CREDIT AGREEMENT
Dated as of February 12, 1998
among
TRENDWEST RESORTS, INC.,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Agent,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS................................................. 1
1.01 Certain Defined Terms................................................................... 1
1.02 Other Interpretive Provisions........................................................... 15
1.03 Accounting Principles................................................................... 16
ARTICLE II THE CREDITS................................................. 17
2.01 Amounts and Terms of Commitments........................................................ 17
(a) The Revolving Credit............................................................. 17
2.02 Loan Accounts........................................................................... 17
2.03 Procedure for Borrowing................................................................. 18
2.04 Conversion and Continuation Elections................................................... 18
2.05 Voluntary Termination or Reduction of
Commitments................................................................................... 20
2.06 Repayment............................................................................... 20
2.07 Interest................................................................................ 20
2.08 Fees.................................................................................... 21
(a) Arrangement, Agency Fees........................................................ 21
(b) Commitment Fees................................................................. 21
2.09 Computation of Fees and Interest........................................................ 21
2.10 Payments by the Company................................................................. 22
2.11 Payments by the Banks to the Agent...................................................... 22
2.12 Sharing of Payments, Etc................................................................ 23
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY.................................... 24
3.01 Other Taxes............................................................................. 24
3.02 Illegality.............................................................................. 24
3.03 Increased Costs and Reduction of Return................................................. 25
3.04 Funding Losses.......................................................................... 25
3.05 Inability to Determine Rates............................................................ 26
3.06 Certificates of Banks................................................................... 26
3.07 Substitution of Banks................................................................... 26
3.08 Survival................................................................................ 27
ARTICLE IV CONDITIONS PRECEDENT............................................. 27
4.01 Conditions of Initial Loans............................................................. 27
(a) Credit Agreement............................................................ 27
(b) Resolutions; Incumbency..................................................... 27
(c) Organization Documents; Good Standing....................................... 27
(d) Legal Opinions.............................................................. 28
(e) Payment of Fees............................................................. 28
(f) Certificate................................................................. 28
(g) Other Documents............................................................. 28
4.02 Conditions to All Borrowings............................................................ 28
(a) Notice of Borrowing or
Conversion/Continuation.............................................................. 28
(b) Continuation of Representations and
Warranties........................................................................... 29
(c) No Existing Default......................................................... 29
ARTICLE V REPRESENTATIONS AND WARRANTIES........................................ 29
5.01 Corporate Existence and Power........................................................... 29
5.02 Corporate Authorization; No Contravention............................................... 30
5.03 Governmental Authorization.............................................................. 30
5.04 Binding Effect.......................................................................... 30
5.05 Litigation.............................................................................. 30
5.06 No Default.............................................................................. 31
5.07 ERISA Compliance........................................................................ 31
5.08 Use of Proceeds; Margin Regulations..................................................... 32
5.09 Title to Properties..................................................................... 32
5.10 Taxes................................................................................... 32
5.11 Financial Condition..................................................................... 32
5.12 Environmental Matters................................................................... 33
5.13 Regulated Entities...................................................................... 33
5.14 No Burdensome Restrictions.............................................................. 33
5.15 Copyrights, Patents, Trademarks and Licenses,
etc........................................................................................... 33
5.16 Subsidiaries............................................................................ 33
5.17 Insurance............................................................................... 34
5.18 Swap Obligations........................................................................ 34
5.19 Full Disclosure......................................................................... 34
ARTICLE VI AFFIRMATIVE COVENANTS............................................ 34
6.01 Financial Statements.................................................................... 34
6.02 Certificates; Other Information......................................................... 35
6.03 Notices................................................................................. 36
6.04 Preservation of Corporate Existence, Etc................................................ 37
6.05 Maintenance of Property................................................................. 37
6.06 Insurance............................................................................... 37
6.07 Payment of Obligations.................................................................. 38
6.08 Compliance with Laws.................................................................... 38
6.09 Compliance with ERISA................................................................... 38
6.10 Inspection of Property and Books and Records............................................ 38
6.11 Environmental Laws...................................................................... 39
6.12 Use of Proceeds......................................................................... 39
6.13 Interest Coverage Ratio................................................................. 39
6.14 Capitalization Ratio................................................................. 39
ARTICLE VII NEGATIVE COVENANTS.............................................. 39
7.01 Limitation on Liens..................................................................... 39
7.02 Disposition of Assets................................................................... 41
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7.03 Consolidations and Mergers.............................................................. 41
7.04 Loans and Investments................................................................... 42
7.05 Transactions with Affiliates............................................................ 43
7.06 Use of Proceeds......................................................................... 43
7.07 Contingent Obligations.................................................................. 43
7.08 Joint Ventures.......................................................................... 44
7.09 Lease Obligations....................................................................... 44
7.10 Restricted Payments..................................................................... 44
7.11 ERISA................................................................................... 45
7.12 Change in Business...................................................................... 45
7.13 Accounting Changes...................................................................... 45
7.14 Agreements by Subsidiaries.............................................................. 45
7.15 Notes Receivable..................................................................... 45
7.16 Time Share Inventory................................................................. 45
ARTICLE VIII EVENTS OF DEFAULT.............................................. 46
8.01 Event of Default........................................................................ 46
(a) Non-Payment................................................................. 46
(b) Representation or Warranty.................................................. 46
(c) Specific Defaults........................................................... 46
(d) Other Defaults.............................................................. 46
(e) Cross-Default............................................................... 46
(f) Insolvency; Voluntary Proceedings........................................... 47
(g) Involuntary Proceedings..................................................... 47
(h) ERISA....................................................................... 47
(i) Monetary Judgments.......................................................... 48
(j) Non-Monetary Judgments...................................................... 48
(k) Change of Control........................................................... 48
8.02 Remedies................................................................................ 48
8.03 Rights Not Exclusive.................................................................... 48
ARTICLE IX THE AGENT.................................................. 49
9.01 Appointment and Authorization; "Agent".................................................. 49
9.02 Delegation of Duties.................................................................... 49
9.03 Liability of Agent...................................................................... 49
9.04 Reliance by Agent....................................................................... 50
9.05 Notice of Default....................................................................... 50
9.06 Credit Decision......................................................................... 51
9.07 Indemnification of Agent................................................................ 51
9.08 Agent in Individual Capacity............................................................ 52
9.09 Successor Agent......................................................................... 52
9.10 Withholding Tax......................................................................... 52
ARTICLE X MISCELLANEOUS................................................ 54
10.01 Amendments and Waivers................................................................. 54
10.02 Notices................................................................................ 55
10.03 No Waiver; Cumulative Remedies......................................................... 55
10.04 Costs and Expenses..................................................................... 56
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10.05 Company Indemnification................................................................ 56
10.06 Payments Set Aside..................................................................... 57
10.07 Successors and Assigns................................................................. 57
10.08 Assignments, Participations, etc....................................................... 57
10.09 Confidentiality........................................................................ 59
10.10 Set-off................................................................................ 60
10.11 Automatic Debits of Fees............................................................... 60
10.12 Notification of Addresses, Lending Offices,
Etc........................................................................................... 60
10.13 Counterparts........................................................................... 60
10.14 Severability........................................................................... 60
10.15 No Third Parties Benefited............................................................. 61
10.16 Governing Law and Jurisdiction......................................................... 61
10.17 Waiver of Jury Trial................................................................... 61
10.18 Entire Agreement....................................................................... 61
10.19 Statute of Frauds...................................................................... 62
SCHEDULES
Schedule 2.01 Commitments
Schedule 5.05 Litigation
Schedule 5.07 ERISA
Schedule 5.11 Permitted Liabilities
Schedule 5.12 Environmental Matters
Schedule 5.16 Subsidiaries and Minority Interests
Schedule 5.17 Insurance Matters
Schedule 7.07 Contingent Obligations
Schedule 10.02 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C-1 Form of Quarterly Compliance Certificate
Exhibit C-2 Form of Monthly Compliance Certificate
Exhibit D-1 Form of Legal Opinion of Company's Washington
Counsel
Exhibit D-2 Form of Legal Opinion of Company's Oregon
Counsel
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Promissory Note
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CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of February 12, 1998, among
Trendwest Resorts, Inc., an Oregon corporation (the "Company"), the several
financial institutions from time to time party to this Agreement (collectively,
the "Banks"; individually, a "Bank"), and Bank of America National Trust and
Savings Association as agent for the Banks.
WHEREAS, the Banks have agreed to make available to the Company a
revolving credit facility upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms have the
following meanings:
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or consolidation or any
other combination with another Person (other than a Person that is a
Subsidiary) provided that the Company or the Subsidiary is the
surviving entity.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise.
"Agent" means BofA in its capacity as agent for the Banks
hereunder, and any successor agent arising under Section 9.09.
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"Agent-Related Persons" means BofA and any successor agent
arising under Section 9.09, together with their respective Affiliates
(including, in the case of BofA, the Arranger), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agent's Payment Office" means the address for payments set
forth on Schedule 10.02 or such other address as the Agent may from
time to time specify.
"Agreement" means this Credit Agreement.
"Applicable Margin" means, with respect to Base Rate Loans,
0%, and with respect to Offshore Rate Loans, 1%.
"Arranger" means BancAmerica Xxxxxxxxx Xxxxxxxx, a
Delaware corporation.
"Assignee" has the meaning specified in subsection
10.08(a).
"Attorney Costs" means and includes all fees and disbursements
of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory
clause hereto.
"Bankruptcy Code" means the Federal Bankruptcy Reform
Act of 1978 (11 U.S.C. ss.101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest
in effect for such day as publicly announced from time to time by BofA
in San Francisco, California, as its "reference rate." (The "reference
rate" is a rate set by BofA based upon various factors including BofA's
costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate.) Any change in
the reference rate announced by BofA shall take effect at the opening
of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest based on the
Base Rate.
"BofA" means Bank of America National Trust and Savings
Association, a national banking association.
"Borrowing" means a borrowing hereunder consisting of
Revolving Loans of the same Type made to the Company on the
2
same day by the Banks under Article II, and, other than in the case of
Base Rate Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs
under Section 2.03.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City, San Francisco, or
Seattle are authorized or required by law to close and, if the
applicable Business Day relates to any Offshore Rate Loan, means such a
day on which dealings are carried on in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Change of Control" means Jeld-Wen, inc. shall cease to
control the Company or cease to own beneficially at least
51% of its voting stock.
"Closing Date" means the date on which all conditions
precedent set forth in Section 4.01 are satisfied or waived by all
Banks (or, in the case of subsection 4.01(e), waived by the Person
entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"Commitment" means, as to each Bank, its Revolving
Credit Commitment.
"Compliance Certificate" means a Quarterly Compliance
Certificate or a Monthly Compliance Certificate.
"Consolidated Net Worth" means the consolidated
shareholders' equity of the Company and its Subsidiaries.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise
acquire such primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any such
primary obligation, or to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency
or any balance sheet
3
item, level of income or financial condition of the primary obligor,
(iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation, or (iv) otherwise to assure or hold harmless the holder of
any such primary obligation against loss in respect thereof (each, a
"Guaranty Obligation"); (b) with respect to any Surety Instrument
issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments; (c) to
purchase any materials, supplies or other property from, or to obtain
the services of, another Person if the relevant contract or other
related document or obligation requires that payment for such
materials, supplies or other property, or for such services, shall be
made regardless of whether delivery of such materials, supplies or
other property is ever made or tendered, or such services are ever
performed or tendered, or (d) in respect of any Swap Contract. The
amount of any Contingent Obligation shall, in the case of Guaranty
Obligations, be deemed equal to the stated or determinable amount of
the primary obligation in respect of which such Guaranty Obligation is
made or, if not stated or if indeterminable, the maximum reasonably
anticipated liability in respect thereof, and in the case of other
Contingent Obligations other than in respect of Swap Contracts, shall
be equal to the maximum reasonably anticipated liability in respect
thereof and, in the case of Contingent Obligations in respect of Swap
Contracts, shall be equal to the Swap Termination Value.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or by
which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under
Section 2.04, the Company (a) converts Loans of one Type to another
Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such date.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"Dollars", "dollars" and "$" each mean lawful money of
the United States.
"Eligible Assignee" means (a) a commercial bank
organized under the laws of the United States, or any state
4
thereof, and having a combined capital and surplus of at least
$100,000,000; (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of
any such country, and having a combined capital and surplus of at least
$100,000,000, provided that such bank is acting through a branch or
agency located in the United States; and (c) a Person that is primarily
engaged in the business of commercial banking and that is (i) a
Subsidiary of a Bank, (ii) a Subsidiary of a Person of which a Bank is
a Subsidiary, or (iii) a Person of which a Bank is a Subsidiary.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability
or responsibility for violation of any Environmental Law, or for
release or injury to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of
the Code for purposes of provisions relating to Section 412 of the
Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA) or a cessation of operations which is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Company or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to
5
administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the
Company or any ERISA Affiliate.
"Eurodollar Reserve Percentage" has the meaning
specified in the definition of "Offshore Rate".
"Event of Default" means any of the events or
circumstances specified in Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal
functions.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York (including any such successor, "H.15(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic
mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City
time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Fee Letter" has the meaning specified in
subsection 2.10(a).
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date
of determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive,
6
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"Guaranty Obligation" has the meaning specified in the
definition of "Contingent Obligation."
"Indebtedness" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services (other than trade payables entered into in the ordinary course
of business on ordinary terms); (c) all non-contingent reimbursement or
payment obligations with respect to Surety Instruments; (d) all
obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights
and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property); (f) all
obligations with respect to capital leases; (g) all indebtedness
referred to in clauses (a) through (f) above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including
accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness; and (h) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in
clauses (a) through (g) above;
Provided, that Indebtedness shall not include sales of Permitted
Receivables sold pursuant to Permitted Receivables Purchase Facilities
and indemnification, recourse or repurchase obligations thereunder. For
all purposes of this Agreement, the Indebtedness of any Person shall
include all recourse Indebtedness of any partnership or joint venture
in which such Person is a general partner or a joint venturer.
