EXHIBIT 10
CREDIT AGREEMENT
among
THE VAIL CORPORATION
(D/B/A "VAIL ASSOCIATES, INC.")
Borrower
NATIONSBANK OF TEXAS, N.A.
Agent
and
THE LENDERS NAMED HEREIN
$450,000,000
DECEMBER 19, 1997
TABLE OF CONTENTS
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SECTION 1 DEFINITIONS AND TERMS........................................................ 1
1.1 Definitions.................................................................. 1
1.2 Number and Gender of Words................................................... 12
1.3 Accounting Principles........................................................ 12
SECTION 2 COMMITMENT................................................................... 12
2.1 Credit Facility.............................................................. 12
2.2 Loan Procedure............................................................... 12
2.3 LC Subfacility............................................................... 13
SECTION 3 TERMS OF PAYMENT............................................................. 15
3.1 Notes and Payments........................................................... 15
3.2 Interest and Principal Payments; Voluntary Commitment Reductions............. 16
3.3 Interest Options............................................................. 16
3.4 Quotation of Rates........................................................... 16
3.5 Default Rate................................................................. 17
3.6 Interest Recapture........................................................... 17
3.7 Interest Calculations........................................................ 17
3.8 Maximum Rate................................................................. 17
3.9 Interest Periods............................................................. 17
3.10 Conversions.................................................................. 18
3.11 Order of Application......................................................... 18
3.12 Sharing of Payments, Etc..................................................... 18
3.13 Booking Loans................................................................ 18
3.14 Basis Unavailable or Inadequate for LIBOR.................................... 18
3.15 Additional Costs............................................................. 18
3.16 Change in Laws............................................................... 19
3.17 Funding Loss................................................................. 19
3.18 Foreign Lenders.............................................................. 19
3.19 Affected Lender's Obligation to Mitigate..................................... 20
3.20 Replacement Lender........................................................... 20
SECTION 4 FEES......................................................................... 20
4.1 Treatment of Fees............................................................ 20
4.2 Fee Letter................................................................... 20
4.3 LC Fees 20
4.4 Commitment Fee............................................................... 21
SECTION 5 GUARANTIES................................................................... 21
SECTION 6 CONDITIONS PRECEDENT......................................................... 21
6.1 Initial Advance.............................................................. 21
6.2 Each Advance................................................................. 21
SECTION 7 REPRESENTATIONS AND WARRANTIES............................................... 22
7.1 Regulation U................................................................. 22
7.2 Corporate Existence, Good Standing, Authority and Compliance................. 22
7.3 Subsidiaries................................................................. 22
(i)
7.4 Authorization and Contravention.............................................. 22
7.5 Binding Effect............................................................... 22
7.6 Financial Statements; Fiscal Year............................................ 22
7.7 Litigation................................................................... 22
7.8 Taxes........................................................................ 23
7.9 Environmental Matters........................................................ 23
7.10 Employee Plans............................................................... 23
7.11 Properties and Liens......................................................... 23
7.12 Government Regulations....................................................... 24
7.13 Transactions with Affiliates................................................. 24
7.14 Debt......................................................................... 24
7.15 Material Agreements.......................................................... 24
7.16 Labor Matters................................................................ 24
7.17 Solvency..................................................................... 24
7.18 Intellectual Property........................................................ 24
7.19 Full Disclosure.............................................................. 24
SECTION 8 AFFIRMATIVE COVENANTS........................................................ 24
8.1 Items to be Furnished........................................................ 24
8.2 Use of Proceeds.............................................................. 26
8.3 Books and Records............................................................ 26
8.4 Inspections.................................................................. 26
8.5 Taxes........................................................................ 26
8.6 Payment of Obligations....................................................... 26
8.7 Expenses..................................................................... 26
8.8 Maintenance of Existence, Assets, and Business............................... 26
8.9 Insurance.................................................................... 27
8.10 Environmental Laws........................................................... 27
8.11 Subsidiaries................................................................. 27
8.12 Indemnification.............................................................. 27
SECTION 9 NEGATIVE COVENANTS........................................................... 27
9.1 Taxes........................................................................ 28
9.2 Payment of Obligations....................................................... 28
9.3 Employee Plans............................................................... 28
9.4 Debt......................................................................... 28
9.5 Liens........................................................................ 28
9.6 Transactions with Affiliates................................................. 28
9.7 Compliance with Laws and Documents........................................... 28
9.8 Loans, Advances and Investments.............................................. 28
9.9 Management Fees and Distributions............................................ 30
9.10 Sale of Assets............................................................... 30
9.11 Mergers and Dissolutions..................................................... 30
9.12 Assignment................................................................... 30
9.13 Fiscal Year and Accounting Methods........................................... 30
9.14 New Businesses............................................................... 30
9.15 Government Regulations....................................................... 30
SECTION 10 FINANCIAL COVENANTS.......................................................... 30
10.1 Maximum Leverage Ratio....................................................... 31
10.2 Minimum Fixed Charge Coverage Ratio.......................................... 31
10.3 Interest Coverage Ratio...................................................... 31
(ii)
SECTION 11 DEFAULT...................................................................... 32
11.1 Payment of Obligation........................................................ 32
11.2 Covenants.................................................................... 32
11.3 Debtor Relief................................................................ 32
11.4 Judgments and Attachments.................................................... 32
11.5 Government Action............................................................ 32
11.6 Misrepresentation............................................................ 32
11.7 Ownership.................................................................... 32
11.8 Default Under Other Agreements............................................... 32
11.9 Validity and Enforceability of Loan Papers................................... 33
11.10 Employee Plans............................................................... 33
SECTION 12 RIGHTS AND REMEDIES.......................................................... 33
12.1 Remedies Upon Default........................................................ 33
12.2 Company Waivers.............................................................. 33
12.3 Performance by Agent......................................................... 33
12.4 Not in Control............................................................... 33
12.5 Course of Dealing............................................................ 34
12.6 Cumulative Rights............................................................ 34
12.7 Application of Proceeds...................................................... 34
12.8 Diminution in Value of Collateral............................................ 34
12.9 Certain Proceedings.......................................................... 34
SECTION 13 AGREEMENT AMONG LENDERS...................................................... 34
13.1 Agent........................................................................ 34
13.2 Expenses..................................................................... 35
13.3 Proportionate Absorption of Losses........................................... 35
13.4 Delegation of Duties; Reliance............................................... 35
13.5 Limitation of Agent's Liability.............................................. 36
13.6 Default; Collateral.......................................................... 37
13.7 Limitation of Liability...................................................... 37
13.8 Relationship of Lenders...................................................... 37
13.9 Benefits of Agreement........................................................ 37
SECTION 14 MISCELLANEOUS................................................................ 37
14.1 Headings..................................................................... 37
14.2 Nonbusiness Days; Time....................................................... 37
14.3 Communications............................................................... 37
14.4 Form and Number of Documents................................................. 37
14.5 Exceptions to Covenants...................................................... 37
14.6 Survival..................................................................... 38
14.7 Governing Law................................................................ 38
14.8 Invalid Provisions........................................................... 38
14.9 Venue; Service of Process; Jury Trial........................................ 38
14.10 Amendments, Consents, Conflicts and Waivers.................................. 38
14.11 Multiple Counterparts........................................................ 39
14.12 Successors and Assigns; Participation........................................ 39
14.13 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances.. 40
14.14 Entirety..................................................................... 40
(iii)
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(vi)
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(v)
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SCHEDULES AND EXHIBITS
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Schedule 1 Parties, Addresses, Committed Sums, and Wiring Information
Schedule 2 Critical Assets
Schedule 2.3 Existing Letters of Credit and Existing Permitted Debt
Schedule 7.2 Corporate Structure and Jurisdictions of Incorporation and
Business
Schedule 7.7 Material Litigation Summary
Schedule 7.9 Material Environmental Matters
Schedule 7.13 Non-Standard Transactions with Affiliates
Exhibit A Revolving Credit Promissory Note
Exhibit B Guaranty
Exhibit C Loan Request
Exhibit D Compliance Certificate
Exhibit E Conversion Request
Exhibit F LC Request
Exhibit G Assignment
(vi)
CREDIT AGREEMENT
----------------
This Credit Agreement is entered into as of December 19, 1997, among
The Vail Corporation, a Colorado corporation doing business as "Vail Associates,
Inc." ("BORROWER"), the Lenders (defined below), and NationsBank of Texas, N.A.,
as Agent for itself and the other Lenders.
In consideration of the mutual covenants contained herein, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Borrower, Lenders, and Agent hereby agree as follows:
SECTION 1 DEFINITIONS AND TERMS.
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1.1 Definitions.
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AFFILIATE means with respect to any Person (the "relevant Person") (i) any
other Person that directly, or indirectly through one or more intermediaries,
controls the relevant Person (a "Controlling Person") or (ii) any Person (other
than the relevant Person) which is controlled by or is under common control with
a Controlling Person. As used herein, the term "control" means possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
AGENT means NationsBank of Texas, N.A., a national banking association, and
its successor or successors as agent for Lenders under this Agreement.
APPLICABLE MARGIN means, for any day, the margin of interest over the Base
Rate or LIBOR, as the case may be, that is applicable when any interest rate is
determined under this Agreement. The Applicable Margin is subject to adjustment
(upwards or downwards, as appropriate) based on the ratio of Funded Debt to
Resort EBITDA, as follows:
=========================================================================================
RATIO OF FUNDED DEBT APPLICABLE APPLICABLE
TO RESORT EBITDA MARGIN FOR MARGIN FOR
LIBOR BASE RATE
LOANS LOANS
-----------------------------------------------------------------------------------------
Less than 2.25 to 1.00 0.500% 0.000%
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Greater than or equal to 2.25 to 1.00, but 0.625%
less than 2.75 to 1.00 (0.500% upon a Credit
Rating Event) 0.000%
-----------------------------------------------------------------------------------------
Greater than or equal to 2.75 to 1.00, but 0.750%
less than 3.25 to 1.00 (0.625% upon a Credit 0.000%
Rating Event)
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Greater than or equal to 3.25 to 1.00, but 1.000%
less than 3.75 to 1.00 (0.875% upon a Credit 0.000%
Rating Event)
Greater than or equal to 3.75 to 1.00 1.250% 0.125%
==========================================================================================
Prior to Agent's receipt of the Companies' consolidated unaudited Financial
Statements for the Companies' fiscal quarter ended January 31, 1998, the ratio
of Funded Debt to Resort EBITDA shall be deemed to be greater than 2.75 to 1.00,
but less than 3.25 to 1.00. Thereafter, the ratio of Funded Debt to Resort
EBITDA shall be calculated on a consolidated basis for the Companies in
accordance with GAAP for the most recently completed fiscal quarter of the
Companies for which results are available. The ratio shall be determined from
the Current Financials and any related Compliance Certificate and any change in
the Applicable Margin resulting from a change in such ratio shall be effective
as of the date of delivery of such compliance certificate. However, if Borrower
fails to furnish to Agent the Current Financials and any related Compliance
Certificate when required pursuant to SECTION 8.1, then the ratio shall be
deemed to be greater than 3.75 to 1.00 until Borrower furnishes the required
Current Financials and any related Compliance Certificate to Agent.
Furthermore, if the Companies' audited Financial Statements subsequently
delivered to Agent for any fiscal year pursuant to SECTION 8.1(A)(II) result in
a different ratio, such revised ratio (whether higher or lower) shall govern
effective as of the date of such delivery. For purposes of determining such
ratio, Resort EBITDA for any fiscal quarter shall include on a pro forma basis
all EBITDA for such period relating to assets acquired (including Restricted
Subsidiaries formed or organized) during such period, but shall exclude on a pro
forma basis all EBITDA for such period relating to any such assets disposed of
in accordance with this Agreement during such period.
APPLICABLE PERCENTAGE means, for any day, the commitment fee percentage
applicable under SECTION 4.4 when commitment fees are determined under this
Agreement. The Applicable Percentage is subject to adjustment (upwards or
downwards, as appropriate) based on the ratio of Funded Debt to Resort EBITDA,
as follows:
=============================================================================
RATIO OF FUNDED DEBT APPLICABLE
TO RESORT EBITDA PERCENTAGE
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Less than 2.25 to 1.00 0.125%
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Greater than or equal to 2.25 to 1.00, but less 0.150%
than 2.75 to 1.00
Greater than or equal to 2.75 to 1.00, but less 0.200%
than 3.25 to 1.00
Greater than or equal to 3.25 to 1.00 0.300%
=============================================================================
The ratio of Funded Debt to Resort EBITDA shall be determined as described in
the definition of "Applicable Margin."
APOLLO means any one or more of the following: Apollo Advisors, L.P., a
Delaware limited partnership, or any fund, investment vehicle or account
managed, advised or controlled by Apollo Advisors, L.P., or any of its
Affiliates, other than the Companies.
BASE RATE means, for any day, the rate per annum equal to the higher of (a)
the sum of the Federal Funds Rate for such day plus 0.5%, and (b) the Prime Rate
for such day. Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Rate shall be effective on the effective date of such change
in the Prime Rate or Federal Funds Rate.
BASE RATE LOAN means a Loan bearing interest at the sum of the Base Rate
plus the Applicable Margin.
BC HOUSING BONDS means the Eagle County, Colorado, Taxable Housing
Facilities Revenue Bonds (BC Housing, LLC Project) Series 1997A in the original
principal amount of $9,100,000.
BC HOUSING INDENTURE means the Trust Indenture dated as of June 1, 1997,
between Eagle County, Colorado, as Issuer, and the BC Housing Trustee, relating
to the BC Housing Bonds, as amended, supplemented or restated from time to time.
BC HOUSING LC means the irrevocable transferable LC issued by Agent to the
BC Housing Trustee, under the terms of which it will be entitled to draw, with
respect to the BC Housing Bonds, up to (a) an amount sufficient to pay
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(i) the principal of the BC Housing Bonds when due, or (ii) the portion of the
purchase price of the BC Housing Bonds tendered or deemed tendered for purchase
in accordance with the BC Housing Indenture and not subsequently remarketed
corresponding to the principal amount of such bonds, plus (b) an amount equal to
approximately 35 days of accrued interest on the BC Housing Bonds (at up to 15%
per annum in accordance with the BC Housing Indenture), to pay (i) interest on
the BC Housing Bonds when due, or (ii) the portion of the purchase price of BC
Housing Bonds tendered or deemed tendered for purchase in accordance with the BC
Housing Indenture and not subsequently remarketed corresponding to accrued
interest then due on such bonds. The BC Housing LC was issued in the maximum
amount of $9,232,709 and will expire on June 15, 2002. The BC Housing LC will
constitute an LC issued under this Agreement.
BC HOUSING TRUSTEE means Colorado National Bank, as the Trustee under the
BC Housing Trust Indenture, and any successor thereto.
BOND LCS means the BC Housing LC and the Xxxxx Creek LCs.
BORROWER is defined in the preamble to this Agreement.
BRIDGE LOAN AGREEMENT means the $32,000,000 Credit Agreement dated as of
October 10, 1997, between Borrower and NationsBank of Texas, N.A.
BUSINESS DAY means any day, other than Saturday, Sunday, and any other day
that commercial banks are authorized or required by Law to be closed in Texas or
New York or, for purposes of any LIBOR Loan, in London.
CAPITAL LEASE means any capital lease or sublease that has been (or under
GAAP should be) capitalized on a balance sheet.
CHANGE OF CONTROL TRANSACTION means the occurrence of any transaction or
event, other than the issuance and sale in a public offering of equity
securities of VRI, as a result of which transaction or event Apollo shall cease
to possess, and some other Person shall obtain, in either case directly or
indirectly, the power to direct or cause the direction of the management or
policies of VRI, whether through the ownership of voting securities, by contract
or otherwise.
CLOSING DATE means the date on which counterparts of this Agreement have
been executed and delivered to Agent by each party hereto in accordance with
SECTION 14.11.
CODE means the Internal Revenue Code of 1986, as amended from time to time,
and related rules and regulations from time to time in effect.
COLLATERAL AGENCY AGREEMENT means the Collateral Agency Agreement dated as
of November 23, 1993, among VHI, Borrower, Beaver Creek Associates, Inc.,
NationsBank of Texas, N.A., as agent for certain lenders to Borrower,
NationsBank of Texas, N.A., as Collateral Agent, and the Indenture Trustees for
the Vail Bonds named therein.
COMMITMENT USAGE means, at any time, the sum of (a) the aggregate Principal
Debt, plus (b) the LC Exposure.
COMMITTED SUM means the amount (as reduced and canceled under this
Agreement) stated beside a Lender's name for the Facility on SCHEDULE 1 as most
recently amended under this Agreement.
COMPANIES means VRI and each of VRI's Restricted and Unrestricted
Subsidiaries now or hereafter existing.
COMPLIANCE CERTIFICATE means a certificate substantially in the form of
EXHIBIT D and signed by Borrower's Chief Financial Officer, together with the
calculation worksheet described therein.
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CONVERSION REQUEST means a request substantially in the form of EXHIBIT E.
CREDIT RATING EVENT means the receipt by VRI, in connection with an
issuance of Subordinated Debt, of an implied rating (which assumes a rating two
levels above the actual rating for such Subordinated Debt) of its senior
indebtedness with an original maturity in excess of one year of BB+ or better
from S&P or of Ba1 or better from Xxxxx'x.
CURRENT FINANCIALS means, at any time, the consolidated Financial
Statements of the Companies most recently delivered to Agent under SECTION 6.1,
8.1(A) or 8.1(B), as the case may be.
DEBT of any Person means at any date, without duplication (and calculated
in accordance with GAAP), (a) all Funded Debt of such Person, (b) all
obligations of such Person to pay the deferred purchase price of property or
services, other than (i) obligations under employment contracts or deferred
employee compensation plans and (ii) trade accounts payable and other expenses
or payables arising in the ordinary course of business, (c) all Debt of others
secured by a Lien on any asset of such Person (or for which the holder of the
Debt has an existing Right, contingent or otherwise, to be so secured), whether
or not such Debt is assumed by such Person, and (d) all guarantees and other
contingent obligations (as a general partner or otherwise) of such Person with
respect to Debt of others.
DEBTOR RELIEF LAWS means the Bankruptcy Reform Act of 1978, as amended from
time to time, and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments or similar Laws affecting creditors' Rights from time to time in
effect.
DEFAULT is defined in SECTION 11.
DEFAULT RATE means an annual rate of interest equal from day to day to the
lesser of (a) the then-existing Base Rate plus 2%, and (b) the Maximum Rate.
DISTRIBUTION means, with respect to any shares of any capital stock or
other equity securities issued by a Person, (a) the retirement, redemption,
purchase or other acquisition for value of those securities by such Person, (b)
the payment of any dividend on or with respect to those securities by such
Person, (c) any loan or advance by that Person to, or other investment by that
Person in, the holder of any of those securities, and (d) any other payment by
that Person with respect to those securities.
