EXHIBIT 10.8
SECOND AMENDMENT OF CREDIT AGREEMENT
BETWEEN
TRENDWEST RESORTS, INC.,
AND
TRENDWEST SOUTH PACIFIC PTY. LTD.,
AS THE BORROWERS,
THE LENDERS NAMED HEREIN,
AS THE LENDERS,
KEYBANK NATIONAL ASSOCIATION,
AS LEAD ARRANGER AND ADMINISTRATIVE AGENT FOR THE LENDERS
AND AS LETTER OF CREDIT ISSUING LENDER,
AND
BANK ONE NA,
AS SYNDICATION AGENT FOR THE LENDERS AND AS AUSTRALIAN LENDER
AND
FLEET NATIONAL BANK,
AS DOCUMENTATION AGENT
DATED AS OF MARCH 7, 2001
SECOND AMENDMENT OF CREDIT AGREEMENT
This Second Amendment of Credit Agreement (the "Second Amendment") is
made and entered into as of March 7, 2001, between TRENDWEST RESORTS, INC., an
Oregon corporation ("Trendwest"), and TRENDWEST SOUTH PACIFIC PTY. LTD., a
corporation organized and existing under the laws of the Commonwealth of
Australia ("South Pacific"), each of the financial institutions shown on the
signature pages to this Amendment (the "Lenders"), KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent and Issuing Lender (as the case may be, the "Agent" or
the "Issuing Lender"), BANK ONE NA, as Syndication Agent and Australian Lender
(the "Australian Lender") and FLEET NATIONAL BANK, as Documentation Agent (the
"Documentation Agent").
PREAMBLE
1. Trendwest and South Pacific (collectively, the "Borrowers") entered
into a Credit Agreement dated as of August 14, 2000, pursuant to which the
Lenders and Issuing Lender provided certain credit facilities to the Borrowers
(the "Original Credit Agreement").
2. The Original Credit Agreement was amended by a First Amendment of
Credit Agreement dated as of January 10, 2001 (the "First Amendment").
3. In order to provide the Borrowers with additional operating
flexibility, the Borrowers wish to obtain from the Lenders certain modifications
(collectively, the "Requested Modifications") of the Original Credit Agreement,
as amended by the First Amendment (collectively, the "Existing Credit
Agreement").
4. The Agent, Lenders, Issuing Lender, and Australian Lender
(collectively, the "Lender Parties") are willing to agree to the Requested
Modifications on the terms set forth in this Amendment.
5. Unless otherwise defined in this Amendment, capitalized terms used in
this Amendment have the meanings assigned to such terms in the Existing Credit
Agreement.
TERMS OF AMENDMENT
NOW, THEREFORE, the Borrowers and Lender Parties agree as follows:
1. The definition of "Aggregate Commitment" in Section 1.1 of the
Existing Credit Agreement is amended to read as follows:
"Aggregate Commitment" means $85,000,000, as such amount may be
reduced pursuant to this Agreement.
2. The definition of "Applicable Margin" in Section 1.1 of the Existing
Credit Agreement is amended to read as follows:
"Applicable Margin" with respect to any period of time means the
per annum percentage determined from the following table, except that
from the date
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of this Second Amendment through April 30, 2001, the Applicable Margin
shall be the amounts indicated in the table for Usage in excess of 66%:
USAGE REVOLVING LOANS LETTERS OF CREDIT
LIBOR
LOANS
AND BASE
AUSTRALIAN RATE
ADVANCES LOANS
less than or equal
to 33% 2.00% 0.125% 2.00%
greater than 33%
and less than or
equal to 66% 2.25% 0.125% 2.25%
greater than 66% 2.50% 0.125% 2.50%
3. The definition of "Australian Advance Limit" in Section 1.1 of the
Existing Credit Agreement is amended to read as follows:
"Australian Advance Limit" means a Dollar Equivalent equal to
the lesser of (a) the Revolving Loan Limit, and (b) $25,000,000.
4. The definition of "Commitment Fee" in Section 1.1 of the Existing
Credit Agreement is amended to read as follows:
"Commitment Fee" with respect to any calendar quarter (or
partial calendar quarter in the case of the period beginning on July 1,
2003 and ending on the Revolving Termination Date) means a fee equal to
the Dollar amount obtained by multiplying the average daily Revolving
Commitment during such calendar quarter (or such partial period) by the
applicable per annum percentage set forth under the "Commitment Fee"
heading in the following table:
COMMITMENT
USAGE FEE
less than or equal
to 33% 0.30%
greater than 33%
and less than or
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equal to 66% 0.40%
greater than 66% 0.50%
5. The defined term "JELD-WEN Debt" is hereby deleted from Section 1.1
of the Existing Credit Agreement, and all references in the Existing Credit
Agreement to the term "JELD-WEN Debt" shall be deemed to be references to the
term "JELD-WEN Note."