"Indemnified Liabilities" has the meaning specified in
Section 10.05.
"Indemnified Person" has the meaning specified in
Section 10.05.
"Independent Auditor" has the meaning specified in
subsection 6.01(a).
7
"Insolvency Proceeding" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any
court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors,
or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, (i) as to any Revolving Loan
other than a Base Rate Loan, the last day of each Interest Period
applicable to such Loan, and (ii) as to any Base Rate Loan, the last
Business Day of each calendar quarter; provided, however, that if any
Interest Period for an Offshore Rate Loan exceeds three months, the
date that falls three months after the beginning of such Interest
Period and after each Interest Payment Date thereafter is also an
Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by the Company in its Notice
of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless, in the case of
an Offshore Rate Loan, the result of such extension would be
to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the preceding
Business Day;
(ii) any Interest Period pertaining to an Offshore
Rate Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii) no Interest Period for any Loan shall extend
beyond the Revolving Termination Date.
8
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Joint Venture" means a single-purpose corporation,
partnership, limited liability company, joint venture or other similar
legal arrangement (whether created by contract or conducted through a
separate legal entity) now or hereafter formed by the Company or any of
its Subsidiaries with another Person in order to conduct a common
venture or enterprise with such Person.
"Lending Office" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, on Schedule
10.02, or such other office or offices as such Bank may from time to
time notify the
Company and the Agent.
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law), but
not including the interest of a lessor under an operating lease or the
interest of a purchaser of Permitted Receivables under any Permitted
Receivables Purchase Facility.
"Loan" means a Revolving Loan by a Bank to the Company under
Article II, which may be a Base Rate Loan or an Offshore Rate Loan
(each, a "Type" of Loan).
"Loan Documents" means this Agreement, any Notes, and
the Fee Letter.
"Majority Banks" means at any time Banks then holding at least
66-2/3% of the then aggregate unpaid principal amount of the Loans, or,
if no such principal amount is then outstanding, Banks then having at
least 66-2/3% of the Commitments.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties, condition (financial or
9
otherwise) of the Company or the Company and its Subsidiaries taken as
a whole; (b) a material impairment of the ability of the Company to
perform under any Loan Document and to avoid any Event of Default; or
(c) a material adverse effect upon the legality, validity, binding
effect or enforceability against the Company of any Loan Document.
"Monthly Compliance Certificate" means a certificate
substantially in the form of Exhibit C-2.
"Multiemployer Plan" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Company or any
ERISA Affiliate makes, is making, or is obligated to make contributions
or, during the preceding three calendar years, has made, or been
obligated to make, contributions.
"Note" means a promissory note executed by the Company in
favor of a Bank pursuant to subsection 2.02(b), in substantially the
form of Exhibit F.
"Notice of Borrowing" means a notice in substantially
the form of Exhibit A.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit B.
"Obligations" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document owing
by the Company to any Bank, the Agent, or any Indemnified Person,
whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter
arising.
"Offshore Rate" means, for any Interest Period, with respect
to Offshore Rate Loans comprising part of the same Borrowing, the rate
of interest per annum (rounded upward to the next 1/16th of 1%)
determined by the Agent as follows:
Offshore Rate = LIBOR
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for
any Interest Period the maximum reserve percentage (expressed
as a decimal, rounded upward to the next 1/100th of 1%) in
effect on such day (whether or not applicable to any Bank)
under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
10
with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum
determined by the Agent to be the arithmetic mean (rounded
upward to the next 1/16th of 1%) of the rates of interest per
annum notified to the Agent by the Reference Bank as the rate
of interest at which dollar deposits in the approximate amount
of the amount of the Loan to be made or continued as, or
converted into, an Offshore Rate Loan by the Reference Bank
and having a maturity comparable to such Interest Period would
be offered to major banks in the London interbank market at
their request at approximately 11:00 a.m. (London time) two
Business Days prior to the commencement of such Interest
Period.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on
the Offshore Rate.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"Other Taxes" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.
"Participant" has the meaning specified in
subsection 10.08(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Company sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described
in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years.
11
"Permitted Liens" has the meaning specified in
Section 7.01.
"Permitted Receivables" shall mean all obligations of any
obligor (whether now existing or hereafter arising) under a contract
for sale of goods or services by the Company or any of its
Subsidiaries, which shall include any obligation of such obligor
(whether now existing or hereafter arising) to pay interest, finance
charges or amounts with respect thereto, and, with respect to any of
the foregoing receivables or obligations, (a) all of the interest of
the Company or any of its Subsidiaries in the goods (including returned
goods) the sale of which gave rise to such receivable or obligation
after the passage of title thereto to any obligor, (b) all other Liens
and property subject thereto from time to time purporting to secure
payment of such receivables or obligations, and (c) all guarantees,
insurance, letters of credit and other agreements or arrangements of
whatever character from time to time supporting or securing payment of
any such receivables or obligations.
"Permitted Receivables Purchase Facility" shall mean any
agreement of the Company or any of its Subsidiaries providing for
sales, transfers or conveyances of Permitted Receivables purporting to
be sales (and considered sales under GAAP) that do not provide,
directly or indirectly, for recourse against the seller of such
Permitted Receivables (or against any of such seller's Affiliates) by
way of a guaranty or any other support arrangement, with respect to the
amount of such Permitted Receivables (based on the financial condition
or circumstances of the obligor thereunder), other than such limited
recourse as is reasonable given market standards for transactions of a
similar type, taking into account such factors as historical bad debt
loss experience and obligor concentration levels.
"Permitted Swap Obligations" means all obligations (contingent
or otherwise) of the Company or any Subsidiary existing or arising
under Swap Contracts, provided that each of the following criteria is
satisfied: (a) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments or assets
held or reasonably anticipated by such Person, or changes in the value
of securities issued by such Person in conjunction with a securities
repurchase program not otherwise prohibited hereunder, and not for
purposes of speculation or taking a "market view;" and (b) such Swap
Contracts do not contain (i) any provision ("walk-away" provision)
exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party, or (ii)
any provision creating or permitting the declaration of an event of
default,
12
termination event or similar event upon the occurrence of an Event of
Default hereunder (other than an Event of Default under subsection
8.01(a)).
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Company sponsors or maintains or to which the
Company makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Bank's Commitment divided by the
combined Commitments of all Banks.
"Quarterly Compliance Certificate" means a certificate
substantially in the form of Exhibit C-1.
"Reference Bank" means BofA.
"Replacement Bank" has the meaning specified in
Section 3.07.
"Reportable Event" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority, in each case applicable
to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
"Responsible Officer" means the chief executive officer or the
president of the Company, or any other officer having substantially the
same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer or the treasurer of
the Company, or any other officer having substantially the same
authority and responsibility.
"Revolving Commitment," as to each Bank, has the
meaning specified in Section 2.01.
"Revolving Loan" has the meaning specified in
Section 2.01.
13
"Revolving Termination Date" means the earlier to occur
of:
(a) February 12, 2001; and
(b) the date on which the Commitments terminate
in accordance with the provisions of this Agreement.
"SEC" means the Securities and Exchange
Commission, or any Governmental Authority succeeding to any
of its principal functions.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the voting stock, membership interests
or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Company.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond, note or xxxx option, interest rate
option, forward foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate swap, swaption,
currency option or any other, similar transaction (including any option
to enter into any of the foregoing) or any combination of the
foregoing, and, unless the context otherwise clearly requires, any
master agreement relating to or governing any or all of the foregoing.
"Swap Termination Value" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced
in clause (a) the amount(s) determined as the xxxx-to-market value(s)
for such Swap Contracts, as determined [by the Company] based upon one
or more mid- market or other readily available quotations provided by
any recognized dealer in such Swap Contracts (which may include any
Bank).
14
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the
case of each Bank and the Agent, respectively, taxes imposed on or
measured by its net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Bank or the Agent, as
the case may be, is organized or maintains a lending office.
"Type" has the meaning specified in the definition of
"Loan."
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.
"United States" and "U.S." each means the United States
of America.
"Vacation Credits" means ownership interests in WorldMark, The
Club that (i) entitle the owner to use a fully-furnished vacation
resort unit based on the number of Vacation Credits purchased and (ii)
are created through the transfer to WorldMark, the Club of resort units
developed or purchased by the Company in exchange for the right to sell
Vacation Credits in these properties based on the number of credits
available, as determined using a formula based on the number of user
days available and the relative value of each property.
"Wholly-Owned Subsidiary" means any corporation in which
(other than directors' qualifying shares required by law) 100% of the
capital stock of each class having ordinary voting power, and 100% of
the capital stock of every other class, in each case, at the time as of
which any determination is being made, is owned, beneficially and of
record, by the Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1.02 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
15
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and
means "including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and (ii) references to any statute
or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Agent or the Banks by way of
consent, approval or waiver shall be deemed modified by the phrase "in its/their
sole discretion."
(g) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Company and the other parties, and are the products of all parties. Accordingly,
they shall not be construed against the Banks or the Agent merely because of the
Agent's or Banks' involvement in their preparation.
1.03 Accounting Principles.
(a) Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal
quarter" refer to such fiscal periods of the Company.
16
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments.
(a) The Revolving Credit. Each Bank severally agrees, on the
terms and conditions set forth herein, to make loans to the Company (each such
loan, a "Revolving Loan") from time to time on any Business Day during the
period from the Closing Date to the Revolving Termination Date, in an aggregate
amount not to exceed at any time outstanding the amount set forth on Schedule
2.01 (such amount, as the same may be reduced under Section 2.05 or as a result
of one or more assignments under Section 10.08, the Bank's "Revolving Credit
Commitment"); provided, however, that, after giving effect to any Borrowing of
Revolving Loans, the aggregate principal amount of all outstanding Revolving
Loans shall not at any time exceed the combined Revolving Credit Commitments.
(b) Within the limits of each Bank's Revolving Credit
Commitment, and subject to the other terms and conditions hereof, the Company
may borrow, prepay, and reborrow.
2.02 Loan Accounts.
(a) The Loans made by each Bank shall be evidenced by one or
more loan accounts or records maintained by such Bank in the ordinary course of
business. The loan accounts or records maintained by the Agent and each Bank
shall be, absent manifest error, conclusive evidence of the amount of the Loans
made by the Banks to the Company and the interest and payments thereon. Any
failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Company hereunder to pay any amount owing
with respect to the Loans.
(b) Upon the request of any Bank made through the Agent, the
Loans made by such Bank may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Bank shall endorse on the schedules annexed
to its Note(s) the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by the Company with respect thereto.
Each such Bank is irrevocably authorized by the Company to endorse its Note(s)
and each Bank's record shall be conclusive absent manifest error; provided,
however, that the failure of a Bank to make, or an error in making, a notation
thereon with respect to any Loan shall not limit or otherwise affect the
obligations of the Company hereunder or under any such Note to such Bank.
17
2.03 Procedure for Borrowing.
(a) Each Borrowing shall be made upon the Company's
irrevocable written notice delivered to the Agent in the form of a Notice of
Borrowing (which notice must be received by the Agent prior to 9:00 a.m. Seattle
time) (i) three Business Days prior to the requested Borrowing Date, in the case
of Offshore Rate Loans; and (ii) on the requested Borrowing Date, in the case of
Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall
be in an aggregate minimum amount of $1,000,000 or any
multiple of $100,000 in excess thereof;
(B) the requested Borrowing Date, which
shall be a Business Day;
(C) the Type of Loans comprising the
Borrowing; and
(D) the duration of the Interest Period
applicable to any Offshore Rate Loans included in such notice.
If the Notice of Borrowing fails to specify the duration of
the Interest Period for any Borrowing comprised of Offshore
Rate Loans, such Interest Period
shall be three months.
(b) The Agent will promptly notify each Bank of its receipt of
any Notice of Borrowing of a Revolving Loan and of the amount of such Bank's Pro
Rata Share of that Borrowing.
(c) Each Bank will make available to the Agent for the account
of the Company at the Agent's Payment Office by 11:00 a.m. (Seattle time) on the
Borrowing Date requested by the Company in funds immediately available to the
Agent the amount of such Bank's Pro Rata Share of each Borrowing of a Revolving
Loan. The proceeds of all such Loans will then be made available to the Company
by the Agent at such office by crediting the account of the Company on the books
of BofA with the aggregate of the amounts made available to the Agent by the
Banks and in like funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent
shall otherwise consent, there may not be more than six different Interest
Periods in effect.
2.04 Conversion and Continuation Elections. (a) The
Company may, upon irrevocable written notice to the Agent in
accordance with subsection 2.04(b):
(i) elect, as of any Business Day, in the case of
Base Rate Loans (other than Swing Loans), or as of the last day of the
applicable Interest Period, in the case of Offshore Rate Loans, to
convert any such Loans (or any part
18
thereof in an amount not less than $1,000,000, or that is in an
integral multiple of $100,000 in excess thereof) into Loans of any
other Type; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Loans having Interest Periods expiring
on such day (or any part thereof in an amount not less than $1,000,000,
or that is in an integral multiple of $100,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
(b) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 9:00 a.m.
(Seattle time) at least (i) three Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as Offshore Rate Loans; and (ii) on the Conversion/Continuation Date, if the
Loans are to be converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation
Date;
(B) the aggregate amount of Loans to be
converted or continued;
(C) the Type of Loans resulting from the
proposed conversion or continuation; and
(D) other than in the case of conversions
into Base Rate Loans, the duration of the requested Interest
Period.
(c) If upon the expiration of any Interest Period applicable
to Offshore Rate Loans, the Company has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Loans, or if any Default or Event
of Default then exists, the Company shall be deemed to have elected to convert
such Offshore Rate Loans into Base Rate Loans effective as of the expiration
date of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of
a Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
19
(e) Unless the Majority Banks otherwise consent, during the
existence of a Default or Event of Default, the Company may not elect to have a
Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, unless the Agent shall otherwise consent, there may not be more than six
different Interest Periods in effect.