EBITDA means earnings before interest expenses, taxes and non-cash
operating charges (such as depreciation and amortization expense), and
extraordinary gains and losses, calculated on a consolidated basis for the
Companies in accordance with GAAP.
ELIGIBLE ASSIGNEE means (i) a Lender; (ii) an Affiliate of a Lender; and
(iii) any other Person approved by Agent and, unless a Default or Potential
Default exists at the time any assignment is effected in accordance with SECTION
14.12(C), Borrower, such approval not to be unreasonably withheld or delayed by
Borrower, provided, however, that neither Borrower nor an Affiliate of Borrower
shall qualify as an Eligible Assignee.
EMPLOYEE PLAN means an employee pension benefit plan covered by Title IV of
ERISA and established or maintained by any Company.
ENVIRONMENTAL LAW means any Law that relates to the pollution or protection
of ambient air, water or land or to Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and related rules and regulations.
4
EXISTING CREDIT AGREEMENT means the Credit Agreement dated as of January 3,
1997, among Borrower, NationsBank of Texas, N.A., as agent, and the banks named
therein (as amended) providing for credit in an amount up to $340,000,000.
FACILITY means the revolving credit facility and LC Subfacility made
available to Borrower under this Agreement.
FEDERAL FUNDS RATE means, for any day, the annual rate (rounded upwards, if
necessary, to the nearest 0.01%) determined (which determination is conclusive
and binding, absent manifest error) by Agent to be equal to the weighted average
of the rates on overnight federal funds transactions with member banks of the
Federal Reserve System arranged by federal funds brokers on that day, as
published by the Federal Reserve Bank of New York on the next Business Day, or,
if those rates are not published for any day, the average rate charged to Agent
(in its individual capacity) on such day on such transactions as determined by
Agent.
FINANCIAL HEDGE means a swap, collar, floor, cap or other contract between
Borrower and any Lender or an Affiliate of any Lender (or another Person
reasonably acceptable to Agent), which is intended to reduce or eliminate the
risk of fluctuations in interest rates and which is legal and enforceable under
applicable Law.
FINANCIAL STATEMENTS of a Person means balance sheets, profit and loss
statements, reconciliations of capital and surplus, and statements of cash flow
prepared (a) according to GAAP, and (b) other than as stated in SECTION 1.3, in
comparative form to prior year-end figures or corresponding periods of the
preceding fiscal year, as applicable.
FOREST SERVICE PERMITS means (a) Ski Area Term Special Use Permit Holder
No. 4056/01 issued by the Service to Borrower for the Vail ski area on November
23, 1993, and expiring on October 31, 2031; (b) Term Special Use Permit No.
Holder 4191/01 issued by the Service to Borrower's wholly-owned subsidiary,
Beaver Creek Associates, Inc., for the Beaver Creek ski area on January 29,
1980, and expiring on December 31, 2006; (c) Special Use Permit Holder No.
4191/02 issued by the Service to Beaver Creek Associates, Inc., on January 29,
1980, to supplement Term Special Use Permit Holder No. 4191/01, and expiring on
December 31, 2006; (d) Term Special Use Permit Holder No. 5289-01 for Keystone
ski area issued by the Service to Vail Summit Resorts on December 31, 1996, and
expiring on December 31, 2032; (e) Term Special Use Permit Holder No. 5289-04
for Breckenridge ski area issued by the Service to Vail Summit Resorts on
December 31, 1996, and expiring on December 31, 2029; and (f) any replacements
of any of the foregoing.
FUNDED DEBT means the following, calculated on a consolidated basis for the
Restricted Companies in accordance with GAAP: (i) all obligations for borrowed
money (whether as a direct obligation on a promissory note, bond, zero coupon
bond, debenture or other similar instrument, or as an unfulfilled reimbursement
obligation on a drawn letter of credit or similar instrument, or otherwise),
plus (but without duplication) (ii) all Capital Lease obligations (other than
the interest component of such obligations) of any Restricted Company.
FUNDING LOSS means any loss or expense that any Lender reasonably incurs
because (a) Borrower fails or refuses (for any reason whatsoever, other than a
default by Agent or the Lender claiming such loss or expense) to take any Loan
that it has requested under this Agreement, or (b) Borrower pays any LIBOR Loan
or converts any LIBOR Loan to a Base Rate Loan, in each case, before the last
day of the applicable Interest Period.
GAAP means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time.
GUARANTOR means any Company which has executed and delivered a Guaranty.
GUARANTY means a guaranty substantially in the form of EXHIBIT B.
5
HAZARDOUS SUBSTANCE means any substance that is defined or classified as a
hazardous waste, hazardous material, pollutant, contaminant or toxic or
hazardous substance under any Environmental Law.
INTELLECTUAL PROPERTY means (a) common law, federal statutory, state
statutory and foreign trademarks or service marks (including, without
limitation, all registrations and pending applications and the goodwill of the
business symbolized by or conducted in connection with any such trademark or
service xxxx), trademark or service xxxx licenses and all proceeds of trademarks
or service marks (including, without limitation, license royalties and proceeds
from infringement suits), (b) U.S. and foreign patents (including, without
limitation, all pending applications, continuations, continuations-in-part,
divisions, reissues, substitutions and extensions of existing patents or
applications), patent licenses and all proceeds of patents (including, without
limitation, license royalties and proceeds from infringement suits), (c)
copyrights (including, without limitation, all registrations and pending
applications), copyright licenses and all proceeds of copyrights (including,
without limitation, license royalties and proceeds from infringement suits), and
(d) trade secrets, but does not include (i) any licenses (including, without
limitation, liquor licenses) or any permits (including, without limitation,
sales tax permits) issued by a Tribunal and in which (y) the licensee's or
permittee's interest is defeasible by such Tribunal and (z) the licensee or
permittee has no right beyond the terms, conditions and periods of the license
or permit, or (ii) trade names or "dba"s to the extent they do not constitute
trademarks or service marks.
INTEREST PERIOD is determined in accordance with SECTION 3.9.
LAWS means all applicable statutes, laws, treaties, ordinances, rules,
regulations, orders, writs, injunctions, decrees and judgments.
LC means (a) each of the Bond LCs and each existing letter of credit issued
by Agent for the account of any of the Companies and described on Part A of
SCHEDULE 2.3, and (b) each other letter of credit (in such form as shall be
customary in respect of obligations of a similar nature and as shall be
reasonably requested by Borrower) issued by Agent under this Agreement and an LC
Agreement.
LC AGREEMENT means a letter of credit application and agreement (in form
and substance satisfactory to Agent in its reasonable discretion) submitted by
Borrower to Agent for an LC for the account of any Company.
LC EXPOSURE means, without duplication, the sum of (a) the aggregate face
amount of all undrawn and uncancelled LCs, plus (b) the aggregate unpaid
reimbursement obligations of Borrower under drawings or drafts under any LC.
LC REQUEST means a request substantially in the form of EXHIBIT G.
LC SUBFACILITY means a subfacility for the issuance of LCs, as described in
SECTION 2.3.
LENDERS means each of the lenders named on the attached SCHEDULE 1 or on
the most recently amended SCHEDULE 1, if any, delivered by Agent under this
Agreement, and, subject to this Agreement, their respective successors and
assigns (but not any Participant who is not otherwise a party to this
Agreement).
LIBOR means, with respect to any LIBOR Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page (or any successor
page or any successor service for the purpose of displaying London interbank
offered rates of major banks) as the
6
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page (or any successor page),
the applicable rate shall be the arithmetic mean of all such rates (rounded
upwards, if necessary, to the nearest 1/100 of 1%).
LIBOR LOAN means a Loan bearing interest at the sum of LIBOR plus the
Applicable Margin.
LIEN means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, a Person shall be deemed to own subject to a Lien
any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
LITIGATION means any action by or before any Tribunal.
LOAN means any amount disbursed by any Lender to Borrower or on behalf of
any Company under the Loan Papers, either as an original disbursement of funds,
the continuation of an amount outstanding, or payment under an LC.
LOAN DATE is defined in SECTION 2.2(A).
LOAN PAPERS means (a) this Agreement and the Notes, (b) each Guaranty, (c)
all LCs and LC Agreements, (d) any Financial Hedge between Borrower and any
Lender or an Affiliate of any Lender, and (e) all renewals, extensions and
restatements of, and amendments and supplements to, any of the foregoing.
LOAN REQUEST means a request substantially in the form of EXHIBIT C.
MATERIAL ADVERSE EVENT means any (a) material impairment of the ability of
the Restricted Companies as a whole to perform their payment or other material
obligations under the Loan Papers or material impairment of the ability of Agent
or any Lender to enforce any of the material obligations of the Restricted
Companies as a whole under the Loan Papers, or (b) material and adverse effect
on the financial condition of the Restricted Companies as a whole.
MATERIAL AGREEMENT means, for any Person, any agreement (excluding purchase
orders for material, services or inventory in the ordinary course of business)
to which that Person is a party, by which that Person is bound, or to which any
assets of that Person may be subject, and that is not cancelable by that Person
upon 30 or fewer days' notice without liability for further payment, other than
nominal penalty, and that requires that Person to pay more than $2,000,000
during any 12-month period.
MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for a Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest that,
under applicable Law, such Lender is permitted to contract for, charge, take,
reserve or receive on the Obligation held by such Lender.
MOODY'S means Xxxxx'x Investors Service, Inc.
MULTIEMPLOYER PLAN means a multiemployer plan as defined in Sections 3(37)
or 4001(a)(3) of ERISA or Section 414(f) of the Code to which any Company (or
any Person that, for purposes of Title IV of ERISA, is a member of Borrower's
controlled group or is under common control with Borrower within the meaning of
Section 414 of the Code) is making, or has made, or is accruing, or has accrued,
an obligation to make contributions.
NOTE means a promissory note substantially in the form of EXHIBIT A, as
amended, supplemented or restated.
OBLIGATION means all present and future indebtedness and obligations, and
all renewals, increases and extensions thereof, or any part thereof, now or
hereafter owed to Agent and Lenders by the Companies under the Loan Papers,
together with all interest accruing thereon, fees, costs and expenses
(including, without limitation, all attorneys'
7
fees and expenses incurred in the enforcement or collection thereof) payable
under the Loan Papers or in connection with the protection of Rights under the
Loan Papers.
PARTICIPANT is defined in SECTION 14.12(B).
PBGC means the Pension Benefit Guaranty Corporation, or any successor
thereof, established under ERISA.
PERMITTED DEBT means:
(a) the Obligation;
(b) existing Debt listed on Part B of SCHEDULE 2.3;
(c) Debt arising from endorsing negotiable instruments for collection
in the ordinary course of business;
(d) up to $100,000,000 of Subordinated Debt (plus any related
oversubscription);
(e) in addition to the foregoing, (i) Debt of Unrestricted
Subsidiaries which is non-recourse to the Restricted Companies and their
assets, (ii) fees and other amounts payable under the Forest Service
Permits in the ordinary course of business, and (iii) inter-Company Debt
between Restricted Companies; and
(f) in addition to the foregoing, up to $100,000,000 of additional
Debt of the Companies in the aggregate at any point in time.
PERMITTED LIENS means:
(a) Liens directly securing the Obligation;
(b) Liens created by, or pursuant to, the Collateral Agency Agreement
for the benefit of the holders of the Vail Bonds and the Debt Service
Reserve Funds established pursuant to the Loan Agreements described in the
Collateral Agency Agreement (and Liens created on all or any portion of the
same assets in connection with any refinancing of such bonds);
(c) Liens on the amounts in the Bond Fund, Redemption Fund and Rebate
Fund established and maintained in accordance with the provisions of the
documents executed in connection with the issuance of the Summit Bonds (and
Liens created on all or any portion of the same assets in connection with
any refinancing of such bonds);
(d) Liens on assets of Unrestricted Subsidiaries securing Debt which
is non-recourse to the Restricted Companies and their assets;
(e) purchase money liens which encumber only the assets acquired;
(f) pledges or deposits made to secure payment of workers'
compensation, unemployment insurance or other forms of governmental
insurance or benefits or to participate in any fund in connection with
workers' compensation, unemployment insurance, pensions or other social
security programs;
(g) good-faith pledges or deposits made to secure performance of
bids, tenders, contracts (other than for the repayment of borrowed money)
or leases, or to secure statutory obligations, surety or appeal bonds or
indemnity, performance or other similar bonds in the ordinary course of
business;
8
(h) encumbrances and restrictions on the use of real property which do
not materially impair the use thereof;
(i) the following, if either (1) no amounts are due and payable and no
Lien has been filed or agreed to, or (2) the validity or amount thereof is
being contested in good faith by lawful proceedings diligently conducted,
reserve or other provision required by GAAP has been made, levy and
execution thereon have been (and continue to be) stayed or payment thereof
is covered in full (subject to the customary deductible) by insurance: (i)
Liens for Taxes; (ii) Liens upon, and defects of title to, property,
including any attachment of property or other legal process prior to
adjudication of a dispute on the merits; (iii) Liens imposed by operation
of law (including, without limitation, Liens of mechanics, materialmen,
warehousemen, carriers and landlords, and similar Liens); and (iv) adverse
judgments on appeal;
(j) any interest or title of a lessor or licensor in assets being
leased or licensed to a Company;
(k) licenses, leases or subleases granted to third Persons which do
not interfere in any material respect with the business conducted by the
Companies;
(l) any Lien on any asset of any corporation that becomes a Subsidiary
of VRI, which Lien exists at the time such corporation becomes a Subsidiary
of VRI and is not created in contemplation thereof;
(m) in respect of Water Rights, the provisions of the instruments
evidencing such Water Rights and any matter affecting such Water Rights
which does not affect the Companies' rights to sufficient quantity and
quality of water to conduct business as in effect on the date hereof or any
expansion planned as of the date hereof (including, without limitation, any
Lien of the Colorado Water Conservation Board, or its successors and
assigns, on stock owned by any Company in a Colorado ditch and reservoir
company formed in accordance with the Colorado Corporation Code, as
amended);
(n) in respect of the Forest Service Permits, the provisions of the
instruments evidencing such permits and all rights of the U.S. and its
agencies with respect thereto or with respect to the land affected thereby;
and
(o) Liens on cash accounts not to exceed $250,000 in the aggregate at
the FirstBank of Vail established in connection with collateralizing a
portion, if any, of certain second mortgage loans made by such bank, and
guaranteed by Borrower, as part of the Vail Associates Home Mortgage
Program for Borrower's employees.
PERSON means any individual, partnership, entity or Tribunal.
POTENTIAL DEFAULT means the occurrence of any event or existence of any
circumstance that would, upon notice or lapse of time or both, become a Default.
PRIME RATE means the per annum rate of interest established from time to
time by Agent as its prime rate, which rate may not be the lowest rate of
interest charged by Agent to its customers.
PRINCIPAL DEBT means, at any time, the unpaid principal balance of all
Loans.
PRO RATA and PRO RATA PART means, when determined for any Lender, if no
Default or Potential Default exists, the proportion (stated as a percentage)
that its Committed Sum bears to the Total Commitment, or if a Default or
Potential Default exists, the proportion (stated as a percentage) that the
Principal Debt owed to it bears to the aggregate Principal Debt owed to all
Lenders.
9
PURCHASER is defined in SECTION 14.12(C).
QUARTERLY DATE means each January 31, April 30, July 31 and October 31.
REPRESENTATIVES means representatives, officers, directors, employees,
attorneys and agents.
REQUIRED LENDERS means Lenders holding more than (a) 50% of the Total
Commitment, if no Default or Potential Default exists, or (b) 50% of the
outstanding Principal Debt, if a Default or Potential Default exists.
RESERVE REQUIREMENT means, with respect to any LIBOR Loan for the relevant
Interest Period, the maximum rate at which reserves (including, without
limitation, any marginal, special, supplemental, or emergency reserves) are
required to be maintained under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities" (as such
term is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of liabilities
which includes deposits by reference to which LIBOR is to be determined, or (ii)
any category of extensions of credit or other assets which include LIBOR Loans.
LIBOR shall be adjusted automatically on and as of the effective date of any
change in the Reserve Requirement.
RESORT EBITDA means EBITDA, minus EBITDA related to real estate activities,
and minus any portion of EBITDA attributable to Unrestricted Subsidiaries.
RESPONSIBLE OFFICER means the chairman, president, chief executive officer
or chief financial officer of Borrower.
RESTRICTED COMPANY means VRI, VHI, Borrower and all of VRI's other direct
and indirect Subsidiaries (other than Unrestricted Subsidiaries).
RESTRICTED SUBSIDIARY means VHI, Borrower and all of VRI's other direct and
indirect Subsidiaries (other than Unrestricted Subsidiaries).
RIGHTS means rights, remedies, powers, privileges and benefits.
S&P means Standard & Poor's Ratings Group (a division of McGraw Hill,
Inc.).
SERVICE means the U.S. Department of Agriculture Forest Service or any
successor agency.
XXXXX CREEK BONDS means the Xxxxx Creek Metropolitan District, Eagle
County, Colorado Variable Rate Revenue Bonds, Series 1995 in the original
principal amount of $26,000,000, and Series 1997 in the original principal
amount of $18,500,000.
XXXXX CREEK INDENTURE means the Trust Indenture dated as of April 1, 1995,
by and between Xxxxx Creek Metropolitan District, as Issuer, and the Xxxxx Creek
Trustee, relating to the Xxxxx Creek Bonds, as supplemented by the First
Supplemental Trust Indenture dated as of March 1, 1997, by and between Xxxxx
Creek Metropolitan District and the Xxxxx Creek Trustee, and as amended, further
supplemented or restated from time to time.
XXXXX CREEK LC means either of the two irrevocable transferable LCs issued
to the Xxxxx Creek Trustee, under the terms of which it will be entitled to
draw, with respect to the applicable series of Xxxxx Creek Bonds, up to (a) an
amount sufficient to pay (i) the principal of the "Outstanding Bonds" (as
defined in the Xxxxx Creek Indenture) when due, or (ii) the portion of the
purchase price of Outstanding Bonds tendered or deemed tendered for purchase in
accordance with the Xxxxx Creek Indenture and not subsequently remarketed
corresponding to the principal amount of
10
such bonds, plus (b) an amount equal to approximately 185 days of accrued
interest on the Outstanding Bonds (at 12% per annum or such higher rate as the
Xxxxx Creek Trustee may designate in accordance with the Xxxxx Creek Indenture),
to pay (i) interest on the Outstanding Bonds when due, or (ii) the portion of
the purchase price of Outstanding Bonds tendered or deemed tendered for purchase
in accordance with the Xxxxx Creek Indenture and not subsequently remarketed
corresponding to accrued interest then due on such bonds. The initial Xxxxx
Creek LC, issued in connection with the Series 1995 Xxxxx Creek Bonds, was in
the maximum amount of $27,581,370 and, as amended, will expire on October 15,
2002. The second Xxxxx Creek LC, issued in connection with the Series 1997 Xxxxx
Creek Bonds, was in the maximum amount of $19,625,206 and will also expire on
October 15, 2002. Each Xxxxx Creek LC will constitute an LC issued under this
Agreement.