6. The definition of "Note Receivable" in Section 1.1 of the Existing
Credit Agreement is amended to read as follows:
"Note Receivable" means a promissory note or other right to
payment received by Trendwest for Vacation Credits or Fractional
Ownership Interests sold by Trendwest, and shall include both on and off
balance sheet Notes Receivable.
7. The definition of "Revolving Loan Limit" in Section 1.1 of the
Existing Credit Agreement is amended to read as follows:
"Revolving Loan Limit" means a Dollar amount equal to the lesser
of (a) the Revolving Commitment, or (b) an amount equal to the sum of
the Eligible Inventory Amount plus 75% of the Dollar amount of Eligible
Receivables, reduced by (i) the then-outstanding principal balance of
the Domestic Advances, (ii) the Dollar Equivalent of the
then-outstanding principal balance of Australian Advances, and (iii) the
Letter of Credit Usage.
8. The defined term "Standstill Agreement" is hereby deleted from
Section 1.1 of the Existing Credit Agreement, and all references in the Existing
Credit Agreement to the term "Standstill Agreement" shall be deemed to be
references to the term "Subordination Agreement."
9. The following definitions are hereby added to Section 1.1 of the
Credit Agreement:
"Documentation Agent" means Fleet National Bank, in its capacity
as documentation agent for the Lenders pursuant to this Agreement and
not in its individual capacity as a Lender, or any successor
documentation agent.
"Guaranty" means a guaranty in form and substance reasonably
satisfactory to the Administrative Agent, guarantying the payment and
performance of the obligations of the Borrowers under the Credit
Agreement, which has been executed and delivered by Trendwest
Investments to the Administrative Agent.
"Hazardous Materials Indemnity" means an indemnity agreement
pursuant to which Trendwest Investments agrees to indemnify the Lenders
against certain claims and other losses incurred in connection with
Hazardous Materials, which agreement shall be in form and substance
satisfactory to the Administrative Agent.
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"JELD-WEN Note" means that certain Promissory Note in the
original principal amount of Seventeen Million Seven Hundred Thousand
Dollars ($17,731,000) dated June 1, 2000, and made and given by
Trendwest to JELD-WEN, Inc., a copy of which is attached hereto as
Exhibit R, as the same may be renewed, extended or otherwise modified.
"MountainStar Expenditures" means all expenditures by the
Borrowers and their Subsidiaries in connection with or otherwise related
to MountainStar, except (i) capitalized interest related to investment
expenditures made on MountainStar; (ii) any new equity proceeds raised
for the specific purpose of making an investment in MountainStar; or
(iii) the amount of any scheduled principal payments with respect to the
JELD-WEN Debt that JELD-WEN agrees may be deferred, to the extent that
such funds have been expended in connection with MountainStar.
"MountainStar Deed of Trust" has the meaning assigned to such
term in Section 26(b) of the Second Amendment.
"Subordination Agreement" has the meaning assigned to such term
in Section 5.4.
"Trendwest Investments" means Trendwest Investments, Inc., a
Washington corporation. Trendwest Investments is a wholly-owned
Subsidiary of Trendwest, and is the entity in title to MountainStar.
"UCC-1 Financing Statement" means a financing statement in form
and substance satisfactory to the Administrative Agent, to be executed
by Trendwest Investments and filed with the Washington State Department
of Licensing to perfect a security interest in all personal property
located on or used in connection with the ownership, operation or
development of the real property comprising MountainStar.
10. Section 4.15 of the Existing Credit Agreement is amended to read as
follows:
4.15 Consents or Approvals. No consent, approval or
authorization or, or filing, registration or qualification with, any
governmental authority or any other Person is required to be obtained by
either of the Borrowers in connection with the execution, delivery or
performance of this Agreement, including in connection with the granting
of the MountainStar Deed of Trust, that has not already been obtained or
completed, except for (a) the consents listed on Exhibit K that have not
been obtained, and (b) those consents, approvals, and authorizations
that have been obtained.
11. Section 6.5(c) of the Existing Credit Agreement is amended by
changing the time period by which a Compliance Certificate must be provided to
the Administrative Agent from "90 days after the end of each fiscal quarter of
each Fiscal Year" to "45 days after the end of each fiscal quarter of each
Fiscal Year."
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12. Section 6.9 of the Existing Credit Agreement is amended by adding
the following sentence as the second sentence of the section: "Trendwest shall
cause Trendwest Investments to own and hold title to MountainStar, and shall not
allow the transfer of any portion of MountainStar to any other Person without
the express written consent of the Administrative Agent."
