shall end on
the next succeeding Banking Day or, if such succeeding Banking Day falls in the
next succeeding calendar month, on the next preceding Banking Day, and (c) no
Interest Period that would end after the Revolving Termination Date shall be
permitted.
"Inventory" means Vacation Credits, Fractional Ownership Interests, and
Construction-in-Process.
"Investments" has the meaning assigned to such term in Section 7.10.
"Issuing Lender" means KeyBank National Association, or any successor
Lender issuing Letters of Credit pursuant to this Agreement.
"JELD-WEN Debt" means Indebtedness of Trendwest and/or its Subsidiaries to
JELD-WEN, inc. or any Affiliates of JELD-WEN, inc.
"KeyBank" means KeyBank National Association, in its capacity as a Lender
and not as Administrative Agent, and its successors and assigns.
"Lenders" has the meaning assigned to such term in the introductory
paragraph of this Agreement and, as the context requires, includes the
Australian Lender and Issuing Lender.
"Letter of Credit" means any letter of credit issued or outstanding under
this Agreement, which letter of credit shall be consistent with the terms of
this Agreement.
"Letter of Credit Action" means the issuance, supplement, amendment,
renewal, extension, modification or other action relating to a Letter of Credit.
"Letter of Credit Application" means an application for a Letter of Credit
Action from time to time in use by the Issuing Lender.
"Letter of Credit Cash Collateral Account" means a blocked deposit account
at the Issuing Lender in which Trendwest hereby grants a security interest to
the Issuing Lender as security for Letter of Credit Usage and with respect to
which Trendwest agrees to execute and deliver from time to time such
documentation as Administrative Agent or the Issuing Lender may reasonably
request to further assure and confirm such security interest.
11
"Letter of Credit Payment Date" means the last Banking Day of each calendar
quarter and the Revolving Termination Date.
"Letter of Credit Sublimit" means an amount equal to lesser of the
Revolving Loan Limit and $5,000,000. The Letter of Credit Sublimit is part of,
and not in addition to, the Aggregate Commitment.
"Letter of Credit Usage" means, as at any date of determination, the
aggregate undrawn face amount of outstanding Letters of Credit plus the
Unreimbursed Amounts.
"Letter of Credit Notice" has the meaning assigned to such term in Section
2.1(k)(ii).
"Leverage Ratio" as of any date means the ratio of Total Funded Debt to
Total Capitalization.
"LIBOR" means, for any Interest Period of a Domestic Advance, (a) the LIBOR
Index Rate for such Interest Period, if such rate is available, and (b) if the
LIBOR Index Rate cannot be determined, the arithmetic average of the rates of
interest per annum (rounded upward, if necessary, to the nearest 1/100th of 1%)
at which deposits in Dollars in immediately available funds are offered to the
Administrative Agent at 11:00 a.m. (London, England time) two (2) Business Days
before the beginning of such Interest Period by three (3) or more major banks in
the interbank eurodollar market selected by the Administrative Agent for a
period equal to such Interest Period and in an amount equal or comparable to the
principal amount of such Domestic Advance to be outstanding for such Interest
Period.
"LIBOR Index Rate " means, for any Interest Period of a Domestic Advance,
the rate per annum (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in Dollars for a period
equal to such Interest Period, that appears on Telerate Page 3750 as of 11:00
a.m. (London, England time) on the day two (2) Business Days before the
commencement of such Interest Period.
"LIBOR Loan" means any Revolving Loan that bears interest with reference to
LIBOR.
"Lien" as applied to the property of any Person means (a) any mortgage,
lien, pledge, assignment, charge, lease constituting a Capitalized Lease
Obligation, conditional sale or other title retention agreement, or other
security interest or encumbrance of any kind with respect to any property of
such Person, or upon the income or profits from such property, (b) any
arrangement, express or implied, under which any property of such Person is
transferred, sequestered or otherwise identified for the purpose of subjecting
the property to the payment of Indebtedness in priority to the payment of the
general, unsecured creditors of such person, (c) the filing of, or any agreement
to give, any financing statement under the UCC or its equivalent of any
jurisdiction with respect to Indebtedness, and (d) in the case of securities or
other equity interests, any purchase option, call or similar right of a third
party with respect to such securities or other equity interests.
"Majority Lenders" means, at any time, the Lenders holding at least 51% of
the then aggregate unpaid principal amount of the Revolving Notes, or, if no
principal amount of the Revolving Notes is then outstanding, the Lenders having
at least 51% of the Aggregate Commitment.
"MountainStar" means the project known as MountainStar and Urban Growth
Area in or around Cle Elum, Washington.
"Multiemployer Plan" has the meaning assigned to such term in Section 3(37)
of ERISA.
12
"Non-Monetary Provisions" means all provisions of this Agreement other than
those provisions pursuant to which the principal of or interest on any Revolving
Note, or any other amounts, are required to be paid by the Borrowers or some
other party.
"Note Maker" means the Person or entity obligated with respect to a Note
Receivable.
"Note Purchase Facilities" means any agreement of Trendwest or any of its
Subsidiaries providing for sales, transfers or conveyances of Notes Receivable
purporting to be sales (and considered sales under GAAP) that do not provide,
directly or indirectly, for recourse against the seller of such Notes Receivable
(or against any of such seller's Affiliates) by way of a guaranty or any other
support arrangement with respect to the amount of such Notes Receivable (based
on the financial condition or circumstances of the obligor thereunder), other
than such limited recourse as is reasonable given market standards for
transactions of a similar type, taking into account such factors as historical
bad debt loss experience and obligor concentration levels.
"Note Receivable" means a promissory note or other right to payment
received by Trendwest for Vacation Credits sold by Trendwest.
"Obligations" means any obligation of the Borrowers (a) to pay to the
Lenders the principal of and interest on the Revolving Notes in accordance with
the terms of the Revolving Notes, (b) with respect to Letter of Credit Usage,
(c) with respect to any Rate Hedging Obligations owing to any Lender, (d) to
pay, satisfy or perform any other liability or obligation to the Administrative
Agent or any Lender, arising under this Agreement, whether now existing or
subsequently incurred by reason of future advances or otherwise, matured or
unmatured, direct or contingent, joint or several, including any related
extensions, modifications or renewals and substitutions, and including all fees,
indemnification amounts, costs and expenses, including interest on such amounts
and reasonable attorneys' fees to the extent permitted by law, incurred by the
Administrative Agent or any Lender for the protection and preservation or
enforcement of its rights and remedies arising under this Agreement, (e) to
repay to the Lenders all amounts advanced at any time by the Lenders under this
Agreement, including advances for principal or interest payments to prior
secured parties, mortgagees, lienors or other Persons, or for taxes, levies,
insurance, rent or repairs to, or maintenance or storage of, any of the property
of Trendwest or any of its Subsidiaries, (f) to perform any covenant or
agreement made with the Lenders pursuant to this Agreement, or (g) to take any
other action with respect to any other liability of any nature of the Borrowers
to the Lenders under this Agreement.
"Original Dollar Amount" means, with respect to any Australian Advance
being continued as an Australian Advance pursuant to Section 2.1(g), the Dollar
Equivalent of such Australian Advance on the first day of the expiring Interest
Period of such Australian Advance.
"Outstanding Obligations" means, as of any date, and giving effect to
making any Extensions of Credit requested on such date and all payments,
repayments and prepayments made on such date, (a) when reference is made to all
Lenders, the sum of (i) the aggregate outstanding principal amount of all
Revolving Loans and (ii) all Letter of Credit Usage, and (b) when reference is
made to one Lender, the sum of (i) the aggregate outstanding principal amount of
all Revolving Loans made by such Lender (excluding, in the case of the
Australian Lender, its Australian Advances except to the extent provided in
clause (iii) below), (ii) such Lender's ratable risk participation in all Letter
of Credit Usage, and (iii) such Lender's ratable risk participation in all
outstanding Australian Advances, determined by reference to the Dollar
Equivalent of such Australian Advances.
"Past-Due Notes" means Notes Receivable with respect to which a payment is
delinquent for a period in excess of 30 days, and less than 91 days, following
the due date of such payment.
13
"PBGC" means the Pension Benefit Guaranty Corporation or any governmental
authority at any time substituted therefor.
"Pension Plan" means an employee pension benefit plan as defined in Section
3(2) of ERISA that is subject to the provisions of Section 302 or Title IV of
ERISA or Section 412 of the Code.
"Permitted Acquisition" means any transaction in which:
(a) any Subsidiary merges with (i) Borrower provided that Borrower shall be
the continuing or surviving corporation, (ii) any one or more Subsidiaries, or
(iii) any joint venture, partnership or other Person, so long as such joint
venture, partnership and other Person, as a result of making such merger and all
other contemporaneous related transactions, becomes a Subsidiary; provided that
when any wholly owned Subsidiary is merging into another Subsidiary, the wholly
owned Subsidiary shall be the continuing or surviving Person;
(b) any Subsidiary sells all or substantially all of its assets (upon
voluntary liquidation or otherwise) to Trendwest or to another Subsidiary;
provided that when any wholly owned Subsidiary is selling all or substantially
all of its assets to another Subsidiary, the Subsidiary acquiring such assets is
a wholly owned Subsidiary; or
(c) any Person sells all or substantially all of its assets to Trendwest or
to a Subsidiary, or merges with Trendwest or a Subsidiary in a transaction in
which Trendwest or such Subsidiary is the continuing or surviving corporation,
and the consideration paid by Trendwest in connection with either such asset or
merger transaction does not exceed 25% of Trendwest's Consolidated Net Worth at
such time, provided that in any such case Trendwest demonstrates to the
Administrative Agent's reasonable satisfaction that such transaction will not
result in a breach of the financial covenants in Section 6.11 or otherwise
result in a Possible Default or Event of Default.
"Permitted Lien" means any of the following Liens:
(a) Liens for taxes or assessments, and similar charges, (i) that are
either not delinquent or are being contested diligently and in good faith by
appropriate proceedings, (ii) as to which the affected Borrower has set aside
adequate reserves on its books, and (iii) that do not entail any significant
risk of loss, forfeiture, foreclosure or sale of the property subject to such
Liens;
(b) Statutory Liens, such as mechanic's, materialman's, warehouseman's,
landlord's, artisan's, xxxxxxx'x, contractor's, carrier's or other like Liens
(i) incurred in good faith in the ordinary course of business, (ii) that are
either not delinquent or are being contested diligently and in good faith by
appropriate proceedings, (iii) as to which Trendwest has set aside adequate
reserves on its books or bonded satisfactorily to the Administrative Agent, and
(iv) that do not entail any significant risk of loss, forfeiture, foreclosure or
sale of the property subject to such Liens;
(c) Encumbrances consisting of zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers, restrictions on the
use of real property or minor irregularities of title, provided that none of
such encumbrances materially impairs the use or value of any property in the
operation of the business of Trendwest and its Subsidiaries;
(d) Liens securing conditional sale, rental or purchase money obligations
permitted under Section 7.4 and Capitalized Lease Obligations permitted under
Section 7.5 (and protective UCC-1 financing statements filed by lessors in
connection with such Liens under leases not intended as security), but only in
the property that is the subject of such obligations;
14
(e) Liens arising under or pursuant to this Agreement or otherwise securing
any Obligation;
(f) Liens relating to judgments or awards with respect to which Trendwest
is, in good faith, prosecuting an appeal or proceeding for review and with
respect to which a stay of execution upon such appeal or proceeding for review
has been secured, and as to which judgments or awards Trendwest has established
adequate reserves on its books or has bonded in a manner satisfactory to the
Administrative Agent;
(g) Pledges or deposits made in the ordinary course of business to secure
payment of worker's compensation, or to participate in any fund in connection
with worker's compensation, unemployment insurance, old-age pensions or other
social security programs;
(h) Liens granted to secure the performance of letters of credit, bids,
tenders, contracts, leases, public or statutory obligations, surety, customs,
appeal and performance bonds and other similar obligations to the extent
permitted in this Agreement and not incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred purchase price
of any property;
(i) Any other Liens listed on Exhibit Q or to which the Majority Lenders
have consented in writing;
(j) Liens on Trendwest's corporate headquarters in Redmond, Washington, to
the extent that such Liens secure Indebtedness of less than $15,000,000;
(k) Liens securing Indebtedness in an aggregate principal amount up to
$50,000 on Trendwest's property in Surfside, Washington;
(l) Liens granted to any Special Purpose Funding Corporation to the extent
that such Liens do not extend to property other than Notes Receivable conveyed
to such Special Purpose Funding Corporation pursuant to Note Purchase
Facilities.
(m) Any other Liens to the extent that such Liens, when considered together
with all other Liens with respect to the personal and real property of Trendwest
and its Subsidiaries, secure Indebtedness in an aggregate Dollar amount not
exceeding 5% of Consolidated Net Worth.
"Person" shall include natural persons, corporations, business trusts,
associations, companies, limited liability companies, joint ventures and
partnerships.
"Plan" means any employee benefit plan, as defined under Section 3(3) of
ERISA, established or maintained by Trendwest or any member of the Controlled
Group or any such Plan to which Trendwest or any member of the Controlled Group
is, or in the last six years was, required to contribute on behalf of its
employees.
"Possible Default" means an event, condition, situation or thing that
constitutes, or that with the lapse of any applicable grace period or the giving
of notice or both would constitute, any Event of Default.
"Prepayment Account" has the meaning assigned to such term in Section
3.4(c)(i).
15
"Prepayment Premium" with respect to the prepayment of any LIBOR Loan or
Australian Advance or any other receipt or recovery of any LIBOR Loan or
Australian Advance prior to the end of the applicable Interest Period, whether
by voluntary prepayment, acceleration, or otherwise, means an amount equal to
the loss or expense sustained by each Lender as a consequence of such
prepayment, receipt or recovery, including any such loss or expense arising from
the liquidation or reemployment of funds obtained by such Lender to maintain its
LIBOR Loan or Australian Advance, as the case may be, or from fees payable to
terminate the deposits from which such funds were obtained; provided, however,
that (a) for purposes of calculating such amount, each LIBOR Loan or Australian
Advance shall be conclusively deemed to have been funded at the LIBOR or BBSY
Rate used in determining the Applicable LIBOR Rate or BBSY Rate for such LIBOR
Loan or Australian Advance by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such LIBOR Loan or Australian Advance is in fact so funded, and
(b) a statement as to the amount of such loss or expense, prepared in good faith
and in reasonable detail by the Lender and submitted by the Lender to Trendwest,
shall be conclusive and binding for all purposes absent manifest error in
computation.
"Proprietary Rights" has the meaning assigned to such term in Section 4.8.
"Ratable Share" means with respect to any Lender, the quotient obtained by
dividing (a) such Lender's Commitment by (b) the Aggregate Commitment.
"Rate Hedging Obligations" means all obligations of Trendwest and its
Subsidiaries, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all related renewals,
extensions and modifications, and substitutions) under (a) agreements, devices
or arrangements designed to protect Trendwest or any of its Subsidiaries from
the fluctuations of interest rates, including interest rate exchange or swap
agreements, interest rate cap or collar protection agreements, and interest rate
options, puts and warrants, and (b) cancellations, buy-backs, reversals,
terminations or assignments of any of the foregoing.
"Reference Banks" means such banks as may from time to time be determined
by the Australian Lender to be "Reference Banks".
"Reference Rate" means the per annum rate of interest designated by KeyBank
from time to time as its prime rate at its main office, such rate to change as
and when such prime rate changes (regardless of whether such rate is publicly
announced). The prime rate functions as a reference rate index, and may not be
the lowest rate of interest charged by KeyBank to its borrowers.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as amended or supplemented from time to time.
"Regulatory Change" means the adoption of or any change in federal, state
or local treaties, laws, rules or regulations or the adoption of or change in
any interpretations, guidelines, directives or requests of or under any federal,
state or local treaties, laws, rules or regulations (whether or not having the
force of law) by any court, governmental authority, central bank or comparable
agency charged with the interpretation or administration of such treaties, laws,
rules or regulations.
"Release" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Hazardous Materials through
ambient air, soil, surface water, groundwater, wetlands, land or subsurface
strata, that, in any such case, is in violation of any Environmental Law.
16
"Reportable Event" means a reportable event as that term is defined in
Title IV of ERISA, excluding, however, such events as to which the PBGC by
regulation has waived the requirement of Section 4043(a) of ERISA that it be
notified within thirty days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of Section 412 of the Code and of
Section 302 of ERISA shall be a Reportable Event regardless of the issuance of
any such waivers in accordance with Section 412(d) of the Code).
"Revolving Commitment" as of any date means the Aggregate Commitment,
reduced by (a) the then-outstanding principal balance of the Domestic Advances,
(b) the Dollar Equivalent of the then-outstanding principal balance of
Australian Advances, and (c) the Letter of Credit Usage.
"Revolving Loan Limit" means a Dollar amount equal to the lesser of (a) the
Revolving Commitment, or (b) an amount equal to the sum of the Eligible
Inventory Amount plus 75% of the Dollar amount of Eligible Receivables minus the
outstanding principal balance of any JELD-WEN Debt.
"Revolving Loans" has the meaning assigned to such term in Section 2.1(a).
"Revolving Notes" has the meaning assigned to such term in Section 2.1(j).
"Revolving Termination Date" means August 14, 2003.
"SPV" has the meaning assigned to such term in Section 11.7(f)(i).
"South Pacific" means Trendwest South Pacific Pty. Ltd., a corporation
organized and existing under the laws of the Commonwealth of Australia.
"Special Purpose Funding Corporation" means any special purpose corporation
the majority of the outstanding capital stock or voting power of which is (or
upon the exercise of all outstanding warrants, options and other rights would
be) owned, directly or indirectly, at the time in question by the Borrower,
provided that (a) the corporation contributes or purchases, for cash and on
arms-length terms, Notes Receivable from the Borrower pursuant to Note Purchase
Facilities, (b) substantially all consideration received by the corporation for
or otherwise in connection with the sale or other transfer of Notes Receivable
or debt or equity interests in the corporation is distributed to or for the
account of Trendwest within one Banking Day following such sale or transfer, (c)
none of Trendwest's or any Subsidiary's assets other than such Notes Receivable
are at any time sold, contributed or otherwise transferred to such corporation,
and (d) neither Trendwest nor any Subsidiary directly or indirectly incurs or
assumes or agrees to incur or assume any obligation to or of such corporation or
with respect to such Notes Receivable, other than the obligation to repurchase
or provide a substitute for any Note Receivable with respect to which Trendwest
or any Subsidiary has breached a representation or warranty made by it in
connection with the sale of such Note Receivable.
"Standstill Agreement" has the meaning assigned to such term in Section
5.4.
"Subsidiary" means each partnership, limited liability company or
corporation, the majority of the outstanding partnership interests, membership
interests, capital stock or voting power of which is (or upon the exercise of
all outstanding warrants, options and other rights would be) owned, directly or
indirectly, at the time in question by Trendwest; provided, however, that no
such entity shall be considered a Subsidiary if it is a Special Purpose Funding
Corporation or if it is the entity currently operating under the name WorldMark,
The Club.
"Syndication Agent" means Bank One NA, in its capacity as syndication agent
for the Lenders pursuant to this Agreement and not in its individual capacity as
a Lender.
17
"Telerate Page 3750" means the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for Dollar deposits).
"Total Capitalization" means a Dollar amount equal to the sum of Total
Funded Debt plus Consolidated Net Worth.
"Total Funded Debt" means, as of any date of determination, all
Indebtedness of Trendwest for borrowed money as of such date, including the
Obligations and, all Capitalized Lease Obligations of Trendwest, contingent
obligations with respect to "off balance sheet" or "synthetic" leases (i.e.,
leases where for tax purposes the lessee is treated as the owner of the leased
property but for GAAP purposes the lease is treated as an operating lease and
the lessor is treated as the owner of the leased property), all other
Indebtedness of Trendwest as of such date that is represented by notes or drafts
representing extensions of credit for borrowed money, and all obligations as of
such date that are evidenced by bonds, debentures, notes or other similar
instruments (including all such obligations to which any property or asset owned
by Trendwest is subject, whether or not the obligation secured by such property
or asset shall have been assumed), and excluding Warehouse Debt.
"Type" means, with respect to any Revolving Loan, its nature as a Domestic
Advance or Australian Advance.
"UCC" means the Uniform Commercial Code, as amended and adopted in any
applicable jurisdiction.
"Unreimbursed Amounts" has the meaning assigned to such term in Section
2.1(k)(iv).
"Usage" with respect to any time period means the percentage equivalent of
the quotient obtained by dividing (a) the sum of the average daily outstanding
principal balance of the Domestic Advances during such time period plus the
Dollar Equivalent of the average daily outstanding principal balance of
Australian Advances during such time period, by (b) the average daily Aggregate
Commitment during such time period.
"Vacation Credits" means ownership interests in WorldMark, The Club that
(a) entitle the holder of such interests to use a fully furnished vacation
resort unit based on the number of such interests purchased and (b) are created
through the transfer to WorldMark, The Club of resort units developed or
purchased by Trendwest in exchange for the right to sell use-rights in these
properties, as determined using a formula based on the number of user days
available and the relative credit value of each property.
"Warehouse Debt" means Indebtedness incurred by any Special Purpose Funding
Corporation to finance the purchase of Notes Receivable from Trendwest or any of
its Subsidiaries.
1.2. General Rules of Interpretation. Except as otherwise expressly
provided in this Agreement or unless the context clearly requires otherwise, the
terms defined in this Section include the plural as well as the singular; the
words "hereof," "herein," "hereunder," "in this Agreement" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision; and references in this Agreement to Sections,
Schedules, and Exhibits refer to Sections of and Schedules and Exhibits to this
18
Agreement. Whenever the words "include," "includes," or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". Unless otherwise stated, references to Subsections refer to the
Subsections of the Section in which the reference appears. All pronouns used in
this Agreement include the masculine, feminine and neuter gender, as the context
requires. Whenever any agreement, promissory note or other instrument or
document is defined in this Agreement, such definition shall be deemed to mean
and include, from and after the date of any related amendment, restatement or
modification, such agreement, promissory note or other instrument or document as
so amended, restated or modified. Each term not otherwise expressly defined in
this Agreement that is defined in the UCC shall have the meaning assigned to
such term in the UCC. In the case of a conflict between the terms of the
Borrowing Base Certificate or the Compliance Certificate and the terms of this
Agreement (excluding the Exhibits and Schedules), the terms of this Agreement
(excluding the Exhibits and Schedules) shall control. A reference to any Act of
Parliament of the Commonwealth of Australia or to any section or provision
thereof shall be read as if the words "or any statutory modification or
re-enactment thereof or any statutory provision substituted therefore" were
added to such reference.
1.3. Accounting Terms. All accounting terms used in this Agreement that are
not expressly defined in this Agreement have the respective meanings given to
them in accordance with GAAP. All computations required under this Agreement
shall be made in accordance with GAAP, and all balance sheets and other
financial statements required to be delivered to the Administrative Agent
pursuant to this Agreement shall be prepared in accordance with GAAP. Unless
otherwise expressly stated, all references to financial data of Trendwest,
including defined terms used with respect to the financial covenants in Section
6.11, shall be deemed to refer to such financial data of Trendwest and its
Subsidiaries on a consolidated basis.
SECTION 2. THE LOANS.
2.1. The Revolving Loans.
(a) Generally. Subject to the terms and conditions of this Agreement,
during the period up to but not including the Revolving Termination Date, the
Lenders severally, but not jointly, shall make loans to the Borrowers in such
amounts as the Borrowers may from time to time request (the "Revolving Loans")
but not exceeding in aggregate principal amount at any one time outstanding the
Revolving Loan Limit. Subject to the limitations set forth in Sections 2.1(b)
and 2.1(c), the Revolving Loans shall be available in Dollars ("Domestic
Advances") and Australian Currency ("Australian Advances"). No Lender shall be
obligated under this Agreement to make a Revolving Loan if immediately after
making such Revolving Loan, the Outstanding Obligations of such Lender would
exceed the amount set forth opposite such Lender's name on Schedule I, as such
amount may be reduced pursuant to Section 2.1(h) or pursuant to Section 11.7
(such Lender's "Commitment").