XXXXX CREEK TRUSTEE means Colorado National Bank, as the Successor Trustee
under the Xxxxx Creek Trust Indenture, and any future successor thereto.
SOLVENT means, as to a Person, that (a) the aggregate fair market value of
its assets exceeds its liabilities, (b) it has sufficient cash flow to enable it
to pay its Debts as they mature, and (c) it does not have unreasonably small
capital to conduct its businesses.
SUBORDINATED DEBT means any unsecured indebtedness for borrowed money for
which a Company is directly and primarily obligated that (i) does not have any
stated maturity before the latest maturity of any part of the Obligation, (ii)
has terms that are no more restrictive upon the Company than the terms of the
Loan Papers, and (iii) is subordinated, upon terms satisfactory to Agent, to the
payment and collection of the Obligation.
SUBSIDIARY means with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person.
SUMMIT BONDS means (a) the Summit County, Colorado, Sports Facilities
Refunding Revenue Bonds (Keystone Resorts Management, Inc. Project) Series 1990,
in the original principal amount of $20,360,000, (b) the Summit County,
Colorado, Sports Facilities Refunding Revenue Bonds (Keystone Resorts
Management, Inc. Project) Series 1991, in the original principal amount of
$3,000,000, and (c) refinancings of any of the foregoing.
TAXES means, for any Person, taxes, assessments or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises or assets.
TERMINATION DATE means the earlier of (a) December 19, 2002, and (b) the
effective date that Lenders' commitments to lend under this Agreement are
otherwise canceled or terminated.
TOTAL COMMITMENT means, at any time, the sum of all Committed Sums for all
Lenders (as reduced or canceled under this Agreement) then in effect.
TRIBUNAL means any (a) local, state, or federal judicial, executive, or
legislative instrumentality, (b) private arbitration board or panel, or (c)
central bank.
TRUSTEE means the Xxxxx Creek Trustee or the BC Housing Trustee, and
TRUSTEES means the Xxxxx Creek Trustee and the BC Housing Trustee.
TYPE means any type of Loan determined with respect to the applicable
interest option.
UCP means The Uniform Customs and Practice for Documentary Credits, 1993
Revision, International Chamber of Commerce Publication No. 500 (or any revision
thereof).
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UNRESTRICTED SUBSIDIARY means Vail Associates Investments, Inc., and any
newly-formed Subsidiary created by Borrower pursuant to SECTION 8.11 (which may
be a partnership, joint venture, corporation or other entity) (a) which does not
own any Forest Service Permit or the stock of any Restricted Company or any of
the assets described on SCHEDULE 2, (b) which has (and whose other partners,
joint venturers or shareholders have) no Debt or other material obligation which
is recourse to any Restricted Company or to the assets of any Restricted Company
(other than with respect to limited guarantees or other recourse agreements of
the Companies which are permitted to be incurred hereunder within the
$100,000,000 of recourse Debt allowed under clause (h) of the definition of
"Permitted Debt"), and (c) which has been designated by Borrower as an
Unrestricted Subsidiary by notice to Agent.
U.S. means the United States of America.
VAIL BONDS means (a) the Eagle County, Colorado, Sports Facilities Revenue
Refunding Bonds (Beaver Creek Associates Project) Series 1992, in the original
principal amount of $19,600,000, (b) the Eagle County, Colorado, Sports and
Housing Facilities Refunding Bonds (Vail Associates Project) Series 1992, in the
original principal amount of $21,600,000, and (c) refinancings of any of the
foregoing.
VAIL SUMMIT RESORTS means Vail Summit Resorts, Inc. (f/k/a "Xxxxxxx
Resorts, Inc.), a Colorado corporation and a wholly-owned Subsidiary of
Borrower.
VHI means Vail Holdings, Inc., a Colorado corporation and the direct owner
of Borrower.
VRI means Vail Resorts, Inc., a Delaware corporation and the indirect owner
of Borrower.
WATER RIGHTS means all water rights and conditional water rights that are
appurtenant to real property owned by the Companies or that have been used or
are intended for use in connection with the conduct of the business of the
Companies, including but not limited to (a) ditch, well, pipeline, spring and
reservoir rights, whether or not adjudicated or evidenced by any well or other
permit, (b) all rights with respect to groundwater underlying any real property
owned by the Companies, (c) any permit to construct any water well, water from
which is intended to be used in connection with such real property, and (d) all
right, title and interest of the Companies under any decreed or pending plan of
augmentation or water exchange plan.
1.2 Number and Gender of Words. The singular number includes the plural
--------------------------
where appropriate and vice versa, and words of any gender include each other
gender where appropriate.
1.3 Accounting Principles. Under the Loan Papers and any documents
---------------------
delivered thereunder, unless otherwise stated, (a) GAAP in effect on the date of
this Agreement determines all accounting and financial terms and compliance with
financial covenants, (b) otherwise, all accounting principles applied in a
current period must be comparable in all material respects to those applied
during the preceding comparable period, and (c) while VRI has any consolidated
Restricted Subsidiaries, all accounting and financial terms and compliance with
financial covenants must be on a consolidating and consolidated basis, as
applicable.
SECTION 2 COMMITMENT.
--------- ----------
2.1 Credit Facility. Subject to the provisions in the Loan Papers, each
---------------
Lender hereby severally and not jointly agrees to lend to Borrower its Pro Rata
Part of one or more revolving Loans in an aggregate principal amount outstanding
at any time up to such Lender's Committed Sum, which Borrower may borrow, repay,
and reborrow under this Agreement. Loans are subject to the following
conditions:
(a) Each Loan must occur on a Business Day and no later than the
Business Day immediately preceding the Termination Date;
12
(b) Each Loan must be in an amount not less than (i) $500,000 or a
greater integral multiple of $100,000 (if a Base Rate Loan), or (ii)
$1,000,000 or a greater integral multiple of $100,000 (if a LIBOR Loan);
and
(c) When determined, (i) Commitment Usage may not exceed the Total
Commitment, and (ii) for any Lender, its Pro Rata Part of the Commitment
Usage may not exceed such Lender's Committed Sum.
2.2 Loan Procedure.
--------------
(a) Borrower may request a Loan by submitting to Agent a Loan Request,
which is irrevocable and binding on Borrower. It must be received by Agent
no later than 1:00 p.m. on the third Business Day preceding the date on
which funds are requested (the "LOAN DATE") for any LIBOR Loan or no later
than 1:00 p.m. on the Business Day immediately preceding the Loan Date for
any Base Rate Loan. Agent shall promptly notify each Lender of its receipt
of any Loan Request and its contents.
(b) Each Lender shall remit its applicable Pro Rata Part of each
requested Loan to Agent's principal office in Dallas, Texas, in funds that
are available for immediate use by Agent by 11:00 a.m. on the applicable
Loan Date. Subject to receipt of such funds, Agent shall (unless to its
actual knowledge any of the applicable conditions precedent have not been
satisfied by Borrower or waived by Required Lenders) make such funds
available to Borrower as directed in the Loan Request.
(c) Absent contrary written notice from a Lender, Agent may assume
that each Lender has made its Pro Rata Part of the requested Loan available
to Agent on the applicable Loan Date, and Agent may, in reliance upon such
assumption (but shall not be required to), make available to Borrower a
corresponding amount. If a Lender fails to make such Pro Rata Part of any
requested Loan available to Agent on the applicable Loan Date, Agent may
recover the applicable amount on demand (i) from that Lender, together with
interest at the Federal Funds Rate during the period commencing on the date
the amount was made available to Borrower by Agent and ending on (but
excluding) the date Agent recovers the amount from that Lender, or (ii), if
that Lender fails to pay its amount upon demand, then from Borrower,
together with interest at an annual interest rate equal to the rate
applicable to the requested Loan during the period commencing on the Loan
Date and ending on (but excluding) the date Agent recovers the amount from
Borrower. No Lender is responsible for the failure of any other Lender to
fund any part of any Loan.
2.3 LC Subfacility.
--------------
(a) Subject to the terms and conditions of this Agreement and
applicable Law, Agent agrees to issue LCs denominated in U.S. Dollars under
the Facility upon Borrower's delivery of an LC Request and an LC Agreement,
each of which must be received by Agent no later than 1:00 p.m. on the
third Business Day preceding the date on which the requested LC is to be
issued; provided that Commitment Usage may not exceed the Total Commitment.
Each LC (other than the Bond LCs) must expire no later than 13 months from
its issuance; provided that any LC (other than the Bond LCs) may, at
Borrower's request, provide that it is self-extending upon its expiration
date for successive periods of 6 to 12 months each (as selected by
Borrower), unless Agent has given the beneficiary thereunder at least 30
days (but no more than 120 days) prior written notice to the contrary
(provided, however, that such notice shall in no event be given by Agent
unless (i) Agent is directed so to do by Borrower, (ii) a Default exists,
or (iii) such extension would extend the expiration date beyond the
Termination Date). Amounts drawn under the Bond LCs are subject to
reinstatement upon the terms set forth therein. In no event may any LC
have an expiration date later than the Termination Date.
(b) Immediately upon Agent's issuance of any LC, Agent shall be deemed
to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from
Agent, without recourse or warranty, an undivided interest and
participation (to
13
the extent of such Lender's Pro Rata Part) in the LC and all applicable
Rights of Agent in the LC (other than Rights to receive the fronting fees
provided for in SECTION 4.3). Agent shall provide copies of LCs to Lenders
upon request and shall distribute quarterly schedules of the outstanding
LCs to each Lender.
(c) To induce Agent to issue and maintain LCs, and to induce Lenders
to participate in issued LCs, Borrower agrees to pay or reimburse Agent (i)
on or before the date when any draft or draw request or other form of
demand is presented under any LC, the amount paid or to be paid by Agent
(subject to a credit, in the case of a Xxxx XX, for any portion of such
reimbursement received by Agent directly from the relevant Trustee for the
account of Borrower under the relevant Indenture) and (ii) promptly, upon
demand, the amount of any additional fees Agent customarily charges for the
application and issuance of an LC, for amending LC Agreements, for honoring
drafts and draw requests or other forms of demands, and taking similar
action in connection with letters of credit. If Borrower (or, in the case
of a drawing under a Xxxx XX, the relevant Trustee) has not reimbursed
Agent for any drafts or draws or other forms of demands paid or to be paid
and Borrower has not requested a Loan to fund such reimbursement
obligations within 24 hours following Agent's demand for reimbursement,
Agent is irrevocably authorized to fund Borrower's reimbursement
obligations as a Loan under this Agreement (and the proceeds of the Loan
shall be advanced directly to Agent to pay Borrower's unpaid reimbursement
obligations). If funds cannot be advanced because the Facility has been
terminated under SECTION 12.1, then Borrower's reimbursement obligation
shall constitute a demand obligation. Borrower's obligations under this
SECTION 2.3(C) are absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense
(other than payment) that Borrower may have at any time against Agent or
any other Person. Agent shall promptly distribute reimbursement payments
received from Borrower to all Lenders according to their Pro Rata Part.
From the date due to the date paid, unpaid reimbursement amounts accrue
interest that is payable on demand at the Default Rate.
(d) Agent shall promptly notify Borrower of the date and amount of any
draft or draw request or other form of demand presented for honor under any
LC and the date and amount of any payment by Agent in connection therewith
(but failure to give notice will not affect Borrower's obligations under
this Agreement). Agent shall pay the requested amount upon presentment of
a draft or draw request unless presentment on its face does not comply with
the terms of the applicable LC. When making payment, Agent may disregard
(i) any default or potential default that exists under any other agreement
and (ii) obligations under any other agreement that have or have not been
performed by the beneficiary or any other Person (and Agent is not liable
for any of those obligations). Borrower's reimbursement obligations to
Agent and Lenders, and each Lender's obligations to Agent, under this
SECTION 2.3 are absolute and unconditional irrespective of, and Agent is
not responsible for, (i) the validity, enforceability, sufficiency,
accuracy or genuineness of documents or endorsements (even if they are in
any respect invalid, unenforceable, insufficient, inaccurate, fraudulent or
forged), (ii) any dispute by any Company with or any Company's claims,
setoffs, defenses (other than payment), counterclaims or other Rights
against Agent, any Lender or any other Person, or (iii) the occurrence of
any Potential Default or Default.
(e) If Borrower (or, in the case of a drawing under a Xxxx XX, the
relevant Trustee) fails to reimburse Agent as provided in SECTION 2.3(C)
within 24 hours after Agent's demand for reimbursement, and funds cannot be
advanced under this Agreement to satisfy the reimbursement obligations,
Agent shall promptly notify each Lender of Borrower's failure, of the date
and amount paid, and of each Lender's Pro Rata Part of the unreimbursed
amount. Each Lender shall promptly and unconditionally make available to
Agent in immediately available funds such Pro Rata Part of the unpaid
reimbursement obligation. Funds are due and payable to Agent before the
close of business on the Business Day when Agent gives notice to each
Lender of Borrower's reimbursement failure (if notice is received by such
Lender before 2:00 p.m.) (in the time zone where such Lender's office
listed on SCHEDULE 1 is located) or on the next succeeding Business Day (if
received after 2:00 p.m.). All amounts payable by any Lender accrue
interest at the Federal Funds Rate from the day the applicable draft or
draw is paid by Agent to (but not including) the date the amount is paid by
the Lender to Agent.
14
(f) Borrower acknowledges that each LC is deemed issued upon delivery
to the beneficiary or Borrower. If Borrower requests any LC be delivered
to Borrower rather than the beneficiary, and Borrower subsequently cancels
that LC, Borrower agrees to return it to Agent together with Borrower's
written certification that it has never been delivered to the beneficiary.
If any LC is delivered to the beneficiary under Borrower's instructions,
Borrower's cancellation is ineffective without Agent's receipt of the
beneficiary's written consent and the LC. BORROWER SHALL INDEMNIFY AGENT
FOR ALL LOSSES, COSTS, DAMAGES, EXPENSES AND REASONABLE ATTORNEYS' FEES
SUFFERED OR INCURRED BY AGENT RESULTING FROM ANY DISPUTE CONCERNING
BORROWER'S CANCELLATION OF ANY LC.
(g) Agent agrees with each Lender that it will exercise and give the
same care and attention to each LC as it gives to its other letters of
credit. Each Lender and Borrower agree that, in paying any draft or draw
or other form of demand under any LC, Agent has no responsibility to obtain
any document (other than any documents expressly required by the respective
LC) or to ascertain or inquire as to any document's validity,
enforceability, sufficiency, accuracy or genuineness or the authority of
any Person delivering it. Neither Agent nor its Representatives will be
liable to any Lender or any Company for any LC's use or for any
beneficiary's acts or omissions. Any action, inaction, error, delay or
omission taken or suffered by Agent or any of its Representatives in
connection with any LC, applicable draws, drafts or documents, or the
transmission, dispatch or delivery of any related message or advice, if in
good faith and in conformity with applicable Laws and in accordance with
the standards of care specified in the UCP, is binding upon the Companies
and Lenders and does not place Agent or any of its Representatives under
any resulting liability to any Company or any Lender. AGENT AND ITS
REPRESENTATIVES ARE NOT LIABLE TO ANY COMPANY OR ANY LENDER FOR ANY ACTION
TAKEN OR OMITTED, IN THE ABSENCE OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
BY AGENT OR ITS REPRESENTATIVE IN CONNECTION WITH ANY LC.
(h) On the Termination Date, or during the continuance of any Default
under SECTION 11.3, or upon any demand by Agent during the continuance of
any other Default, Borrower shall provide to Agent, for the benefit of
Lenders, cash collateral in an amount equal to the then-existing LC
Exposure. Any cash collateral provided by Borrower to Agent hereunder
shall be deposited by Agent in an interest-bearing cash collateral account
maintained with Agent at the office of Agent and invested in obligations
issued or guaranteed by the U.S. and, upon cure of any Default or upon the
surrender of any LC, Agent shall deliver the appropriate funds (together
with interest earned with respect thereto) on deposit in such collateral
account to Borrower.
(i) BORROWER SHALL PROTECT, INDEMNIFY, PAY AND SAVE AGENT, EACH LENDER
AND THEIR RESPECTIVE REPRESENTATIVES HARMLESS FROM AND AGAINST ANY AND ALL
CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, COSTS, CHARGES AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS' FEES) WHICH ANY OF THEM MAY INCUR OR BE
SUBJECT TO AS A CONSEQUENCE OF THE ISSUANCE OF ANY LC, ANY DISPUTE ABOUT
IT, OR THE FAILURE OF AGENT TO HONOR A DRAFT OR DRAW REQUEST OR OTHER FORM
OF DEMAND UNDER ANY LC, UNLESS THEY ARISE AS A RESULT OF AGENT'S FAILURE TO
ACT IN ACCORDANCE WITH THE PROCEDURES OF THE UCP (AS MODIFIED BY ANY LC
AGREEMENT OR OTHER WRITING BETWEEN BORROWER AND AGENT).
(j) Although referenced in any LC, terms of any particular agreement
or other obligation to the beneficiary are not incorporated into this
Agreement in any manner. The fees and other amounts payable with respect
to each LC are as provided in this Agreement, drafts and draws and other
forms of demands under each LC are part of the Obligation, and the terms of
this Agreement control any conflict between the terms of this Agreement and
any LC Agreement.
15
SECTION 3 TERMS OF PAYMENT.
--------- ----------------
3.1 Notes and Payments.
------------------
(a) The Principal Debt shall be evidenced by Notes, payable to each
Lender in the stated principal amount of its Committed Sum.
(b) Borrower must make each payment on the Obligation to Agent's
principal office in Dallas, Texas, in funds that will be available for
immediate use by Agent by 12:00 noon on the day due; otherwise, but subject
to SECTION 3.8, those funds continue to accrue interest as if they were
received on the next Business Day. Agent shall pay to each Lender any
payment to which that Lender is entitled on the same day Agent receives the
funds from Borrower if Agent receives the payment before 12:00 noon, and
otherwise before 12:00 noon on the following Business Day. If and to the
extent that Agent does not make payments to Lenders when due, unpaid
amounts shall accrue interest at the Federal Funds Rate from the due date
until (but not including) the payment date.
3.2 Interest and Principal Payments; Voluntary Commitment Reductions.
----------------------------------------------------------------
(a) Accrued interest on each LIBOR Loan is due and payable on the last
day of its Interest Period. If any Interest Period with respect to a LIBOR
Loan is a period greater than three months, then accrued interest is also
due and payable on the date three months after the commencement of the
Interest Period. Accrued interest on each Base Rate Loan is due and
payable on each Quarterly Date (commencing January 31, 1998) and on the
Termination Date.