13. Section 6.11(c) of the Existing Credit Agreement is amended to read
as follows:
(c) Consolidated Net Worth. At December 31, 2000,
Trendwest shall maintain a Consolidated Net Worth of at least
$186,698,000 ("Closing Threshold"). As of the end of each fiscal quarter
thereafter, Trendwest shall maintain a minimum Consolidated Net Worth
equal to the Closing Threshold plus the sum of (i) 75% of Trendwest's
positive net income for the period commencing on April 1, 2000 and
ending on the day proceeding such fiscal quarter plus (ii) the Dollar
amount of net proceeds received by Trendwest from the sale of new common
or preferred equity during such period.
14. Section 6.11 of the Existing Credit Agreement is amended by adding
the following as Section 6.11(d):
(d) Minimum EBITDA. Trendwest shall maintain EBITDA of
at least $45,000,000 as of the last day of each fiscal quarter of each
Fiscal Year.
15. Section 6 of the Existing Credit Agreement is amended by adding the
following as Section 6.12 and Section 6.13:
6.12 Maintenance of Liens. Trendwest shall do all things
requested by the Administrative Agent that are reasonably necessary to
ensure that the Administrative Agent has a Lien on MountainStar as
described in or otherwise contemplated by the MountainStar Deed of
Trust.
6.13 Appraisals. If at any time any Lender discovers that it
must have a current appraisal of all or any portion of the real property
comprising MountainStar that is subject to the MountainStar Deed of
Trust in order to comply with any law, rule or regulation applicable to
it, then, upon request by such Lender, the Borrowers shall, at their
expense, order appraisals of all of such real property. Such appraisals
shall be in form and substance acceptable to the Lenders, shall be
prepared by appraisers acceptable to the Lenders, and shall be delivered
to the Administrative Agent within forty-five days of the receipt by
Trendwest of a written request for such appraisals.
16. Section 7.7 of the Existing Credit Agreement is amended to read as
follows:
7.7 Notes Receivable. As of the end of each calendar month,
Trendwest shall not suffer or permit either the number or the amount of
Past-Due Notes to exceed 5% of the total number or amount of Notes
Receivable at the close of any period of three consecutive calendar
months, and shall not suffer or permit either the number or amount of
Delinquent Notes to exceed 3% of the total number or amount of Notes
Receivable at the close of any period of three
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consecutive calendar months. For purposes of this Section 7.7, the
aggregate principal balance of Past-Due Notes and Delinquent Notes shall
be computed net of allowance for doubtful accounts and sales returns.
17. Section 7 of the Existing Credit Agreement is amended by adding the
following sections:
7.19 Limitations on Expenditures on MountainStar. Trendwest
shall not make any MountainStar Expenditures (a) in excess of (i)
$15,000,000 during the year ending December 31, 2001, (ii) $5,000,000
during the year ending December 31, 2002, or (iii) $20,000,000 during
the three-year period ending December 31, 2003; or (b) if Trendwest
cannot demonstrate to the Administrative Agent's satisfaction that, as
of the end of the preceding calendar month, the ration of Total Funded
Debt to EBITDA was less than 2:1.
7.20 No Expenditures for New Master-Planned Resort Projects.
Trendwest shall not, and shall not permit any of its Subsidiaries to,
incur or otherwise make any expenditures for or in connection with any
new master-planned resort projects.
7.21 Limitation on Australian Activities. Neither Trendwest nor
South Pacific shall permit the total of (a) the Dollar Equivalent of
Australian Advances outstanding to South Pacific, plus (b) the amount of
Indebtedness owed by South Pacific to Trendwest, at any time to exceed
$35,000,000.
18. Section 10.10 of the Existing Credit Agreement is amended by adding
the following sentence as the second sentence of the section:
The Administrative Agent shall resign, by giving written notice of such
resignation to the Lenders, at such time as its Ratable Share is less
than twenty-five percent (25%).
19. Section 10.13 of the Existing Credit Agreement is amended to read as
follows:
10.13 Other Agents. None of Lenders identified on the facing
page or signature pages of this Agreement as a "Syndication Agent" or a
"Documentation Agent" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none
of Lenders so identified as either a "Syndication Agent" or a
"Documentation Agent" shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not
relied, and will not rely, on any of Lenders so identified in deciding
to enter into this Agreement or in taking or not taking action under
this Agreement.