(b) Domestic Advances. The Lenders severally, but not jointly, shall
make Domestic Advances to Trendwest in such amounts as Trendwest may from time
to time request, but at no time shall the aggregate principal amount of Domestic
Advances outstanding exceed the Revolving Loan Limit.
(c) Australian Advances. The Australian Lender shall make Australian
Advances to South Pacific in such amounts as South Pacific may from time to time
request, but at no time shall the Dollar Equivalent of the aggregate principal
amount of Australian Advances outstanding to South Pacific exceed the Australian
Advance Limit. No Lender other than the Australian Lender shall make Australian
Advances pursuant to this Agreement, and no Borrower other than South Pacific
shall obtain Australian Advances. Upon the making of each Australian Advance by
the Australian Lender, each Lender shall be deemed irrevocably and
unconditionally to have purchased from the Australian Lender, without recourse
or warranty, a risk participation in such Australian Advance in an amount equal
to such Lender's Ratable Share times the Dollar Equivalent of the Australian
Advance.
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(d) Repayment and Reborrowing. Prior to the Revolving Termination
Date, the Borrowers may, at the Borrowers' option, from time to time repay all
or any portion of the Revolving Loans, subject to the provisions of Section 3.4,
and the Borrowers may reborrow from time to time amounts so paid up to the
amount of the Revolving Loan Limit in effect at the time of reborrowing.
(e) Making of the Revolving Loans. The Revolving Loans shall be made
as follows:
(i) Amounts and Certain Conditions. Each Revolving Loan shall be
made by the Lenders in such amount as the applicable Borrower shall
request; provided, however, that each such Revolving Loan shall be in an
amount that is a minimum of (A) with respect to any Domestic Advance,
$1,000,000 and integral multiples of $1,000,000 in excess of $1,000,000, in
the case of LIBOR Loans, and $100,000 and integral multiples of $50,000 in
excess of $100,000, in the case of Base Rate Loans, and (B) with respect to
any Australian Advance, the Australian Currency Equivalent of $1,000,000
and integral multiples of the Australian Currency Equivalent of $1,000,000
in excess of such amount. The obligation of the Lenders to make any
Revolving Loan is conditioned upon (x) there being no Possible Default or
Event of Default at such time or immediately after the Revolving Loan, and
(y) the representations and warranties contained in this Agreement being
true and correct in all material respects as if made on and as of the date
of such borrowing, except to the extent that any of such representations
and warranties expressly relate to an earlier date.
(ii) Place, Notice, and Funding of Revolving Loans.
(A) Place of Domestic Advances. Domestic Advances shall be
effected at the principal banking office of the Administrative Agent
in Seattle, Washington, and shall be made at such times as the
applicable Borrower may request by notice to the Administrative Agent
no later than (A) in the case of Base Rate Loans, 10:00 a.m., Seattle
time, on the Borrowing Date of a requested Base Rate Loan, and (B) in
the case of LIBOR Loans, 10:00 a.m., Seattle time, three Banking Days
prior to the Borrowing Date of a requested LIBOR Loan.
(B) Place of Australian Advances. Australian Advances shall
be effected at the Australian Lender's Money Market Desk in Adelaide,
South Australia, and shall be made at such times as Trendwest may
request by notice to the Australian Lender no later than 2:00 p.m.,
Eastern Time, one Banking Day prior to the Borrowing Date of a
requested Australian Advance.
(C) Notice of Revolving Loans. The notices required to be
delivered pursuant to Sections 2.1(e)(ii)(A) and 2.1(e)(ii)(B) shall
be in substantially the form of Exhibit A and Exhibit B, respectively
(each a "Borrowing Notice"). The information in the Borrowing Notice
may be communicated to the Administrative Agent, in the case of
Domestic Advances, or to the Australian Lender, in the case of
Australian Advances, by telephonic communication so long as the
Administrative Agent or the Australian Lender, as the case may be,
receives the signed Borrowing Notice by facsimile transmission or
other delivery method on the same day as the telephone communication.
So long as the Administrative Agent has acted in good faith in relying
upon a Borrowing Notice purporting to be signed by the chief financial
officer, treasurer or assistant treasurer of Trendwest, on behalf of
the applicable Borrower, the Borrowing Notice shall be conclusively
presumed to have been executed by such person, and authorized by the
applicable Borrower, regardless of whether such Borrowing Notice
subsequently proves to be forged, fraudulent, invalid or insufficient
20
in any respect. A copy of each Borrowing Notice required to be
delivered by Trendwest to the Australian Lender shall be concurrently
delivered by Trendwest to the Australian Lender's principal banking
office in Chicago, Illinois and to the Administrative Agent.
(D) Funding of Domestic Advances by Lenders. Upon receipt of
each Borrowing Notice for a Domestic Advance, the Administrative Agent
shall promptly notify each Lender of the amount and date of the
proposed Domestic Advance (the "Funding Notification"). Not later than
12:00 Noon, Seattle time, on the Borrowing Date of a proposed Domestic
Advance, each Lender shall provide the Administrative Agent at the
Administrative Agent's address specified in Section 11.4 with
immediately available Dollars equal to such Lender's Ratable Share of
such Domestic Advance, and the Administrative Agent shall pay over
such immediately available Dollars to Trendwest.
(E) Non-Receipt of Funds/Domestic Advances. Unless the
Administrative Agent shall have received notice from a Lender prior to
the Borrowing Date for a Domestic Advance to be made by such Lender
that such Lender will not make available to the Administrative Agent
such funds, the Administrative Agent may assume that such Lender has
made such funds available to the Administrative Agent on the Borrowing
Date for such Domestic Advance in accordance with Section
2.1(e)(ii)(D), and the Administrative Agent in its sole discretion
may, but shall not be obligated to, in reliance upon such assumption,
make available to Trendwest on such Borrowing Date a corresponding
amount. If and to the extent such Lender shall not have so made such
funds available to the Administrative Agent, such Lender agrees to
repay to the Administrative Agent immediately on demand such
corresponding amount together with interest thereon, for each day from
the date such amount is made available to Trendwest until the date
such amount is repaid to the Administrative Agent, at the Federal
Funds Rate. If such Lender shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such
Lender's Revolving Loan for purposes of this Agreement. If such Lender
does not pay such corresponding amount immediately upon the
Administrative Agent's demand, the Administrative Agent shall promptly
notify Trendwest, and Trendwest shall immediately pay such
corresponding amount to the Administrative Agent with interest
thereon, for each day from the date such amount is made available to
Trendwest until the date such amount is repaid to the Administrative
Agent, at the rate of interest applicable at the time to such proposed
Revolving Loan.
(F) Funding of Australian Advances. Not later than 1:00
p.m., Eastern Time, on the Borrowing Date of a proposed Australian
Advance with respect to which the Australian Lender has received a
Borrowing Notice, the Australian Lender shall make such Australian
Advance, in immediately available Australian Currency, to South
Pacific, and shall advise the Administrative Agent, in writing, of the
Dollar Equivalent of such Australian Advance. If South Pacific at any
time fails to pay when due any amount payable in connection with an
Australian Advance, the Australian Lender shall promptly notify the
Administrative Agent of the amount of such payment, and the
Administrative Agent shall promptly notify each Lender of the Dollar
Equivalent of such amount ("Defaulted Amount"). Each Lender shall pay
to the Administrative Agent for the account of the Australian Lender
such Lender's Ratable Share of the Defaulted Amount. Each such payment
shall be deemed a Base Rate Loan made by such Lender to South Pacific.
The Base Rate Loans contemplated by the preceding sentence shall be
21
made notwithstanding Borrower's failure to satisfy the conditions set
forth in Section 5 at the time such Base Rate Loans are made. If the
Administrative Agent notifies a Lender of the Defaulted Amount before
1:00 p.m., Eastern Time, on any Business Day, such Lender shall make
available to the Administrative Agent for the account of the
Australian Lender its Ratable Share of the Defaulted Amount by 4:00
p.m., Eastern Time, on such Business Day in same day funds and if
notified after 1:00 p.m., Eastern Time, then by 4:00 p.m., Eastern
Time, on the next Business Day. If a Lender fails to make such payment
by such time, it shall pay the Administrative Agent interest at the
Federal Funds Rate on such amount for the account of the Australian
Lender for each day from such date until such payment is made. The
failure of a Lender to make any such payment shall not relieve any
other Lender of its obligations under this Section 2.1(e)(ii)(F), but
no Lender shall be responsible for the failure of any other Lender to
make such payment. Each Lender's payment of its Ratable Share of any
Defaulted Amount shall, to the extent of such payment, be deemed to be
a funding of such Lender's risk participation in the Australian
Advance to which the Defaulted Amount relates, and each Lender making
such payment shall thereupon acquire a participation interest, in
accordance with such Lender's Ratable Share, in the claim of the
Australian Lender against the Borrowers with respect to such payment.
Each such Lender shall share, in accordance with its Ratable Share, in
any payment made by the Borrowers with respect to such claim.
(f) Conversion/Continuation of Domestic Advances. At Trendwest's
election pursuant to notice in substantially the form of Exhibit D ("Domestic
Conversion/Continuation Notice") given to the Administrative Agent not later
than 10:00 a.m., Seattle time, three Banking Days prior to such conversion or
continuation, and subject to the condition that no Event of Default or Possible
Default shall then exist, any Domestic Advance may be converted to or continued
as a LIBOR Loan as requested by Trendwest; provided, however, that each such
conversion shall be in an amount that is a minimum of $1,000,000, and integral
multiples of $1,000,000 in excess of $1,000,000. The Domestic
Conversion/Continuation Notice shall be in writing, or by telephonic
communication confirmed by telecopy or other facsimile transmission on the same
day as the telephone request, and shall specify (i) the proposed date of the
conversion or continuation, and (ii) the Domestic Advance being converted or
continued, and (iii) the Interest Period to be applicable in connection with
such conversion or continuation. The Domestic Conversion/Continuation Notice
shall be accompanied by a completed Borrowing Base Certificate, duly executed by
Trendwest and dated as of the date of the Domestic Conversion/Continuation
Notice. If Trendwest has not timely delivered to the Administrative Agent a
Domestic Conversion/Continuation Notice with respect to any terminating Interest
Period applicable to a LIBOR Loan, the affected Domestic Advance shall convert
to a one-month LIBOR Loan at the end of such Interest Period.
(g) Continuation/Conversion of Australian Advances. At Trendwest's
election pursuant to notice in substantially the form of Exhibit E ("Australian
Continuation Notice") given to the Australian Lender and Administrative Agent
not later than 2:00 p.m., Eastern Time, one Banking Day prior to such
continuation, and subject to the condition that no Event of Default or Possible
Default shall then exist, any Australian Advance may be continued as an
Australian Advance as requested by South Pacific. The Australian Continuation
Notice shall be in writing, or by telephonic communication confirmed by telecopy
or other facsimile transmission on the same day as the telephone request, and
shall specify (i) the proposed date of the continuation, and (ii) the Australian
Advance being continued, and (iii) the Interest Period to be applicable in
connection with such continuation. The Australian Continuation Notice shall be
accompanied by a completed Borrowing Base Certificate, duly executed by
Trendwest and dated as of the date of the Australian Continuation Notice. With
respect to any continuation of an Australian Advance pursuant to this paragraph,
the Dollar Equivalent of such Australian Advance on the proposed date of
22
continuation shall not exceed or be less than the Original Dollar Amount of such
Australian Advance. On the first day of the Interest Period specified in the
Australian Continuation Notice, South Pacific shall make such prepayments, or
the Australian Lender shall make such additional Australian Advances, as shall
be necessary to ensure compliance with the immediately preceding sentence. If
Trendwest has not timely delivered to the Australian Lender and the
Administrative Agent an Australian Continuation Notice with respect to any
terminating Interest Period, the affected Australian Advance shall convert to a
one-month LIBOR Loan at the end of such Interest Period.
(h) Reduction of Aggregate Commitment. At any time prior to the
Revolving Termination Date, by written notice to the Administrative Agent no
later than 10:00 a.m., Seattle time, three Banking Days prior to such
termination or reduction, Trendwest may permanently terminate, or from time to
time permanently reduce, the Aggregate Commitment, subject to Section 3.4(b)(i).
Such notice shall be in writing or by telephonic communication confirmed by
telecopy or other facsimile transmission on the same day as such telephone
notice. Any such partial reduction shall be in an amount that is not less than
$5,000,000 or an integral multiple of $1,000,000 in excess of $5,000,000. The
Administrative Agent shall notify the Lenders of any such reduction or
termination of the Aggregate Commitment.
(i) Maturity. All Revolving Loans, together with all interest accrued
on such Revolving Loans, shall be paid in full no later than the Revolving
Termination Date.
(j) Revolving Notes. All Revolving Loans shall be evidenced by
separate promissory notes substantially in the form of Exhibit F, duly executed
and delivered by the Borrowers at Closing, dated the date of this Agreement, and
made payable to each Lender in the aggregate principal amount of such Lender's
Ratable Share of the Aggregate Commitment (the "Revolving Notes"). The Lenders
may, and are hereby authorized by the Borrowers to, set forth on any grids
attached to the Revolving Notes, or in other comparable records maintained by
the Lenders, the amount of each Revolving Loan, all payments and prepayments of
principal and interest received, the current outstanding principal balance, and
other appropriate information with respect to the Revolving Loans. The aggregate
unpaid amount of any Revolving Loan set forth in any records maintained by a
Lender with respect to a Revolving Note shall be, in the absence of manifest
error, conclusive evidence of the principal amount owing and unpaid on such
Revolving Note. Failure of a Lender to record the principal amount of any
Revolving Loan on the grid(s) attached to a Revolving Note shall not limit or
otherwise affect the obligation of the Borrowers under this Agreement or under
such Revolving Note to repay the principal amount of and all interest accrued on
such Revolving Loan.
(k) Letters of Credit.
(i) The Letter of Credit Commitment. Subject to the terms and
conditions set forth in this Agreement, until the Revolving Termination
Date, the Issuing Lender shall take such Letter of Credit Actions as
Trendwest may from time to time request; provided, however, that the
Outstanding Obligations of each Lender (excluding the Australian Lender's
Australian Advances) shall not exceed such Lender's Commitment, the
Outstanding Obligations of all Lenders shall not exceed the Aggregate
Commitment at any time, and Letter of Credit Usage shall not exceed the
Letter of Credit Sublimit at any time. Subject to subsection (vi) below and
unless consented to by the Issuing Lender and Majority Lenders, no Letter
of Credit may expire more than 12 months after the date of its issuance or
last renewal; provided, however, that no Letter of Credit shall expire
after the Revolving Termination Date. If any Letter of Credit Usage remains
outstanding after such date, Trendwest shall, not later than such date,
deposit cash in an amount equal to such Letter of Credit Usage in a Letter
of Credit Cash Collateral Account.
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(ii) Requesting Letter of Credit Actions. Trendwest may
irrevocably request a Letter of Credit Action in an amount of at least
$100,000 by delivering a Letter of Credit Application therefor to the
Issuing Lender, with a copy to the Administrative Agent (who shall notify
the Lenders), by written (not telephonic) notice not later than two Banking
Days prior to the proposed date of issuance of such Letter of Credit Action
("Letter of Credit Notice"). Each Letter of Credit Action shall be in a
form acceptable to the Issuing Lender, in its sole discretion. Unless the
Administrative Agent notifies the Issuing Lender that such Letter of Credit
Action is not permitted under this Agreement, or the Issuing Lender
notifies the Administrative Agent that it has determined that such Letter
of Credit Action is contrary to any applicable laws or policies of the
Issuing Lender, the Issuing Lender shall, upon satisfaction of the
applicable conditions set forth in Section 5 with respect to any Letter of
Credit Action constituting an Extension of Credit, effect such Letter of
Credit Action. This Agreement shall control in the event of any conflict
with any Letter of Credit Application. Upon the issuance of a Letter of
Credit, each Lender shall be deemed irrevocably and unconditionally to have
purchased from the Issuing Lender, without recourse or warranty, a risk
participation in such Letter of Credit in an amount equal to such Lender's
Ratable Share times the amount of such Letter of Credit.
(iii) Reimbursement of Payments Under Letters of Credit.
Trendwest shall reimburse the Issuing Lender through the Administrative
Agent for any payment that the Issuing Lender makes under a Letter of
Credit on or before the date of such payment; provided, however, that if
the conditions precedent set forth in Section 5 can be satisfied, Trendwest
may request a Domestic Advance to reimburse the Issuing Lender for such
payment pursuant to Section 2.1 or, failing to make such request, Trendwest
shall be deemed to have requested a Base Rate Loan on such payment date
pursuant to subsection (v) below.
(iv) Funding by Lenders When Issuing Lender Not Reimbursed. Upon
any drawing under a Letter of Credit, the Issuing Lender shall notify the
Administrative Agent and Trendwest. If Trendwest fails to timely make the
payment required pursuant to subsection (iii) above, the Issuing Lender
shall notify the Administrative Agent of such fact and the amount of such
unreimbursed payment ("Unreimbursed Amounts"). The Administrative Agent
shall promptly notify each Lender of its Ratable Share of such amount by
prompt written notice. Each Lender shall make funds in an amount equal to
its Ratable Share of such amount available to the Administrative Agent at
the Administrative Agent's address specified in Section 11.4 not later than
12:00 Noon, Seattle time, on the proposed date of issuance set forth in the
Letter of Credit Application, and the Administrative Agent shall remit the
funds so received to the Issuing Lender. The obligation of each Lender to
so reimburse the Issuing Lender shall be absolute and unconditional and
shall not be affected by the occurrence of a Possible Default or Event of
Default or any other occurrence or event. Any such reimbursement shall not
relieve or otherwise impair the obligation of Trendwest to reimburse the
Issuing Lender for the amount of any payment made by the Issuing Lender
under any Letter of Credit, together with interest as provided in this
Agreement.
(v) Nature of Lenders' Funding. If the conditions precedent set
forth in Section 5 can be satisfied (except for the giving of a Letter of
Credit Notice) on any date that Trendwest is obligated to, but fails to,
reimburse the Issuing Lender for a drawing under a Letter of Credit, the
funding by Lenders pursuant to the previous subsection shall be deemed to
be Base Rate Loans (without regard to the required minimum amount) deemed
requested by Trendwest. If the conditions precedent set forth in Section 5
cannot be satisfied on the date that Trendwest is obligated to, but fails
to, reimburse the Issuing Lender for a drawing under a Letter of Credit,
Each Lender's payment pursuant to the immediately preceding subsection
shall, to the extent of such payment, be deemed to be a funding by such
Lender of its risk participation in such Letter of Credit, and each Lender
24
making such funding shall thereupon acquire a participation interest, in
accordance with such Lender's Ratable Share, in the claim of the Issuing
Lender against Trendwest in respect of such payment and shall share, in
accordance with that Ratable Share, in any payment made by Trendwest with
respect to such claim. Any amounts made available by a Lender under its
risk participation shall be payable by Trendwest upon demand of the
Administrative Agent, and shall bear interest at a rate per annum equal to
the Default Rate.
(vi) Special Provisions Relating to Evergreen Letters of Credit.
Trendwest may request Letters of Credit that have automatic extension or
renewal provisions ("evergreen" Letters of Credit) so long as the Issuing
Lender consents in its sole and absolute discretion to such extension or
renewal and has the right to not permit any such extension or renewal at
least annually within a notice period to be agreed upon at the time each
such Letter of Credit is issued. Once an evergreen Letter of Credit is
issued, unless the Administrative Agent has notified the Issuing Lender
that the Majority Lenders have elected not to permit such extension or
renewal, Trendwest, the Administrative Agent and the Lenders shall be
deemed to have authorized (but may not require) the Issuing Lender to, in
its sole and absolute discretion, permit the renewal of such evergreen
Letter of Credit at any time to a date not later than the Revolving
Termination Date, and, unless directed by the Issuing Lender, Trendwest
shall not be required to request such extension or renewal. The Issuing
Lender may, in its sole and absolute discretion, elect not to permit an
evergreen Letter of Credit to be extended or renewed at any time.
(vii) Obligations Absolute. The obligation of Trendwest to pay to
the Issuing Lender the amount of any payment made by the Issuing Lender
under any Letter of Credit shall be absolute, unconditional, and
irrevocable. Without limiting the foregoing, Trendwest's obligation shall
not be affected by any of the following circumstances:
(A) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other related agreement or instrument;
(B) any amendment or waiver of or any consent to departure
from such Letter of Credit, this Agreement, or any other related
agreement or instrument;
(C) the existence of any claim, setoff, defense, or other
rights that the Borrower may have at any time against the Issuing
Lender, the Administrative Agent, the Syndication Agent or any Lender,
any beneficiary of such Letter of Credit (or any persons or entities
for whom any such beneficiary may be acting) or any other Person,
whether in connection with such Letter of Credit, this Agreement, or
any other related agreement or instrument, or any unrelated
transactions;
(D) any demand, statement, or any other document presented
under such 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 whatsoever so long as any such document
appeared to comply with the terms of the Letter of Credit;
25
(E) payment by the Issuing Lender in good faith under such
Letter of Credit against presentation of a draft or any accompanying
document that does not strictly comply with the terms of such Letter
of Credit; or any payment made by the Issuing Lender under such Letter
of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief
Laws;
(F) the existence, character, quality, quantity, condition,
packing, value or delivery of any property purported to be represented
by documents presented in connection with such Letter of Credit or for
any difference between any such property and the character, quality,
quantity, condition, or value of such property as described in such
documents;
(G) the time, place, manner, order or contents of shipments
or deliveries of property as described in documents presented in
connection with such Letter of Credit or the existence, nature and
extent of any insurance relative thereto;
(H) the solvency or financial responsibility of any party
issuing any documents in connection with such Letter of Credit;
(I) any failure or delay in notice of shipments or arrival
of any property;
(J) any error in the transmission of any message relating to
such Letter of Credit not caused by the Issuing Lender, or any delay
or interruption in any such message;
(K) any error, neglect or default of any correspondent of
the Issuing Lender in connection with such Letter of Credit;
(L) any consequence arising from acts of God, wars,
insurrections, civil unrest, disturbances, labor disputes, emergency
conditions or other causes beyond the control of Issuing Lender;
(M) so long as the Issuing Lender in good faith determines
that the document appears to comply with the terms of the Letter of
Credit, the form, accuracy, genuineness or legal effect of any
contract or document referred to in any document submitted to Issuing
Lender in connection with such Letter of Credit; and
(N) any other circumstances whatsoever where the Issuing
Lender has acted in good faith.
In addition, Trendwest will promptly examine a copy of each Letter of
Credit and related amendments delivered to it and, in the event of any
claim of noncompliance with Trendwest's instructions or other
irregularity, Trendwest will immediately notify the Issuing Lender in
writing. The Borrower shall be conclusively deemed to have waived any
such claim against the Issuing Lender and its correspondents unless
such notice is given as aforesaid.
26
(viii) Role of Issuing Lender. Each Lender and Trendwest agree
that, in paying any drawing under a Letter of Credit, the Issuing Lender
shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any
such document or the authority of the Person executing or delivering any
such document. No Administrative Agent-Related Person nor any of the
respective correspondents, participants or assignees of the Issuing Lender
shall be liable to any Lender for any action taken or omitted in connection
herewith at the request or with the approval of the Lenders or Majority
Lenders, as applicable; any action taken or omitted in the absence of gross
negligence or willful misconduct; or the due execution, effectiveness,
validity or enforceability of any document or instrument related to any
Letter of Credit. Trendwest hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended
to, and shall not, preclude Trendwest's pursuing such rights and remedies
as it may have against the beneficiary or transferee at law or under any
other agreement. No Administrative Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the Issuing Lender,
shall be liable or responsible for any of the matters described in
subsection (vii) above. In furtherance and not in limitation of the
foregoing, the Issuing Lender 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, and the Issuing
Lender shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, that may prove to be invalid or ineffective for any
reason.