(b) The Principal Debt is due and payable on the Termination Date.
(c) If the Commitment Usage ever exceeds the Total Commitment,
Borrower shall pay Principal Debt in at least the amount of that excess,
together with (i) all accrued and unpaid interest on the principal amount
so paid and (ii) any resulting Funding Loss.
(d) Borrower may voluntarily reduce or prepay the Facility as follows:
(i) Without premium or penalty and upon giving at least two
Business Days prior written and irrevocable notice to Agent, Borrower
may terminate all or reduce part of the unused portion of the Total
Commitment. Each partial reduction (unless the remaining portion of
such commitment is less) must be in an amount of not less than
$5,000,000 or a greater integral multiple of $1,000,000, and shall be
Pro Rata among all Lenders. Once terminated or reduced, such
commitments may not be reinstated or increased.
(ii) Borrower may voluntarily prepay all or any part of the
Principal Debt at any time without premium or penalty, subject to the
following conditions:
(A) Agent must receive Borrower's written payment notice
(which shall specify (1) the payment date, and (2) the Type and
amount of the Loan(s) to be paid; such notice shall constitute an
irrevocable and binding obligation of Borrower to make a payment
on the designated date) by 1:00 p.m. on (x) the third Business
Day preceding the date of payment of a LIBOR Loan and (y) the
date of payment of a Base Rate Loan;
(B) each partial payment must be in a minimum amount of at
least $500,000 if a Base Rate Loan or $1,000,000 if a LIBOR Loan
or, in either case, a greater integral multiple of $100,000;
16
(C) all accrued interest on the principal amount so to be
prepaid must also be paid in full on the date of payment; and
(D) Borrower shall pay any related Funding Loss upon demand.
3.3 Interest Options. Except where specifically otherwise provided,
----------------
Loans bear interest at an annual rate equal to the lesser of (a) the Base Rate
plus the Applicable Margin or LIBOR plus the Applicable Margin for the Interest
Period, if any, selected by Borrower (in each case as designated or deemed
designated by Borrower), as the case may be, and (b) the Maximum Rate. Each
change in the Base Rate and Maximum Rate is effective, without notice to
Borrower or any other Person, upon the effective date of change.
3.4 Quotation of Rates. A Responsible Officer of Borrower may call
------------------
Agent before delivering a Loan Request to receive an indication of the interest
rates then in effect, but the indicated rates do not bind Agent or Lenders or
affect the interest rate that is actually in effect when Borrower delivers its
Loan Request or on the Loan Date.
3.5 Default Rate. If permitted by Law, all past-due Principal Debt,
------------
Borrower's past-due payment and reimbursement obligations in connection with
LCs, and past-due interest accruing on any of the foregoing bears interest from
the date due (stated or by acceleration) at the Default Rate until paid,
regardless whether payment is made before or after entry of a judgment.
3.6 Interest Recapture. If the designated interest rate applicable to
------------------
any Loan exceeds the Maximum Rate, the interest rate on that Loan is limited to
the Maximum Rate, but any subsequent reductions in the designated rate shall not
reduce the interest rate thereon below the Maximum Rate until the total amount
of accrued interest equals the amount of interest that would have accrued if
that designated rate had always been in effect. If at maturity (stated or by
acceleration), or at final payment of the Notes, the total interest paid or
accrued is less than the interest that would have accrued if the designated
rates had always been in effect, then, at that time and to the extent permitted
by Law, Borrower shall pay an amount equal to the difference between (a) the
lesser of the amount of interest that would have accrued if the designated rates
had always been in effect and the amount of interest that would have accrued if
the Maximum Rate had always been in effect, and (b) the amount of interest
actually paid or accrued on the Notes.
3.7 Interest Calculations.
---------------------
(a Interest will be calculated on the basis of actual number of days
elapsed (including the first day, but excluding the last day), but computed
as if each calendar year consisted of 360 days for LIBOR Loans (unless the
calculation would result in an interest rate greater than the Maximum Rate,
in which event interest will be calculated on the basis of a year of 365 or
366 days, as the case may be), and 365 or 366 days, as the case may be, for
Base Rate Loans. All interest rate determinations and calculations by
Agent are conclusive and binding absent manifest error.
(b The provisions of this Agreement relating to calculation of the
Base Rate and LIBOR are included only for the purpose of determining the
rate of interest or other amounts to be paid under this Agreement that are
based upon those rates. Each Lender may fund and maintain its funding of
all or any part of each Loan as it selects.
3.8 Maximum Rate. Regardless of any provision contained in any Loan
------------
Paper or any document related thereto, no Lender is entitled to contract for,
charge, take, reserve, receive or apply, as interest on all or any part of the
Obligation any amount in excess of the Maximum Rate, and, if Lenders ever do so,
then any excess shall be treated as a partial payment of principal and any
remaining excess shall be refunded to Borrower. In determining if the interest
paid or payable exceeds the Maximum Rate, Borrower and Lenders shall, to the
maximum extent permitted under applicable Law, (a) treat all Loans as but a
single extension of credit (and Lenders and Borrower agree that is the case
17
and that provision in this Agreement for multiple Loans is for convenience
only), (b) characterize any nonprincipal payment as an expense, fee or premium
rather than as interest, (c) exclude voluntary payments and their effects, and
(d) amortize, prorate, allocate and spread the total amount of interest
throughout the entire contemplated term of the Obligation. However, if the
Obligation is paid in full before the end of its full contemplated term, and if
the interest received for its actual period of existence exceeds the Maximum
Amount, Lenders shall refund any excess (and Lenders shall not, to the extent
permitted by Law, be subject to any penalties provided by any Laws for
contracting for, charging, taking, reserving or receiving interest in excess of
the Maximum Amount).
3.9 Interest Periods. When Borrower requests any LIBOR Loan, Borrower
----------------
may elect the applicable interest period (each an "INTEREST PERIOD"), which may
be, at Borrower's option, one, two, three or six months, subject to the
following conditions: (a) the initial LIBOR Interest Period commences on the
applicable Loan Date or conversion date, and each subsequent LIBOR Interest
Period commences on the day when the next preceding applicable Interest Period
expires; (b) if any LIBOR Interest Period begins on a day for which no
numerically corresponding Business Day in the calendar month at the end of the
Interest Period exists, then the Interest Period ends on the last Business Day
of that calendar month; (c) no LIBOR Interest Period for any portion of
Principal Debt may extend beyond the scheduled payment date for that portion of
Principal Debt; and (d) no more than 20 LIBOR Interest Periods may be in effect
at one time.
3.10 Conversions. Subject to the dollar limits and denominations of
-----------
SECTION 2.1 and the limitations on LIBOR Interest Periods of SECTION 3.9,
Borrower may (a) convert all or part of a LIBOR Loan on the last day of the
applicable Interest Period to a Base Rate Loan, (b) convert all or part of a
Base Rate Loan at any time to a LIBOR Loan, and (c) elect a new Interest Period
for all or part of a LIBOR Loan, in each case by delivering a Conversion Request
to Agent no later than 1:00 p.m. on the third Business Day before the conversion
date or the last day of the Interest Period, as the case may be (for conversion
to a LIBOR Loan or election of a new Interest Period), and no later than 1:00
p.m. one Business Day before the last day of the Interest Period (for conversion
to a Base Rate Loan). Absent Borrower's notice of conversion or election of a
new Interest Period, a LIBOR Loan shall be converted to a Base Rate Loan when
the applicable Interest Period expires.
3.11 Order of Application. If no Default or Potential Default exists,
--------------------
any payment shall be applied to the Obligation in the order and manner as
Borrower directs. If a Default or Potential Default exists or if Borrower fails
to give direction, any other payment (including proceeds from the exercise of
any Rights hereunder) shall be applied in the following order: (a) to all fees
and expenses for which Agent or Lenders have not been paid or reimbursed in
accordance with the Loan Papers (and if such payment is less than all unpaid or
unreimbursed fees and expenses, then the payment shall be paid against unpaid
and unreimbursed fees and expenses in the order of incurrence or due date); (b)
to accrued interest on the Principal Debt; and (c) ratably to the remainder of
the Obligation.
3.12 Sharing of Payments, Etc.. If any Lender obtains any payment
-------------------------
(whether voluntary, involuntary or otherwise) that exceeds its Pro Rata Part of
the Commitment Usage then that Lender shall purchase from the other Lenders
participations that will cause the purchasing Lender to share the excess payment
ratably with each other Lender. If all or any portion of any excess payment is
subsequently recovered from the purchasing Lender, then the purchase shall be
rescinded and the purchase price restored to the extent of the recovery.
Borrower agrees that any Lender purchasing a participation from another Lender
under this section may, to the fullest extent permitted by Law, exercise all of
its Rights of payment with respect to that participation as fully as if that
Lender were the direct creditor of Borrower in the amount of that participation.
3.13 Booking Loans. To the extent permitted by Law, any Lender may
-------------
make, carry or transfer its Loans at, to, or for the account of any of its
branch offices or the office of any of its Affiliates. However, no Affiliate is
entitled to receive any greater payment under SECTION 3.15 than the transferor
Lender would have been entitled to receive with respect to those Loans.
3.14 Basis Unavailable or Inadequate for LIBOR. If, on or before any
-----------------------------------------
date when LIBOR is to be determined for a Loan, Agent or any Lender determines
(and Required Lenders agree with that determination) that the
18
basis for determining the applicable rate is not available or that the resulting
rate does not accurately reflect the cost to Lenders of making or converting
Loans at that rate for the applicable Interest Period, then Agent shall promptly
notify Borrower and Lenders of that determination (which is conclusive and
binding on Borrower absent manifest error) and the applicable Loan shall bear
interest at the sum of the Base Rate plus the Applicable Margin. Until Agent
notifies Borrower that those circumstances no longer exist, Lenders' commitments
under this Agreement to make, or to convert to, LIBOR Loans are suspended.
3.15 Additional Costs.
----------------
(a With respect to any LIBOR Loan, (i) if any present or future Law
imposes, modifies, or deems applicable (or if compliance by any Lender with
any requirement of any Tribunal results in) any Reserve Requirement, and if
(ii) those reserves reduce any sums receivable by that Lender under this
Agreement or increase the costs incurred by that Lender in advancing or
maintaining any portion of any LIBOR Loan, then (iii) that Lender (through
Agent) shall deliver to Borrower a certificate setting forth in reasonable
detail the calculation of the amount necessary to compensate it for its
reduction or increase (which certificate is conclusive and binding absent
manifest error), and (iv) Borrower shall promptly pay that amount to that
Lender upon demand. This paragraph shall survive the satisfaction and
payment of the Obligation and termination of this Agreement. This
paragraph may be invoked by a Lender only if such Lender is generally
invoking similar provisions against other Persons to which such Lender
lends funds pursuant to facilities similar to the Facility.
(b With respect to any Loan or LC, if any present or future Law
regarding capital adequacy or compliance by Agent (as issuer of LCs) or any
Lender with any request, directive or requirement now existing or hereafter
imposed by any Tribunal regarding capital adequacy, or any change in its
written policies or in the risk category of this transaction, reduces the
rate of return on its capital as a consequence of its obligations under
this Agreement to a level below that which it otherwise could have achieved
(taking into consideration its policies with respect to capital adequacy)
by an amount deemed by it to be material (and it may, in determining the
amount, utilize reasonable assumptions and allocations of costs and
expenses and use any reasonable averaging or attribution method), then
(unless the effect is already reflected in the rate of interest then
applicable under this Agreement) Agent or that Lender (through Agent) shall
notify Borrower and deliver to Borrower a certificate setting forth in
reasonable detail the calculation of the amount necessary to compensate it
(which certificate is conclusive and binding absent manifest error), and
Borrower shall promptly pay that amount to Agent or that Lender upon
demand. This paragraph shall survive the satisfaction and payment of the
Obligation and termination of this Agreement. This paragraph may be
invoked by a Lender only if such Lender is generally invoking similar
provisions against other Persons to which such Lender lends funds pursuant
to facilities similar to the Facility.
(c Any Taxes payable by Agent or any Lender or ruled (by a Tribunal)
payable by Agent or any Lender in respect of any Loan Paper or any document
related thereto shall, if permitted by Law, be paid by Borrower, together
with interest and penalties, if any (other than for Taxes imposed on or
measured by the overall net income of Agent or that Lender and interest and
penalties incurred as a result of the gross negligence or willful
misconduct of Agent or any Lender). Agent or that Lender (through Agent)
shall notify Borrower and deliver to Borrower a certificate setting forth
in reasonable detail the calculation of the amount of payable Taxes, which
certificate is conclusive and binding (absent manifest error), and Borrower
shall promptly pay that amount to Agent for its account or the account of
that Lender, as the case may be. If Agent or that Lender subsequently
receives a refund of the Taxes paid to it by Borrower, then the recipient
shall promptly pay the refund to Borrower.
3.16 Change in Laws. If any Law makes it unlawful for any Lender to
--------------
make or maintain LIBOR Loans, then that Lender shall promptly notify Borrower
and Agent, and (a) as to undisbursed funds, that requested Loan shall be made as
a Base Rate Loan, and (b), as to any outstanding Loan, (i) if maintaining the
Loan until the last day of the
19
applicable Interest Period is unlawful, the Loan shall be converted to a Base
Rate Loan as of the date of notice, and Borrower shall pay any related Funding
Loss, or (ii) if not prohibited by Law, the Loan shall be converted to a Base
Rate Loan as of the last day of the applicable Interest Period, or (iii) if any
conversion will not resolve the unlawfulness, Borrower shall promptly pay the
Loan, without penalty, together with any related Funding Loss. Concurrently with
any payment contemplated by clause (iii) of the immediately preceding sentence,
Borrower shall borrow a Base Rate Loan in an equal principal amount from such
Lender (on which interest and principal shall be payable contemporaneously with
the related LIBOR Loans of the other Lenders) and such Lender shall fund such
Base Rate Loan.
3.17 Funding Loss. BORROWER AGREES TO INDEMNIFY EACH LENDER AGAINST, AND
------------
PAY TO IT UPON DEMAND, ANY FUNDING LOSS OF THAT LENDER. When any Lender demands
that Borrower pay any Funding Loss, that Lender shall deliver to Borrower and
Agent a certificate setting forth in reasonable detail the basis for imposing
Funding Loss and the calculation of the amount, which calculation is conclusive
and binding absent manifest error. The provisions of and undertakings and
indemnification set forth in this paragraph shall survive the satisfaction and
payment of the Obligation and termination of this Agreement.
3.18 Foreign Lenders. Each Lender that is organized under the Laws of any
---------------
jurisdiction other than the U.S. or any State thereof (a) represents to Agent
and Borrower that (i) no Taxes are required to be withheld by Agent or Borrower
with respect to any payments to be made to it in respect of the Obligation and
(ii) it has furnished to Agent and Borrower two duly completed copies of U.S.
Internal Revenue Service Form 4224 or Form 1001 (wherein it claims entitlement
to complete exemption from U.S. federal withholding tax on all interest payments
under the Loan Papers) or Form W-8, or any other successor tax form acceptable
to Agent and Borrower, and (b) covenants to (i) provide Agent and Borrower a new
tax form upon the expiration, inaccuracy or obsolescence of any previously
delivered form according to, and to the extent permitted by, Law, duly executed
and completed by it, and (ii) comply from time to time with all Laws with regard
to the withholding tax exemption. If any of the foregoing is not true or the
applicable forms are not provided, then Borrower and Agent (without duplication)
may deduct and withhold from interest payments under the Loan Papers U.S.
federal income tax at the full rate applicable under the Code. In addition,
Borrower shall not be required to make any payments contemplated by SECTION
3.15(C) to the extent that such payments would not have been payable if such
Lender had furnished the appropriate form (properly and accurately completed in
all respects) which it was otherwise required to furnish in accordance with this
SECTION 3.18.
3.19 Affected Lender's Obligation to Mitigate. Each Lender agrees that, as
----------------------------------------
promptly as practicable after it becomes aware of the occurrence of an event or
the existence of a condition which would entitle it to exercise any rights under
SECTIONS 3.15 or 3.16, it shall use commercially reasonable efforts to make,
fund or maintain the affected Loans of such Lender through another lending
office of such Lender if (a) as a result thereof the additional moneys which
would otherwise be required to be paid in respect of such Loans of such Lender
would be reduced or the illegality or other adverse circumstances which would
otherwise affect such Loans of such Lender would cease to exist or the increased
cost which would otherwise be required to be paid in respect of such Loans would
be reduced and (b) the making, funding or maintaining of such Loans through such
other lending office would not otherwise materially adversely affect such Loans
or such Lender.
3.20 Replacement Lender. In the event Borrower becomes obligated to pay
------------------
any additional amounts to any Lender pursuant to SECTIONS 3.15 or 3.16 as a
result of any event or condition described in any of such Sections, then, unless
such Lender has theretofore taken steps to remove or cure, and has removed or
cured, the conditions creating the cause of such obligation to pay such
additional amounts, Borrower may designate a substitute lender acceptable to
Agent (such lender herein called a "REPLACEMENT LENDER") to purchase such
Lender's rights and obligations with respect to its entire Pro Rata Part
hereunder with respect to the Facility as a whole, without recourse to or
warranty by, or expense to, such Lender in accordance with SECTION 14.12(C) for
a purchase price equal to the outstanding principal amounts payable to such
Lender with respect to such Pro Rata Part, plus any accrued and unpaid interest
and accrued and unpaid fees and charges in respect of such Pro Rata Part and on
other terms reasonably satisfactory to Agent. Upon such purchase by the
Replacement Lender and payment of all other amounts owing to the Lender being
replaced hereunder,
20
such Lender shall no longer be a party hereto or have any rights or obligations
hereunder, and the Replacement Lender shall succeed to the rights and
obligations of such Lender with respect to such Pro Rata Part hereunder.
SECTION 4 FEES.
--------- ----
4.1 Treatment of Fees. The fees described in this SECTION 4 (a) are not
-----------------
compensation for the use, detention, or forbearance of money, (b) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this Agreement, (c) are payable in accordance with SECTION 3.1(B), (d) are non-
refundable, and (e) to the fullest extent permitted by Law, bear interest, if
not paid when due, at the Default Rate.
4.2 Fee Letter. Borrower shall pay the fees described in the letter
----------
agreement between Borrower and Agent dated November 19, 1997.
4.3 LC Fees. Borrower shall pay to Agent for the Pro Rata benefit of
-------
Lenders a fee for the issuance of each LC (which fee may, subject to the
provisions of this Agreement, be included in a Loan) equal to (a) the Applicable
Margin for LIBOR Loans (as in effect from day to day while such LC is
outstanding), multiplied by (b) the face amount of such LC as it exists from day
to day, payable in arrears on each Quarterly Date during the life of such LC,
and on the expiry date of such LC, calculated on the basis of the actual number
of days elapsed (including the first day, but excluding the last day of any
calculation period), but computed as if each calendar year consisted of 360
days. In addition, Borrower shall pay to Agent for its own account a fronting
fee for the issuance of each LC equal to 0.125% of the face amount of such LC
(but in no event less than $350).