20. Section 11.5 of the Existing Credit Agreement is amended by adding
the following as the second paragraph of Section 11.5:
Each of the Borrowers waive, for the benefit of the Lenders only:
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(a) Any right to require the Lenders, as a condition of payment
or performance by such Borrower, to (i) proceed against any other
Borrower, any guarantor of the Obligations or any other Person, (ii)
proceed against or exhaust any security held from such Borrower, any
other Borrower or any guarantor of the Obligations or any other Person,
(iii) apply the property of such Borrower first to discharge the
Obligations, (iv) proceed against or have resort to any balance of any
deposit account or credit on the books of the Lenders in favor of such
Borrower, any other Borrower or any other Person, or (v) pursue any
other remedy in the power of the Lenders whatsoever;
(b) Any right of subrogation, and any defense that such Borrower
may have based upon any election of remedies by the Lenders that
destroys such Borrower's subrogation rights or such Borrower's rights to
proceed against any other Borrower or any other person for
reimbursement, including any loss of rights such Borrower may suffer by
reason of any rights, powers or remedies of such Borrower in connection
with any anti-deficiency laws or any other laws limiting, qualifying or
discharging the Borrowers' indebtedness or remedies against the
Borrowers;
(c) Any right to enforce any remedy that the Lenders now have or
may hereafter have against any other Borrower, any guarantor of the
Borrowers' Obligations to the Lenders, or any other person;
(d) Any benefit of, or any right to participate in, any security
whatsoever now or subsequently held by the Lenders;
(e) Any claim or defense arising out of the Lenders' failure to
perfect any lien or security interest securing the Obligations;
(f) Any claim resulting from any act or omission by the Lenders
that directly or indirectly results in or contributes to the loss,
limitation or impairment of the right to recover any deficiency from
such Borrower due to the Lenders' election to proceed under a power of
sale set forth in any deed of trust or due to any fair value limitations
or determinations in connection with a judicial foreclosure of any
property securing the Obligations;
(g) Any claim that such Borrower may now or subsequently have
against any other Borrower;
(h) Any defense arising by reason of any modification of the
Obligations in any form whatsoever, including the renewal, extension,
acceleration or other change in time for payment of the Obligations, or
other change in the terms of any of the Obligations, including the
increase or decrease of the rate of interest on the Obligations;
(i) Any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of any other Borrower,
including any defense based on or arising out of the lack of validity or
the unenforceability of the Obligations or any agreement or instrument
relating to the Obligations, or by
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reason of the cessation of the liability of any other Borrower from any
cause other than indefeasible payment in full of all of the Obligations;
(j) Any defense based upon any statute or rule of law that
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal;
(k) Any defense based upon the Lenders' acts or omissions in the
administration of the Obligations, including any act or omission that
directly or indirectly results in or contributes to the discharge of any
of the Obligations, except behavior that amounts to bad faith;
(l) Any principles or provisions of law, statutory or otherwise,
that are or might be in conflict with the terms of this Agreement, and
any legal or equitable discharge of such Borrower's obligations under
this Agreement;
(m) The benefit of any statute of limitations affecting such
Borrower's liability under this Agreement or the enforcement of this
Agreement;
(n) Any rights to set-offs, recoupments, and counterclaims;
(o) Any requirement that the Lenders protect, secure, perfect or
insure any security interest or lien or any property subject to such
interest or lien;
(p) Notices (including any notice required under Section 9-504
of the Uniform Commercial Code of the State of Washington), demands,
presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance of this
Agreement, notices of default under any of the documents executed in
connection with this Agreement, notices of any renewal, extension or
modification of the Obligations or any agreement related to the
Obligations, notices of any extension of credit to any other Borrower,
and any right to consent to any of such matters; and
(q) To the fullest extent permitted by law, any defenses or
benefits that may be derived from or afforded by law that limit the
liability of or exonerate guarantors or sureties, or that may conflict
with the terms of this Agreement.
Notwithstanding any other provision of this Agreement, each
Borrower affirms that it signs this Agreement as a principal, and not as
surety, guarantor, or accommodation party.
21. In the first sentence of Section 11.7(b) of the Existing Credit
Agreement, part (i) is amended to read as follows:
(i) such assignment, if not to a Lender or an Affiliate of the
assigning Lender, shall be consented to by Trendwest at all time other
than during the existence of an Default or Event of Default and by the
Administrative Agent (which approval of Trendwest shall not be
unreasonably withheld or delayed),
The following sentence is added as the second sentence of Section 11.7(b):
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Notwithstanding the foregoing, (x) during the existence of a Default or
an Event of Default, a Lender shall not be required to obtain the
consent of any other Person with respect to an assignment of its
interest under this Credit Agreement; and (y) a Lender may at any time
pledge or assign all or any part of (or a proportionate participating
interest in) such Lender's rights under this Credit Agreement and all
documents executed in connection herewith to any Federal Reserve Bank in
accordance with applicable laws.