(ix) Applicability of ISP98 and UCP. Unless otherwise expressly
agreed by the Issuing Lender and Trendwest when a Letter of Credit is
issued and subject to applicable laws, performance under Letters of Credit
by the Issuing Lender, its correspondents, and beneficiaries will be
governed by (A) with respect to standby Letters of Credit, the rules of the
"International Standby Practices 1998" or such later revision as may be
published by the Institute of International Banking Law & Practice, subject
to applicable laws, and (B) with respect to commercial Letters of Credit,
the rules of the Uniform Customs and Practice for Documentary Credits, as
published in its most recent version by the International Chamber of
Commerce (the "ICC") on the date any commercial Letter of Credit is issued,
and including the ICC decision published by the Commission on Banking
Technique and Practice on April 6, 1998 regarding the European single
currency (euro).
2.2. Fees.
(a) Revolving Loan Fees. The Borrower shall pay to the Administrative
Agent, for the benefit of the Lenders in accordance with their respective
Ratable Shares, the Commitment Fee with respect to each calendar quarter, in
arrears, on (i) each September 30, December 31, March 31, and June 30 during the
period commencing on the Closing Date and ending on the Revolving Termination
Date, and (ii) on the Revolving Termination Date. On each annual anniversary of
the Closing Date, Trendwest shall pay to the Administrative Agent, for its own
account, the applicable Administrative Agent fees.
(b) Letter of Credit Fees. With respect to each Letter of Credit, upon
the issuance, renewal, and/or amendment of such Letter of Credit, Trendwest
shall pay to the Administrative Agent, for its own account, a nonrefundable
fronting fee in an amount equal to 0.125% of the face amount of such Letter of
Credit. In addition, Trendwest shall pay to the Administrative Agent on the
first Banking Day of each calendar quarter in arrears, for the account of each
Lender in accordance with its Ratable Share, a nonrefundable Letter of Credit
fee equal to the product of the Applicable Margin times the average daily Letter
of Credit Usage since the later of the Closing Date and the first Banking Day of
the previous calendar quarter.
27
2.3. Increased Costs. If at any time any Regulatory Change (including any
Regulatory Change with respect to Regulation D) shall
(a) impose any reserve and/or special deposit requirement against
assets held by or deposits in, or for the amount of any loans or letters of
credit by, any Lender or the Issuing Lender, or
(b) subject any Lender or the Issuing Lender to any tax, levy, impost,
charge, fee, duty, deduction or withholding of any kind whatsoever (other than
any tax imposed upon the net income of such Lender and other than changes in
franchise taxes),
and the result of any such Regulatory Change is to increase the cost (whether by
incurring a cost or adding to a cost) to such Lender of making, maintaining or
renewing a Revolving Loan or issuing, maintaining or renewing a Letter of
Credit, or to reduce the amount of principal, interest or fees received or
receivable by such Lender or Issuing Lender with respect to any Revolving Loan
or Letter of Credit, then such Lender or Issuing Lender shall notify the
Administrative Agent and Trendwest of such occurrence. Thereafter, upon demand
by such Lender, Trendwest shall pay to such Lender or Issuing Lender additional
amounts sufficient to compensate and indemnify such Lender or Issuing Lender for
such increased cost or reduced amount. A statement as to the increased cost or
reduced amount as a result of any event mentioned in this Section shall be
submitted by such Lender or Issuing Lender to the Administrative Agent and
Trendwest and shall, in the absence of manifest error, be conclusive and binding
as to the amount of such increased cost or reduced amount.
2.4. Australian Currency Unavailable or BBSY Rate Unascertainable. If the
Australian Lender determines with respect to any Australian Advance that
Australian Currency of the relevant amount for the relevant Interest Period is
not available to it in the foreign exchange market or that, by reason of
circumstances affecting such market, adequate and reasonable means do not exist
for ascertaining the BBSY Rate applicable to such Interest Period, or that the
BBSY Rate does not adequately reflect the cost to the Australian Lender of
making such Australian Advance, as the case may be, the Australian Lender shall
promptly give notice of such determination to the Borrowers and the
Administrative Agent, and any request for a new Australian Advance, or any
Australian Conversion Notice with respect to which no conversion or continuation
has yet occurred, shall be deemed to be a request for, and Borrowing Notice with
respect to, a Domestic Advance of like amount. The Australian Lender's
determination under this Section 2.4 shall be conclusive.
2.5. Changes in Law Rendering Australian Advances Unlawful. If at any time
any Regulatory Change shall make it unlawful for the Australian Lender to fund
any Australian Advance that the Australian Lender has committed to make under
this Agreement with Australian Currency, the Australian Lender shall notify the
Borrowers and the Administrative Agent, and the obligation of the Australian
Lender to fund such Australian Advance shall, upon the occurrence of such event,
immediately be suspended for the duration of such illegality. If any such
Regulatory Change makes it unlawful for the Australian Lender to continue in
effect the funding of any Australian Advance previously made by it, the
Australian Lender shall, upon the happening of such event, notify the Borrowers
and the Administrative Agent in writing, and South Pacific shall, on the earlier
of (a) the last day of the then-current Interest Period, or (b) if required by
such Regulatory Change, on such date as shall be specified in such notice,
either convert all such Australian Advances to Domestic Advances or prepay all
such Australian Advances in full.
2.6. LIBOR Not Ascertainable. If the Administrative Agent determines (which
determination shall be conclusive) that, by reason of circumstances affecting
the foreign exchange market, adequate and reasonable means do not exist for
28
ascertaining LIBOR for a LIBOR Loan, or that LIBOR does not adequately reflect
the cost to the Lenders of making such LIBOR Loan, as the case may be, the
Administrative Agent shall promptly give notice of such determination to
Trendwest, and any request for a new LIBOR Loan, or any Domestic
Conversion/Continuation Notice with respect to which no conversion or
continuation has yet occurred, shall be deemed to be a request for, and
Borrowing Notice with respect to, a Base Rate Loan of like amount.
2.7. Changes in Law Rendering LIBOR Loans Unlawful. If at any time any
Regulatory Change shall make it unlawful for any Lender to fund any LIBOR Loan
that the Lender has committed to make under this Agreement, the Lender shall
notify Trendwest and the Administrative Agent, and the obligation of such Lender
to fund such LIBOR Loan shall, upon the occurrence of such event, immediately be
suspended for the duration of such illegality. If any such Regulatory Change
makes it unlawful for any Lender to continue in effect the funding of any LIBOR
Loan previously made by it, such Lender shall, upon the happening of such event,
notify Trendwest and the Administrative Agent in writing, and Trendwest shall,
on the earlier of (a) the last day of the then-current Interest Period, or (b)
if required by such Regulatory Change, on such date as shall be specified in
such notice, either convert such LIBOR Loan to a Base Rate Loan or prepay such
LIBOR Loan in full.
2.8. Indemnity. Without prejudice to any other provisions of this
Agreement, the Borrowers shall jointly and severally indemnify each Lender
against any loss or expense that it may sustain or incur as a consequence of any
failure by the Borrowers to accept any LIBOR Loan or Australian Advance
requested pursuant to this Agreement or any default by the Borrowers in payment
when due of any amount due under this Agreement with respect to any LIBOR Loan
or Australian Advance or any whole or partial prepayment or conversion by the
Borrowers of a LIBOR Loan or Australian Advance prior to the end of its Interest
Period, whether voluntarily or as required pursuant to the terms of this
Agreement, including any premium or penalty actually incurred by such Lender
with respect to funds borrowed by it for the purpose of making or maintaining
such LIBOR Loan or Australian Advance, as determined by such Lender. A statement
as to any such loss or expense shall be submitted by such Lender to the
Borrowers for payment under this paragraph, with a copy to the Administrative
Agent, which statement shall, in the absence of manifest error, be conclusive
and binding as to the amount of such loss or expense.
2.9. Capital Adequacy. If any Lender shall determine that any Regulatory
Change with respect to capital adequacy, or compliance by such Lender (or its
lending office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any governmental authority, central
bank or comparable agency, has the effect of reducing the rate of return on such
Lender's capital (or on the capital of such Lender's holding company) as a
consequence of its obligations under this Agreement to a level below that which
such Lender (or its holding company) could have achieved but for such Regulatory
Change or compliance (taking into consideration such Lender's policies or the
policies of its holding company with respect to capital adequacy) by an amount
that such Lender deems to be material, then from time to time, within ten days
after demand by such Lender, the Borrowers shall pay to such Lender such
additional amount or amounts as will compensate such Lender (or its holding
company) for such reduction. Such Lender will designate a different lending
office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the sole judgment of such Lender, be
otherwise disadvantageous to such Lender. A certificate of such Lender claiming
compensation under this Section and setting forth the additional amount to be
paid to it in such respect shall be conclusive and binding in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods. Failure on the part of any Lender to demand
compensation for any reduction in return on capital with respect to any period
shall not constitute a waiver of such Lender's rights to demand compensation for
any reduction in return on capital in such period or in any other period. The
protection of this Section shall be available to each Lender regardless of any
possible contention of the invalidity or inapplicability of the law, regulation
or other condition that shall have been imposed.
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2.10. Australian GST.
(a) Notwithstanding any other provision of this Agreement:
(i) in the event that GST has application to any supply made
under or in connection with this Agreement by a Lender, that Lender may, in
addition to any amount or consideration payable under this Agreement,
recover from South Pacific an additional amount on account of GST, such
amount to be calculated by multiplying the relevant amount or consideration
payable by South Pacific for the relevant supply by the prevailing GST
rate; and /or
(ii) without limiting the generality of the foregoing, in the
event that a Lender is not entitled to an input tax credit in respect of
the amount of any GST charged to or recovered from that Lender by any
person, or payable by that Lender, or in respect of any amount which is
recovered from that Lender by way of reimbursement of GST referable
directly or indirectly to any supply made under or in connection with this
Agreement, that Lender shall be entitled to increase any amount or
consideration payable by South Pacific on account of such input tax and
recover from South Pacific the amount of any such increase.
(b) Any additional amount on account of GST, or on account of an
amount for which a Lender is not entitled to an input tax credit,
recoverable from South Pacific pursuant to Section 2.10(a) shall be
calculated without any deduction or set-off of any other amount and is
payable by South Pacific upon demand by the party whether such demand is by
means of an invoice or otherwise.
(c) Each Lender will use its best endeavors to determine reasonably
the extent (if any) to which any amount payable by South Pacific to that
party for any supply made under this Agreement may be reduced as a direct
consequence of the abolition of or reduction in any taxes, duties, or
statutory charges paid or payable by that Lender (as part of the imposition
of GST) that directly relate to the supply by that Lender, and the amount
payable by South Pacific to that Lender shall be reduced only to the extent
of the reduction (if any) so determined by the Australian Lender.
(d) Without limiting sub-paragraph 2.10(a), if requested by South
Pacific in writing, the relevant Lender will provide an invoice in relation
to any supply to which sub-paragraph 2.10(a) has been applied no later than
28 days after the request is made.
2.11. Survival. All of the Borrowers' obligations under Sections 2.3, 2.5,
2.7, 2.8 2.9, and 2.10 shall survive termination of the Commitments and payment
in full of all Obligations.
SECTION 3. PAYMENTS.
3.1. Interest.
(a) The Borrowers shall pay to the Lenders interest on the unpaid
principal amount of each Revolving Loan for the period commencing on the date on
which such Revolving Loan is made until such Revolving Loan is paid in full, and
such payments shall be made in arrears on each Interest Payment Date and at
maturity (whether at stated maturity, by acceleration or otherwise), and
thereafter on demand. Subject to Section 3.1(b), prior to maturity, all Base
Rate Loans shall bear interest at a per annum rate equal to the Base Rate plus
the Applicable Margin, all LIBOR Loans shall bear interest at a per annum rate
equal to the Applicable LIBOR Rate plus the Applicable Margin, and all
Australian Advances shall bear interest at a per annum rate equal to the BBSY
Rate plus the Applicable Margin. With respect to any particular interest payment
to be made on an Interest Payment Date, the Applicable Margin used in
30
calculating the amount of such payment shall be computed by reference to (i) in
the case of Base Rate Loans, the calendar quarter ending immediately before such
Interest Payment Date, and (ii) in the case of LIBOR Loans, the Interest Period
ending on such Interest Payment Date.
(b) Upon the occurrence of any Event of Default, the entire
outstanding principal amount of each Revolving Loan and (to the extent permitted
by law) unpaid interest on such Revolving Loan and all other amounts due under
this Agreement shall bear interest from the date of occurrence of the Event of
Default until paid in full at the Default Interest Rate.
(c) Interest shall be computed on the basis of a 360-day year
calculated for the actual number of days
elapsed.
(d) The rate of interest payable on any Revolving Note from time to
time shall in no event exceed the maximum rate, if any, permissible under
applicable law. If the rate of interest payable on any Revolving Note is ever
reduced as a result of the preceding sentence and any time thereafter the
maximum rate permitted by applicable law shall exceed the rate of interest
provided for on such Revolving Note, then the rate provided for on such
Revolving Note shall be increased to the maximum rate permitted by applicable
law for such period as is required so that the total amount of interest received
by the holder of such Revolving Note is that which would have been received by
such holder but for the operation of the preceding sentence.
3.2. Principal. The Borrowers shall pay to the Lenders on the Revolving
Termination Date the entire outstanding principal amount of all Revolving Loans.
3.3. Other Payment Matters.
(a) Payment Statements. Prior to each Interest Payment Date with
respect to Domestic Advances, the Administrative Agent shall render a statement
to the Borrower of all amounts due to the Lenders for principal, interest and
fees under this Agreement. Prior to each Interest Payment Date with respect to
Australian Advances, the Australian Lender shall render a statement to South
Pacific (with a copy to Trendwest and the Administrative Agent) of all amounts
due to the Australian Lender for principal, interest and fees under this
Agreement. All amounts listed on any such statement with respect to a Domestic
Advance or Australian Advance shall be due and payable on the Interest Payment
Date with respect to which such statement was sent. As to all other Obligations
that become due and payable other than on a fixed date by their terms, the
Administrative Agent or the Australian Lender, as the case may be, shall advise
the Borrowers (and the Administrative Agent, in the case of an Australian
Advance) by a written statement that they are due and payable, and the Borrowers
shall pay the same within ten days of receipt of such statement. Any failure by
the Administrative Agent or the Australian Lender to render any such statement
or give any such advice shall in no way relieve the Borrowers of any liability
for or obligation to pay any amount due and payable under this Agreement.
(b) Days Other Than Banking Days. Whenever any payment to be made
under this Agreement, including any payment to be made on a Revolving Note,
shall be stated to be due on a day that is not a Banking Day, such payment shall
be made on the next succeeding Banking Day, and such extension of time shall in
each case be included in the computation of the interest payable on such
Revolving Note.
(c) Time and Place of Payments. Unless otherwise provided in this
Agreement, all payments or prepayments made or due under this Agreement or under
the Revolving Notes shall be made in immediately available Dollars or, in the
case of Australian Advances, immediately available Australian Currency, by
federal funds wire transfer, and without setoff, deduction or counterclaim, to
31
the Administrative Agent, for the account of the Lenders in the case of Domestic
Advances, or for the account of the Australian Lender in the case of Australian
Advances, prior to 10:00 a.m., Seattle time, on the date when due, at its
offices at 000 Xxxx Xxxx Xxxxxx Xxxxxxxxx, Xxxxx, Xxxxx 00000, or at such other
place as may be designated in writing by the Administrative Agent. Funds
received after 10:00 a.m., Seattle time, shall be deemed to have been received
on the next Banking Day. At the time of making each payment or prepayment in
connection with this Agreement or the Revolving Notes, the applicable Borrower
shall, subject to the other terms and conditions of this Agreement, specify to
the Administrative Agent the Revolving Loan or other obligation to which such
payment is to be applied. In the event that the applicable Borrower fails to
specify the relevant Revolving Loan or other obligation to which such payment is
to be applied or if an Event of Default shall have occurred and be continuing,
the Administrative Agent may apply such payment to such Revolving Loans or other
obligation as it may determine, in its sole and absolute discretion. The
Borrowers authorize the Administrative Agent to debit the Borrowers' accounts
with the Administrative Agent in order to cause timely payment of amounts due
under this Agreement to be made; provided, however, that insufficient funds in
such accounts shall in no way relieve the Borrowers of any liability for or
obligation to pay any such amounts.
(d) Currency Matters. This Agreement arises in the context of an
international transaction, and the specification of payment in a specific
currency at a specific place pursuant to this Agreement is of the essence. Such
specified currency shall be the currency of account and payment under this
Agreement. The obligations of the Borrowers under this Agreement shall not be
discharged by an amount paid in any other currency or at another place, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid, on
prompt conversion into the applicable currency and transfer to the Lenders under
normal banking procedure, does not yield the amount of such currency due under
this Agreement. In the event that any payment, whether pursuant to a judgment or
otherwise, upon conversion and transfer, does not result in payment of the
amount of such currency due under this Agreement, then the Lenders shall have an
independent cause of action against the Borrowers for the currency deficit.
(e) Non-Receipt of Funds from Borrower. Unless the Administrative
Agent shall have received notice from the applicable Borrower prior to the date
on which any payment is due to the Lenders under this Agreement that the
Borrower will not make such payment in full, the Administrative Agent may assume
that the Borrower has made such payment in full to the Administrative Agent on
such date, and the Administrative Agent, in its sole discretion, may, but shall
not be obligated to, in reliance upon such assumption, cause to be distributed
to each Lender on such due date an amount equal to the amount then due such
Lender. If and to the extent that the applicable Borrower shall not have so made
such payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate.
3.4. Prepayments.
(a) Voluntary Prepayments. By notice to the Administrative Agent
(which shall be in writing or by telephonic communication confirmed by telecopy
or other facsimile transmission on the same day as such telephone notice) no
later than 10:00 a.m., Seattle time, on the Banking Day of such prepayment, in
the case of any Base Rate Loan, or on the fifth Banking Day prior to such
prepayment, in the case of any LIBOR Loan or Australian Advance, the applicable
Borrower may, at such Borrower's option, prepay any Domestic Advance or
Australian Advance in whole at any time or in part from time to time without
penalty or premium (except that any such prepayment of any LIBOR Loan or
Australian Advance shall be made together with payment of the applicable
Prepayment Premium); provided, however, that each partial prepayment of a Base
Rate Loan shall be in the aggregate principal amount of not less than $250,000
32
or an integral multiple of $100,000 in excess of $250,000, and each partial
prepayment of a LIBOR Loan or Australian Advance shall be in the aggregate
principal amount of not less than $1,000,000 or an integral multiple of
$1,000,000 in excess of $1,000,000. All accrued interest on the amount prepaid
shall be paid with the prepayment.
(b) Mandatory Prepayments.
(i) Compliance with Revolving Loan Limit. If at any time the
Outstanding Obligations exceed the Revolving Loan Limit, the Borrowers
shall immediately prepay the Revolving Loans, without penalty or premium
(except that any such prepayment of any LIBOR Loan or Australian Advance
shall be made together with payment of the applicable Prepayment Premium),
in an amount necessary to cause the outstanding principal amount of the
Outstanding Obligations not to exceed the Revolving Loan Limit. All accrued
interest on amounts prepaid pursuant to this paragraph shall be paid with
the prepayment.
(ii) Compliance with Australian Advance Limit. If at any time the
Dollar Equivalent of the outstanding principal amount of Australian
Advances exceeds the Australian Advance Limit, South Pacific shall
immediately prepay the Australian Advances, together with the applicable
Prepayment Premium (if any), in an amount necessary to cause the Dollar
Equivalent of the outstanding principal amount of Australian Advances not
to exceed the Australian Advance Limit. All accrued interest on amounts
prepaid pursuant to this paragraph shall be paid with the prepayment.
(iii) Insurance Proceeds. Immediately following the date of
receipt of any cash payments under any insurance policy maintained by the
Borrowers that have not been reinvested, or irrevocably deposited with the
Administrative Agent for reinvestment, in assets of a kind then used or
usable in the business of the Borrowers or used to maintain the business of
the Borrowers as a going concern as a consequence of any business
interruption, the Borrowers shall make a mandatory prepayment of the
Revolving Loans in the amount of such unreinvested or unused proceeds;
provided, however, that notwithstanding any of the foregoing to the
contrary, upon and during the continuance of any Event of Default or
Possible Default, all such insurance proceeds, regardless of reinvestment
or other use, received by the Borrowers shall be applied as a prepayment of
the Revolving Loans.
(c) Application of Prepayments. All prepayments made pursuant to this
Section 3.4 shall be applied first to any Prepayment Premium then due, then to
accrued interest and Fees, and then to the principal outstanding in connection
with the Revolving Loans. All mandatory prepayments of principal required to be
made pursuant to Sections 3.4(b)(i) or 3.4(b)(ii) shall be applied first to the
Base Rate Loans, and then, after the principal balances of the Base Rate Loans
have been reduced to zero, to the LIBOR Loans and Australian Advances with the
shortest remaining Interest Periods; provided, however, that if the amount of
Base Rate Loans then outstanding is not sufficient to satisfy the entire
prepayment requirement, the applicable Borrower may, at its option, place any
amounts that it would otherwise be required to use to prepay LIBOR Loans and
Australian Advances on a day other than the last day of the Interest Period
therefor in an account (the "Prepayment Account") pledged to the Administrative
Agent for the benefit of the Lenders until the end of such Interest Period, at
which time such pledged amounts will be applied to prepay such LIBOR Loans and
Australian Advances. Unless a Possible Default or Event of Default shall occur,
the Administrative Agent shall, acting upon written instructions of the
applicable Borrower, invest amounts placed in the Prepayment Account in Eligible
Investments; provided, however, that the Administrative Agent shall not be
liable for any action taken or omitted to be taken in connection with such
investment activities (except for its own gross negligence or willful
misconduct). Subject to the foregoing described pledge, all interest and
earnings on amounts placed in the Prepayment Account shall be for the account of
the applicable Borrower.
33
(d) Prepayment Premium. Upon any prepayment or conversion (whether
voluntary or involuntary) of any LIBOR Loan or Australian Advance not made on
the last day of the applicable Interest Period, the applicable Borrower shall
pay the applicable Prepayment Premium to (i) the Administrative Agent, for the
account of the Lenders, in the case of LIBOR Loans, and (ii) the Australian
Lender, for its own account and not for the benefit of the other Lenders, in the
case of Australian Advances.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS.
To induce the Lenders and the Issuing Lender to enter into this Agreement,
make the Revolving Loans, and issue Letters of Credit, the Borrowers represent
and warrant to the Lenders:
4.1. Incorporation, Good Standing, and Qualification. Each of the Borrowers
is a corporation, duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, and is duly qualified or
registered to conduct business and in good standing under the laws of each
jurisdiction in which the character of its business or the ownership of its
assets makes such qualification or registration necessary, except where failure
to so qualify or register would not have a material adverse effect upon each
such Borrower or upon its ability to perform its obligations under this
Agreement.
4.2. Power and Authority. Each of the Borrowers has all requisite legal
power and authority to own and operate its properties, to carry on its business
as now conducted and proposed to be conducted, and to enter into and carry out
the terms of this Agreement.
4.3. Authorization. The execution, delivery, and performance by each of the
Borrowers of this Agreement have been duly authorized by all necessary corporate
and shareholder action.
4.4. Enforceability. This Agreement is a valid, legal, and binding
obligation of each of the Borrowers, enforceable against it in accordance with
its terms, except to the extent that the enforceability of this Agreement may be
limited by bankruptcy, insolvency or other similar laws affecting creditors'
rights generally and the availability of equitable remedies.
