EXHIBIT 10.11(a)
Conformed Copy reflecting
First Amendment of 3/14/97,
Second Amendment of 5/30/97,
and Third Amendment of 9/19/97,
CREDIT AGREEMENT
among
THE VAIL CORPORATION
(D/B/A "VAIL ASSOCIATES, INC.")
Borrower
NATIONSBANK OF TEXAS, N.A.
Agent
and
THE LENDERS NAMED HEREIN
$340,000,000
JANUARY 3, 1997
TABLE OF CONTENTS
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Page
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SECTION 1 DEFINITIONS AND TERMS........................................................ 1
1.1 Definitions.................................................................. 1
1.2 Number and Gender of Words................................................... 15
1.3 Accounting Principles........................................................ 15
SECTION 2 COMMITMENT................................................................... 15
2.1 Credit Facility.............................................................. 15
2.2 Loan Procedure............................................................... 16
2.3 LC Subfacility............................................................... 16
SECTION 3 TERMS OF PAYMENT............................................................. 19
3.1 Notes and Payments........................................................... 19
3.2 Interest and Principal Payments; Voluntary Commitment Reductions............. 19
3.3 Interest Options............................................................. 21
3.4 Quotation of Rates........................................................... 21
3.5 Default Rate................................................................. 21
3.6 Interest Recapture........................................................... 21
3.7 Interest Calculations........................................................ 21
3.8 Maximum Rate................................................................. 22
3.9 Interest Periods............................................................. 22
3.10 Conversions.................................................................. 22
3.11 Order of Application......................................................... 22
3.12 Sharing of Payments, Etc..................................................... 22
3.13 Booking Loans................................................................ 23
3.14 Basis Unavailable or Inadequate for LIBOR.................................... 23
3.15 Additional Costs............................................................. 23
3.16 Change in Laws............................................................... 24
3.17 Funding Loss................................................................. 24
3.18 Foreign Lenders.............................................................. 24
3.19 Affected Lender's Obligation to Mitigate..................................... 24
3.20 Replacement Lender........................................................... 25
SECTION 4 FEES......................................................................... 25
4.1 Treatment of Fees............................................................ 25
4.2 Underwriting and Administrative Fees......................................... 25
4.3 LC Fees...................................................................... 25
4.4 Commitment Fee............................................................... 25
SECTION 5 SECURITY..................................................................... 25
5.1 Guaranties................................................................... 25
5.2 Collateral................................................................... 26
5.3 Additional Security and Guaranties........................................... 26
5.4 Financing Statements......................................................... 26
SECTION 6 CONDITIONS PRECEDENT......................................................... 27
6.1 Initial Advance.............................................................. 27
6.2 Each Advance................................................................. 28
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SECTION 7 REPRESENTATIONS AND WARRANTIES............................................... 28
7.1 Regulation U................................................................. 28
7.2 Corporate Existence, Good Standing, Authority and Compliance................. 28
7.3 Subsidiaries................................................................. 29
7.4 Authorization and Contravention.............................................. 29
7.5 Binding Effect............................................................... 29
7.6 Financial Statements; Fiscal Year............................................ 29
7.7 Litigation................................................................... 29
7.8 Taxes........................................................................ 29
7.9 Environmental Matters........................................................ 29
7.10 Employee Plans............................................................... 30
7.11 Properties and Liens......................................................... 30
7.12 Chief Executive Offices...................................................... 30
7.13 Government Regulations....................................................... 30
7.14 Transactions with Affiliates................................................. 30
7.15 Debt......................................................................... 30
7.16 Material Agreements.......................................................... 31
7.17 Labor Matters................................................................ 31
7.18 Solvency..................................................................... 31
7.19 Trade Names.................................................................. 31
7.20 Intellectual Property........................................................ 31
7.21 Full Disclosure.............................................................. 31
7.22 Stock Purchase Agreement..................................................... 31
SECTION 8 AFFIRMATIVE COVENANTS........................................................ 31
8.1 Items to be Furnished........................................................ 31
8.2 Use of Proceeds.............................................................. 32
8.3 Books and Records............................................................ 33
8.4 Inspections.................................................................. 33
8.5 Taxes........................................................................ 33
8.6 Payment of Obligations....................................................... 33
8.7 Expenses..................................................................... 33
8.8 Maintenance of Existence, Assets, and Business............................... 33
8.9 Insurance.................................................................... 34
8.10 Preservation and Protection of Rights........................................ 34
8.11 Environmental Laws........................................................... 34
8.12 Subsidiaries................................................................. 34
8.13 Indemnification.............................................................. 34
8.14 Interest Rate Hedging........................................................ 35
SECTION 9 NEGATIVE COVENANTS........................................................... 35
9.1 Taxes........................................................................ 35
9.2 Payment of Obligations....................................................... 35
9.3 Employee Plans............................................................... 35
9.4 Debt......................................................................... 35
9.5 Liens........................................................................ 35
9.6 Transactions with Affiliates................................................. 35
9.7 Compliance with Laws and Documents........................................... 35
9.8 Loans, Advances and Investments.............................................. 35
9.9 Management Fees and Distributions............................................ 37
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9.10 Sale of Assets................................................................ 37
9.11 Mergers and Dissolutions...................................................... 37
9.12 Assignment.................................................................... 37
9.13 Fiscal Year and Accounting Methods............................................ 37
9.14 New Businesses................................................................ 37
9.15 Government Regulations........................................................ 37
SECTION 10 FINANCIAL COVENANTS........................................................... 38
10.1 Maximum Leverage Ratio........................................................ 38
10.2 Minimum Fixed Charge Coverage Ratio........................................... 38
10.3 Interest Coverage Ratio....................................................... 39
SECTION 11 DEFAULT....................................................................... 39
11.1 Payment of Obligation......................................................... 39
11.2 Covenants..................................................................... 39
11.3 Debtor Relief................................................................. 40
11.4 Judgments and Attachments..................................................... 40
11.5 Government Action............................................................. 40
11.6 Misrepresentation............................................................. 40
11.7 Ownership..................................................................... 40
11.8 Default Under Other Agreements................................................ 40
11.9 Validity and Enforceability of Loan Papers.................................... 40
11.10 Employee Plans................................................................ 40
SECTION 12 RIGHTS AND REMEDIES........................................................... 41
12.1 Remedies Upon Default......................................................... 41
12.2 Company Waivers............................................................... 41
12.3 Performance by Agent.......................................................... 41
12.4 Not in Control................................................................ 41
12.5 Course of Dealing............................................................. 41
12.6 Cumulative Rights............................................................. 41
12.7 Application of Proceeds....................................................... 42
12.8 Diminution in Value of Collateral............................................. 42
12.9 Certain Proceedings........................................................... 42
SECTION 13 AGREEMENT AMONG LENDERS....................................................... 42
13.1 Agent......................................................................... 42
13.2 Expenses...................................................................... 43
13.3 Proportionate Absorption of Losses............................................ 43
13.4 Delegation of Duties; Reliance................................................ 43
13.5 Limitation of Agent's Liability............................................... 44
13.6 Default; Collateral........................................................... 44
13.7 Limitation of Liability....................................................... 45
13.8 Relationship of Lenders....................................................... 45
13.9 Collateral Matters............................................................ 45
13.10 Benefits of Agreement......................................................... 45
SECTION 14 MISCELLANEOUS................................................................. 45
14.1 Headings...................................................................... 45
14.2 Nonbusiness Days; Time........................................................ 45
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14.3 Communications................................................................ 45
14.4 Form and Number of Documents.................................................. 46
14.5 Exceptions to Covenants....................................................... 46
14.6 Survival...................................................................... 46
14.7 Governing Law................................................................. 46
14.8 Invalid Provisions............................................................ 46
14.9 Venue; Service of Process; Jury Trial......................................... 46
14.10 Amendments, Consents, Conflicts and Waivers................................... 47
14.11 Multiple Counterparts......................................................... 47
14.12 Successors and Assigns; Participation......................................... 48
14.13 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances... 49
14.14 Entirety...................................................................... 49
SCHEDULES AND EXHIBITS
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Schedule 1 Parties, Addresses, Committed Sums, and Wiring Information
Schedule 2 Critical Assets
Schedule 2.3 Existing Letters of Credit
Schedule 3.2 Amortization of Term Loans
Schedule 7.2 Jurisdictions of Incorporation and Business
Schedule 7.3 Corporate Structure
Schedule 7.7 Litigation Summary
Schedule 7.9 Material Environmental Matters
Schedule 7.14 Transactions with Affiliates
Schedule 7.19 Trade Names
Exhibit A-1 Revolving Credit Promissory Note
Exhibit A-2 Tranche A Promissory Note
Exhibit A-3 Tranche B Promissory Note
Exhibit B Guaranty
Exhibit C Pledge Agreement
Exhibit D Loan Request
Exhibit E Compliance Certificate
Exhibit F Conversion Request
Exhibit G LC Request
Exhibit H Assignment
CREDIT AGREEMENT
----------------
This Credit Agreement is entered into as of January 3, 1997, among The Vail
Corporation, a Colorado corporation doing business as "Vail Associates, Inc."
("BORROWER"), the Lenders (defined below), and NationsBank of Texas, N.A., as
Agent for itself and the other Lenders.
In consideration of the mutual covenants contained herein, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower, Lenders, and Agent hereby agree as follows:
SECTION 1 DEFINITIONS AND TERMS.
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1.1 Definitions.
-----------
AFFILIATE means with respect to any Person (the "relevant Person") (i) any
other Person that directly, or indirectly through one or more intermediaries,
controls the relevant Person (a "Controlling Person") or (ii) any Person (other
than the relevant Person) which is controlled by or is under common control with
a Controlling Person. As used herein, the term "control" means possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
AGENT means NationsBank of Texas, N.A., a national banking association, and
its successor or successors as agent for Lenders under this Agreement.
APPLICABLE MARGIN means, for any day, the margin of interest over the Base
Rate or LIBOR, as the case may be, that is applicable when any interest rate is
determined under this Agreement, as follows:
(a) With respect to the Revolving Credit Tranche and the Tranche A
Term Loan, the Applicable Margin is subject to adjustment (upwards or
downwards, as appropriate) based on the ratio of Funded Debt to Resort
EBITDA, as follows:
RATIO OF FUNDED DEBT APPLICABLE APPLICABLE
TO RESORT EBITDA MARGIN FOR MARGIN FOR
LIBOR BASE RATE
LOANS LOANS
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Less than 2.00 to 1.00 0.500% 0.000%
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Greater than or equal to 0.750% if Subordinated 0.000%
2.00 to 1.00, but less than Debt comprises 15% or less
2.75 to 1.00 of Funded Debt and 0.625%
if Subordinated Debt
comprises more than 15%
of Funded Debt
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Greater than or equal to 1.000% if Subordinated 0.000%
2.75 to 1.00, but less than Debt comprises 15% or less
3.50 to 1.00 of Funded Debt and 0.875%
if Subordinated Debt
comprises more than 15%
of Funded Debt
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Greater than or equal to 1.375% if Subordinated 0.000%
3.50 to 1.00, but less than Debt comprises 15% or less
4.00 to 1.00 of Funded Debt and
1.250% if Subordinated Debt
comprises more than 15%
of Funded Debt
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Greater than or equal to 1.750% if Subordinated 0.250% if
4.00 to 1.00 Debt comprises 15% or less Subordinated
of Funded Debt and 1.625% Debt comprises
if Subordinated Debt 15% or less of
comprises more than 15% Funded Debt and
of Funded Debt 0.125% if
Subordinated
Debt comprises
more than 15%
of Funded Debt
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Prior to Agent's receipt of the Companies' consolidated unaudited
Financial Statements for the Companies' fiscal year ended July 31, 1997,
the ratio of Funded Debt to Resort EBITDA shall be deemed to be greater
than 4.00 to 1.00 until the receipt of such Financial Statements (unless
and until VRI has received Net Equity Proceeds of at least $65,000,000,
whereupon the ratio shall be deemed to be greater than 2.75 to 1.00, but
less than 3.50 to 1.00 until the receipt of such Financial Statements).
After Agent's receipt of the Companies' consolidated unaudited
Financial Statements for the Companies' fiscal year ended July 31, 1997,
the ratio of Funded Debt to Resort EBITDA shall be calculated on a
consolidated basis for the Companies in accordance with GAAP for the most
recently completed fiscal year of the Companies for which results are
available. The ratio shall be determined from the Current Financials and
any related Compliance Certificate. However, if Borrower fails to furnish
to Agent the Current Financials and any related Compliance Certificate when
required pursuant to SECTION 8.1, then the ratio shall be deemed to be
greater than 4.00 to 1.00 until Borrower furnishes the required Current
Financials and any related Compliance Certificate to Agent. Furthermore,
if the Companies' audited Financial Statements subsequently delivered to
Agent for such fiscal year pursuant to SECTION 8.1(a)(ii) result in a
different ratio, such revised ratio (whether higher or lower) shall govern
effective as of the date of such delivery. For purposes of determining
such ratio, Resort EBITDA for any fiscal year shall include on a pro forma
basis all EBITDA for such period relating to assets acquired (including
Restricted Subsidiaries formed or organized) during such period, but shall
exclude on a pro forma basis all EBITDA for such period relating to any
such assets disposed of in accordance with this Agreement during such
period.
(b) With respect to the Tranche B Term Loan, the Applicable Margin is
(i) 2.250% for LIBOR Loans and 0.750% for Base Rate Loans, if Subordinated
Debt comprises 15% or less of Funded Debt, and (ii) 2.125% for LIBOR Loans
and 0.625% for Base Rate Loans, if Subordinated Debt comprises more than
15% of Funded Debt. Notwithstanding the foregoing, if VRI receives Net
Equity Proceeds of at least $65,000,000 within 60 days after Borrower's
receipt of clearance for the Ralston Resorts Acquisition from the U.S.
Justice Department under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, then the Applicable Margin for the Tranche B Term Loan
is subject to adjustment (upwards or downwards, as appropriate) based on
the ratio of Funded Debt to Resort EBITDA, as follows:
RATIO OF FUNDED DEBT APPLICABLE APPLICABLE
TO RESORT EBITDA MARGIN FOR MARGIN FOR
LIBOR BASE RATE
LOANS LOANS
- --------------------------------------------------------------------------------
Less than 2.00 to 1.00 0.625% 0.000%
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Greater than or equal to 0.875% if Subordinated 0.000%
2.00 to 1.00, but less than Debt comprises 15% or less
2.75 to 1.00 of Funded Debt and 0.750%
if Subordinated Debt
comprises more than 15%
of Funded Debt
- --------------------------------------------------------------------------------
Greater than or equal to 1.125% if Subordinated 0.000%
2.75 to 1.00, but less than Debt comprises 15% or less
3.50 to 1.00 of Funded Debt and 1.000%
if Subordinated Debt
comprises more than 15%
of Funded Debt
- --------------------------------------------------------------------------------
Greater than or equal to 1.500% if Subordinated 0.000%
3.50 to 1.00, but less than Debt comprises 15% or less
4.00 to 1.00 of Funded Debt and 1.375%
if Subordinated Debt
comprises more than 15%
of Funded Debt
- --------------------------------------------------------------------------------
Greater than or equal to 1.875% if Subordinated 0.375% if
4.00 to 1.00 Debt comprises 15% or less Subordinated
of Funded Debt and 1.750% Debt comprises
if Subordinated Debt 15% or less of
comprises more than 15% Funded Debt and
of Funded Debt 0.250% if
Subordinated
Debt comprises
more than 15%
of Funded Debt
- --------------------------------------------------------------------------------
If VRI receives Net Equity Proceeds of at least $65,000,000 within 60
days after Borrower's receipt of clearance for the Ralston Resorts
Acquisition from the U.S. Justice Department under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, then (x) prior to Agent's
receipt of the Companies' unaudited consolidated Financial Statements for
the Companies' fiscal year ended July 31, 1997, the ratio of Funded Debt to
Resort EBITDA shall be deemed to be greater than 2.75 to 1.00, but less
than 3.50 to 1.00, and (y) thereafter, the ratio shall be determined as
described in the last paragraph of part (a) above of this definition.
APPLICABLE PERCENTAGE means, for any day, the commitment fee percentage
applicable under SECTION 4.4 when commitment fees are determined under this
Agreement. The Applicable Percentage is subject to adjustment (upwards or
downwards, as appropriate) based on the ratio of Funded Debt to Resort EBITDA,
as follows:
RATIO OF FUNDED DEBT APPLICABLE
TO RESORT EBITDA PERCENTAGE
- -------------------------------------------------------------
Less than 2.00 to 1.00 0.200%
- -------------------------------------------------------------
Greater than or equal to 2.00 to 1.00, 0.250%
but less than 2.75 to 1.00
- -------------------------------------------------------------
- --------------------------------------------------------------------
Greater than or equal to 2.75 to 1.00, 0.300%
but less than 3.50 to 1.00
- --------------------------------------------------------------------
Greater than or equal to 3.50 to 1.00, 0.375%
but less than 4.00 to 1.00
- --------------------------------------------------------------------
Greater than or equal to 4.00 to 1.00 0.500% if Subordinated
Debt comprises 15% or
less of Funded Debt and
0.375% if Subordinated
Debt comprises more than
15% of Funded Debt
- --------------------------------------------------------------------
The ratio of Funded Debt to Resort EBITDA shall be determined as described in
the second and third paragraphs of part (a) of the definition of "Applicable
Margin."
APOLLO means any one or more of the following: Apollo Advisors, L.P., a
Delaware limited partnership, or any fund, investment vehicle or account
managed, advised or controlled by Apollo Advisors, L.P., or any of its
Affiliates, other than the Companies.
BASE RATE means, for any day, the greater of (a) the annual interest rate
most recently announced by Agent as its prime rate (which may not necessarily
represent the lowest or best rate actually charged to any customer) in effect at
its principal office in Dallas, Texas, automatically fluctuating upward and
downward as specified in each announcement without special notice to Borrower or
any other Person, and (b) the sum of the Federal Funds Rate plus 0.5%.
BASE RATE LOAN means a Loan bearing interest at the sum of the Base Rate
plus the Applicable Margin.
BC HOUSING BONDS means the Eagle County, Colorado, Taxable Housing
Facilities Revenue Bonds (BC Housing, LLC Project) Series 1997A in the original
principal amount of $9,100,000.
BC HOUSING INDENTURE means the Trust Indenture dated as of June 1, 1997,
between Eagle County, Colorado, as Issuer, and the BC Housing Trustee, relating
to the BC Housing Bonds, as amended, supplemented or restated from time to time.
BC HOUSING LC means the irrevocable transferable LC to be issued by Agent
to the BC Housing Trustee, under the terms of which it will be entitled to draw,
with respect to the BC Housing Bonds, up to (a) an amount sufficient to pay (i)
the principal of the BC Housing Bonds when due, or (ii) the portion of the
purchase price of the BC Housing Bonds tendered or deemed tendered for purchase
in accordance with the BC Housing Indenture and not subsequently remarketed
corresponding to the principal amount of such bonds, plus (b) an amount equal to
approximately 35 days of accrued interest on the BC Housing Bonds (at up to 15%
per annum in accordance with the BC Housing Indenture), to pay (i) interest on
the BC Housing Bonds when due, or (ii) the portion of the purchase price of BC
Housing Bonds tendered or deemed tendered for purchase in accordance with the BC
Housing Indenture and not subsequently remarketed corresponding to accrued
interest then due on such bonds. The BC Housing LC will be in the maximum
amount of $9,232,709 and will expire on June 15, 2002. The BC Housing LC will
constitute an LC issued under this Agreement.
BC HOUSING TRUSTEE means Colorado National Bank, as the Trustee under the
BC Housing Trust Indenture, and any successor thereto.
BORROWER is defined in the preamble to this Agreement.
BUSINESS DAY means any day, other than Saturday, Sunday, and any other day
that commercial banks are authorized or required by Law to be closed in Texas or
New York or, for purposes of any LIBOR Loan, in London.
CAPITAL LEASE means any capital lease or sublease that has been (or under
GAAP should be) capitalized on a balance sheet.
CHANGE OF CONTROL TRANSACTION means the occurrence of any transaction or
event, other than the issuance and sale in a public offering of equity
securities of VRI, as a result of which transaction or event Apollo shall cease
to possess, and some other Person shall obtain, in either case directly or
indirectly, the power to direct or cause the direction of the management or
policies of VRI, whether through the ownership of voting securities, by contract
or otherwise.
CLOSING DATE means the date on which counterparts of this Agreement have
been executed and delivered to Agent by each party hereto in accordance with
SECTION 14.11.
CODE means the Internal Revenue Code of 1986, as amended from time to time,
and related rules and regulations from time to time in effect.
COLLATERAL is defined in SECTION 5.2.
COLLATERAL AGENCY AGREEMENT means the Collateral Agency Agreement dated as
of November 23, 1993, among VHI, Borrower, Beaver Creek Associates, Inc.,
NationsBank of Texas, N.A., as agent for certain lenders to Borrower,
NationsBank of Texas, N.A., as Collateral Agent, and the Indenture Trustees for
the Vail Bonds named therein.
COMMITTED SUM means the aggregate amount (as reduced and canceled under
this Agreement) stated beside a Lender's name for the Facility on SCHEDULE 1 as
most recently amended under this Agreement.
COMPANIES means VRI and each of VRI's Restricted and Unrestricted
Subsidiaries now or hereafter existing.
COMPLIANCE CERTIFICATE means a certificate substantially in the form of
EXHIBIT E and signed by Borrower's Chief Financial Officer, together with the
calculation worksheet described therein.
CONVERSION REQUEST means a request substantially in the form of EXHIBIT F.
CURRENT FINANCIALS means, at any time, the consolidated Financial
Statements of the Companies most recently delivered to Agent under SECTION 6.1,
8.1(a) or 8.1(b), as the case may be.
DEBT of any Person means at any date, without duplication (and calculated
in accordance with GAAP), (a) all Funded Debt of such Person, (b) all
obligations of such Person to pay the deferred purchase price of property or
services, other than (i) obligations under employment contracts or deferred
employee compensation plans and (ii) trade accounts payable and other expenses
or payables arising in the ordinary course of business, (c) all Debt of others
secured by a Lien on any asset of such Person (or for which the holder of the
Debt has an existing Right, contingent or otherwise, to be so secured), whether
or not such Debt is assumed by such Person, and (d) all guarantees and other
contingent obligations (as a general partner or otherwise) of such Person with
respect to Debt of others.
DEBTOR RELIEF LAWS means the Bankruptcy Reform Act of 1978, as amended from
time to time, and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments or similar Laws affecting creditors' Rights from time to time in
effect.
DEFAULT is defined in SECTION 11.
DEFAULT RATE means an annual rate of interest equal from day to day to the
lesser of (a) the then-existing Base Rate plus 2%, and (b) the Maximum Rate.
DISTRIBUTION means, with respect to any shares of any capital stock or
other equity securities issued by a Person, (a) the retirement, redemption,
purchase or other acquisition for value of those securities by such Person, (b)
the payment of any dividend on or with respect to those securities by such
Person, (c) any loan or advance by that Person to, or other investment by that
Person in, the holder of any of those securities, and (d) any other payment by
that Person with respect to those securities.
EBITDA means earnings before interest expenses, taxes and non-cash
operating charges (such as depreciation and amortization expense), and
extraordinary gains and losses, calculated on a consolidated basis for the
Companies in accordance with GAAP.
EMPLOYEE PLAN means an employee pension benefit plan covered by Title IV of
ERISA and established or maintained by any Company.
ENVIRONMENTAL LAW means any Law that relates to the pollution or protection
of ambient air, water or land or to Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and related rules and regulations.
EXCESS CASH FLOW means, in respect of any period, the following, calculated
on a consolidated basis for the Restricted Companies in accordance with GAAP:
(a) net income (excluding gains from dispositions of assets), plus depreciation
and amortization expense, plus other noncash charges, minus other noncash income
for such period, minus (b) the sum of Scheduled Principal Payments, voluntary
prepayments of principal on the Term Loans and payments or prepayments of
principal on other non-revolving indebtedness during such period, plus capital
expenditures during such period (including permitted investments under SECTION
9.8(i)).
EXISTING CREDIT AGREEMENTS means (a) the Credit Agreement dated as of
November 23, 1993, among Borrower, NationsBank of Texas, N.A., as agent, and the
banks named therein (as amended by (i) the Amended and Restated Permanent Credit
Agreement dated as of February 7, 1994, (ii) the First Amendment to Amended and
Restated Permanent Credit Agreement dated as of June 1, 1994, (iii) the Second
Amended and Restated Credit Agreement dated as of March 31, 1995, and (iv) the
First Amendment to Second Amended and Restated Credit Agreement of even date
herewith), providing for credit in an amount up to $105,000,000, and (b) the
Credit Agreement dated as of March 31, 1995, among Borrower, NationsBank of
Texas, N.A., as agent, and the banks named therein, providing for credit in an
amount up to $30,000,000.
FACILITY means, collectively, the Revolving Credit Tranche, the Tranche A
Term Loan and the Tranche B Term Loan.
FEDERAL FUNDS RATE means, for any day, the annual rate (rounded upwards, if
necessary, to the nearest 0.01%) determined (which determination is conclusive
and binding, absent manifest error) by Agent to be equal to the weighted average
of the rates on overnight federal funds transactions with member banks of the
Federal Reserve System arranged by federal funds brokers on that day, as
published by the Federal Reserve Bank of New York on the next Business Day, or,
if those rates are not published for any day, the average of the quotations at
approximately 10:00 a.m. received by Agent from three federal funds brokers of
recognized standing selected by Agent in its sole discretion.
FINANCIAL HEDGE means a swap, collar, floor, cap or other contract between
Borrower and any Lender or
an Affiliate of any Lender (or another Person reasonably acceptable to Agent),
which is intended to reduce or eliminate the risk of fluctuations in interest
rates and which is legal and enforceable under applicable Law.
FINANCIAL STATEMENTS of a Person means balance sheets, profit and loss
statements, reconciliations of capital and surplus, and statements of cash flow
prepared (a) according to GAAP, and (b) other than as stated in SECTION 1.3, in
comparative form to prior year-end figures or corresponding periods of the
preceding fiscal year, as applicable.
FOREST SERVICE ASSIGNMENTS means, collectively (a) Assignments in Trust of
each of the Forest Service Permits, and (b) any replacement of all or any
portion of the foregoing, as contemplated by SECTION 5.3(b).
FOREST SERVICE PERMITS means the Vail Forest Service Permits and the
Ralston Forest Service Permits.
FUNDED DEBT means the following, calculated on a consolidated basis for the
Restricted Companies in accordance with GAAP: (i) all obligations for borrowed
money (whether as a direct obligation on a promissory note, bond, zero coupon
bond, debenture or other similar instrument, or as an unfulfilled reimbursement
obligation on a drawn letter of credit or similar instrument, or otherwise),
plus (but without duplication) (ii) all Capital Lease obligations (other than
the interest component of such obligations) of any Restricted Company.
FUNDING LOSS means any loss or expense that any Lender reasonably incurs
because (a) Borrower fails or refuses (for any reason whatsoever, other than a
default by Agent or the Lender claiming such loss or expense) to take any Loan
that it has requested under this Agreement, or (b) Borrower pays any LIBOR Loan
or converts any LIBOR Loan to a Base Rate Loan, in each case, before the last
day of the applicable Interest Period.
GAAP means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time.
GUARANTOR means any Company which has executed and delivered a Guaranty.
GUARANTY means a guaranty substantially in the form of EXHIBIT B.
HAZARDOUS SUBSTANCE means any substance that is defined or classified as a
hazardous waste, hazardous material, pollutant, contaminant or toxic or
hazardous substance under any Environmental Law.
INTELLECTUAL PROPERTY means (a) common law, federal statutory, state
statutory and foreign trademarks or service marks (including, without
limitation, all registrations and pending applications and the goodwill of the
business symbolized by or conducted in connection with any such trademark or
service mark), trademark or service mark licenses and all proceeds of trademarks
or service marks (including, without limitation, license royalties and proceeds
from infringement suits), (b) United States and foreign patents (including,
without limitation, all pending applications, continuations, continuations-in-
part, divisions, reissues, substitutions and extensions of existing patents or
applications), patent licenses and all proceeds of patents (including, without
limitation, license royalties and proceeds from infringement suits), (c)
copyrights (including, without limitation, all registrations and pending
applications), copyright licenses and all proceeds of copyrights (including,
without limitation, license royalties and proceeds from infringement suits), and
(d) trade secrets, but does not include (i) any licenses (including, without
limitation, liquor licenses) or any permits (including, without limitation,
sales tax permits) issued by a Tribunal and in which (y) the licensee's or
permittee's interest is defeasible by such Tribunal and (z) the licensee or
permittee has no right beyond the terms, conditions and periods of the license
or permit, or (ii) trade names or "dba"s to the extent they do not constitute
trademarks or service marks.