The following sentence (the existing second sentence) of Section 11.7(b) is
amended to read as follows:
Upon obtaining any consent required as set forth in the first sentence
of this Section 11.7(b), any forms required by Section 11.8 and payment
of the requisite fee described below, the assignee named in the
Assignment and Acceptance shall be a Lender for all purposes of this
Agreement to the extent of the Assigned Interest, and the assigning
Lender shall be released from any further obligations under this
Agreement to the extent of such Assigned Interest.
22. That portion of Section 11.13 of the Existing Credit Agreement that
appears before the words "provided, however," is amended to read as follows:
"Any term of this Agreement or of the Revolving Notes may be amended and the
observance of any term of this agreement or of the Revolving Notes may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Borrowers and at least
two-thirds (2/3) of the Lenders;".
23. Schedule 1 to the Existing Credit Agreement is hereby deleted, and
Schedule 1 to this Second Amendment is substituted in its place.
24. Exhibit C to the Existing Credit Agreement is hereby deleted, and
Exhibit C to this Second Amendment is substituted in its place.
25. As partial consideration for the Requested Modifications, the
Borrowers represent and warrant to the Lender Parties as follows:
(a) Corporate Authority; Conflict. The execution, delivery and
performance by the Borrowers of this Second Amendment are within the Borrowers'
corporate powers, have been duly authorized by all necessary corporate action,
and require no action or consent by or in respect of, or filing with, any
governmental body, agency, official or any other person or entity, and the
execution, delivery and performance by the Borrowers of this Second Amendment do
not contravene, or constitute a default under, any provision of applicable law
or regulations or of the certificate or articles of incorporation or the bylaws
of the Borrowers or any of their Subsidiaries or any material agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrowers or any of their Subsidiaries.
(b) Enforceability. This Second Amendment constitutes the valid
and binding obligations of the Borrowers, enforceable against the Borrowers in
accordance with their terms, except as enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' remedies, and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
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(c) No Event of Default. No Possible Default or Event of Default
has occurred and is continuing, and the representations and warranties of the
Borrowers contained in the Existing Credit Agreement and the other documents
delivered pursuant to the Existing Credit Agreement true and correct in all
material respects as of the date of this Second Amendment as if made on the date
of this Second Amendment.
(d) Possible Claims and Defenses. The Borrowers have no claims
or defenses against any person or entity that would or might affect (i) the
enforceability of any provisions of the Existing Credit Agreement, as modified
by this Second Amendment (collectively, the "Amended Credit Agreement"), or (ii)
the collectability of sums advanced by the Lender Parties pursuant to the
Existing Credit Agreement or the Amended Credit Agreement.
26. The Lender Parties' obligations under this Second Amendment are
subject to satisfaction of the following conditions on or prior to the date on
which this Second Amendment is executed by the Borrowers and the Lender Parties:
(a) MountainStar Deed of Trust. The MountainStar Deed of Trust
shall have been duly executed and acknowledged by Trendwest Investments,
delivered to the Administrative Agent, and duly recorded with Kittitas County
Recorder. In addition, Trendwest shall cause Trendwest Investments to execute
and deliver to the Administrative Agent the Hazardous Materials Indemnity and
the UCC-1 Financing Statement. Lenders shall release the MountainStar Deed of
Trust at such time as Trendwest Investments has received all water rights and
final plat approval for the development of any portion of either the Master
Planned Resort Community or the City of Cle Elum Urban Growth Area.
(b) Real Estate Matters.
(i) With respect to MountainStar, Trendwest shall cause
Trendwest Investments to have executed and delivered to the Administrative
Agent, for the benefit of the Lenders in accordance with their respective
Ratable Shares, a first priority deed of trust, in form and substance
satisfactory to the Administrative Agent, covering all parcels of real property
that comprise MountainStar, consisting of approximately 7,400 acres. Such deed
of trust is referred to in this Agreement as the "MountainStar Deed of Trust."
Trendwest shall cause Trendwest Investments to have paid all taxes, fees or
charges incurred in connection with the execution or recording of the
MountainStar Deed of Trust.
(ii) Trendwest shall cause Trendwest Investments to have
procured and delivered to the Administrative Agent a commitment from a title
insurance company satisfactory to the Agent for an ALTA mortgagee's policy of
title insurance (Form 1970 if available, or, if not, Form 1984 or 1990 with 1970
Endorsement) covering each parcel of real estate comprising MountainStar, which
policy shall (i) be issued in favor of the Administrative Agent, for the benefit
of the Lenders in accordance with their respective Ratable Shares, (ii) be
reasonably satisfactory to the Administrative Agent, and (iii) insure that the
MountainStar Deed of Trust is a valid first priority lien on the real property
covered by the MountainStar Deed of Trust. In addition, such policy shall, to
the extent available and appropriate (A) insure title to the real property and
all recorded easements benefiting such real property, (B) contain an "Extended
Coverage Endorsement" insuring over the general exceptions contained customarily
in such policy, (C) contain an access endorsement in form satisfactory to the
Administrative Agent, and (D) contain a "contiguity" endorsement in form
satisfactory to the Administrative Agent.