4.5. Financial Statements. Trendwest has delivered to the Lenders (a) the
audited financial statements of Trendwest as of and for the years ended December
31, 1999, December 31, 1998, and December 31, 1997, and (b) the unaudited
financial statements of Trendwest as of and for the 3-month period ended March
31, 2000 (collectively, the "Financial Statements"). To the best of Trendwest's
knowledge, the Financial Statements are true and complete in all material
respects (including a disclosure of all material contingent liabilities) and
present fairly the financial condition and results of operations of Trendwest
and its Subsidiaries as of the dates and for the periods indicated and have been
prepared in accordance with GAAP, subject to normal year-end adjustments and the
absence of footnotes in the case of statements for interim periods.
4.6. Projections. Trendwest has delivered to the Lenders Trendwest's
projections for the period June 30, 2000 through December 31, 2003. Such
projections were prepared with a reasonable basis and in good faith, and they
assume the consummation of the transactions contemplated in this Agreement. Such
projections are set forth on Exhibit G.
4.7. Capitalization of Borrowers. The capitalization of each of the
Borrowers as of July 31, 2000 is set forth on Exhibit H and is correct and
accurate in all material respects. All of the issued and outstanding shares of
capital stock of the Borrowers has been duly and validly issued and are fully
34
paid and nonassessable. None of the shares of capital stock of the Borrowers has
been issued in violation of the Securities Act of 1933, as amended, or the
securities or "Blue Sky" or any other applicable laws, rules or regulations of
any applicable jurisdiction. Except as set forth in documents filed with the
Securities and Exchange Commission as exhibits to Trendwest's Form 10-K, as of
the Closing Date, Trendwest does not have any commitment or obligation, either
firm or conditional, to issue, deliver, purchase or sell, under any offer,
option agreement, bonus agreement, purchase plan, incentive plan, compensation
plan, warrant, conversion rights, contingent share agreement, shareholders
agreement, partnership agreement or otherwise, any shares of its capital stock,
or other equity securities or securities convertible into shares of capital
stock.
4.8. Title to Properties; Patents, Trademarks, Etc. Each of the Borrowers
has good and marketable title to all of its assets, whether real or personal,
tangible or intangible, free and clear of any Liens or adverse claims, except
Permitted Liens. Each of the Borrowers owns or possesses the valid right to use
all the letters patent, patents, patent applications, patent and know-how
licenses, inventions, technology, permits, trademark registrations and
applications, trademarks, service marks, trade names, copyrights, product
designs, applications, formulae, processes, and all licenses and rights with
respect to the foregoing that are used or necessary for the conduct of business
(collectively, "Proprietary Rights"). The Proprietary Rights are not materially
comprised of any patents, patent applications, federally registered trademarks,
copyrights, or other intellectual property rights subject to any statute of the
United States. Neither of the Borrowers is aware of any existing or threatened
infringement or misappropriation of (a) any Proprietary Rights of others by
either of the Borrowers, or (b) any Proprietary Rights of the Borrowers by
others.
4.9. Litigation; Proceedings. Except as disclosed on Exhibit I, as of the
Closing Date, there is no action, suit, proceeding, inquiry or investigation at
law or in equity, or by or before any court or governmental instrumentality or
agency, nor any order, decree or judgment in effect, pending or, to the best of
the Borrowers' knowledge, threatened against or affecting either of the
Borrowers or any of their respective properties or rights that, if determined
adversely to the Borrowers, is reasonably likely to result in liability to the
Borrowers of at least $1,000,000.
4.10. Taxes. To the best of the Borrowers' knowledge, all tax returns,
reports and statements (including those relating to income taxes, withholding,
social security and unemployment taxes, sales and use taxes, and franchise
taxes) required to be filed by the Borrowers have been properly filed with the
appropriate governmental agencies in all domestic and foreign jurisdictions in
which such returns, reports and statements are required to be filed, and such
returns, reports and statements are complete and accurate, and all taxes and
other impositions due and payable have been timely paid prior to the date on
which any related fine, penalty, interest, late charge or loss may be imposed
for non-payment, except for any such fine, penalty, interest, late charge or
loss that is being contested in good faith, by appropriate proceedings, and as
to which adequate reserves have been set aside in accordance with GAAP. As of
the Closing Date, neither of the Borrowers has filed with the Internal Revenue
Service or any other domestic or foreign governmental authority any agreement or
other document extending or having the effect of extending the period for
assessment or collection of any federal, state, local or foreign taxes or other
impositions. To the best of each Borrower's knowledge, all tax deficiencies
asserted or assessments made as a result of any examinations conducted by the
Internal Revenue Service or any other domestic or foreign governmental authority
relating to such Borrower have been fully paid or are being contested in
accordance with the provisions of Section 6.4. To the best of each Borrower's
knowledge, proper and accurate amounts have been withheld by such Borrower from
its employees for all periods to fully comply with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law. To the best of each Borrower's knowledge, the charges, accruals and
reserves on the books of such Borrower with respect to any taxes or other
governmental charges are adequate.
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4.11. Absence of Conflicts. The execution, delivery and performance of, and
the transactions contemplated by, this Agreement will not (a) violate, be in
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under (i) any provision of the articles of incorporation
or bylaws of either of the Borrowers, (ii) any arbitration award or any order of
any court or of any other governmental agency or authority binding on either of
the Borrowers, (iii) any material license, permit or authorization under which
either of the Borrowers operates, (iv) any applicable law, rule, order or
regulation (including Regulations T, U or X of the Board of Governors of the
Federal Reserve System), or (v) any material agreement, instrument or document
by which either of the Borrowers or any of its properties is bound, or (b)
result in the creation or imposition of any Lien of any nature upon any of the
properties of either of the Borrowers.
4.12. Indebtedness. As of the Closing Date, and after giving effect to
consummation of the transactions contemplated by this Agreement, neither of the
Borrowers has any Indebtedness of any nature, whether due or to become due,
absolute, contingent or otherwise, including Indebtedness for taxes and any
related interest or penalties, except (a) the liability to pay legal and
accounting fees and reasonable closing expenses in connection with this
Agreement, (b) the Obligations, (c) Indebtedness that does not individually
exceed $500,000, (d) as disclosed in the Financial Statements, and (e) as
disclosed on Exhibit J.
4.13. Compliance. Neither of the Borrowers is in material violation of any
statute, ordinance, law, rule, regulation or order of the United States of
America or any federal, state, county, municipal or other governmental agency or
authority applicable to it, its properties, or the conduct of its business.
Neither of the Borrowers has violated or breached in any material respect the
provisions of any indenture, license, agreement, note, lease, or other
instrument or document to which it is a party or by which it is bound, nor does
there exist any material default, or any event or condition that, upon notice or
lapse of time, or both, would become a material default, under any such
indenture, license, agreement, note, lease, or other instrument or document.
4.14. Statements Not Misleading. No statement, representation or warranty
made by either of the Borrowers or any other party on behalf of either of the
Borrowers (other than the Administrative Agent or the Lenders) in or pursuant to
this Agreement or the Exhibits contains or will contain any untrue statement of
a material fact, nor omits or will omit to state a material fact necessary to
make such statement not misleading, except where such untrue statement, omission
or violation relates to a condition, situation, event or thing that could not
reasonably be expected to have a material adverse effect upon the either of the
Borrowers or their ability to perform the Obligations. There is no fact known to
either of the Borrowers (other than matters of a general economic nature) that
has had or could have a material adverse effect upon either such Borrower and
that has not been disclosed in this Agreement or in other documents,
certificates and statements furnished to the Lenders for use in connection with
the transactions contemplated by this Agreement.
4.15. Consents or Approvals. No consent, approval or authorization of, or
filing, registration or qualification with, any governmental authority or any
other Person is required to be obtained by either of the Borrowers in connection
with the execution, delivery or performance of this Agreement, that has not
already been obtained or completed, except for (a) the consents listed on
Exhibit K that have not been obtained, and (b) those consents, approvals, and
authorizations that have been obtained.
4.16. Material Contracts and Commitments. All material contracts and
commitments of the Borrowers, whether oral or written, have been filed by
Trendwest with the Securities and Exchange Commission as exhibits to Trendwest's
Form 10-K or are set forth in Exhibit L, including (a) any security agreement,
pledge agreement, mortgage or guaranty, (b) management, construction
36
supervision, service or employment agreements, conditional sale contract or
lease of real or personal property, that involve expenditures in excess of
$1,000,000 in any single case, (c) collective bargaining agreements, (d)
contracts or commitments for the future purchase or sale of goods or services by
the Borrowers, other than those that involve the payment or receipt of less than
$1,000,000 in any single case, (e) contracts or commitments that involve a
Capital Expenditure in excess of $1,000,000 in any single case, (f) all material
licenses, permits and authorizations, and (g) all other material agreements. To
the best of the Borrowers' knowledge, except as disclosed on Exhibit L, all of
the items listed on Exhibit L are in full force and effect without material
default. Trendwest has made available to the Administrative Agent true and
complete copies of each of the foregoing contracts and commitments.
4.17. Employee Benefit Plans. Except as otherwise provided in this Section
4.17, neither Borrower nor any member of the Controlled Group has or will have
any liability, or reasonably anticipates any liability of any kind in excess, in
the aggregate, of $100,000, with respect to any Benefit Arrangement other than
(a) a Plan that is intended to be qualified under Code Section 401(a), (b) a
fully insured employee welfare benefit plan (as defined under ERISA Section
3(1)), or (c) any self-insured medical plan covering active employees. Neither
of the Borrowers nor any member of the Controlled Group has, will have, or
reasonably anticipates (i) any liability of any kind in excess, in the
aggregate, of $100,000 for any post-retirement welfare benefits, or (ii) any
liability of any kind in excess, in the aggregate, of $250,000 under any
nonqualified deferred compensation plan or arrangement. With respect to the
Plans currently maintained by the Borrowers or any member of the Controlled
Group: (A) each Plan that is intended to be qualified under Code Section 401(a)
is so qualified and has been so qualified during the period from its adoption to
date and each trust forming a part of each such Plan is exempt from tax under
Code Section 501(a), (B) each Plan complies in all material respects with all
applicable requirements of law, has been administered in accordance with its
terms, and all required contributions have been made, and (C) neither of the
Borrowers nor any member of the Controlled Group knows or has reason to know
that such Borrower or any member of the Controlled Group has engaged in a
transaction that would subject it to any material tax, penalty or liability
under ERISA or the Code for any prohibited transaction. Neither of the Borrowers
nor any member of the Controlled Group maintains, contributes to or has any
liability with respect to any Pension Plan, including any Multiemployer Plan.
4.18. Licenses and Agreements. The material agreements shown on Exhibit L
or filed with the SEC as exhibits to Trendwest's Form 10-K constitute all of the
material licenses and agreements that, as of the Closing Date, are necessary for
the lawful operation of the businesses of Trendwest and its Subsidiaries in the
manner and to the full extent that it is currently operated. There is no
authorization, permit, consent, franchise, registration, certificate, license,
agreement or other right filed with, issued or granted by, or entered into by a
federal, state or local governmental authority that permits or authorizes or
relates to the operation of such businesses that Trendwest or its Subsidiaries,
as applicable, have not obtained, the failure of which to obtain would have a
material adverse effect on Trendwest or its Subsidiaries or the ability of the
Borrowers to perform the Obligations.
4.19. Material Restrictions. Except as disclosed in this Agreement or the
Exhibits, neither Trendwest nor any of its Subsidiaries is a party to any
agreement or other instrument, or subject to any other restriction, that
materially and adversely affects or could materially and adversely affect the
business, property, assets, operations or condition, financial or otherwise, of
Trendwest or such Subsidiaries.
4.20. Subsidiaries. Exhibit M lists each of the Subsidiaries of Trendwest
and, in the case of Subsidiaries that are not wholly owned by Trendwest,
specifies the other holders of equity interests and the percentage owned by such
holders.
37
4.21. Investment Company Act. Neither Trendwest nor any of its Subsidiaries
(a) is an investment company as that term is defined in the Investment Company
Act of 1940, as amended, (b) directly or indirectly controls, or is directly or
indirectly controlled by, a company that is an investment company as that term
is defined in such statute, and (c) is otherwise subject to regulation under
such act.
4.22. Absence of Material Adverse Changes. There have been no materially
adverse changes in the business, properties, operations or condition, financial
or otherwise, of Trendwest and its Subsidiaries since December 31, 1999.
4.23. Defaults. No Possible Default or Event of Default now exists or will
exist upon the making of any Revolving Loan or issuance of any Letter of Credit.
4.24. Securities Laws. No proceeds of any Loan will be used by either
Borrower to acquire any security in any transaction that is subject to Section
13 or 14 of the Securities Exchange Act of 1934, as amended. Neither the
registration of any security under the Securities Act of 1933, as amended, or
the securities laws of any state, nor the qualification of an indenture with
respect to such security under the Trust Indenture Act of 1939, as amended, is
required in connection with the consummation of this Agreement, the execution
and delivery of the Revolving Notes, or the issuance of Letters of Credit.
4.25. Insurance. All policies of insurance of any kind or nature owned by
or issued to Trendwest or any of its Subsidiaries, including policies of fire,
theft, public liability, property damage, other casualty, employee fidelity,
worker's compensation, employee health and welfare, title, property and
liability insurance, are in full force and effect and are of a nature and
provide such coverage as is sufficient and as is customarily carried by
companies of the size and character of Trendwest and its Subsidiaries and
engaged in similar businesses. To the best of the Borrowers' knowledge, in the
past three years, neither of the Borrowers has been refused insurance for which
it or any of its Subsidiaries applied or had any policy of insurance terminated
(except at its own request).
4.26. Labor Matters. There are no strikes or other material labor disputes
or grievances pending or, to the best of the Borrowers' knowledge, threatened
against Trendwest or any of its Subsidiaries. There are no material unfair labor
practice charges or grievances pending or in process or, to the best of the
Borrowers' knowledge, threatened by or on behalf of any employee or group of
employees of Trendwest or any of its Subsidiaries. Neither Trendwest nor any of
its Subsidiaries has received any written complaints or knowledge of any
threatened complaints, nor to the best of the Borrowers' knowledge are any such
complaints on file with any federal, state or local governmental agency,
alleging employment discrimination by Trendwest or any of its Subsidiaries. All
payments due under any collective bargaining agreement to which Trendwest or any
of its Subsidiaries is a party have (to the best of the Borrowers' knowledge
with respect to payments due prior to the date of this Agreement) been paid or
accrued as a liability on the consolidated books of Trendwest.
4.27. Notes Receivable. Each Note Receivable represented by the Borrowers
to be an Eligible Receivable for purposes of this Agreement conforms to the
requirements of the definition of an Eligible Receivable. All of the information
delivered to the Lenders by the Borrowers with respect to the Notes Receivable
is and will be true and correct, subject to immaterial variance. The Lenders and
their assigns and agents shall have the right, at any time and at the Borrowers'
expense, to inspect, examine, and audit the Borrowers' records and to confirm
with Note Makers the accuracy of such Notes Receivable.
4.28. Inventory. All Inventory represented by the Borrowers to be Eligible
Inventory for purposes of this Agreement conforms to the requirements of the
definition of Eligible Inventory. All of the information delivered to the
Lenders by Trendwest with respect to Inventory is and will be true and correct,
38
subject to immaterial variance, and the value of such Inventory has been and
will be determined on a consistent accounting basis. Except as otherwise agreed
by the Administrative Agent in writing, no party other than Trendwest shall have
any right, title or interest in or to Eligible Inventory. Except as otherwise
disclosed to the Lenders in writing, all Eligible Inventory is now and at all
times hereafter will be free and clear of all claims, offsets, security
interests and other encumbrances of any kind.
4.29. Environmental Compliance. Except as set forth in Exhibit N:
(a) Neither of the Borrowers has any knowledge of or reason to believe
that there has been any actual or threatened litigation or claims against it
(including Environmental Claims) of any kind by any Person relating to
Environmental Laws or other environmental matters.
(b) Each of Trendwest and its Subsidiaries has obtained all material
permits, licenses and other authorizations that are required under all
Environmental Laws. Each of Trendwest and its Subsidiaries is in material
compliance with all terms and conditions of all such permits, licenses and
authorizations, and is also in material compliance with all Environmental Laws
in all jurisdictions in which Trendwest or any of its Subsidiaries owns or
operates a facility or site, arranges or has arranged for disposal or treatment
of Hazardous Materials, solid waste or other wastes, accepts or has accepted for
transport any Hazardous Materials, solid waste or other wastes or holds or has
held any interest in real property or otherwise.
(c) There are no Environmental Claims pending or, to the best of the
Borrowers' knowledge, threatened by any Person with respect to any alleged
failure by Trendwest or any of its Subsidiaries to comply with any Environmental
Law or to have any permit, license or authorization required in connection with
the conduct of the business of Trendwest or any of its Subsidiaries or with
respect to any generation, treatment, storage, recycling, transportation, use,
disposal or Release of any Hazardous Materials generated by Trendwest or any of
its Subsidiaries or with respect to any real property in which Trendwest any of
its Subsidiaries holds or has held an interest or any past or present operation
of Trendwest or any of its Subsidiaries.
(d) No material work, repairs, construction, Capital Expenditures or
other remedial work of any nature with respect to any real property in which
Trendwest or any of its Subsidiaries holds or has held an interest or any past
or present operation of Trendwest or any of its Subsidiaries is required under
any Environmental Law.
(e) No property now, or to the best of the Borrowers' knowledge,
previously, owned or premises leased by Trendwest or any of its Subsidiaries is
listed or proposed for listing on the National Priorities list promulgated
pursuant to CERCLA, CERCLIS or on any similar state or provincial list of sites
requiring investigation or clean-up.
(f) There are no Liens arising under or pursuant to any Environmental
Laws on any of the property owned or premises leased by Trendwest or any of its
Subsidiaries, and no government actions have been taken or are in process that
could subject any of such property to such Liens.
(g) Neither Trendwest nor any of its Subsidiaries has retained or
assumed any liabilities (contingent or otherwise) with respect to any
Environmental Claims (i) under the terms of any contract or agreement, or (ii)
by operation of law as a result of the sale of assets or stock.
39
(h) There have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by, or that are in the possession of,
Trendwest or any of its Subsidiaries in relation to any property or facility now
or previously owned or leased by Trendwest or any of its Subsidiaries that have
not been made available to the Lenders.
SECTION 5. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE LENDERS.
The obligations of the Lenders to make any Revolving Loans, the obligations
of the Issuing Lender to issue any Letters of Credit, and the performance by the
Lenders and the Issuing Lender of the other actions to be taken by them on or
after the Closing Date are subject to the fulfillment or waiver in writing of
each of the following conditions precedent:
5.1. Compliance. All of the representations and warranties of the Borrowers
in Section 4 shall be true in all material respects on and as of the Closing
Date and the date of any subsequent Revolving Loan or Letter of Credit, as if
made on and as of such date and time, except to the extent that such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties shall be true in all material respects
as of such earlier date. The Borrowers shall have performed and be in compliance
in all material respects with all the applicable terms and provisions of this
Agreement, and no Possible Default or Event of Default shall have occurred and
be continuing, on and as of the Closing Date and the date of any subsequent
Revolving Loan or Letter of Credit. Each request by a Borrower for a Revolving
Loan shall, in and of itself, constitute a representation and warranty that each
of the Borrowers, as of the date of such Revolving Loan, is in compliance in all
material respects with such conditions.
5.2. Satisfaction of Other Conditions. All conditions and other
requirements set forth in Section 2 with respect to the obligations of the
Lenders to make Revolving Loans and the obligation of the Issuing Lender to
issue any Letters of Credit (including payment of the Fees) shall have been
satisfied or met.
5.3. The Revolving Notes. Each of the Revolving Notes shall have been duly
executed and delivered by the Borrowers to the Administrative Agent.
5.4. Standstill Agreement. Trendwest shall have entered into and delivered
to the Administrative Agent a standstill agreement in form and substance
reasonably satisfactory to the Administrative Agent pursuant to which
performance by Trendwest and its Subsidiaries of their respective obligations
with respect to the JELD-WEN Debt shall be subject to fulfillment of certain
conditions (the "Standstill Agreement").
5.5. Opinions of Borrowers' Counsel. On the Closing Date, the
Administrative Agent shall have received the favorable written opinions of
counsel to the Borrowers, dated the Closing Date, addressed to the Lenders and
in form and substance satisfactory to the Administrative Agent; provided,
however, that the Administrative Agent's receipt of a favorable legal opinion
from South Pacific's Australian counsel shall only be a condition precedent to
the obligations of the Australian Lender to make any Australian Advances.
5.6. Statement of Application of Proceeds and Borrowing Notice. On the
Closing Date, Trendwest shall have delivered to the Administrative Agent a
certificate, in form and substance satisfactory to the Administrative Agent,
setting forth the application of the proceeds of the initial Revolving Loans.
The applicable Borrower shall also deliver to the Administrative Agent a
Borrowing Notice for each such Revolving Loan.
40
5.7. Insurance Certificates. On the Closing Date, Trendwest shall have
furnished to the Administrative Agent certificates of insurance, together with
copies, if available on the Closing Date, of all policies or other satisfactory
evidence that the insurance required by Section 6.3 is in full force and effect.
5.8. Corporate Documents. On the Closing Date, Trendwest shall deliver to
the Administrative Agent the following:
(a) Certificates of good standing for Trendwest from the secretary of
state or other appropriate governmental authority of Oregon, Washington,
California, Nevada, Utah and Arizona, in each case dated as of a date as near to
the Closing Date as practicable.
(b) Certified copies of the articles of incorporation or other charter
documents for the Borrowers from the appropriate governmental agency within the
relevant jurisdiction of incorporation, in each case dated as of a date as near
to the Closing Date as practicable.
(c) A certificate signed by the Secretary or Assistant Secretary of
each of the Borrowers, dated as of the Closing Date, certifying that attached to
the certificate are true and complete copies of (i) the bylaws of such Borrower,
and (ii) resolutions adopted by the board of directors of such Borrower,
authorizing the execution, delivery and performance by such Borrower of this
Agreement and the Revolving Notes.
(d) Incumbency certificates for the Borrowers.
(e) Such other documents as any Lender may reasonably request in
connection with the proceedings taken by the Borrowers authorizing this
Agreement.
5.9. Fees and Expenses. The Borrowers shall have paid all fees, expenses
and other amounts due pursuant to this Agreement, including the Fees.
5.10. Legal Approval. All legal matters incident to this Agreement and the
consummation of the transactions contemplated by this Agreement shall be
satisfactory to Xxxxxx & Xxxx, counsel to the Administrative Agent.
5.11. Delivery of Closing Documents. The Borrowers shall have delivered to
the Administrative Agent copies for each Lender of each agreement, instrument,
and other document required to be delivered pursuant to this Section 5.
5.12. Other Documents. The Administrative Agent and each Lender shall have
received such other certificates, opinions, agreements and documents, in form
and substance satisfactory to it, as it may reasonably request.
SECTION 6. AFFIRMATIVE COVENANTS OF THE BORROWERS.
Trendwest agrees with the Lenders that so long as this Agreement shall
remain in effect or any of the Obligations shall remain unpaid or to be
performed, Trendwest shall perform and comply, and cause its Subsidiaries to
perform and comply, with the affirmative covenants contained in this Section.
6.1. Use of Proceeds. The Borrowers shall use the proceeds of the Revolving
Loans and Letters of Credit to refinance existing Indebtedness, finance the
development of MountainStar and for general corporate purposes.