2.05 Voluntary Termination or Reduction of Commitments. The
Company may, upon not less than five Business Days' prior notice
to the Agent, terminate the Commitments, or permanently reduce
the Commitments by an aggregate minimum amount of $1,000,000 or
any multiple of $100,000 in excess thereof; unless, after giving
effect thereto and to any prepayments of Loans made on the
effective date thereof, the then-outstanding principal amount of
the Loans would exceed the amount of the combined Commitments
then in effect. Once reduced in accordance with this Section,
the Commitments may not be increased. Any reduction of the
Commitments shall be applied to each Bank according to its Pro
Rata Share. All accrued commitment fees to, but not including
the effective date of any reduction or termination of
Commitments, shall be paid on the effective date of such
reduction or termination.
2.06 Repayment. The Company shall repay to the Agent for the account of
the Banks on the Revolving Termination Date the aggregate principal amount of
Loans outstanding on such date.
2.07 Interest.
(a) Each Revolving Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per annum
equal to the Offshore Rate or the Base Rate, as the case may be (and subject to
the Company's right to convert to other Types of Loans under Section 2.04), plus
the Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. During the existence of any Event of Default, interest
shall be paid on demand of the Agent at the request or with the consent of the
Majority Banks.
(c) Notwithstanding subsection (a) of this Section, if any
amount of principal of or interest on any Loan, or any other amount payable
hereunder or under any other Loan Document is not paid in full when due (whether
at stated maturity, by acceleration, demand or otherwise), the Company agrees to
pay interest on such unpaid principal or other amount, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon
20
to the extent permitted by law, payable on demand, at a fluctuating rate per
annum equal to the Base Rate plus 2%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Company to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary to
the provisions of any law applicable to such Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by such Bank,
and in such event the Company shall pay such Bank interest at the highest rate
permitted by applicable law.
2.08 Fees.
(a) Arrangement, Agency Fees. The Company shall pay an
arrangement fee to the Arranger for the Arranger's own account, and shall pay an
agency fee to the Agent for the Agent's own account, as required by the letter
agreement ("Fee Letter") between the Company and the Arranger and Agent dated
November 18, 1997.
(b) Commitment Fees. The Company shall pay to the Agent for the
account of each Bank a commitment fee on the average daily unused portion of
such Bank's Revolving Commitment, computed on a quarterly basis in arrears on
the last Business Day of each calendar quarter based upon the daily utilization
for that quarter as calculated by the Agent, equal to 0.3% per annum. Such
commitment fee shall accrue from the Closing Date to the Revolving Termination
Date and shall be due and payable quarterly in arrears on the last Business Day
of each quarter commencing on March 31, 1998 through the Revolving Termination
Date, with the final payment to be made on the Revolving Termination Date;
provided that, in connection with any reduction or termination of Commitments
under Section 2.05, the accrued commitment fee calculated for the period ending
on such date shall also be paid on the date of such reduction or termination,
with the following quarterly payment being calculated on the basis of the period
from such reduction or termination date to such quarterly payment date. The
commitment fees provided in this subsection shall accrue at all times after the
above-mentioned commencement date, including at any time during which one or
more conditions in Article IV are not met.
2.09 Computation of Fees and Interest.
(a) All computations of interest for Base Rate Loans when the
Base Rate is determined by BofA's "reference rate" shall be made on the basis of
a year of 365 or 366 days, as the case may be, and actual days elapsed. All
other computations of fees and interest shall be made on the basis of a 360-day
year and actual days elapsed (which results in more interest being paid
21
than if computed on the basis of a 365-day year). Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Company and the Banks in the absence of manifest
error. The Agent will, at the request of the Company or any Bank, deliver to the
Company or the Bank, as the case may be, a statement showing the quotations used
by the Agent in determining any interest rate and the resulting interest rate.
2.10 Payments by the Company.
(a) All payments to be made by the Company shall be made without
set-off, recoupment, counterclaim or other deduction. Except as otherwise
expressly provided herein, all payments by the Company shall be made to the
Agent for the account of the Banks at the Agent's Payment Office, and shall be
made in dollars and in immediately available funds, no later than 11:00 a.m.
(Seattle time) on the date specified herein. The Agent will promptly distribute
to each Bank its Pro Rata Share (or other applicable share as expressly provided
herein) of such payment in like funds as received. Any payment received by the
Agent later than 11:00 a.m. (Seattle time) shall be deemed to have been received
on the following Business Day and any applicable interest or fee shall continue
to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to
the date on which any payment is due to the Banks that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Company has not made such
payment in full to the Agent, each Bank shall repay to the Agent on demand such
amount distributed to such Bank, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such Bank
until the date repaid.
2.11 Payments by the Banks to the Agent.
(a) Unless the Agent receives notice from a Bank on
or prior to the Closing Date or, with respect to any Borrowing
22
after the Closing Date, at least one Business Day prior to the date of such
Borrowing, that such Bank will not make available as and when required hereunder
to the Agent for the account of the Company the amount of that Bank's Pro Rata
Share of the Borrowing, the Agent may assume that each Bank has made such amount
available to the Agent in immediately available funds on the Borrowing Date and
the Agent may (but shall not be so required), in reliance upon such assumption,
make available to the Company on such date a corresponding amount. If and to the
extent any Bank shall not have made its full amount available to the Agent in
immediately available funds and the Agent in such circumstances has made
available to the Company such amount, that Bank shall on the Business Day
following such Borrowing Date make such amount available to the Agent, together
with interest at the Federal Funds Rate for each day during such period. A
notice of the Agent submitted to any Bank with respect to amounts owing under
this subsection (a) shall be conclusive, absent manifest error. If such amount
is so made available, such payment to the Agent shall constitute such Bank's
Loan on the date of Borrowing for all purposes of this Agreement. If such amount
is not made available to the Agent on the Business Day following the Borrowing
Date, the Agent will notify the Company of such failure to fund and, upon demand
by the Agent, the Company shall pay such amount to the Agent for the Agent's
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a Loan
on such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
2.12 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such participations in the
Loans made by them as shall be necessary to cause such purchasing Bank to share
the excess payment pro rata with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid therefor, together with an
amount equal to such paying Bank's ratable share (according to the proportion of
(i) the amount of such paying Bank's required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
23
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.10) with respect to
such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation. The Agent will keep records (which
shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify the
Banks following any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Other Taxes. The Company shall pay all Other Taxes.
3.02 Illegality.
(a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by the Bank to the Company through
the Agent, any obligation of that Bank to make Offshore Rate Loans shall be
suspended until the Bank notifies the Agent and the Company that the
circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any
Offshore Rate Loan, the Company shall, upon its receipt of notice of such fact
and demand from such Bank (with a copy to the Agent), prepay in full such
Offshore Rate Loans of that Bank then outstanding, together with interest
accrued thereon and amounts required under Section 3.04, either on the last day
of the Interest Period thereof, if the Bank may lawfully continue to maintain
such Offshore Rate Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such Offshore Rate Loan. If the Company is
required to so prepay any Offshore Rate Loan, then concurrently with such
prepayment, the Company shall borrow from the affected Bank, in the amount of
such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore
Rate Loans has been so terminated or suspended, the Company may elect, by giving
notice to the Bank through the Agent that all Loans which would otherwise be
made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section,
the affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making
24
such demand and will not, in the judgment of the Bank, be illegal or otherwise
disadvantageous to the Bank.
3.03 Increased Costs and Reduction of Return.
(a) If any Bank determines that, due to either (i) the
introduction of or any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the Offshore
Rate or in respect of the assessment rate payable by any Bank to the FDIC for
insuring U.S. deposits) in or in the interpretation of any law or regulation or
(ii) the compliance by that Bank with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law),
there shall be any increase in the cost to such Bank of agreeing to make or
making, funding or maintaining any Offshore Rate Loans, then the Company shall
be liable for, and shall from time to time, upon demand (with a copy of such
demand to be sent to the Agent), pay to the Agent for the account of such Bank,
additional amounts as are sufficient to compensate such Bank for such increased
costs.
(b) If any Bank shall have determined that (i) the introduction
of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Bank (or its Lending Office) or any corporation controlling the Bank with
any Capital Adequacy Regulation, affects or would affect the amount of capital
required or expected to be maintained by the Bank or any corporation controlling
the Bank and (taking into consideration such Bank's or such corporation's
policies with respect to capital adequacy and such Bank's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations under this
Agreement, then, upon demand of such Bank to the Company through the Agent, the
Company shall pay to the Bank, from time to time as specified by the Bank,
additional amounts sufficient to compensate the Bank for such increase.
3.04 Funding Losses. The Company shall reimburse each Bank and hold each
Bank harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of the Company to make on a timely
basis any payment of principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or convert a
Loan after the Company has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/ Continuation;
25
(c) the prepayment or other payment (including after
acceleration thereof) of an Offshore Rate Loan on a day that is not the last day
of the relevant Interest Period; or
(d) the automatic conversion under Section 2.04 of any Offshore
Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Company to the Banks under this Section and
under subsection 3.03(a), each Offshore Rate Loan made by a Bank (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Offshore Rate
for such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
3.05 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan, or that the Offshore Rate applicable pursuant to subsection 2.07(a) for
any requested Interest Period with respect to a proposed Offshore Rate Loan does
not adequately and fairly reflect the cost to the Banks of funding such Loan,
the Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Loans hereunder shall
be suspended until the Agent revokes such notice in writing. Upon receipt of
such notice, the Company may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Company does not revoke
such Notice, the Banks shall make, convert or continue the Loans, as proposed by
the Company, in the amount specified in the applicable notice submitted by the
Company, but such Loans shall be made, converted or continued as Base Rate Loans
instead of Offshore Rate Loans.
3.06 Certificates of Banks. Any Bank claiming reimbursement or
compensation under this Article III shall deliver to the Company (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Bank hereunder and such certificate shall be conclusive and binding on
the Company in the absence of manifest error.
3.07 Substitution of Banks. Upon the receipt by the Company from any
Bank (an "Affected Bank") of a claim for compensation under Section 3.03, the
Company may: (i) request the Affected Bank to use its best efforts to obtain a
replacement bank or financial institution (which shall, in any event, be an
Eligible Assignee) satisfactory to the Company to acquire and assume all
26
or a ratable part of all of such Affected Bank's Loans and Commitment (a
"Replacement Bank"); (ii) request one more of the other Banks to acquire and
assume all or part of such Affected Bank's Loans and Commitment; or (iii)
designate a Replacement Bank. Any such designation of a Replacement Bank under
clause (i) or (iii), or of an existing Bank under clause (ii), shall be subject
to the prior written consent of the Agent (which consent shall not be
unreasonably withheld) and shall be effected in accordance with the assignment
provisions contained in Section 10.08; provided, however, that the Company shall
be liable to any Affected Bank for any amounts arising under Section 3.04 as a
result of a Bank's or Replacement Bank's acquisition of such Affected Bank's
Commitment or Loans on a date other than the last day of the applicable Interest
Period for Offshore Loans then outstanding.
3.08 Survival. The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans. The obligation of each Bank to make
its initial Loan hereunder is subject to the condition that the Agent shall have
received on or before the Closing Date all of the following, in form and
substance satisfactory to the Agent and each Bank, and in sufficient copies for
each Bank:
(a) Credit Agreement. This Agreement executed by
each party thereto;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of
directors of the Company authorizing the transactions
contemplated hereby, certified as of the Closing Date by the
Secretary or an Assistant Secretary of the Company; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company certifying the names and true signatures of the
officers of the Company authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be delivered
by it hereunder;
(c) Organization Documents; Good Standing. Each of
the following documents:
(i) the articles or certificate of incorporation
and the bylaws of the Company as in effect on the Closing
27
Date, certified by the Secretary or Assistant Secretary of
the Company as of the Closing Date; and
(ii) a good standing certificate for the Company
from the Secretary of State of Oregon and the Secretary of
State of Washington.
(d) Legal Opinions. An opinion of Xxxxxx Xxxxx, Washington
counsel to the Company, and of Xxxxx Xxxx, Oregon counsel to the Company, each
addressed to the Agent, substantially in the form of Exhibit D-1 and Exhibit
D-2, respectively.
(e) Payment of Fees. Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with Attorney Costs of the Agent to the extent
invoiced prior to or on the Closing Date, plus such additional amounts of
Attorney Costs as shall constitute the Agent's reasonable estimate of Attorney
Costs incurred or to be incurred by it through the closing proceedings (provided
that such estimate shall not thereafter preclude final settling of accounts
between the Company and the Agent); including any such costs, fees and expenses
arising under or referenced in Sections 2.08 and 10.04;
(f) Certificate. A certificate signed by a
Responsible Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties contained
in Article V are true and correct on and as of such date, as
though made on and as of such date;
(ii) no Default or Event of Default exists or
would result from the initial Borrowing; and
(iii) there has occurred since December 31,
1996, no event or circumstance that has resulted or could
reasonably be expected to result in a Material Adverse
Effect; and
(g) Other Documents. Such other approvals, opinions,
documents or materials as the Agent or any Bank may request.
4.02 Conditions to All Borrowings. The obligation of each Bank to make
any Loan to be made by it (including its initial Loan) or to continue or convert
any Loan under Section 2.04 is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date or Conversion/Continuation
Date:
(a) Notice of Borrowing or Conversion/Continuation.
The Agent shall have received (with, in the case of the initial
Loan only, a copy for each Bank) a Notice of Borrowing or a
Notice of Conversion/Continuation, as applicable;
28
(b) Continuation of Representations and Warranties. The
representations and warranties in Article V shall be true and correct on and as
of such Borrowing Date or Conversion/ Continuation Date with the same effect as
if made on and as of such Borrowing Date or Conversion/Continuation Date (except
to the extent such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct as of such earlier date); and
(c) No Existing Default. No Default or Event of
Default shall exist or shall result from such Borrowing or
continuation or conversion.