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(iii) Trendwest shall cause Trendwest Investment to have
provided to the Administrative Agent copies of (A) the summary of the final
Environmental Impact Statement on the master planned resort portion of
MountainStar, prepared by the Kittitas County Planning Department and dated
April 2000, and (B) such other evidence concerning compliance (both past and
present) with Environmental Laws by Trendwest or Trendwest Investments as any
Lender may reasonably request.
(c) Guaranty. The Guaranty shall have been duly executed by
Trendwest Investments and delivered to the Administrative Agent.
(d) Hazardous Materials Indemnity. The Hazardous Materials
Indemnity shall have been duly executed by Trendwest Investments and delivered
to the Administrative Agent.
(e) UCC-1 Financing Statement. The UCC-1 Financing Statement
shall have been duly executed by Trendwest Investments and delivered to the
Administrative Agent.
(f) Resolutions. The Administrative Agent shall have received
certified copies of the resolutions of the Borrowers' Boards of Directors
approving the execution, delivery, and performance of this Second Amendment,
together with evidence of the authority and specimen signatures of the persons
who have signed the Second Amendment. The Administrative Agent shall have
received certified copies of the resolutions of the Board of Directors of
Trendwest Investments approving the execution, delivery and performance of the
Guaranty, the MountainStar Deed of Trust, the Hazardous Materials Indemnity and
the UCC-1 Financing Statement, and specimen signatures of the persons who have
signed such documents on behalf of Trendwest Investments.
(g) Opinions of Counsel. The Administrative Agent shall have
received a legal opinion from Borrowers' counsel in form and substance
satisfactory to the Administrative Agent. The Administrative Agent shall also
have received a legal opinion from counsel to Trendwest Investments in form and
substance satisfactory to the Administrative Agent, opining as to the execution,
authorization and enforceability of the Guaranty, the MountainStar Deed of
Trust, the Hazardous Materials Indemnity and the UCC-1 Financing Statement.
(h) Payment of Expenses. The Borrowers shall have reimbursed the
Lender Parties for all legal fees and expenses incurred by the Lender Parties in
connection with the preparation of this Second Amendment and related documents.
(i) Representations and Warranties. The representations and
warranties set forth in Section 25 of this Second Amendment shall be true and
correct.
(j) Other Documents. The Lender parties shall have received such
other documents and instruments as they may reasonably request.
27. Nothing in this Amendment will be construed to obligate the Lender
Parties to consent to any further modification of the terms of the Existing
Credit Agreement, the Amended Credit Agreement or any other document.
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28. The Borrowers hereby acknowledge that they expect to receive no
further accommodations from the Lender Parties, and that this Second Amendment
will not be construed to create any course of dealing between the Borrowers and
the Lender Parties.
29. Except as expressly set forth in this Second Amendment, the
execution, delivery, and performance of this Second Amendment will not operate
as a waiver or amendment of any right, power, or remedy of the Lender Parties or
the Borrowers under the Existing Credit Agreement or any related document.
30. Except as otherwise expressly set forth in this Second Amendment,
all of the terms, conditions, and covenants of the Existing Credit Agreement
remain in full force and effect. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE
NOT ENFORCEABLE UNDER WASHINGTON LAW.
31. This Second Amendment may be executed and delivered in separate
counterparts, all of which taken together will constitute one and the same
instrument. Each party to this Second Amendment may accomplish such execution
and delivery by signing a counterpart of this Second Amendment and sending such
counterpart by facsimile to the other party. Upon the request of either party,
the other party will deliver an executed original of this Second Amendment,
provided, however, that the failure to deliver such original will not affect the
validity, enforceability, and/or binding effect of this Second Amendment.
[SIGNATURE BLOCKS ON FOLLOWING PAGE]
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[SIGNATURE PAGE FOR SECOND AMENDMENT]
THIS SECOND AMENDMENT has been executed and delivered by duly authorized
officers of the Borrowers and the Lender Parties, as of the date specified
above.