41
6.2. Continued Existence; Maintenance of Rights and Licenses; Compliance
with Law. Each of the Borrowers shall do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its corporate
existence. Without limiting the generality of the foregoing, each of the
Borrowers shall maintain in full force and effect, until termination in
accordance with their respective terms, any and all material contracts, licenses
and other rights necessary to operate the businesses of Trendwest and its
Subsidiaries, not breach or violate such contracts, licenses or rights, and take
all actions that may be required to comply in all material respects with all
applicable laws, statutes, rules, regulations, orders and decrees now in effect
or subsequently promulgated by any governmental authority. Trendwest shall renew
and extend, or obtain replacements for, and cause each of its Subsidiaries to
renew and extend, or obtain replacements for, all of the foregoing contracts,
licenses, and rights that may be necessary for the continuance of the businesses
of Trendwest and its Subsidiaries.
6.3. Insurance. Trendwest shall keep, and cause its Subsidiaries to keep,
its insurable real properties insured at all times by financially sound and
reputable insurers reasonably acceptable to the Administrative Agent, and
maintain such other insurance, to such extent and against such risks, including
fire, lightning, vandalism, malicious mischief, flood (to the extent required by
the Administrative Agent, if the real property is located in an identified flood
hazard area, in which insurance has been made available pursuant to the National
Flood Insurance Act of 1968), and other risks insured against by special form
coverage, as is customary with companies in the businesses in which Trendwest
and its Subsidiaries are engaged. All such insurance shall be in amounts
sufficient to prevent Trendwest or its Subsidiaries from becoming a coinsurer,
shall name the Administrative Agent, for the benefit of the Lenders in
accordance with their respective Ratable Shares, as loss payee, and may contain
loss deductible provisions that shall not exceed $100,000. Trendwest shall
maintain, and cause its Subsidiaries to maintain, in full force and effect
liability insurance, business interruption insurance, errors and omissions
insurance, pollution insurance, general accident and commercial general
liability insurance and all other insurance as is usually carried by companies
engaged in the same or similar business similarly situated against claims for
personal or bodily injury, death or property damage occurring upon, in, about or
in connection with the use or operation of any property, motor vehicles, or
vessels owned, occupied, controlled or used by Trendwest, its Subsidiaries, and
their respective employees or agents, or arising in any other manner out of the
businesses conducted by Trendwest and its Subsidiaries. All of such insurance
shall be in amounts reasonably satisfactory to the Administrative Agent and
shall be obtained and maintained by means of policies with generally recognized,
responsible insurance companies authorized to do business in such states,
provinces, territories, or jurisdictions as may be necessary, depending upon the
locations of the assets of Trendwest and its Subsidiaries and shall name the
Administrative Agent, for the benefit of the Lenders in accordance with their
respective Ratable Shares, as an additional insured or loss payee, as the case
may be. The insurance to be provided may be provided by way of blanket policies.
Each policy of insurance shall be written so as not to be subject to
cancellation or substantial modification without not less than thirty days
advance written notice to the Administrative Agent. Trendwest shall furnish the
Administrative Agent annually with certificates or other evidence satisfactory
to the Administrative Agent that the insurance required by this Agreement has
been obtained and is in full force and effect and, prior to the expiration of
any such insurance, Trendwest shall furnish the Administrative Agent with
evidence satisfactory to the Administrative Agent that such insurance has been
renewed or replaced. Trendwest shall, upon request of the Administrative Agent,
furnish the Administrative Agent such additional information about such
insurance as the Administrative Agent may from time to time reasonably request.
6.4. Obligations and Taxes. Trendwest shall pay or perform, and cause its
Subsidiaries to pay or perform, all material Indebtedness and other material
liabilities and obligations in a timely manner in accordance with normal
business practices and with the terms governing such Indebtedness. Trendwest
shall comply, and cause its Subsidiaries to comply, with the terms and covenants
42
of all material agreements and all material leases of real or personal property
and shall keep them all in full force and effect until termination of such
agreements and leases in accordance with their respective terms. Trendwest shall
promptly pay and discharge, and cause its Subsidiaries to promptly pay and
discharge, all taxes, assessments and governmental charges or levies imposed
upon Trendwest or its Subsidiaries or with respect to its or their property
before the imposition of any penalty, and all lawful claims for labor,
materials, supplies or other matters that, if unpaid, might become a Lien or
charge upon such properties or any part thereof; provided, however, that neither
Trendwest nor any of its Subsidiaries shall be required to pay and discharge any
such tax, assessment, charge, levy or claim so long as (a) the validity of such
tax, assessment, charge, levy, or claim is being contested diligently and in
good faith by appropriate proceedings, and enforcement is stayed pending the
outcome of such proceedings, and (b) Trendwest has set aside on its books
adequate reserves with respect thereto.
6.5. Financial Statements and Reports. Trendwest shall maintain true and
complete books and records of account in accordance with GAAP, and shall furnish
to the Administrative Agent, for delivery to the Lenders, each of the following
financial statements and projections at the following times:
(a) As soon as available, but in no event later than 90 days after the
end of each of its Fiscal Years, beginning with the year ending December 31,
2000, Trendwest shall furnish audited consolidated financial statements,
including an audited balance sheet and income and expense statement, showing the
financial condition of Trendwest and its Subsidiaries as of the close of such
Fiscal Year and the results of operations during such Fiscal Year, and a
consolidated statement of change in financial position of Trendwest and its
Subsidiaries for such Fiscal Year, together with such additional statements,
schedules and footnotes as are customary in a complete accountant's report, and
such financial statements shall be certified by independent certified public
accountants selected by Trendwest and reasonably acceptable to the
Administrative Agent and accompanied by the "no material weakness" letter of
such accountants to Trendwest, and the opinion of such accountants shall be
unqualified.
(b) As soon as available, but in no event later than 45 days after the
end of each of the first three fiscal quarters of each of its Fiscal Years,
beginning with the quarter ending September 30, 2000, Trendwest shall furnish
unaudited consolidated financial statements, including a balance sheet and
income and expense statement, showing the financial condition of Trendwest and
its Subsidiaries as of the end of such period and the results of operations
during such period and for the then-elapsed portion of the Fiscal Year, and a
consolidated statement of change in financial position of Trendwest and its
Subsidiaries for the portion of the Fiscal Year ended with the last day of such
quarter, and all such financial statements (other than financial statements
delivered in the Fiscal Year following the Closing) shall set forth, in
comparative form, corresponding figures for the equivalent period of the prior
year, shall be in form and detail satisfactory to the Administrative Agent, and
shall be certified as to accuracy and completeness by Trendwest's chief
financial officer.
(c) As soon as available, but in no event later than 90 days after the
end of each fiscal quarter of each Fiscal Year, a compliance certificate (the
"Compliance Certificate") in the form of Exhibit O of Trendwest's chief
financial officer, (i) setting forth the computations showing compliance with
the financial covenants set forth in Section 6.11, and (ii) certifying that no
Possible Default or Event of Default has occurred, or if any Event of Default or
Possible Default has occurred, stating the nature of, and the actions that
Trendwest intends to take in connection with, such Event of Default or Possible
Default.
(d) As soon as available, but in no event later than 20 days after the
end of each calendar month, a Borrowing Base Certificate, completed and signed
by the chief financial officer, treasurer or assistant treasurer of Trendwest.
43
(e) Promptly upon their becoming available, the following shall be
furnished by Trendwest: (i) copies of any periodic or special reports filed by
Trendwest or any of its Subsidiaries with any federal, state or local
governmental agency or authority if such reports indicate any material change in
the ownership of Trendwest or any of its Subsidiaries, or any materially adverse
change in the business, operations, affairs or condition of Trendwest or any of
its Subsidiaries, and (ii) copies of any material notices and other material
communications from any federal, state or local governmental agency or authority
that specifically relate to Trendwest or any of its Subsidiaries or the material
licenses, permits or authorizations of Trendwest or any of its Subsidiaries and
the substance of which relates to a matter that could reasonably be expected to
be materially adverse to Trendwest or any of its Subsidiaries.
(f) Trendwest shall furnish prompt written notice in the event that
(i) Trendwest or any member of the Controlled Group fails to make any payments
when due and payable under any Multiemployer Plan, or (ii) Trendwest or any
member of the Controlled Group receives notice from the Internal Revenue
Service, the Department of Labor or the administrator of any Multiemployer Plan
that Trendwest or such Controlled Group member has failed to meet the minimum
funding requirements of any Multiemployer Plan, and shall (at the same time)
provide the Administrative Agent with a copy of such notice, or (iii) Trendwest
or any member of the Controlled Group gives or is required to give notice to the
PBGC or receives notice of any "reportable event" (as defined in Title IV of
ERISA) with respect to any Multiemployer Plan that might constitute grounds for
a termination of such Multiemployer Plan under Title IV of ERISA, or knows that
the plan administrator of any Multiemployer Plan has given or is required to
give notice of any such reportable event, or (iv) Trendwest or any member of the
Controlled Group receives a notice from a Multiemployer Plan that the PBGC has
instituted proceedings to terminate or to appoint a trustee to administer a
Multiemployer Plan, or (v) Trendwest or any member of the Controlled Group
withdraws in a complete or partial withdrawal from any Multiemployer Plan, or
any plan that is a "multiple employer plan" within the meaning of Section 4063
of ERISA, or incurs any withdrawal liability under Section 4204 of ERISA, or
(vi) Trendwest or any member of the Controlled Group receives a notice from a
Multiemployer Plan that such plan is in reorganization or insolvent pursuant to
Section 4241 or 4245 of ERISA or that such plan intends to terminate or has
terminated under Section 4041A of ERISA, or (vii) proceedings are instituted by
a fiduciary of a Multiemployer Plan against Trendwest or any member of the
Controlled Group to enforce Section 515 of ERISA.
(g) Upon the Administrative Agent's written request, such other
information about the financial condition, properties and operations of
Trendwest and its Subsidiaries as any Lender may from time to time reasonably
request.
6.6. Notices. Trendwest shall give the Administrative Agent, for
distribution to the Lenders, (a) within five days after Trendwest's receipt of
notice thereof, notice of any action, suit or proceeding by or against Trendwest
or any of its Subsidiaries, that, if adversely determined, could reasonably be
expected to have a material adverse effect upon Trendwest or any of its
Subsidiaries, including any material admonition, censure or adverse citation or
order by any governmental authority or regulatory agency, (b) within three days
after Trendwest's receipt of notice thereof, notice of any action or event
constituting an event of default or violation of any material contract, license
or permit to which Trendwest or any of its Subsidiaries is a party or by which
Trendwest or any of its Subsidiaries is bound, if such event of default or
violation could reasonably be expected to have a material adverse effect upon
Trendwest or any of its Subsidiaries, (c) within three days after the occurrence
of any Possible Default or Event of Default, notice of the actions Trendwest
intends to take in connection with such Possible Default or Event of Default,
(d) within five days after its receipt of notice thereof, notice of any
cancellation of or any material amendment to any of the insurance policies
maintained in accordance with the requirements of this Agreement, except for
cancellations and amendments that occur in the ordinary course of business, (e)
promptly after the occurrence thereof, notice of any material adverse change in
the business or financial condition of Trendwest or any of its Subsidiaries, (f)
promptly after the occurrence thereof, notice of any strike, labor dispute, slow
44
down or work stoppage due to a labor disagreement (or any material development
regarding any of such matters) affecting Trendwest or any of its Subsidiaries
that could reasonably be expected to have a material adverse effect on Trendwest
or any of its Subsidiaries, and (g) concurrently with the delivery of any such
notice to the Australian Lender, a copy of any notice required to be delivered
by either of the Borrowers to the Australian Lender pursuant to the terms of
this Agreement.
6.7. Maintenance of Property. Trendwest shall at all times maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve, its real
property and related improvements, machinery, equipment, motor vehicles,
vessels, fixtures and other property in good working order, condition and
repair, normal wear and tear excepted, and in compliance with all material
applicable standards, rules or regulations imposed by any governmental authority
or agency or policy of insurance, except for such property that, in the judgment
of Trendwest, is no longer necessary to the business of Trendwest or its
Subsidiaries.
6.8. Information and Inspection. Trendwest shall furnish to the Lenders
from time to time, promptly upon request, information reasonably requested with
respect to any covenant, provision or condition of this Agreement, or to any
matter connected with Trendwest's books, records, operations, financial
condition, properties, activities or business. At all reasonable times,
Trendwest shall permit any authorized representative designated by any Lender to
visit and inspect any of the properties of Trendwest or its Subsidiaries, and
their respective books and records, and to take extracts from and make copies of
such books and records, and to discuss Trendwest's affairs, finances, and
accounts with the management of Trendwest and its independent accountants.
Trendwest agrees to keep and maintain such records as the Lenders may require,
including information with respect to (a) Eligible Receivables and Note
Receivable balances and agings, and (b) Eligible Inventory and records itemizing
and describing the Inventory, Borrower's Inventory costs and selling prices, and
the daily withdrawals and additions to Inventory. In addition, within 30 days
following Closing, Trendwest shall deliver to the Administrative Agent a
certificate of good standing for South Pacific from the appropriate Australian
governmental authority, dated as of a date after the Closing Date.
6.9. Title To Property. Trendwest shall own and hold, and cause each of its
Subsidiaries to own and hold, title to all of its assets in its own name and not
in the name of any nominee.
6.10. Environmental Compliance and Indemnity. Trendwest shall comply, and
cause each of its Subsidiaries to comply, in all material respects with all
Environmental Laws, including all Environmental Laws in jurisdictions in which
Trendwest or any of its Subsidiaries owns or operates a facility or site,
arranges for disposal or treatment of Hazardous Materials, solid waste or other
wastes, accepts for transport any Hazardous Materials, solid wastes or other
wastes or holds any interest in real property or otherwise. Trendwest shall not,
and shall not permit any of its Subsidiaries to, cause or allow the Release of
Hazardous Materials, solid waste or other wastes on, under or to any real
property in which Trendwest or any of its Subsidiaries holds any interest or
performs any of its operations, in material violation of any Environmental Law.
Trendwest shall notify the Lenders promptly after its receipt of notice thereof,
of any Environmental Claim that involves any potential or actual material
liability of Trendwest or any of its Subsidiaries arising in connection with any
noncompliance with or violation of the requirements of any Environmental Law or
a material Release or threatened Release of any Hazardous Materials, solid waste
or other waste into the environment. Trendwest shall promptly notify the Lenders
(i) upon Trendwest's receipt of notice that Trendwest or any of its Subsidiaries
is or may be liable to any Person as a result of any material Release of a
Hazardous Material on, under or from the real property in which Trendwest or any
of its Subsidiaries holds or has held an interest, or that Trendwest or any of
46
its Subsidiaries has been identified as potentially responsible for, or is
subject to investigation by any governmental authority relating to, such
Release, and (ii) of the commencement or threat of any judicial or
administrative proceeding alleging a violation of any Environmental Laws.
6.11. Financial Covenants.
(a) Leverage Ratio. Trendwest shall maintain at all times a Leverage
Ratio of less than or equal to 0.35:1.
(b) Fixed Charge Coverage Ratio. Trendwest shall maintain a Fixed
Charge Coverage Ratio of at least 1.75:1 as of the last day of each fiscal
quarter of each Fiscal Year.
(c) Consolidated Net Worth. At September 30, 2000, Trendwest shall
maintain a Consolidated Net Worth of at least $144,774,400 ("Closing
Threshold"). As of the end of each fiscal quarter thereafter, Trendwest shall
maintain a minimum Consolidated Net Worth equal to the Closing Threshold plus
the sum of (i) 75% of Trendwest's positive net income for the period commencing
on April 1, 2000 and ending on the day preceding such fiscal quarter plus (ii)
the Dollar amount of net proceeds received by Trendwest from the sale of new
common or preferred equity during such period.
SECTION 7. NEGATIVE COVENANTS OF THE BORROWERS.
Trendwest agrees with the Lenders that so long as this Agreement shall
remain in effect or any of the Obligations shall remain unpaid or to be
performed, Trendwest shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, take any of the actions, nor permit to occur any of the
conditions, set forth in this Section 7.
7.1. Indebtedness. Trendwest shall not, and shall not permit any of its
Subsidiaries to, incur, create, assume or permit to exist any Indebtedness,
except:
(a) The Obligations;
(b) Indebtedness reflected in the Financial Statements;
(c) Indebtedness permitted under Sections 7.3, 7.4 or 7.5;
(d) Unsecured trade accounts payable, and other unsecured current
Indebtedness, incurred in the ordinary course of business (but excluding any
Indebtedness for borrowed money);
(e) Indebtedness for taxes, assessments, governmental charges, liens
or similar claims to the extent that payment of such Indebtedness shall not be
required to be made by the provisions of Section 6.4;
(f) Indebtedness securing Permitted Liens; and
(g) Other unsecured Indebtedness in an aggregate principal amount not
to exceed $1,000,000 at any time outstanding and incurred in the ordinary course
of business.
7.2. Liens. Trendwest shall not, and shall not permit any of its
Subsidiaries to, incur, create, assume or permit to exist any Lien of any nature
on any property or assets now owned or subsequently acquired by Trendwest or any
Subsidiary, other than Permitted Liens. Trendwest shall not, and shall not
46
permit any of its Subsidiaries to, enter into or permit to exist any arrangement
or agreement, other than pursuant to this Agreement, that directly or indirectly
prohibits Trendwest or any Subsidiary from creating or incurring any Lien on any
assets of Trendwest or any of its Subsidiaries.
7.3. Guaranties. Trendwest shall not, and shall not permit any of its
Subsidiaries to, incur Guaranty Obligations, except with respect to endorsements
of negotiable instruments for collection in the ordinary course of business.
7.4. Conditional Sale Obligations. Trendwest shall not, and shall not
permit any of its Subsidiaries to, incur, create, assume or permit to exist,
with respect to any personal property, any conditional sale obligation, any
purchase money obligation, any purchase money security interest or any other
arrangement for the use of personal property of any other Person, other than an
arrangement classifiable as a capital lease that is permitted in Section 7.5
below, if the aggregate amount payable by Trendwest or any such Subsidiary
pursuant to such arrangements would exceed the sum of $1,000,000 in any Fiscal
Year.
7.5. Capital Leases. Trendwest shall not, and shall not permit any of its
Subsidiaries to, incur, create, assume or permit to exist any lease of personal
or real property that is classified for accounting purposes as a capital lease
in accordance with GAAP if the aggregate amount payable by Trendwest and its
Subsidiaries with respect to such lease would exceed the sum of $2,000,000 in
any Fiscal Year.
7.6. Claims. Trendwest shall not, and shall not permit any of its
Subsidiaries to, fail to timely assert any material claim, cause of action or
contract right that it possesses against any third party or agree to settle or
compromise any such claim, cause of action or contract right except in any case
in the exercise of good business judgment and except for settlements or
compromises made in the reasonable exercise of business judgment in the ordinary
course of business.
7.7. Notes Receivable. Trendwest shall not suffer or permit either the
number or amount of Past-Due Notes to exceed 7.5% of the total number or amount
of Notes Receivable at the close of any calendar month, and shall not suffer or
permit either the number or amount of Delinquent Notes to exceed 12% of the
total number or amount of Notes Receivable at the close of any period of two
consecutive calendar months. For purposes of this Section 7.7, the aggregate
principal balance of Past-Due Notes and Delinquent Notes shall be computed net
of allowance for doubtful accounts and sales returns.
7.8. Capital Distributions. Trendwest shall not make, or declare or incur
any liability to make, any Capital Distribution except (a) common stock
dividends, and (b) Trendwest may repurchase up to 364,928 shares of Trendwest's
common stock on such terms and conditions as Trendwest's Board of Directors has
approved prior to the date of this Agreement.
7.9. Disposal of Property; Mergers; Acquisitions; Reorganizations.
(a) Except as provided in Sections 7.9(b), 7.9(c) and 7.9(d),
Trendwest shall not, and shall not permit any of its Subsidiaries to, (i)
dissolve or liquidate, (ii) sell, lease, transfer or otherwise dispose of any
material portion of its properties and assets to any Person, except for (A) the
contribution or cash sale of Notes Receivable, on arms-length terms, to any
Special Purpose Funding Corporation pursuant to Note Purchase Facilities, (B)
the sale of all or any portion of MountainStar, (C) dispositions the aggregate
Dollar value of which does not exceed 5% of Consolidated Net Worth, and (D) the
sale of any asset that Trendwest, in the good faith exercise of its business
judgment, determines is no longer useful in its operations if such asset is
replaced with a comparable asset of equal or greater value or if the value of
such disposed asset, together with the value of all other assets disposed of by
Trendwest and its Subsidiaries in the prior twelve-month period and not
replaced, is not material in amount, (iii) be a party to any consolidation,
merger, recapitalization or other form of reorganization, (iv) make any
48
acquisition of all or substantially all the assets of any Person, or of a
business division or line of business of any Person, or of any other assets
constituting a going business, (v) create or acquire any Subsidiary, or (vi) be
or become a party to any joint venture or partnership.
(b) Trendwest may conduct Asset Sales not otherwise permitted pursuant
to Section 7.9(a) with the consent of the Majority Lenders. The proceeds of any
such Asset Sale shall be paid to the Administrative Agent as a mandatory
prepayment of the Revolving Loans pursuant to Section 3.4.
(c) Notwithstanding clause (v) of Section 7.9(a), Trendwest may create
a wholly owned corporate Subsidiary subject to satisfaction of each of the
following conditions:
(i) No Event of Default or Possible Default then exists or would
exist after giving effect to such creation.
(ii) Trendwest shall have given the Administrative Agent thirty
days prior written notice of the creation of such wholly owned Subsidiary
and shall have provided information to the Administrative Agent as to the
business purpose for creating such Subsidiary.
(iii) Such wholly owned Subsidiary shall execute and deliver to
the Administrative Agent a joinder agreement, in form and substance
satisfactory to the Administrative Agent, pursuant to which it shall become
a party to this Agreement and agree to be a borrower for all purposes of
this Agreement.
(iv) Trendwest shall have delivered to the Administrative Agent
evidence reasonably satisfactory to the Administrative Agent to the effect
that all approvals, consents or authorizations required in connection with
the creation of such wholly owned Subsidiary and the transfer to it of any
assets shall have been obtained, and such opinions as the Administrative
Agent may reasonably request as to the corporate or other organization of
such Subsidiary, and such other matters as the Administrative Agent may
deem appropriate.
(d) Trendwest may consummate Permitted Acquisitions.
7.10. Investments. Trendwest shall not, and shall not permit any of its
Subsidiaries to, purchase or otherwise acquire, hold or invest in any stock or
other securities or evidences of indebtedness of, or any interest or investment
in, or make or permit to exist any loans or advances to, any other Person
("Investments"), except any of the following:
(a) Direct obligations of the United States Government maturing within
one year.
(b) Certificates of deposit of a commercial bank chartered under the
laws of the United States or any state of the United States, and having capital,
surplus and undivided profits in excess of $200,000,000;
(c) Any investment in commercial paper that at the time of such
investment is assigned the highest quality rating in accordance with the rating
systems employed by either Xxxxx'x Investors Service, Inc. or Standard & Poor's
Ratings Group;
(d) Securities received pursuant to a plan of reorganization adopted
in an insolvency proceeding or otherwise in immaterial amounts in exchange for
accounts receivable of the entity that is the subject of such insolvency
proceeding generated in the ordinary course of Trendwest's business; and
48
(e) Short-term loans to employees not to exceed $300,000 and advances
of expenses to employees.
7.11. Amendment of Governing Documents. Trendwest shall not, and shall not
permit any of its Subsidiaries to, permit the amendment or modification of, or
any supplement to, its articles of incorporation or bylaws, unless required by
law, in any manner that is adverse to the interests of the Lenders (as may be
reasonably determined by the Lenders).