INTEREST PERIOD is determined in accordance with SECTION 3.9.
LAWS means all applicable statutes, laws, treaties, ordinances, rules,
regulations, orders, writs, injunctions, decrees and judgments.
LC means (a) each of the Smith Creek LCs, the BC Housing LC and each
existing letter of credit issued by Agent for the account of any of the
Companies and described on SCHEDULE 2.3, and (b) each other letter of credit (in
such form as shall be customary in respect of obligations of a similar nature
and as shall be reasonably requested by Borrower) issued by Agent under this
Agreement and an LC Agreement.
LC AGREEMENT means a letter of credit application and agreement (in form
and substance satisfactory to Agent in its reasonable discretion) submitted by
Borrower to Agent for an LC for the account of any Company.
LC EXPOSURE means, without duplication, the sum of (a) the aggregate face
amount of all undrawn and uncancelled LCs, plus (b) the aggregate unpaid
reimbursement obligations of Borrower under drawings or drafts under any LC.
LC REQUEST means a request substantially in the form of EXHIBIT G.
LC SUBFACILITY means a subfacility under the Revolving Credit Tranche for
the issuance of LCs, as described in SECTION 2.3.
LENDERS means each of the lenders named on the attached SCHEDULE 1 or on
the most recently amended SCHEDULE 1, if any, delivered by Agent under this
Agreement, and, subject to this Agreement, their respective successors and
assigns (but not any Participant who is not otherwise a party to this
Agreement).
LIBOR means, with respect to any LIBOR Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page (or any successor
page or any successor service for the purpose of displaying London interbank
offered rates of major banks) as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on Reuters Screen
LIBO Page (or any successor page), the applicable rate shall be the arithmetic
mean of all such rates.
LIBOR LOAN means a Loan bearing interest at the sum of LIBOR plus the
Applicable Margin.
LIEN means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, a Person shall be deemed to own subject to a Lien
any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
LITIGATION means any action by or before any Tribunal.
LOAN means any amount disbursed by any Lender to Borrower or on behalf of
any Company under the Loan Papers, either as an original disbursement of funds,
the continuation of an amount outstanding, or payment under an LC.
LOAN DATE is defined in SECTION 2.2(a).
LOAN PAPERS means (a) this Agreement and the Notes, (b) the Security
Documents and documents related thereto and each Guaranty, (c) all LCs and LC
Agreements, (d) any Financial Hedge between Borrower and any
Lender or an Affiliate of any Lender, and (e) all renewals, extensions and
restatements of, and amendments and supplements to, any of the foregoing.
LOAN REQUEST means a request substantially in the form of EXHIBIT D.
MATERIAL ADVERSE EVENT means any (a) material impairment of the ability of
the Restricted Companies as a whole to perform their payment or other material
obligations under the Loan Papers or material impairment of the ability of Agent
or any Lender to enforce any of the material obligations of the Restricted
Companies as a whole under the Loan Papers, or (b) material and adverse effect
on the financial condition of the Restricted Companies as a whole.
MATERIAL AGREEMENT means, for any Person, any agreement (excluding purchase
orders for material, services or inventory in the ordinary course of business)
to which that Person is a party, by which that Person is bound, or to which any
assets of that Person may be subject, and that is not cancelable by that Person
upon 30 or fewer days' notice without liability for further payment, other than
nominal penalty, and that requires that Person to pay more than $2,000,000
during any 12-month period.
MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for a Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest that,
under applicable Law, such Lender is permitted to contract for, charge, take,
reserve or receive on the Obligation held by such Lender.
MULTIEMPLOYER PLAN means a multiemployer plan as defined in Sections 3(37)
or 4001(a)(3) of ERISA or Section 414(f) of the Code to which any Company (or
any Person that, for purposes of Title IV of ERISA, is a member of Borrower's
controlled group or is under common control with Borrower within the meaning of
Section 414 of the Code) is making, or has made, or is accruing, or has accrued,
an obligation to make contributions.
NET EQUITY PROCEEDS means the net cash proceeds received by the Companies
from the issuance and sale of equity securities.
NOTE means a promissory note substantially in the form of EXHIBIT A-1, A-2,
or A-3, as amended, supplemented or restated.
OBLIGATION means all present and future indebtedness and obligations, and
all renewals, increases and extensions thereof, or any part thereof, now or
hereafter owed to Agent and Lenders by the Companies under the Loan Papers,
together with all interest accruing thereon, fees, costs and expenses
(including, without limitation, all attorneys' fees and expenses incurred in the
enforcement or collection thereof) payable under the Loan Papers or in
connection with the protection of Rights under the Loan Papers.
PARTICIPANT is defined in SECTION 14.12(b).
PBGC means the Pension Benefit Guaranty Corporation, or any successor
thereof, established under ERISA.
PERMITTED DEBT means:
(a) the Obligation;
(b) amounts owed, and all guarantee obligations in existence on the
date hereof of any Company, in connection with the Vail Bonds and the
Ralston Bonds;
(c) Subordinated Debt of VRI, VHI or Borrower and Debt incurred to
refinance VRI's 12- 1/4% Senior Subordinated Notes Due 2002;
(d) Debt arising from endorsing negotiable instruments for collection
in the ordinary course of business;
(e) contingent obligations of Borrower under the $10,115,000 Standby
Bond Purchase Agreement between Borrower and Colorado National Bank, as
Trustee, dated July 9, 1996;
(f) in addition to the foregoing, (i) Debt of Unrestricted
Subsidiaries which is non-recourse to the Restricted Companies and their
assets, (ii) fees and other amounts payable under the Forest Service
Permits in the ordinary course of business, and (iii) inter-Company Debt
between Restricted Companies;
(g) approximately $3,000,000 remaining outstanding under a $4,500,000
term loan payable by Ralston Resorts to National Australia Bank Limited in
connection with the Keystone Conference Center and refinancings thereof;
and
(h) in addition to the foregoing, up to $40,000,000 of additional
Debt of the Companies in the aggregate at any point in time.
PERMITTED LIENS means:
(a) Liens directly securing the Obligation;
(b) Liens created by, or pursuant to, the Collateral Agency Agreement
for the benefit of the holders of the Vail Bonds and the Debt Service
Reserve Funds established pursuant to the Loan Agreements described in the
Collateral Agency Agreement;
(c) Liens on the amounts in the Bond Fund, Redemption Fund and Rebate
Fund established and maintained in accordance with the provisions of the
documents executed in connection with the issuance of the Ralston Bonds;
(d) Liens on assets of Unrestricted Subsidiaries securing Debt which
is non-recourse to the Restricted Companies and their assets;
(e) purchase money liens which encumber only the assets acquired;
(f) pledges or deposits made to secure payment of workers'
compensation, unemployment insurance or other forms of governmental
insurance or benefits or to participate in any fund in connection with
workers' compensation, unemployment insurance, pensions or other social
security programs;
(g) good-faith pledges or deposits made to secure performance of
bids, tenders, contracts (other than for the repayment of borrowed money)
or leases, or to secure statutory obligations, surety or appeal bonds or
indemnity, performance or other similar bonds in the ordinary course of
business;
(h) encumbrances and restrictions on the use of real property which
do not materially impair the use thereof;
(i) the following, if either (1) no amounts are due and payable and
no Lien has been filed or agreed to, or (2) the validity or amount thereof
is being contested in good faith by lawful proceedings diligently
conducted, reserve or other provision required by GAAP has been made, levy
and execution thereon have been (and continue to be) stayed or payment
thereof is covered in full (subject to the customary deductible) by
insurance: (i) Liens for Taxes; (ii) Liens upon, and defects of title to,
property, including any attachment of property or other legal process prior
to adjudication of a dispute on the merits;
(iii) Liens imposed by operation of law (including, without limitation,
Liens of mechanics, materialmen, warehousemen, carriers and landlords, and
similar Liens); and (iv) adverse judgments on appeal;
(j) any interest or title of a lessor or licensor in assets being
leased or licensed to a Company;
(k) licenses, leases or subleases granted to third Persons which do
not interfere in any material respect with the business conducted by the
Companies;
(l) any Lien on any asset of any corporation that becomes a
Subsidiary of VRI, which Lien exists at the time such corporation becomes a
Subsidiary of VRI and is not created in contemplation thereof;
(m) in respect of Water Rights, the provisions of the instruments
evidencing such Water Rights and any matter affecting such Water Rights
which does not affect the Companies' rights to sufficient quantity and
quality of water to conduct business as in effect on the date hereof or any
expansion planned as of the date hereof (including, without limitation, any
Lien of the Colorado Water Conservation Board, or its successors and
assigns, on stock owned by any Company in a Colorado ditch and reservoir
company formed in accordance with the Colorado Corporation Code, as
amended);
(n) in respect of the Forest Service Permits, the provisions of the
instruments evidencing such permits and all rights of the United States and
its agencies with respect thereto or with respect to the land affected
thereby; and
(o) Liens on cash accounts not to exceed $250,000 in the aggregate at
the FirstBank of Vail established in connection with collateralizing a
portion, if any, of certain second mortgage loans made by such bank, and
guaranteed by Borrower, as part of the Vail Associates Home Mortgage
Program for Borrower's employees.
PERSON means any individual, partnership, entity or Tribunal.
PLEDGE AGREEMENTS means the following, each of even date herewith and
substantially in the form of EXHIBIT C: (a) Pledge Agreement from VRI relating
to the capital stock issued by VHI and each of VRI's other direct Restricted
Subsidiaries, (b) Pledge Agreement from VHI relating to the capital stock issued
by Borrower, (c) Pledge Agreement from Borrower relating to the capital stock
issued by Ralston Resorts and Borrower's other direct Restricted Subsidiaries,
(d) Pledge Agreement from Ralston Resorts relating to the capital stock issued
by its Restricted Subsidiaries and its Rights with respect to Distributions from
Keystone/Intrawest L.L.C., (e) Pledge Agreement from Vail Associates Real Estate
Group, Inc., relating to the capital stock issued by its direct Restricted
Subsidiaries, (f) Pledge Agreement from Beaver Creek Associates, Inc., relating
to the capital stock issued by its Restricted Subsidiary, and (g) Pledge
Agreement from Vail Associates Real Estate, Inc., relating to the capital stock
issued by its Restricted Subsidiary and its 50% ownership interest in Slifer,
Smith & Frampton/Vail Associates Real Estate, L.L.C.
POTENTIAL DEFAULT means the occurrence of any event or existence of any
circumstance that would, upon notice or lapse of time or both, become a Default.
PRINCIPAL DEBT means, at any time, the unpaid principal balance of all
Loans.
PRO RATA and PRO RATA PART means, when determined for any Lender, (a) with
respect to the Revolving Credit Tranche, if no Principal Debt is outstanding,
the proportion (stated as a percentage) that its commitment for such Tranche
bears to Lenders' aggregate commitment for such Tranche, or if any Principal
Debt is outstanding, the proportion (stated as a percentage) that its Principal
Debt under such Tranche bears to all such Principal Debt, (b)
with respect to the Tranche A Term Loan or the Tranche B Term Loan, the
proportion (stated as a percentage) that its Principal Debt under such Tranche
bears to all such Principal Debt, and (c) with respect to the Facility as a
whole, if no Default or Potential Default exists, the proportion (stated as a
percentage) that its Committed Sum bears to the Total Commitment, or if a
Default or Potential Default exists, the proportion (stated as a percentage)
that the Principal Debt owed to it bears to the aggregate Principal Debt owed to
all Lenders.
PURCHASER is defined in SECTION 14.12(c).
QUARTERLY DATE means each March 31, June 30, September 30 and December 31.
RALSTON BONDS means (a) the Summit County, Colorado, Sports Facilities
Refunding Revenue Bonds (Keystone Resorts Management, Inc. Project) Series 1990,
in the original principal amount of $20,360,000, (b) the Summit County,
Colorado, Sports Facilities Refunding Revenue Bonds (Keystone Resorts
Management, Inc. Project) Series 1991, in the original principal amount of
$3,000,000, and (c) refinancings of any of the foregoing.
RALSTON FOREST SERVICE PERMITS means (a) Term Special Use Permit Holder No.
5289-01 for Keystone ski area issued by the Service to Ralston Resorts on
December 31, 1996, and expiring on December 31, 2032; (b) Term Special Use
Permit Holder No. 5289-04 for Breckenridge ski area issued by the Service to
Ralston Resorts on December 31, 1996, and expiring on December 31, 2029; (c)
Term Special Use Permit Holder No. 5289-02 for Arapahoe Basin ski area issued by
the Service to Ralston Resorts on December 31, 1996, and expiring on December
31, 2029; and (d) any replacements of any of the foregoing, as contemplated by
SECTION 5.3(b).
RALSTON RESORTS means Ralston Resorts, Inc., a Colorado corporation.
RALSTON RESORTS ACQUISITION means Borrower's acquisition of all of the
capital stock of Ralston Resorts from Ralston Foods, Inc., pursuant to the Stock
Purchase Agreement.
REPRESENTATIVES means representatives, officers, directors, employees,
attorneys and agents.
REQUIRED LENDERS means Lenders holding more than (a) 50% of the Total
Commitment, if no Default or Potential Default exists, or (b) 50% of the
outstanding Principal Debt, if a Default or Potential Default exists.
RESERVE REQUIREMENT means, with respect to any LIBOR Loan for the relevant
Interest Period, the maximum aggregate reserve requirements (including all
basic, supplemental, emergency, special, marginal and other reserves required by
applicable Law) applicable to a member bank of the Federal Reserve System for
eurocurrency fundings or liabilities.
RESORT EBITDA means EBITDA, minus EBITDA related to real estate activities,
and minus any portion of EBITDA attributable to Unrestricted Subsidiaries.
RESPONSIBLE OFFICER means the chairman, president, chief executive officer
or chief financial officer of Borrower.
RESTRICTED COMPANY means VRI, VHI, Borrower and all of VRI's other direct
and indirect Subsidiaries (other than Unrestricted Subsidiaries).
RESTRICTED SUBSIDIARY means VHI, Borrower and all of VRI's other direct and
indirect Subsidiaries (other than Unrestricted Subsidiaries).
REVOLVING CREDIT COMMITMENT means the amount (as reduced and canceled under
this Agreement) so designated beside a Lender's name on SCHEDULE 1 as most
recently amended under this Agreement.
REVOLVING CREDIT COMMITMENT USAGE means, at any time, the sum of (a) the
aggregate Principal Debt under the Revolving Credit Tranche, plus (b) the LC
Exposure.
REVOLVING CREDIT TERMINATION DATE means the earlier of (a) April 15, 2003,
and (b) the effective date that the Lenders' commitments to lend under this
Agreement are otherwise canceled or terminated.
REVOLVING CREDIT TRANCHE is defined in SECTION 2.1.
RIGHTS means rights, remedies, powers, privileges and benefits.
SCHEDULED PRINCIPAL PAYMENTS means the installments of principal due on the
Term Loans as described on SCHEDULE 3.2.
SECURITY DOCUMENTS means, collectively, the Pledge Agreements, the Forest
Service Assignments and any other security agreements or similar documents
entered into by any Restricted Company from time to time pursuant to the Loan
Papers, as amended, supplemented or restated.
SERVICE means the United States Department of Agriculture Forest Service or
any successor agency.
SMITH CREEK BONDS means the Smith Creek Metropolitan District, Eagle
County, Colorado Variable Rate Revenue Bonds, the initial series of which was
Series 1995 in the original principal amount of $26,000,000 and the second
series of which will be Series 1997 in the original principal amount of
$18,500,000.
SMITH CREEK INDENTURE means the Trust Indenture dated as of April 1, 1995,
by and between Smith Creek Metropolitan District, as Issuer, and the Smith Creek
Trustee, relating to the Smith Creek Bonds, as supplemented by the First
Supplemental Trust Indenture dated as of March 1, 1997, by and between Smith
Creek Metropolitan District and the Smith Creek Trustee, and as amended, further
supplemented or restated from time to time.
SMITH CREEK LC means either of the two irrevocable transferable LCs issued
to the Smith Creek Trustee, under the terms of which it will be entitled to
draw, with respect to the applicable series of Smith Creek Bonds, up to (a) an
amount sufficient to pay (i) the principal of the "Outstanding Bonds" (as
defined in the Smith Creek Indenture) when due, or (ii) the portion of the
purchase price of Outstanding Bonds tendered or deemed tendered for purchase in
accordance with the Smith Creek Indenture and not subsequently remarketed
corresponding to the principal amount of such bonds, plus (b) an amount equal to
approximately 185 days of accrued interest on the Outstanding Bonds (at 12% per
annum or such higher rate as the Smith Creek Trustee may designate in accordance
with the Smith Creek Indenture), to pay (i) interest on the Outstanding Bonds
when due, or (ii) the portion of the purchase price of Outstanding Bonds
tendered or deemed tendered for purchase in accordance with the Smith Creek
Indenture and not subsequently remarketed corresponding to accrued interest then
due on such bonds. The initial Smith Creek LC, issued in connection with the
Series 1995 Smith Creek Bonds, was in the maximum amount of $27,581,370 and, as
amended, will expire on October 15, 2002. The second Smith Creek LC, issued in
connection with the Series 1997 Smith Creek Bonds, will be in the maximum amount
of $19,625,206 and will also expire on October 15, 2002. Each Smith Creek LC
will constitute an LC issued under this Agreement.
SMITH CREEK TRUSTEE means Colorado National Bank, as the Successor Trustee
under the Smith Creek Trust Indenture, and any future successor thereto.
SOLVENT means, as to a Person, that (a) the aggregate fair market value of
its assets exceeds its liabilities, (b) it has sufficient cash flow to enable it
to pay its Debts as they mature, and (c) it does not have unreasonably small
capital to conduct its businesses.
STOCK PURCHASE AGREEMENT means the Stock Purchase Agreement dated July 22,
1996, among VRI, Ralston Foods, Inc., and Ralston Resorts, as amended.
SUBORDINATED DEBT means (a) VRI's 12- 1/4% Senior Subordinated Notes Due
2002, currently in the amount of $62,647,000 and (b) any other unsecured
indebtedness for borrowed money for which a Company is directly and
primarily obligated that (i) does not have any stated maturity before the latest
maturity of any part of the Obligation if such indebtedness was created after
the Closing Date, (ii) has terms that are no more restrictive upon the Company
than the terms of the Loan Papers, and (iii) is subordinated, upon terms
satisfactory to Agent, to the payment and collection of the Obligation.
SUBSIDIARY means with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person.
TAXES means, for any Person, taxes, assessments or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises or assets.
TERM LOANS means the Tranche A Term Loan and the Tranche B Term Loan.
TOTAL COMMITMENT means, at any time, the sum of all Committed Sums for all
Lenders (as reduced or canceled under this Agreement) then in effect.
TRANCHE means each of the Revolving Credit Tranche, the Tranche A Term Loan
and the Tranche B Term Loan.
TRANCHE A COMMITMENT means the amount (as reduced or canceled under this
Agreement) so designated beside a Lender's name on SCHEDULE 1 as most recently
amended under this Agreement.
TRANCHE A TERMINATION DATE means the earlier of (a) April 15, 2003, and (b)
the effective date that Lenders' commitments to lend under this Agreement are
otherwise canceled or terminated.
TRANCHE A TERM LOAN is defined in SECTION 2.1(b).
TRANCHE B COMMITMENT means the amount (as reduced or canceled under this
Agreement) so designated beside a Lender's name on SCHEDULE 1 as most recently
amended under this Agreement.
TRANCHE B TERMINATION DATE means the earlier of (a) April 15, 2004, and (b)
the effective date that Lenders' commitments to lend under this Agreement are
otherwise canceled or terminated.
TRANCHE B TERM LOAN is defined in SECTION 2.1(c).
TRIBUNAL means any (a) local, state, or federal judicial, executive, or
legislative instrumentality, (b) private arbitration board or panel, or (c)
central bank.
TRUSTEE means the Smith Creek Trustee or the BC Housing Trustee, and
TRUSTEES means the Smith Creek Trustee and the BC Housing Trustee.
TYPE means any type of Loan determined with respect to the applicable
interest option.
UCP means The Uniform Customs and Practice for Documentary Credits, 1993
Revision, International Chamber of Commerce Publication No. 500 (as amended or
modified).
UNRESTRICTED SUBSIDIARY means Vail Associates Investments, Inc., and any
newly-formed Subsidiary created by Borrower pursuant to SECTION 8.12 (which may
be a partnership, joint venture, corporation or other entity) (a) which does not
own any Forest Service Permit or the stock of any Restricted Company (regardless
of
whether the Liens of the Security Documents relating to such assets have been
released) or any of the assets described on SCHEDULE 2, (b) which has (and whose
other partners, joint venturers or shareholders have) no Debt or other material
obligation which is recourse to any Restricted Company or to the assets of any
Restricted Company (other than with respect to limited guarantees or other
recourse agreements of the Companies which are permitted to be incurred
hereunder within the $40,000,000 of recourse Debt allowed under clause (h) of
the definition of "Permitted Debt"), and (c) which has been designated by
Borrower as an Unrestricted Subsidiary by notice to Agent.
VAIL BONDS means (a) the Eagle County, Colorado, Sports Facilities Revenue
Refunding Bonds (Beaver Creek Associates Project) Series 1992, in the original
principal amount of $19,600,000, (b) the Eagle County, Colorado, Sports and
Housing Facilities Refunding Bonds (Vail Associates Project) Series 1992, in the
original principal amount of $21,600,000, and (c) refinancings of any of the
foregoing.
VAIL FOREST SERVICE PERMITS means (a) Ski Area Term Special Use Permit
Holder No. 4056/01 issued by the Service to Borrower for the Vail ski area on
November 23, 1993, and expiring on October 31, 2031; (b) Term Special Use Permit
No. Holder 4191/01 issued by the Service to Borrower's wholly-owned subsidiary,
Beaver Creek Associates, Inc., for the Beaver Creek ski area on January 29,
1980, and expiring on December 31, 2006; (c) Special Use Permit Holder No.
4191/02 issued by the Service to Beaver Creek Associates, Inc., on January 29,
1980, to supplement Term Special Use Permit Holder No. 4191/01, and expiring on
December 31, 2006; and (d) any replacements of any of the foregoing, as
contemplated by SECTION 5.3(b).
VHI means Vail Holdings, Inc., a Colorado corporation and the direct owner
of Borrower.
VRI means Vail Resorts, Inc., a Delaware corporation and the indirect owner
of Borrower.
WATER RIGHTS means all water rights and conditional water rights that are
appurtenant to real property owned by the Companies or that have been used or
are intended for use in connection with the conduct of the business of the
Companies, including but not limited to (a) ditch, well, pipeline, spring and
reservoir rights, whether or not adjudicated or evidenced by any well or other
permit, (b) all rights with respect to groundwater underlying any real property
owned by the Companies, (c) any permit to construct any water well, water from
which is intended to be used in connection with such real property, and (d) all
right, title and interest of the Companies under any decreed or pending plan of
augmentation or water exchange plan.
1.2 Number and Gender of Words. The singular number includes the plural
--------------------------
where appropriate and vice versa, and words of any gender include each other
gender where appropriate.
1.3 Accounting Principles. Under the Loan Papers and any documents
---------------------
delivered thereunder, unless otherwise stated, (a) GAAP in effect on the date of
this Agreement determines all accounting and financial terms and compliance with
financial covenants, (b) otherwise, all accounting principles applied in a
current period must be comparable in all material respects to those applied
during the preceding comparable period, and (c) while VRI has any consolidated
Restricted Subsidiaries, all accounting and financial terms and compliance with
financial covenants must be on a consolidating and consolidated basis, as
applicable.
SECTION 2 COMMITMENT.
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2.1 Credit Facility.
---------------
(a) Subject to the provisions in the Loan Papers, each Lender shown
on SCHEDULE 1 as providing a Revolving Credit Commitment hereby severally
and not jointly agrees to lend to Borrower its Pro Rata Part (in accordance
with its Revolving Credit Commitment) of one or more revolving Loans in an
aggregate principal amount outstanding at any time up to such Lender's
Revolving Credit Commitment which Borrower may borrow, repay, and reborrow
under this Agreement (collectively for all Lenders, the "REVOLVING CREDIT
TRANCHE"). Revolving Credit Loans are subject to the following conditions:
(i) Each Revolving Credit Loan must occur on a Business Day
and no later than the Business Day immediately preceding the Revolving
Credit Termination Date;
(ii) Each Revolving Credit Loan must be in an amount not less
than (i) $500,000 or a greater integral multiple of $100,000 (if a
Base Rate Loan), or (ii) $1,000,000 or a greater integral multiple of
$100,000 (if a LIBOR Loan);
(iii) When determined, (i) Revolving Credit Commitment Usage may
not exceed the aggregate commitment under the Revolving Credit Tranche
(as such amount is reduced and canceled in accordance with this
Agreement), and (ii) for any Lender, its Pro Rata Part of the
Revolving Credit Commitment Usage may not exceed such Lender's
Revolving Credit Commitment; and
(iv) During each fiscal year of the Companies there must be a
period of at least 30 consecutive days (which period must include
April 15th of such year) when the unused portion of the aggregate
commitment under the Revolving Credit Tranche equals or exceeds
$50,000,000.
(b) Subject to the provisions in the Loan Papers, each Lender shown
on SCHEDULE 1 as providing a Tranche A Commitment hereby severally and not
jointly agrees to lend to Borrower on the Closing Date its part of a single
disbursement of funds in the amount of such Lender's Tranche A Commitment
which, when repaid, may not be reborrowed hereunder (collectively for all
Lenders, the "TRANCHE A TERM LOAN").
(c) Subject to the provisions in the Loan Papers, each Lender shown
on SCHEDULE 1 as providing a Tranche B Commitment hereby severally and not
jointly agrees to lend to Borrower on the Closing Date its part of a single
disbursement of funds in the amount of such Lender's Tranche B Commitment
which, when repaid, may not be reborrowed hereunder (collectively for all
Lenders, the "TRANCHE B TERM LOAN").
2.2 Loan Procedure.
--------------
(a) Borrower may request a Loan by submitting to Agent a Loan
Request, which is irrevocable and binding on Borrower. It must be received
by Agent no later than 1:00 p.m. on the third Business Day preceding the
date on which funds are requested (the "LOAN DATE") for any LIBOR Loan or
no later than 1:00 p.m. on the Business Day immediately preceding the Loan
Date for any Base Rate Loan. Agent shall promptly notify each Lender of
its receipt of any Loan Request and its contents.
(b) Each Lender shall remit its applicable Pro Rata Part of each
requested Loan under a Tranche for which such Lender has provided a
commitment to Agent's principal office in Dallas, Texas, in funds that are
available for immediate use by Agent by 11:00 a.m. on the applicable Loan
Date. Subject to receipt of such funds, Agent shall (unless to its actual
knowledge any of the applicable conditions precedent have not been
satisfied by Borrower or waived by Required Lenders) make such funds
available to Borrower as directed in the Loan Request.
(c) Absent contrary written notice from a Lender, Agent may assume
that each Lender which has provided a commitment for the relevant Tranche
has made its Pro Rata Part of the requested Loan available to Agent on the
applicable Loan Date, and Agent may, in reliance upon such assumption (but
shall not be required to), make available to Borrower a corresponding
amount. If a Lender fails to make such Pro Rata Part of any requested Loan
available to Agent on the applicable Loan Date, Agent may recover the
applicable amount on demand (i) from that Lender, together with interest at
the Federal Funds Rate during the period commencing on the date the amount
was made available to Borrower by Agent and
ending on (but excluding) the date Agent recovers the amount from that
Lender, or (ii), if that Lender fails to pay its amount upon demand, then
from Borrower, together with interest at an annual interest rate equal to
the rate applicable to the requested Loan during the period commencing on
the Loan Date and ending on (but excluding) the date Agent recovers the
amount from Borrower. No Lender is responsible for the failure of any other
Lender to fund any part of any Loan.