4.4 Commitment Fee. Borrower shall pay to Agent for the ratable account
--------------
of Lenders a commitment fee, payable as it accrues on each Quarterly Date and on
the Termination Date, equal to the Applicable Percentage (per annum), of the
amount by which the Total Commitment exceeds the average daily Commitment Usage,
in each case during the calendar quarter (or portion thereof) ending on such
date, calculated on the basis of the actual number of days elapsed (including
the first day, but excluding the last day) in a calendar year of 365 or 366
days, as the case may be.
SECTION 5 GUARANTIES. All obligations of Borrower under the Loan Papers to
--------- ----------
which it is a party shall be guaranteed in accordance with a Guaranty executed
by each other Restricted Company.
SECTION 6 CONDITIONS PRECEDENT.
--------- --------------------
6.1 Initial Advance. In addition to the items described in SECTION 6.2,
---------------
Lenders will not be obligated to fund the initial Loan, and Agent will not be
obligated to issue the initial LC, unless Agent has received each of the
following items:
(a the Promissory Notes;
(b a Guaranty executed by each Restricted Company (other than
Borrower);
(c an Officers' Certificate for each Company, relating to Articles
of Incorporation, Bylaws, Resolutions, and Incumbency;
(d Certificates of Existence and Good Standing (Account Status) for
each Company from its state of organization and each other state where it
does business, each dated after October 15, 1997;
(e Legal opinions of Xxxxx X. Xxxxxx and special New York counsel to
Borrower;
(f Payment in full of all amounts then due Agent under SECTION 8.7
or the fee letter described in SECTION 4.2;
21
(g Financial Statements showing the consolidated financial condition
and results of operations of the Companies, as of, and for the fiscal year
ended on, September 30, 1997, accompanied by the unqualified opinion of a
firm of nationally-recognized independent certified public accountants,
based on an audit using generally accepted auditing standards, that such
Financial Statements were prepared in accordance with GAAP and present
fairly, in all material respects, such financial conditions and results,
together with a copy of any management letter prepared by such accounting
firm in connection with such audit; and
(h Evidence that all amounts owed under the Existing Credit
Agreement have been paid in full and all financing commitments thereunder
have been terminated.
6.2 Each Advance. Lenders will not be obligated to fund (as opposed to
------------
continue or convert) any Loan (including the initial Loans), and Agent will not
be obligated to issue (as opposed to extend) any LC (including the initial LCs),
unless on the applicable date (and after giving effect to the requested Loan or
LC): (a) Agent shall have timely received a Loan Request or LC Request (together
with the applicable LC Agreement), as the case may be; (b) Agent shall have
received any applicable LC fee; (c) all of the representations and warranties of
the Companies in the Loan Papers are true and correct in all material respects
(unless they speak to a specific date or are based on facts which have changed
by transactions contemplated or permitted by this Agreement); (d) no Material
Adverse Event, Default or Potential Default exists; and (e) the funding of the
Loan or issuance of the LC is permitted by Law. Upon Agent's reasonable request,
Borrower shall deliver to Agent evidence substantiating any of the matters in
the Loan Papers that are necessary to enable Borrower to qualify for the Loan or
LC. Each condition precedent in this Agreement is material to the transactions
contemplated by this Agreement, and time is of the essence with respect to each
condition precedent. Subject to the prior approval of Required Lenders, Lenders
may fund any Loan, and Agent may issue any LC, without all conditions being
satisfied, but, to the extent permitted by Law, that funding and issuance shall
not be deemed to be a waiver of the requirement that each condition precedent be
satisfied as a prerequisite for any subsequent funding or issuance, unless
Required Lenders specifically waive each item in writing.
SECTION 7 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
--------- ------------------------------
Agent and Lenders as follows:
7.1 Regulation U. No Company is engaged principally, or as one of its
------------
important activities, in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulations T, U
or G of the Board of Governors of the Federal Reserve System, as amended.
7.2 Corporate Existence, Good Standing, Authority and Compliance. Each
------------------------------------------------------------
Company is duly organized, validly existing and in good standing under the Laws
of the jurisdiction in which it is incorporated or organized as identified on
SCHEDULE 7.2 (or any revised SCHEDULE 7.2 delivered by Borrower to Lenders
pursuant to SECTION 8.11, 9.10 or 9.11). Except where failure is not a Material
Adverse Event, each Restricted Company (a) is duly qualified to transact
business and is in good standing as a foreign corporation or other entity in
each jurisdiction where the nature and extent of its business and properties
require due qualification and good standing as identified on SCHEDULE 7.2 (or
any such revised SCHEDULE 7.2), and (b) possesses all requisite authority,
permits and power to conduct its business as is now being, or is contemplated by
this Agreement to be, conducted.
7.3 Subsidiaries. VRI has no Subsidiaries, other than as disclosed on
------------
SCHEDULE 7.2 (or on any revised SCHEDULE 7.2 delivered by Borrower to Lenders
pursuant to SECTION 8.11, 9.10 or 9.11). All of the outstanding shares of
capital stock (or similar voting interests) of the Companies are duly
authorized, validly issued, fully paid and nonassessable. All of the outstanding
shares of capital stock of the Companies other than VRI are owned of record and
beneficially as set forth thereon, free and clear of any Liens, restrictions,
claims or Rights of another Person, other than Permitted Liens, and are not
subject to any warrant, option or other acquisition Right of any Person or
subject to any transfer restriction, other than restrictions imposed by
securities Laws and general corporate Laws.
22
7.4 Authorization and Contravention. The execution and delivery by each
-------------------------------
Company of each Loan Paper or related document to which it is a party and the
performance by it of its obligations thereunder (a) are within its corporate
power, (b) have been duly authorized by all necessary corporate action, (c)
require no action by or filing with any Tribunal (other than any action or
filing that has been taken or made on or before the date of this Agreement), (d)
do not violate any provision of its charter or bylaws, (e) do not violate any
provision of Law or any order of any Tribunal applicable to it, other than
violations that individually or collectively are not a Material Adverse Event,
(f) do not violate any Material Agreements to which it is a party, or (g) do not
result in the creation or imposition of any Lien on any asset of any Company.
7.5 Binding Effect. Upon execution and delivery by all parties thereto,
--------------
each Loan Paper which is a contract will constitute a legal and binding
obligation of each Company party thereto, enforceable against it in accordance
with its terms, except as enforceability may be limited by applicable Debtor
Relief Laws and general principles of equity.
7.6 Financial Statements; Fiscal Year. The Current Financials were
---------------------------------
prepared in accordance with GAAP and, together with the notes thereto, present
fairly, in all material respects, the consolidated financial condition, results
of operations, and cash flows of the Companies as of, and for the portion of the
fiscal year ending on the date or dates thereof (subject only to normal year-end
adjustments). Except for transactions directly related to, or specifically
contemplated by, the Loan Papers, no subsequent material adverse changes have
occurred in the consolidated financial condition of the Companies from that
shown in the Current Financials. Effective with fiscal year 1998, the fiscal
year of each Company ends on July 31.
7.7 Litigation. Except as disclosed on SCHEDULE 7.7 (or on any revised
----------
SCHEDULE 7.7 delivered by Borrower to Lenders), (a) no Company (other than as a
creditor or claimant) is subject to, or aware of the threat of, any Litigation
that is reasonably likely to be determined adversely to any Company and, if so
adversely determined, is a Material Adverse Event, (b) no outstanding or unpaid
judgments against any Company exist as of the date hereof, and (c) no Company is
a party to, or bound by, any judicial or administrative order, judgment, decree
or consent decree relating to any past or present practice, omission, activity
or undertaking which constitutes a Material Adverse Event.
7.8 Taxes. All Tax returns of each Company required to be filed have been
-----
filed (or extensions have been granted) before delinquency, other than returns
for which the failure to file is not a Material Adverse Event, and all Taxes
shown as due and payable as of the date hereof in such returns have been paid
before delinquency, other than Taxes for which the criteria for Permitted Liens
(as specified in clause (f) of the definition of "Permitted Liens") have been
satisfied or for which nonpayment is not a Material Adverse Event.
7.9 Environmental Matters. Except as disclosed on SCHEDULE 7.9 (or any
---------------------
revised SCHEDULE 7.9 delivered by Borrower to Lenders) and except for
conditions, circumstances or violations that are not, individually or in the
aggregate, a Material Adverse Event, no Company (a) knows of any environmental
condition or circumstance adversely affecting any Company's properties or
operations, (b) has, to its knowledge, received any written report of any
Company's violation of any Environmental Law, or (c) knows that any Company is
under any obligation imposed by a Tribunal to remedy any violation of any
Environmental Law. Except as disclosed on SCHEDULE 7.9 (or any such revised
SCHEDULE 7.9), each Company believes that its properties and operations do not
violate any Environmental Law, other than violations that are not, individually
or in the aggregate, a Material Adverse Event. No facility of any Company is
used for, or to the knowledge of any Company has been used for, treatment or
disposal of any Hazardous Substance or storage of Hazardous Substances, other
than in material compliance with applicable Environmental Laws.
7.10 Employee Plans. Except where occurrence or existence is not a
--------------
Material Adverse Event, (a) no Employee Plan has incurred an "accumulated
funding deficiency" (as defined in section 302 of ERISA or section 412 of the
Code), (b) no Company has incurred liability under ERISA to the PBGC in
connection with any Employee Plan (other than required insurance premiums, all
of which have been paid), (c) no Company has withdrawn in whole or in part from
participation in a Multiemployer Plan, (d) no Company has engaged in any
"prohibited transaction" (as
23
defined in section 406 of ERISA or section 4975 of the Code), and (e) no
"reportable event" (as defined in section 4043 of ERISA) has occurred with
respect to an Employee Plan, excluding events for which the notice requirement
is waived under applicable PBGC regulations.
7.11 Properties and Liens.
--------------------
(a Each Company has good and marketable title to all its material
property reflected on the Current Financials (other than for property that
is obsolete or that has been disposed of in the ordinary course of business
or, after the date of this Agreement, as otherwise permitted by SECTION
9.10 or SECTION 9.11).
(b Except for Permitted Liens, no Lien exists on any property of any
Company (including, without limitation, the Forest Service Permits and the
Water Rights), and the execution, delivery, performance or observance of
the Loan Papers will not require or result in the creation of any Lien on
any Company's property.
(c As of the date hereof, the Forest Service Permits constitute all
of the material licenses, permits or leases from the U.S. held by the
Companies for use in connection with their respective skiing businesses.
(d Each of the Water Rights is, to the knowledge of the Companies,
in full force and effect and, to the knowledge of the Companies, there is
no material default or existing condition which with the giving of notice
or the passage of time or both would cause a material default under any
Water Right that is material to the operation of the Companies. Subject to
the available supply and to the terms and conditions of the applicable
decrees, the Companies' Water Rights provide a dependable, legal and
physical snowmaking, irrigation and domestic water supply for the operation
of the Companies' businesses.
7.12 Government Regulations. No Company is subject to regulation under the
----------------------
Investment Company Act of 1940, as amended, or the Public Utility Holding
Company Act of 1935, as amended.
7.13 Transactions with Affiliates. Except as set forth in SCHEDULE 7.13
----------------------------
and except for other transactions which do not, in the aggregate, cost the
Restricted Companies more than $2,000,000 in any fiscal year, no Restricted
Company is a party to any transaction with any Affiliate (other than another
Restricted Company), except upon fair and reasonable terms not materially less
favorable than it could obtain or could become entitled to in an arm's-length
transaction with a Person that was not its Affiliate.
7.14 Debt. After the funding of the Loans made on the Closing Date and the
----
payment of certain Debts with the proceeds thereof as described in SECTION 8.2,
no Company will be an obligor on any Debt, other than Permitted Debt.
7.15 Material Agreements. All Material Agreements to which any Restricted
-------------------
Company is a party are in full force and effect, and no default or potential
default exists on the part of any Restricted Company thereunder that is a
Material Adverse Event.
7.16 Labor Matters. There are no binding agreements of any type with any
-------------
labor union, labor organization, collective bargaining unit or employee group to
which any Company is bound, other than Vail Summit Resorts' collective
bargaining agreements with the Breckenridge Professional Ski Patrol Association
and Keystone Professional Ski Patrol Association and agreements which may be
entered into after the date of this Agreement which do not constitute a Material
Adverse Event. No actual or threatened strikes, labor disputes, slow downs,
walkouts, or other concerted interruptions of operations by the employees of any
Company that constitute a Material Adverse Event exist. Hours worked by and
payment made to employees of the Companies have not been in violation of the
Fair Labor Standards Act, as amended, or any other applicable Law dealing with
labor matters, other than any violations, individually or collectively, that are
not a Material Adverse Event. All payments due from any Company for employee
24
health and welfare insurance have been paid or accrued as a liability on its
books, other than any nonpayments that are not, individually or collectively, a
Material Adverse Event.
7.17 Solvency. On each Loan Date, Borrower is, and after giving effect to
--------
the requested Loan will be, Solvent.
7.18 Intellectual Property. Each Company owns (or otherwise holds rights
---------------------
to use) all material Intellectual Property, licenses, permits and trade names
necessary to continue to conduct its businesses as presently conducted by it and
proposed to be conducted by it immediately after the date of this Agreement. To
its knowledge, each Company is conducting its business without infringement or
claim of infringement of any license, patent, copyright, service xxxx,
trademark, trade name, trade secret or other intellectual property right of
others, other than any infringements or claims that, if successfully asserted
against or determined adversely to any Company, would not, individually or
collectively, constitute a Material Adverse Event. To the knowledge of any
Company as of the date hereof, no infringement or claim of infringement by
others of any material Intellectual Property, license, permit, trade name, or
other intellectual property of any Company exists, other than claims which will
not cause a Material Adverse Event.
7.19 Full Disclosure. Each material fact or condition relating to the Loan
---------------
Papers or the financial condition, business or property of any Company has been
disclosed to Agent. All information furnished by any Company to Agent in
connection with the Loan Papers on or before the date of this Agreement was,
taken as a whole, true and accurate in all material respects or based on
reasonable estimates on the date the information is stated or certified.
SECTION 8 AFFIRMATIVE COVENANTS. So long as Lenders are committed to fund Loans
--------- ---------------------
and Agent is committed to issue LCs under this Agreement, and thereafter until
the Obligation is paid in full, Borrower covenants and agrees as follows:
8.1 Items to be Furnished. Borrower shall cause the following to be
---------------------
furnished to each Lender:
(a With respect to each fiscal year of the Companies:
(i Promptly after preparation, unaudited Financial Statements
showing the consolidated financial condition and results of operations
of the Companies as of the last day of such fiscal year and for such
fiscal year, accompanied by a Compliance Certificate with respect to
such Financial Statements (for purposes of adjusting the Applicable
Margin and the Applicable Percentage in accordance with the
definitions of such terms); and
(ii Promptly after preparation, and no later than 105 days after
the last day of each fiscal year of the Companies, Financial
Statements showing the consolidated financial condition and results of
operations of the Companies as of, and for the year ended on, that
last day, accompanied by: (A) the unqualified opinion of a firm of
nationally-recognized independent certified public accountants, based
on an audit using generally accepted auditing standards, that the
Financial Statements were prepared in accordance with GAAP and present
fairly, in all material respects, the consolidated financial condition
and results of operations of the Companies, (B) any management letter
prepared by the accounting firm delivered in connection with its
audit, (C) a certificate from the accounting firm to Agent indicating
that during its audit it obtained no knowledge of any Default or
Potential Default or, if it obtained knowledge, the nature and period
of existence thereof, and (D) a Compliance Certificate with respect to
the Financial Statements.
(b Promptly after preparation, and no later than 60 days after the
last day of each fiscal quarter of the Companies, Financial Statements
showing the consolidated financial condition and results of operations of
the Companies for the fiscal quarter and for the period from the beginning
of the current fiscal year to the
25
last day of the fiscal quarter, accompanied by a Compliance Certificate
with respect to the Financial Statements.
(c Promptly after receipt, a copy of each interim or special audit
report and management letter issued by independent accountants with respect
to any Company or its financial records.
(d Notice, promptly after any Company knows or has reason to know,
of (i) the existence and status of any Litigation that, if determined
adversely to any Company, would be a Material Adverse Event, (ii) any
change in any material fact or circumstance represented or warranted by any
Company in connection with any Loan Paper, (iii) the receipt by any Company
of notice of any violation or alleged violation of any Environmental Law or
ERISA (which individually or collectively with other violations or
allegations is reasonably likely to constitute a Material Adverse Event),
or (iv) a Default or Potential Default, specifying the nature thereof and
what action the Companies have taken, are taking, or propose to take.
(e Promptly after filing, copies of all material reports or filings
filed by or on behalf of any Company with any securities exchange or the
Securities and Exchange Commission (including, without limitation, copies
of each Form 10-K, Form 10-Q and Form S-8 filed by or on behalf of VRI with
the Securities and Exchange Commission within 15 days after filing).
(f Promptly upon reasonable request by Agent or Required Lenders
(through Agent), information (not otherwise required to be furnished under
the Loan Papers) respecting the business affairs, assets and liabilities of
the Companies (including, but not limited to, seasonal operating
statistics, annual budgets, etc.) and opinions, certifications and
documents in addition to those mentioned in this Agreement; provided,
however, that Agent and Lenders shall not disclose to any third Person any
data or information obtained thereby in accordance with the provisions of
this paragraph (f), except (i) with the prior written consent of the
appropriate Company, (ii) to the extent necessary to comply with Law or the
ruling of any Tribunal in which event, Agent and/or such Lenders shall
notify the appropriate Company as promptly as practicable (and, if
possible, prior to making such disclosure) and shall seek confidential
treatment of the information desired, (iii) at the request of any banking
or other regulatory authority, or (iv) to their respective Representatives
to the extent such disclosure is necessary in connection with the
transactions contemplated by the Loan Papers.
8.2 Use of Proceeds. Borrower will use some or all of the proceeds of the
---------------
initial Loan to repay all amounts outstanding under the Existing Credit
Agreement and the Bridge Loan Agreement, and terminate the financing commitments
under each such agreement. Borrower will use all other proceeds of Loans and LCs
for seasonal working capital, to make acquisitions, advances and other
investments permitted by SECTION 9.8, and for other general corporate purposes
and capital expenditures of the Companies. No part of the proceeds of any LC
draft or drawing or of any Loan will be used, directly or indirectly, for a
purpose that violates any Law, including without limitation, the provisions of
Regulations G or U.
8.3 Books and Records. Each Company will maintain books, records and
-----------------
accounts necessary to prepare financial statements in accordance with GAAP.