7.12. Other Amendments or Waivers. Trendwest shall not, and shall not
permit any of its Subsidiaries or Special Purpose Funding Corporations to,
amend, alter or modify, or consent to or suffer any amendment, alteration or
modification of, any material contract, license, permit or authorization to
which Trendwest or such Subsidiary or Special Funding Corporation is a party
(including any agreement with WorldMark, The Club), except for any amendments,
alterations or modifications that would not have the effect of (a) materially
and adversely affecting Trendwest's financial condition or the ability of
Trendwest or any of its Subsidiaries to operate its business or to perform the
Obligations, or (b) materially and adversely affecting the rights of the
Administrative Agent or the Lenders.
7.13. Management Agreements and Fees. Trendwest shall not, and shall not
permit any of its Subsidiaries to, make or enter into, or pay any management
fees pursuant to, any so-called management or service agreement or joint
operating agreement pursuant to which management, supervision or control of its
business, or any significant aspect of such business, shall be delegated to or
placed in any Person other than an employee of Trendwest or such Subsidiary.
7.14. ERISA. Neither Trendwest nor any member of the Controlled Group shall
maintain, contribute to or have any liability with respect to any Pension Plan,
including any Multiemployer Plan.
7.15. Affiliates. Trendwest shall not, and shall not permit any of its
Subsidiaries to, enter into any transaction or agreement with any Affiliate of
Trendwest or such Subsidiary or any shareholder or beneficiary of Trendwest or
such Subsidiary or pay any compensation or salary to any such Person unless the
terms of such transaction or agreement are not substantially less favorable to
Trendwest or such Subsidiary than could be obtained in an arms-length
transaction with an unaffiliated third party or unless the amount paid to such
person is not substantially in excess of the fair value of the services rendered
by such person.
7.16. Change of Name or Office. Trendwest shall not change its name or the
location of its chief executive office without thirty days' prior written notice
to the Administrative Agent.
7.17. Change in Business. Trendwest shall not change the nature of its
business in any material respect.
7.18. Regulation U. Trendwest shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, (a) apply any part of the proceeds of
the Revolving Loans or Letters of Credit to the purchasing or carrying of any
"margin stock" within the meaning of Regulations T, U or X of the Board of
Governors of the Federal Reserve System, or any interpretations or rulings under
such regulations, (b) extend credit to others for the purpose of purchasing or
carrying any such margin stock, or (c) retire Indebtedness that was incurred to
purchase or carry any such margin stock.
49
SECTION 8. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events, whether
voluntarily or involuntarily or by operation of law, shall constitute an event
of default by the Borrowers under this Agreement (an "Event of Default"):
8.1. Non-Payment. Either of the Borrowers fails to pay (a) when due,
whether by acceleration of maturity or otherwise, any installment of principal
under any Revolving Note or any amount payable with respect to any Letter of
Credit, or (b) within five Banking Days of the date when due, whether by
acceleration of maturity or otherwise, any installment of interest or any fee or
other payment obligation with respect to the Obligations.
8.2. Failure of Performance with Respect to Other Obligations. Either of
the Borrowers fails to observe, perform or be in compliance with any of the
Non-Monetary Provisions required to be observed, performed or complied with by
such Borrower and, provided that such failure is of a type that can be cured,
such failure shall continue and not be cured for thirty days after (i) such
Borrower receives written notice of such failure from the Administrative Agent
or a Lender, or (ii) the Lenders are notified of such failure or should have
been notified pursuant to the provisions of Section 6.6, whichever is earlier;
provided, however, such failure shall not constitute an Event of Default if all
of the following conditions are satisfied:
(a) Such failure does not relate to any of the financial covenants in
Section 6.11;
(b) Such failure is not, in the Lenders' sole and absolute discretion,
likely to have a material and adverse effect on the ability of the Borrowers to
repay all of the Obligations in accordance with the terms and conditions of this
Agreement; and
(c) Such failure cannot be cured within such 30-day period, and the
Borrowers commence to cure such failure within such 30-day period and thereafter
promptly and diligently proceed to cure, and ultimately cure, such failure
within 60 days following the expiration of such 30-day period.
8.3. Breach of Warranty. Any financial statement, representation, warranty,
statement or certificate made or furnished by the Borrowers to the
Administrative Agent or the Lenders in or in connection with this Agreement, or
as an inducement to the Administrative Agent or the Lenders to enter into this
Agreement, including those in Section 4, shall have been false, incorrect or
incomplete when made or deemed made in any material respect.
8.4. Cross-Defaults. Trendwest or any Subsidiary defaults in any payment
due on any Indebtedness (other than the Obligations) and such default continues
for more than the period of grace, if any, applicable to such default, or
Trendwest or any Subsidiary defaults in the performance of or compliance with
any term of any evidence of such Indebtedness or of any mortgage, indenture or
other agreement relating to such Indebtedness, and any such default continues
for more than the period of grace, if any, specified therein; provided, however,
that any such default shall not be deemed to constitute an Event of Default if
the aggregate amount of all such Indebtedness does not exceed $1,000,000.
8.5. Assignment for Benefit of Creditors. Trendwest or any Subsidiary makes
an assignment for the benefit of its creditors, or admits its insolvency or
fails to pay its debts generally as such debts become due.
50
8.6. Bankruptcy. Any petition seeking relief under Debtor Relief Laws shall
be filed by or against Trendwest or any Subsidiary or any proceeding shall be
commenced by or against Trendwest or any Subsidiary with respect to relief under
the Debtor Relief Laws for the reorganization, winding-up or liquidation of
Persons or an arrangement, composition, extension or adjustment with creditors,
and such involuntary petition or proceeding is not discharged within sixty days
of its filing or commencement.
8.7. Appointment of Receiver; Liquidation. A receiver or trustee is
appointed for Trendwest or any Subsidiary or for any substantial part of
Trendwest's or any Subsidiary's assets, and such receiver or trustee is not
discharged within sixty days of appointment; any proceedings are instituted for
the dissolution or the full or partial liquidation of Trendwest or any
Subsidiary and such proceedings are not dismissed or discharged within sixty
days of their commencement; or Trendwest or any Subsidiary discontinues its
business.
8.8. Judgments. Trendwest or any Subsidiary incurs nonappealable final
judgments for the payment of money aggregating at any one time in excess of
$1,000,000 (to the extent not covered by insurance) and fails to discharge (or
make adequate provision for the discharge of) the same within a period of thirty
days unless, pending further proceedings, execution on such judgments has been
effectively stayed.
8.9. Impairment of Obligations. Any provision of this Agreement or any
Revolving Note ceases to be a legal, valid and binding agreement or obligation
enforceable against any Lender or the Administrative Agent in accordance with
its terms, or is terminated, invalidated, set aside or declared ineffective or
inoperative.
8.10. Termination of Material Agreement. Any agreement, license, permit or
authorization that is necessary to the consolidated operations of Trendwest's
business, including any agreement with WorldMark, The Club, is revoked or
terminated or materially, adversely modified and not replaced by a substitute
acceptable to the Majority Lenders within thirty days of such revocation,
termination or modification.
8.11. Change of Control. There occurs any Change of Control with respect to
Trendwest.
8.12. Condemnation. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of any
substantial portion of the assets of Trendwest (on a consolidated basis)
pursuant to a final, non-appealable order, unless such taking could not
reasonably be expected to have a material adverse effect upon Trendwest (on a
consolidated basis) or the ability of the Borrowers to perform the Obligations.
8.13. Cessation of Operations. The operations of the Borrowers are
interrupted at any time for more than 30 days, whether or not consecutive,
during any period of 60 consecutive days, unless the Borrowers are receiving
during such period of interruption insurance sufficient to assure that its per
diem Adjusted Cash Flow during such period is a least equal to that which could
reasonably have been expected during such period but for the interruption.
51
SECTION 9. REMEDIES.
Notwithstanding any contrary provision or implication in this Agreement or
elsewhere,
9.1. Optional Defaults.
If any Event of Default referred to in Sections 8.1 through 8.4 or Sections
8.8 through 8.14 occurs, the Administrative Agent, with the consent of the
Majority Lenders, upon written notice to the Borrowers, may
(a) terminate the Aggregate Commitment and the credit established by
this Agreement, at which time the obligations of the Lenders to make any
additional Revolving Loans, and the obligation of the Issuing Lender to issue
any Letters of Credit, immediately shall be terminated,
(b) accelerate the maturity of the Revolving Loans and all other
Obligations, at which time all Obligations shall become and thereafter be
immediately due and payable in full without any presentment or demand and
without any further or other notice of any kind, all of which are hereby waived
by the Borrowers, and/or
(c) demand immediate payment by the Borrowers of an amount equal to
the aggregate amount of all outstanding Letter of Credit Usage, to be held in
the Letter of Credit Cash Collateral Account.
9.2. Automatic Defaults. If any Event of Default referred to in Sections
8.5 through 8.7 occurs,
(a) the Aggregate Commitment and the credit established by this
Agreement shall automatically and immediately terminate, and the Lenders
thereafter shall be under no obligation to grant any additional Revolving Loans
and the Issuing Lender shall be under no obligation to issue any Letters of
Credit,
(b) the principal of and interest on the Revolving Notes, then
outstanding, and all of the other Obligations shall immediately become due and
payable in full, all without any presentment, demand or notice of any kind, all
of which are hereby waived by the Borrowers, and
(c) an amount equal to the aggregate amount of all outstanding Letter
of Credit Usage shall be immediately due and payable to the Issuing Lender
without notice to or demand upon the Borrowers, which are expressly waived by
the Borrowers, to be held in the Letter of Credit Cash Collateral Account.
9.3. Performance by the Lenders. If at any time either of the Borrowers
fails or refuses to pay or perform any material obligation or duty to any third
Person, except for payments that are the subject of bona fide disputes in the
ordinary course of business, the Lenders may, in their sole and absolute
discretion, but shall not be obligated to, pay or perform the same on behalf of
such Borrower, and such Borrower shall promptly repay all amounts so paid, and
all costs and expenses so incurred. This repayment obligation shall become one
of the Obligations and shall bear interest at the Default Interest Rate as if
such obligation were a Base Rate Loan.
9.4. Other Remedies. Upon the occurrence of an Event of Default, the
Administrative Agent and the Lenders may exercise any other right, power or
remedy as may be provided in this Agreement, in the Revolving Notes, or as may
52
be provided at law or in equity, including the right to recover judgment against
the Borrowers for any amount due either before, during or after any proceedings
for the enforcement of any security or any realization upon any security.
9.5. Enforcement and Waiver by the Lenders. The Lenders shall have the
right at all times to enforce the provisions of this Agreement in strict
accordance with the terms of this Agreement, notwithstanding any conduct or
custom on the part of the Lenders in refraining from so doing at any time,
unless the Lenders shall have waived such enforcement in writing with respect to
a particular instance. The failure of the Lenders at any time to enforce their
rights under such provisions shall not be construed as having created a custom
or course of dealing in any way contrary to the specific provisions of this
Agreement, or as having in any way modified or waived such rights. All rights,
powers and remedies of the Lenders are cumulative and concurrent and the
exercise of one right, power or remedy shall not be deemed a waiver or release
of any other right, power or remedy.
SECTION 10. THE ADMINISTRATIVE AGENT.
10.1. Appointment and Authorization.
(a) KeyBank National Association is hereby appointed Administrative
Agent under this Agreement, and each of the Lenders irrevocably authorizes the
Administrative Agent to act as the Administrative Agent of such Lender. The
Administrative Agent agrees to act as such upon the express conditions contained
in this Section 10. The Administrative Agent shall not have a fiduciary
relationship with respect to any Lender by reason of this Agreement.
(b) The Issuing Lender shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith
until such time and except for so long as the Administrative Agent may agree at
the request of the Majority Lenders to act for such Issuing Lender with respect
thereto; provided, however, that the Issuing Lender shall have all of the
benefits and immunities (i) provided to the Administrative Agent in this Section
10 with respect to any acts taken or omissions suffered by the Issuing Lender in
connection with Letters of Credit issued by it or proposed to be issued by it
and the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Administrative Agent" as used in this
Section 10 included the Issuing Lender with respect to such acts or omissions,
and (ii) as additionally provided in this Agreement with respect to the Issuing
Lender.
10.2. Powers. The Administrative Agent shall have and may exercise such
powers under this Agreement as are specifically delegated to it by the terms of
this Agreement, together with such additional powers as are reasonably
incidental thereto. The Administrative Agent shall not have any implied duties
or any obligation to the Lenders to take any action under this Agreement except
any action specifically provided by this Agreement to be taken by the
Administrative Agent.
10.3. General Immunity. Neither the Administrative Agent nor any of its
directors, officers, affiliates, agents or employees shall be liable to the
Lenders or any Lender for any action taken or omitted to be taken by it or them
under or in connection with this Agreement except for its or their own gross
negligence or willful misconduct. Without limiting the foregoing, neither the
Administrative Agent nor any of its directors, officers, affiliates, agents or
employees shall be responsible for, or have any duty to examine (a) the
genuineness, execution, validity, effectiveness, enforceability, value or
sufficiency of this Agreement or any other document or instrument furnished
pursuant to or in connection with this Agreement, (b) the collectibility of any
amounts owed by the Borrowers, (c) any recitals, statements, reports,
representations or warranties made in connection with this Agreement, (d) the
performance or satisfaction by the Borrowers or other party of any covenant or
agreement contained in this Agreement, (e) any failure of any party to this
Agreement to receive any communication sent, including any facsimile, telegram,
teletype, bank wire, cable, radiogram or telephone message sent or any writing,
54
application, notice, report, statement, certificate, resolution, request, order,
consent letter or other instrument or paper or communication entrusted to the
mails or to a delivery service, or (f) the assets or liabilities or financial
condition or results of operations or business or creditworthiness of the
Borrowers. The Administrative Agent shall not be bound to ascertain or inquire
as to the performance or observance of any of the terms of this Agreement.
10.4. Action on Instructions of the Lenders. The Administrative Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Lenders
(subject to Section 10.12 and Section 11.13), and such instructions shall be
binding upon all the Lenders and all holders of the Revolving Notes; provided,
however, that the Administrative Agent shall not be required to take any action
that exposes it to personal liability or that is contrary to this Agreement or
applicable law. The foregoing provisions of this Section 10.4 shall not limit in
any way the exercise by any Lender of any right or remedy granted to such Lender
pursuant to the terms of this Agreement. Except as otherwise expressly provided
in this Agreement, any reference in this Agreement to action by the Lenders
shall be deemed to be a reference to the Majority Lenders.
10.5. Employment of Agents and Counsel. The Administrative Agent may
execute any of its duties as Administrative Agent under this Agreement by or
through employees, agents and attorneys-in-fact and shall not be answerable to
the Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
10.6. Reliance on Documents; Counsel. The Administrative Agent shall be
entitled to rely upon any Revolving Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed by it to be
genuine and correct and to have been signed or sent by the proper Person or
Persons, and, with respect to legal matters, upon the opinion of counsel
selected by the Administrative Agent, which counsel may be employees of the
Administrative Agent, concerning all matters pertaining to the agency created by
and the duties under this Agreement.
10.7. Administrative Agent's Reimbursement and Indemnification. Each of the
Lenders agrees to reimburse and indemnify the Administrative Agent, which
indemnification shall be shared by the Lenders ratably in proportion to their
respective Ratable Shares of the Aggregate Commitment, (a) for any amounts not
reimbursed by the Borrowers for which the Administrative Agent is entitled to
reimbursement by the Borrowers under this Agreement, (b) for any other expenses
reasonably incurred by the Administrative Agent on behalf of the Lenders in
connection with the preparation, execution, delivery, administration, amendment
or enforcement of this Agreement, and (c) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature that may be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of this Agreement or any other document or transaction related to this Agreement
or the enforcement of any of the terms of this Agreement or of any such other
document; provided, however, that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Administrative Agent.
10.8. Rights as a Lender. With respect to its Ratable Share of the
Revolving Loans, the Revolving Loans made by it and the Revolving Notes and
Letters of Credit issued to it or by it, KeyBank shall have the same rights and
powers under this Agreement as any Lender and may exercise such rights and
powers as though it were not the Administrative Agent or the Issuing Lender, and
the term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include KeyBank National Association in its individual capacity. KeyBank
55
National Association may accept deposits from, lend money to, and generally
engage in any kind of banking or trust business with Trendwest and/or any of its
Subsidiaries as if it were not the Administrative Agent or the Issuing Lender
under this Agreement.
10.9. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by Trendwest 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 Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. The
Administrative Agent shall not be required to keep the Lenders informed as to
the performance or observance by the Borrowers of this Agreement or any other
document referred to or provided for in this Agreement or to inspect the
properties or books of Trendwest or any of its Subsidiaries. Except for such
notice and other notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Administrative Agent under this
Agreement, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of Trendwest and its Subsidiaries that may come
into its possession.
10.10. Successor Administrative Agent. The Administrative Agent may resign
at any time by giving written notice of such resignation to the Lenders. Upon
any such resignation, the Majority Lenders (with the consent of the Borrowers,
if at the time of such resignation no Event of Default exists, which consent
shall not be unreasonably withheld) shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Majority Lenders (with the consent of the Borrowers to the
extent required) and shall have accepted such appointment within thirty days
after the notice of resignation, then the retiring Administrative Agent may
appoint a successor Administrative Agent. Such successor Administrative Agent
shall be a commercial bank chartered under the laws of the United States or any
state of the United States and having capital, surplus and retained earnings of
at least $200,000,000. Upon the acceptance of any appointment as the
Administrative Agent under this Agreement by a successor Administrative Agent,
such successor Administrative Agent shall immediately succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation as the Administrative Agent under this
Agreement, the provisions of this Section 10 shall continue in effect for its
benefit with respect to any actions taken or omitted to be taken by it while it
was acting as the Administrative Agent under this Agreement.
10.11. Ratable Sharing. All principal and interest payments received by the
Administrative Agent with respect to Domestic Advances and Defaulted Amounts and
all Fees other than the Administrative Agent Fees shall be remitted to the
Lenders in accordance with their respective Ratable Shares of the Revolving
Loans. All principal and interest payments received by the Australian Lender
with respect to Australian Advances shall be retained by the Australian Lender
for its own account (and not for the benefit of the other Lenders) to the extent
that such payments do not represent repayment of Defaulted Amounts. All amounts
received by the Issuing Lender with respect to Letters of Credit shall be
retained by the Issuing Lender for its own account (and not for the benefit of
the other Lenders) to the extent that such payments do not represent payment of
Unreimbursed Amounts. Any amounts received by the Administrative Agent or any
other Lender upon the sale of any collateral for the Obligations or upon the
exercise of any remedies under this Agreement or upon the exercise of any right
of setoff shall be remitted to the Lenders in accordance with their respective
Ratable Shares of the Revolving Loans. If any Lender shall obtain any payment
under this Agreement in connection with a Domestic Advance, Defaulted Amount, or
Unreimbursed Amount (whether voluntary, involuntary, through exercise of any
right of set-off or otherwise) in excess of its Ratable Share, then such Lender
shall immediately remit such excess to the other Lenders to the extent necessary
56
to ensure that each Lender has received no more than and no less than its
Ratable Share of such payment. Notwithstanding anything in this Agreement to the
contrary, all Liens at any time granted to the Administrative Agent are for the
benefit of the Lenders in accordance with their respective Ratable Shares.
10.12. Actions by the Administrative Agent and the Lenders. The
Administrative Agent shall take formal action only upon the agreement of the
Majority Lenders; provided, however, that if the Administrative Agent gives
notice to the Lenders of a Possible Default or an Event of Default, and the
Majority Lenders cannot agree (which agreement shall not be unreasonably
withheld) on a mutual course of action within thirty days following such notice,
the Administrative Agent may (but shall not be required to) pursue such legal
rights and remedies against the Borrowers as it deems necessary and appropriate
to protect the Lenders and any collateral under the circumstances.
10.13. Other Agents. None of Lenders identified on the facing page or
signature pages of this Agreement as a "Syndication Agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of Lenders so identified as a "Syndication Agent" shall have or be deemed
to have any fiduciary relationship with any Lender. Each Lender acknowledges
that it has not relied, and will not rely, on any of Lenders so identified in
deciding to enter into this Agreement or in taking or not taking action under
this Agreement.
SECTION 11. MISCELLANEOUS.
11.1. Construction. The provisions of this Agreement shall be in addition
to those of any other guaranty, security agreement, note or other evidence of
the Obligations, all of which shall be construed as complementary to each other.
Nothing contained in this Agreement shall prevent the Lenders from enforcing any
or all of such instruments in accordance with their respective terms. Each
right, power or privilege specified or referred to in this Agreement is in
addition to any other rights, powers or privileges that the Lenders may
otherwise have or acquire by operation of law, by other contract or otherwise.
No course of dealing with respect to, nor any omission or delay in the exercise
of, any right, power or privilege by the Lenders shall operate as a waiver of
such right, power or privilege, nor shall any single or partial exercise thereof
preclude any further or other exercise thereof or of any other, as each right,
power or privilege may be exercised independently or concurrently with others
and as often and in such order as the Lenders may deem expedient.
Notwithstanding any other provision of this Agreement, the Borrowers shall not
be required to pay any amount pursuant to this Agreement that is in excess of
the maximum amount permitted by law.
11.2. Further Assurance. From time to time, the Borrowers shall execute and
deliver to the Lenders such additional documents and take such actions as the
Administrative Agent may reasonably require to carry out the purposes of this
Agreement, or to preserve and protect the rights of the Lenders under this
Agreement.
11.3. Expenses of the Administrative Agent and the Lenders;
Indemnification.
(a) Whether or not the transactions contemplated by this Agreement are
consummated, the Borrowers shall pay the reasonable costs and expenses,
including the reasonable fees and disbursements of the Administrative Agent's
counsel, incurred by the Lenders in connection with (i) the negotiation,
preparation, amendment, or modification of, and the transactions contemplated
by, this Agreement, (ii) the making of the Revolving Loans and issuance of
56
Letters of Credit, (iii) the negotiation, preparation or enforcement of any
other document in connection with this Agreement or the Revolving Loans or
Letters of Credit, (iv) any proceeding brought or other action taken by the
Lenders to enforce any provision of this Agreement, or to enforce or exercise
any right, power or remedy under this Agreement, or (v) any action that may be
taken or instituted by any Person against any Lender as a result of any of the
foregoing. The estimated fees and expenses of the Administrative Agent's counsel
through the Closing shall be paid to the Administrative Agent (for its own
account and not for the benefit of the Lenders) on the Closing Date. If any
taxes, charges or fees shall be payable, or ruled to be payable, to any state or
federal authority with respect to the execution, delivery or performance of this
Agreement or the Revolving Notes or Letters of Credit by reason of any existing
or subsequently enacted federal or state statute, the Borrowers will pay all
such taxes, charges or fees, including related interest and penalties, if any,
and will indemnify and hold harmless the Lenders against any liability in
connection with such taxes, charges or fees (other than any tax imposed upon the
net income of the Lenders).
(b) The Borrowers hereby indemnify and hold harmless the
Administrative Agent and each Lender and their respective directors, officers,
employees, agents, counsel, subsidiaries and affiliates (the "Indemnified
Persons") from and against any and all losses, liabilities, obligations,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature (including reasonable attorneys fees) that may be imposed
on, incurred by, or asserted against any Indemnified Person in any way relating
to or arising out of this Agreement or any of the transactions contemplated by
this Agreement; provided, however, that the Borrowers shall not be liable to any
Indemnified Person if there is a judicial determination that such losses,
liabilities, obligations, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulted from the gross negligence or willful
misconduct of such Indemnified Person.
11.4. Notices. Except as otherwise expressly provided in this Agreement,
all notices, demands and requests required or permitted to be given under the
provisions of this Agreement shall be in writing and shall be deemed to have
been duly delivered and received (a) on the date of personal delivery, (b) on
the date of receipt (as shown on the return receipt) if mailed by registered or
certified mail, postage prepaid and return receipt requested, (c) on the next
business day after delivery to a courier service that guarantees delivery on the
next business day if the conditions to the courier's guarantee are complied
with, or (d) on the date of receipt by telecopy, in each case addressed as
follows:
TO THE ADMINISTRATIVE AGENT AND ISSUING LENDER:
KeyBank National Association
Large Corporate Group
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx
Facsimile: 000-000-0000
Copy to:
Xxxx X. Xxxxxxxxxxx
Xxxxxx & Xxxx P.C.