2.3 LC Subfacility.
--------------
(a) Subject to the terms and conditions of this Agreement and
applicable Law, Agent agrees to issue LCs under the Revolving Credit
Tranche upon Borrower's delivery of an LC Request and an LC Agreement, each
of which must be received by Agent no later than 1:00 p.m. on the third
Business Day preceding the date on which the requested LC is to be issued;
provided that the LC Exposure may not exceed $85,000,000 and the Revolving
Credit Commitment Usage may not exceed the aggregate commitment under the
Revolving Credit Tranche (as such amount is reduced and canceled in
accordance with this Agreement). Each LC (other than Smith Creek LCs) must
expire no later than 13 months from its issuance; provided that any LC
(other than Smith Creek LCs) may, at Borrower's request, provide that it is
self-extending upon its expiration date for successive periods of 6 to 12
months each (as selected by Borrower), unless Agent has given the
beneficiary thereunder at least 30 days (but no more than 120 days) prior
written notice to the contrary (provided, however, that such notice shall
in no event be given by Agent unless (i) Agent is directed so to do by
Borrower or (ii) a Default exists). Amounts drawn under Smith Creek LCs
are subject to reinstatement upon the terms set forth therein. In no event
may any LC have an expiration date later than the Revolving Credit
Termination Date.
(b) Immediately upon Agent's issuance of any LC, Agent shall be
deemed to have sold and transferred to each Lender with a Revolving Credit
Commitment, and each such Lender shall be deemed irrevocably and
unconditionally to have purchased and received from Agent, without recourse
or warranty, an undivided interest and participation (to the extent of such
Lender's Pro Rata Part of the Revolving Credit Tranche) in the LC and all
applicable Rights of Agent in the LC (other than Rights to receive the
fronting fees provided for in SECTION 4.3). Agent shall provide a copy of
each LC to each such Lender promptly after issuance.
(c) To induce Agent to issue and maintain LCs, and to induce Lenders
to participate in issued LCs, Borrower agrees to pay or reimburse Agent (i)
on or before the date when any draft or draw request is presented under any
LC, the amount paid or to be paid by Agent (subject to a credit, in the
case of a Smith Creek LC or the BC Housing LC, for any portion of such
reimbursement received by Agent directly from the relevant Trustee for the
account of Borrower under the relevant Indenture) and (ii) promptly, upon
demand, the amount of any additional fees Agent customarily charges for the
application and issuance of an LC, for amending LC Agreements, for honoring
drafts and draw requests, and taking similar action in connection with
letters of credit. If Borrower (or, in the case of a drawing under a Smith
Creek LC or the BC Housing LC, the relevant Trustee) has not reimbursed
Agent for any drafts or draws paid or to be paid and Borrower has not
requested a Loan to fund such reimbursement obligations within 24 hours
following Agent's demand for reimbursement, Agent is irrevocably authorized
to fund Borrower's reimbursement obligations as a Loan under the Revolving
Credit Tranche(and the proceeds of the Loan shall be advanced directly to
Agent to pay Borrower's unpaid reimbursement obligations). If funds cannot
be advanced under the Revolving Credit Tranche because the Revolving Credit
Commitment has been terminated under SECTION 12.1, then Borrower's
reimbursement obligation shall constitute a demand obligation. Borrower's
obligations under this SECTION 2.3(C) are absolute and unconditional under
any and all circumstances and irrespective of any setoff, counterclaim or
defense (other than payment) that Borrower may have at any time against
Agent or any other Person. Agent shall promptly distribute reimbursement
payments received from Borrower to all Lenders according to their Pro Rata
Part of the Revolving Credit Tranche. From the date due to the date paid,
unpaid reimbursement amounts accrue interest that is payable on demand at
the Default Rate.
(d) Agent shall promptly notify Borrower of the date and amount of
any draft or draw request presented for honor under any LC and the date and
amount of any payment by Agent in connection therewith (but failure to give
notice will not affect Borrower's obligations under this Agreement). Agent
shall pay the requested amount upon presentment of a draft or draw request
unless presentment on its face does not comply with the terms of the
applicable LC. When making payment, Agent may disregard (i) any default or
potential default that exists under any other agreement and (ii)
obligations under any other agreement that have or have not been performed
by the beneficiary or any other Person (and Agent is not liable for any of
those obligations). Borrower's reimbursement obligations to Agent and
Lenders, and each Lender's obligations to Agent, under this SECTION 2.3 are
absolute and unconditional irrespective of, and Agent is not responsible
for, (i) the validity, enforceability, sufficiency, accuracy or genuineness
of documents or endorsements (even if they are in any respect invalid,
unenforceable, insufficient, inaccurate, fraudulent or forged), (ii) any
dispute by any Company with or any Company's claims, setoffs, defenses
(other than payment), counterclaims or other Rights against Agent, any
Lender or any other Person, or (iii) the occurrence of any Potential
Default or Default.
(e) If Borrower (or, in the case of a drawing under a Smith Creek LC
or the BC Housing LC, the relevant Trustee) fails to reimburse Agent as
provided in SECTION 2.3(C) within 24 hours after Agent's demand for
reimbursement, and funds cannot be advanced under the Revolving Credit
Tranche to satisfy the reimbursement obligations, Agent shall promptly
notify each Lender of Borrower's failure, of the date and amount paid, and
of each Lender's Pro Rata Part under the Revolving Credit Tranche of the
unreimbursed amount. Each Lender shall promptly and unconditionally make
available to Agent in immediately available funds such Pro Rata Part of the
unpaid reimbursement obligation. Funds are due and payable to Agent before
the close of business on the Business Day when Agent gives notice to each
Lender of Borrower's reimbursement failure (if notice is received by such
Lender before 2:00 p.m.) (in the time zone where such Lender's office
listed on SCHEDULE 1 is located) or on the next succeeding Business Day (if
received after 2:00 p.m.). All amounts payable by any Lender accrue
interest at the Federal Funds Rate from the day the applicable draft or
draw is paid by Agent to (but not including) the date the amount is paid by
the Lender to Agent.
(f) Borrower acknowledges that each LC is deemed issued upon delivery
to the beneficiary or Borrower. If Borrower requests any LC be delivered
to Borrower rather than the beneficiary, and Borrower subsequently cancels
that LC, Borrower agrees to return it to Agent together with Borrower's
written certification that it has never been delivered to the beneficiary.
If any LC is delivered to the beneficiary under Borrower's instructions,
Borrower's cancellation is ineffective without Agent's receipt of the
beneficiary's written consent and the LC. BORROWER SHALL INDEMNIFY AGENT
FOR ALL LOSSES, COSTS, DAMAGES, EXPENSES AND REASONABLE ATTORNEYS' FEES
SUFFERED OR INCURRED BY AGENT RESULTING FROM ANY DISPUTE CONCERNING
BORROWER'S CANCELLATION OF ANY LC.
(g) Agent agrees with each Lender that it will exercise and give the
same care and attention to each LC as it gives to its other letters of
credit. Each Lender and Borrower agree that, in paying any draft or draw
under any LC, Agent has no responsibility to obtain any document (other
than any documents expressly required by the respective LC) or to ascertain
or inquire as to any document's validity, enforceability, sufficiency,
accuracy or genuineness or the authority of any Person delivering it.
Neither Agent nor its Representatives will be liable to any Lender or any
Company for any LC's use or for any beneficiary's acts or omissions. Any
action, inaction, error, delay or omission taken or suffered by Agent or
any of its Representatives in connection with any LC, applicable draws,
drafts or documents, or the transmission, dispatch or delivery of any
related message or advice, if in good faith and in conformity with
applicable Laws and in accordance with the standards of care specified in
the UCP, is binding upon the Companies and Lenders and does not place Agent
or any of its Representatives under any resulting liability to any Company
or any Lender. AGENT AND ITS REPRESENTATIVES ARE NOT LIABLE TO ANY COMPANY
OR ANY LENDER FOR ANY ACTION TAKEN OR OMITTED, IN THE ABSENCE OF GROSS
NEGLIGENCE OR WILLFUL
MISCONDUCT, BY AGENT OR ITS REPRESENTATIVE IN CONNECTION WITH ANY LC.
(h) On the Revolving Credit Termination Date, or during the
continuance of any Default under SECTION 11.3, or upon any demand by Agent
during the continuance of any other Default, Borrower shall provide to
Agent, for the benefit of Lenders, cash collateral in an amount equal to
the then-existing LC Exposure. Any cash collateral provided by Borrower to
Agent hereunder shall be deposited by Agent in an interest-bearing cash
collateral account maintained with Agent at the office of Agent and
invested in obligations issued or guaranteed by the United States and, upon
cure of any Default or upon the surrender of any LC, Agent shall deliver
the appropriate funds (together with interest earned with respect thereto)
on deposit in such collateral account to Borrower.
(i) BORROWER SHALL PROTECT, INDEMNIFY, PAY AND SAVE AGENT, EACH
LENDER AND THEIR RESPECTIVE REPRESENTATIVES HARMLESS FROM AND AGAINST ANY
AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, COSTS, CHARGES AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) WHICH ANY OF THEM MAY INCUR
OR BE SUBJECT TO AS A CONSEQUENCE OF THE ISSUANCE OF ANY LC, ANY DISPUTE
ABOUT IT, OR THE FAILURE OF AGENT TO HONOR A DRAFT OR DRAW REQUEST UNDER
ANY LC, UNLESS THEY ARISE AS A RESULT OF AGENT'S FAILURE TO ACT IN
ACCORDANCE WITH THE PROCEDURES OF THE UCP (AS MODIFIED BY ANY LC AGREEMENT
OR OTHER WRITING BETWEEN BORROWER AND AGENT).
(j) Although referenced in any LC, terms of any particular agreement
or other obligation to the beneficiary are not incorporated into this
Agreement in any manner. The fees and other amounts payable with respect
to each LC are as provided in this Agreement, drafts and draws under each
LC are part of the Obligation, and the terms of this Agreement control any
conflict between the terms of this Agreement and any LC Agreement.
SECTION 3 TERMS OF PAYMENT.
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3.1 Notes and Payments.
------------------
(a) Principal Debt under the Facility shall be evidenced by Notes,
payable to each Lender in the stated principal amount of its Revolving
Credit Commitment, its Tranche A Commitment, and/or its Tranche B
Commitment, as applicable.
(b) Borrower must make each payment on the Obligation to Agent's
principal office in Dallas, Texas, in funds that will be available for
immediate use by Agent by 12:00 noon on the day due; otherwise, but subject
to SECTION 3.8, those funds continue to accrue interest as if they were
received on the next Business Day. Agent shall pay to each Lender any
payment to which that Lender is entitled on the same day Agent receives the
funds from Borrower if Agent receives the payment before 12:00 noon, and
otherwise before 12:00 noon on the following Business Day. If and to the
extent that Agent does not make payments to Lenders when due, unpaid
amounts shall accrue interest at the Federal Funds Rate from the due date
until (but not including) the payment date.
3.2 Interest and Principal Payments; Voluntary Commitment Reductions.
----------------------------------------------------------------
(a) Accrued interest on each LIBOR Loan is due and payable on the
last day of its Interest Period. If any Interest Period with respect to a
LIBOR Loan is a period greater than three months, then accrued interest is
also due and payable on the date three months after the commencement of the
Interest Period. Accrued interest on each Base Rate Loan is due and
payable on each Quarterly Date (commencing December 31, 1996) and on the
Revolving Credit Termination Date, the Tranche A Termination Date, and the
Tranche B Termination Date, respectively, with respect to those portions of
the Principal Debt due on such termination dates.
(b) The Principal Debt under the Revolving Credit Tranche is due and
payable on the Revolving Credit Termination Date. The Principal Debt under
the Term Loans is due and payable in installments as set forth on SCHEDULE
3.2. Upon any mandatory or voluntary prepayment of the Term Loans pursuant
to SECTION 3.2(d) or (e), Agent shall prepare and distribute to Borrower
and Lenders a revised SCHEDULE 3.2 reflecting the application of such
prepayments in accordance with such Sections. In any event, any Principal
Debt and accrued interest remaining outstanding under the Tranche A Term
Loan is due and payable on the Tranche A Termination Date and any Principal
Debt and accrued interest remaining outstanding under the Tranche B Term
Loan is due and payable on the Tranche B Termination Date.
(c) If the Revolving Credit Commitment Usage ever exceeds the
aggregate commitment under the Revolving Credit Tranche, Borrower shall pay
Principal Debt under the Revolving Credit Tranche in at least the amount of
that excess, together with (i) all accrued and unpaid interest on the
principal amount so paid and (ii) any resulting Funding Loss.
(d) Borrower shall make mandatory prepayments on the Term Loans equal
to the following amounts:
(i) Immediately upon receipt thereof, 100% of the net cash
proceeds (after selling expenses and income taxes related thereto and
any reserves for retained liabilities until such liabilities are
extinguished) received by any Restricted Company from any disposition
of:
(A) any asset described on SCHEDULE 2 (other than from the
licensing of Intellectual Property, the sale of equipment for
fair and adequate consideration which is replaced with new or
upgraded equipment, or the sale of inventory, in each case in the
ordinary course of business), and
(B) any other asset (including stock of Subsidiaries) in
excess of $1,000,000 per disposition and in excess of $5,000,000
for all dispositions in any fiscal year of the Companies, other
than (1) proceeds from dispositions of real estate made by the
Companies in the ordinary course of their real estate activities,
and (2) proceeds which are reinvested by the Companies in similar
assets within 180 days;
(ii) On April 15th of each year, commencing with April 15, 1998,
50% of the Restricted Companies' Excess Cash Flow for their preceding
fiscal year; and
(iii) Immediately upon receipt thereof, 100% of the first
$65,000,000 of Net Equity Proceeds (or net cash proceeds received by
the Companies from an issuance of Subordinated Debt) and 50% of any
such net proceeds in excess of $100,000,000 (but, in each case, only
to the extent such proceeds are not used to pay Subordinated Debt,
including accrued interest and premium thereon).
Any mandatory payment of Principal Debt under this SECTION 3.2(d) on the
Term Loans shall be (A) allocated pro rata between the Term Loans, and (B)
then applied pro rata to all remaining installments of principal due on
each Term Loan.
(e) Borrower may voluntarily reduce or prepay the Facility as
follows:
(i) Without premium or penalty and upon giving at least two
Business Days prior written and irrevocable notice to Agent, Borrower
may terminate all or reduce part of the unused portion of the
aggregate Revolving Credit Commitment. Each partial reduction (unless
the remaining portion of such commitment is less) must be in an amount
of not less than $5,000,000
or a greater integral multiple of $1,000,000, and shall be Pro Rata
among all Lenders according to their respective Revolving Credit
Commitments. Once terminated or reduced, such commitments may not be
reinstated or increased.
(ii) Borrower may voluntarily prepay all or any part of the
Principal Debt at any time without premium or penalty, subject to the
following conditions:
(A) Agent must receive Borrower's written payment notice
(which shall specify (1) the payment date, (2) the Type and
amount of the Loan(s) to be paid, (3) whether such payment is to
be applied to the Revolving Credit Tranche or to the Term Loans,
and (4) which option Borrower elects under clause (E) below with
respect to the application of any payment to the Term Loans; such
notice shall constitute an irrevocable and binding obligation of
Borrower to make a payment on the designated date) by 1:00 p.m.
on (x) the third Business Day preceding the date of payment of a
LIBOR Loan and (y) the date of payment of a Base Rate Loan;
(B) each partial payment on the Revolving Credit Tranche
must be in a minimum amount of at least $500,000 if a Base Rate
Loan or $1,000,000 if a LIBOR Loan or, in either case, a greater
integral multiple of $100,000, and each partial payment on the
Term Loans must be in a minimum amount of at least $5,000,000 or
a greater integral multiple of $1,000,000;
(C) all accrued interest on the principal amount so to be
prepaid must also be paid in full on the date of payment;
(D) Borrower shall pay any related Funding Loss upon demand;
and
(E) any voluntary payment of Principal Debt on the Term
Loans shall be (1) allocated pro rata between the Term Loans, and
(2) then applied, at Borrower's option, either pro rata to the
next two installments of principal due on each Term Loan or pro
rata to all remaining installments of principal due on each Term
Loan.
3.3 Interest Options. Except where specifically otherwise provided, Loans
----------------
bear interest at an annual rate equal to the lesser of (a) the Base Rate plus
the Applicable Margin or LIBOR plus the Applicable Margin for the Interest
Period, if any, selected by Borrower (in each case as designated or deemed
designated by Borrower), as the case may be, and (b) the Maximum Rate. Each
change in the Base Rate and Maximum Rate is effective, without notice to
Borrower or any other Person, upon the effective date of change.
3.4 Quotation of Rates. A Responsible Officer of Borrower may call Agent
------------------
before delivering a Loan Request to receive an indication of the interest rates
then in effect, but the indicated rates do not bind Agent or Lenders or affect
the interest rate that is actually in effect when Borrower delivers its Loan
Request or on the Loan Date.
3.5 Default Rate. If permitted by Law, all past-due Principal Debt,
------------
Borrower's past-due payment and reimbursement obligations in connection with
LCs, and past-due interest accruing on any of the foregoing bears interest from
the date due (stated or by acceleration) at the Default Rate until paid,
regardless whether payment is made before or after entry of a judgment.
3.6 Interest Recapture. If the designated interest rate applicable to any
------------------
Loan exceeds the Maximum Rate, the interest rate on that Loan is limited to the
Maximum Rate, but any subsequent reductions in the designated rate shall not
reduce the interest rate thereon below the Maximum Rate until the total amount
of accrued interest equals the amount of interest that would have accrued if
that designated rate had always been in effect. If at maturity (stated or by
acceleration), or at final payment of the Notes, the total interest paid or
accrued is less than
the interest that would have accrued if the designated rates had always been in
effect, then, at that time and to the extent permitted by Law, Borrower shall
pay an amount equal to the difference between (a) the lesser of the amount of
interest that would have accrued if the designated rates had always been in
effect and the amount of interest that would have accrued if the Maximum Rate
had always been in effect, and (b) the amount of interest actually paid or
accrued on the Notes.
3.7 Interest Calculations.
---------------------
(a) Interest will be calculated on the basis of actual number of days
elapsed (including the first day, but excluding the last day), but computed
as if each calendar year consisted of 360 days for LIBOR Loans (unless the
calculation would result in an interest rate greater than the Maximum Rate,
in which event interest will be calculated on the basis of a year of 365 or
366 days, as the case may be), and 365 or 366 days, as the case may be, for
Base Rate Loans. All interest rate determinations and calculations by Agent
are conclusive and binding absent manifest error.
(b) The provisions of this Agreement relating to calculation of the
Base Rate and LIBOR are included only for the purpose of determining the
rate of interest or other amounts to be paid under this Agreement that are
based upon those rates. Each Lender may fund and maintain its funding of
all or any part of each Loan as it selects.
3.8 Maximum Rate. Regardless of any provision contained in any Loan Paper
------------
or any document related thereto, no Lender is entitled to contract for, charge,
take, reserve, receive or apply, as interest on all or any part of the
Obligation any amount in excess of the Maximum Rate, and, if Lenders ever do so,
then any excess shall be treated as a partial payment of principal and any
remaining excess shall be refunded to Borrower. In determining if the interest
paid or payable exceeds the Maximum Rate, Borrower and Lenders shall, to the
maximum extent permitted under applicable Law, (a) treat all Loans as but a
single extension of credit (and Lenders and Borrower agree that is the case and
that provision in this Agreement for multiple Loans is for convenience only),
(b) characterize any nonprincipal payment as an expense, fee or premium rather
than as interest, (c) exclude voluntary payments and their effects, and (d)
amortize, prorate, allocate and spread the total amount of interest throughout
the entire contemplated term of the Obligation. However, if the Obligation is
paid in full before the end of its full contemplated term, and if the interest
received for its actual period of existence exceeds the Maximum Amount, Lenders
shall refund any excess (and Lenders shall not, to the extent permitted by Law,
be subject to any penalties provided by any Laws for contracting for, charging,
taking, reserving or receiving interest in excess of the Maximum Amount).
3.9 Interest Periods. When Borrower requests any LIBOR Loan, Borrower may
----------------
elect the applicable interest period (each an "INTEREST PERIOD"), which may be,
at Borrower's option, one, two, three or six months, subject to the following
conditions: (a) the initial LIBOR Interest Period commences on the applicable
Loan Date or conversion date, and each subsequent LIBOR Interest Period
commences on the day when the next preceding applicable Interest Period expires;
(b) if any LIBOR Interest Period begins on a day for which no numerically
corresponding Business Day in the calendar month at the end of the Interest
Period exists, then the Interest Period ends on the last Business Day of that
calendar month; (c) no LIBOR Interest Period for any portion of Principal Debt
may extend beyond the scheduled payment date for that portion of Principal Debt;
and (d) no more than 20 LIBOR Interest Periods may be in effect at one time.
3.10 Conversions. Subject to the dollar limits and denominations of
-----------
SECTION 2.1(a)(ii) (regardless of whether a conversion relates to a portion of
the Revolving Credit Tranche or to a portion of one of the Term Loans) and the
limitations on LIBOR Interest Periods of SECTION 3.9, Borrower may (a) convert
all or part of a LIBOR Loan on the last day of the applicable Interest Period to
a Base Rate Loan, (b) convert all or part of a Base Rate Loan at any time to a
LIBOR Loan, and (c) elect a new Interest Period for all or part of a LIBOR Loan,
in each case by delivering a Conversion Request to Agent no later than 1:00 p.m.
on the third Business Day before the conversion date or the last day of the
Interest Period, as the case may be (for conversion to a LIBOR Loan or
election of a new Interest Period), and no later than 1:00 p.m. one Business Day
before the last day of the Interest Period (for conversion to a Base Rate Loan).
Absent Borrower's notice of conversion or election of a new Interest Period, a
LIBOR Loan shall be converted to a Base Rate Loan when the applicable Interest
Period expires.
3.11 Order of Application.
--------------------
(a) Mandatory prepayments on the Term Loans under SECTION 3.2(d) and
voluntary payments on the Term Loans under SECTION 3.2(e)(ii) shall be
applied as set forth in such Sections.
(b) If no Default or Potential Default exists, any other payment
shall be applied to the Obligation in the order and manner as Borrower
directs.
(c) If a Default or Potential Default exists or if Borrower fails to
give direction, any other payment (including proceeds from the exercise of
any Rights hereunder) shall be applied in the following order: (i) to all
fees and expenses for which Agent or Lenders have not been paid or
reimbursed in accordance with the Loan Papers (and if such payment is less
than all unpaid or unreimbursed fees and expenses, then the payment shall
be paid against unpaid and unreimbursed fees and expenses in the order of
incurrence or due date); (ii) to accrued interest on the Principal Debt;
and (iii) ratably to the remainder of the Obligation.
3.12 Sharing of Payments, Etc.. If any Lender obtains any payment (whether
-------------------------
voluntary, involuntary or otherwise) that exceeds its combined Pro Rata Part of
the Tranche to which such payment relates (or which relates to a Tranche in
which such Lender does not participate) then that Lender shall purchase from the
other Lenders participations that will cause the purchasing Lender to share the
excess payment ratably with each other Lender. If all or any portion of any
excess payment is subsequently recovered from the purchasing Lender, then the
purchase shall be rescinded and the purchase price restored to the extent of the
recovery. Borrower agrees that any Lender purchasing a participation from
another Lender under this section may, to the fullest extent permitted by Law,
exercise all of its Rights of payment with respect to that participation as
fully as if that Lender were the direct creditor of Borrower in the amount of
that participation.
3.13 Booking Loans. To the extent permitted by Law, any Lender may make,
-------------
carry or transfer its Loans at, to, or for the account of any of its branch
offices or the office of any of its Affiliates. However, no Affiliate is
entitled to receive any greater payment under SECTION 3.15 than the transferor
Lender would have been entitled to receive with respect to those Loans.
3.14 Basis Unavailable or Inadequate for LIBOR. If, on or before any date
-----------------------------------------
when LIBOR is to be determined for a Loan, Agent or any Lender determines (and
Required Lenders agree with that determination) that the basis for determining
the applicable rate is not available or that the resulting rate does not
accurately reflect the cost to Lenders of making or converting Loans at that
rate for the applicable Interest Period, then Agent shall promptly notify
Borrower and Lenders of that determination (which is conclusive and binding on
Borrower absent manifest error) and the applicable Loan shall bear interest at
the sum of the Base Rate plus the Applicable Margin. Until Agent notifies
Borrower that those circumstances no longer exist, Lenders' commitments under
this Agreement to make, or to convert to, LIBOR Loans are suspended.
3.15 Additional Costs.
----------------
(a) With respect to any LIBOR Loan, (i) if any present or future Law
imposes, modifies, or deems applicable (or if compliance by any Lender with
any requirement of any Tribunal results in) any Reserve Requirement, and if
(ii) those reserves reduce any sums receivable by that Lender under this
Agreement or increase the costs incurred by that Lender in advancing or
maintaining any portion of any LIBOR Loan, then (iii) that Lender (through
Agent) shall deliver to Borrower a certificate setting forth in reasonable
detail the calculation of the amount necessary to compensate it for its
reduction or increase
(which certificate is conclusive and binding absent manifest error), and
(iv) Borrower shall promptly pay that amount to that Lender upon demand.
This paragraph shall survive the satisfaction and payment of the Obligation
and termination of this Agreement. This paragraph may be invoked by a
Lender only if such Lender is generally invoking similar provisions against
other Persons to which such Lender lends funds pursuant to facilities
similar to the Facility.
(b) With respect to any Loan or LC, if any present or future Law
regarding capital adequacy or compliance by Agent (as issuer of LCs) or any
Lender with any request, directive or requirement now existing or hereafter
imposed by any Tribunal regarding capital adequacy, or any change in its
written policies or in the risk category of this transaction, reduces the
rate of return on its capital as a consequence of its obligations under
this Agreement to a level below that which it otherwise could have achieved
(taking into consideration its policies with respect to capital adequacy)
by an amount deemed by it to be material (and it may, in determining the
amount, utilize reasonable assumptions and allocations of costs and
expenses and use any reasonable averaging or attribution method), then
(unless the effect is already reflected in the rate of interest then
applicable under this Agreement) Agent or that Lender (through Agent) shall
notify Borrower and deliver to Borrower a certificate setting forth in
reasonable detail the calculation of the amount necessary to compensate it
(which certificate is conclusive and binding absent manifest error), and
Borrower shall promptly pay that amount to Agent or that Lender upon
demand. This paragraph shall survive the satisfaction and payment of the
Obligation and termination of this Agreement. This paragraph may be
invoked by a Lender only if such Lender is generally invoking similar
provisions against other Persons to which such Lender lends funds pursuant
to facilities similar to the Facility.
(c) Any Taxes payable by Agent or any Lender or ruled (by a Tribunal)
payable by Agent or any Lender in respect of any Loan Paper or any document
related thereto shall, if permitted by Law, be paid by Borrower, together
with interest and penalties, if any (other than for Taxes imposed on or
measured by the overall net income of Agent or that Lender and interest and
penalties incurred as a result of the gross negligence or willful
misconduct of Agent or any Lender). Agent or that Lender (through Agent)
shall notify Borrower and deliver to Borrower a certificate setting forth
in reasonable detail the calculation of the amount of payable Taxes, which
certificate is conclusive and binding (absent manifest error), and Borrower
shall promptly pay that amount to Agent for its account or the account of
that Lender, as the case may be. If Agent or that Lender subsequently
receives a refund of the Taxes paid to it by Borrower, then the recipient
shall promptly pay the refund to Borrower.
3.16 Change in Laws. If any Law makes it unlawful for any Lender to make
--------------
or maintain LIBOR Loans, then that Lender shall promptly notify Borrower and
Agent, and (a) as to undisbursed funds, that requested Loan shall be made as a
Base Rate Loan, and (b), as to any outstanding Loan, (i) if maintaining the Loan
until the last day of the applicable Interest Period is unlawful, the Loan shall
be converted to a Base Rate Loan as of the date of notice, and Borrower shall
pay any related Funding Loss, or (ii) if not prohibited by Law, the Loan shall
be converted to a Base Rate Loan as of the last day of the applicable Interest
Period, or (iii) if any conversion will not resolve the unlawfulness, Borrower
shall promptly pay the Loan, without penalty, together with any related Funding
Loss. Concurrently with any payment contemplated by clause (iii) of the
immediately preceding sentence, Borrower shall borrow a Base Rate Loan in an
equal principal amount from such Lender (on which interest and principal shall
be payable contemporaneously with the related LIBOR Loans of the other Lenders)
and such Lender shall fund such Base Rate Loan.