(d) In the case of a Borrowing, the total principal amount of
Loans outstanding as a result of Loans made on any Borrowing Date shall not
exceed the sum of (i) 50% of inventory, including (x) costs of unsold Vacation
Credits and (y) construction in progress, and (ii) 75% of Unencumbered Notes
Receivable, determined in each case as of the date of the most recent Monthly
Compliance Certificate furnished pursuant to subsection 6.02(c). "Unencumbered
Notes Receivable" means notes receivable, net of allowance for doubtful accounts
and sales returns and net of residual interest in notes receivable sold.
Each Notice of Borrowing and Notice of Conversion/Continuation submitted by the
Company hereunder shall constitute a representation and warranty by the Company
hereunder, as of the date of each such notice and as of each Borrowing Date or
Conversion/Continuation Date, as applicable, that the conditions in this Section
4.02 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
5.01 Corporate Existence and Power. The Company and each of
its Subsidiaries:
(a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents;
29
(c) is duly qualified as a foreign corporation and is licensed
and in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification or license; and
(d) is in compliance with all Requirements of Law; except, in
each case referred to in clause (c) or clause (d), to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
5.02 Corporate Authorization; No Contravention. The execution, delivery
and performance by the Company of this Agreement and each other Loan Document to
which the Company is party, have been duly authorized by all necessary corporate
action, and do not and will not:
(a) contravene the terms of any of the Company's
Organization Documents;
(b) conflict with or result in any breach or contravention of,
or the creation of any Lien under, any document evidencing any Contractual
Obligation to which the Company is a party or any order, injunction, writ or
decree of any Governmental Authority to which the Company or its property is
subject; or
(c) violate any Requirement of Law.
5.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any of its Subsidiaries of the Agreement or any other Loan Document.
5.04 Binding Effect. This Agreement and each other Loan Document to
which the Company is a party constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
5.05 Litigation. Except as specifically disclosed in Schedule 5.05,
there are no actions, suits, proceedings, claims or disputes pending, or to the
best knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective properties which:
30
(a) purport to affect or pertain to this Agreement or
any other Loan Document, or any of the transactions contemplated
hereby or thereby; or
(b) if determined adversely to the Company or its Subsidiaries,
would reasonably be expected to have a Material Adverse Effect. No injunction,
writ, temporary restraining order or any order of any nature has been issued by
any court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
5.06 No Default. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company. As of the Closing Date,
neither the Company nor any Subsidiary is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or that would, if such default had occurred after the Closing Date,
create an Event of Default under subsection 8.01(e).
5.07 ERISA Compliance. Except as specifically disclosed in
Schedule 5.07:
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has requested
a favorable determination letter from the IRS and to the best knowledge of the
Company, nothing has occurred which would prevent receipt of such a letter. The
Company and each ERISA Affiliate has made all required contributions to any Plan
subject to Section 412 of the Code, and no application for a funding waiver or
an extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA);
31
(iv) neither the Company nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would result in such liability)
under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and
(v) neither the Company nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.
5.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by Section 6.12
and Section 7.07. Neither the Company nor any Subsidiary is generally engaged in
the business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
5.09 Title to Properties. The Company and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
5.10 Taxes. The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.
5.11 Financial Condition.
(a) The unaudited consolidated financial statements of the
Company and its Subsidiaries dated September 30, 1997, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal year ended on that date:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, subject to ordinary, good faith year
end audit adjustments;
(ii) fairly present the financial condition of
the Company and its Subsidiaries as of the date thereof and
results of operations for the period covered thereby; and
(iii) except as specifically disclosed in
Schedule 5.11, show all material indebtedness and other
32
liabilities, direct or contingent, of the Company and its consolidated
Subsidiaries as of the date thereof, including liabilities for taxes,
material commitments and Contingent Obligations.
(b) Since September 30, 1997, there has been no
Material Adverse Effect.
5.12 Environmental Matters. The Company conducts in the ordinary course
of business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof the Company has reasonably concluded that, except as specifically
disclosed in Schedule 5.12, such Environmental Laws and Environmental Claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
5.13 Regulated Entities. None of the Company, any Person controlling the
Company, or any Subsidiary, is an "Investment Company" within the meaning of the
Investment Company Act of 1940. The Company is not subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
5.14 No Burdensome Restrictions. Neither the Company nor any Subsidiary
is a party to or bound by any Contractual Obligation, or subject to any
restriction in any Organization Document, or any Requirement of Law, which could
reasonably be expected to have a Material Adverse Effect.
5.15 Copyrights, Patents, Trademarks and Licenses, etc. The Company or
its Subsidiaries own or are licensed or otherwise have the right to use all of
the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of the Company, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Company or any
Subsidiary infringes upon any rights held by any other Person. Except as
specifically disclosed in Schedule 5.05, no claim or litigation regarding any of
the foregoing is pending or threatened, and no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or, to the knowledge of the Company, proposed, which, in either case,
could reasonably be expected to have a Material Adverse Effect.
5.16 Subsidiaries. The Company has no Subsidiaries other
than those specifically disclosed in part (a) of Schedule 5.16
hereto and has no equity investments in any other corporation or
33
entity other than those specifically disclosed in part (b) of
Schedule 5.16.
5.17 Insurance. Except as specifically disclosed in Schedule 5.17, the
properties of the Company and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Company, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Company or such Subsidiary operates.
5.18 Swap Obligations. Neither the Company nor any of its Subsidiaries
has incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into any Swap Contract.
5.19 Full Disclosure. None of the representations or warranties made by
the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Company to the Banks prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Majority Banks
waive compliance in writing:
6.01 Financial Statements. The Company shall deliver to the
Agent and each Bank, in form and detail satisfactory to the Agent
and the Majority Banks:
(a) As soon as available and in any event within 60 days after
the close of each fiscal quarter of Company (90 days after the close of the
fourth quarter), its unaudited (1) consolidated balance sheet of the Company and
its consolidated subsidiaries as at the end of such fiscal quarter
34
setting forth in comparative form the corresponding figures as at the end of the
preceding fiscal quarter, and (2) consolidated statement of income,
shareholders' equity, and cash flows of the Company and its consolidated
subsidiaries for such fiscal quarter of the Company and for the portion of the
fiscal year ended with such period, setting forth in comparative form the
corresponding figures for the previous fiscal quarter with transactions and
account balances accounted for in conformity with GAAP applied on a basis
consistent with that of the preceding quarter or containing disclosure of the
effect on financial position or results of operations of any change in the
application of accounting principles during the quarter.
(b) As soon as available and in any event within 120 days after
the close of each fiscal year of the Company, (1) the consolidated balance sheet
of Company and its consolidated subsidiaries as at the end of such fiscal year,
setting forth in comparative form the corresponding figures as at the end of the
preceding fiscal year, and (2) the consolidated statement of income,
shareholders' equity and cash flows of the Company and its consolidated
subsidiaries for such fiscal year of the Company, setting forth in comparative
form the corresponding figures for the previous fiscal year, prepared in
conformity with GAAP applied on a basis consistent with that of the preceding
year or containing disclosure of the effect on financial position or results of
operations of any change in the application of accounting principles during the
year. Such consolidated balance sheets and related statements of income,
shareholders' equity and cash flows shall be accompanied by an unqualified
report and opinion of KPMG Peat Marwick LLP or other independent public
accountants of nationally recognized standing approved by Agent (the
"Independent Auditor"), which report and opinion shall be in accordance with
generally accepted auditing standards relating to reporting or, if qualified,
the opinion shall not be qualified due to any limitation in scope of the
examination or due to any departure from any generally accepted accounting
principles, and shall be accompanied by a statement of the Independent Auditor
that, in making the audit necessary for the certification of such financial
statements and such report, the Independent Auditor has obtained no knowledge of
any Default or Event of Default hereunder or of any default under any other
evidence of Indebtedness or, if in the opinion of the Independent Auditor any
such Default shall exist, shall include a statement as to the nature and status
thereof.
6.02 Certificates; Other Information. The Company shall
furnish to the Agent and each Bank:
(a) concurrently with the delivery of the financial
statements referred to in subsections 6.01(a) and (b), a
Quarterly Compliance Certificate executed by a Responsible
Officer;
35
(b) within 45 days after the close of each calendar
month a Monthly Compliance Certificate executed by a Responsible
Officer;
(c) promptly, copies of all financial statements and reports
that the Company sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms 10K, 10Q
and 8K) that the Company or any Subsidiary may make to, or file with, the SEC;
and
(e) promptly, such additional information regarding the
business, financial or corporate affairs of the Company or any Subsidiary as the
Agent, at the request of any Bank, may from time to time request.
6.03 Notices. The Company shall promptly notify the Agent
and each Bank:
(a) of the occurrence of any Default or Event of
Default, and of the occurrence or existence of any event or
circumstance that foreseeably will become a Default or Event of
Default;
(b) of any matter that has resulted or may result in a Material
Adverse Effect, including (i) breach or non-performance of, or any default
under, a Contractual Obligation of the Company or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension between the Company
or any Subsidiary and any Governmental Authority; or (iii) the commencement of,
or any material development in, any litigation or proceeding affecting the
Company or any Subsidiary; including pursuant to any applicable Environmental
Laws;
(c) of the occurrence of any of the following events affecting
the Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Agent and each Bank a copy of any notice with respect
to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Company or any ERISA Affiliate with
respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code
by the Company or any ERISA Affiliate; or
(iv) the adoption of any amendment to a Plan
subject to Section 412 of the Code, if such amendment results in a
material increase in contributions or Unfunded Pension Liability.
36
(d) of any material change in accounting policies or
financial reporting practices by the Company or any of its
consolidated Subsidiaries;
(e) upon the request from time to time of the Agent, the Swap
Termination Values, together with a description of the method by which such
values were determined, relating to any then-outstanding Swap Contracts to which
the Company or any of its Subsidiaries is party.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Company or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under subsection 6.03(a) shall describe with particularity any and all clauses
or provisions of this Agreement or other Loan Document that have been (or
foreseeably will be) breached or violated.
6.04 Preservation of Corporate Existence, Etc. The Company
shall, and shall cause each Subsidiary to:
(a) preserve and maintain in full force and effect
its corporate existence and good standing under the laws of its
state or jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business except
in connection with transactions permitted by Section 7.03 and sales of assets
permitted by Section 7.02;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks,
trade names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.05 Maintenance of Property. The Company shall maintain, and shall
cause each Subsidiary to maintain, and preserve all its property which is used
or useful in its business in good working order and condition, ordinary wear and
tear excepted and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect, except as permitted by Section 7.02.
6.06 Insurance. The Company shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily
37
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar circumstances
by such other Persons.
6.07 Payment of Obligations. The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law
become a Lien upon its property; and
(c) all indebtedness, as and when due and payable,
but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.
6.08 Compliance with Laws. The Company shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
6.09 Compliance with ERISA. The Company shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
6.10 Inspection of Property and Books and Records. The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company and such Subsidiary. The
Company shall permit, and shall cause each Subsidiary to permit, representatives
and independent contractors of the Agent or any Bank to visit and inspect any of
their respective properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Company; provided, however, when an Event
38
of Default exists the Agent or any Bank may do any of the foregoing at the
expense of the Company at any time during normal business hours and without
advance notice.
6.11 Environmental Laws. The Company shall, and shall cause
each Subsidiary to, conduct its operations and keep and maintain
its property in compliance with all Environmental Laws.
6.12 Use of Proceeds. The Company shall use the proceeds of the Loans
for working capital, refinancing debt, making Acquisitions and other general
corporate purposes not in contravention of any Requirement of Law or of any Loan
Document.
6.13 Interest Coverage Ratio. The Company shall maintain at the close of
each fiscal quarter an Interest Coverage Ratio of at least 6.0 to 1.0. "Interest
Coverage Ratio" means the ratio of (a) the consolidated net income of the
Company and its Subsidiaries, determined in accordance with GAAP but without
deducting expenses for interest, taxes on income, depreciation, or amortization,
for the period of four consecutive fiscal quarters of the Company ending at the
close of the fiscal quarter last ended to (b) the consolidated interest expense
of the Company and the Subsidiaries for such period.
6.14 Capitalization Ratio. The Company shall maintain as of
the close of each fiscal quarter a Capitalization Ratio equal to
or less than 1.0 to 2.0. "Capitalization Ratio" means the ratio
of (a) Consolidated Indebtedness to (b) Consolidated Net Worth.
"Consolidated Indebtedness" means the consolidated Indebtedness
of the Company and its Subsidiaries.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Majority Banks
waive compliance in writing:
7.01 Limitation on Liens. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following ("Permitted
Liens"):
(a) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or to the
extent that non-payment thereof is permitted by Section 6.07, provided that no
notice of lien has been filed or recorded under the Code;
39
(b) Carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto;
(c) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation;
(d) Liens on the property of the Company or its Subsidiary
securing (i) the non-delinquent performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, (ii) contingent obligations
on surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business;
(e) Liens consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively stayed and all such
liens in the aggregate at any time outstanding for the Company and its
Subsidiaries do not exceed $1,000,000;
(f) Easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(g) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the FRB, and (ii) such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution; and
(h) Liens consisting of pledges of cash collateral or
government securities to secure on a xxxx-to-market basis
Permitted Swap Obligations only, provided that (i) the counterparty to any Swap
Contract relating to any such Permitted Swap Obligation is under a similar
requirement to deliver similar collateral from time to time to the Company or
the Subsidiary party thereto on a xxxx-to-market basis; and (ii) the aggregate
value of such collateral so pledged by the Company and the
40
Subsidiaries together in favor of any counterparty does not at
any time exceed $1,000,000;
(i) Liens on the Company's headquarters building
securing Indebtedness not exceeding $10,000,000 at any time; and
(j) Liens on other property securing Indebtedness; provided,
that, (i) the aggregate amount of secured Indebtedness does not exceed 5% of
Consolidated Net Worth and (ii) in the case of Indebtedness of a Subsidiary, the
Indebtedness is permitted by Section 7.05.