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
TO THE LENDERS, AT THE ADDRESSES LISTED ON THE SIGNATURE PAGES OF THIS
AGREEMENT OR IN THE ASSIGNMENT INSTRUMENT DELIVERED PURSUANT TO
SECTION 11.7(b)
57
TO THE BORROWERS:
Trendwest Resorts, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx X'Xxxx, CFO
Facsimile: 000-000-0000
and
Trendwest South Pacific Pty. Ltd.
The Trendwest Building
Level 2, 000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 0000
Xxxxxxxxx
Attn: Xxxxxx Xxxxxx
Phone: 000 00 0 0000-0000
Facsimile: 011 61 7 5574-0100
with a copy to:
Xxxx X. Xxxx, Xx.
Xxxxxxx and Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
or to such other address or addresses as the party to which such notice is
directed may have designated in writing to the other parties to this Agreement.
11.5. Waiver and Release by the Borrowers. Each of the Borrowers releases
the Administrative Agent and each Lender from, and hereby waives, all claims for
loss or damage caused by any act or omission on the part of the Administrative
Agent or any Lender or their respective officers, attorneys, agents and
employees, except gross negligence and willful misconduct.
11.6. Right of Set-Off. Upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set-off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrowers against any and all of the Obligations,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such Obligations may be unmatured. Such Lender agrees
promptly to notify the Borrowers after any such set-off and application made by
such Lender; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Lenders
under this Section are in addition to other rights and remedies (including other
rights of set-off) that the Lenders may have under law, at equity, by contract
or otherwise. The Borrowers and the Australian Lender acknowledge and agree that
the Obligations are mutual debts within the meaning of Section 86(1) of the
Bankruptcy Xxx 0000 of the Commonwealth of Australia (as incorporated in the
Corporations Law), and that upon the liquidation or bankruptcy of the Borrowers,
the provisions of Section 86 of such Bankruptcy Act shall apply so that any
Obligations due from the Borrowers to the Australian Lender under this Agreement
shall be set off against any sum due from the Australian Lender to the Borrowers
under this Agreement.
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11.7. Successors and Assigns; Assignments and Participations.
(a) Whenever any of the parties to this Agreement is referred to in
this Agreement, such reference shall be deemed to include the successors and
assigns of such party; provided, however, that neither of the Borrowers may
assign or transfer any of its rights or obligations under this Agreement or
under the Revolving Notes without the prior written consent of all of the
Lenders and the Administrative Agent.
(b) From time to time following the Closing Date, each Lender may
assign to one or more Eligible Assignees all or any portion of its Commitment
and/or Revolving Loans; provided, however, that (i) such assignment, if not to a
Lender or an Affiliate of the assigning Lender, shall be consented to by
Trendwest at all times other than during the existence of a Default or Event of
Default and by the Administrative Agent, Issuing Lender, and the Australian
Lender (which approval of Trendwest shall not be unreasonably withheld or
delayed), (ii) a copy of a duly signed and completed Assignment and Acceptance
shall be delivered to the Administrative Agent, (iii) except in the case of an
assignment (A) to an Affiliate of the assigning Lender or to another Lender or
(B) of the entire remaining Commitment of the assigning Lender, the portion of
the Commitment assigned shall not be less than $5,000,000, and (iv) the
effective date of any such assignment shall be as specified in the Assignment
and Acceptance, but not earlier than the date that is five Banking Days after
the date on which the Administrative Agent has received the Assignment and
Acceptance. Upon obtaining any consent required as set forth in the prior
sentence, any forms required by Section 11.8 and payment of the requisite fee
described below, the assignee named in the Assignment and Acceptance shall be a
Lender for all purposes of this Agreement to the extent of the Assigned Interest
(as defined in such Assignment and Acceptance), and the assigning Lender shall
be released from any further obligations under this Agreement to the extent of
such Assigned Interest. Upon request, the Borrowers shall execute and deliver
new or replacement Revolving Notes to the assigning Lender and the assignee
Lender to evidence Revolving Loans made by them. The Administrative Agent's
consent to any assignment shall not be deemed to constitute any representation
or warranty by any Indemnified Person as to any matter. For purposes of this
Agreement, each mutual fund that is an Affiliate of a Lender shall be deemed to
be a single Eligible Assignee, whether or not such fund is managed by the same
fund manager as other mutual funds that are Affiliates of the same Lender.
(c) After receipt of a completed Assignment and Acceptance, and
receipt of an assignment fee of $3,500 from such Eligible Assignee and/or such
assigning Lender (including in the case of assignments to Affiliates of
assigning Lenders), the Administrative Agent shall, promptly following the
effective date thereof, provide to the Borrowers and Lenders a revised Schedule
I giving effect thereto.
(d) Each Lender may from time to time, without the consent of any
other Person, grant participations to one or more other Person (including
another Lender) in all or any portion of its Ratable Share of the Revolving
Loans and/or Aggregate Commitment; provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties to this Agreement for the
performance of such obligations, (iii) the participating banks or other
financial institutions shall not be a Lender under this Agreement for any
purpose except, if the participation agreement so provides, for the purposes of
Sections 2.3 through 2.10 (but only to the extent that the cost of such benefits
to the Borrowers does not exceed the cost that the Borrowers would have incurred
in respect of such Lender absent the participation) and subject to Sections
10.11 and 11.6, (iv) the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, (v)
the participation agreement shall not restrict an increase in the Aggregate
Commitment or in the granting Lender's Commitment or Ratable Share, so long as
the amount of the participation interest is not increased, and (vi) the consent
of the holder of such participation interest shall not be required for
amendments or waivers of provisions of this Agreement; provided, however, that
the assigning Lender may, in any agreement with a participant, give such
participant the right to consent to any matter that (A) extends the Revolving
Credit Termination Date as to such participant or any other date upon which any
payment of money is due to such participant, (B) reduces the rate of interest
60
owing to such participant, any fee or any other monetary amount owing to such
participant, or (C) reduces the amount of any installment of principal owing to
such participant. Any Lender that sells a participation to any Person that is a
"foreign corporation, partnership or trust" within the meaning of the Code shall
include in its participation agreement with such Person a covenant by such
Person that such Person will comply with the provisions of Section 11.8 as if
such Person were a Lender and provide that the Administrative Agent and the
Borrowers shall be third party beneficiaries of such covenant.
(e) KeyBank National Association shall not enter into any agreement
with any other Lender pursuant to which the former agrees not to consent to any
amendment, modification or waiver of any provision of this Agreement without the
consent of such other Lender.
(f) (i) Notwithstanding anything to the contrary contained in this
Agreement, any Lender (a "Designating Lender") may grant to one or more special
purpose funding vehicles (each, an "SPV"), identified as such in writing from
time to time by the Designating Lender to the Administrative Agent and
Trendwest, the option to provide to the Borrowers all or any part of any
Revolving Loan that such Designating Lender would otherwise be obligated to make
to the Borrowers pursuant to this Agreement; provided, however, that (A) nothing
in this Agreement shall constitute a commitment by any SPV to make any Revolving
Loan, (B) if an SPV elects not to exercise such option or otherwise fails to
provide all or any part of such Revolving Loan, the Designating Lender shall be
obligated to make such Revolving Loan pursuant to the terms of this Agreement,
and (C) the Designating Lender shall remain liable for any indemnity or other
payment obligation with respect to its Commitment. The making of a Revolving
Loan by an SPV shall utilize the Commitment of the Designating Lender to the
same extent, and as if, such Revolving Loan were made by such Designating
Lender.
(ii) As to any Revolving Loans or portion thereof made by it,
each SPV shall have all the rights that a Lender making such Revolving Loans or
portion thereof would have had under this Agreement; provided, however, that
each SPV shall have granted to its Designating Lender an irrevocable power of
attorney, to deliver and receive all communications and notices under this
Agreement (and any related documents) and to exercise on such SPV's behalf, all
of such SPV's voting rights under this Agreement. No additional Revolving Note
shall be required to evidence the Revolving Loans or portion thereof made by an
SPV; and the related Designating Lender shall be deemed to hold its Revolving
Note as agent for such SPV to the extent of the Revolving Loans or portion
thereof funded by such SPV. In addition, any payments for the account of any SPV
shall be paid to its Designating Lender as agent for such SPV.
(iii) Each party to this Agreement hereby agrees that no SPV
shall be liable for any indemnity or payment under this Agreement for which a
Lender would otherwise be liable. In furtherance of the foregoing, each such
party hereby agrees (which agreements shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPV, it will not institute against, or join any other person in
instituting against, such SPV any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof.
60
(iv) In addition, notwithstanding anything to the contrary
contained in this Section 11.7(f) or otherwise in this Agreement, any SPV may
(A) at any time and without paying any processing fee therefor, assign or
participate all or a portion of its interest in any Revolving Loans to the
Designating Lender or to any financial institutions providing liquidity and/or
credit support to or for the account of such SPV to support the funding or
maintenance of Revolving Loans and (B) disclose on a confidential basis any
non-public information relating to its Revolving Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancements to such SPV. This Section 11.7(f) may not be amended
without the written consent of any Designating Lender affected thereby.
11.8. Foreign Lenders. Each Lender that is a "foreign corporation,
partnership or trust" within the meaning of the Code shall deliver to the
Administrative Agent, prior to receipt of any payment subject to withholding
under the Code (or after accepting an assignment of an interest herein), two
duly signed completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Person and entitling it to an exemption from, or reduction of,
withholding tax on all payments to be made to such Person by the Borrowers
pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto
(relating to all payments to be made to such Person by Borrower pursuant to this
Agreement) or such other evidence satisfactory to the Borrowers and the
Administrative Agent that such Person is entitled to an exemption from, or
reduction of, U.S. withholding tax. Thereafter and from time to time, each such
Person shall (a) promptly submit to the Administrative Agent such additional
duly completed and signed copies of one of such forms (or such successor forms
as shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to the Borrowers and
the Administrative Agent of any available exemption from or reduction of, United
States withholding taxes in respect of all payments to be made to such Person by
the Borrowers pursuant to this Agreement, (b) promptly notify the Administrative
Agent of any change in circumstances that would modify or render invalid any
claimed exemption or reduction, and (c) take such steps as shall not be
materially disadvantageous to it, in the reasonable judgment of such Lender, and
as may be reasonably necessary to avoid any requirement of applicable law that
the Borrowers make any deduction or withholding for taxes from amounts payable
to such Person. If such Person fails to deliver the above forms or other
documentation, then the Administrative Agent may withhold from any interest
payment to such Person an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction. If any
governmental authority asserts that the Administrative Agent did not properly
withhold any tax or other amount from payments made in respect of such Person,
such Person shall indemnify the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, and costs and expenses
(including attorney fees and expenses) of the Administrative Agent. The
obligation of Lenders under this Section shall survive the payment of all
Obligations and the resignation or replacement of the Administrative Agent.
11.9. Applicable Law. This Agreement, and the duties, rights, powers and
remedies of the parties to this Agreement, shall be construed in accordance
with, and governed by, the laws of the State of Washington, without regard to
the conflicts of laws provisions of Washington.
11.10. Binding Effect and Entire Agreement. This Agreement shall inure to
the benefit of, and shall be binding upon, the respective successors and
permitted assigns of the parties to this Agreement. This Agreement and the
Exhibits (which are hereby incorporated in this Agreement) constitute the entire
agreement among the parties on the subject matter of this Agreement and the
Exhibits. BORROWER ACKNOWLEDGES THAT ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
61
11.11. Counterparts. This Agreement may be executed and delivered in any
number of counterparts or duplicate originals, each of which shall be deemed to
be an original, but all of which together shall constitute one and the same
instrument.
11.12. Survival of Agreements. All covenants, agreements, representations
and warranties made in this Agreement shall survive any investigation and the
Closing and shall continue in full force and effect so long as any of the
Obligations remain to be performed or paid or the Lenders have any obligation to
advance sums under this Agreement.
11.13. Modification. Any term of this Agreement or of the Revolving Notes
may be amended and the observance of any term of this Agreement or of the
Revolving Notes may be waived (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of the
Borrowers and the Majority Lenders; provided, however, that no such amendment or
waiver or other action shall, without the prior written consent of all of the
Lenders or the holders of all of the Revolving Notes at the time outstanding,
(a) extend the maturity or reduce the principal amount of, or reduce the rate or
extend the time of payment of interest on, or reduce the amount or extend the
time of payment of any principal of, any Revolving Note, (b) reduce the amount
or extend the time of payment of the Fees, (c) change the Aggregate Commitment
or the Ratable Share of any Lender (other than any change in the Aggregate
Commitment or Ratable Share resulting from the sale of a participation in or
assignment of any Lender's interest in the Aggregate Commitment and Revolving
Loans in accordance with Section 11.7), (d) change the percentage referred to in
the definition of "Majority Lenders" contained in Section 1.1, or (e) amend this
Section 11.13; and provided further, that (a) no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Lender in addition to the
Majority Lenders or all Lenders, as the case may be, affect the rights or duties
of the Issuing Lender, (b) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Majority
Lenders or all Lenders, as the case may be, affect the rights or duties of the
Administrative Agent, and (c) no amendment, waiver or consent shall, unless in
writing and signed by Australian Lender in addition to the Majority Lenders or
all Lenders, as the case may be, affect the rights or duties of Australian
Lender. Notwithstanding the foregoing provisions of this Section 11.13, this
Agreement and the Revolving Notes may be amended or modified in the manner
contemplated by Section 11.7 for the purpose of permitting any Lender to assign
its interest, rights and obligations under this Agreement to another bank or
financial institution. Any amendment or waiver effected in accordance with this
Section 11.13 shall be binding upon each holder of any Revolving Note at the
time outstanding, each future holder of any Revolving Note and the Borrowers.
11.14. Separability. If any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of all remaining provisions shall not in
any way be affected or impaired. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
11.15. Section Headings. The section headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
11.16. Enforcement. Each of the Borrowers (a) hereby irrevocably submits to
the jurisdiction of the state courts of the State of Washington and to the
jurisdiction of the United States District Court for the Western District of
Washington, for the purpose of any suit, action or other proceeding arising out
of or based upon this Agreement (or the subject matter of this Agreement)
brought by the Lenders or their successors or assigns, and (b) hereby waives,
62
and agrees not to assert, by way of motion, as a defense, or otherwise, in any
such suit, action or proceeding, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Agreement (or the subject matter of this
Agreement) may not be enforced in or by such court, and (c) hereby waives and
agrees not to seek any review by any court of any other jurisdiction that may be
called upon to grant an enforcement of the judgment of any such Washington state
or federal court. Each of the Borrowers hereby consents to service of process by
registered mail at the address to which notices are to be given pursuant to
Section 11.4. Each of the Borrowers agrees that its submission to jurisdiction
and its consent to service of process by mail is made for the express benefit of
the Lenders. Final judgment against either of the Borrowers in any such action,
suit or proceeding may be enforced in other jurisdictions by suit, action or
proceeding on the judgment, or in any other manner provided by or pursuant to
the laws of such other jurisdiction; provided, however, that the Lenders may at
their option bring suit, or institute other judicial proceedings, against either
of the Borrowers or any of their assets in any state or federal court of the
United States or of any country or place where such Borrower, or such assets,
may be found.
11.17. Termination. Except as otherwise expressly provided in this
Agreement, the provisions of Agreement shall terminate when all amounts due
under this Agreement and the Revolving Notes shall have been indefeasibly paid
in full in cash and all other Obligations shall have been fully performed so
long as the Lenders have no further obligation to make Revolving Loans or
otherwise advance sums under this Agreement and the Issuing Lender has no
further obligation to issue Letters of Credit.
11.18. Jury Trial Waiver. EACH OF THE BORROWERS AND THE LENDERS WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, BETWEEN THE LENDERS AND THE BORROWERS ARISING OUT
OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE REVOLVING
NOTES, LETTERS OF CREDIT, OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS RELATED TO THIS
AGREEMENT.
11.19. Confidentiality. Each Lender agrees to hold any confidential
information that it may receive from the Borrowers pursuant to this Agreement in
confidence, except for disclosure (a) to legal counsel, accountants and other
professional and business advisors and Affiliates to such Lender (provided such
Persons also agree to hold such information confidential), (b) to regulatory
officials, (c) as required by law, regulation or legal process, (d) in
connection with any legal proceeding to which such Lender is a party, and (e) as
permitted by Section 11.7; provided, however, that, to the extent practicable,
prior to making any disclosure pursuant to clause (c) or (d) above, the
disclosing Lender shall notify Trendwest of its intent to make such disclosure.
11.20. Joint and Several Liability. Notwithstanding any provision of this
Agreement, all obligations of the Borrowers under this Agreement and the
Revolving Notes shall be joint and several.
11.21. Equal Opportunity to Draft. The Lenders and the Borrowers have
participated in and had an equal opportunity to participate in the drafting of
this Agreement. No ambiguity with respect to any provision of this Agreement
shall be construed against any Lender or Borrower on the basis of a claim that
such Lender or Borrower drafted the ambiguous provision.
63
IN WITNESS OF THE FOREGOING, the Borrowers, the Lenders and the
Administrative Agent have caused this Agreement to be executed by their
respective duly authorized representatives as of the date first above written.
BORROWERS: LENDERS:
TRENDWEST RESORTS, INC. KEYBANK NATIONAL ASSOCIATION,
In its individual capacity as a Lender
and Issuing Lender
By_____________________________ By __________________________________
President Its__________________________________
TRENDWEST
SOUTH PACIFIC PTY. LTD. Address:
KeyBank National Association
Large Corporate Group
000 Xxxxx Xxxxxx, 00xx Xxxxx
By_______________________________ Xxxxxxx, Xxxxxxxxxx 00000
President Attn: Xxxx X. Xxxxx
Facsimile: 000-000-0000
64
BANK ONE NA,
In its individual capacity as a Lender and
Australian Lender
By_______________________________________
Its______________________________________
Addresses:
Bank One NA
(Chicago Office - Operational Matters)
1 Bank Xxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Facsimile: 000-000-0000
Bank One NA
(LA Office - Matters Re Credit Agreement)
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Bank One NA
(Australia Office - Australian Advances)
Xxxxx 0
00 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxxx 0000
AUSTRALIA
Attn: Xxxx Xxxxxxx or Xxxxxx Xxxx
Facsimile: 61 8 8223 2948
ADMINISTRATIVE AGENT:
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent
By_____________________________________
Its____________________________________
65
SYNDICATION AGENT:
BANK ONE NA,
as Syndication Agent
By______________________________________
Its_____________________________________
Address:
Bank One NA (Chicago Office)
1 Bank Xxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Facsimile: 000-000-0000
66
SCHEDULE 1
----------
LENDER COMMITMENT (Dollars)
------ ----------
KeyBank National Association $30,000,000
Bank One NA $30,000,000
S-1
EXHIBIT A
---------
REQUEST FOR DOMESTIC ADVANCE
[Date]
To each Lender party to
the referenced Credit Agreement
c/o KeyBank National Association,
as Administrative Agent for the Lenders
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Re: Credit Agreement dated as of August 14, 2000, between Trendwest
Resorts, Inc. (the "Borrower"), Trendwest South Pacific Pty.
Ltd., the lenders from time to time party thereto (the
"Lenders"), and KeyBank National Association, as Administrative
Agent for itself and the other such lenders (the "Credit
Agreement")
Ladies and Gentlemen:
The Borrower hereby requests that a [(Base Rate Loan)(LIBOR Loan)] be made
to it in the amount of ________________ [specify amount of Dollars], on
_______________, ____, for the account of the Borrower and evidenced by the
Borrower's Revolving Notes [if such requested Domestic Advance is a LIBOR Loan,
insert "and the initial Interest Period shall be (insert permitted Interest
Period)"]. Please [deposit the proceeds of the (Base Rate Loan)(LIBOR Loan) into
KeyBank Account No. __________] [wire the proceeds of the (Base Rate Loan)(LIBOR
Loan) as follows:____________________________].
In support of this request, the Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that:
1. The representations and warranties contained in Section 4 of the Credit
Agreement are true and correct in all material respects on and as of the date of
this letter, and will be true and correct in all material respects on the date
on which the above-referenced Domestic Advance is made (both before and after
such Domestic Advance is made), as if such representations and warranties were
made on and as of such date (except for representations and warranties that
specifically relate to an earlier date, which shall be true and correct as of
such earlier date).
2. No Event of Default or Possible Default has occurred and is continuing
or will exist on the date on which such Domestic Advance is made, and such
Domestic Advance shall not cause an Event of Default or Possible Default.
Acceptance of the proceeds of such Domestic Advance by the Borrower shall
be deemed to be a further representation and warranty that the representations
and warranties made in this letter are true and correct in all material respects
at the time such proceeds are disbursed.
A-1
Capitalized terms used but not defined in this letter have the respective
meanings assigned to them in the Credit Agreement.
TRENDWEST RESORTS, INC.
By:___________________________________
Its:__________________________________
A-2
EXHIBIT B
---------
REQUEST FOR AUSTRALIAN ADVANCE
[Date]
Bank One NA
as Australian Lender under the
referenced Credit Agreement
Money Market Desk
Bank One NA (A.R.B.N. 065 752 918)
Xxxxx 0
00 Xxxxxxxxx Xxxxxx
XXXXXXXX XX 0000
Re: Credit Agreement dated as of August 14, 2000, between Trendwest
Resorts, Inc. (the "Borrower"), Trendwest South Pacific Pty.
Ltd. ("South Pacific"), the lenders from time to time party
thereto (the "Lenders"), and KeyBank National Association, as
Administrative Agent for itself and the other such lenders (the
"Credit Agreement")
Ladies and Gentlemen:
The Borrower hereby requests that an Australian Advance be made to South
Pacific in the amount of ________________ [specify amount of Australian
Currency], on _______________, ____, for the account of South Pacific and
evidenced by the Revolving Notes, and the initial Interest Period shall be
[insert permitted Interest Period]. Please [deposit the proceeds of the
Australian Advance into Account No. _____________ at ____________________] [wire
the proceeds of the Australian Advance as follows:
______________________________________].
In support of this request, the Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that:
1. The representations and warranties contained in Section 4 of the Credit
Agreement are true and correct in all material respects on and as of the date of
this letter, and will be true and correct in all material respects on the date
on which the above-referenced Australian Advance is made (both before and after
such Australian Advance is made), as if such representations and warranties were
made on and as of such date (except for representations and warranties that
specifically relate to an earlier date, which shall be true and correct as of
such earlier date).
2. No Event of Default or Possible Default has occurred and is continuing
or will exist on the date on which such Australian Advance is made, and such
Australian Advance shall not cause an Event of Default or Possible Default.
Acceptance of the proceeds of such Australian Advance by the Borrower shall
be deemed to be a further representation and warranty that the representations
and warranties made in this letter are true and correct in all material respects
at the time such proceeds are disbursed.
B-1
Capitalized terms used but not defined in this letter have the respective
meanings assigned to them in the Credit Agreement.
TRENDWEST RESORTS, INC.
By:___________________________________
Its:__________________________________
B-2
EXHIBIT C
---------
BORROWING BASE CERTIFICATE
The undersigned warrants and certifies to the Lenders that: (i) all
information contained in this Certificate is true and accurate to the best of
Trendwest's knowledge; (ii) the information provided in this Certificate
complies with the Agreement; (iii) Trendwest has exercised its best efforts to
ascertain the truthfulness and accuracy of the information contained in this
Certificate; (iv) no Possible Default or Event of Default has occurred, and (v)
Trendwest is aware that the Lenders are relying on the information contained in
this Certificate as the basis for determining the eligibility of the Borrowers
for additional Revolving Loans and/or Letters of Credit. Unless otherwise
defined, all capitalized terms used in this Certificate have the meanings
assigned to such terms in the Credit Agreement dated as of August 14, 2000,
between Trendwest Resorts, Inc., Trendwest South Pacific Pty. Ltd., the lenders
from time to time party thereto, and KeyBank National Association, as
Administrative Agent for itself and the other such lenders.