3.17 Funding Loss. BORROWER AGREES TO INDEMNIFY EACH LENDER AGAINST, AND
------------
PAY TO IT UPON DEMAND, ANY FUNDING LOSS OF THAT LENDER. When any Lender demands
that Borrower pay any Funding Loss, that Lender shall deliver to Borrower and
Agent a certificate setting forth in reasonable detail the basis for imposing
Funding Loss and the calculation of the amount, which calculation is conclusive
and binding absent manifest error. The provisions of and undertakings and
indemnification set forth in this paragraph shall survive the satisfaction and
payment of the Obligation and termination of this Agreement.
3.18 Foreign Lenders. Each Lender that is organized under the Laws of any
---------------
jurisdiction other than the
United States of America or any State thereof (a) represents to Agent and
Borrower that (i) no Taxes are required to be withheld by Agent or Borrower with
respect to any payments to be made to it in respect of the Obligation and (ii)
it has furnished to Agent and Borrower two duly completed copies of U.S.
Internal Revenue Service Form 4224 or Form 1001 (wherein it claims entitlement
to complete exemption from U.S. federal withholding tax on all interest payments
under the Loan Papers) or Form W-8, or any other successor tax form acceptable
to Agent and Borrower, and (b) covenants to (i) provide Agent and Borrower a new
tax form upon the expiration, inaccuracy or obsolescence of any previously
delivered form according to, and to the extent permitted by, Law, duly executed
and completed by it, and (ii) comply from time to time with all Laws with regard
to the withholding tax exemption. If any of the foregoing is not true or the
applicable forms are not provided, then Borrower and Agent (without duplication)
may deduct and withhold from interest payments under the Loan Papers United
States federal income tax at the full rate applicable under the Code. In
addition, Borrower shall not be required to make any payments contemplated by
SECTION 3.15(C) to the extent that such payments would not have been payable if
such Lender had furnished the appropriate form (properly and accurately
completed in all respects) which it was otherwise required to furnish in
accordance with this SECTION 3.18.
3.19 Affected Lender's Obligation to Mitigate. Each Lender agrees that, as
----------------------------------------
promptly as practicable after it becomes aware of the occurrence of an event or
the existence of a condition which would entitle it to exercise any rights under
SECTIONS 3.15 OR 3.16, it shall use commercially reasonable efforts to make,
fund or maintain the affected Loans of such Lender through another lending
office of such Lender if (a) as a result thereof the additional moneys which
would otherwise be required to be paid in respect of such Loans of such Lender
would be reduced or the illegality or other adverse circumstances which would
otherwise affect such Loans of such Lender would cease to exist or the increased
cost which would otherwise be required to be paid in respect of such Loans would
be reduced and (b) the making, funding or maintaining of such Loans through such
other lending office would not otherwise materially adversely affect such Loans
or such Lender.
3.20 Replacement Lender. In the event Borrower becomes obligated to pay
------------------
any additional amounts to any Lender pursuant to SECTIONS 3.15 OR 3.16 as a
result of any event or condition described in any of such Sections, then, unless
such Lender has theretofore taken steps to remove or cure, and has removed or
cured, the conditions creating the cause of such obligation to pay such
additional amounts, Borrower may designate a substitute lender acceptable to
Agent (such lender herein called a "REPLACEMENT LENDER") to purchase such
Lender's rights and obligations with respect to its entire Pro Rata Part
hereunder with respect to the Facility as a whole, without recourse to or
warranty by, or expense to, such Lender in accordance with SECTION 14.12(C) for
a purchase price equal to the outstanding principal amounts payable to such
Lender with respect to such Pro Rata Part, plus any accrued and unpaid interest
and accrued and unpaid fees and charges in respect of such Pro Rata Part and on
other terms reasonably satisfactory to Agent. Upon such purchase by the
Replacement Lender and payment of all other amounts owing to the Lender being
replaced hereunder, such Lender shall no longer be a party hereto or have any
rights or obligations hereunder, and the Replacement Lender shall succeed to the
rights and obligations of such Lender with respect to such Pro Rata Part
hereunder.
SECTION 4 FEES.
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4.1 Treatment of Fees. The fees described in this SECTION 4 (a) are not
-----------------
compensation for the use, detention, or forbearance of money, (b) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this Agreement, (c) are payable in accordance with SECTION 3.1(B), (d) are non-
refundable, and (e) to the fullest extent permitted by Law, bear interest, if
not paid when due, at the Default Rate.
4.2 Underwriting and Administrative Fees. Borrower shall pay to
------------------------------------
NationsBank of Texas, N.A. the fees described in the letter agreement between
them of even date herewith.
4.3 LC Fees. Borrower shall pay to Agent for the Pro Rata benefit of
-------
Lenders according to their Revolving Credit Commitments a fee for the issuance
of each LC (which fee may, subject to the provisions of this Agreement, be
included in a Loan) equal to (a) the Applicable Margin for LIBOR Loans under the
Revolving Credit
Tranche (as in effect from day to day while such LC is outstanding), multiplied
by (b) the face amount of such LC as it exists from day to day, payable in
arrears on each Quarterly Date during the life of such LC, and on the expiry
date of such LC, calculated on the basis of the actual number of days elapsed
(including the first day, but excluding the last day), but computed as if each
calendar year consisted of 360 days. In addition, Borrower shall pay to Agent
for its own account a fronting fee for the issuance of each LC equal to 0.125%
of the face amount of such LC (but in no event less than $350).
4.4 Commitment Fee. Borrower shall pay to Agent for the ratable account
--------------
of Lenders a commitment fee, payable as it accrues on each Quarterly Date and on
the Revolving Credit Termination Date, equal to the Applicable Percentage (per
annum), of the amount by which the aggregate commitment under the Revolving
Credit Tranche exceeds the average daily Commitment Usage, in each case during
the calendar quarter (or portion thereof) ending on such date, calculated on the
basis of the actual number of days elapsed (including the first day, but
excluding the last day) in a calendar year of 365 or 366 days, as the case may
be.
SECTION 5 SECURITY.
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5.1 Guaranties. All obligations of Borrower under the Loan Papers to
----------
which it is a party shall be guaranteed in accordance with a Guaranty of even
date herewith, executed by each Restricted Company (other than Borrower).
5.2 Collateral.
----------
(a) All obligations of Borrower under the Loan Papers to which it is
a party shall be secured to the extent and in the manner provided in the
appropriate Security Document by the following (the "COLLATERAL") (i) a
first Lien on all capital stock issued to VRI by its direct Restricted
Subsidiaries, (ii) a first Lien on all capital stock issued to Ralston
Resorts by its Restricted Subsidiaries and on its Rights with respect to
Distributions from Keystone/Intrawest L.L.C., (iii) a second Lien on all
capital stock issued to VHI by Borrower, (iv) a second Lien on all capital
stock issued to Borrower or Borrower's Restricted Subsidiaries by all
companies which were Restricted Subsidiaries of Borrower prior to the
Ralston Acquisition, and the Companies' 50% interest in Slifer, Smith &
Frampton/Vail Associates Real Estate, L.L.C., (v) a first Lien on all
capital stock issued to Borrower or any Restricted Subsidiary of Borrower
by Ralston Resorts and any Restricted Subsidiaries of Borrower created or
acquired after the Ralston Acquisition; (vi) a second Lien on each of the
Vail Forest Service Permits, and (vii) a first Lien on each of the Ralston
Forest Service Permits.
(b) Upon receipt by the Companies of Net Equity Proceeds of at least
$65,000,000 and the application of such proceeds in prepayment of
Subordinated Debt and/or Principal Debt in accordance with SECTION
3.2(D)(III), Liens created by the Security Documents shall terminate and
Agent and Lenders shall release their interests in the Collateral. Upon
compliance with the provisions of the immediately preceding sentence or in
accordance with the provisions of SECTION 14.13, Agent will, at the expense
of Borrower, deliver to Borrower any Collateral that is in its possession
and execute and deliver such documents, certificates or other instruments
as Borrower may reasonably request to evidence the termination of such
Liens and the release of the Collateral.
5.3 Additional Security and Guaranties.
----------------------------------
(a) Lenders may, without notice or demand and without affecting any
Person's obligations under the Loan Papers, from time to time (i) receive
and hold additional collateral from any Person for the payment of all or
any part of the Obligation and exchange, enforce or release all or any part
of that collateral and (ii) accept and hold any endorsement or guaranty of
payment of all or any part of the Obligation and release any endorser or
guarantor, or any Person who has given any other security for the payment
of all or any part of the Obligation, or any other Person in any way
obligated to pay all or any part
of the Obligation; provided, however, that the provisions of this SECTION
5.3(a) shall in no event be construed to obligate any Company to deliver to
any Lender additional collateral.
(b) Borrower may from time to time substitute for any existing Forest
Service Permit another permit, license or grant of right if (i) Borrower
determines that such substitution is in the best interests of the
Companies, (ii) such substitute permit, license or grant of right contains
terms no less beneficial to the Companies than those contained in the
existing Forest Service Permit which it is intended to replace, and (iii)
such substitution does not impair in any material respect the rights of
Agent and Lenders. Upon receipt from Borrower of notice that the Service
has agreed to issue a new permit, license or grant of right in replacement
of an existing Forest Service Permit, and that Borrower elects to exercise
its rights under this SECTION 5.3(b), Agent shall release to Borrower or
(if so requested by Borrower) to the Service directly all instruments in
Agent's possession constituting the Lien on the existing Forest Service
Permit to be replaced. Agent shall also execute and deliver any and all
releases, termination agreements or other similar documents requested by
the Service or reasonably requested by Borrower in connection therewith.
Upon receipt of such instruments and documents, Borrower shall deliver to
Agent, or cause the Service so to deliver to Agent, the new permit, license
or grant of right, together with the Service's standard form collateral
assignment agreement relating thereto reflecting a Lien of the same
priority as the one released.
5.4 Financing Statements. Borrower will execute, or cause to be executed,
--------------------
financing statements, stock powers and other writings in the form and content
reasonably required by Agent, and Borrower will pay all costs of filing any
financing, continuation or termination statements, or other action taken by
Agent relating to the Collateral, including, without limitation, costs and
expenses of any Lien search reasonably required by Agent.
SECTION 6 CONDITIONS PRECEDENT.
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6.1 Initial Advance. In addition to the items described in SECTION 6.2,
---------------
Lenders will not be obligated to fund the initial Loan, and Agent will not be
obligated to issue the initial LC, unless the unused portion of the Revolving
Credit Commitment will be at least $50,000,000 after giving effect to the
Ralston Resorts Acquisition and all Loans and LCs outstanding under the
Revolving Credit Tranche at the close of business on the date the initial Loan
is made or the initial LC is issued and Agent has received each of the following
items:
(a) the Promissory Notes;
(b) a Guaranty executed by each Restricted Company (other than
Borrower);
(c) (i) each Pledge Agreement (together with (A) the stock
certificates for shares subjected to a first Lien under the Pledge
Agreements and blank stock powers for such certificates, and (B) a letter
agreement between Agent and the Collateral Agent under the Collateral
Agency Agreement pursuant to which (x) Agent appoints Collateral Agent as
its agent for purposes of perfecting its security interest in the shares
held by the Collateral Agent under the Collateral Agency Agreement which
are subjected to a second Lien under the Pledge Agreements, and (y) the
Collateral Agent accepts such appointment and acknowledges the second Lien
in favor of Agent),
(ii) the Forest Service Assignments, and
(iii) UCC-1 Financing Statements with respect to the foregoing;
(d) a Second Amendment to the Pledge Agreement dated as of November
23, 1993 (as amended by a First Amendment thereto dated July 1994), among
Borrower, VHI, Beaver Creek Associates, Inc., Vail Associates Real Estate
Group, Inc., and Vail Associates Real Estate, Inc., as obligors, and
NationsBank of Texas, N.A., as the Collateral Agent under the Collateral
Agency Agreement, deleting all references therein which would obligate the
pledgors thereunder to pledge the stock of any future subsidiaries of any
such pledgor (together with appropriate UCC-3 Amendments);
(e) the initial Loan Request or the initial LC Request and LC
Agreement;
(f) an Officers' Certificate for each Company, relating to Articles
of Incorporation, Bylaws, Resolutions, and Incumbency;
(g) Certificates of Existence and Good Standing (Account Status) for
each Company from its state of organization and each other state where it
does business, each dated after September 15, 1996;
(h) Legal opinions of James S. Mandel, and special New York counsel
to Borrower;
(i) Payment in full of all amounts then due Agent under SECTION 8.7
or the fee letter described in SECTION 4.2;
(j) Lien Search Reports for each Company from the State of Colorado,
the Colorado county in which it has its principal place of business and
each other state where it does business, each dated after September 15,
1996;
(k) Copies of the Stock Purchase Agreement and the Shareholder
Agreement referred to therein (and the Ralston Resorts Acquisition shall
have been consummated as described in SECTION 7.22);
(l) (i) Financial Statements showing the consolidated financial
condition and results of operations of the Companies and Ralston Resorts
and its Subsidiaries, respectively, as of, and for the years ended on,
September 30, 1993, 1994 and 1995, and in the case of Ralston Resorts and
its Subsidiaries only, the nine-month period ended June 30, 1996,
accompanied in each case by the unqualified opinion of a firm of
nationally-recognized independent certified public accountants, based on an
audit using generally accepted auditing standards, that such Financial
Statements were prepared in accordance with GAAP and present fairly, in all
material respects, such financial conditions and results, together with a
copy of any management letter prepared by such accounting firm in
connection with such audit, (ii) any Financial Statements for the Companies
or for Ralston Resorts and its Subsidiaries prepared for any interim
financial period ending after the periods covered in the Financial
Statements delivered under clause (i) above, and (iii) a pro forma balance
sheet of the Companies as of the Closing Date giving effect to the Ralston
Resorts Acquisition and the transactions contemplated hereby and reflecting
estimated purchase price accounting adjustments, and such other information
relating to the Ralston Resorts Acquisition as Agent may require;
(m) Copies of all governmental, shareholder and third party consents
and approvals (including, without limitation, those required under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended) necessary
in connection with the Ralston Resorts Acquisition and the related
financings and other transactions contemplated hereby; and
(n) Evidence that all amounts owed under the Existing Credit
Agreements have been paid in full, no letters of credit remain outstanding
thereunder, and all financing commitments thereunder have been terminated.
6.2 Each Advance. Lenders will not be obligated to fund (as opposed to
------------
continue or convert) any Loan (including the initial Loans), and Agent will not
be obligated to issue (as opposed to extend) any LC (including the initial LCs),
unless on the applicable date (and after giving effect to the requested Loan or
LC): (a) Agent shall have timely received a Loan Request or LC Request
(together with the applicable LC Agreement), as the case may be; (b) Agent shall
have received any applicable LC fee; (c) all of the representations and
warranties of the Companies in the Loan Papers are true and correct in all
material respects (unless they speak to a specific date or are based on facts
which have changed by transactions contemplated or permitted by this Agreement);
(d) no Material Adverse Event, Default or Potential Default exists; and (e) the
funding of the Loan or issuance of the LC is permitted by Law. Upon Agent's
reasonable request, Borrower shall deliver to Agent evidence substantiating any
of the matters in the Loan Papers that are necessary to enable Borrower to
qualify for the Loan or LC. Each condition precedent in this Agreement is
material to the transactions contemplated by this Agreement, and time is of the
essence with respect to each condition precedent. Subject to the prior approval
of Required Lenders, Lenders may fund any Loan, and Agent may issue any LC,
without all conditions being satisfied, but, to the extent permitted by Law,
that funding and issuance shall not be deemed to be a waiver of the requirement
that each condition precedent be satisfied as a prerequisite for any subsequent
funding or issuance, unless Required Lenders specifically waive each item in
writing.
SECTION 7 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
- --------- ------------------------------
Agent and Lenders as follows:
7.1 Regulation U. No Company is engaged principally, or as one of its
------------
important activities, in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulations U or
G of the Board of Governors of the Federal Reserve System, as amended.
7.2 Corporate Existence, Good Standing, Authority and Compliance. Each
------------------------------------------------------------
Company is duly organized, validly existing and in good standing under the Laws
of the jurisdiction in which it is incorporated or organized as identified on
SCHEDULE 7.2 (or any revised SCHEDULE 7.2 delivered by Borrower to Lenders
pursuant to SECTION 8.12, 9.10 or 9.11). Except where failure is not a Material
Adverse Event, each Restricted Company (a) is duly qualified to transact
business and is in good standing as a foreign corporation or other entity in
each jurisdiction where the nature and extent of its business and properties
require due qualification and good standing as identified on SCHEDULE 7.2 (or
any such revised SCHEDULE 7.2), and (b) possesses all requisite authority,
permits and power to conduct its business as is now being, or is contemplated by
this Agreement to be, conducted.
7.3 Subsidiaries. VRI has no Subsidiaries, other than as disclosed on
------------
SCHEDULE 7.3 (or on any revised SCHEDULE 7.3 delivered by Borrower to Lenders
pursuant to SECTION 8.12, 9.10 or 9.11). All of the outstanding shares of
capital stock (or similar voting interests) of the Companies are duly
authorized, validly issued, fully paid and nonassessable, and are owned of
record and beneficially as set forth thereon, free and clear of any Liens,
restrictions, claims or Rights of another Person, other than Permitted Liens,
and are not subject to any warrant, option or other acquisition Right of any
Person or subject to any transfer restriction, other than restrictions imposed
by (a) securities Laws and general corporate Laws, and (b) the Security
Documents.
7.4 Authorization and Contravention. The execution and delivery by each
-------------------------------
Company of each Loan Paper or related document to which it is a party and the
performance by it of its obligations thereunder (a) are within its corporate
power, (b) have been duly authorized by all necessary corporate action, (c)
require no action by or filing with any Tribunal (other than any action or
filing that has been taken or made on or before the date of this Agreement), (d)
do not violate any provision of its charter or bylaws, (e) do not violate any
provision of Law or any order of any Tribunal applicable to it, other than
violations that individually or collectively are not a Material Adverse Event,
(f) do not violate any Material Agreements to which it is a party, or (g) do not
result in the creation or imposition of any Lien (other than the Liens created
pursuant to the Security Documents) on any asset of any Company.
7.5 Binding Effect. Upon execution and delivery by all parties thereto,
--------------
each Loan Paper which is a contract will constitute a legal and binding
obligation of each Company party thereto, enforceable against it in accordance
with its terms, except as enforceability may be limited by applicable Debtor
Relief Laws and general principles of equity.
7.6 Financial Statements; Fiscal Year. The Current Financials were
---------------------------------
prepared in accordance with GAAP and, together with the notes thereto, present
fairly, in all material respects, the consolidated financial condition, results
of operations, and cash flows of the Companies as of, and for the portion of the
fiscal year ending on the date or dates thereof (subject only to normal year-end
adjustments). Except for transactions directly related to, or specifically
contemplated by, the Loan Papers, no subsequent material adverse changes have
occurred in the
consolidated financial condition of the Companies from that shown in the Current
Financials. The fiscal year of each Company ends on July 31.
7.7 Litigation. Except as disclosed on SCHEDULE 7.7 (or on any revised
----------
SCHEDULE 7.7 delivered by Borrower to Lenders), (a) no Company (other than as a
creditor or claimant) is subject to, or aware of the threat of, any Litigation
that is reasonably likely to be determined adversely to any Company and, if so
adversely determined, is a Material Adverse Event, (b) no outstanding or unpaid
judgments against any Company exist as of the date hereof, and (c) no Company is
a party to, or bound by, any judicial or administrative order, judgment, decree
or consent decree relating to any past or present practice, omission, activity
or undertaking which constitutes a Material Adverse Event.
7.8 Taxes. All Tax returns of each Company required to be filed have been
-----
filed (or extensions have been granted) before delinquency, other than returns
for which the failure to file is not a Material Adverse Event, and all Taxes
shown as due and payable as of the date hereof in such returns have been paid
before delinquency, other than Taxes for which the criteria for Permitted Liens
(as specified in clause (f) of the definition of "Permitted Liens") have been
satisfied or for which nonpayment is not a Material Adverse Event.
7.9 Environmental Matters. Except as disclosed on SCHEDULE 7.9 (or any
---------------------
revised SCHEDULE 7.9 delivered by Borrower to Lenders) and except for
conditions, circumstances or violations that are not, individually or in the
aggregate, a Material Adverse Event, no Company (a) knows of any environmental
condition or circumstance adversely affecting any Company's properties or
operations, (b) has, to its knowledge, received any written report of any
Company's violation of any Environmental Law, or (c) knows that any Company is
under any obligation imposed by a Tribunal to remedy any violation of any
Environmental Law. Except as disclosed on SCHEDULE 7.9 (or any such revised
SCHEDULE 7.9), each Company believes that its properties and operations do not
violate any Environmental Law, other than violations that are not, individually
or in the aggregate, a Material Adverse Event. No facility of any Company is
used for, or to the knowledge of any Company has been used for, treatment or
disposal of any Hazardous Substance or storage of Hazardous Substances, other
than in material compliance with applicable Environmental Laws.
7.10 Employee Plans. Except where occurrence or existence is not a
--------------
Material Adverse Event, (a) no Employee Plan has incurred an "accumulated
funding deficiency" (as defined in section 302 of ERISA or section 412 of the
Code), (b) no Company has incurred liability under ERISA to the PBGC in
connection with any Employee Plan (other than required insurance premiums, all
of which have been paid), (c) no Company has withdrawn in whole or in part from
participation in a Multiemployer Plan, (d) no Company has engaged in any
"prohibited transaction" (as defined in section 406 of ERISA or section 4975 of
the Code), and (e) no "reportable event" (as defined in section 4043 of ERISA)
has occurred with respect to an Employee Plan, excluding events for which the
notice requirement is waived under applicable PBGC regulations.
7.11 Properties and Liens.
--------------------
(a) Each Company has good and marketable title to all its material
property reflected on the Current Financials (other than for property that
is obsolete or that has been disposed of in the ordinary course of business
or, after the date of this Agreement, as otherwise permitted by SECTION
9.10 or SECTION 9.11).
(b) Except for Permitted Liens, no Lien exists on any property of any
Company (including, without limitation, the Forest Service Permits and the
Water Rights), and the execution, delivery, performance or observance of
the Loan Papers will not require or result in the creation of any Lien
(other than the Liens created pursuant to the Security Documents) on any
Company's property.
(c) As of the date hereof, the Forest Service Permits constitute all
of the material licenses, permits or leases from the United States Federal
Government held by the Companies for use in connection
with their respective skiing businesses.
(d) Each of the Water Rights is, to the knowledge of the Companies,
in full force and effect and, to the knowledge of the Companies, there is
no material default or existing condition which with the giving of notice
or the passage of time or both would cause a material default under any
Water Right that is material to the operation of the Companies. Subject to
the available supply and to the terms and conditions of the applicable
decrees, the Companies' Water Rights provide a dependable, legal and
physical snowmaking, irrigation and domestic water supply for the operation
of the Companies' businesses.
7.12 Chief Executive Offices. Each Company's chief executive office is
-----------------------
located as shown on SCHEDULE 7.2 (or any revised SCHEDULE 7.2 delivered by
Borrower to Lenders).
7.13 Government Regulations. No Company is subject to regulation under the
----------------------
Investment Company Act of 1940, as amended, or the Public Utility Holding
Company Act of 1935, as amended.
7.14 Transactions with Affiliates. Except as set forth in SCHEDULE 7.14,
----------------------------
no Restricted Company is a party to any transaction with any Affiliate (other
than another Restricted Company), except upon fair and reasonable
terms not materially less favorable than it could obtain or could become
entitled to in an arm's-length transaction with a Person that was not its
Affiliate.
7.15 Debt. After the funding of the Loans made on the Closing Date and the
----
payment of certain Debts with the proceeds thereof as described in SECTION 8.2,
no Company will be an obligor on any Debt, other than Permitted Debt.
7.16 Material Agreements. All Material Agreements to which any Restricted
-------------------
Company is a party are in full force and effect, and no default or potential
default exists on the part of any Restricted Company thereunder that is a
Material Adverse Event.
7.17 Labor Matters. There are no binding agreements of any type with any
-------------
labor union, labor organization, collective bargaining unit or employee group to
which any Company is bound, other than Ralston Resorts' collective bargaining
agreements with the Breckenridge Professional Ski Patrol Association and
Keystone Professional Ski Patrol Association and agreements which may be entered
into after the date of this Agreement which do not constitute a Material Adverse
Event. No actual or threatened strikes, labor disputes, slow downs, walkouts,
or other concerted interruptions of operations by the employees of any Company
that constitute a Material Adverse Event exist. Hours worked by and payment
made to employees of the Companies have not been in violation of the Fair Labor
Standards Act or any other applicable Law dealing with labor matters, other than
any violations, individually or collectively, that are not a Material Adverse
Event. All payments due from any Company for employee health and welfare
insurance have been paid or accrued as a liability on its books, other than any
nonpayments that are not, individually or collectively, a Material Adverse
Event.
7.18 Solvency. On each Loan Date, Borrower is, and after giving effect to
--------
the requested Loan will be, Solvent.
7.19 Trade Names. No Company has used or transacted business under any
-----------
other corporate or registered trade name during the five years preceding the
Closing Date, other than as disclosed on the attached SCHEDULE 7.19.
7.20 Intellectual Property. Each Company owns (or otherwise holds rights
---------------------
to use) all material Intellectual Property, licenses, permits and trade names
necessary to continue to conduct its businesses as presently conducted by it and
proposed to be conducted by it immediately after the date of this Agreement. To
its knowledge, each Company is conducting its business without infringement or
claim of infringement of any license, patent, copyright, service mark,
trademark, trade name, trade secret or other intellectual property right of
others, other than
any infringements or claims that, if successfully asserted against or determined
adversely to any Company, would not, individually or collectively, constitute a
Material Adverse Event. To the knowledge of any Company as of the date hereof,
no infringement or claim of infringement by others of any material Intellectual
Property, license, permit, trade name, or other intellectual property of any
Company exists, other than claims which will not cause a Material Adverse Event.
7.21 Full Disclosure. Each material fact or condition relating to the Loan
---------------
Papers or the financial condition, business or property of any Company has been
disclosed to Agent. All information furnished by any Company to Agent in
connection with the Loan Papers on or before the date of this Agreement was,
taken as a whole, true and accurate in all material respects or based on
reasonable estimates on the date the information is stated or certified.
7.22 Stock Purchase Agreement. The Ralston Resorts Acquisition has been
------------------------
consummated as of the Closing Date in accordance with the Stock Purchase
Agreement and in compliance with all applicable Laws.
SECTION 8 AFFIRMATIVE COVENANTS. So long as Lenders are committed to fund Loans
- --------- ---------------------
and Agent is committed to issue LCs under this Agreement, and thereafter until
the Obligation is paid in full, Borrower covenants and agrees as follows:
8.1 Items to be Furnished. Borrower shall cause the following to be
---------------------
furnished to each Lender:
(a) With respect to each fiscal year of the Companies:
(i) Promptly after preparation, unaudited Financial Statements
showing the consolidated financial condition and results of operations of
the Companies as of the last day of such fiscal year and for such fiscal
year, accompanied by a Compliance Certificate with respect to such
Financial Statements (for purposes of adjusting the Applicable Margin and
the Applicable Percentage in accordance with the definitions of such
terms); and
(ii) Promptly after preparation, and no later than 120 days
after the last day of each fiscal year of the Companies, Financial
Statements showing the consolidated financial condition and results of
operations of the Companies as of, and for the year ended on, that last
day, accompanied by: (A) the unqualified opinion of a firm of nationally-
recognized independent certified public accountants, based on an audit
using generally accepted auditing standards, that the Financial Statements
were prepared in accordance with GAAP and present fairly, in all material
respects, the consolidated financial condition and results of operations of
the Companies, (B) any management letter prepared by the accounting firm
delivered in connection with its audit, (C) a certificate from the
accounting firm to Agent indicating that during its audit it obtained no
knowledge of any Default or Potential Default or, if it obtained knowledge,
the nature and period of existence thereof, and (D) a Compliance
Certificate with respect to the Financial Statements.
(b) Promptly after preparation, and no later than 60 days after the
last day of each fiscal quarter of the Companies, Financial Statements
showing the consolidated financial condition and results of operations of
the Companies for the fiscal quarter and for the period from the beginning
of the current fiscal year to the last day of the fiscal quarter,
accompanied by a Compliance Certificate with respect to the Financial
Statements.