8.4 Inspections. Upon reasonable request, each Company will allow Agent
-----------
(or its Representatives) to inspect any of its properties, to review reports,
files and other records and to make and take away copies, to conduct tests or
investigations, and to discuss any of its affairs, conditions and finances with
its other creditors, directors, officers, employees or representatives from time
to time, during reasonable business hours; provided, however, that Agent and its
Representatives shall not disclose to any Person any data or information
obtained thereby in accordance with the provisions of this SECTION 8.4 which is
not a matter of public knowledge, except (i) with the prior written consent of
the appropriate Company, (ii) to the extent necessary to comply with Law or the
ruling of any Tribunal in which event, Agent and/or its Representatives shall
notify the appropriate Company as promptly as practicable (and, if possible,
prior
26
to making such disclosure) and shall seek confidential treatment of the
information desired, (iii) at the request of any banking or other regulatory
authority, or (iv) to their respective Representatives to the extent such
disclosure is necessary in connection with the transactions contemplated by the
Loan Papers. Any of the Lenders (or their Representatives) may accompany Agent
during such inspections.
8.5 Taxes. Each Restricted Company will promptly pay when due any and all
-----
Taxes, other than Taxes which are being contested in good faith by lawful
proceedings diligently conducted, against which reserve or other provision
required by GAAP has been made; provided, however, that all such Taxes shall, in
any event, be paid prior to any levy for execution in respect of any Lien on any
property of a Restricted Company.
8.6 Payment of Obligations. Each Company will pay (or renew and extend)
----------------------
all of its obligations at such times and to such extent as may be necessary to
prevent a Material Adverse Event (except for obligations, other than Funded
Debt, which are being contested in good faith by appropriate proceedings);
provided that Borrower shall not and shall not permit any other Company to repay
advances from Apollo, other than as provided in SECTION 9.9.
8.7 Expenses. Borrower shall promptly pay upon demand (a) all reasonable
--------
and customary costs, fees, and expenses paid or incurred by Agent and its
Affiliates, in connection with the arrangement, syndication and negotiation of
the Facility and the negotiation, preparation, delivery and execution of the
Loan Papers and any related amendment, waiver, or consent (including in each
case, without limitation, the reasonable fees and expenses of Agent's counsel)
and (b) all reasonable costs and expenses of Lenders and Agent incurred by Agent
or any Lender in connection with the enforcement of the obligations of any
Company arising under the Loan Papers or the exercise of any Rights arising
under the Loan Papers (including, but not limited to, reasonable attorneys' fees
and court costs), all of which shall be a part of the Obligation and shall bear
interest, if not paid upon demand, at the Default Rate until paid.
8.8 Maintenance of Existence, Assets, and Business.
----------------------------------------------
(a Except as otherwise permitted by SECTION 9.11, each Company will
(i) maintain its corporate existence and good standing in its state of
incorporation and its authority to transact business in all other states
where failure to maintain its authority to transact business is a Material
Adverse Event; (ii) maintain all Water Rights, licenses, permits and
franchises necessary for its business where failure is a Material Adverse
Event; and (iii) keep all of its assets that are useful in and necessary to
its business in good working order and condition (ordinary wear and tear
excepted) and make all necessary repairs and replacements.
(b Neither Borrower, VRI nor VHI will change its name in any manner
(except by registering additional trade names), unless such Company shall
have given Agent prior notice thereof. Borrower shall promptly notify
Agent of any change in name of any other Company (except the registering of
additional tradenames).
8.9 Insurance. Each Company will maintain with financially sound,
---------
responsible, and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by self-
insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses. At Agent's request, each Company
will deliver to Agent certificates of insurance for each policy of insurance and
evidence of payment of all premiums.
8.10 Environmental Laws. Each Company will (a) conduct its business so as
------------------
to comply in all material respects with all applicable Environmental Laws and
shall promptly take required corrective action to remedy any non-compliance with
any Environmental Law, except where failure to comply or take action would not
be a Material Adverse Event, and (b) establish and maintain a management system
designed to ensure compliance with applicable Environmental Laws and minimize
material financial and other risks to each Company arising under applicable
Environmental Laws or as the result of environmentally related injuries to
Persons or property, except where failure to
27
comply would not be a Material Adverse Event. Borrower shall deliver reasonable
evidence of compliance with the foregoing covenant to Agent within 30 days after
any written request from Required Lenders, which request shall be made only if
Required Lenders reasonably believe that a failure to comply with the foregoing
covenant would be a Material Adverse Event.
8.11 Subsidiaries. Subject to SECTION 9.8, the Companies may create or
------------
acquire additional Subsidiaries (including Unrestricted Subsidiaries); provided
that (a) each Person that becomes a Restricted Subsidiary after the date of this
Agreement (whether as a result of acquisition, creation or otherwise) shall
execute and deliver a Guaranty within 10 days after becoming a Restricted
Subsidiary, and (b) Borrower shall deliver to Agent a revised SCHEDULE 7.2
reflecting such new Subsidiary within 10 days after it becomes a Subsidiary.
8.12 Indemnification. BORROWER SHALL INDEMNIFY, PROTECT AND HOLD AGENT AND
---------------
LENDERS AND THEIR RESPECTIVE AFFILIATES, REPRESENTATIVES, SUCCESSORS AND ASSIGNS
AND ATTORNEYS (COLLECTIVELY, THE "INDEMNIFIED PARTIES") HARMLESS FROM AND
AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, CLAIMS AND PROCEEDINGS AND ALL COSTS, EXPENSES
(INCLUDING, WITHOUT LIMITATION, ALL ATTORNEYS' FEES AND LEGAL EXPENSES WHETHER
OR NOT SUIT IS BROUGHT) AND DISBURSEMENTS OF ANY KIND OR NATURE (THE
"INDEMNIFIED LIABILITIES") THAT MAY AT ANY TIME BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST THE INDEMNIFIED PARTIES, IN ANY WAY RELATING TO OR ARISING OUT
OF (A) THE DIRECT OR INDIRECT RESULT OF THE VIOLATION BY ANY COMPANY OF ANY
ENVIRONMENTAL LAW, (B) ANY COMPANY'S GENERATION, MANUFACTURE, PRODUCTION,
STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL OR PRESENCE IN
CONNECTION WITH ITS PROPERTIES OF A HAZARDOUS SUBSTANCE (INCLUDING, WITHOUT
LIMITATION, (I) ALL DAMAGES OF ANY USE, GENERATION, MANUFACTURE, PRODUCTION,
STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL OR PRESENCE, OR (II)
THE COSTS OF ANY ENVIRONMENTAL INVESTIGATION, MONITORING, REPAIR, CLEANUP OR
DETOXIFICATION AND THE PREPARATION AND IMPLEMENTATION OF ANY CLOSURE, REMEDIAL
OR OTHER PLANS), OR (C) THE LOAN PAPERS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN. HOWEVER, ALTHOUGH EACH INDEMNIFIED PARTY HAS THE RIGHT TO BE
INDEMNIFIED FOR ITS OWN ORDINARY NEGLIGENCE, NO INDEMNIFIED PARTY HAS THE RIGHT
TO BE INDEMNIFIED FOR ITS OWN FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE
PROVISIONS OF AND UNDERTAKINGS AND INDEMNIFICATION SET FORTH IN THIS PARAGRAPH
SHALL SURVIVE THE SATISFACTION AND PAYMENT OF THE OBLIGATION AND TERMINATION OF
THIS AGREEMENT.
SECTION 9 NEGATIVE COVENANTS. So long as Lenders are committed to fund Loans
--------- ------------------
and Agent is committed to issue LCs under this Agreement, and thereafter until
the Obligation is paid in full, Borrower covenants and agrees as follows:
9.1 Taxes. No Company shall use any portion of the proceeds of any Loan
-----
to pay the wages of employees, unless a timely payment to or deposit with the
U.S. of all amounts of Tax required to be deducted and withheld with respect to
such wages is also made.
9.2 Payment of Obligations. No Company shall voluntarily prepay principal
----------------------
of, or interest on, any Funded Debt, other than the Obligation, if a Default or
Potential Default exists (or would result from such payment).
9.3 Employee Plans. Except where a Material Adverse Event would not
--------------
result, no Company shall permit any of the events or circumstances described in
SECTION 7.10 to exist or occur.
9.4 Debt. No Company shall create, incur or suffer to exist any Debt,
----
other than Permitted Debt.
9.5 Liens. No Company shall (a) create, incur or suffer or permit to be
-----
created or incurred or to exist any Lien upon any of its assets, other than
Permitted Liens, or (b) enter into or permit to exist any arrangement or
agreement that directly or indirectly prohibits any Company from creating or
incurring any Lien, other than the Loan Papers, the Bond Documents described in
the Collateral Agency Agreement (and any documents relating to a refinancing of
the Vail Bonds) and leases or licenses that prohibit Liens on the leased or
licensed property.
9.6 Transactions with Affiliates. Except for transactions which do not,
----------------------------
in the aggregate, cost the Restricted Companies more than $2,000,000 in any
fiscal year, no Restricted Company shall enter into or suffer to exist
28
any transaction with any Affiliate (other than another Restricted Company), or
guaranty, obtain any letter of credit or similar instrument in support of, or
create, incur or suffer to exist any Lien upon any of its assets as security
for, any Debt or other obligation of any Affiliate (other than Debts or other
obligations of another Restricted Company) unless (i) such transaction is an
advance or equity contribution to an Unrestricted Subsidiary permitted by
SECTION 9.8(J), (ii) such transaction is described in SECTION 9.9 or on SCHEDULE
7.13, or (iii) such transaction is upon fair and reasonable terms not materially
less favorable than it could obtain or could become entitled to in an arm's-
length transaction with a Person that was not its Affiliate.
9.7 Compliance with Laws and Documents. No Company shall (a) violate the
----------------------------------
provisions of any Laws or rulings of any Tribunal applicable to it or of any
Material Agreement to which it is a party if that violation alone, or when
aggregated with all other violations, would be a Material Adverse Event, (b)
violate the provisions of its charter or bylaws if such violation would cause a
Material Adverse Event, or (c) repeal, replace or amend any provision of its
charter or bylaws if that action would be a Material Adverse Event.
9.8 Loans, Advances and Investments. Except as permitted by SECTION 9.9
-------------------------------
or SECTION 9.11, no Restricted Company shall make or suffer to exist any loan,
advance, extension of credit or capital contribution to, make any investment in,
or purchase or commit to purchase any stock or other securities or evidences of
Debt of, or interests in, any other Person, other than:
(a) expense accounts for and other loans or advances to its
directors, officers and employees in the ordinary course of business;
(b) marketable obligations issued or unconditionally guaranteed by
the U.S. or issued by any of its agencies and backed by the full faith and
credit of the U.S., in each case maturing within one year from the date of
acquisition;
(c) short-term investment grade domestic and eurodollar certificates
of deposit or time deposits that are fully insured by the Federal Deposit
Insurance Corporation or are issued by commercial banks organized under the
Laws of the U.S. or any of its states having combined capital, surplus, and
undivided profits of not less than $100,000,000 (as shown on its most
recently published statement of condition);
(d) commercial paper and similar obligations rated "P-1" by Xxxxx'x
or "A-1" by S&P;
(e) readily marketable tax-free municipal bonds of a domestic issuer
rated "A-2" or better by Xxxxx'x or "A" or better by S&P, and maturing
within one year from the date of issuance;
(f) mutual funds or money market accounts investing primarily in
items described in clauses (b) through (e) above;
(g) demand deposit accounts maintained in the ordinary course of
business;
(h) current trade and customer accounts receivable that are for goods
furnished or services rendered in the ordinary course of business and that
are payable in accordance with customary trade terms;
(i) Financial Xxxxxx existing on the date hereof which have
previously been approved by Agent and other Financial Xxxxxx entered into
after the date hereof under terms reasonably acceptable to Agent;
(j) in addition to items covered elsewhere in this definition, but
subject to SECTIONS 8.11 and 9.14, investments in any Person (including
purchases of stock or other securities or evidence of Debt of, assets of,
or loans, advances, extensions of credit or capital contributions to such
Person, but excluding capital appreciation and accrued interest), provided
that all such investments (when added to those made by Unrestricted
Subsidiaries) made in (i) Unrestricted Subsidiaries, (ii) Persons that are
not Affiliates of Borrower
29
after such investment (excluding investments in Keystone/Intrawest LLC
existing on the date of this Agreement and the existing obligation of Vail
Summit Resorts to contribute to Keystone/Intrawest LLC additional land
which had a book value as of June 30, 1996, of $8,900,000), and (iii)
Apollo shall not in the aggregate exceed 15% of the Companies' consolidated
net worth at the time of determination; and
(k) the following investments:
(i) Housing Revenue Bonds, Series X-0, X-0, X-0, and B-2,
issued by Eagle Bend Affordable Housing Corporation, held in the face
amount of $800,000;
(ii) Housing Revenue Bonds, Series 1993C, issued by Lake Creek
Affordable Housing Corporation, held in the face amount of $1,166,250;
(iii) the possible purchase of bonds with respect to Borrower's
contingent obligations under the $10,115,000 Standby Bond Purchase
Agreement between Borrower and Colorado National Bank, as Trustee,
dated July 9, 1996;
(iv) a secured loan of $300,000 made to Xxxxxx X. Xxxx in 1991,
a secured loan of $438,750 made to Xxxxxxx X. Xxxx in 1996, and a
secured loan of $350,000 made to Mr. and Xxx. Xxxxx X. Xxxxxxxx in
1996;
(v) a capital contribution, in an amount not to exceed
$650,000, in Boulder/Beaver LLC;
(vi) a capital contribution, in the amount of $1,364,579, in
The Inn Hotel Partnership; and
(vii) Workers compensation reserve account, established pursuant
to a self-insurance permit from the State of Colorado Department of
Labor, invested exclusively in items described in clauses (b) through
(f) above.
9.9 Management Fees and Distributions. No Company shall make any
---------------------------------
Distribution, except as follows:
(a) if no Default or Potential Default exists (or would result
therefrom), the Companies may pay management fees to Apollo of up to
$500,000 (in cash and/or services) in any fiscal year of the Companies;
(b) VRI may make payments of approximately $2,000,000 accruing to
certain option holders;
(c) any Company may make Distributions to a Restricted Company;
(d) if VRI issues any Subordinated Debt which is subsequently
converted to preferred stock, VRI may pay dividends on such stock at an
annual rate which is less than or equal to the annual rate of interest
payable on such Subordinated Debt prior to its conversion; and
(e) VRI may make other Distributions to its shareholders (in addition
to those described in clause (d) above), so long as all of such other
Distributions made during any four consecutive fiscal quarters of the
Companies (including any dividends on preferred stock which exceed the
amount permitted under clause (d) above) do not exceed 50% of the
Restricted Companies' net income during such period.
30
9.10 Sale of Assets. No Company shall sell, assign, lease, transfer or
--------------
otherwise dispose of all or any material portion of the assets described in
SCHEDULE 2, if the ratio described in SECTION 10.1 would increase as a result of
such disposition.
9.11 Mergers and Dissolutions. No Restricted Company shall merge or
------------------------
consolidate with any other Person (unless Borrower or, if Borrower is not a
party to such merger or consolidation, a Restricted Subsidiary is the surviving
entity in connection with any such merger or consolidation) or liquidate, wind
up or dissolve (or suffer any liquidation or dissolution). Promptly after such
merger or consolidation, Borrower shall deliver to Agent a revised SCHEDULE 7.2
reflecting any merger or consolidation.
9.12 Assignment. No Company shall assign or transfer any of its Rights
----------
or cause to be delegated its duties or obligations under any of the Loan Papers.
9.13 Fiscal Year and Accounting Methods. No Company shall change its
----------------------------------
fiscal year or its method of accounting (other than immaterial changes in
methods or as required by GAAP).
9.14 New Businesses. No Restricted Company shall engage in any
--------------
business, except the businesses in which they are presently engaged and any
other business reasonably related to the Companies' current operations or the
resort, leisure or ski business; provided, however, that the foregoing shall not
be construed to prohibit the cessation by any Company of its business activities
or the sale or transfer of the business or assets of such Company to the extent
not otherwise prohibited by this Agreement.
9.15 Government Regulations. No Company shall conduct its business in a
----------------------
way that it becomes regulated under the Investment Company Act of 1940, as
amended, or the Public Utility Holding Company Act of 1935, as amended.
SECTION 10 FINANCIAL COVENANTS. So long as Lenders are committed to fund
---------- -------------------
Loans and Agent is committed to issue LCs under this Agreement, and thereafter
until the Obligation is paid and performed in full (except for provisions under
the Loan Papers expressly intended to survive payment of the Obligation and
termination of the Loan Papers), Borrower covenants and agrees as follows to
comply with each of the following ratios. For purposes of determining each such
ratio, Resort EBITDA for any period shall include on a pro forma basis all
EBITDA for such period relating to assets acquired (including Restricted
Subsidiaries formed or acquired) during such period, but shall exclude on a pro
forma basis all EBITDA for such period relating to any such assets disposed of
in accordance with this Agreement during such period.
10.1 Maximum Leverage Ratio. As calculated as of the last day of each
----------------------
fiscal quarter of the Companies, the Companies shall not permit the ratio of (x)
the unpaid principal amount of Funded Debt existing as of such last day to (y)
Resort EBITDA for the four fiscal quarters ending on such last day to exceed the
------
following:
================================================================================
As of the last day of each fiscal quarter
occurring after the Closing Date through
and including January 31, 1999: 4.25 to 1.00
As of the last day of each fiscal quarter
commencing with April 30, 1999: 3.75 to 1.00
================================================================================
10.2 Minimum Fixed Charge Coverage Ratio . As calculated as of the last
-----------------------------------
day of each fiscal quarter of the Companies, the Companies shall not permit the
ratio of (x) Resort EBITDA for the four fiscal quarters ending on such last day
minus Adjusted Capital Expenditures (as defined below) to (y) interest on the
Obligation and scheduled principal and interest payments on all other Funded
Debt plus Distributions made by VRI, in each case in such four fiscal quarters,
to be less than the following:
----
31
================================================================================
As of the last day of each fiscal quarter
occurring after the Closing Date through
and including July 31, 1999: 1.15 to 1.00
As of the last day of each fiscal quarter
commencing with October 31, 1999, through
and including July 31, 2000: 1.20 to 1.00
As of the last day of each fiscal quarter
commencing with October 31, 2000: 1.25 to 1.00
================================================================================
For purposes of clause (y) of such ratio for the four-quarter period ending on
June 30, 1997, payments of principal and interest shall be calculated as though
all such Debt was incurred at the beginning of such four-quarter period. As
used in this SECTION 10.2, "ADJUSTED CAPITAL EXPENDITURES" means (a) for the
four fiscal quarters ending any January 31, the lesser of (i) the Companies'
actual capital expenditures during such four fiscal quarters, and (ii)
$25,000,000, and (b) for the four fiscal quarters ending on any April 30, July
31, or October 31, the lesser of (i) the Companies' actual capital expenditures
during such four fiscal quarters, and (ii) $15,000,000.