Month Ended: _______________________
I. CALCULATION OF REVOLVING COMMITMENT Balances
Outstanding
-----------
A. Aggregate commitment
B. Outstanding domestic principal balance
Outstanding Australian principal balance (AUD$) $ ---
C. Conversion Rate
-------------------------- -------------------------
$ ---
D. Total outstanding principal balance $ ---
E. Letter of Credit Usage
-------------------------
F. Remaining Commitment Available (A-D-E) $ ---
=========================
II. CALCULATION OF ELIGIBLE INVENTORY AMOUNT
A. Total Inventory (lower of cost or net realizable value) $ ---
B. Less: MountainStar Construction In Progress
-------------------------- -------------------------
C. Eligible Inventory (A -B) $ ---
D. 50% of Eligible Inventory $ ---
-------------------------
E. Eligible Inventory Amount (lesser of D or $30 million) $ ---
=========================
III. CALCULATION OF ELIGIBLE RECEIVABLES
A. Total Notes Receivable $ ---
B. Less: Allowance for doubtful accounts $ ---
Less: Recourse liability $ ---
Less: Notes Receivable in default $ ---
Less: Other excluded Notes Receivable $ ---
-------------------------- -------------------------
Total excluded Notes Receivable $ ---
C. Eligible Notes Receivable (A-B) $ ---
-------------------------
D. 75% of Eligible Notes Receivable $ ---
=========================
C-1
IV. CALCULATION OF REVOLVING LOAN LIMIT
Borrowing Base:
A. Eligible Inventory Amount (Line IIE) $ ---
B. 75% of Eligible Receivables (Line IIID) $ ---
-------------------------
C. Total Borrowing Base (A+B) $ ---
D. Less: JELD-WEN Note $ ---
E. Borrowing Base (C-D)
F. Revolving Loan Limit (Lesser or IF or IVE) $ ---
=========================
Dated as of this _____ day of ______________, _______.
TRENDWEST RESORTS, INC.
By:_______________________________
Its:______________________________
C-2
EXHIBIT D
---------
DOMESTIC CONVERSION/CONTINUATION NOTICE
[Date]
To each Lender party to
the referenced Credit Agreement
c/o KeyBank National Association,
as Administrative Agent for the Lenders
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Re: Credit Agreement dated as of August 14, 2000, between Trendwest
Resorts, Inc. (the "Borrower"), Trendwest South Pacific Pty.
Ltd., the lenders from time to time party thereto (the
"Lenders"), and KeyBank National Association, as Administrative
Agent for itself and the other such lenders (the "Credit
Agreement")
Ladies and Gentlemen:
The Borrower hereby requests that _______ (specify amount of Dollars) of
the principal amount of the Revolving Loan originally made on ______________,
____, which Revolving Loan is currently a [insert LIBOR Loan or Base Rate Loan,
as the case may be], be continued as or converted into, as the case may be, a
LIBOR Loan on ____________, ____. The Borrower hereby elects an Interest Period
for such LIBOR Loan of [insert permitted Interest Period].
In support of this request, the Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that:
1. The representations and warranties contained in Section 4 of the Credit
Agreement are true and correct in all material respects on and as of the date of
this letter, and will be true and correct in all material respects on the date
on which the above-referenced Revolving Loan is [continued][converted] (both
before and after such Revolving Loan is [continued] [converted]), as if such
representations and warranties were made on and as of such date (except for
representations and warranties that specifically relate to an earlier date,
which shall be true and correct as of such earlier date).
2. No Event of Default or Possible Default has occurred and is continuing
or will exist on the date on which such Revolving Loan is [continued][converted]
(whether before or after such Revolving Loan is [continued][converted]).
D-1
Acceptance of the proceeds of such [continued][converted] Revolving Loan by
the Borrower shall be deemed to be a further representation and warranty that
the representations and warranties made in this letter are true and correct in
all material respects at the time of such [continuation][conversion].
Capitalized terms used but not defined in this letter have the respective
meanings assigned to them in the Credit Agreement.
TRENDWEST RESORTS, INC.
By:_______________________________
Its:______________________________
D-2
EXHIBIT E
---------
AUSTRALIAN CONTINUATION NOTICE
[Date]
To each Lender party to
the referenced Credit Agreement
c/o KeyBank National Association,
as Administrative Agent for the Lenders
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Re: Credit Agreement dated as of August 14, 2000, between Trendwest
Resorts, Inc. (the "Borrower"), Trendwest South Pacific Pty.
Ltd., the lenders from time to time party thereto (the
"Lenders"), and KeyBank National Association, as Administrative
Agent for itself and the other such lenders (the "Credit
Agreement")
Ladies and Gentlemen:
The Borrower hereby requests that _______ (specify amount of Australian
Currency) of the principal amount of the Revolving Loan originally made on
______________, ____, which Revolving Loan is currently an Australian Advance,
be continued as an Australian Advance on ____________, ____. The Borrower hereby
elects an Interest Period for such Australian Advance of [insert permitted
Interest Period].
In support of this request, the Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that:
1. The representations and warranties contained in Section 4 of the Credit
Agreement are true and correct in all material respects on and as of the date of
this letter, and will be true and correct in all material respects on the date
on which the above-referenced Revolving Loan is [continued][converted] (both
before and after such Revolving Loan is [continued] [converted]), as if such
representations and warranties were made on and as of such date (except for
representations and warranties that specifically relate to an earlier date,
which shall be true and correct as of such earlier date).
2. No Event of Default or Possible Default has occurred and is continuing
or will exist on the date on which such Revolving Loan is [continued][converted]
(whether before or after such Revolving Loan is [continued][converted]).
E-1
Acceptance of the proceeds of such [continued][converted] Revolving Loan by
South Pacific or the Borrower shall be deemed to be a further representation and
warranty that the representations and warranties made in this letter are true
and correct in all material respects at the time of such
[continuation][conversion].
Capitalized terms used but not defined in this letter have the respective
meanings assigned to them in the Credit Agreement.
TRENDWEST RESORTS, INC.
By:_______________________________
Its:______________________________
E-2
EXHIBIT F
---------
FORM OF REVOLVING NOTE
August 14, 0000
Xxxxxxx, Xxxxxxxxxx
For value received, Trendwest Resorts, Inc., an Oregon corporation, and
Trendwest South Pacific Pty. Ltd., a corporation organized and existing under
the laws of the Commonwealth of Australia (collectively, the "Borrowers"),
jointly, severally, unconditionally, and irrevocably promise to pay to the order
of ____________________, a national banking association (the "Lender"), at the
place, in the currency and manner, and on the dates set forth in the Credit
Agreement referred to below, in immediately available funds, the aggregate
unpaid principal amount of all Revolving Loans made by the Lender pursuant to
the Credit Agreement referred to below, as recorded in the books and records of
the Lender; and to pay interest on the unpaid principal balance of this Note
from time to time outstanding, in like money and funds, for the period from the
date of this Note until the Revolving Loans evidenced by this Note shall be paid
in full, at the rates per annum and on the dates provided in the Credit
Agreement referred to below.
The Lender is hereby authorized by the Borrowers to record on the Lender's
books and records, the date, currency, amount and type of each Revolving Loan,
the duration of the related Interest Period (if applicable), the amount of each
payment or prepayment of principal on each such Revolving Loan, and the other
information provided for in such books and records, which such books and records
shall constitute prima facie evidence of the information so recorded; provided,
however, that any failure by the Lender to record any such information shall not
relieve the Borrowers of their obligations to repay the outstanding principal
amount of such Revolving Loans, all accrued interest on such Revolving Loans,
and any amount payable with respect to such Revolving Loans in accordance with
the terms of this Note and the Credit Agreement referred to below.
Each of the Borrower signs this Note as a principal (and not as surety,
guarantor, or accommodation party), and each such Borrower and each endorser or
guarantor of this Note waives demand, presentment, protest, diligence, notice of
dishonor and any other formality in connection with this Note. If the
indebtedness evidenced by this Note or any part of such indebtedness is
collected in any proceeding or is placed in the hands of attorneys for
collection, each of the Borrowers agrees to pay, in addition to the principal,
interest and other sums due and payable on this Note, all costs of collecting
this Note, including, without limitation, reasonable attorneys' fees and
expenses (including, without limitation, allocated costs and expenses of
attorneys who are employees of the Lender).
Each of the Borrower's obligations under this Note shall not be limited or
affected in any way by (a) the Lender's failure, neglect, or omission to take
any action of any kind, (b) any discharge of such Borrower's liability under
this Note by a bankruptcy court or in any other insolvency proceeding, (c) the
expiration of any statute of limitations, or (d) any other means other than the
receipt by the Lender of payment in full on this Note. Each of the Borrowers
intends by this paragraph to waive any "suretyship" defense that such Borrower
may have in the event that the Borrower is deemed by any court to have been a
surety, guarantor, or accommodation party under this Note, despite all
representations and warranties in this Note to the contrary.
F-2
This Note evidences one or more Revolving Loans made under the Credit
Agreement dated as of August 14, 2000, between the Borrowers; the Lender and
______________________, as lenders (the "Lenders"), and KeyBank National
Association, as Administrative Agent for the Lenders (the "Credit Agreement"),
to which reference is hereby made for a statement of the circumstances under
which this Note is subject to prepayment and under which its due date may be
accelerated. This Note is made under, and shall be governed by and construed in
accordance with, the laws of the State of Washington in the same manner
applicable to contracts made and to be performed entirely within such State and
without giving effect to choice of law principles of such State.
Capitalized terms used but not defined in this Note have the respective
meanings assigned to them in the Credit Agreement.
EACH OF THE BORROWERS ACKNOWLEDGES THAT ORAL AGREEMENTS OR ORAL COMMITMENTS
TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
TRENDWEST RESORTS, INC.
By:_______________________________
Its:______________________________
TRENDWEST SOUTH PACIFIC PTY. LTD.,
an Australian corporation
By:_______________________________
Its:______________________________
F-2
EXHIBIT G
---------
PROJECTIONS
For the period from June 30, 2000 through June 30, 2003
[See Attached.]
G-1
EXHIBIT H
---------
CAPITALIZATION
Capitalization as of July 31, 2000:
Preferred stock, no par value. Authorized 10,000,000 shares; no shares
issued or outstanding
Common stock, no par value. Authorized 90,000,000 shares;
issued and outstanding 16,926,183, at July 31, 2000
H-1
EXHIBIT I
---------
LITIGATION
None.
I-1
EXHIBIT J
---------
INDEBTEDNESS
1. Standby Letter of Credit issued by First National Bank of Chicago in the
amount of $464,506.60. The Letter of Credit expires May 21, 2001 for the
benefit of Case #97-2-19757-1 KNT K ing County Superior Court.
2. Performance Bonds (required for marketing premiums in Las Vegas) as follows:
(a) $75,000 issued by Developers Insurance Company;
(b) $54,000 issued by Developers Insurance Company.
J-1
EXHIBIT K
---------
CONSENTS
None.
K-1
EXHIBIT L
---------
MATERIAL CONTRACTS AND LICENSES
None.
L-1
EXHIBIT M
---------
SUBSIDIARIES
TW Resorts Real Estate, Inc.
TRI Funding II, Inc.
TRI Funding III, Inc.
Trendwest Investments, Inc.
TW Holdings II, Inc.
TW Holdings III, Inc.
MountainStar Resorts, Inc.
MountainStar Resort Resources, Inc.
Trendwest Properties, Inc.
Trendwest South Pacific PTY LTD
31674 Yukon, Inc.
Trendwest Funding I, Inc.
Trendwest Funding II, Inc.
TRI Funding Company I, L.L.C.
M-1
EXHIBIT N
---------
ENVIRONMENTAL MATTERS
The environmental matters disclosed in that certain Phase I Environmental Site
Assessment regarding property located in Seaside, Oregon, prepared for Trendwest
Resorts, Inc. by JELD-WEN Risk Management Department dated March 2000.
N-1
EXHIBIT O
---------
COMPLIANCE LETTER AND CERTIFICATE
----------------, ------
KeyBank National Association,
As Administrative Agent
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Ladies and Gentlemen:
As required by Section 6.5(c) of the Credit Agreement dated as of August
14, 2000, between Trendwest Resorts, Inc., Trendwest South Pacific Pty. Ltd.,
the lenders from time to time party thereto, and KeyBank National Association,
as Administrative Agent for itself and the other such lenders (the "Agreement"),
the undersigned has reviewed the activities of the Borrower for the fiscal
quarter [year] ending _____, ____, and, consequently, warrant and certify to the
Lenders that: (i) all information contained in the attached Certificate is true
and accurate to the best of Borrower's knowledge; (ii) the amounts set forth in
the attached Certificate accurately present amounts required to be calculated
under the financial covenants set forth in Section 6.11 of the Agreement; (iii)
Borrower has exercised its best efforts to ascertain the truthfulness and
accuracy of the information contained in the attached Certificate; (iv) no
Possible Default or Event of Default has occurred; and (v) Borrower is aware
that the Lenders are relying on the information contained in this Certificate as
the basis for determining the Borrower's eligibility for additional Revolving
Loans. Unless otherwise defined, all capitalized terms used in this Certificate
have the meanings assigned to such terms in the Agreement.
TRENDWEST RESORTS, INC.
By:___________________________
Its Chief Financial Officer
O-1
COMPLIANCE CERTIFICATE
(for fiscal quarter [year] ending ______, ____)
As of
3/31/2000
6.11(a) Maximum Leverage Ratio
Total Funded Debt
Revolving Credit A
JELD-WEN note B
Capitalized Lease Obligations 5,000,000 C
Other Indebtedness D
Off B/S Synthetic Leases E
---------
Total Funded Debt (A+B+C+D+E+F) 5,000,000 F
=========
Consolidated Net Worth 17,500,000G
---------
Total Capitalization (F+G) 22,500,000H
=========
Leverage Ratio (F/H) 22.2%
Maximum Permitted 35.0%
Quarter Quarter Quarter Quarter
Ended Ended Ended Ended LTM
6.11(b) Minimum Fixed Charge Coverage Ratio 6/30/99 9/30/99 12/31/99 3/31/00 3/31/00
-------------------------------------------------------
Adjusted EBITDA
Net Income ---
---
Add: Income taxes
Interest expense ---
Depreciation and amortization ---
Amortization of residual interest in Notes ---
Receivable sold
Unrealized loss on residual interest in Notes ---
Receivable sold
Contract servicing liability arising from the ---
sale of Notes Receivable
Non-cash extraordinary losses ---
---
Less: Residual interest in Notes Receivable sold
Amortization of contract servicing liability ---
Unrealized Gain on residual interests in Notes ---
Receivable sold
Non-cash or extraordinary income items ---
-------------------------------------------------------
Adjusted EBITDA --- --- --- --- --- I
=========================================================
---
Capital expenditures --- J
---------------------------------------------------------
Available Cashflow (I-J) --- --- --- --- --- K
=========================================================
Fixed Charges
Current Portion of Long-Term Debt --- L
Interest Expense --- M
Cash Income Taxes --- N
---------------------------------------------------------
Total Fixed Charges (L+M+N) --- --- --- --- --- O
=========================================================
Fixed Charge Coverage Ratio (H/L) #DIV/O!
Minimum Required 2.25x
As of
12/31/00
----------
6.11(c) Minimum Consolidated Net Worth
Minimum Required as of the Previous Quarter 175,000,000 P
Ended (__/__/__)
Quarter Net Income (without Deducing for Losses) 10,000,000
----------------------
75% of quarterly net income 7,500,000 7,500,000 Q
100% of the Proceeds from the Sale of Equity --- --- R
Minimum Consolidated Net Worth (P+Q+R) 182,500,000
===========
Actual Consolidated Net Worth 200,000,000
O-2
EXHIBIT P
---------
ASSIGNMENT AND ACCEPTANCE
Reference is made to that certain Credit Agreement dated as of August 14,
2000, between Trendwest Resorts, Inc., Trendwest South Pacific Pty. Ltd. (the
"Borrowers"), the lenders from time to time party thereto (the "Lenders"), and
KeyBank National Association, as Administrative Agent for itself and the other
such lenders (as amended, restated, extended, supplemented or otherwise modified
in writing from time to time, the "Agreement;" the terms defined therein being
used herein as therein defined).
The assignor identified on the signature page hereto ("Assignor") and the
assignee identified on the signature page hereto ("Assignee") agree as follows:
1. (a) Subject to paragraph 11, effective as of the date written on
Schedule 1 hereto (the "Effective Date"), Assignor irrevocably sells and assigns
to Assignee, without recourse to Assignor, and Assignee hereby irrevocably
purchases and assumes from Assignor, without recourse to Assignor, the interest
described on Schedule 1 hereto (the "Assigned Interest") in and to Assignor's
rights and obligations under the Agreement.
(b) From and after the Effective Date, (i) Assignee shall be a party under
the Agreement and will have all the rights and obligations of a Lender for all
purposes under the Agreement to the extent of the Assigned Interest and be bound
by the provisions thereof, and (ii) Assignor shall relinquish its rights and be
released from its obligations under the Agreement to the extent of the Assigned
Interest. Assignor and/or Assignee, as agreed by Assignor and Assignee, shall
deliver, in immediately available funds, any applicable assignment fee required
under Section 11.7(c) of the Agreement.
2. On the Effective Date, Assignee shall pay to Assignor, in immediately
available funds, an amount equal to the purchase price of the Assigned Interest
as agreed upon by Assignor and Assignee.
3. Assignor and Assignee agree that all payments of principal, interest,
fees and other amounts in respect of the Assigned Interest accruing from and
after the Effective Date shall be for the account of Assignee, and all payments
of such amounts in respect of the Assigned Interest accruing prior to the
Effective Date shall remain for the account of Assignor. Assignor and Assignee
hereby agree that if either receives any payment of such amounts which is for
the account of the other, it shall hold the same in trust for such party and
shall promptly pay the same to such party.
4. Assignor represents and warrants to Assignee that:
(a) Assignor is the legal and beneficial owner of the Assigned Interest,
and the Assigned Interest is free and clear of any adverse claim;
(b) The Assigned Interest listed on Schedule 1 accurately and completely
sets forth the amount of all outstanding Obligations relating to the Assigned
Interest as of the Effective Date;
P-1
(c) It has the power and authority and the legal right to make, deliver and
perform, and has taken all necessary action, to authorize the execution,
delivery and performance of this Assignment and Acceptance, and any and all
other documents delivered by it in connection herewith and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
Assignment and Acceptance and the Agreement, and no consent or authorization of,
filing with, or other act by or in respect of any governmental authority, is
required in connection in connection herewith or therewith; and
(d) This Assignment and Acceptance constitutes the legal, valid and binding
obligation of Assignor.
Assignor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrowers or the performance by
the Borrowers of their respective obligations under the Agreement and Revolving
Notes, and assumes no responsibility with respect to any statements, warranties
or representations made under or in connection with the Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Agreement or the Revolving Notes other than as expressly set forth above.
5. Assignee represents and warrants to Assignor and the Administrative
Agent that:
(a) it is an Eligible Assignee;
(b) it has the power and authority and the legal right to make, deliver and
perform, and has taken all necessary action, to authorize the execution,
delivery and performance of this Assignment and Acceptance, and any and all
other documents delivered by it in connection herewith and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
Assignment and Acceptance and the Agreement, and no consent or authorization of,
filing with, or other act by or in respect of any governmental authority, is
required in connection in connection herewith or therewith;
(c) this Assignment and Acceptance constitutes the legal, valid and binding
obligation of Assignee;
(d) under applicable laws, no tax will be required to be withheld by the
Administrative Agent or the Borrower with respect to any payments to be made to
Assignee hereunder or under the Agreement or the Revolving Notes, and prior to
or concurrently with the Administrative Agent's receipt of this Assignment and
Acceptance, Assignee has delivered to the Administrative Agent any tax forms
required by Section 11.8 of the Agreement; and
(e) Assignee has received a copy of the Agreement, together with copies of
the most recent financial statements delivered pursuant thereto, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance. Assignee has
independently and without reliance upon Assignor or the Administrative Agent and
based on such information as Assignee has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Assignee will,
independently and without reliance upon the Administrative Agent or any 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 the Agreement.
6. Assignee appoints and authorizes the Administrative Agent to take such
action as Administrative Agent on its behalf and to exercise such powers and
discretion under the Agreement or any other instrument or document furnished
pursuant hereto or thereto as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are incidental thereto.
P-2
7. If either Assignee or Assignor desires a Revolving Note to evidence its
Loans, it shall request that the Administrative Agent procure a Revolving Note
from the Borrowers.
8. Assignor and Assignee agree to execute and deliver such other
instruments, and take such other action, as either party may reasonably request
in connection with the transactions contemplated by this Assignment and
Acceptance.
9. This Assignment and Acceptance shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns; provided,
however, that Assignee shall not assign its rights or obligations hereunder
without the prior written consent of Assignor and any purported assignment,
absent such consent, shall be void.
10. This Assignment and Acceptance may be executed by facsimile signatures
with the same force and effect as if manually signed and may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Assignment and
Acceptance shall be governed by and construed in accordance with the laws of the
state specified in the Agreement.
11. The effectiveness of the assignment described herein is subject to:
(a) if such consent is required by the Agreement, Assignor and Assignee
obtaining the consent of the Administrative Agent and the Borrower to the
assignment described herein. By delivering a duly executed and delivered copy of
this Assignment and Acceptance to the Administrative Agent, Assignor and
Assignee hereby request any such required consent and request that the
Administrative Agent register Assignee as a Lender under the Agreement effective
as of the Effective Date.
(b) receipt by the Administrative Agent of (or other arrangements
acceptable to the Administrative Agent with respect to) any applicable
assignment fee referred to in Section 11.7(c) of the Agreement and any tax forms
required by Section 11.8 of the Agreement.
12. Attached hereto as Schedule 2 is all contact, address, account and
other administrative information relating to Assignee.
By signing below, the Administrative Agent agrees to register Assignee as a
Lender under the Agreement, effective as of the Effective Date with respect to
the Assigned Interest and will adjust the registered Ratable Share of Assignor
under the Agreement to reflect the assignment of the Assigned Interest.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers.
Assignor:
[Name of Assignor]
By:____________________________________
Name:__________________________________
Title:_________________________________
P-3
Assignee:
___ Tax forms required by [Name of Assignee]
Section 11.8 of the
Agreement included
By:____________________________________
Name:__________________________________
Title:_________________________________
In accordance with and subject to Section 11.4
of the Agreement, the undersigned consent to the
foregoing assignment as of the Effective Date:
TRENDWEST RESORTS, INC.
By:__________________________________________
Name: _______________________________________
Title: ______________________________________
TRENDWEST SOUTH PACIFIC PTY. LTD.
By:__________________________________________
Name: _______________________________________
Title: ______________________________________
KEYBANK NATIONAL ASSOCIATION,
as the Administrative Agent
By:__________________________________________
Name: _______________________________________
Title: ______________________________________
P-4
SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE
The Assigned Interest
Effective Date: ______________________
Type and amount of outstanding
Assigned Commitment Obligations assigned Assigned Ratable Share
------------------- ------------------------------ ----------------------
$ [type] $ %
------------------ ----------------------- ---------------------
P-5
SCHEDULE 2 TO ASSIGNMENT AND ACCEPTANCE
Administrative Details
(Assignee to list names of credit contacts, addresses, phone and facsimile
numbers, electronic mail addresses and account and payment information)
P-6
EXHIBIT Q
----------
LIENS
None.
Q-1