(c) Promptly after receipt, a copy of each interim or special audit
report and management letter issued by independent accountants with respect
to any Company or its financial records.
(d) Notice, promptly after any Company knows or has reason to know,
of (i) the existence and status of any Litigation that, if determined
adversely to any Company, would be a Material Adverse
Event, (ii) any change in any material fact or circumstance represented or
warranted by any Company in connection with any Loan Paper, (iii) the
receipt by any Company of notice of any violation or alleged violation of
any Environmental Law or ERISA (which individually or collectively with
other violations or allegations is reasonably likely to constitute a
Material Adverse Event), or (iv) a Default or Potential Default, specifying
the nature thereof and what action the Companies have taken, are taking, or
propose to take.
(e) Promptly after filing, copies of all material reports or filings
filed by or on behalf of any Company with any securities exchange or the
Securities and Exchange Commission (including, without limitation, copies
of each Form 10-K, Form 10-Q and Form S-8 filed by or on behalf of VRI with
the Securities and Exchange Commission within 15 days after filing).
(f) Promptly upon reasonable request by Agent or Required Lenders
(through Agent), information (not otherwise required to be furnished under
the Loan Papers) respecting the business affairs, assets and liabilities of
the Companies (including, but not limited to, seasonal operating
statistics, annual budgets, etc.) and opinions, certifications and
documents in addition to those mentioned in this Agreement; provided,
however, that Agent and Lenders shall not disclose to any third Person any
data or information obtained thereby in accordance with the provisions of
this paragraph (f), except (i) with the prior written consent of the
appropriate Company, (ii) to the extent necessary to comply with Law or the
ruling of any Tribunal in which event, Agent and/or such Lenders shall
notify the appropriate Company as promptly as practicable (and, if
possible, prior to making such disclosure) and shall seek confidential
treatment of the information desired, (iii) at the request of any banking
or other regulatory authority, or (iv) to their respective Representatives
to the extent such disclosure is necessary in connection with the
transactions contemplated by the Loan Papers.
8.2 Use of Proceeds. Borrower will use some or all of the proceeds of the
---------------
initial Loan to (i) repay all amounts payable under the Existing Credit
Agreements and terminate the financing commitments thereunder, and (ii)
refinance certain Debt of Ralston Resorts in connection with the Ralston Resorts
Acquisition. Borrower will use all other proceeds of Loans and LCs to pay fees
and expenses incurred in connection with the Ralston Resorts Acquisition, for
seasonal working capital, to make advances to other Companies permitted by
SECTION 9.8, and for other general corporate purposes and capital expenditures
of the Companies. No part of the proceeds of any LC draft or drawing or of any
Loan will be used, directly or indirectly, for a purpose that violates any Law,
including without limitation, the provisions of Regulations G or U.
8.3 Books and Records. Each Company will maintain books, records and
-----------------
accounts necessary to prepare financial statements in accordance with GAAP.
8.4 Inspections. Upon reasonable request, each Company will allow Agent
-----------
(or its Representatives) to inspect any of its properties, to review reports,
files and other records and to make and take away copies, to conduct tests or
investigations, and to discuss any of its affairs, conditions and finances with
its other creditors, directors, officers, employees or representatives from time
to time, during reasonable business hours; provided, however, that Agent and its
Representatives shall not disclose to any Person any data or information
obtained thereby in accordance with the provisions of this SECTION 8.4 which is
not a matter of public knowledge, except (i) with the prior written consent of
the appropriate Company, (ii) to the extent necessary to comply with Law or the
ruling of any Tribunal in which event, Agent and/or its Representatives shall
notify the appropriate Company as promptly as practicable (and, if possible,
prior to making such disclosure) and shall seek confidential treatment of the
information desired, (iii) at the request of any banking or other regulatory
authority, or (iv) to their respective Representatives to the extent such
disclosure is necessary in connection with the transactions contemplated by the
Loan Papers. Any of the Lenders (or their Representatives) may accompany Agent
during such inspections.
8.5 Taxes. Each Restricted Company will promptly pay when due any and all
-----
Taxes, other than Taxes which are being contested in good faith by lawful
proceedings diligently conducted, against which reserve or
other provision required by GAAP has been made; provided, however, that all such
Taxes shall, in any event, be paid prior to any levy for execution in respect of
any Lien on any property of a Restricted Company.
8.6 Payment of Obligations. Each Company will pay (or renew and extend)
----------------------
all of its obligations at such times and to such extent as may be necessary to
prevent a Material Adverse Event (except for obligations, other than Funded
Debt, which are being contested in good faith by appropriate proceedings);
provided that Borrower shall not and shall not permit any other Company to repay
advances from Apollo, other than as provided in SECTION 9.9.
8.7 Expenses. Borrower shall promptly pay upon demand (a) all reasonable
--------
and customary costs, fees, and expenses paid or incurred by Agent and its
Affiliates, in connection with the arrangement, syndication and negotiation of
the Facility and the negotiation, preparation, delivery and execution of the
Loan Papers and any related amendment, waiver, or consent (including in each
case, without limitation, the reasonable fees and expenses of Agent's counsel)
and (b) all reasonable costs and expenses of Lenders and Agent incurred by Agent
or any Lender in connection with the enforcement of the obligations of any
Company arising under the Loan Papers or the exercise of any Rights arising
under the Loan Papers (including, but not limited to, reasonable attorneys' fees
and court costs), all of which shall be a part of the Obligation and shall bear
interest, if not paid upon demand, at the Default Rate until paid.
8.8 Maintenance of Existence, Assets, and Business.
----------------------------------------------
(a) Except as otherwise permitted by SECTION 9.11, each Company will
(i) maintain its corporate existence and good standing in its state of
incorporation and its authority to transact business in all other states
where failure to maintain its authority to transact business is a Material
Adverse Event; (ii) maintain all Water Rights, licenses, permits and
franchises necessary for its business where failure is a Material Adverse
Event; and (iii) keep all of its assets that are useful in and necessary to
its business in good working order and condition (ordinary wear and tear
excepted) and make all necessary repairs and replacements.
(b) No Company will change its name in any manner (except by
registering additional trade names, in which event Borrower shall promptly
supply Lenders with a revised SCHEDULE 7.19), unless such Company shall
have given the Agent prior notice thereof.
8.9 Insurance. Each Company will maintain with financially sound,
---------
responsible, and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by self-
insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses. At Agent's request, each Company
will deliver to Agent certificates of insurance for each policy of insurance and
evidence of payment of all premiums.
8.10 Preservation and Protection of Rights. Each Company will perform the
-------------------------------------
acts and duly authorize, execute, acknowledge, deliver, file and record any
additional writings as Agent or Required Lenders may reasonably deem necessary
or appropriate to perfect and maintain the Liens created pursuant to the
Security Documents.
8.11 Environmental Laws. Each Company will (a) conduct its business so as
------------------
to comply in all material respects with all applicable Environmental Laws and
shall promptly take required corrective action to remedy any non-compliance with
any Environmental Law, except where failure to comply or take action would not
be a Material Adverse Event, and (b) establish and maintain a management system
designed to ensure compliance with applicable Environmental Laws and minimize
material financial and other risks to each Company arising under applicable
Environmental Laws or as the result of environmentally related injuries to
Persons or property, except where failure to comply would not be a Material
Adverse Event. Borrower shall deliver reasonable evidence of
compliance with the foregoing covenant to Agent within 30 days after any written
request from Required Lenders, which request shall be made only if Required
Lenders reasonably believe that a failure to comply with the foregoing covenant
would be a Material Adverse Event.
8.12 Subsidiaries. Subject to SECTION 9.8, the Companies may create or
------------
acquire additional Subsidiaries (including Unrestricted Subsidiaries); provided
that (a) each Person that becomes a Restricted Subsidiary after the date of this
Agreement (whether as a result of acquisition, creation or otherwise) shall
execute and deliver a Guaranty within 10 days after becoming a Restricted
Subsidiary, (b) Borrower shall deliver to Agent revised SCHEDULES 7.2 and 7.3
reflecting such new Subsidiary within 10 days after it becomes a Subsidiary, and
(c) until the release, if any, of the Collateral pursuant to SECTION 5.2(b), the
appropriate Companies shall pledge to Agent for the benefit of Lenders all stock
or other ownership interests of each such new Restricted Subsidiary owned by
such Companies within 10 days after it becomes a Restricted Subsidiary.
8.13 Indemnification. BORROWER SHALL INDEMNIFY, PROTECT AND HOLD AGENT AND
---------------
LENDERS AND THEIR RESPECTIVE AFFILIATES, REPRESENTATIVES, SUCCESSORS AND ASSIGNS
AND ATTORNEYS (COLLECTIVELY, THE "INDEMNIFIED PARTIES") HARMLESS FROM AND
AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, CLAIMS AND PROCEEDINGS AND ALL COSTS, EXPENSES
(INCLUDING, WITHOUT LIMITATION, ALL ATTORNEYS' FEES AND LEGAL EXPENSES WHETHER
OR NOT SUIT IS BROUGHT) AND DISBURSEMENTS OF ANY KIND OR NATURE (THE
"INDEMNIFIED LIABILITIES") THAT MAY AT ANY TIME BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST THE INDEMNIFIED PARTIES, IN ANY WAY RELATING TO OR ARISING OUT
OF (A) THE DIRECT OR INDIRECT RESULT OF THE VIOLATION BY ANY COMPANY OF ANY
ENVIRONMENTAL LAW, (B) ANY COMPANY'S GENERATION, MANUFACTURE, PRODUCTION,
STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL OR PRESENCE IN
CONNECTION WITH ITS PROPERTIES OF A HAZARDOUS SUBSTANCE (INCLUDING, WITHOUT
LIMITATION, (I) ALL DAMAGES OF ANY USE, GENERATION, MANUFACTURE, PRODUCTION,
STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL OR PRESENCE, OR (II)
THE COSTS OF ANY ENVIRONMENTAL INVESTIGATION, MONITORING, REPAIR, CLEANUP OR
DETOXIFICATION AND THE PREPARATION AND IMPLEMENTATION OF ANY CLOSURE, REMEDIAL
OR OTHER PLANS), OR (C) THE LOAN PAPERS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN. HOWEVER, ALTHOUGH EACH INDEMNIFIED PARTY HAS THE RIGHT TO BE
INDEMNIFIED FOR ITS OWN ORDINARY NEGLIGENCE, NO INDEMNIFIED PARTY HAS THE RIGHT
TO BE INDEMNIFIED FOR ITS OWN FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE
PROVISIONS OF AND UNDERTAKINGS AND INDEMNIFICATION SET FORTH IN THIS PARAGRAPH
SHALL SURVIVE THE SATISFACTION AND PAYMENT OF THE OBLIGATION AND TERMINATION OF
THIS AGREEMENT.
8.14 Interest Rate Hedging. Borrower shall enter into Financial Hedges for
---------------------
an aggregate notional amount of at least $75,000,000 on terms reasonably
acceptable to Agent within 60 days after the Closing Date.
SECTION 9 NEGATIVE COVENANTS. So long as Lenders are committed to fund Loans
- --------- ------------------
and Agent is committed to issue LCs under this Agreement, and thereafter until
the Obligation is paid in full, Borrower covenants and agrees as follows:
9.1 Taxes. No Company shall use any portion of the proceeds of any Loan
-----
to pay the wages of employees, unless a timely payment to or deposit with the
United States of America of all amounts of Tax required to be deducted and
withheld with respect to such wages is also made.
9.2 Payment of Obligations. No Company shall voluntarily prepay principal
----------------------
of, or interest on, any Funded Debt, other than the Obligation, if a Default or
Potential Default exists (or would result from such payment).
9.3 Employee Plans. Except where a Material Adverse Event would not
--------------
result, no Company shall permit any of the events or circumstances described in
SECTION 7.10 to exist or occur.
9.4 Debt. No Company shall create, incur or suffer to exist any Debt,
----
other than Permitted Debt.
9.5 Liens. No Company shall (a) create, incur or suffer or permit to be
-----
created or incurred or to exist any Lien upon any of its assets, other than
Permitted Liens, or (b) enter into or permit to exist any arrangement or
agreement that directly or indirectly prohibits any Company from creating or
incurring any Lien, other than the Loan Papers, the Bond Documents described in
the Collateral Agency Agreement and leases or licenses that prohibit Liens on
the leased or licensed property.
9.6 Transactions with Affiliates.
----------------------------
(a) Except as set forth on SCHEDULE 7.14, no Restricted Company shall
guaranty, obtain any letter of credit or similar instrument in support of,
or create, incur or suffer to exist any Lien upon any of its assets as
security for, any Debt or other obligation of any Affiliate (other than
Debts or other obligations of another Restricted Company).
(b) No Restricted Company shall enter into or suffer to exist any
transaction with any Affiliate (other than another Restricted Company),
unless (i) such transaction is an advance or equity contribution to an
Unrestricted Subsidiary permitted by SECTION 9.8(i), (ii) such transaction
is described in SECTION 9.9 or on SCHEDULE 7.14, or (iii) such transaction
is upon fair and reasonable terms not materially less favorable than it
could obtain or could become entitled to in an arm's-length transaction
with a Person that was not its Affiliate.
9.7 Compliance with Laws and Documents. No Company shall (a) violate the
----------------------------------
provisions of any Laws or rulings of any Tribunal applicable to it or of any
Material Agreement to which it is a party if that violation alone, or when
aggregated with all other violations, would be a Material Adverse Event, (b)
violate the provisions of its charter or bylaws if such violation would cause a
Material Adverse Event, or (c) repeal, replace or amend any provision of its
charter or bylaws if that action would be a Material Adverse Event.
9.8 Loans, Advances and Investments. Except as permitted by SECTION 9.9
-------------------------------
or SECTION 9.11, no Restricted Company shall make or suffer to exist any loan,
advance, extension of credit or capital contribution to, make any investment in,
or purchase or commit to purchase any stock or other securities or evidences of
Debt of, or interests in, any other Person, other than:
(a) expense accounts for and other loans or advances to its
directors, officers and employees in the ordinary course of business;
(b) marketable obligations issued or unconditionally guaranteed by
the United States Government or issued by any of its agencies and backed by
the full faith and credit of the United States of America, in each case
maturing within one year from the date of acquisition;
(c) short-term investment grade domestic and eurodollar certificates
of deposit or time deposits that are fully insured by the Federal Deposit
Insurance Corporation or are issued by commercial banks organized under the
Laws of the United States of America or any of its states having combined
capital, surplus, and undivided profits of not less than $100,000,000 (as
shown on its most recently published statement of condition);
(d) commercial paper and similar obligations rated "P-1" by Moody's
Investors Service, Inc., or "A-1" by Standard & Poor's Ratings Group (a
division of McGraw Hill, Inc.);
(e) readily marketable tax-free municipal bonds of a domestic issuer
rated "A-2" or better by Moody's Investors Service, Inc., or "A" or better
by Standard & Poors Ratings Group (a division of McGraw Hill, Inc.), and
maturing within one year from the date of issuance;
(f) mutual funds or money market accounts investing primarily in
items described in clauses (b) through (e) above;
(g) demand deposit accounts maintained in the ordinary course of
business;
(h) current trade and customer accounts receivable that are for goods
furnished or services rendered in the ordinary course of business and that
are payable in accordance with customary trade terms;
(i) in addition to items covered elsewhere in this definition, but
subject to SECTIONS 8.12 and 9.14, investments in any Person (including
purchases of stock or other securities or evidence of Debt of, assets of,
or loans, advances, extensions of credit or capital contributions to such
Person, but excluding capital appreciation and accrued interest), provided
that all such investments (when added to those made by Unrestricted
Subsidiaries) made in (i) Unrestricted Subsidiaries, (ii) Persons that are
not Affiliates of Borrower after such investment (excluding investments in
Keystone/Intrawest LLC existing on the date of this Agreement and the
existing obligation of Ralston Resorts to contribute to Keystone/Intrawest
LLC additional land which had a book value as of June 30, 1996, of
$8,900,000), and (iii) Apollo shall not in the aggregate exceed 15% of the
Companies' consolidated net worth at the time of determination; and
(j) the following investments:
(i) Housing Revenue Bonds, Series A-1, A-2, A-3, and B-2,
issued by Eagle Bend Affordable Housing Corporation, held in the face
amount of $800,000;
(ii) Housing Revenue Bonds, Series 1993C, issued by Lake Creek
Affordable Housing Corporation, held in the face amount of $1,166,250;
(iii) the possible purchase of bonds with respect to Borrower's
contingent obligations under the $10,115,000 Standby Bond Purchase
Agreement between Borrower and Colorado National Bank, as Trustee,
dated July 9, 1996;
(iv) a secured loan of $300,000 made to Andrew P. Daly in
1991, a secured loan of $438,750 to be made to Lucinda M. Daly, and a
secured loan of $350,000 to be made to Mr. and Mrs. James P. Thompson;
and
(v) Workers compensation reserve account, established
pursuant to a self-insurance permit from the State of Colorado
Department of Labor, invested exclusively in items described in
clauses (b) through (f) above.
9.9 Management Fees and Distributions. No Company shall make any
---------------------------------
Distribution, except as follows:
(a) if no Default or Potential Default exists (or would result
therefrom), the Companies may pay management fees to Apollo of up to
$500,000 (in cash and/or services) in any fiscal year of the Companies;
(b) VRI may make payments of up to $55,000,000 in connection with its
distribution of a nontransferable right to receive up to $5.00 per share of
VRI's Common Stock to all stockholders of record on October 11, 1996, and a
related payable accruing to certain option holders (provided that such
payments may only be made to the extent the Companies receive sufficient
gross proceeds under contracts existing as of September 30, 1996, for the
sale of certain real estate and related amenities); and
(c) any Company may make Distributions to a Restricted Company.
9.10 Sale of Assets. No Company shall sell, assign, lease, transfer or
--------------
otherwise dispose of all or any material portion of the assets described in
SCHEDULE 2, if the ratio described in SECTION 10.1 would increase as a
result of such disposition after any application of proceeds thereof to the Term
Loans under SECTION 3.2(d)(i)(a). Any sale of assets is subject to the mandatory
prepayment provisions of SECTION 3.2(d)(i).
9.11 Mergers and Dissolutions. No Restricted Company shall merge or
------------------------
consolidate with any other Person (unless Borrower or, if Borrower is not a
party to such merger or consolidation, a Restricted Subsidiary is the surviving
entity in connection with any such merger or consolidation) or liquidate, wind
up or dissolve (or suffer any liquidation or dissolution). Prior to any such
merger or consolidation, Borrower shall deliver any notice and legal opinion
required by SECTION 2(b)(ii) of the relevant Pledge Agreement, if applicable.
Promptly after such merger or consolidation, Borrower shall deliver to Agent
revised SCHEDULES 7.2 and 7.3 reflecting any merger or consolidation.
9.12 Assignment. No Company shall assign or transfer any of its Rights or
----------
cause to be delegated its duties or obligations under any of the Loan Papers.
9.13 Fiscal Year and Accounting Methods. No Company shall change its
----------------------------------
fiscal year or its method of accounting (other than immaterial changes in
methods or as required by GAAP). [Under the Third Amendment, Lenders allowed
the Companies to change their fiscal year end from September 30 to July 31.]
9.14 New Businesses. No Restricted Company shall engage in any business,
--------------
except the businesses in which they are presently engaged and any other business
reasonably related to the Companies' current operations or the resort, leisure
or ski business; provided, however, that the foregoing shall not be construed to
prohibit the cessation by any Company of its business activities or the sale or
transfer of the business or assets of such Company to the extent not otherwise
prohibited by this Agreement.
9.15 Government Regulations. No Company shall conduct its business in a
----------------------
way that it becomes regulated under the Investment Company Act of 1940, as
amended, or the Public Utility Holding Company Act of 1935, as amended.
SECTION 10 FINANCIAL COVENANTS. So long as Lenders are committed to fund Loans
- ---------- -------------------
and Agent is committed to issue LCs under this Agreement, and thereafter until
the Obligation is paid and performed in full (except for provisions under the
Loan Papers expressly intended to survive payment of the Obligation and
termination of the Loan Papers), Borrower covenants and agrees as follows to
comply with each of the following ratios. For purposes of determining each such
ratio, Resort EBITDA for any period shall include on a pro forma basis all
EBITDA for such period relating to assets acquired (including Restricted
Subsidiaries formed or acquired) during such period, but shall exclude on a pro
forma basis all EBITDA for such period relating to any such assets disposed of
in accordance with this Agreement during such period.
10.1 Maximum Leverage Ratio. As calculated as of the last day of each
----------------------
fiscal quarter of the Companies, the Companies shall not permit the ratio of (x)
the unpaid principal amount of Funded Debt existing as of such last day to (y)
Resort EBITDA for the four fiscal quarters ending on such last day to exceed the
------
following:
------------------------------------------------------------------
As of the last day of each fiscal 4.25 to 1.00
quarter occurring after the Closing
Date through and including January
31, 1999:
------------------------------------------------------------------
As of the last day of each fiscal 3.75 to 1.00
quarter commencing with April 30,
1999:
------------------------------------------------------------------
10.2 Minimum Fixed Charge Coverage Ratio. As calculated as of the last day
-----------------------------------
of each fiscal quarter of the Companies, the Companies shall not permit the
ratio of (x) Resort EBITDA for the four fiscal quarters ending on such last day
minus Adjusted Capital Expenditures to (y) Scheduled Principal Payments and
interest on the
Obligation and scheduled principal and interest payments on all other Funded
Debt (other than with respect to principal payments on VRI's 12-1/4% Senior
Subordinated Notes Due 2002) in such four fiscal quarters to be less that the
----
following:
-----------------------------------------------------------------
As of the last day of each fiscal 1.15 to 1.00
quarter occurring after the Closing
Date through and including July 31,
1999:
-----------------------------------------------------------------
As of the last day of each fiscal 1.20 to 1.00
quarter commencing with October 31,
1999, through and including July 31,
2000:
-----------------------------------------------------------------
As of the last day of each fiscal 1.25 to 1.00
quarter commencing with October 31,
2000:
For purposes of clause (y) of such ratio for the four-quarter periods ending on
December 31, 1996, March 31, 1997, and June 30, 1997, payments of principal and
interest shall be calculated as though all such Debt was incurred at the
beginning of such four-quarter period. As used in this SECTION 10.2, "ADJUSTED
CAPITAL EXPENDITURES" means (a) for the four fiscal quarters ending any January
31, the lesser of (i) the Companies' actual capital expenditures during such
four fiscal quarters, and (ii) $25,000,000, and (b) for the four fiscal quarters
ending on any April 30, July 31, or October 31, the lesser of (i) the Companies'
actual capital expenditures during such four fiscal quarters, and (ii)
$15,000,000.
10.3 Interest Coverage Ratio. As calculated as of the last day of each
-----------------------
fiscal quarter of the Companies, the Companies shall not permit the ratio of (x)
Resort EBITDA for the four fiscal quarters ending on such last day to (y)
payments of interest on Funded Debt in such four fiscal quarters to be less than
----
the following:
-----------------------------------------------------------------
As of the last day of each fiscal 2.25 to 1.00
quarter occurring after the Closing
Date through and including July 31,
1998:
-----------------------------------------------------------------
As of the last day of each fiscal 2.50 to 1.00
quarter commencing with October 31,
1998, through and including July 31,
1999:
-----------------------------------------------------------------
As of the last day of each fiscal 2.75 to 1.00
quarter commencing with October 31,
1999, through and including July 31,
2000:
-----------------------------------------------------------------
As of the last day of each fiscal 3.00 to 1.00
quarter commencing with October 31,
2000:
-----------------------------------------------------------------
For purposes of clause (y) of such ratio for the four-quarter periods ending on
December 31, 1996, March 31, 1997, and June 30, 1997, the payments of interest
on Funded Debt shall be calculated as though such Funded Debt was incurred at
the beginning of such four-quarter period.
SECTION 11 DEFAULT. The term "DEFAULT" means the occurrence of any one or more
- ---------- -------
of the following events:
11.1 Payment of Obligation. The failure or refusal of any Company to pay
---------------------
(i) any principal payment contemplated by SECTION 3.2(b) of this Agreement after
such payment becomes due and payable hereunder, (ii) any principal payment
(other than those contemplated by SECTION 3.2(b)) or interest payment
contemplated to be made hereunder within 3 Business Days after demand therefor
by Agent, (iii) any amount contemplated to be paid hereunder in respect of fees,
costs, expenses or indemnities within 10 Business Days after demand therefor by
Agent
and (iv) any amount in respect of its reimbursement obligations in
connection with any drawing under an LC within 3 Business Days after demand
therefor by Agent.
11.2 Covenants. The failure or refusal of any Company to punctually and
---------
properly perform, observe, and comply with:
(a) Any covenant, agreement or condition applicable to it contained
in SECTIONS 8.2, 8.14, 9 (other than SECTIONS 9.1, 9.3, 9.6 and 9.7) or 10;
or
(b) Any other covenant, agreement or condition applicable to it
contained in any Loan Paper (other than the covenants to pay the Obligation
and the covenants in clause (a) preceding), and failure or refusal
continues for 30 days.
11.3 Debtor Relief. Any Restricted Company (a) fails to pay its Debts
-------------
generally as they become due, (b) voluntarily seeks, consents to, or acquiesces
in the benefit of any Debtor Relief Law, or (c) becomes a party to or is made
the subject of any proceeding provided for by any Debtor Relief Law, other than
as a creditor or claimant, that could suspend or otherwise adversely affect the
Rights of Agent or any Lender granted in the Loan Papers (unless, if the
proceeding is involuntary, the applicable petition is dismissed within 60 days
after its filing).
11.4 Judgments and Attachments. Any Restricted Company fails, within 60
-------------------------
days after entry, to pay, bond or otherwise discharge any judgment or order for
the payment of money in excess of $5,000,000 (individually or collectively) or
any warrant of attachment, sequestration or similar proceeding against any
assets of any Restricted Company having a value (individually or collectively)
of $5,000,000, which is neither (a) stayed on appeal nor (b) diligently
contested in good faith by appropriate proceedings and adequate reserves have
been set aside on its books in accordance with GAAP.
11.5 Government Action. Any Tribunal condemns, seizes or otherwise
-----------------
appropriates, or takes custody or control of all or any substantial portion of
the assets described on SCHEDULE 2.
11.6 Misrepresentation. Any material representation or warranty made by
-----------------
any Company in connection with any Loan Paper at any time proves to have been
materially incorrect when made; provided that if such Company made such
representation or warranty in good faith without any knowledge on the part of
the Companies that it was materially incorrect, such misrepresentation shall not
constitute a Default if the Companies notify Agent of such misrepresentation
within 5 Business Days after such Company has knowledge thereof.
11.7 Ownership. There shall occur a Change of Control Transaction.
---------
11.8 Default Under Other Agreements. (a) Any Restricted Company fails to
------------------------------
pay when due (after lapse of any applicable grace period) any recourse Debt in
excess (individually or collectively) of $5,000,000; (b) any default exists
under any agreement to which any Restricted Company is a party, the effect of
which is to cause, or to permit any Person (other than a Restricted Company) to
cause, any recourse obligation in excess (individually or collectively) of
$5,000,000 to become due and payable by any Restricted Company before its stated
maturity, except to the extent such obligation is declared to be due and payable
as a result of the sale of any asset to which it relates; or (c) an "Enforcement
Notice" is delivered by the Beaver Creek Indenture Trustee or the Vail Indenture
Trustee under the Collateral Agency Agreement (and has not been rescinded or
withdrawn).
11.9 Validity and Enforceability of Loan Papers. Except in accordance with
------------------------------------------
its terms or as otherwise expressly permitted by this Agreement, any Loan Paper
at any time after its execution and delivery ceases to be in full force and
effect in any material respect or is declared to be null and void or its
validity or enforceability is contested by any Company party thereto or any
Company denies that it has any further liability or obligations under any Loan
Paper to which it is a party.
11.10 Employee Plans. Except where occurrence or existence is not a
--------------
Material Adverse Event, (a) an Employee Plan incurs an "accumulated funding
deficiency" (as defined in section 302 of ERISA or section 412 of the Code), (b)
a Company incurs liability under ERISA to the PBGC in connection with any
Employee Plan (other than required insurance premiums paid when due), (c) a
Company withdraws in whole or in part from participation in a Multiemployer
Plan, (d) a Company engages in any "prohibited transaction" (as defined in
section 406 of ERISA or section 4975 of the Code), or (e) a "reportable event"
(as defined in section 4043 of ERISA) occurs with respect to an Employee Plan,
excluding events for which the notice requirement is waived under applicable
PBGC regulations.