10.3 Interest Coverage Ratio. As calculated as of the last day of each
-----------------------
fiscal quarter of the Companies, the Companies shall not permit the ratio of (x)
Resort EBITDA for the four fiscal quarters ending on such last day to (y)
payments of interest on Funded Debt in such four fiscal quarters to be less than
----
the following:
================================================================================
As of the last day of each fiscal quarter
occurring after the Closing Date through
and including July 31, 1998: 2.25 to 1.00
As of the last day of each fiscal quarter
commencing with October 31, 1998, through
and including July 31, 1999: 2.50 to 1.00
As of the last day of each fiscal quarter
commencing with October 31, 1999, through
and including July 31, 2000: 2.75 to 1.00
As of the last day of each fiscal quarter
commencing with October 31, 2000: 3.00 to 1.00
================================================================================
SECTION 11 DEFAULT. The term "DEFAULT" means the occurrence of any one or
---------- -------
more of the following events:
11.1 Payment of Obligation. The failure or refusal of any Company to
---------------------
pay (i) any principal payment contemplated by SECTION 3.2(B) of this Agreement
after such payment becomes due and payable hereunder, (ii) any principal payment
(other than those contemplated by SECTION 3.2(B)) or interest payment
contemplated to be made hereunder within 3 Business Days after demand therefor
by Agent, (iii) any amount contemplated to be paid hereunder in respect of fees,
costs, expenses or indemnities within 10 Business Days after demand therefor by
Agent and (iv) any amount in respect of its reimbursement obligations in
connection with any drawing under an LC within 3 Business Days after demand
therefor by Agent.
11.2 Covenants. The failure or refusal of any Company to punctually and
---------
properly perform, observe, and comply with:
32
(a) Any covenant, agreement or condition applicable to it contained
in SECTIONS 8.2, 9 (other than SECTIONS 9.1, 9.3, 9.6 and 9.7) or 10; or
(b) Any other covenant, agreement or condition applicable to it
contained in any Loan Paper (other than the covenants to pay the Obligation
and the covenants in clause (a) preceding), and failure or refusal
continues for 30 days.
11.3 Debtor Relief. Any Restricted Company (a) fails to pay its Debts
-------------
generally as they become due, (b) voluntarily seeks, consents to, or acquiesces
in the benefit of any Debtor Relief Law, or (c) becomes a party to or is made
the subject of any proceeding provided for by any Debtor Relief Law, other than
as a creditor or claimant, that could suspend or otherwise adversely affect the
Rights of Agent or any Lender granted in the Loan Papers (unless, if the
proceeding is involuntary, the applicable petition is dismissed within 60 days
after its filing).
11.4 Judgments and Attachments. Any Restricted Company fails, within 60
-------------------------
days after entry, to pay, bond or otherwise discharge any judgment or order for
the payment of money in excess of $5,000,000 (individually or collectively) or
any warrant of attachment, sequestration or similar proceeding against any
assets of any Restricted Company having a value (individually or collectively)
of $5,000,000, which is neither (a) stayed on appeal nor (b) diligently
contested in good faith by appropriate proceedings and adequate reserves have
been set aside on its books in accordance with GAAP.
11.5 Government Action. Any Tribunal condemns, seizes or otherwise
-----------------
appropriates, or takes custody or control of all or any substantial portion of
the assets described on SCHEDULE 2.
11.6 Misrepresentation. Any material representation or warranty made by
-----------------
any Company in connection with any Loan Paper at any time proves to have been
materially incorrect when made; provided that if such Company made such
representation or warranty in good faith without any knowledge on the part of
the Companies that it was materially incorrect, such misrepresentation shall not
constitute a Default if the Companies notify Agent of such misrepresentation
within 5 Business Days after such Company has knowledge thereof.
11.7 Ownership. There shall occur a Change of Control Transaction.
---------
11.8 Default Under Other Agreements. (a) Any Restricted Company fails
------------------------------
to pay when due (after lapse of any applicable grace period) any recourse Debt
in excess (individually or collectively) of $5,000,000; (b) any default exists
under any agreement to which any Restricted Company is a party, the effect of
which is to cause, or to permit any Person (other than a Restricted Company) to
cause, any recourse obligation in excess (individually or collectively) of
$5,000,000 to become due and payable by any Restricted Company before its stated
maturity, except to the extent such obligation is declared to be due and payable
as a result of the sale of any asset to which it relates; or (c) an "Enforcement
Notice" is delivered by the Beaver Creek Indenture Trustee or the Vail Indenture
Trustee under the Collateral Agency Agreement (and has not been rescinded or
withdrawn).
11.9 Validity and Enforceability of Loan Papers. Except in accordance
------------------------------------------
with its terms or as otherwise expressly permitted by this Agreement, any Loan
Paper at any time after its execution and delivery ceases to be in full force
and effect in any material respect or is declared to be null and void or its
validity or enforceability is contested by any Company party thereto or any
Company denies that it has any further liability or obligations under any Loan
Paper to which it is a party.
11.10 Employee Plans. Except where occurrence or existence is not a
--------------
Material Adverse Event, (a) an Employee Plan incurs an "accumulated funding
deficiency" (as defined in section 302 of ERISA or section 412 of the Code), (b)
a Company incurs liability under ERISA to the PBGC in connection with any
Employee Plan (other than required insurance premiums paid when due), (c) a
Company withdraws in whole or in part from participation in a
33
Multiemployer Plan, (d) a Company engages in any "prohibited transaction" (as
defined in section 406 of ERISA or section 4975 of the Code), or (e) a
"reportable event" (as defined in section 4043 of ERISA) occurs with respect to
an Employee Plan, excluding events for which the notice requirement is waived
under applicable PBGC regulations.
SECTION 12 RIGHTS AND REMEDIES.
---------- -------------------
12.1 Remedies Upon Default.
---------------------
(a) If a Default exists under SECTION 11.3, the commitment to
extend credit under this Agreement automatically terminates, the entire
unpaid balance of the Obligation automatically becomes due and payable
without any action of any kind whatsoever, and Borrower must provide cash
collateral in an amount equal to the then-existing LC Exposure.
(b) If any Default exists, subject to the terms of SECTION 13.5(B),
Agent may (with the consent of, and must, upon the request of, Required
Lenders), do any one or more of the following: (i) if the maturity of the
Obligation has not already been accelerated under SECTION 12.1(A), declare
the entire unpaid balance of all or any part of the Obligation immediately
due and payable, whereupon it is due and payable; (ii) terminate the
commitments of Lenders to extend credit or to continue or convert any Loan
under this Agreement; (iii) reduce any claim to judgment; (iv) demand
Borrower to provide cash collateral in an amount equal to the LC Exposure
then existing; and (v) exercise any and all other legal or equitable Rights
afforded by the Loan Papers, the Laws of the State of New York, or any
other applicable jurisdiction.
12.2 Company Waivers. TO THE EXTENT PERMITTED BY LAW, EACH COMPANY
---------------
WAIVES PRESENTMENT AND DEMAND FOR PAYMENT, PROTEST, NOTICE OF INTENTION TO
ACCELERATE, NOTICE OF ACCELERATION AND NOTICE OF PROTEST AND NONPAYMENT, AND
AGREES THAT ITS LIABILITY WITH RESPECT TO ALL OR ANY PART OF THE OBLIGATION IS
NOT AFFECTED BY ANY RENEWAL OR EXTENSION IN THE TIME OF PAYMENT OF ALL OR ANY
PART OF THE OBLIGATION, BY ANY INDULGENCE, OR BY ANY RELEASE OR CHANGE IN ANY
SECURITY FOR THE PAYMENT OF ALL OR ANY PART OF THE OBLIGATION.
12.3 Performance by Agent. If any covenant, duty or agreement of any
--------------------
Company is not performed in accordance with the terms of the Loan Papers, Agent
may, while a Default exists, at its option (but subject to the approval of
Required Lenders), perform or attempt to perform that covenant, duty or
agreement on behalf of that Company (and any amount expended by Agent in its
performance or attempted performance is payable by the Companies, jointly and
severally, to Agent on demand, becomes part of the Obligation, and bears
interest at the Default Rate from the date of Agent's expenditure until paid).
However, Agent does not assume and shall never have, except by its express
written consent, any liability or responsibility for the performance of any
covenant, duty or agreement of any Company.
12.4 Not in Control. None of the covenants or other provisions
--------------
contained in any Loan Paper shall, or shall be deemed to, give Agent or Lenders
the Right to exercise control over the assets (including, without limitation,
real property), affairs, or management of any Company; the power of Agent and
Lenders is limited to the Right to exercise the remedies provided in this
SECTION 12.
12.5 Course of Dealing. The acceptance by Agent or Lenders of any
-----------------
partial payment on the Obligation shall not be deemed to be a waiver of any
Default then existing. No waiver by Agent, Required Lenders or Lenders of any
Default shall be deemed to be a waiver of any other then-existing or subsequent
Default. No delay or omission by Agent, Required Lenders or Lenders in
exercising any Right under the Loan Papers will impair that Right or be
construed as a waiver thereof or any acquiescence therein, nor will any single
or partial exercise of any Right preclude other or further exercise thereof or
the exercise of any other Right under the Loan Papers or otherwise.
12.6 Cumulative Rights. All Rights available to Agent, Required
-----------------
Lenders, and Lenders under the Loan Papers are cumulative of and in addition to
all other Rights granted to Agent, Required Lenders, and Lenders at law or
34
in equity, whether or not the Obligation is due and payable and whether or not
Agent, Required Lenders, or Lenders have instituted any suit for collection,
foreclosure, or other action in connection with the Loan Papers.
12.7 Application of Proceeds. Any and all proceeds ever received by
-----------------------
Agent or Lenders from the exercise of any Rights pertaining to the Obligation
shall be applied to the Obligation according to SECTION 3.11.
12.8 Diminution in Value of Collateral. Neither Agent nor any Lender
---------------------------------
has any liability or responsibility whatsoever for any diminution in or loss of
value of any collateral ever securing payment or performance of all or any part
of the Obligation (other than diminution in or loss of value caused by its gross
negligence or willful misconduct).
12.9 Certain Proceedings. The Companies will promptly execute and
-------------------
deliver, or cause the execution and delivery of, all applications, certificates,
instruments, registration statements and all other documents and papers Agent or
Required Lenders reasonably request in connection with the obtaining of any
consent, approval, registration, qualification, permit, license or authorization
of any Tribunal or other Person necessary or appropriate for the effective
exercise of any Rights under the Loan Papers. Because Borrower agrees that
Agent's and Required Lenders' remedies at Law for failure of the Companies to
comply with the provisions of this paragraph would be inadequate and that
failure would not be adequately compensable in damages, Borrower agrees that the
covenants of this paragraph may be specifically enforced.
SECTION 13 AGREEMENT AMONG LENDERS.
---------- -----------------------
13.1 Agent.
-----
(a) Each Lender appoints Agent (and Agent accepts appointment) as
its nominee and agent, in its name and on its behalf pursuant to the terms
and conditions of the Loan Papers: (i) to act as its nominee and on its
behalf in and under all Loan Papers; (ii) to arrange the means whereby its
funds are to be made available to Borrower under the Loan Papers; (iii) to
take any action that it properly requests under the Loan Papers (subject to
the concurrence of other Lenders as may be required under the Loan Papers);
(iv) to receive all documents and items to be furnished to it under the
Loan Papers; (v) to be the secured party, mortgagee, beneficiary, recipient
and similar party in respect of any collateral for the benefit of Lenders;
(vi) to promptly distribute to it all material information, requests,
documents and items received from any Company under the Loan Papers; (vii)
to promptly distribute to it its ratable part of each payment (whether
voluntary, as proceeds of collateral upon or after foreclosure, as proceeds
of insurance thereon, or otherwise) in accordance with the terms of the
Loan Papers; and (viii) to deliver to the appropriate Persons requests,
demands, approvals, and consents received from it.
(b) If the initial or any successor Agent ever ceases to be a party
to this Agreement or if the initial or any successor Agent ever resigns
(whether voluntarily or at the request of Required Lenders), then Required
Lenders shall appoint the successor Agent from among Lenders (other than
the resigning Agent). If Required Lenders fail to appoint a successor Agent
within 30 days after the resigning Agent has given notice of resignation or
Required Lenders have removed the resigning Agent, then the resigning Agent
may, on behalf of Lenders, appoint a successor Agent, which must be a
commercial bank having a combined capital and surplus of at least
$1,000,000,000 (as shown on its most recently published statement of
condition). Upon its acceptance of appointment as successor Agent, the
successor Agent succeeds to and becomes vested with all of the Rights of
the prior Agent, and the prior Agent is discharged from its duties and
obligations of Agent under the Loan Papers (but, when used in connection
with LCs issued and outstanding before the appointment of the successor
Agent, "Agent" shall continue to refer solely to NationsBank of Texas, N.A.
(but, any LCs issued or renewed after the appointment of any successor
Agent shall be issued or renewed by the successor Agent)), and each Lender
shall execute the documents as any Lender, the resigning or removed Agent,
or the successor Agent reasonably request to reflect the change. After any
Agent's resignation or removal as Agent
35
under the Loan Papers, the provisions of this SECTION 13 inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under the Loan Papers.
(c) Agent, in its capacity as a Lender, has the same Rights under
the Loan Papers as any other Lender and may exercise those Rights as if it
were not acting as Agent; the term "Lender" shall, unless the context
otherwise indicates, include Agent; and Agent's resignation or removal
shall not impair or otherwise affect any Rights that it has or may have in
its capacity as an individual Lender. Each Lender and Borrower agree that
Agent is not a fiduciary for Lenders or for Borrower but simply is acting
in the capacity described in this Agreement to alleviate administrative
burdens for Borrower and Lenders, that Agent has no duties or
responsibilities to Lenders or Borrower, except those expressly set forth
in the Loan Papers, and that Agent in its capacity as a Lender has all
Rights of any other Lender.
(d) Agent may now or hereafter be engaged in one or more loan,
letter of credit, leasing or other financing transactions with Borrower,
act as trustee or depositary for Borrower, or otherwise be engaged in other
transactions with Borrower (collectively, the "OTHER ACTIVITIES") not the
subject of the Loan Papers. Without limiting the Rights of Lenders
specifically set forth in the Loan Papers, Agent is not responsible to
account to Lenders for those other activities, and no Lender shall have any
interest in any other activities, any present or future guaranties by or
for the account of Borrower that are not contemplated or included in the
Loan Papers, any present or future offset exercised by Agent in respect of
those other activities, any present or future property taken as security
for any of those other activities, or any property now or hereafter in
Agent's possession or control that may be or become security for the
obligations of Borrower arising under the Loan Papers by reason of the
general description of indebtedness secured or of property contained in any
other agreements, documents, or instruments related to any of those other
activities (but, if any payments in respect of those guaranties or that
property or the proceeds thereof is applied by Agent to reduce the
Obligation, then each Lender is entitled to share ratably in the
application as provided in the Loan Papers).
13.2 Expenses. Each Lender shall pay its Pro Rata Part of any
--------
reasonable expenses (including, without limitation, court costs, reasonable
attorneys' fees and other costs of collection) incurred by Agent (while acting
in such capacity) in connection with any of the Loan Papers if Agent is not
reimbursed from other sources within 30 days after incurrence. Each Lender is
entitled to receive its Pro Rata Part of any reimbursement that it makes to
Agent if Agent is subsequently reimbursed from other sources.
13.3 Proportionate Absorption of Losses. Except as otherwise provided
----------------------------------
in the Loan Papers, nothing in the Loan Papers gives any Lender any advantage
over any other Lender insofar as the Obligation is concerned or to relieve any
Lender from absorbing its Pro Rata Part of any losses sustained with respect to
any portion of the Obligation in which it participates (except to the extent
unilateral actions or inactions by any Lender result in Borrower or any other
obligor on the Obligation having any credit, allowance, setoff, defense, or
counterclaim solely with respect to all or any part of that Lender's portion of
the Obligation).
13.4 Delegation of Duties; Reliance. Lenders may perform any of their
------------------------------
duties or exercise any of their Rights under the Loan Papers by or through
Agent, and Lenders and Agent may perform any of their duties or exercise any of
their Rights under the Loan Papers by or through their respective
Representatives. Agent, Lenders and their respective Representatives (a) are
entitled to rely upon (and shall be protected in relying upon) any written or
oral statement believed by it or them to be genuine and correct and to have been
signed or made by the proper Person and, with respect to legal matters, upon
opinion of counsel selected by Agent or that Lender (but nothing in this clause
(a) permits Agent to rely on (i) oral statements if a writing is required by
this Agreement or (ii) any other writing if a specific writing is required by
this Agreement), (b) are entitled to deem and treat each Lender as the owner and
holder of its portion of the Principal Debt for all purposes until, subject to
SECTION 14.12, written notice of the assignment or transfer is given to and
received by Agent (and any request, authorization, consent or approval of any
Lender is conclusive and binding on each subsequent holder, assignee or
transferee of or Participant in that Lender's portion of the Principal Debt
until that notice is given and received), (c) are not deemed to have notice of
the occurrence of a
36
Default unless a responsible officer of Agent, who handles matters associated
with the Loan Papers and transactions thereunder, has actual knowledge or Agent
has been notified by a Lender or Borrower, and (d) are entitled to consult with
legal counsel (including counsel for Borrower), independent accountants, and
other experts selected by Agent and are not liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of
counsel, accountants, or experts.
13.5 Limitation of Agent's Liability.
-------------------------------
(a) NEITHER AGENT NOR ANY OF ITS AFFILIATES, REPRESENTATIVES,
SUCCESSORS OR ASSIGNS WILL BE LIABLE FOR ANY ACTION TAKEN OR OMITTED TO BE
TAKEN BY IT OR THEM UNDER THE LOAN PAPERS IN GOOD FAITH AND BELIEVED BY IT
OR THEM TO BE WITHIN THE DISCRETION OR POWER CONFERRED UPON IT OR THEM BY
THE LOAN PAPERS OR BE RESPONSIBLE FOR THE CONSEQUENCES OF ANY ERROR OF
JUDGMENT (EXCEPT FOR FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), AND
NONE OF THEM HAS A FIDUCIARY RELATIONSHIP WITH ANY LENDER BY VIRTUE OF THE
LOAN PAPERS (BUT NOTHING IN THIS AGREEMENT NEGATES THE OBLIGATION OF AGENT
TO ACCOUNT FOR FUNDS RECEIVED BY IT FOR THE ACCOUNT OF ANY LENDER).