7.02 Disposition of Assets. The Company shall not, and shall not suffer
or permit any Subsidiary to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
(a) dispositions of inventory, or used, worn-out or
surplus equipment, all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) dispositions of property by the Company or any
Subsidiary to the Company or any Subsidiary pursuant to
reasonable business requirements;
(d) dispositions of Permitted Receivables pursuant to
Permitted Receivables Purchase Facilities; and
(e) dispositions not otherwise permitted hereunder which are
made for fair market value; provided, that (i) at the time of any disposition,
no Event of Default shall exist or shall result from such disposition, (ii) the
aggregate sales price from such disposition shall be paid in cash, and (iii) the
aggregate value of all assets so sold by the Company and its Subsidiaries,
together, during any fiscal year shall not exceed 5% of Consolidated Net Worth
at the close of the immediately preceding fiscal year.
7.03 Consolidations and Mergers. The Company shall not, and shall not
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions all or substantially all of its assets (whether now owned
or hereafter acquired) to or in favor of any Person, except:
41
(a) any Subsidiary may merge with the Company, provided that the
Company shall be the continuing or surviving corporation, or with any one or
more Subsidiaries, provided that if any transaction shall be between a
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving corporation;
(b) any Subsidiary may sell all or substantially all
of its assets (upon voluntary liquidation or otherwise), to the
Company or another Wholly-Owned Subsidiary;
(c) the Company or any Subsidiary may sell assets to
the extent permitted by subsection 7.02(d) or (e); and
(d) the Company or any Subsidiary may enter into a
merger if it is an Acquisition permitted by subsection 7.04(d).
7.04 Loans and Investments. The Company shall not purchase or acquire,
or suffer or permit any Subsidiary to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, or make or commit to make
any Acquisitions, or make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Company (together, "Investments"), except for:
(a) Investments held by the Company or Subsidiary in
the form of cash equivalents;
(b) Extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale or lease of
goods or services in the ordinary course of business;
(c) Extensions of credit by the Company to any of its
Wholly-Owned Subsidiaries or by any of its Wholly-Owned
Subsidiaries to another of its Wholly-Owned Subsidiaries;
(d) Investments incurred in order to consummate Acquisitions
otherwise permitted herein, provided that (i) the book value (as to the
purchaser) of any such Acquisition shall not exceed at the time of such
Investment 25% of Consolidated Net Worth as calculated immediately prior to such
Acquisition, (ii) such Acquisitions are undertaken in accordance with all
applicable Requirements of Law; and (iii) the prior, effective written consent
or approval to such Acquisition of the board of directors or equivalent
governing body of the acquiree is obtained;
(e) Investments constituting Permitted Swap
Obligations or payments or advances under Swap Contracts relating
to Permitted Swap Obligations;
42
(f) Capital expenditures in connection with lines of
business currently conducted by Company or by the Subsidiary
making the expenditure; and
(g) Secured loans made by the Company to developers to finance
property development when the property is mortgaged to the Company to secure the
loan, the amount of the loan does not exceed the value of the land, the proceeds
of the loan are used for construction of condominium units and related
amenities, and the Company has the right or obligation to purchase the property
from the developer upon completion of construction.
7.05 Transactions with Affiliates. The Company shall not, and shall not
suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of the Company, except upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Company or such
Subsidiary.
7.06 Use of Proceeds.
(a) The Company shall not, and shall not suffer or permit any
Subsidiary to, use any portion of the Loan proceeds, directly or indirectly, (i)
to purchase or carry Margin Stock, (ii) to repay or otherwise refinance
indebtedness of the Company or others incurred to purchase or carry Margin
Stock, (iii) to extend credit for the purpose of purchasing or carrying any
Margin Stock, or (iv) to acquire any security in any transaction that is subject
to Section 13 or 14 of the Exchange Act.
(b) The Company shall not, directly or indirectly, use any
portion of the Loan proceeds (i) knowingly to purchase Ineligible Securities
from the Arranger during any period in which the Arranger makes a market in such
Ineligible Securities, (ii) knowingly to purchase during the underwriting or
placement period Ineligible Securities being underwritten or privately placed by
the Arranger, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by the Arranger and issued by or for
the benefit of the Company or any Affiliate of the Company. The Arranger is a
registered broker-dealer and permitted to underwrite and deal in certain
Ineligible Securities; and "Ineligible Securities" means securities which may
not be underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (12 U.S.C. ss. 24, Seventh), as
amended.
7.07 Contingent Obligations. The Company shall not, and
shall not suffer or permit any Subsidiary to, create, incur,
assume or suffer to exist any Contingent Obligations except:
(a) endorsements for collection or deposit in the
ordinary course of business;
43
(b) Permitted Swap Obligations;
(c) Contingent Obligations of the Company and its
Subsidiaries existing as of the Closing Date and listed in
Schedule 7.07; and
(d) Contingent Obligations with respect to Surety
Instruments incurred in the ordinary course of business.
7.08 Joint Ventures. The Company shall not, and shall not
suffer or permit any Subsidiary to enter into any Joint Venture,
other than in the ordinary course of business.
7.09 Lease Obligations. The Company shall not, and shall not suffer or
permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except for:
(a) leases of the Company and of Subsidiaries in
existence on the Closing Date and any renewal, extension or
refinancing thereof;
(b) operating leases entered into by the Company or
any Subsidiary after the Closing Date in the ordinary course of
business;
(c) leases entered into by the Company or any
Subsidiary after the Closing Date pursuant to sale-leaseback
transactions permitted under subsection 7.02(d);
(d) capital leases other than those permitted under clauses (a)
and (c) of this Section, entered into by the Company or any Subsidiary after the
Closing Date to finance the acquisition of equipment; provided that in the case
of a Subsidiary the capital lease is permitted under subsection 7.05(c).
7.10 Restricted Payments. The Company shall not, and shall not suffer or
permit any Subsidiary to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of its capital stock or any warrants,
rights or options to acquire such shares, now or hereafter outstanding; except
that:
(a) the Company may (i) declare and make dividend payments or
other distributions payable solely in its common stock and (ii) purchase, redeem
or otherwise acquire shares of its common stock or warrants or options to
acquire any such shares with the proceeds received from the substantially
concurrent issue of new shares of its common stock; and
44
(b) a Wholly-Owned Subsidiary may declare or pay cash
dividends to its stockholders.
7.11 ERISA. The Company shall not, and shall not suffer or permit any of
its ERISA Affiliates to: (a) engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan which has resulted
or could reasonably expected to result in liability of the Company in an
aggregate amount in excess of $1,000,000; or (b) engage in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
7.12 Change in Business. The Company shall not, and shall not suffer or
permit any Subsidiary to, engage in any material line of business substantially
different from those lines of business carried on by the Company and its
Subsidiaries on the date hereof.
7.13 Accounting Changes. The Company shall not, and shall not suffer or
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Company or of any Subsidiary.
7.14 Agreements by Subsidiaries. No Subsidiary except TW Holdings, Inc.
shall enter into any agreement that restricts dealings between the Company and
such Subsidiary, including any agreement that prohibits or restricts the ability
of such Subsidiary to pay dividends or to make loans or advances to the Company.
7.15 Notes Receivable. The Company shall not suffer or permit either the
number or amount of Past-Due Notes Receivable to exceed 7.5% of the total number
or amount of Notes Receivable at the close of any calendar month, and shall not
suffer or permit either the number or amount of Delinquent Notes Receivable to
exceed 12% of the total number or amount of Notes Receivable at the close of any
period of two consecutive calendar months. "Notes Receivable" means installment
notes receivable generated by sales of Vacation Credits and secured by an
interest in the related Vacation Credits, the amount of which shall be
calculated net of allowance for doubtful accounts, sales returns, and deferred
gross profit. "Past-Due Notes Receivable" are Notes Receivable more than 30 days
but not more than 90 days past-due. "Delinquent Notes Receivable" are Notes
Receivable more than 90 days past-due.
7.16 Time Share Inventory. The Company shall not suffer or permit the
amount of its inventory at the close of any fiscal quarter, including (i) costs
of unsold Vacation Credits and (ii) construction in progress, to exceed 40% of
aggregate Vacation Credit sales revenues, net of rescissions, reversals, and
cash discounts, for the period of four consecutive fiscal quarters then ended.
45
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default. Any of the following shall
constitute an "Event of Default":
(a) Non-Payment. The Company fails to pay, (i) when and as
required to be paid herein, any amount of principal of any Loan, or (ii) within
3 Business Days after the same becomes due, any interest, fee or any other
amount payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty
by the Company or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company, any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
(c) Specific Defaults. The Company fails to perform
or observe any term, covenant or agreement contained in any of
Section 6.03, 6.13 or 6.14 or in Article VII other than
Section 7.05, 7.12 or 7.13 thereof; or
(d) Other Defaults. The Company [or any Subsidiary party
thereto] fails to perform or observe any other term or covenant contained in
this Agreement or any other Loan Document, [and such default shall continue
unremedied for a period of 20 days after the date upon which written notice
thereof is given to the Company by the Agent or any Bank; or
(e) Cross-Default. (i) The Company or any Subsidiary (A) fails
to make any payment in respect of any Indebtedness or Contingent Obligation
(other than in respect of Swap Contracts), having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
$1,000,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure; or (B) fails to perform or observe any other condition
or covenant, or any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness or Contingent
Obligation, and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure
if the effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on
46
behalf of such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its stated maturity,
or such Contingent Obligation to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (1) any event
of default under such Swap Contract as to which the Company or any Subsidiary is
the Defaulting Party (as defined in such Swap Contract) or (2) any Termination
Event (as so defined) as to which the Company or any Subsidiary is an Affected
Party (as so defined), and, in either event, the Swap Termination Value owed by
the Company or such Subsidiary as a result thereof is greater than $5,000,000;
or
(f) Insolvency; Voluntary Proceedings. The Company or any
Subsidiary (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the Company's or any Subsidiary's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Company or any Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) the Company or any Subsidiary acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Company under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$1,000,000; (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans at any time exceeds $1,000,000; or (iii) the Company or any ERISA
Affiliate shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of $1,000,000; or
47
(i) Monetary Judgments. One or more non- interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards is entered
against the Company or any Subsidiary involving in the aggregate a liability (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $1,000,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of 30
days after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or
decree is entered against the Company or any Subsidiary which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be any
period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) Change of Control. There occurs any Change of
Control.
8.02 Remedies. If any Event of Default occurs, the Agent
shall, at the request of, or may, with the consent of, the
Majority Banks,
(a) declare the commitment of each Bank to make Loans
to be terminated, whereupon such commitments shall be terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all
rights and remedies available to it and the Banks under the Loan
Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 8.01 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans shall automatically terminate and the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Agent or any
Bank.
8.03 Rights Not Exclusive. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not
exclusive of any other rights, powers, privileges or remedies
48
provided by law or in equity, or under any other instrument, document or
agreement now existing or hereafter arising.
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization; "Agent". Each Bank hereby
irrevocably (subject to Section 9.09) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
9.02 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.03 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
49
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
9.04 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Banks as it deems appropriate
and, if it so requests, it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Majority Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Bank.
9.05 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Agent for the account of the Banks, unless the Agent shall have
received written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will notify the Banks of its receipt of any such
notice. The Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Majority Banks in accordance with Article
VIII; provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
50
Default as it shall deem advisable or in the best interest of the Banks.
9.06 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and credit worthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company and its Subsidiaries
hereunder. Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and credit worthiness of the Company.
Except for notices, reports and other documents expressly herein required to be
furnished to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or credit worthiness of the Company which may come into the possession
of any of the Agent-Related Persons.
9.07 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
from and against any and all Indemnified Liabilities; provided, however, that no
Bank shall be liable for the payment to the Agent-Related Persons of any portion
of such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each Bank
shall reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or
51
on behalf of the Company. The undertaking in this Section shall survive the
payment of all Obligations hereunder and the resignation or replacement of the
Agent.
9.08 Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that, pursuant
to such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA shall have the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though BofA were not the Agent, and the terms "Bank" and "Banks" include BofA in
its individual capacity.
9.09 Successor Agent. The Agent may, and at the request of the Majority
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Majority Banks shall appoint from among the
Banks a successor agent for the Banks which successor agent shall be approved by
the Company. If no successor agent is appointed prior to the effective date of
the resignation of the Agent, the Agent may appoint, after consulting with the
Banks and the Company, a successor agent from among the Banks. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article IX and
Sections 10.04 and 10.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Majority Banks appoint a successor agent as provided for above.
9.10 Withholding Tax. (a) If any Bank is a "foreign
corporation, partnership or trust" within the meaning of the Code
and such Bank claims exemption from, or a reduction of, U.S.
withholding tax under Sections 1441 or 1442 of the Code, such
Bank agrees with and in favor of the Agent, to deliver to the
Agent:
52
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, two
properly completed and executed copies of IRS Form 1001 before the
payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under
this Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224 before
the payment of any interest is due in the first taxable year of such
Bank and in each succeeding taxable year of such Bank during which
interest may be paid under this Agreement; and
(iii) such other form or forms as may be
required under the Code or other laws of the United States as a
condition to exemption from, or reduction of, United States withholding
tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Company to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Bank. To the extent of
such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Company to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. However, if the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Bank not providing such forms or
other documentation an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction.
53
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly executed, or because such
Bank failed to notify the Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Bank shall indemnify the Agent fully for all amounts paid, directly
or indirectly, by the Agent as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Banks under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Agent.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) and the Company and acknowledged by the Agent,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such waiver, amendment, or consent shall, unless in writing and signed by all
the Banks and the Company and acknowledged by the Agent, do any of the
following:
(a) increase or extend the Commitment of any Bank (or
reinstate any Commitment terminated pursuant to Section 8.02);
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or (subject to clause (ii) below) any fees or other amounts
payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Loans which is
required for the Banks or any of them to take any action
hereunder; or
54
(e) amend this Section, or Section 2.12, or any
provision herein providing for consent or other action by all
Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Majority Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document, and (ii) the Fee Letter may be amended, or
rights or privileges thereunder waived, in a writing executed by the parties
thereto.