SECTION 12. RIGHTS AND REMEDIES.
- ---------- -------------------
12.1 Remedies Upon Default.
---------------------
(a) If a Default exists under SECTION 11.3, the commitment to extend
credit under this Agreement automatically terminates, the entire unpaid
balance of the Obligation automatically becomes due and payable without any
action of any kind whatsoever, and Borrower must provide cash collateral in
an amount equal to the then-existing LC Exposure.
(b) If any Default exists, subject to the terms of SECTION 13.5(b),
Agent may (with the consent of, and must, upon the request of, Required
Lenders), do any one or more of the following: (i) if the maturity of the
Obligation has not already been accelerated under SECTION 12.1(a), declare
the entire unpaid balance of all or any part of the Obligation immediately
due and payable, whereupon it is due and payable; (ii) terminate the
commitments of Lenders to extend credit or to continue or convert any Loan
under this Agreement; (iii) reduce any claim to judgment; (iv) demand
Borrower to provide cash collateral in an amount equal to the LC Exposure
then existing; and (v) exercise any and all other legal or equitable Rights
afforded by the Loan Papers, the Laws of the State of New York, or any
other applicable jurisdiction. In addition, Agent may (with the consent of,
and must, upon the request of, Lenders holding at least 50% of the
Revolving Credit Commitment) terminate the Revolving Credit Commitment.
12.2 Company Waivers. TO THE EXTENT PERMITTED BY LAW, EACH COMPANY
---------------
WAIVES PRESENTMENT AND DEMAND FOR PAYMENT, PROTEST, NOTICE OF INTENTION TO
ACCELERATE, NOTICE OF ACCELERATION AND NOTICE OF PROTEST AND NONPAYMENT, AND
AGREES THAT ITS LIABILITY WITH RESPECT TO ALL OR ANY PART OF THE OBLIGATION IS
NOT AFFECTED BY ANY RENEWAL OR EXTENSION IN THE TIME OF PAYMENT OF ALL OR ANY
PART OF THE OBLIGATION, BY ANY INDULGENCE, OR BY ANY RELEASE OR CHANGE IN ANY
SECURITY FOR THE PAYMENT OF ALL OR ANY PART OF THE OBLIGATION.
12.3 Performance by Agent. If any covenant, duty or agreement of any
--------------------
Company is not performed in accordance with the terms of the Loan Papers, Agent
may, while a Default exists, at its option (but subject to the approval of
Required Lenders), perform or attempt to perform that covenant, duty or
agreement on behalf of that Company (and any amount expended by Agent in its
performance or attempted performance is payable by the Companies, jointly and
severally, to Agent on demand, becomes part of the Obligation, and bears
interest at the Default Rate from the date of Agent's expenditure until paid).
However, Agent does not assume and shall never have, except by its express
written consent, any liability or responsibility for the performance of any
covenant, duty or agreement of any Company.
12.4 Not in Control. None of the covenants or other provisions contained
--------------
in any Loan Paper shall, or shall be deemed to, give Agent or Lenders the Right
to exercise control over the assets (including, without limitation, real
property), affairs, or management of any Company; the power of Agent and Lenders
is limited to the Right to exercise the remedies provided in this SECTION 12.
12.5 Course of Dealing. The acceptance by Agent or Lenders of any
-----------------
partial payment on the Obligation shall not be deemed to be a waiver of any
Default then existing. No waiver by Agent, Required Lenders or Lenders of any
Default shall be deemed to be a waiver of any other then-existing or subsequent
Default. No delay or
omission by Agent, Required Lenders or Lenders in exercising any Right
under the Loan Papers will impair that Right or be construed as a waiver thereof
or any acquiescence therein, nor will any single or partial exercise of any
Right preclude other or further exercise thereof or the exercise of any other
Right under the Loan Papers or otherwise.
12.6 Cumulative Rights. All Rights available to Agent, Required Lenders,
-----------------
and Lenders under the Loan Papers are cumulative of and in addition to all other
Rights granted to Agent, Required Lenders, and Lenders at law or in equity,
whether or not the Obligation is due and payable and whether or not Agent,
Required Lenders, or Lenders have instituted any suit for collection,
foreclosure, or other action in connection with the Loan Papers.
12.7 Application of Proceeds. Any and all proceeds ever received by
-----------------------
Agent or Lenders from the exercise of any Rights pertaining to the Obligation
shall be applied to the Obligation according to SECTION 3.11.
12.8 Diminution in Value of Collateral. Neither Agent nor any Lender has
---------------------------------
any liability or responsibility whatsoever for any diminution in or loss of
value of any collateral now or hereafter securing payment or performance of all
or any part of the Obligation (other than diminution in or loss of value caused
by its gross negligence or willful misconduct).
12.9 Certain Proceedings. The Companies will promptly execute and
-------------------
deliver, or cause the execution and delivery of, all applications, certificates,
instruments, registration statements and all other documents and papers Agent or
Required Lenders reasonably request in connection with the obtaining of any
consent, approval, registration, qualification, permit, license or authorization
of any Tribunal or other Person necessary or appropriate for the effective
exercise of any Rights under the Loan Papers. Because Borrower agrees that
Agent's and Required Lenders' remedies at Law for failure of the Companies to
comply with the provisions of this paragraph would be inadequate and that
failure would not be adequately compensable in damages, Borrower agrees that the
covenants of this paragraph may be specifically enforced.
SECTION 13 AGREEMENT AMONG LENDERS.
- ---------- -----------------------
13.1 Agent.
-----
(a) Each Lender appoints Agent (and Agent accepts appointment) as
its nominee and agent, in its name and on its behalf pursuant to the terms
and conditions of the Loan Papers: (i) to act as its nominee and on its
behalf in and under all Loan Papers; (ii) to arrange the means whereby its
funds are to be made available to Borrower under the Loan Papers; (iii) to
take any action that it properly requests under the Loan Papers (subject to
the concurrence of other Lenders as may be required under the Loan Papers);
(iv) to receive all documents and items to be furnished to it under the
Loan Papers; (v) to be the secured party, mortgagee, beneficiary, recipient
and similar party in respect of any collateral for the benefit of Lenders;
(vi) to promptly distribute to it all material information, requests,
documents and items received from any Company under the Loan Papers; (vii)
to promptly distribute to it its ratable part of each payment (whether
voluntary, as proceeds of collateral upon or after foreclosure, as proceeds
of insurance thereon, or otherwise) in accordance with the terms of the
Loan Papers; and (viii) to deliver to the appropriate Persons requests,
demands, approvals, and consents received from it.
(b) If the initial or any successor Agent ever ceases to be a party
to this Agreement or if the initial or any successor Agent ever resigns
(whether voluntarily or at the request of Required Lenders), then Required
Lenders shall appoint the successor Agent from among Lenders (other than
the resigning Agent). If Required Lenders fail to appoint a successor
Agent within 30 days after the resigning Agent has given notice of
resignation or Required Lenders have removed the resigning Agent, then the
resigning Agent may, on behalf of Lenders, appoint a successor Agent, which
must be a commercial bank having a combined capital and surplus of at least
$1,000,000,000 (as shown on its most recently published statement of
condition). Upon its acceptance of appointment as successor Agent, the
successor Agent succeeds to
and becomes vested with all of the Rights of the prior Agent, and the prior
Agent is discharged from its duties and obligations of Agent under the Loan
Papers (but, when used in connection with LCs issued and outstanding before
the appointment of the successor Agent, "Agent" shall continue to refer
solely to NationsBank of Texas, N.A. (but, any LCs issued or renewed after
the appointment of any successor Agent shall be issued or renewed by the
successor Agent)), and each Lender shall execute the documents as any
Lender, the resigning or removed Agent, or the successor Agent reasonably
request to reflect the change. After any Agent's resignation or removal as
Agent under the Loan Papers, the provisions of this SECTION 13 inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under the Loan Papers.
(c) Agent, in its capacity as a Lender, has the same Rights under
the Loan Papers as any other Lender and may exercise those Rights as if it
were not acting as Agent; the term "Lender" shall, unless the context
otherwise indicates, include Agent; and Agent's resignation or removal
shall not impair or otherwise affect any Rights that it has or may have in
its capacity as an individual Lender. Each Lender and Borrower agree that
Agent is not a fiduciary for Lenders or for Borrower but simply is acting
in the capacity described in this Agreement to alleviate administrative
burdens for Borrower and Lenders, that Agent has no duties or
responsibilities to Lenders or Borrower, except those expressly set forth
in the Loan Papers, and that Agent in its capacity as a Lender has all
Rights of any other Lender.
(d) Agent may now or hereafter be engaged in one or more loan,
letter of credit, leasing or other financing transactions with Borrower,
act as trustee or depositary for Borrower, or otherwise be engaged in other
transactions with Borrower (collectively, the "OTHER ACTIVITIES") not the
subject of the Loan Papers. Without limiting the Rights of Lenders
specifically set forth in the Loan Papers, Agent is not responsible to
account to Lenders for those other activities, and no Lender shall have any
interest in any other activities, any present or future guaranties by or
for the account of Borrower that are not contemplated or included in the
Loan Papers, any present or future offset exercised by Agent in respect of
those other activities, any present or future property taken as security
for any of those other activities, or any property now or hereafter in
Agent's possession or control that may be or become security for the
obligations of Borrower arising under the Loan Papers by reason of the
general description of indebtedness secured or of property contained in any
other agreements, documents, or instruments related to any of those other
activities (but, if any payments in respect of those guaranties or that
property or the proceeds thereof is applied by Agent to reduce the
Obligation, then each Lender is entitled to share ratably in the
application as provided in the Loan Papers).
13.2 Expenses. Each Lender shall pay its Pro Rata Part (based on the
--------
Facility as a whole) of any reasonable expenses (including, without limitation,
court costs, reasonable attorneys' fees and other costs of collection) incurred
by Agent (while acting in such capacity) in connection with any of the Loan
Papers if Agent is not reimbursed from other sources within 30 days after
incurrence. Each Lender is entitled to receive its Pro Rata Part (based on the
Facility as a whole) of any reimbursement that it makes to Agent if Agent is
subsequently reimbursed from other sources.
13.3 Proportionate Absorption of Losses. Except as otherwise provided in
----------------------------------
the Loan Papers, nothing in the Loan Papers gives any Lender any advantage over
any other Lender insofar as the Obligation is concerned or to relieve any Lender
from absorbing its Pro Rata Part of any losses sustained with respect to any
portion of the Obligation in which it participates (except to the extent
unilateral actions or inactions by any Lender result in Borrower or any other
obligor on the Obligation having any credit, allowance, setoff, defense, or
counterclaim solely with respect to all or any part of that Lender's portion of
the Obligation).
13.4 Delegation of Duties; Reliance. Lenders may perform any of their
------------------------------
duties or exercise any of their Rights under the Loan Papers by or through
Agent, and Lenders and Agent may perform any of their duties or exercise any of
their Rights under the Loan Papers by or through their respective
Representatives. Agent, Lenders and their respective Representatives (a) are
entitled to rely upon (and shall be protected in relying upon) any written
or oral statement believed by it or them to be genuine and correct and to have
been signed or made by the proper Person and, with respect to legal matters,
upon opinion of counsel selected by Agent or that Lender (but nothing in this
clause (a) permits Agent to rely on (i) oral statements if a writing is required
by this Agreement or (ii) any other writing if a specific writing is required by
this Agreement), (b) are entitled to deem and treat each Lender as the owner and
holder of its portion of the Principal Debt for all purposes until, subject to
SECTION 14.12, written notice of the assignment or transfer is given to and
received by Agent (and any request, authorization, consent or approval of any
Lender is conclusive and binding on each subsequent holder, assignee or
transferee of or Participant in that Lender's portion of the Principal Debt
until that notice is given and received), (c) are not deemed to have notice of
the occurrence of a Default unless a responsible officer of Agent, who handles
matters associated with the Loan Papers and transactions thereunder, has actual
knowledge or Agent has been notified by a Lender or Borrower, and (d) are
entitled to consult with legal counsel (including counsel for Borrower),
independent accountants, and other experts selected by Agent and are not liable
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of counsel, accountants, or experts.
13.5 Limitation of Agent's Liability.
-------------------------------
(a) NEITHER AGENT NOR ANY OF ITS AFFILIATES, REPRESENTATIVES,
SUCCESSORS OR ASSIGNS WILL BE LIABLE FOR ANY ACTION TAKEN OR OMITTED TO BE
TAKEN BY IT OR THEM UNDER THE LOAN PAPERS IN GOOD FAITH AND BELIEVED BY IT
OR THEM TO BE WITHIN THE DISCRETION OR POWER CONFERRED UPON IT OR THEM BY
THE LOAN PAPERS OR BE RESPONSIBLE FOR THE CONSEQUENCES OF ANY ERROR OF
JUDGMENT (EXCEPT FOR FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), AND
NONE OF THEM HAS A FIDUCIARY RELATIONSHIP WITH ANY LENDER BY VIRTUE OF THE
LOAN PAPERS (BUT NOTHING IN THIS AGREEMENT NEGATES THE OBLIGATION OF AGENT
TO ACCOUNT FOR FUNDS RECEIVED BY IT FOR THE ACCOUNT OF ANY LENDER).
(b) Unless indemnified to its satisfaction, Agent may not be
compelled to do any act under the Loan Papers or to take any action toward
the execution or enforcement of the powers thereby created or to prosecute
or defend any suit in respect of the Loan Papers. If Agent requests
instructions from Lenders, or Required Lenders, as the case may be, with
respect to any act or action in connection with any Loan Paper, Agent is
entitled to refrain (without incurring any liability to any Person by so
refraining) from that act or action unless and until it has received
instructions. In no event, however, may Agent or any of its
Representatives be required to take any action that it or they determine
could incur for it or them criminal or onerous civil liability or that is
contrary to any Loan Paper or applicable Law. Without limiting the
generality of the foregoing, no Lender has any right of action against
Agent as a result of Agent's acting or refraining from acting under this
Agreement in accordance with instructions of Required Lenders (or of all
Lenders, if instructions from all Lenders is specifically required by the
terms of the Loan Papers).
(c) Agent is not responsible to any Lender or any Participant for,
and each Lender represents and warrants that it has not relied upon Agent
in respect of, (i) the creditworthiness of any Company and the risks
involved to that Lender, (ii) the effectiveness, enforceability,
genuineness, validity or due execution of any Loan Paper (other than by
Agent), (iii) any representation, warranty, document, certificate, report
or statement made therein (other than by Agent) or furnished thereunder or
in connection therewith, (iv) the adequacy of any collateral now or
hereafter securing the Obligation or the existence, priority or perfection
of any Lien now or hereafter granted or purported to be granted on the
collateral under any Loan Paper, or (v) the observance of or compliance
with any of the terms, covenants or conditions of any Loan Paper on the
part of any Company. EACH LENDER AGREES TO INDEMNIFY AGENT AND ITS
REPRESENTATIVES AND HOLD THEM HARMLESS FROM AND AGAINST (BUT LIMITED TO
SUCH LENDER'S PRO RATA PART, BASED ON THE FACILITY AS A WHOLE, OF) ANY AND
ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, REASONABLE EXPENSES AND REASONABLE DISBURSEMENTS
OF ANY KIND OR NATURE WHATSOEVER THAT MAY BE IMPOSED ON, ASSERTED AGAINST,
OR INCURRED BY THEM IN ANY WAY RELATING TO OR ARISING OUT OF THE LOAN
PAPERS OR ANY ACTION TAKEN OR OMITTED BY THEM UNDER THE LOAN PAPERS IF
AGENT AND ITS REPRESENTATIVES ARE NOT REIMBURSED FOR SUCH AMOUNTS BY ANY
COMPANY. Although Agent and its Representatives have the right to be
indemnified under this Agreement for its or
their own ordinary negligence, Agent and its Representatives do not have
the right to be indemnified under this Agreement for its or their own
fraud, gross negligence or willful misconduct.
13.6 Default; Collateral. While a Default exists, Lenders agree to
-------------------
promptly confer in order that Required Lenders or Lenders, as the case may be,
may agree upon a course of action for the enforcement of the Rights of Lenders;
and Agent is entitled to refrain from taking any action (without incurring any
liability to any Person for so refraining) unless and until it has received
instructions from Required Lenders. In actions with respect to any property of
Borrower, Agent is acting for the ratable benefit of each Lender. Agent shall
hold, for the ratable benefit of all Lenders, any security it receives for the
Obligation or any guaranty of the Obligation it receives upon or in lieu of
foreclosure.
13.7 Limitation of Liability. No Lender or any Participant will incur
-----------------------
any liability to any other Lender or Participant, except for acts or omissions
in bad faith, and neither Agent nor any Lender or Participant will incur any
liability to any other Person for any act or omission of any other Lender or any
Participant.
13.8 Relationship of Lenders. The Loan Papers and the documents
-----------------------
delivered in connection therewith do not create a partnership or joint venture
among Agent and Lenders or among Lenders.
13.9 Collateral Matters.
------------------
(a) Each Lender authorizes and directs Agent to enter into the
Security Documents for the ratable benefit of Lenders and the other secured
parties identified therein. Each Lender agrees that any action taken by
Agent concerning any Collateral with the consent of, or at the request of,
Required Lenders in accordance with the provisions of the Loan Papers, and
the exercise by Agent (with the consent of, or at the request of, Required
Lenders) of powers concerning the Collateral set forth in any Loan Paper,
together with other reasonably incidental powers, shall be authorized by
and binding upon all Lenders.
(b) Agent is authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender, from time to
time before a Default or Potential Default, to take any action with respect
to any Collateral or Security Documents that may be necessary to perfect
and maintain perfected the Liens upon the Collateral granted by the
Security Documents.
(c) Agent has no obligation whatsoever to any Lender or to any
other Person to assure that the Collateral exists or is owned by any
Company or is cared for, protected or insured or has been encumbered or
that the Liens granted under the Security Documents have been properly or
sufficiently or lawfully created, perfected, protected or enforced, or are
entitled to any particular priority.
(d) Agent shall exercise the same care and prudent judgment with
respect to the Collateral and the Security Documents as it normally and
customarily exercises in respect of similar collateral and security
documents.
(e) Lenders irrevocably authorize Agent to release any Lien upon
any Collateral in accordance with SECTION 5.2(b) or 5.3(b).
13.10 Benefits of Agreement. None of the provisions of this SECTION 13
---------------------
inure to the benefit of any Company or any other Person other than Agent and
Lenders; consequently, no Company or any other Person is entitled to rely upon,
or to raise as a defense, in any manner whatsoever, the failure of Agent or any
Lender to comply with these provisions.
SECTION 14 MISCELLANEOUS.
- ---------- -------------
14.1 Headings. The headings, captions and arrangements used in any of
--------
the Loan Papers are, unless
specified otherwise, for convenience only and shall not
be deemed to limit, amplify or modify the terms of the Loan Papers, nor affect
the meaning thereof.
14.2 Nonbusiness Days; Time. Any payment or action that is due under any
----------------------
Loan Paper on a non-Business Day may be delayed until the next-succeeding
Business Day (but interest shall continue to accrue on any applicable payment
until payment is in fact made) unless the payment concerns a LIBOR Loan, in
which case if the next-succeeding Business Day is in the next calendar month,
then such payment shall be made on the next-preceding Business Day. Unless
otherwise indicated, all time references (e.g., 1:00 p.m.) are to Dallas, Texas
time.
14.3 Communications. Unless otherwise specifically provided, whenever any
--------------
Loan Paper requires or permits any consent, approval, notice, request or demand
from one party to another, communication must be in writing (which may be by
telex or telecopy) to be effective and shall be deemed to have been given (a) if
by telex, when transmitted to the appropriate telex number and the appropriate
answerback is received, (b) if by telecopy, when transmitted to the appropriate
telecopy number (and all communications sent by telecopy must be confirmed
promptly thereafter by telephone; but any requirement in this parenthetical
shall not affect the date when the telecopy shall be deemed to have been
delivered), (c) if by mail, on the third Business Day after it is enclosed in an
envelope and properly addressed, stamped, sealed, and deposited in the
appropriate official postal service, or (d) if by any other means, when actually
delivered. Until changed by notice pursuant to this Agreement, the address (and
telecopy number) for each party to a Loan Paper is set forth on the attached
SCHEDULE 1.
14.4 Form and Number of Documents. The form, substance, and number of
----------------------------
counterparts of each writing to be furnished under the Loan Papers must be
satisfactory to Agent and its counsel, each in its reasonable discretion.
14.5 Exceptions to Covenants. The Companies may not take or fail to take
-----------------------
any action that is permitted as an exception to any of the covenants contained
in any Loan Paper if that action or omission would result in the breach of any
other covenant contained in any Loan Paper.
14.6 Survival. All covenants, agreements, undertakings, representations
--------
and warranties made in any of the Loan Papers survive all closings under the
Loan Papers and, except as otherwise indicated, are not affected by any
investigation made by any party.
14.7 Governing Law. The Laws (other than conflict-of-laws provisions) of
-------------
the State of New York and of the United States of America govern the Rights and
duties of the parties to the Loan Papers and the validity, construction,
enforcement and interpretation of the Loan Papers.
14.8 Invalid Provisions. Any provision in any Loan Paper held to be
------------------
illegal, invalid or unenforceable is fully severable; the appropriate Loan Paper
shall be construed and enforced as if that provision had never been included;
and the remaining provisions shall remain in full force and effect and shall not
be affected by the severed provision. Agent, Lenders, and the Companies shall
negotiate, in good faith, the terms of a replacement provision as similar to the
severed provision as may be possible and be legal, valid and enforceable.
14.9 Venue; Service of Process; Jury Trial. EACH PARTY TO ANY LOAN PAPER,
-------------------------------------
IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS (AND IN THE CASE OF
BORROWER, FOR EACH OTHER COMPANY), (a) IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS, (b)
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING
OUT OF OR IN CONNECTION WITH THE LOAN PAPERS AND THE OBLIGATION BROUGHT IN
DISTRICT COURTS OF DALLAS OR HARRIS COUNTY, TEXAS, OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN OR SOUTHERN DISTRICT OF TEXAS, DALLAS OR HOUSTON
DIVISION, (c) IRREVOCABLY WAIVES ANY CLAIMS
THAT ANY LITIGATION BROUGHT IN ANY OF THE AFOREMENTIONED COURTS HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM, (d) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING
AGAINST ANY PARTY TO ANY LOAN PAPER ARISING OUT OF OR IN CONNECTION WITH THE
LOAN PAPERS OR THE OBLIGATION MAY BE BROUGHT IN ONE OF THE AFOREMENTIONED
COURTS, AND (e) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY LOAN PAPER. The scope of each of the foregoing waivers is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including,
without limitation, contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Borrower (for itself and on behalf of
each other Company) acknowledges that these waivers are a material inducement to
Agent's and each Lender's agreement to enter into a business relationship, that
Agent and each Lender has already relied on these waivers in entering into this
Agreement, and that Agent and each Lender will continue to rely on each of these
waivers in related future dealings. Borrower (for itself and on behalf of each
other Company) further warrants and represents that it has reviewed these
waivers with its legal counsel, and that it knowingly and voluntarily agrees to
each waiver following consultation with legal counsel. THE WAIVERS IN THIS
SECTION 14.9 MAY NOT BE MODIFIED EXCEPT IN ACCORDANCE WITH SECTION 14.10, AND
SHALL, EXCEPT TO THE EXTENT WAIVED OR MODIFIED IN ACCORDANCE WITH SECTION 14.10,
APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR PLACEMENTS TO OR OF THIS OR
ANY OTHER LOAN PAPER. In the event of Litigation, this Agreement may be filed as
a written consent to a trial by the court.
14.10 Amendments, Consents, Conflicts and Waivers.
-------------------------------------------
(a) Unless otherwise specifically provided, (i) this Agreement may
be amended only by an instrument in writing executed by Borrower, Agent and
Required Lenders and supplemented only by documents delivered or to be
delivered in accordance with the express terms of this Agreement, and (ii)
the other Loan Papers may only be the subject of an amendment, modification
or waiver that has been approved by Required Lenders and Borrower.
(b) Any amendment to or consent or waiver under any Loan Paper that
purports to waive any mandatory prepayment or change the allocation of any
payment among the Revolving Credit Loans, the Tranche A Loans and the
Tranche B Loans must be by an instrument in writing executed by Borrower,
Agent, Lenders holding at least 50% of the Revolving Credit Commitment,
Lenders holding at least 50% of the Tranche A Commitment and Lenders
holding at least 50% of the Tranche B Commitment. Any amendment to or
consent or waiver that purports to reactivate (or would have the effect of
reactivating) the Revolving Credit Commitment after its termination
pursuant to SECTION 12.1 must be by an instrument in writing executed by
Borrower, Agent and Lenders holding at least 50% of the Revolving Credit
Commitment. Any amendment to or consent or waiver under any Loan Paper
that purports to accomplish any of the following must be by an instrument
in writing executed by Borrower and Agent and executed (or approved, as the
case may be) by each Lender: (i) extend the due date, decrease the amount
of, or reallocate among the Tranches any scheduled payment of the
Obligation; (ii) decrease any rate or amount of interest, fees or other
sums payable to Agent or Lenders under this Agreement (except such
reductions as are contemplated by this Agreement); (iii) change the
definition of "Committed Sum," "Required Lenders," "Revolving Credit
Commitment," "Revolving Credit Termination Date," "Tranche A Commitment,"
"Tranche A Termination Date," "Tranche B Commitment," or "Tranche B
Termination Date;" (iv) increase any one or more Lenders' Committed Sums;
(v) waive compliance with, amend or release (in whole or in part) the
Guaranties of VRI or all or substantially all of the Restricted
Subsidiaries; (vi) consent to the release of any material portion of the
Collateral (other than pursuant to SECTION 5.2(b) or 5.3(b), which may be
released by Agent alone in accordance with SECTION 13.9(e)); or (vii)
change this clause (b), SECTION 9.12 or any other matter specifically
requiring the consent of all Lenders under this Agreement.
(c) Any conflict or ambiguity between the terms and provisions of
this Agreement and terms
and provisions in any other Loan Paper is controlled by the terms and
provisions of this Agreement.
(d) No course of dealing or any failure or delay by Agent, any
Lender, or any of their respective Representatives with respect to
exercising any Right of Agent or any Lender under this Agreement operates
as a waiver thereof. A waiver must be in writing and signed by Agent and
Lenders (or Required Lenders, if permitted under this Agreement) to be
effective, and a waiver will be effective only in the specific instance and
for the specific purpose for which it is given.
14.11 Multiple Counterparts. Each Loan Paper (other than the Notes) may be
---------------------
executed in a number of identical counterparts, each of which shall be deemed an
original for all purposes and all of which constitute, collectively, one
agreement; but, in making proof of thereof, it shall not be necessary to produce
or account for more than one counterpart. Each Lender need not execute the same
counterpart of this Agreement so long as identical counterparts are executed by
Borrower, each Lender, and Agent. This Agreement shall become effective when
counterparts of this Agreement have been executed and delivered to Agent by each
Lender, Agent and Borrower, or, in the case only of Lenders, when Agent has
received telecopied, telexed or other evidence satisfactory to it that each
Lender has executed and is delivering to Agent a counterpart of this Agreement.
14.12 Successors and Assigns; Participation.
-------------------------------------
(a) The Loan Papers bind and inure to the benefit of the parties
hereto, any intended beneficiary thereof, and each of their respective
successors and permitted assigns. No Lender may transfer, pledge, assign,
sell any participation in, or otherwise encumber its portion of the
Obligation, except as permitted by this SECTION 14.12.
(b) Any Lender may, in the ordinary course of its business, at any
time sell to one or more Persons (each a "PARTICIPANT") participating
interests in all or any part of its Rights and obligations under the Loan
Papers. The selling Lender shall remain a "Lender" under this Agreement
(and the Participant shall not constitute a "Lender" under this Agreement)
and its obligations under this Agreement shall remain unchanged. The
selling Lender shall remain solely responsible for the performance of its
obligations under the Loan Papers and shall remain the holder of its share
of the Principal Debt for all purposes under this Agreement. Borrower and
Agent shall continue to deal solely and directly with the selling Lender in
connection with that Lender's Rights and obligations under the Loan Papers.