BORROWERS: LENDERS:
TRENDWEST RESORTS, INC. KEYBANK NATIONAL ASSOCIATION,
In its individual capacity as a Lender and
Issuing Lender
By /s/ Curtis S. Freeman By /s/ Cheryl L. Ebner
------------------------------- --------------------------------------
Assistant Treasurer Its Senior Vice President
------------------------------- -----------------------------------
- --------------------------------------------------------------------------------
TRENDWEST BANK ONE NA,
SOUTH PACIFIC PTY. LTD. In its individual capacity as a Lender and
Australian Lender
By /s/ Curtis S. Freeman By /s/ Joseph R. Perdenza
------------------------------- --------------------------------------
Director Its Assistant Vice President
------------------------------- -----------------------------------
- --------------------------------------------------------------------------------
FLEET NATIONAL BANK
By /s/ Jeffrey D. Gilbreath
--------------------------------------
Its Group Manager
-----------------------------------
- --------------------------------------------------------------------------------
ADMINISTRATIVE AGENT:
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent
By /s/ Cheryl L. Ebner
--------------------------------------
Its Senior Vice President
-----------------------------------
SYNDICATION AGENT:
BANK ONE NA,
as Syndication Agent
By /s/ JOSEPH R. PERDENZA
--------------------------------------
Its Assistant Vice President
-----------------------------------
- --------------------------------------------------------------------------------
DOCUMENTATION AGENT:
FLEET NATIONAL BANK
By /s/ JEFFREY D. GILBREATH
--------------------------------------
Its Group Manager
-----------------------------------
SCHEDULE I
LENDER COMMITMENT (Dollars)
KeyBank National Association $25,000,000
Bank One NA $30,000,000
Fleet National Bank $30,000,000
S-1
EXHIBIT C
BORROWING BASE CERTIFICATE
The undersigned warrants and certifies to the Lenders that: (i) all
information contained in this Certificate is true and accurate to the best of
Trendwest's knowledge; (ii) the information provided in this Certificate
complies with the Agreement; (iii) Trendwest has exercised its best efforts to
ascertain the truthfulness and accuracy of the information contained in this
Certificate; (iv) no Possible Default or Event of Default has occurred, and (v)
Trendwest is aware that the Lenders are relying on the information contained in
this Certificate as the basis for determining the eligibility of the Borrowers
for additional Revolving Loans and/or Letters of Credit. Unless otherwise
defined, all capitalized terms used in this Certificate have the meanings
assigned to such terms in the Credit Agreement dated as of August 14, 2000,
between Trendwest Resorts, Inc., Trendwest South Pacific Pty. Ltd., the lenders
from time to time party thereto, and KeyBank National Association, as
Administrative Agent for itself and the other such lenders.
Month Ended: _______________
I. CALCULATION OF REVOLVING Balances
COMMITMENT Outstanding
A. Aggregate commitment
B. Outstanding domestic principal balance
Outstanding Australian principal balance (AUD$) $
C. Conversion Rate
------------------------- -------------------------
$
D. Total outstanding principal balance $
E. Letter of Credit Usage
-------------------------
F. Revolving Commitment (A-D-E) $
-------------------------
II. CALCULATION OF ELIGIBLE INVENTORY AMOUNT
A. Total Inventory (lower of cost or net $
realizable value)
B. Less: MountainStar Construction In Progress
------------------------- -------------------------
C. Eligible Inventory (A-B) $
D. 50% of Eligible Inventory $
C-1
-------------------------
$
E. Eligible Inventory Amount (lesser of D or $40
million)
-------------------------
III. CALCULATION OF ELIGIBLE RECEIVABLES
A. Total Notes Receivable $
B. Less: Allowance for doubtful accounts $
Less: Recourse liability $
Less: Notes Receivable in default $
Less: Other excluded Notes Receivable $
------------------------- -------------------------
Total excluded Notes Receivable $
C. Eligible Notes Receivable (A-B) $
-------------------------
D. 75% of Eligible Notes Receivable $
-------------------------
IV. CALCULATION OF REVOLVING LOAN LIMIT
BORROWING BASE:
A. Eligible Inventory Amount (Line IIE) $
B. 75% of Eligible Receivables (Line IIID) $
-------------------------
C. Total Borrowing Base (A+B) $
D. Less: Total outstanding principal balance and
Letter of Credit Usage (Line ID + Line IE)
E. Net Borrowing Base (C-D)
F. REVOLVING LOAN LIMIT (LESSER OF LINE IF OR $
LINE IVE)
=========================
Dated as of this _____ day of _____________, __________.
TRENDWEST RESORTS, INC.