10.02 Notices. (a) All notices, requests, consents, approvals, waivers
and other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission, provided that any
matter transmitted by the Company by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on
Schedule 10.02, and (ii) shall be followed promptly by delivery of a hard copy
original thereof) and mailed, faxed or delivered, to the address or facsimile
number specified for notices on Schedule 10.02; or, as directed to the Company
or the Agent, to such other address as shall be designated by such party in a
written notice to the other parties, and as directed to any other party, at such
other address as shall be designated by such party in a written notice to the
Company and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II or IX to the Agent shall not be effective until
actually received by the Agent.
(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Company. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice and the Agent and the Banks shall not have any liability to
the Company or other Person on account of any action taken or not taken by the
Agent or the Banks in reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans shall not be affected in any way or
to any extent by any failure by the Agent and the Banks to receive written
confirmation of any telephonic or facsimile notice or the receipt by the Agent
and the Banks of a confirmation which is at variance with the terms understood
by the Agent and the Banks to be contained in the telephonic or facsimile
notice.
10.03 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Agent or
55
any Bank, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.
10.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent) within
five Business Days after demand (subject to subsection 4.01(e)) for all costs
and expenses incurred by BofA (including in its capacity as Agent) in connection
with the development, preparation, delivery, administration and execution of,
and any amendment, supplement, waiver or modification to (in each case, whether
or not consummated), this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including reasonable Attorney
Costs incurred by BofA (including in its capacity as Agent) with respect
thereto; and
(b) pay or reimburse the Agent, the Arranger and each Bank
within five Business Days after demand (subject to subsection 4.01(e)) for all
costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or any other Loan Document during the existence of
an Event of Default or after acceleration of the Loans (including in connection
with any "workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding).
10.05 Company Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify, defend and
hold the Agent-Related Persons, and each Bank and each of its respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Bank) be imposed on, incurred by or asserted against
any such Person in any way relating to or arising out of this Agreement or any
document contemplated by or referred to herein, or the transactions contemplated
hereby, or any action taken or omitted by any such Person under or in connection
with any of the foregoing, including with respect to any investigation,
litigation or proceeding (including any Insolvency Proceeding or appellate
proceeding) related to or arising out of this Agreement or the Loans or the use
of the proceeds thereof, whether or not any Indemnified Person is a
56
party thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that the Company shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities resulting solely from the gross
negligence or willful misconduct of such Indemnified Person. The agreements in
this Section shall survive payment of all other Obligations.
10.06 Payments Set Aside. To the extent that the Company makes a payment
to the Agent or the Banks, or the Agent or the Banks exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
10.07 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Bank.
10.08 Assignments, Participations, etc. (a) Any Bank may, with the
written consent of the Company at all times other than during the existence of
an Event of Default and the Agent, which consents shall not be unreasonably
withheld, at any time assign and delegate to one or more Eligible Assignees
(provided that no written consent of the Company or the Agent shall be required
in connection with any assignment and delegation by a Bank to an Eligible
Assignee that is an Affiliate of such Bank) (each an "Assignee") all, or any
ratable part of all, of the Loans, the Commitments and the other rights and
obligations of such Bank hereunder, in a minimum amount of $10,000,000;
provided, that the assigning Bank shall either assign all of its Loans and
Commitment or else retain at least $10,000,000 of the amount of its Loans and
Commitment immediately prior to the assignment; and provided further, that the
Company and the Agent may continue to deal solely and directly with such Bank in
connection with the interest so assigned to an Assignee until (i) written notice
of such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Bank and the Assignee; (ii) such Bank and its Assignee
shall have delivered to the Company and the Agent an Assignment and Acceptance
in the form of Exhibit E ("Assignment and Acceptance") together with any
57
Note or Notes subject to such assignment and (iii) the assignor Bank or Assignee
has paid to the Agent a processing fee in the amount of $4,000.
(b) From and after the date that the Agent notifies the assignor
Bank that it has received (and provided its consent with respect to) an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Bank under
the Loan Documents, and (ii) the assignor Bank shall, to the extent that rights
and obligations hereunder and under the other Loan Documents have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the
Agent that it has received an executed Assignment and Acceptance and payment of
the processing fee, (and provided that it consents to such assignment in
accordance with subsection 10.08(a) and that the assigned Loans are evidenced by
Notes), the Company shall execute and deliver to the Agent, new Notes evidencing
such Assignee's assigned Loans and Commitment and, if the assignor Bank has
retained a portion of its Loans and its Commitment, replacement Notes in the
principal amount of the Loans retained by the assignor Bank (such Notes to be in
exchange for, but not in payment of, the Notes held by such Bank). Immediately
upon each Assignee's making its processing fee payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but only
to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Bank
pro tanto.
(d) Any Bank may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Company (a "Participant")
participating interests in all or any portion of any Loans, the Commitment of
that Bank and the other interests of that Bank (the "originating Bank")
hereunder and under the other Loan Documents; provided, however, that (i) the
originating Bank's obligations under this Agreement shall remain unchanged, (ii)
the originating Bank shall remain solely responsible for the performance of such
obligations, (iii) the Company and the Agent shall continue to deal solely and
directly with the originating Bank in connection with the originating Bank's
rights and obligations under this Agreement and the other Loan Documents, and
(iv) no Bank shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would require unanimous consent of
58
the Banks as described in the first proviso to Section 10.01. In the case of any
such participation, the Participant shall be entitled to the benefit of Sections
3.01, 3.03 and 10.05 as though it were also a Bank hereunder, and if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any
Bank may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and any Note held by
it in favor of any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law.
10.09 Confidentiality. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Company and provided to it by the Company or any Subsidiary, or
by the Agent on the Company's or such Subsidiary's behalf, under this Agreement
or any other Loan Document, and neither it nor any of its Affiliates shall use
any such information other than in connection with or in enforcement of this
Agreement and the other Loan Documents or in connection with other business now
or hereafter existing or contemplated with the Company or any Subsidiary; except
to the extent such information (i) was or becomes generally available to the
public other than as a result of disclosure by the Bank, or (ii) was or becomes
available on a non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; provided, however, that any Bank may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent, any
Bank or their respective Affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document; (F) to such Bank's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or potential,
provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Banks hereunder; (H) as to any
Bank or its Affiliate, as expressly permitted under the terms of any other
document or
59
agreement regarding confidentiality to which the Company or any Subsidiary is
party or is deemed party with such Bank or such Affiliate; and (I) to its
Affiliates.
10.10 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to the Company, any such notice being waived by the Company to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Bank or any of its Affiliates
to or for the credit or the account of the Company against any and all
Obligations owing to such Bank, now or hereafter existing, irrespective of
whether or not the Agent or such Bank shall have made demand under this
Agreement or any Loan Document and although such Obligations may be contingent
or unmatured. Each Bank agrees promptly to notify the Company and the Agent
after any such set-off and application made by such Bank; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application.
10.11 Automatic Debits of Fees. With respect to any commitment fee,
arrangement fee, or other fee, or any other cost or expense (including Attorney
Costs) due and payable to the Agent, BofA or the Arranger under the Loan
Documents, the Company hereby irrevocably authorizes BofA to debit any deposit
account of the Company with BofA in an amount such that the aggregate amount
debited from all such deposit accounts does not exceed such fee or other cost or
expense. If there are insufficient funds in such deposit accounts to cover the
amount of the fee or other cost or expense then due, such debits will be
reversed (in whole or in part, in BofA's sole discretion) and such amount not
debited shall be deemed to be unpaid. No such debit under this Section shall be
deemed a set-off.
10.12 Notification of Addresses, Lending Offices, Etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
10.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
10.14 Severability. The illegality or unenforceability of
any provision of this Agreement or any instrument or agreement
required hereunder shall not in any way affect or impair the
60
legality or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
10.15 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Banks, the
Agent and the Agent-Related Persons, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.
10.16 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND ANY NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
WASHINGTON; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT SITTING IN SEATTLE, WASHINGTON AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE COMPANY, THE AGENT AND THE BANKS CONSENTS, FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH OF THE COMPANY, THE AGENT AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO.
10.17 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE
BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.18 Entire Agreement. This Agreement, together with the
other Loan Documents, embodies the entire agreement and
understanding among the Company, the Banks and the Agent, and
supersedes all prior or contemporaneous agreements and
61
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
10.19 Statute of Frauds. ORAL AGREEMENTS OR ORAL
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Seattle, Washington by their proper and duly
authorized officers as of the day and year first above written.
TRENDWEST RESORTS, INC.
By:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Bank
By:
Title:
62
THE FIRST NATIONAL BANK OF CHICAGO
By:
Title:
NATIONSBANK, N.A.
By:
Title:
63
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
Pro Rata
Bank Commitment Share
Bank of America National
Trust and Savings
Association $10,000,000 33.3%
First National Bank of
Chicago $10,000,000 33.3%
NationsBank, N.A._ $10,000,000 33.3%
----------- -----
TOTAL $30,000,000 100%
64
EXHIBIT A
NOTICE OF BORROWING
Date:_________, ____
To: Bank of America National Trust and Savings Association
as Agent for the Banks parties to the Credit Agreement
dated as of February 12, 1998 (as amended, amended and
restated, modified, supplemented, extended or renewed
from time to time, the "Credit Agreement") among
----------------
Trendwest Resorts, Inc., certain Banks which are
signatories thereto, and Bank of America National
Trust and Savings Association, as Agent
Bank of American National Trust and Savings Association,
as Agent
Agency Administrative Services #5596
0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Trendwest Resorts AO
Fax: (000) 000-0000
Phone: (000) 000-0000
Ladies and Gentlemen:
The undersigned, Trendwest Resorts, Inc. (the "Company"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.03 of
the Credit Agreement, of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is
, .
2. The aggregate amount of the proposed Borrowing is
$ .
3. The Borrowing is to be comprised of $
of [Base Rate] [Offshore Rate] Loans.
4. The duration of the Interest Period for the
Offshore Rate Loans included in the Borrowing shall be
_____ months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Company
contained in Article V of the Credit Agreement are true and
A-1
correct as though made on and as of such date (except to the extent
such representations and warranties relate to an earlier date, in which
case they are true and correct as of such date);
(b) no Default or Event of Default exists or shall
result from such proposed Borrowing; and
(c) the proposed Borrowing will not cause the aggregate
principal amount of all outstanding Loans to exceed the combined
Commitments of the Banks.
TRENDWEST RESORTS, INC.
By:
Name:
Title:
A-2
EXHIBIT B
NOTICE OF CONVERSION/CONTINUATION
Date: _______, ___
To: Bank of America National Trust and Savings Association,
as Agent for the Banks parties to the Credit Agreement
dated as of February 12, 1998 (as amended, amended and
restated, modified, supplemented, extended or renewed
from time to time, the "Credit Agreement") among
----------------
Trendwest Resorts, Inc., certain Banks which are
signatories thereto, and Bank of America National Trust
and Savings Association, as Agent
Bank of American National Trust and Savings Association,
as Agent
Agency Administrative Services #5596
0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Trendwest Resorts AO
Fax: (000) 000-0000
Phone: (000) 000-0000
Ladies and Gentlemen:
The undersigned, Trendwest Resorts, Inc. (the "Company"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.04 of
the Credit Agreement, of the [conversion] [continuation] of the Loans specified
herein, that:
1. The Conversion/Continuation Date is ,
.
2. The aggregate amount of the Loans to be [converted]
[continued] is $ .
3. The Loans are to be [converted into] [continued as]
[Offshore Rate] [Base Rate] Loans.
4. The duration of the Interest Period for Offshore
Rate Loans included in the [conversion] [continuation] shall
be months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the proposed Conversion/Continuation
Date, before and after giving effect thereto and to the application of the
proceeds therefrom:
B-1
(a) the representations and warranties of the Company
contained in Article V of the Credit Agreement are true and correct as
though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in which case
they are true and correct as of such date);
(b) no Default or Event of Default exists or shall
result from such proposed [conversion] [continuation]; and
(c) the proposed [conversion][continuation] will not cause the
aggregate principal amount of all outstanding Loans to exceed the
combined Commitments of the Banks.
TRENDWEST RESORTS, INC.
By:
Name:
Title:
B-2
EXHIBIT C-1
TRENDWEST RESORTS, INC.
QUARTERLY COMPLIANCE CERTIFICATE
Financial
Statement Date:_____, ____
TO: Bank of America National Trust and Savings Association,
as Agent
Seafirst-Commercial Wholesale Banking
Northwest National Accounts #61101
000 0xx Xxxxxx, XXX-00
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx, Vice President
and
Credit Products #5771
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Vice President
Reference is made to that certain Credit Agreement dated as of February
12, 1997 (as amended, amended and restated, modified, supplemented, extended or
renewed from time to time, the "Credit Agreement") among Trendwest Resorts,
Inc., an Oregon corporation (the "Company"), the several financial institutions
from time to time parties to the Credit Agreement (the "Banks") and Bank of
America National Trust and Savings Association, as agent for the Banks (in such
capacity, the "Agent"). Unless otherwise defined herein, capitalized terms used
herein have the respective meanings assigned to them in the Credit Agreement.