(b) Unless indemnified to its satisfaction, Agent may not be
compelled to do any act under the Loan Papers or to take any action toward
the execution or enforcement of the powers thereby created or to prosecute
or defend any suit in respect of the Loan Papers. If Agent requests
instructions from Lenders, or Required Lenders, as the case may be, with
respect to any act or action in connection with any Loan Paper, Agent is
entitled to refrain (without incurring any liability to any Person by so
refraining) from that act or action unless and until it has received
instructions. In no event, however, may Agent or any of its Representatives
be required to take any action that it or they determine could incur for it
or them criminal or onerous civil liability or that is contrary to any Loan
Paper or applicable Law. Without limiting the generality of the foregoing,
no Lender has any right of action against Agent as a result of Agent's
acting or refraining from acting under this Agreement in accordance with
instructions of Required Lenders (or of all Lenders, if instructions from
all Lenders is specifically required by the terms of the Loan Papers).
(c) Agent is not responsible to any Lender or any Participant for,
and each Lender represents and warrants that it has not relied upon Agent
in respect of, (i) the creditworthiness of any Company and the risks
involved to that Lender, (ii) the effectiveness, enforceability,
genuineness, validity or due execution of any Loan Paper (other than by
Agent), (iii) any representation, warranty, document, certificate, report
or statement made therein (other than by Agent) or furnished thereunder or
in connection therewith, (iv) the adequacy of any collateral ever securing
the Obligation or the existence, priority or perfection of any Lien ever
granted or purported to be granted on any collateral under any Loan Paper,
or (v) the observance of or compliance with any of the terms, covenants or
conditions of any Loan Paper on the part of any Company. EACH LENDER AGREES
TO INDEMNIFY AGENT AND ITS REPRESENTATIVES AND HOLD THEM HARMLESS FROM AND
AGAINST (BUT LIMITED TO SUCH LENDER'S PRO RATA PART OF) ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, REASONABLE EXPENSES AND REASONABLE DISBURSEMENTS OF ANY KIND
OR NATURE WHATSOEVER THAT MAY BE IMPOSED ON, ASSERTED AGAINST, OR INCURRED
BY THEM IN ANY WAY RELATING TO OR ARISING OUT OF THE LOAN PAPERS OR ANY
ACTION TAKEN OR OMITTED BY THEM UNDER THE LOAN PAPERS IF AGENT AND ITS
REPRESENTATIVES ARE NOT REIMBURSED FOR SUCH AMOUNTS BY ANY COMPANY.
Although Agent and its Representatives have the right to be indemnified
under this Agreement for its or their own ordinary negligence, Agent and
its Representatives do not have the right to be indemnified under this
Agreement for its or their own fraud, gross negligence or willful
misconduct.
13.6 Default; Collateral. While a Default exists, Lenders agree to
-------------------
promptly confer in order that Required Lenders or Lenders, as the case may be,
may agree upon a course of action for the enforcement of the Rights of Lenders;
and Agent is entitled to refrain from taking any action (without incurring any
liability to any Person for so refraining) unless and until it has received
instructions from Required Lenders. In actions with respect to any property of
Borrower,
37
Agent is acting for the ratable benefit of each Lender. Agent shall hold, for
the ratable benefit of all Lenders, any security it receives for the Obligation
or any guaranty of the Obligation it receives upon or in lieu of foreclosure.
13.7 Limitation of Liability. No Lender or any Participant will incur
-----------------------
any liability to any other Lender or Participant, except for acts or omissions
in bad faith, and neither Agent nor any Lender or Participant will incur any
liability to any other Person for any act or omission of any other Lender or any
Participant.
13.8 Relationship of Lenders. The Loan Papers and the documents
-----------------------
delivered in connection therewith do not create a partnership or joint venture
among Agent and Lenders or among Lenders.
13.9 Benefits of Agreement. None of the provisions of this SECTION 13
---------------------
inure to the benefit of any Company or any other Person other than Agent and
Lenders; consequently, no Company or any other Person is entitled to rely upon,
or to raise as a defense, in any manner whatsoever, the failure of Agent or any
Lender to comply with these provisions.
SECTION 14 MISCELLANEOUS.
---------- -------------
14.1 Headings. The headings, captions and arrangements used in any of
--------
the Loan Papers are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify or modify the terms of the Loan Papers, nor
affect the meaning thereof.
14.2 Nonbusiness Days; Time. Any payment or action that is due under
----------------------
any Loan Paper on a non-Business Day may be delayed until the next-succeeding
Business Day (but interest shall continue to accrue on any applicable payment
until payment is in fact made) unless the payment concerns a LIBOR Loan, in
which case if the next-succeeding Business Day is in the next calendar month,
then such payment shall be made on the next-preceding Business Day. Unless
otherwise indicated, all time references (e.g., 1:00 p.m.) are to Dallas, Texas
time.
14.3 Communications. Unless otherwise specifically provided, whenever
--------------
any Loan Paper requires or permits any consent, approval, notice, request or
demand from one party to another, communication must be in writing (which may be
by telex or telecopy) to be effective and shall be deemed to have been given (a)
if by telex, when transmitted to the appropriate telex number and the
appropriate answerback is received, (b) if by telecopy, when transmitted to the
appropriate telecopy number (and all communications sent by telecopy must be
confirmed promptly thereafter by telephone; but any requirement in this
parenthetical shall not affect the date when the telecopy shall be deemed to
have been delivered), (c) if by mail, on the third Business Day after it is
enclosed in an envelope and properly addressed, stamped, sealed, and deposited
in the appropriate official postal service, or (d) if by any other means, when
actually delivered. Until changed by notice pursuant to this Agreement, the
address (and telecopy number) for each party to a Loan Paper is set forth on the
attached SCHEDULE 1.
14.4 Form and Number of Documents. The form, substance, and number of
----------------------------
counterparts of each writing to be furnished under the Loan Papers must be
satisfactory to Agent and its counsel, each in its reasonable discretion.
14.5 Exceptions to Covenants. The Companies may not take or fail to
-----------------------
take any action that is permitted as an exception to any of the covenants
contained in any Loan Paper if that action or omission would result in the
breach of any other covenant contained in any Loan Paper.
14.6 Survival. All covenants, agreements, undertakings, representations
--------
and warranties made in any of the Loan Papers survive all closings under the
Loan Papers and, except as otherwise indicated, are not affected by any
investigation made by any party.
38
14.7 Governing Law. The Laws (other than conflict-of-laws provisions)
-------------
of the State of New York and of the U.S. govern the Rights and duties of the
parties to the Loan Papers and the validity, construction, enforcement and
interpretation of the Loan Papers.
14.8 Invalid Provisions. Any provision in any Loan Paper held to be
------------------
illegal, invalid or unenforceable is fully severable; the appropriate Loan Paper
shall be construed and enforced as if that provision had never been included;
and the remaining provisions shall remain in full force and effect and shall not
be affected by the severed provision. Agent, Lenders, and the Companies shall
negotiate, in good faith, the terms of a replacement provision as similar to the
severed provision as may be possible and be legal, valid and enforceable.
14.9 Venue; Service of Process; Jury Trial. EACH PARTY TO ANY LOAN
-------------------------------------
PAPER, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS (AND IN THE CASE OF
BORROWER, FOR EACH OTHER COMPANY), (a) IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS, (b)
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING
OUT OF OR IN CONNECTION WITH THE LOAN PAPERS AND THE OBLIGATION BROUGHT IN
DISTRICT COURTS OF DALLAS OR XXXXXX COUNTY, TEXAS, OR IN THE U.S. DISTRICT COURT
FOR THE NORTHERN OR SOUTHERN DISTRICT OF TEXAS, DALLAS OR HOUSTON DIVISION, (c)
IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY OF THE
AFOREMENTIONED COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (d) IRREVOCABLY
AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY TO ANY LOAN PAPER ARISING OUT
OF OR IN CONNECTION WITH THE LOAN PAPERS OR THE OBLIGATION MAY BE BROUGHT IN ONE
OF THE AFOREMENTIONED COURTS, AND (e) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY LOAN PAPER. The scope of each of the
foregoing waivers is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including, without limitation, contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. Borrower (for
itself and on behalf of each other Company) acknowledges that these waivers are
a material inducement to Agent's and each Lender's agreement to enter into a
business relationship, that Agent and each Lender has already relied on these
waivers in entering into this Agreement, and that Agent and each Lender will
continue to rely on each of these waivers in related future dealings. Borrower
(for itself and on behalf of each other Company) further warrants and represents
that it has reviewed these waivers with its legal counsel, and that it knowingly
and voluntarily agrees to each waiver following consultation with legal counsel.
THE WAIVERS IN THIS SECTION 14.9 MAY NOT BE MODIFIED EXCEPT IN ACCORDANCE WITH
SECTION 14.10, AND SHALL, EXCEPT TO THE EXTENT WAIVED OR MODIFIED IN ACCORDANCE
WITH SECTION 14.10, APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR
PLACEMENTS TO OR OF THIS OR ANY OTHER LOAN PAPER. In the event of Litigation,
this Agreement may be filed as a written consent to a trial by the court.
14.10 Amendments, Consents, Conflicts and Waivers.
-------------------------------------------
(a) Unless otherwise specifically provided, (i) this Agreement may
be amended only by an instrument in writing executed by Borrower, Agent and
Required Lenders and supplemented only by documents delivered or to be
delivered in accordance with the express terms of this Agreement, and (ii)
the other Loan Papers may only be the subject of an amendment, modification
or waiver that has been approved by Required Lenders and Borrower.
(b) Any amendment to or consent or waiver under any Loan Paper that
purports to accomplish any of the following must be by an instrument in
writing executed by Borrower and Agent and executed (or approved, as the
case may be) by each Lender: (i) extend the due date, decrease the amount
of, or reallocate any scheduled payment of the Obligation; (ii) decrease
any rate or amount of interest, fees or other sums payable to Agent or
Lenders under this Agreement (except such reductions as are contemplated by
this
39
Agreement); (iii) change the definition of "Committed Sum," "Required
Lenders," or "Termination Date;" (iv) increase any one or more Lenders'
Committed Sums; (v) waive compliance with, amend or release (in whole or in
part) the Guaranties of VRI or all or substantially all of the Restricted
Subsidiaries; or (vi) change this clause (b), SECTION 9.12 or any other
matter specifically requiring the consent of all Lenders under this
Agreement.
(c) Any conflict or ambiguity between the terms and provisions of
this Agreement and terms and provisions in any other Loan Paper is
controlled by the terms and provisions of this Agreement.
(d) No course of dealing or any failure or delay by Agent, any
Lender, or any of their respective Representatives with respect to
exercising any Right of Agent or any Lender under this Agreement operates
as a waiver thereof. A waiver must be in writing and signed by Agent and
Lenders (or Required Lenders, if permitted under this Agreement) to be
effective, and a waiver will be effective only in the specific instance and
for the specific purpose for which it is given.
14.11 Multiple Counterparts. Each Loan Paper (other than the Notes) may
---------------------
be executed in a number of identical counterparts, each of which shall be deemed
an original for all purposes and all of which constitute, collectively, one
agreement; but, in making proof of thereof, it shall not be necessary to produce
or account for more than one counterpart. Each Lender need not execute the same
counterpart of this Agreement so long as identical counterparts are executed by
Borrower, each Lender, and Agent. This Agreement shall become effective when
counterparts of this Agreement have been executed and delivered to Agent by each
Lender, Agent and Borrower, or, in the case only of Lenders, when Agent has
received telecopied, telexed or other evidence satisfactory to it that each
Lender has executed and is delivering to Agent a counterpart of this Agreement.
14.12 Successors and Assigns; Participation.
-------------------------------------
(a) The Loan Papers bind and inure to the benefit of the parties
hereto, any intended beneficiary thereof, and each of their respective
successors and permitted assigns. No Lender may transfer, pledge, assign,
sell any participation in, or otherwise encumber its portion of the
Obligation, except as permitted by this SECTION 14.12.
(b) Any Lender may, in the ordinary course of its business, at any
time sell to one or more Persons (each a "PARTICIPANT") participating
interests in all or any part of its Rights and obligations under the Loan
Papers. The selling Lender shall remain a "Lender" under this Agreement
(and the Participant shall not constitute a "Lender" under this Agreement)
and its obligations under this Agreement shall remain unchanged. The
selling Lender shall remain solely responsible for the performance of its
obligations under the Loan Papers and shall remain the holder of its share
of the Principal Debt for all purposes under this Agreement. Borrower and
Agent shall continue to deal solely and directly with the selling Lender in
connection with that Lender's Rights and obligations under the Loan Papers.
Participants have no Rights under the Loan Papers, other than certain
voting Rights as provided below. Subject to the following, each Lender may
obtain (on behalf of its Participants) the benefits of SECTION 3 with
respect to all participations in its part of the Obligation outstanding
from time to time so long as Borrower is not obligated to pay any amount in
excess of the amount that would be due to that Lender under SECTION 3
calculated as though no participation have been made. No Lender may sell
any participating interest under which the Participant has any Rights to
approve any amendment, modification or waiver of any Loan Paper, except to
the extent the amendment, modification or waiver extends the due date for
payment of any principal, interest or fees due under the Loan Papers or
reduces the interest rate or the amount of principal or fees applicable to
the Obligation (except reductions contemplated by this Agreement).
(c) Any Lender may at any time, in the ordinary course of its
business, assign to any Eligible Assignee (each a "PURCHASER") all or any
part (but if less than all, then not less than $5,000,000) of its Rights
40
and obligations under the Loan Papers. In each case, the Purchaser shall
assume those Rights and obligations under an assignment agreement
substantially in the form of the attached EXHIBIT G. Each assignment under
this SECTION 14.12(C) shall include a ratable interest in the assigning
Lender's Rights and obligations under the Facility. Upon (i) delivery of
an executed copy of the assignment agreement to Borrower and Agent and the
recordation thereof in the Register provided for in SECTION 14.12(D) and
(ii) with respect to each assignment after the completion of the primary
syndication of the Facility, payment of a fee of $3,500 from the transferor
to Agent, from and after the effective date specified in the Assignment
Agreement (which shall be after the date of delivery), the Purchaser shall
for all purposes be a Lender party to this Agreement and shall have all the
Rights and obligations of a Lender under this Agreement to the same extent
as if it were an original party to this Agreement with commitments as set
forth in the assignment agreement, and the transferor Lender shall be
released from its obligations under this Agreement to a corresponding
extent, and, except as provided in the following sentence, no further
consent or action by Borrower, Lenders or Agent shall be required. Upon
the consummation of any transfer to a Purchaser under this clause (c), the
then-existing SCHEDULE 1 shall automatically be deemed to reflect the name,
address and Committed Sum of such Purchaser, Agent shall deliver to
Borrower and Lenders an amended SCHEDULE 1 reflecting those changes, and
Borrower shall execute and deliver to the Purchaser and, if applicable,
such Lender, a Note in the face amount of its Committed Sum and the
transferor Lender shall return to Borrower the Note previously delivered to
it under this Agreement. A Purchaser is subject to all the provisions in
this section as if it were a Lender signatory to this Agreement as of the
date of this Agreement.
(d) Agent shall maintain at its address on SCHEDULE 1 a copy of
each Lender assignment agreement delivered to it in accordance with the
terms of SECTION 14.12(C) and a register for the recordation of the
principal amount, Type and Interest Period of each Loan and the names,
addresses and Committed Sums of each Lender from time to time (the
"REGISTER"). Agent will make reasonable efforts to maintain the accuracy of
the Register and to promptly update the Register from time to time, as
necessary. The entries in the Register shall be conclusive in the absence
of manifest error and Borrower, Agent and Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by Borrower and each Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(e) This SECTION 14.12 relates to absolute assignments and,
notwithstanding SECTION 14.12(A), does not prohibit assignments creating
security interests. Specifically, without limitation, any Lender may at
any time, without the consent of Borrower or Agent, assign all or any part
of its Rights under the Loan Papers to a Federal Reserve Bank without
releasing the transferor Lender from its obligations thereunder.
14.13 Discharge Only Upon Payment in Full; Reinstatement in Certain
-------------------------------------------------------------
Circumstances. Each Company's obligations under the Loan Papers remain in
-------------
full force and effect until the Total Commitment is terminated and the
Obligation is paid in full (except for provisions under the Loan Papers
expressly intended to survive payment of the Obligation and termination of the
Loan Papers). If at any time any payment of the principal of or interest on any
Note or any other amount payable by Borrower or any other obligor on the
Obligation under any Loan Paper is rescinded or must be restored or returned
upon the insolvency, bankruptcy or reorganization of Borrower or otherwise, the
obligations of each Company under the Loan Papers with respect to that payment
shall be reinstated as though the payment had been due but not made at that
time.
14.14 ENTIRETY. THE RIGHTS AND OBLIGATIONS OF THE COMPANIES, LENDERS
--------
AND AGENT SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS AMONG THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO THOSE WRITINGS. THIS AGREEMENT AND THE OTHER WRITTEN LOAN
PAPERS (EACH AS AMENDED IN WRITING FROM TIME TO TIME) EXECUTED BY ANY COMPANY,
ANY LENDER OR AGENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
41
AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES. This Agreement supersedes all prior written agreements and
understandings relating to the subject matter hereof and may be supplemented
only by documents delivered in accordance with the terms hereof.
EXECUTED as of the day and year first mentioned.
THE VAIL CORPORATION
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
NATIONSBANK OF TEXAS, N.A.
By: __________________________________________
Xxxxx X. Xxxxxxx
Senior Vice President
42
BANKBOSTON, N.A.
By: __________________________________________
Name: __________________________________________
Title:__________________________________________
U.S BANK NATIONAL ASSOCIATION,
D/B/A COLORADO NATIONAL BANK
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
CREDIT LYONNAIS NEW YORK BRANCH
By: _____________________________
Name: _____________________________
Title:_____________________________
BANKERS TRUST COMPANY
By: ____________________________________
Name: ____________________________________
Title:____________________________________
BANK OF AMERICA NT & SA
By: _____________________________
Name: _____________________________
Title:_____________________________
FLEET NATIONAL BANK
By: __________________________________
Name: __________________________________
Title:__________________________________
XXXXXX TRUST AND SAVINGS BANK
BY: __________________________________
Name:__________________________________
Title:_________________________________
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
LOS ANGELES AGENCY
By: __________________________________
Name: __________________________________
Title:__________________________________
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION
By: __________________________
Xxxxxx X. Xxxxx
Vice President
KEYBANK NATIONAL ASSOCIATION
By: __________________________
Name:__________________________
Title:_________________________
FIRST SECURITY BANK, N.A.
By: _____________________________
Name: _____________________________
Title:_____________________________
CIBC INC.
By: ______________________________
Name: ______________________________
Title:______________________________
THE BANK OF NOVA SCOTIA
By: ___________________________
Name:___________________________
Title:__________________________