Participants have no Rights under the Loan Papers, other than certain
voting Rights as provided below. Subject to the following, each Lender may
obtain (on behalf of its Participants) the benefits of SECTION 3 with
respect to all participations in its part of the Obligation outstanding
from time to time so long as Borrower is not obligated to pay any amount in
excess of the amount that would be due to that Lender under SECTION 3
calculated as though no participation have been made. No Lender may sell
any participating interest under which the Participant has any Rights to
approve any amendment, modification or waiver of any Loan Paper, except to
the extent the amendment, modification or waiver extends the due date for
payment of any principal, interest or fees due under the Loan Papers or
reduces the interest rate or the amount of principal or fees applicable to
the Obligation (except reductions contemplated by this Agreement). Except
in the case of the sale of a participating interest to another Lender, the
relevant participation agreement shall prohibit the Participant from
transferring, pledging, assigning, selling participation in, or otherwise
encumbering its portion of the Obligation.
(c) Any Lender may at any time, in the ordinary course of its
business, (i) without the consent of Borrower or Agent, assign all or any
part of its Rights and obligations under the Loan Papers to any of its
Affiliates (each a "PURCHASER") and (ii) upon the prior written consent of
Borrower (if no Default or Potential Default exists) and Agent (which will
not be unreasonably withheld), assign to any other Person (each of which is
also a "PURCHASER") all or any part (but if less than all, then not less
than $5,000,000) of its Rights and obligations under the Loan Papers. In
each case, the Purchaser shall assume those Rights and obligations under an
assignment agreement substantially in the form of the attached
EXHIBIT H. Each assignment under this SECTION 14.12(c) shall include a
ratable interest in the assigning Lender's Rights and obligations under the
Facility with respect to the Tranche or Tranches affected by such
assignment. Upon (i) delivery of an executed copy of the assignment
agreement to Borrower and Agent and the recordation thereof in the Register
provided for in SECTION 14.12(d) and (ii) with respect to each assignment
after the completion of the primary syndication described above, payment of
a fee of $3,500 from the transferor to Agent, from and after the effective
date specified in the Assignment Agreement (which shall be after the date
of delivery), the Purchaser shall for all purposes be a Lender party to
this Agreement and shall have all the Rights and obligations of a Lender
under this Agreement to the same extent as if it were an original party to
this Agreement with commitments as set forth in the assignment agreement,
and the transferor Lender shall be released from its obligations under this
Agreement to a corresponding extent, and, except as provided in the
following sentence, no further consent or action by Borrower, Lenders or
Agent shall be required. Upon the consummation of any transfer to a
Purchaser under this clause (c), the then-existing SCHEDULE 1 shall
automatically be deemed to reflect the name, address, Revolving Credit
Commitment, Tranche A Commitment, and/or Tranche B Commitment, as the case
may be, and Committed Sum of such Purchaser, Agent shall deliver to
Borrower and Lenders an amended SCHEDULE 1 reflecting those changes,
Borrower shall execute and deliver to each of the transferor Lender and the
Purchaser a Note or Notes, as applicable, in the face amount of its
Revolving Credit Commitment, Tranche A Commitment, and/or Tranche B
Commitment, as the case may be, following transfer, and, upon receipt of
its new Note or Notes, as applicable, the transferor Lender shall return to
Borrower the relevant Note or Notes previously delivered to it under this
Agreement. A Purchaser is subject to all the provisions in this section as
if it were a Lender signatory to this Agreement as of the date of this
Agreement.
(d) Agent shall maintain at its address on SCHEDULE 1 a copy of each
Lender assignment agreement delivered to it in accordance with the terms of
SECTION 14.12(c) and a register for the recordation of the principal
amount, Type and Interest Period of each Loan and the names, addresses and
Commitments of each Lender from time to time (the "REGISTER"). Agent will
make reasonable efforts to maintain the accuracy of the Register and to
promptly update the Register from time to time, as necessary. The entries
in the Register shall be conclusive in the absence of manifest error and
Borrower, Agent and Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection
by Borrower and each Lender, at any reasonable time and from time to time
upon reasonable prior notice.
(e) This SECTION 14.12 relates to absolute assignments and,
notwithstanding SECTION 14.12(a), does not prohibit assignments creating
security interests. Specifically, without limitation, any Lender may at
any time, without the consent of Borrower or Agent, assign all or any part
of its Rights under the Loan Papers to a Federal Reserve Bank without
releasing the transferor Lender from its obligations thereunder.
14.13 Discharge Only Upon Payment in Full; Reinstatement in Certain
-------------------------------------------------------------
Circumstances. Each Company's obligations under the Loan Papers remain in full
- -------------
force and effect until the Total Commitment is terminated and the Obligation is
paid in full (except for provisions under the Loan Papers expressly intended to
survive payment of the Obligation and termination of the Loan Papers). If at
any time any payment of the principal of or interest on any Note or any other
amount payable by Borrower or any other obligor on the Obligation under any Loan
Paper is rescinded or must be restored or returned upon the insolvency,
bankruptcy or reorganization of Borrower or otherwise, the obligations of each
Company under the Loan Papers with respect to that payment shall be reinstated
as though the payment had been due but not made at that time.
14.14 ENTIRETY. THE RIGHTS AND OBLIGATIONS OF THE COMPANIES, LENDERS AND
--------
AGENT SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS AMONG THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO THOSE WRITINGS. THIS AGREEMENT AND THE OTHER WRITTEN
LOAN PAPERS (EACH AS AMENDED IN WRITING FROM TIME TO TIME) EXECUTED BY ANY
COMPANY, ANY LENDER OR AGENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES. This Agreement supersedes all prior written agreements and
understandings relating to the subject matter hereof, including, without
limitation, the Offering Memorandum dated September 1996, and may be
supplemented only by documents delivered in accordance with the terms hereof.
EXECUTED as of the day and year first mentioned.
THE VAIL CORPORATION
By:
Name:
NATIONSBANK OF TEXAS, N.A.
By:
Frank M. Johnson
Senior Vice President
THE FIRST NATIONAL BANK OF BOSTON
By:
Andrew T. Fay
Vice President
COLORADO NATIONAL BANK
By:
William J. Sullivan
Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By:
Mischa Zabotin
Vice President
BANKERS TRUST COMPANY
By:
Name:
Title:
BANK OF AMERICA ILLINOIS
By:
Name:
Title:
FLEET NATIONAL BANK
By:
Guy G. Smith
Senior Vice President
HARRIS TRUST AND SAVINGS BANK
By:
James H. Colley
Vice President
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
LOS ANGELES AGENCY
By:
Paul Clifford
Deputy General Manager
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION
By:
Sandra A. Sauer
Vice President
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.
By:
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By:
Jeffrey W. Maillet
Senior Vice President and Portfolio Manager
KEY BANK OF COLORADO
By:
Name:
Title:
MARINE MIDLAND BANK
By:
John Lyons
Senior Vice President
THE SAKURA BANK, LIMITED, LOS ANGELES
AGENCY
By:
Name:
Title:
CITY NATIONAL BANK
By:
David A. Nelson
Vice President
EXHIBIT A-1
-----------
REVOLVING CREDIT PROMISSORY NOTE
$____________Dallas, Texas______________________, 19_______
For value received, THE VAIL CORPORATION ("MAKER"), hereby promises to
pay to the order of ___________________ ("PAYEE") on or before the Revolving
Credit Termination Date, the principal amount of $_______________, or so much
thereof as may be disbursed and outstanding hereunder, together with interest,
as hereinafter described.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of January 3, 1997 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Agent, and the Lenders referred to therein (including, without
limitation, Payee) and is one of the "Notes" referred to therein issued in
connection with the Revolving Credit Commitments. Unless defined herein or the
context otherwise requires, capitalized terms used herein have the meaning given
to such terms in the Credit Agreement. Reference is made to the Credit
Agreement for provisions affecting this note regarding applicable interest
rates, principal and interest payment dates, final maturity, acceleration of
maturity, exercise of Rights, payment of attorneys' fees, court costs and other
costs of collection, and certain waivers by Maker and others now or hereafter
obligated for payment of any sums due hereunder.
This note is a Loan Paper and, therefore, is subject to the applicable
provisions of SECTION 14 (including, without limitation, the registration
provisions of SECTION 14.12(d)) of the Credit Agreement, all of which applicable
provisions are incorporated herein by reference the same as if set forth herein
verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
THE VAIL CORPORATION
By:
Name:
Title:
EXHIBIT A-2
-----------
TRANCHE A TERM LOAN PROMISSORY NOTE
$_______________Dallas, Texas______________________, 19_______
For value received, THE VAIL CORPORATION ("MAKER"), hereby promises to
pay to the order of ___________________ ("PAYEE") on or before the Tranche A
Termination Date, the principal amount of $______________, or so much thereof as
may be disbursed and outstanding hereunder, together with interest, as
hereinafter described.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of January 3, 1997 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Agent, and the Lenders referred to therein (including, without
limitation, Payee) and is one of the "Notes" referred to therein issued in
connection with the Tranche A Commitments. Unless defined herein or the context
otherwise requires, capitalized terms used herein have the meaning given to such
terms in the Credit Agreement. Reference is made to the Credit Agreement for
provisions affecting this note regarding applicable interest rates, principal
and interest payment dates, final maturity, acceleration of maturity, exercise
of Rights, payment of attorneys' fees, court costs and other costs of
collection, and certain waivers by Maker and others now or hereafter obligated
for payment of any sums due hereunder.
This note is a Loan Paper and, therefore, is subject to the applicable
provisions of SECTION 14 (including, without limitation, the registration
provisions of SECTION 14.12(d)) of the Credit Agreement, all of which applicable
provisions are incorporated herein by reference the same as if set forth herein
verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
THE VAIL CORPORATION
By:
Name:
Title:
EXHIBIT A-3
-----------
TRANCHE B TERM LOAN PROMISSORY NOTE
$_____________Dallas, Texas______________________, 19_______
For value received, THE VAIL CORPORATION ("MAKER"), hereby promises to
pay to the order of ___________________ ("PAYEE") on or before the Tranche B
Termination Date, the principal amount of $______________, or so much thereof as
may be disbursed and outstanding hereunder, together with interest, as
hereinafter described.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of January 3, 1997 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Agent, and the Lenders referred to therein (including, without
limitation, Payee) and is one of the "Notes" referred to therein issued in
connection with the Tranche B Commitments. Unless defined herein or the context
otherwise requires, capitalized terms used herein have the meaning given to such
terms in the Credit Agreement. Reference is made to the Credit Agreement for
provisions affecting this note regarding applicable interest rates, principal
and interest payment dates, final maturity, acceleration of maturity, exercise
of Rights, payment of attorneys' fees, court costs and other costs of
collection, and certain waivers by Maker and others now or hereafter obligated
for payment of any sums due hereunder.
This note is a Loan Paper and, therefore, is subject to the applicable
provisions of SECTION 14 (including, without limitation, the registration
provisions of SECTION 14.12(d)) of the Credit Agreement, all of which applicable
provisions are incorporated herein by reference the same as if set forth herein
verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
THE VAIL CORPORATION
By:
Name:
Title:
EXHIBIT B
---------
GUARANTY
THIS GUARANTY is executed as of ___________, 19__, by each of the
undersigned (each a "GUARANTOR" and collectively the "GUARANTORS") for the
benefit of NATIONSBANK OF TEXAS, N.A. (with its successors in such capacity,
"AGENT"), as Agent for itself and other Lenders ("LENDERS" and together with
Agent, the "GUARANTEED PARTIES") now or hereafter party to the Credit Agreement
with THE VAIL CORPORATION ("BORROWER") dated as of January 3, 1997 (as
hereafter amended, supplemented, or restated, the "CREDIT AGREEMENT").
Capitalized terms not otherwise defined herein are used as defined in the Credit
Agreement.
A. Each Guarantor is an Affiliate of Borrower.
B. The execution and delivery of this Guaranty is an integral part of the
transactions contemplated by the Loan Papers and a condition precedent to
Lenders' obligations to extend credit under the Credit Agreement.
C. In each Guarantor's judgment, the value of the consideration received
and to be received by it under the Loan Papers is reasonably worth at least as
much as its liability and obligation under this Guaranty, and such liability and
obligation may reasonably be expected to benefit it directly or indirectly.
NOW, THEREFORE, each Guarantor jointly and severally guarantees to Lenders
the prompt payment at maturity (by acceleration or otherwise), and at all times
thereafter, of the Guaranteed Debt owing to Lenders as follows:
1. Borrower. The term "BORROWER" includes, without limitation, Borrower
--------
as a debtor-in-possession and any party hereafter appointed Receiver for
Borrower or all or substantially all of its assets under any Debtor Relief Law.
2. Guaranteed Debt. The term "GUARANTEED DEBT" means all present and
---------------
future indebtedness and obligations, and all renewals, increases and extensions
thereof, or any part thereof, now or hereafter owed to the Guaranteed Parties by
Borrower under the Loan Papers to which it is a party, together with all
interest accruing thereon, fees, costs and expenses (including, without
limitation, (a) all attorneys' fees and expenses incurred pursuant to, or in
connection with the protection of Rights under, the Loan Papers to which
Borrower is a party, and (b) amounts that would become due but for operation of
Section 502, 506 or any other applicable provision of Title 11 of the United
States Code), together with all pre- and post-maturity interest thereon
(including, without limitation, all post-petition interest if Borrower
voluntarily or involuntarily files for bankruptcy protection) and any and all
costs, attorneys' fees and expenses reasonably incurred by any Guaranteed Party
to enforce Borrower's payment of any of the foregoing indebtedness.
3. Absolute Guaranty. This instrument is an absolute, irrevocable and
-----------------
continuing guaranty, and the circumstance that at any time or from time to time
the Guaranteed Debt may be paid in full does not affect the obligation of any
Guarantor with respect to the Guaranteed Debt of Borrower thereafter incurred.
NOTWITHSTANDING ANY CONTRARY PROVISION IN THIS GUARANTY, HOWEVER, EACH
GUARANTOR'S MAXIMUM LIABILITY HEREUNDER IS LIMITED, TO THE EXTENT, IF ANY,
REQUIRED SO THAT ITS LIABILITY IS NOT SUBJECT TO AVOIDANCE UNDER ANY DEBTOR
RELIEF LAW.
4. Representations and Warranties. Each Guarantor acknowledges that
------------------------------
certain representations and warranties contained in the other Loan Papers
(including, without limitation, SECTION 7 of the Credit Agreement) apply to it
and hereby represents and warrants to Agent and Lenders that each such
representation and warranty is true and correct.
5. Covenants. Each Guarantor acknowledges that certain covenants,
---------
agreements and undertakings contained in the other Loan Papers (including,
without limitation, SECTIONS 8, 9 and 10 of the Credit Agreement)
apply to it and hereby covenants and agrees with Agent and Lenders to comply
with each such covenant, agreement and undertaking.
6. Other Indebtedness. If any Guarantor becomes liable for any
------------------
indebtedness owing by Borrower to any Guaranteed Party, other than under this
Guaranty, such liability will not be in any manner impaired or affected by this
Guaranty, and the rights of the Guaranteed Parties under this Guaranty are
cumulative of any and all other rights that the Guaranteed Parties may ever have
against that Guarantor. The exercise by any Guaranteed Parties of any right or
remedy under this Guaranty or otherwise will not preclude the concurrent or
subsequent exercise of any other right or remedy.
7. Default. If a Default under the Credit Agreement exists and as a
-------
result of such Default amounts are owing to any Guaranteed Party in respect of
its Guaranteed Debt, each Guarantor shall, on demand and without further notice
of dishonor and without any notice having been given to any Guarantor previous
to such demand of either the acceptance by any Guaranteed Party of this Guaranty
or the creation or incurrence of any Guaranteed Debt, pay the amount of the
Guaranteed Debt then due and payable to the appropriate Guaranteed Party, and it
is not necessary for such Guaranteed Party, in order to enforce such payment by
any Guarantor, first or contemporaneously to institute suit or exhaust remedies
against Borrower or others liable on such indebtedness or to enforce rights
against any collateral securing such indebtedness.
8. Subordinated Debt. All obligations of Borrower to any Guarantor (the
-----------------
"SUBORDINATED DEBT") are expressly subordinated to the full and final payment of
the Guaranteed Debt. Each Guarantor agrees not to accept any payment of the
Subordinated Debt from Borrower with respect thereto, if a Default exists; and,
if any Guarantor receives any payment of the Subordinated Debt in violation of
the foregoing, that Guarantor will hold any such payment in trust for Agent and
promptly turn it over to Agent, in the form received (with any necessary
endorsements), to be applied to the Guaranteed Debt in the manner contemplated
by the Credit Agreement.
9. Waiver of Subrogation and Contribution. No Guarantor will assert,
--------------------------------------
enforce or otherwise exercise (a) any right of subrogation to any of the rights
or liens of Agent or Lenders or any other beneficiary against Borrower or any
other obligor on the Guaranteed Debt or any collateral or other security, or (b)
any right of recourse, reimbursement, subrogation, contribution, indemnification
or similar right against Borrower or any other obligor on all or any part of the
Guaranteed Debt or any guarantor thereof, and each Guarantor irrevocably waives
any and all of the foregoing rights (whether such rights arise in equity, under
contract, by statute, under common law or otherwise). Guarantor irrevocably
waives the benefit of, and any right to participate in, any collateral or other
security given to Agent or any other beneficiary to secure payment of the
Guaranteed Debt.
10. Obligations Not Diminished. No Guarantor's obligations under this
--------------------------
Guaranty will be released, diminished or affected by the occurrence of any one
or more of the following events: (a) any Guaranteed Party's taking or accepting
of any other security or guaranty for any or all of the Guaranteed Debt; (b) any
release, surrender, exchange, subordination, impairment or loss of any
collateral securing any or all of the Guaranteed Debt; (c) any full or partial
release of the liability of any other obligor on the Obligation; (d) the
modification of or waiver of compliance with, any terms of any other Loan Paper;
(e) the insolvency, bankruptcy or lack of corporate power of any party at any
time liable for any or all of the Guaranteed Debt, whether now existing or
hereafter occurring; (f) any renewal, extension or rearrangement of any or all
of the Guaranteed Debt or any adjustment, indulgence, forbearance or compromise
that may be granted or given by Agent or Lenders to any other obligor on the
Obligation; (g) any neglect, delay, omission, failure or refusal of Agent or
Lenders to take or prosecute any action in connection with the Guaranteed Debt;
(h) any failure of Agent or Lenders to notify any Guarantor of any renewal,
extension or assignment of any or all of the Guaranteed Debt or the release of
any security or of any other action taken or refrained from being taken by Agent
or Lenders against Borrower or any new agreement between Agent or Lenders and
Borrower, it being understood that Agent and Lenders are not required to give
Guarantors any notice of any kind under any circumstances whatsoever with
respect to or in connection with the Guaranteed Debt; (i) the unenforceability
of any part of the Guaranteed Debt against any party because it exceeds the
amount permitted by law, the act of creating it is ultra vires, the officers
creating it exceeded their authority or violated their fiduciary
duties in connection therewith, or otherwise; or (j) any payment of the
Obligation to Agent or Lenders is held to constitute a preference under any
Debtor Relief Law or for any other reason Agent or Lenders are required to
refund such payment or make payment to someone else (and in each such instance
this Guaranty will be reinstated in an amount equal to such payment).
11. Waiver of Right to Require Suit. Each Guarantor waives all rights by
-------------------------------
which it might be entitled to require suit on an accrued right of action in
respect of any of the Guaranteed Debt or require suit against Borrower or
others.
12. Independent Credit Investigation. Each Guarantor confirms that it has
--------------------------------
executed and delivered this Guaranty after reviewing the terms and conditions of
the Loan Papers and such other information as it has deemed appropriate in order
to make its own credit analysis and decision to execute and deliver this
Guaranty. Each Guarantor confirms that it has made its own independent
investigation with respect to Borrower's creditworthiness and is not executing
and delivering this Guaranty in reliance on any representation or warranty by
Agent or Lenders as to such creditworthiness. Each Guarantor expressly assumes
all responsibilities to remain informed of the financial condition of Borrower
and any circumstances affecting (a) Borrower's ability to perform under the Loan
Papers to which it is a party or (b) any collateral securing all or any part of
the Guaranteed Debt.
13. No Discharge. The Guaranteed Debt will not be reduced, discharged or
------------
released because or by reason of any existing or future offset, claim or defense
(except for the defense of payment of the Guaranteed Debt) of Borrower or any
other party against Agent or Lenders or against payment of the Guaranteed Debt,
whether such offset, claim or defense arises in connection with the Guaranteed
Debt or otherwise. Such claims and defenses include, without limitation,
failure of consideration, breach of warranty, fraud, bankruptcy,
incapacity/infancy, statute of limitations, lender liability, accord and
satisfaction, usury, forged signatures, mistake, impossibility, frustration of
purpose, and unconscionability.
14. Successors and Assigns. This Guaranty is for the benefit of Agent and
----------------------
Lenders and their respective successors and permitted assigns, and in the event
of an assignment of all or any of the Guaranteed Debt, the Rights hereunder, to
the extent applicable to the portion assigned, shall be transferred therewith.
This Guaranty shall be binding upon each Guarantor and its successors and
permitted assigns.
15. Loan Paper. This Guaranty is a Loan Paper and is subject to the
----------
applicable provisions of SECTION 14 of the Credit Agreement, all of which are
incorporated into this Guaranty by reference the same as if set forth in this
Guaranty verbatim.
VAIL RESORTS, INC.
VAIL HOLDINGS, INC.
VAIL TRADEMARKS, INC.
VAIL ASSOCIATES REAL ESTATE GROUP, INC.
BEAVER CREEK CONSULTANTS, INC.
BEAVER CREEK ASSOCIATES, INC.
VAIL/BEAVER CREEK RESORT PROPERTIES, INC.
VAIL FOOD SERVICES, INC.
PINEY RIVER RANCH, INC.
VAIL/ARROWHEAD, INC.
BEAVER CREEK FOOD SERVICES, INC.
VAIL ASSOCIATES HOLDINGS, LTD.
VAIL ASSOCIATES REAL ESTATE, INC.
VAIL ASSOCIATES CONSULTANTS, INC.
VAIL ASSOCIATES MANAGEMENT COMPANY
VAIL ASSOCIATES RANCH AND LAND
COMPANY
By:
Name:
Title:
GILLETT GROUP MANAGEMENT, INC.
GHTV, INC.
GILLETT BROADCASTING, INC.
GILLETT BROADCASTING OF MARYLAND, INC.
By:
Name:
of each of the above Companies
RALSTON RESORTS, INC.
KEYSTONE CONFERENCE SERVICES, INC.
KEYSTONE DEVELOPMENT SALES, INC.
KEYSTONE FOOD & BEVERAGE COMPANY
KEYSTONE RESORT PROPERTY MANAGEMENT COMPANY
By:
Name:
of each of the above Companies
EXHIBIT C
---------
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is entered into as of _______________, 19____,
between __________________ (with its successors, "PLEDGOR") and NATIONSBANK OF
TEXAS, N.A. (with its successors in such capacity, "AGENT"), as Agent for itself
and other Lenders ("LENDERS") now or hereafter party to the Credit Agreement
with THE VAIL CORPORATION ("BORROWER") dated as of January 3, 1997 (as
hereafter amended, supplemented, or restated from time to time, the "CREDIT
AGREEMENT"). Capitalized terms not otherwise defined herein are used as defined
in the Credit Agreement.
A. Pledgor is an Affiliate of Borrower.
B. The execution and delivery of this Pledge Agreement is an integral
part of the transactions contemplated by the Loan Papers and a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement.
C. In Pledgor's judgment, the value of the consideration received and to
be received by it under the Loan Papers is reasonably worth at least as much as
its liability and obligation under this Pledge Agreement, and such liability and
obligation may reasonably be expected to benefit it directly or indirectly.
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein or in the Credit
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Agreement, or unless the context otherwise requires, all terms used herein which
are defined in the UCC as in effect on the date hereof shall have the meanings
therein stated. The following additional terms, as used herein, have the
following respective meanings:
COLLATERAL AGENT means the "Collateral Agent" as defined in the Collateral
Agency Agreement and the IRB Pledge Agreement.
FIRST PRIORITY PLEDGED STOCK means the Pledged Stock described on ANNEX A
as being subject to no prior Lien and all capital stock hereafter issued by the
issuers of such Pledged Stock required to be included in the definition of
"PLEDGED STOCK" pursuant to the provisions of SECTION 2(b)(iv).
IRB PLEDGE AGREEMENT means the "Pledge Agreement" as defined in the
Collateral Agency Agreement.
IRB PLEDGE AGREEMENT COLLATERAL means the "Pledge Agreement Collateral" as
defined in the IRB Pledge Agreement.
[KEYSTONE/INTRAWEST DISTRIBUTIONS means all of Pledgor's present and future
rights to receive payments or other distributions from Keystone/Intrawest
L.L.C., a Delaware limited liability company, whether on account of Pledgor's
membership interest in Keystone/Intrawest L.L.C., or otherwise.]
OBLIGATION means (a) all obligations of Pledgor under the Guaranty of even
date herewith executed by it and others for the benefit of Agent on behalf of
the Lenders, and (b) all present and future indebtedness and obligations, and
all renewals, increases and extensions thereof, or any part thereof, now or
hereafter owed to Agent or Lenders by Borrower under the Loan Papers to which it
is a party, together with all interest accruing thereon, fees, costs and
expenses (including, without limitation, (x) all attorneys' fees and expenses
incurred pursuant to, or in connection with the protection of Rights under, the
Loan Papers to which Borrower is a party, and (y) amounts that would become due
but for operation of Section 502, 506 or any other applicable provision of Title
11 of the United States Code), together with all pre- and post-maturity interest
thereon (including, without limitation, all post-petition interest if Borrower
voluntarily or involuntarily files for bankruptcy protection) and any and all
costs, attorneys' fees and expenses reasonably incurred by Agent or any Lender
to enforce Borrower's payment of any of
the foregoing indebtedness.
PLEDGE AGREEMENT COLLATERAL means all of the property referred to in
SECTION 3(a).
PLEDGED STOCK means all of the issued and outstanding capital stock [and
membership interests] now owned or hereafter acquired by Pledgor in the issuers
listed in ANNEX A hereto, including the stock identified on ANNEX A, any
additional or substitute shares of capital stock now owned or hereafter acquired
by Pledgor in such issuers issued after the date hereof and all capital stock
[and membership interests] required to be included in this definition pursuant
to the provisions of SECTION 2(b)(iv). [and (b) the Keystone/Intrawest
Distributions.]
PROCEEDS means all proceeds of, and all other profits, products, rentals
and receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or other realization
upon, the Pledge Agreement Collateral, whether now existing or hereafter
arising.
SECOND PRIORITY PLEDGED STOCK means the Pledged Stock described on ANNEX A
as being subject to a prior Lien and all capital stock hereafter issued by the
issuers of such Pledged Stock required to be included in the definition of
"PLEDGED STOCK" pursuant to the provisions of Section 2.B(d) of the IRB Pledge
Agreement.
SECURITY INTERESTS means the security interests in the Pledge Agreement
Collateral granted hereunder securing the Obligation.
UCC means the Uniform Commercial Code as in effect on the date hereof in
the State of New York; provided, however, that to the extent that the perfection
or the effect of perfection or non-perfection of the Security Interests in any
Pledge Agreement Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than New York, "UCC" means the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or effect of perfection or non-perfection.
2. Representations, Warranties and Certain Agreements.
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(a) Pledgor represents and warrants as follows:
(i) Pledgor has good title to all of the Pledge Agreement
Collateral purported to be owned by it, free and clear of any Liens,
other than the Liens granted to the Collateral Agent under the IRB
Pledge Agreement and the Collateral Agency Agreement. The Pledged
Stock described on ANNEX A includes all of the issued and outstanding
capital stock of each issuer as of the date hereof, except as
otherwise indicated on ANNEX A. All of the Pledged Stock has been
duly authorized and validly issued, is fully paid and non-assessable,
and is subject to no options to purchase or similar rights of any
Person other than the Collateral Agent. As of the date hereof,
Pledgor is not a party to or otherwise bound by any agreement (other
than this Pledge Agreement, the Collateral Agency Agreement and IRB
Pledge Agreement) which restricts in any manner the rights of any
present or future holder of any of the Pledged Stock with respect to
transfers thereof or payments of dividends thereon.