The undersigned Responsible Officer of Trendwest Resorts, Inc., hereby
certifies as of the date hereof that he/she is the
of the Company, and that, as such, he/she is authorized to
execute and deliver this Certificate to the Banks and the Agent on the behalf of
the Company and its consolidated Subsidiaries, and that:
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection [6.01(a)] of the Credit
Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
audited consolidated balance sheet of the Company and its consolidated
Subsidiaries as at the end of the fiscal year ended _______________, ____ and
(b) the related consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal year, setting forth in each
C-1-1
case in comparative form the figures for the previous fiscal year, and
accompanied by the unqualified opinion of KPMG Peat Marwick LLP, or other
nationally-recognized independent public accounting firm, which states that such
consolidated financial statements present fairly the financial position of the
Company and its consolidated Subsidiaries for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years.
or
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection [6.01(b)] of the Credit
Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
unaudited consolidated balance sheet of the Company and its consolidated
Subsidiaries as of the end of the fiscal quarter ended __________, ____, and (b)
the related unaudited consolidated statements of income, shareholders' equity,
and cash flows for the period commencing on the first day and ending on the last
day of such quarter. Such financial statements were prepared in accordance with
GAAP (subject only to ordinary, good faith year-end audit adjustments and the
absence of footnotes) and present fairly, in all material respects, the
financial position and the results of operations of the Company and its
consolidated Subsidiaries.
2. The undersigned has reviewed and is familiar with the terms of the
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and conditions (financial or
otherwise) of the Company during the accounting period covered by the attached
financial statements.
3. To the best of the undersigned's knowledge, the Company, during such
period, has observed, performed or satisfied all of its covenants and other
agreements, and satisfied every condition in the Credit Agreement to be
observed, performed or satisfied by the Company, and the undersigned has no
knowledge of any Default or Event of Default, including, without limitation
under subsection 8.01(e) of the Credit Agreement.
4. The following financial covenant analyses and information set forth
on Schedule 2 attached hereto are true and accurate on and as of the date of
this Certificate. All amounts and ratios in Schedule 2 refer to the financial
statements attached as Schedule 1 hereto and are determined in accordance with
the specifications set forth in the Credit Agreement.
C-1-2
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of , .
TRENDWEST RESORTS, INC.
By:
Name:
Title:
C-1-3
Schedule 2
to
TRENDWEST RESORTS, INC.
QUARTERLY COMPLIANCE CERTIFICATE
Financial Statement Date: _______________
Section 6.13 - Interest Coverage Ratio
Net Income $__________
Plus: Income Tax Provision __________
Plus: Interest Expense __________
Plus: Depreciation __________
Plus: Amortization __________
(a) EBITDA $__________
Divided by:
(b) Interest Expense $__________
(c) (a / b) ___
Minimum Permitted 6.0
Section 6.14 - Capitalization Ratio
Notes Payable $__________
Plus: Capital Lease Obligations __________
(a) Consolidated Indebtedness $__________
Divided by:
(b) Shareholders' equity $__________
(c) (a / b) ___%
Maximum Permitted 50%
C-1-4
Section 7.16 - Time Share Inventory
Unsold Vacation Credits $__________
Plus: Construction in progress __________
(a) Total Inventory $__________
Divided by:
(b) Prior four (4) quarter Vacation Credit sales,
revenues, net $__________
(c) (a / b) ___%
Maximum Permitted 40%
Section 7.01 - Limitation on Liens
(a) Total Secured Debt $__________
(b) Consolidated Net Worth $__________
(c) (a / b) ___%
Maximum Permitted 5%
C-1-5
EXHIBIT C-2
TRENDWEST RESORTS, INC.
MONTHLY COMPLIANCE CERTIFICATE
Calendar Month Ending: _________,_______
TO: Bank of America National Trust and Savings Association,
as Agent
Seafirst-Commercial Wholesale Banking
Northwest National Accounts #61101
000 0xx Xxxxxx, XXX-00
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx, Vice President
and
Credit Products #5771
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Vice President
Reference is made to that certain Credit Agreement dated as of February
12, 1998 (as amended, amended and restated, modified, supplemented, extended or
renewed from time to time, the "Credit Agreement") among Trendwest Resorts,
Inc., an Oregon corporation (the "Company"), the several financial institutions
from time to time parties to the Credit Agreement (the "Banks") and Bank of
America National Trust and Savings Association, as agent for the Banks (in such
capacity, the "Agent"). Unless otherwise defined herein, capitalized terms used
herein have the respective meanings assigned to them in the Credit Agreement.
The undersigned Responsible Officer of Trendwest Resorts, Inc., hereby
certifies as of the date hereof that he/she is the ____________________ of the
Company, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Banks and the Agent on the behalf of the Company and its
consolidated Subsidiaries, and that:
1. The undersigned has reviewed and is familiar with the terms of the
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and conditions (financial or
otherwise) of the Company during the calendar month ended __________, _____.
2. To the best of the undersigned's knowledge, the
Company, during such period, has observed, performed or satisfied
all of its covenants and other agreements, and satisfied every
condition in the Credit Agreement to be observed, performed or
C-2-1
satisfied by the Company, and the undersigned has no knowledge of any Default or
Event of Default, including, without limitation under subsection 8.01(e) of the
Credit Agreement.
3. The following financial covenant analyses and information set forth
on Schedule 1 attached hereto are true and accurate on and as of the date of
this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of , .
TRENDWEST RESORTS, INC.
By:
Name:
Title:
C-2-2
Schedule 1
to
TRENDWEST RESORTS, INC.
MONTHLY COMPLIANCE CERTIFICATE
Month Ended: _______________
Section 7.15 Notes Receivable Past Due and Delinquent
1 2
Balances
# of Loans Outstanding
(a) __________ $__________
Outstanding Past Due Amount
(b) 31 - 90 Days __________ $__________
(c) b / a __________ $__________
Maximum Permitted: 7.5% 7.5%
Outstanding Delinquent Amount
(d) >91 days __________ $__________
(e) d / a __________ $__________
Maximum Permitted for any two
(2) Consecutive Months: 12% 12%
C-2-3
Section 4.02(d) - Borrowing Base Availability Calculation
Notes Receivable $__________
Less: Allowance for doubtful accounts, __________
Less: Allowance for sales returns, __________
Less: Residual interest in notes receivable sold __________
(a) Unencumbered Notes Receivable $__________
(b) NR Advance Rate 75%
(c) Notes Receivable available for Advances
(a x b) $__________
Unsold Vacation Credits $__________
Construction in Progress __________
(Lower of Cost or Net Realizable Value) __________
(d) Total Inventory $__________
(e) Inventory Advance Rate 50%
(f) Inventory available for Advances
d x e $__________
Total Available Funds (< $30,000,000)
c + f $__________
X-0-0
XXXXXXX X-0
FORM OF OPINION OF COMPANY'S WASHINGTON COUNSEL
[on letterhead of Trendwest Resorts, Inc.]
February ___, 1998
Bank of America National Trust and Savings Association as agent under the Credit
Agreement (as hereinafter defined)
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx
Ladies and Gentlemen:
I have acted as Washington counsel to Trendwest Resorts, Inc. an Oregon
corporation (the "Corporation"), in connection with the transaction contemplated
by the Credit Agreement dated as of February 12, 1998, (the "Credit Agreement")
between the Corporation, you, and the other financial institutions party
thereto. This opinion letter is provided to you at the request of the
Corporation pursuant to Section 4.01(d) of the Credit Agreement. Except as
otherwise indicated herein, capitalized terms used in this opinion letter are
defined as set forth in the Credit Agreement.
I have examined the originals or copies of such documents, certificates
and records as I have deemed relevant or necessary as the basis for the opinions
hereinafter expressed. I have assumed the genuineness of all signatures, the
authenticity of documents, certificates and records submitted to me as
originals, the conformity to the originals of all documents, certificates and
records submitted to me as certified or reproduction copies, the legal capacity
of all natural persons executing documents, certificates and records, and the
completeness and accuracy as of the date of this opinion letter of the
information contained in such documents, certificates and records.
This opinion letter is subject to all assumptions, qualifications and
limitations not inconsistent herewith that are described in the Legal Opinion
Accord of the ABA Section of Business Law (1991) at Section 4 ("Reliance by
Opinion Giver on Assumptions"), Section 14 ("Other Common Qualifications"),
D-1-1
Bank of America National Trust
and Savings Association
Page 2
Section 16 ("No Violation of Law") and Section 19 ("Specific
Legal Issues").
The law covered by opinions expressed herein is limited to the Federal
law of the United States and the law of the State of Washington. I express no
opinion with respect to the laws, regulations or ordinances of any county,
municipality or other local governmental agency.
As used in this opinion letter, the expression "to my knowledge" or
expressions of like import means my conscious awareness of facts or other
information and does not include information that might be revealed if there
were to be undertaken a canvass of all offices of the Corporation or a review of
all of its files. Except as otherwise set forth herein, I have not reviewed any
agreements, orders, writs, judgments or decrees.
For purposes of this opinion letter I also assume that: the Corporation
is duly incorporated and validly existing under the laws of the State of Oregon;
the Corporation has corporate power and authority to enter into and perform the
Credit Agreement; and the execution, delivery and performance of the Credit
Agreement have been duly authorized by all necessary corporate action on the
part of the Corporation.
Based upon and subject to the foregoing, I am of the opinion that:
1. The Corporation has received a certificate of authority
to transact business as a foreign corporation in the States of
Washington, ___________________, ________________________, and
-----------------------.
2. The Credit Agreement has been duly executed and delivered by the
Corporation and constitutes the valid and binding obligation of the Corporation
enforceable against the Corporation in accordance with its terms, except:
(a) The enforceability thereof may be affected by bankruptcy,
insolvency, moratorium, fraudulent transfer and other similar laws affecting the
rights and remedies of creditors generally and by the effect of general
principles of equity, including without limitation, equitable defenses and
concepts of materiality, reasonableness, unconscionability, impracticability,
impossibility, good faith and fair dealing, and the possible
D-1-2
Bank of America National Trust
and Savings Association
Page 3
unavailability of specific performance or injunctive relief,
whether applied in an action at law or in equity;
(b) The courts of the State of Washington will consider extrinsic
evidence of circumstances surrounding the making of the Credit Agreement to
ascertain the intent of the parties in using the language employed therein, even
when such language is unambiguous, and may incorporate additional or
supplementary terms into the Credit Agreement in order to effectuate the intent
of the parties; and
(c) While certain provisions of the Credit Agreement may be
unenforceable, such unenforceability will not in our opinion render the Credit
Agreement invalid as a whole or preclude (i) judicial enforcement of the
obligation of the Corporation to repay the indebtedness evidenced by the Credit
Agreement, together with interest thereon (to the extent not deemed a penalty)
or (ii) acceleration of the obligation of the Corporation to repay such
indebtedness upon material default by the Corporation in payment of the
principal of or interest on such indebtedness or upon material default in any
other material provision of the Credit Agreement (to the extent the Credit
Agreement provides for such acceleration).
3. Execution and delivery by the Corporation of, and performance of its
agreements in, the Agreement do not (i) breach or result in a default under any
existing material obligation of the Corporation under any indenture, mortgage,
contract or other agreement to which the Corporation is a party and of which I
have knowledge, or (ii) breach or otherwise violate any existing material
obligation of the Corporation under any court or administrative order, writ,
judgment or decree of which I have knowledge that names the corporation and is
specifically directed to it or its property
4. Execution, delivery and performance by the Corporation
of the Agreement do not violate applicable provisions of
statutory law or regulations.
5. No authorization, consent or approval of, filing with, or other
action by, any governmental authority is required for the execution and delivery
of the Credit Agreement by the Corporation or the repayment of the Loans by the
Corporation.
D-1-3
Bank of America National Trust
and Savings Association
Page 4
6. I confirm to you that, to my knowledge, there are no actions or
proceedings against the Corporation, pending or overtly threatened in writing,
before any court, governmental agency or arbitrator which (i) seek to impair the
enforceability of the Credit Agreement or (ii) except as disclosed in Schedule
5.05 to the Credit Agreement, if determined adversely to the Corporation, would
result in a judgment or order against the Corporation (in excess of insurance
coverage) for more than $500,000 in any one case or $1,000,000 in the aggregate.
This opinion letter is delivered as of its date and without any
undertaking to advise you of any changes of law or fact that occur after the
date of this opinion letter even though the changes may affect a legal analysis
or conclusion or an information confirmation in this opinion letter.
A copy of this opinion letter may be delivered by you to each Bank, and
they may rely on this opinion letter as if it were addressed and had been
delivered to them on the date hereof. Subject to the foregoing, this opinion
letter may be relied upon by you only in connection with the transaction
described in the initial paragraph of this opinion letter and may not be used or
relied upon by you for any other purpose or by any other person for any purpose
whatsoever without, in each instance, my prior written consent.
Very truly yours,
XXXXXX XXXXX
X-0-0
XXXXXXX X-0
FORM OF OPINION OF COMPANY'S OREGON COUNSEL
[on letterhead of Jeld-Wen, inc.]
February ___, 1998
Bank of America National Trust and Savings Association as agent under the Credit
Agreement (as hereinafter defined)
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx
Ladies and Gentlemen:
I have acted as Oregon counsel to Trendwest Resorts, Inc. an Oregon
corporation (the "Corporation") and a subsidiary of Jeld-Wen, inc., in
connection with the transaction contemplated by the Credit Agreement dated as of
February 12, 1998 (the "Credit Agreement") between the Corporation, you, and the
other financial institutions party thereto. This opinion letter is provided to
you at the request of the Corporation pursuant to Section 4.01(d) of the Credit
Agreement. Except as otherwise indicated herein, capitalized terms used in this
opinion letter are defined as set forth in the Credit Agreement.
I have examined the originals or copies of such documents, certificates
and records as I have deemed relevant or necessary as the basis for the opinions
hereinafter expressed. I have assumed the genuineness of all signatures, the
authenticity of documents, certificates and records submitted to me as
originals, the conformity to the originals of all documents, certificates and
records submitted to me as certified or reproduction copies, the legal capacity
of all natural persons executing documents, certificates and records, and the
completeness and accuracy as of the date of this opinion letter of the
information contained in such documents, certificates and records.