By
--------------------------------------
Its
-----------------------------------
EXHIBIT C
COPY OF JELD-WEN NOTE
PROMISSORY NOTE
$17,731,000.00 (U.S.) KLAMATH FALLS, OREGON
JUNE 1, 2000
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
JELD-Wen, inc., an Oregon corporation, at its office at 3250 Lakeport Boulevard,
Klamath Falls, OR 97601, or at such other place as the holder of this Note
(hereinafter, "holder") may from time to time designate in writing, the sum of
Seventeen Million Seven Hundred Thirty-One Thousand and NO/100 Dollars
($17,731,000.00) in lawful money of the United States, with interest thereon
from the date of this Note until paid at the rate set forth below, computed on
monthly balances. Interest for each full calendar month during the term of this
Note shall be calculated on the basis of a 360-day year and twelve 30-day
months. Interest for any partial calendar month at the beginning of the term of
this Note shall be calculated on the basis of a 360-day year and the actual
number of days in that month. Interest for any partial calendar month at the end
of the term of this Note shall be calculated on the basis of a 365- or 366-day
year and the actual number of days in that month.
1. Interest Rate.
The per annum interest rate hereunder (the "Note Rate") shall be nine
percent (9%).
2. Payments.
Payments will be made on the schedule attached hereto as Exhibit 1.
3. Maturity.
Unless sooner repaid by Borrower, the entire unpaid principal balance of
this Note, plus all accrued but unpaid interest, and all other amounts owing
hereunder shall be due and payable in full on June 1, 2003 (the "Maturity
Date").
4. Application of Payments.
Payments shall be applied: (i) first, to the payment of accrued
interest; (ii) second, to the reduction of principal of this Note.
5. Prepayment.
Borrower may, upon thirty (30) days' prior written notice to holder,
prepay its obligation under this Note in full or in part on any Quarterly
Payment Date without penalty.
R-1
6. Late Charge.
If any amount payable hereunder is paid more than ten (10) days after
the due date thereof, Borrower promises to pay a late charge of five percent
(5%) of the delinquent amount as liquidated damages for the extra expense in
handling past due payments.
7. Default; Remedies.
If default is made in the payment of any amount payable hereunder when
due, then, at the option of holder, the entire indebtedness evidenced hereby
shall become immediately due and payable. Upon default, and without notice or
demand, all amounts owed under this Note, including all accrued but unpaid
interest, shall thereafter bear interest at the rate of five percent (5%) per
annum above the Note Rate (the "Default Rate") until such default is cured.
Failure to exercise any option granted to holder hereunder shall not waive the
right to exercise the same in the event of any subsequent default. Interest at
the Default Rate shall commence to accrue upon default under this Note,
including the failure to pay this Note at maturity.
8. Attorney Fees.
In the event of any default under this Note, or in the event that any
dispute arises relating to the interpretation, enforcement or performance o this
Note, holder shall be entitled to collect from Borrower on demand all fees and
expenses incurred in connection therewith, including but not limited to fees of
attorneys, accountants, appraisers, environmental inspectors, consultants,
expert witnesses, arbitrators, mediators, and court reporters. Without limiting
the generality of the foregoing, Borrower shall pay all such costs and expenses
incurred in connection with (a) arbitration or other alternative dispute
resolution proceedings, trial court actions, and appeals; (b) bankruptcy or
other insolvency proceedings of Borrower, any guarantor or other party liable
for any of the obligations of this Note, or any party having any interest in any
security for any of those obligations; (c) judicial or nonjudicial foreclosure
on, or appointment of a receiver for, any property securing this Note; (d)
postjudgment collection proceedings; (e) all claims, counterclaims,
cross-claims, and defenses asserted in any of the foregoing whether or not they
arise out of or are related to this Note or any security for this Note; (f) all
preparation for any of the foregoing; and (g) all settlement negotiations with
respect to any of the foregoing.
9. Miscellaneous.
(a) Every person or entity at any time liable for the payment of the
indebtedness evidenced hereby waives presentment for payment, demand,
and notice of nonpayment of this Note. Every such person or entity
further hereby consents to any extension of the time of payment hereof
or other modification of the terms of payment of this Note or the
release of any party liable for the payment of the indebtedness
evidenced hereby at any time and from time to time at the request of
anyone now or hereafter liable therefor. Any such extension or release
may be made without notice to any of such persons or entities and
without discharging their liability.
(b) Each person or entity who signs this Note is jointly and severally
liable for the full repayment of the entire indebtedness evidenced
hereby and the full performance of each and every obligation contained
in the Security Documents.
(c) The headings to the various sections have been inserted for
convenience of reference only and do not define, limit, modify, or
expand the express provisions of this Note.
(d) Time is of the essence under this Note and in the performance of
every term, covenant, and obligation contained herein.
(e) This Note is made with reference to and is to be construed in
accordance with the laws of the State of Oregon.
DATED as of the day and year first above written.
TRENDWEST RESORTS, INC.
an Oregon corporation
By
--------------------------------------
Its
-----------------------------------