This opinion letter is subject to all assumptions, qualifications and
limitations not inconsistent herewith that are described in the Legal Opinion
Accord of the ABA Section of Business Law (1991) at Section 4 ("Reliance by
Opinion Giver on
D-2-1
Bank of America National Trust
and Savings Association
Page 2
Assumptions"), Section 16 ("No Violation of Law") and Section 19 ("Specific
Legal Issues").
The law covered by opinions expressed herein is limited to the Federal
law of the United States and the law of the State of Oregon. I express no
opinion with respect to the laws, regulations or ordinances of any county,
municipality or other local governmental agency.
As used in this opinion letter, the expression "to my knowledge" or
expressions of like import means my conscious awareness of facts or other
information and does not include information that might be revealed if there
were to be undertaken a canvass of all offices of the Corporation or a review of
all of its files. Except as otherwise set forth herein, I have not reviewed any
agreements, orders, writs, judgments or decrees.
Based upon and subject to the foregoing, I am of the opinion that:
1. The Corporation is a corporation duly incorporated and validly
existing under the laws of the State of Oregon and has the corporate power and
corporate authority to own and operate its properties and assets and, to our
knowledge, to engage in the business that it now carries on.
2. The Corporation has corporate power and authority to enter into and
perform the Agreement. The execution, delivery and performance of the Agreement
have been duly authorized by all necessary corporate action on the part of the
Corporation, and the Agreement has been duly executed and delivered by the
Corporation.
3. Execution and delivery by the Corporation of, and performance of its
agreements in, the Agreement do not (i) violate the Corporation's articles of
incorporation or bylaws, (ii) breach or result in a default under any existing
material obligation of the Corporation under any indenture, mortgage, contract
or other agreement to which the Corporation is a party and of which I have
knowledge, or (iii) breach or otherwise violate any existing material obligation
of the Corporation under any court or administrative order, writ, judgment or
decree of which I have knowledge that names the corporation and is specifically
directed to it or its property
X-0-0
Xxxx xx Xxxxxxx National Trust
and Savings Association
Page 3
4. Execution, delivery and performance by the Corporation
of the Agreement do not violate applicable provisions of
statutory law or regulations.
5. No authorization, consent or approval of, filing with, or other
action by, any governmental authority is required for the execution and delivery
of the Credit Agreement by the Corporation or the repayment of the Loans by the
Corporation.
6. I confirm to you that, to my knowledge, there are no actions or
proceedings against the Corporation, pending or overtly threatened in writing,
before any court, governmental agency or arbitrator which (i) seek to impair the
enforceability of the Credit Agreement or (ii) except as disclosed in Schedule
5.05 to the Credit Agreement, if determined adversely to the Corporation, would
result in a judgment or order against the Corporation (in excess of insurance
coverage) for more than $500,000 in any one case or $1,000,000 in the aggregate.
This opinion letter is delivered as of its date and without any
undertaking to advise you of any changes of law or fact that occur after the
date of this opinion letter even though the changes may affect a legal analysis
or conclusion or an information confirmation in this opinion letter.
A copy of this opinion letter may be delivered by you to each Bank, and
they may rely on this opinion letter as if it were addressed and had been
delivered to them on the date hereof. Subject to the foregoing, this opinion
letter may be relied upon by you only in connection with the transaction
described in the initial paragraph of this opinion letter and may not be used or
relied upon by you for any other purpose or by any other person for any purpose
whatsoever without, in each instance, my prior written consent.
Very truly yours,
XXXXX XXXX
D-2-3
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of __________, _____ is made between
______________________________ (the "Assignor") and
__________________________ (the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Credit Agreement dated
as of February 12, 1998 (as amended, amended and restated, modified,
supplemented, extended or renewed from time to time, the "Credit Agreement")
among Trendwest Resorts, Inc., an Oregon corporation (the "Company"), the
several financial institutions from time to time party thereto (including the
Assignor, the "Banks"), and Bank of America National Trust and Savings
Association, as agent for the Banks (the "Agent"). Any terms defined in the
Credit Agreement and not defined in this Assignment and Acceptance are used
herein as defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to making Loans (the "Committed Loans") to the Company in an aggregate
amount not to exceed $__________ (the "Commitment");
WHEREAS, [the Assignor has made Committed Loans in the aggregate
principal amount of $__________ to the Company] [no Committed Loans are
outstanding under the Credit Agreement];
WHEREAS, the Assignor wishes to assign to the Assignee [part of the]
[all] rights and obligations of the Assignor under the Credit Agreement in
respect of its Commitment, [together with a corresponding portion of each of its
outstanding Committed Loans,] in an amount equal to $__________ (the "Assigned
Amount") on the terms and subject to the conditions set forth herein and the
Assignee wishes to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor,
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without recourse and without representation or warranty (except as provided in
this Assignment and Acceptance) __% (the "Assignee's Percentage Share") of (A)
the Commitment [and the Committed Loans] of the Assignor and (B) all related
rights, benefits, obligations, liabilities and indemnities of the Assignor under
and in connection with the Credit Agreement and the Loan Documents.
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Bank under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank. It is the intent
of the parties hereto that the Commitment of the Assignor shall, as of the
Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its indemnity
rights under the Loan Documents (including rights arising under Article III and
Sections 10.04 and 10.05 of the Credit Agreement) to the extent such rights
relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and
assumption set forth herein, on the Effective Date the Assignee's
Commitment will be $__________.
(d) After giving effect to the assignment and
assumption set forth herein, on the Effective Date the Assignor's
Commitment will be $__________.
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Committed Loans. [Add, if applicable, payment of accrued interest on, and fees
with respect to, Committed Loans assigned.]
(b) The [Assignor] [Assignee] further agrees to pay to
the Agent a processing fee in the amount specified in
subsection 10.08(a) of the Credit Agreement.
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3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date
with respect to the Commitment[,] [and Committed Loans] shall be for the account
of the Assignor. Any interest, fees and other payments accrued on and after the
Effective Date with respect to the Assigned Amount shall be for the account of
the Assignee. Each of the Assignor and the Assignee agrees that it will hold in
trust for the other party any interest, fees and other amounts which it may
receive to which the other party is entitled pursuant to the preceding sentence
and pay to the other party any such amounts which it may receive promptly upon
receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to in Section 6.01 of the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective
date for this Assignment and Acceptance shall be __________, _____ (the
"Effective Date"); provided that the following conditions precedent have been
satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be
executed and delivered by the Assignor and the Assignee;
(ii) the consent of the Company and the Agent
required for an effective assignment of the Assigned Amount by the Assignor to
the Assignee under subsection 10.08(a) of the Credit Agreement shall have been
duly obtained and shall be in full force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all
amounts due to the Assignor under this Assignment and Acceptance;
(iv) the Assignee shall have complied with
subsection 9.10(a) of the Credit Agreement (if applicable); and
(v) the processing fee referred to in
Section 2(b) hereof shall have been paid to the Agent.
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(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Company, and the Agent for
acknowledgement by the Agent, a Notice of Assignment substantially in the form
attached hereto as Schedule 1.
6. Agent.
(a) The Assignee hereby appoints and authorizes the Assignor
to take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Agent by the Banks pursuant to the
terms of the Credit Agreement.
[(b) The Assignee shall assume no duties or obligations held
by the Assignor in its capacity as Agent under the Credit Agreement.] [INCLUDE
ONLY IF ASSIGNOR IS AGENT]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Assignor, the Agent and
the Company that under applicable law and treaties no tax will be required to be
withheld by the Assignor with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Agent and
the Company prior to the time that the Agent or Company is required to make any
payment of principal, interest or fees hereunder, duplicate executed originals
of either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein the Assignee claims entitlement to the benefits of a
tax treaty that provides for a complete exemption from U.S. federal income
withholding tax on all payments hereunder) and agrees to provide new Forms 4224
or 1001 upon the expiration of any previously delivered form or comparable
statements in accordance with applicable U.S. law and regulations and amendments
thereto, duly executed and completed by the Assignee, and (c) agrees to comply
with all applicable U.S. laws and regulations with regard to such withholding
tax exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any Lien or other adverse claim; (ii) it
is duly organized and existing and it has the full power and authority to take,
and has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and
E-4
performance of this Assignment and Acceptance, and apart from any agreements or
undertakings or filings required by the Credit Agreement, no further action by,
or notice to, or filing with, any Person is required of it for such execution,
delivery or performance; and (iv) this Assignment and Acceptance has been duly
executed and delivered by it and constitutes the legal, valid and binding
obligation of the Assignor, enforceable against the Assignor in accordance with
the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or
affecting creditors' rights and to general equitable principles.
(b) The Assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document furnished pursuant
thereto. The Assignor makes no representation or warranty in connection with,
and assumes no responsibility with respect to, the solvency, financial condition
or statements of the Company, or the performance or observance by the Company,
of any of its respective obligations under the Credit Agreement or any other
instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and deliver
such other instruments, and take such other action, as either party may
reasonably request in connection with the
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transactions contemplated by this Assignment and Acceptance, including the
delivery of any notices or other documents or instruments to the Company or the
Agent, which may be required in connection with the assignment and assumption
contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this
Assignment and Acceptance shall be in writing and signed by the parties hereto.
No failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made
without any set-off or counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs
and expenses incurred in connection with the negotiation, preparation, execution
and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF WASHINGTON. The Assignor
and the Assignee each irrevocably submits to the non-exclusive jurisdiction of
any State or Federal court sitting in Washington over any suit, action or
proceeding arising out of or relating to this Assignment and Acceptance and
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such Washington State or Federal court. Each party to
this Assignment and Acceptance hereby irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
[Other provisions to be added as may be negotiated between the
Assignor and the Assignee, provided that such provisions are not inconsistent
with the Credit Agreement.]
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IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
Name:
Title:
[ASSIGNEE]
By:
Name:
Title:
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SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
---------------, -----
Bank of America National Trust and Savings Association,
as Agent
0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: Agency Administrative Services #5596
Re: Trendwest Resorts
Bank of America National Trust and Savings Association,
as Agent
Credit Products #5771
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Vice President
Trendwest Resorts, Inc.
00000 X.X. 00xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of February 12, 1998 (as
amended, amended and restated, modified, supplemented, extended or renewed from
time to time, the "Credit Agreement") among Trendwest Resorts, Inc. (the
"Company"), the Banks referred to therein, and Bank of America National Trust
and Savings Association as agent for the Banks (the "Agent"). Terms defined in
the Credit Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "Assignor")1 to _______________ (the
"Assignee") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor[,] [and] all
outstanding Loans made by the Assignor) pursuant to the Assignment and
Acceptance Agreement attached hereto (the "Assignment and Acceptance"). Before
giving effect to such assignment the Assignor's Commitment is $ ___________[,]
[and the aggregate amount of its outstanding Loans is $_____________].
--------
1 See Section 10.08 of Credit Agreement regarding
circumstances under which Company consent is or is not
required.
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2. The Assignee agrees that, upon receiving the consent of the
Agent and, if applicable, the Company, to such assignment, the Assignee will be
bound by the terms of the Credit Agreement as fully and to the same extent as if
the Assignee were the Bank originally holding such interest in the Credit
Agreement.
3. The following administrative details apply to the
Assignee:
(A) Notice Address:
Assignee name: __________________________
Address: _______________________________
-------------------------------
Attention: _____________________________
Telephone: (___) _______________________
Telecopier: (___) ______________________
Telex (Answerback): ____________________
(B) Payment Instructions:
Account No.: ___________________________
At: ___________________________
---------------------------
---------------------------
Reference: ___________________________
Attention: ___________________________
4. You are entitled to rely upon the representations, warranties
and covenants of each of the Assignor and Assignee contained in the Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
Name:
Title:
By:
Name:
Title:
1424\80\00006.AGM/2.5.98
Seattle
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[NAME OF ASSIGNEE]
By:
Name:
Title:
By:
Name:
Title:
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
TRENDWEST RESORTS, INC.
By:
Name:
Title:
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:
Name:
Title:
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EXHIBIT F
FORM OF PROMISSORY NOTE
[Seattle, WA]
$----------------- ------------, -----
FOR VALUE RECEIVED, the undersigned, Trendwest Resorts, Inc., an Oregon
corporation (the "Company"), hereby promises to pay to the order of (the "Bank")
the principal sum of Dollars ($ ) or, if less, the aggregate unpaid principal
amount of all Loans made by the Bank to the Company pursuant to the Credit
Agreement dated as of February 12, 1998 (as amended, amended and restated,
modified, supplemented, extended or renewed from time to time, the "Credit
Agreement") among the Company, the Bank, the other banks parties thereto, and
Bank of America National Trust and Savings Association as Agent for the Banks,
on the dates and in the amounts provided in the Credit Agreement. The Company
further promises to pay interest on the unpaid principal amount of the Loans
evidenced hereby from time to time at the rates, on the dates, and otherwise as
provided in the Credit Agreement.
The Bank is authorized to endorse the amount and the date on which each
Loan is made, the maturity date therefor and each payment of principal with
respect thereto on the schedules annexed hereto and made a part hereof, or on
continuations thereof which shall be attached hereto and made a part hereof;
provided, that any failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect any obligation of the
Company under the Credit Agreement and this Promissory Note (the "Note").
This Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement, which Credit Agreement, among other things,
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events and also for prepayments on account of principal hereof
prior to the maturity hereof upon the terms and conditions therein specified.
Terms defined in the Credit Agreement are used herein with their
defined meanings therein unless otherwise defined herein. This Note shall be
governed by, and construed and interpreted in
Seattle
F-1
accordance with, the laws of the State of Washington applicable to contracts
made and to be performed entirely within such State.
TRENDWEST RESORTS, INC.
By:
Name:
Title:
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Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
(2) (3) (4)
Amount Maturity Amount of
of Date of Base (5)
(1) Base Base Rate Loan Notation
Date Rate Loan Rate Loan Repaid Made By
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Schedule B to Note
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
(2) (3) (4)
Amount Maturity Amount of
of Date of Offshore (5)
(1) Offshore Offshore Rate Loan Notation
Date Rate Loan Rate Loan Repaid Made By
F-4