(ii) Contemporaneously with the execution and delivery of this
agreement, Pledgor has delivered to Agent the Pledged Stock described
on ANNEX A (other than any Second Priority Pledged Stock [and the
SSF/VARE membership interest] [and the Keystone/Intrawest
Distributions]). No Pledge Agreement Collateral is in the possession
of any Person asserting any claim thereto or security interest therein
that is not permitted under the Loan Papers, except that (i) Agent or
its designee may have possession of the Pledge Agreement Collateral
(other than the IRB Pledge Agreement Collateral), and (ii) Collateral
Agent may have possession of the IRB Pledge Agreement Collateral.
(iii) Assuming that Agent is in continuous possession of the
First Priority Pledged Stock, the Security Interests will constitute
valid and perfected security interests in the First Priority Pledged
Stock prior to all other Liens. Appropriate financing statements have
been filed in the necessary jurisdictions with respect to all other
Pledge Agreement Collateral, and the Security Interests, to the extent
they may be perfected by filing financing statements in the necessary
jurisdictions, constitute valid and continuing perfected security
interests in such other Pledge Agreement Collateral to the extent a
security interest can be created therein under the UCC, securing the
payment of the Obligation. All other actions necessary to perfect the
Security Interests in each item of such Pledge Agreement Collateral
have been duly taken to the extent a security interest can be created
therein under the UCC as in effect in the applicable jurisdictions of
the United States.
(b) Pledgor agrees as follows:
(i) Pledgor will not change the location of its chief executive
office or chief place of business unless it shall have given Agent
prior notice thereof and (at Pledgor's cost and expense) delivered an
opinion of counsel with respect thereto prior to taking such action in
customary form confirming the continued validity and perfection under
the UCC (to the extent such Security Interests may be perfected under
the UCC) of the Security Interests (which opinion may contain such
exceptions and assumptions as are customary in a legal opinion of such
type). Pledgor shall at all times maintain its chief executive office
within one of the 48 contiguous states in which Article 9 --Secured
Transactions of the UCC is in effect. Pledgor shall not in any event
change the location of any Pledge Agreement Collateral if such change
would cause the Security Interests in such Pledge Agreement Collateral
to lapse or cease to be perfected unless prior to taking such action
it shall have taken such actions as may be necessary to prevent such
lapse in perfection or failure to be perfected.
(ii) Pledgor may not change its name or corporate structure in
any manner unless it shall have given Agent prior notice thereof and
delivered an opinion of counsel in customary form with respect thereto
prior to taking such action confirming the continued validity and
perfection under the UCC (to the extent such Security Interests may be
perfected under the UCC) of the Security Interests (which opinion may
contain such exceptions and assumptions as are customary in a legal
opinion of such type).
(iii) Pledgor shall keep full and accurate books and records
relating to the Pledge Agreement Collateral, and stamp or otherwise
mark such books and records in such manner as Required Lenders may
reasonably require in order to reflect the Security Interests.
(iv) The Pledged Stock will at all times include not less than
the percentage of the issued and outstanding capital stock [and
membership interests] of each issuer shown on ANNEX A, except to the
extent any such Pledged Stock shall have been released in accordance
with the provisions of SECTION 11 below.
(v) Pledgor shall not become a party to any agreement
prohibited by the last sentence of SECTION 2(a)(i).
3. The Security Interests.
----------------------
(a) Pledgor, to secure the full and punctual payment and performance
of the Obligation, hereby grants to Agent, for the benefit of Lenders, a
continuing security interest in and to all of the following property,
whether now owned or existing or hereafter acquired or arising and
regardless of where
located:
(i) all books and records of Pledgor pertaining to any of the
property described in this SECTION 3(a);
(ii) the Pledged Stock owned or held by Pledgor and all of its
rights and privileges with respect thereto including, without
limitation, all dividends, interest, principal and other payments and
distributions made upon or with respect to the Pledged Stock; and
(iii) all Proceeds of all or any of the property described in
clauses (i) and (ii) of this SECTION 3(a) to the extent that such
Proceeds consist of cash or other property which would constitute
Pledge Agreement Collateral pursuant to such clauses (i) and (ii).
(b) The Security Interests are granted as security only and shall not
subject Agent or any Lender to, or transfer or in any way affect or modify,
any obligation or liability of the undersigned with respect to any of the
Pledge Agreement Collateral or any transaction in connection therewith.
(c) Notwithstanding any provision to the contrary set forth in this
agreement, the Security Interests and Rights granted to the Agent hereunder
shall be subject and subordinated to the Liens and Rights granted to the
Collateral Agent under the IRB Pledge Agreement and Collateral Agency
Agreement.
4. Delivery of Pledged Stock. If at any time or from time to time after
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the date hereof Pledgor shall receive any stock required to be pledged
hereunder, it shall promptly:
(a) deliver to Agent the certificate evidencing each such share of
stock, accompanied by instruments of transfer or assignment duly executed
in blank, to be held by Agent for the benefit of Lenders as collateral for
the Obligation in accordance with this agreement (other than any Second
Priority Pledged Stock); and
(b) execute, deliver, file and record any and all instruments,
assignments, agreements, financing statements and other documents
necessary, to the extent determined by and in form and substance
satisfactory to Agent in its reasonable judgment, to perfect or continue
the perfection of a security interest in such stock for the benefit of
Lenders.
5. General Authority. Pledgor hereby irrevocably appoints Agent its true
-----------------
and lawful attorney, with full power of substitution, in the name of the
Pledgor, Agent, Lenders, or otherwise, for the sole use and benefit of Agent and
Lenders, but at Pledgor's expense, to the extent permitted by law to exercise,
at any time and from time to time while a Default exists, all or any of the
following powers (in addition to the powers specified in the Credit Agreement)
with respect to all or any of the Pledge Agreement Collateral, but only to the
extent directed to do so by Required Lenders and subject to the rights granted
to the Collateral Agent under the IRB Pledge Agreement and Collateral Agency
Agreement:
(a) to ask for, demand, sue for, collect, receive and give
acquittance for any and all moneys due or to become due thereon or by
virtue thereof;
(b) to commence, settle, compromise, compound, adjust, prosecute or
defend any claim, suit, action or proceeding with respect thereto;
(c) to sell, transfer, assign or otherwise deal in or with the same
or any party thereof or the Proceeds or avails thereof, as fully and
effectually as if Agent were the absolute owner thereof; and
(d) to extend the time of payment of any or all thereof and to make
any allowance and other
adjustments with reference thereof;
provided, however, that Agent shall give Pledgor not less than ten days prior
written notice of the time and place of any sale or other intended disposition
of any of the Pledge Agreement Collateral pursuant to clause (c) of this SECTION
5. Pledgor agrees that such notice constitutes "reasonable notification" within
the meaning of Section 9-504(3) of the UCC.
6. Record Ownership of Pledged Stock; Notices.
------------------------------------------
(a) While a Default exists, Agent may at any time or from time to
time at the direction of Required Lenders, cause any or all of the First
Priority Pledged Stock to be transferred of record into the name of Agent
or its nominee. If Agent transfers any First Priority Pledged Stock into
its name or the name of its nominee, Agent will thereafter promptly give
Pledgor copies of any notices and communications received by Agent with
respect to any First Priority Pledged Stock. If such Default is cured or
waived, Agent shall then cause any First Priority Pledged Stock so
transferred into its name to be transferred into Pledgor's name.
(b) If a Default exists, Pledgor will promptly give to Agent copies
of any notices and communications received by it with respect to any
Pledged Stock.
7. Right to Receive Distributions on Pledged Stock.
-----------------------------------------------
(a) While a Default exists, Agent shall have the right to receive and
retain as additional security hereunder all dividends, interest, principal
and other payments and distributions made upon or with respect to the First
Priority Pledged Stock. Pledgor shall take all such action necessary or
appropriate, or as Agent may reasonably request, to give effect to such
right. Any dividends, interest, principal and other payments and
distributions which are received in respect of the First Priority Pledged
Stock by Pledgor while a Default exists shall be received in trust for the
benefit of Required Lenders, and shall be segregated from other funds of
Pledgor and shall (to the extent so directed by Agent at the direction of
Required Lenders) forthwith be paid over to Agent (with any necessary
endorsement). Agent will not exercise its rights under this subsection
unless directed to do so by Required Lenders. All such dividends,
interest, principal and other payments and distributions shall be delivered
to Agent upon demand.
(b) So long as no Default exists, Pledgor shall have full power and
authority to receive and retain all dividends, distributions, and other
payments in respect of Pledged Stock pledged to Agent hereunder.
8. Right to Vote Pledged Stock; Releases.
-------------------------------------
(a) Unless a Default exists and Required Lenders have directed Agent
not to permit Pledgor to exercise such rights, Pledgor shall have the
right, from time to time, to vote and to give consents, ratifications and
waivers with respect to the Pledged Stock and other Pledge Agreement
Collateral that it owns and Agent shall, upon receiving a written request
from an authorized financial officer of Pledgor deliver to Pledgor or as
specified in such request, such proxies, powers of attorney, consents,
ratifications and waivers as shall be reasonably requested by Pledgor in
respect of any of the Pledged Stock owned by it which are registered in the
name of Agent or its nominee and any other Pledge Agreement Collateral
owned by Pledgor.
(b) If a Default exists, Agent shall have the right, to the extent
permitted by law, to vote and to give consents, ratifications and waivers
and take any other action with respect to all the First Priority Pledged
Stock with the same force and effect as if Agent were the absolute and sole
owner thereof. Pledgor shall at the request of Agent take all such action
as may be necessary or appropriate to give effect
to the rights granted to Agent pursuant to the immediate preceding sentence.
9. Remedies Upon Enforcement Notice.
--------------------------------
(a) If a Default exists, Agent may (to the extent so directed by
Required Lenders and subject to the rights granted to the Collateral Agent
under the IRB Pledge Agreement and Collateral Agency Agreement) exercise,
on behalf of Lenders, all rights of a secured party under the UCC (whether
or not in effect in the jurisdiction where such rights are exercised) and,
without limiting the foregoing, Agent may, at the direction of Required
Lenders [(and subject to the rights of the Collateral Agent under the terms
of the IRB Pledge Agreement and the Collateral Agency Agreement)], without
being required to give any notice, except as herein provided or as may be
required by Law, sell the Pledge Agreement Collateral or any part thereof
at public or private sale, for cash, upon credit or for future delivery,
and at such price or prices as Agent may deem satisfactory. Agent or any
Lender may be the purchaser of any or all of the Pledge Agreement
Collateral so sold at any public sale (or, if the Pledge Agreement
Collateral is of a type customarily sold in a recognized market or is of a
type which is the subject of widely distributed standard price quotations,
at any private sale). Pledgor will execute and deliver such documents and
take such other lawful actions Agent deems necessary or advisable in order
that any such sale may be made in compliance with law. Upon any such sale
Agent shall have the right to deliver, assign and transfer to the purchaser
thereof the Pledge Agreement Collateral so sold. Each purchaser at any
such sale shall hold the Pledge Agreement Collateral so sold to it
absolutely and free from any claim or right of whatsoever kind, including
any equity or right of redemption of Pledgor which may be waived, and
Pledgor to the extent permitted by law, hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have under any
law now existing or hereafter adopted. The notice (if any) of such sale
required by SECTION 5 shall (1) in case of a public sale, state the time
and place fixed for such sale, and (2) in the case of a private sale, state
the day after which such sale may be consummated. Any such public sale
shall be held at such time or times within ordinary business hours and at
such place or places as Agent may fix in the notice of such sale. At any
such sale the Pledge Agreement Collateral may be sold in one lot as an
entirety or in separate parcels, as Agent may determine. Agent shall not be
obligated to make any such sale pursuant to any such notice. Agent may,
without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned. In case of any sale of all or any part
of the Pledge Agreement Collateral on credit or for future delivery, the
Pledge Agreement Collateral so sold may be retained by Agent until the
selling price is paid by the purchaser thereof, but Agent shall not incur
any liability in case of the failure of such purchaser to take up and pay
for the Pledge Agreement Collateral so sold and, in case of any such
failure, such Pledge Agreement Collateral may again be sold upon like
notice. Agent, instead of exercising the power of sale herein conferred
upon it, may proceed by a suit or suits at law or in equity to foreclose
the Security Interests and sell the Pledge Agreement Collateral, or any
portion thereof, under a judgment or decree of a court or courts of
competent jurisdiction.
(b) Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, Agent may be compelled, with respect to any sale of all or
any part of the Pledged Stock, to limit purchasers to those who will agree,
among other things, to acquire the Pledged Stock for their own account, for
investment and not with a view to the distribution or resale thereof.
Pledgor acknowledges that any such private sales may be at prices and on
terms less favorable to Agent than those obtainable through a public sale
without such restrictions, and, notwithstanding such circumstances, agree
that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Pledged
Stock for the period of time necessary to permit the issuer thereof to
register it for public sale.
(c) For the purpose of enforcing any and all rights and remedies
under this Pledge
Agreement, Agent may, subject to the provisions of the Credit Agreement,
[the IRB Pledge Agreement, and the Collateral Agency Agreement,] have
access to and use Pledgor's books and records relating to the Pledge
Agreement Collateral.
10. Application of Proceeds. During the time a Default exists, the
-----------------------
proceeds of any sale of, or other realization upon, all or any part of the
Pledge Agreement Collateral (subject to the rights of Collateral Agent) shall be
delivered to Agent for the benefit of Lenders.
11. Termination of Security Interests; Release of Pledge Agreement
--------------------------------------------------------------
Collateral. At the time specified in SECTION 5.2(b) or 14.13 of the Credit
- ----------
Agreement for the reversion or release of the Pledge Agreement Collateral to
Pledgor, the Security Interests shall terminate and all rights to the Pledge
Agreement Collateral shall revert and be released to it. At any time and from
time to time prior to such termination of the Security Interests, Agent may
release any of the Pledge Agreement Collateral. Upon any such termination of
the Security Interests or release of Pledge Agreement Collateral, Agent will, at
the expense of the Borrower, deliver to Pledgor any Pledge Agreement Collateral
so released that is in its possession and execute and deliver such documents,
certificates or other instruments as the Borrower shall reasonably request to
evidence the termination of the Security Interests or the release of such Pledge
Agreement Collateral, as the case may be.
12. Waivers; Estoppel; Non-Exclusive Remedies.
-----------------------------------------
(a) No failure on the part of Agent to exercise, no delay in
exercising, and no course of dealing with respect to, any right under this
agreement shall operate as a waiver thereof; nor shall any single or
partial exercise by Agent of any right under this agreement preclude any
other or further exercise thereof or the exercise of any other right.
(b) Pledgor, to the extent it may lawfully do so, (i) agrees that it
will not at any time, in any manner whatsoever, claim or take the benefit
or advantage of any appraisement, valuation, stay, extension, moratorium,
turnover or redemption law, or any law permitting it to direct the order in
which the Pledge Agreement Collateral shall be sold, now or at any time
hereafter in force, which may delay, prevent or otherwise affect the
performance or enforcement of this agreement, (ii) hereby waives all
benefit or advantage of all such laws and covenants and (iii) agrees that
it will suffer and permit the execution of every such power as though no
such law were in force.
(c) Pledgor, to the extent it may lawfully do so, on behalf of itself
and all who claim through or under it, including, without limitation, any
and all subsequent creditors, vendees, assignees and lienors, waives and
releases all rights to demand or to have any marshalling of the Pledge
Agreement Collateral upon any sale, whether made under any power of sale
granted in this agreement or pursuant to judicial proceedings or upon
foreclosure or any enforcement of this agreement and consents and agrees
that all the Pledge Agreement Collateral may at any such sale be offered
and sold as an entirety.
(d) Pledgor waives, to the extent permitted by applicable law,
presentment, demand, protest and any notice of any kind (except notices
explicitly required under this agreement) in connection with this agreement
and any action taken by Agent with respect to the Pledge Agreement
Collateral.
(e) The Rights in this agreement are cumulative and are not exclusive
of any other remedies provided by Law or any other contract.
13. Successors and Assigns. This agreement is for the benefit of Agent
----------------------
and Lenders and their respective successors and permitted assigns, and in the
event of an assignment of all or any of the Obligation, the Rights hereunder, to
the extent applicable to the portion assigned, shall be transferred therewith.
This agreement shall be binding on the undersigned, Agent, Lenders, and their
respective successors and permitted assigns.
14. Loan Paper. This agreement is a Loan Paper and is subject to the
----------
applicable provisions of SECTION 14 of the Credit Agreement, all of which are
incorporated into this agreement by reference the same as if set forth in this
agreement verbatim.
NATIONSBANK OF TEXAS, N.A., ,
as Agent , as Pledgor ,
By: By:
Name: Name:
Title: Title:
ANNEX A TO PLEDGE AGREEMENT
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PLEDGED STOCK
-------------
Authorized
and Pledged
Outstanding Par Stock\ Certificate Percentage
Issuer Shares Value Interest Number Owned Other Liens
- ---------------------------------------------------- ----------- ------ --------- ----------- ----------- ------------------
(a) INSERT FOR PLEDGE AGREEMENT FROM VRI
------------------------------------
Gillett Group Management, Inc. 1,000 $ 1.00 1,000 2 100% None
Gillett Broadcasting of Maryland, Inc. 1,000 $ 1.00 1,000 3 100% None
GHTV, Inc. 1,000 $ 1.00 1,000 3 100% None
Gillett Broadcasting, Inc. 1,000 $ 1.00 1,000 2 100% None
Vail Holdings, Inc. 1,000 $ 1.00 1,000 4 100% None
(b) INSERT FOR PLEDGE AGREEMENT FROM VHI
------------------------------------
The Vail Corporation 1,000 $ 1.00 1,000 2 100% Prior Lien under
Collateral Agency
Agreement
(c) INSERT FOR PLEDGE AGREEMENT FROM BORROWER
-----------------------------------------
Ralston Resorts, Inc. 100 $ 10.00 100 5 100% None
Vail Trademarks, Inc. 1,000 $ 1.00 1,000 1 100% Prior Lien under
Collateral Agency
Agreement
Vail Associates Real Estate Group, Inc. 1,000 $ 1.00 1,000 2 100% Prior Lien under
Collateral Agency
Agreement
Beaver Creek Consultants, Inc. 1,000 $ 1.00 1,000 2 100% Prior Lien under
Collateral Agency
Agreement
Beaver Creek Associates, Inc. 1,000 $ 1.00 1,000 2 100% Prior Lien under
Collateral Agency
Agreement
Vail/Beaver Creek Resort Properties, Inc. 1,000 $ 1.00 800 5 80% Prior Lien under
Collateral Agency
Agreement
Vail Food Services, Inc. 1,000 $ 1.00 1,000 2 100% Prior Lien under
Collateral Agency
Agreement
Piney River Ranch, Inc. 1,000 $ 1.00 1,000 2 100% Prior Lien under
Collateral Agency
Agreement
Vail/Arrowhead, Inc. 1,000 $ 1.00 1,000 1 100% Prior Lien under
Collateral Agency
Agreement
(d) INSERT FOR PLEDGE AGREEMENT FROM RALSTON RESORTS
------------------------------------------------
Keystone Conference Services, Inc. 1,000 $ 1.00 1,000 3 100% None
Keystone Development Sales, Inc. 100 $ 1.00 100 5 100% None
Keystone Food & Beverage Company 10 $ 100.00 10 3 100% None
Keystone Resort Property Management Company 100 $ 1.00 100 9 100% None
Rights with respect to Distributions from
Keystone/Intrawest L.L.C.
(e) INSERT FOR PLEDGE AGREEMENT FROM VAIL ASSOCIATES REAL ESTATE GROUP, INC.
------------------------------------------------------------------------
Vail Associates Holdings, Ltd. 1,000 $ 1.00 1,000 2 100% Prior Lien under
Collateral Agency
Agreement
Vail Associates Real Estate, Inc. 1,000 $ 1.00 800 3 80% Prior Lien under
Collateral Agency
Agreement
Vail Associates Consultants, Inc. 1,000 $ 1.00 800 4 100% Prior Lien under
200 6 Collateral Agency
Agreement
Vail Associates Management Company 1,000 $ 1.00 1,000 2 100% Prior Lien under
Collateral Agency
Agreement
(f) INSERT FOR PLEDGE AGREEMENT FROM BEAVER CREEK ASSOCIATES, INC.
--------------------------------------------------------------
Beaver Creek Food Services, Inc. 1,000 $ 1.00 1,000 1 100% Prior Lien under
Collateral Agency
Agreement
(g) INSERT FOR PLEDGE AGREEMENT FROM VAIL ASSOCIATES REAL ESTATE, INC.
------------------------------------------------------------------
Vail Associates Ranch and Land Company 1,000 $ 1.00 800 5 100% Prior Lien under
200 6 Collateral Agency
Agreement
Slifer, Smith & Frampton/Vail Associates Real N/A N/A 50% N/A 50% Prior Lien under
Estate, L.L.C. Collateral Agency
Agreement
EXHIBIT D
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LOAN REQUEST
______________, 19__
NationsBank of Texas, N.A., as Agent
Corporate Finance Group
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Frank M. Johnson
Fax: (214) 508-0980
Reference is made to the Credit Agreement dated as of January 3, 1997 (as
amended, supplemented or restated from time to time, the "CREDIT AGREEMENT"),
among THE VAIL CORPORATION, the Lenders named therein, and NationsBank of Texas,
N.A., as Agent. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. The
undersigned hereby gives you notice pursuant to SECTION 2.2(a) of the Credit
Agreement that it requests a Loan under the Credit Agreement on the following
terms:
(A) Loan Date (a Business Day)
(B) Principal Amount of Loan*
(C) Type of Loan**
(D) For LIBOR Loan, Interest Period
and the last day thereof***
(E) Tranche****
Please deposit the requested Loan in our account with you [and then wire
transfer amounts from that account as follows:
Borrower hereby certifies that the following statements are true and
correct on the date hereof, and will be true and correct on the Loan Date
specified above after giving effect to such Loan: (a) all of the
representations and warranties of the Companies in the Loan Papers are true and
correct in all material respects (except to the extent that (i) they speak to a
specific date or (ii) the facts on which they are based have been changed by
transactions contemplated or permitted by the Credit Agreement); and (b) no
Material Adverse Event has occurred and no Default or Potential Default exists.
Very truly yours,
THE VAIL CORPORATION
By
Name:
Title:
* Not less than $500,000 or a greater integral multiple of $100,000 (if a
Base Rate Loan); not less than $1,000,000 or a greater integral multiple of
$100,000 (if a LIBOR Loan).
** LIBOR Loan or Base Rate Loan.
*** LIBOR Loan -- 1, 2, 3 or 6 months.
In no event may the Interest Period end after the appropriate Termination
Date.
**** Revolving Credit Loan, Tranche A Term Loan or Tranche B Term Loan.
EXHIBIT E
---------
COMPLIANCE CERTIFICATE
FOR _____________ ENDED _____________, 19__
NationsBank of Texas, N.A., as Agent
Corporate Finance Group
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Frank M. Johnson
Fax: (214) 508-0980
Reference is made to the Credit Agreement dated as of January 3, 1997 (as
amended, supplemented or restated, the "CREDIT AGREEMENT"), among THE VAIL
CORPORATION, the Lenders named therein, and NationsBank of Texas, N.A., as
Agent. Unless otherwise defined herein, all capitalized terms have the meanings
given to such terms in the Credit Agreement.
This certificate is delivered pursuant to SECTION 8.1 of the Credit
Agreement.
I certify to Agent that I am the Chief Financial Officer of Borrower on
the date hereof and that:
1. The financial statements attached hereto were prepared in accordance
with GAAP (except for the omission of footnotes from financial statements
delivered pursuant to SECTION 8.1(b)) and present fairly, in all material
respects, the consolidated financial condition and results of operations of the
Companies as of, and for the _____________________ ending on _____________, 19__
(the "SUBJECT PERIOD").
2. During the Subject Period, no Default or Potential Default has
occurred which has not been cured or waived (except for any Defaults set forth
on the attached schedule).
3. Evidence of compliance by Borrower with the financial covenants of
SECTION 10 of the Credit Agreement as of the last day of the Subject Period is
set forth on the attached calculation worksheet.
4. If this certificate is delivered with financial statements for a
period ending on September 30, the calculation of the Restricted Companies'
Excess Cash Flow for the fiscal year of the Companies ending on such date is set
forth on the attached calculation worksheet.
Very truly yours,
Name:
Chief Financial Officer
ANNEX A TO EXHIBIT E
--------------------
CREDIT FACILITY COVENANTS CALCULATIONS
___________________, ______
______ Months
Ended - -
------------------
10.1 MAXIMUM LEVERAGE RATIO:
(a) FUNDED DEBT OF THE RESTRICTED COMPANIES:
(i) Funded Debt of the Companies per the Financial Statements $
(ii) Minus the following items of Funded Debt for the following
-----
Unrestricted Subsidiaries:
(A) Vail Associates Investments, Inc. ( )
(B) _______________________ ( )
(iii) Plus the principal portion of all Capital Lease obligations
----
of the Companies per the Financial Statements $
(iv) Minus the principal portion of the following Capital Lease
-----
obligations for the following Unrestricted Subsidiaries:
(A) Vail Associates Investments, Inc. ( )
(B) _______________________ ( )
TOTAL FUNDED DEBT OF THE RESTRICTED COMPANIES $
===
(b) RESORT EBITDA:
(i) EBITDA of the Companies for the last four fiscal quarters per
the Financial Statements $
(ii) Plus pro forma EBITDA for assets acquired during such period $
----
(iii) Minus pro forma EBITDA for assets disposed of during such period ( )
-----
(iv) Minus EBITDA for such period related to real estate activities ( )
-----
(v) Minus the following EBITDA for such period attributable to the
-----
following Unrestricted Subsidiaries:
(A) Vail Associates Investments, Inc. ( )
(B) _______________________ ( )
TOTAL RESORT EBITDA OF THE RESTRICTED COMPANIES $
===
Ratio
Maximum Ratio
10.2 MINIMUM FIXED CHARGE COVERAGE RATIO:
(a) COVERAGE
(i) Resort EBITDA for the last four fiscal quarters (from 10.1(b) above) $
(ii) Minus "Adjusted Capital Expenditures" (as defined in (S) 10.2 of
-----
the Agreement) for such period ( )
---
$
(b) FIXED CHARGES
(i) Scheduled Principal Payments and interest on the Obligation for
the last four fiscal quarters $
(ii) Plus scheduled principal and interest payments on all other
----
Funded Debt during such period (other than VRI's 12- 1/4% Senior
Subordinated Notes Due 2002) $
Ratio $
Minimum required ratio
10.3 INTEREST COVERAGE RATIO
(a) Resort EBITDA for the last four fiscal $
quarters (from 10.1(b) above)
(b) Payments of interest on the Restricted $
Companies in the last four fiscal quarters
Ratio
Minimum required ratio
EXHIBIT F
---------
CONVERSION REQUEST
______________, 19__
NationsBank of Texas, N.A., as Agent
Corporate Finance Group
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Frank M. Johnson
Fax: (214) 508-0980
Reference is made to the Credit Agreement dated as of January 3, 1997
(as amended, supplemented or restated, the "CREDIT AGREEMENT"), among THE VAIL
CORPORATION, the Lenders named therein, and NationsBank of Texas, N.A., as
Agent. Unless otherwise defined herein, all capitalized terms have the meanings
given to such terms in the Credit Agreement.
The undersigned hereby gives you notice pursuant to SECTION 3.10 of the
Credit Agreement that it elects to convert all or part of a Loan under the
Credit Agreement from one Type to another Type or elects a new Interest Period
for a LIBOR Loan on the following terms:
(A) Date of conversion or last day of
applicable Interest Period (a Business Day)
(B) Type**, Principal Amount*, and Tranche****
of Existing Borrowing being converted
(C) New Type of Borrowing selected**
(D) For conversion to a LIBOR Rate Borrowing, the
Interest Period selected and the last day thereof***
(E) Type** and Principal Amount* of Existing Borrowing
Being Continued
(F) For continuation of a LIBOR Rate Borrowing, the
Interest Period selected and the last day thereof***
Very truly yours,
THE VAIL CORPORATION
By:
Name:
Title:
* Not less than $500,000 or a greater integral multiple of $100,000 (if a
Base Rate Loan); not less than $1,000,000 or a greater integral multiple of
$100,000 (if a LIBOR Loan).
** LIBOR Loan or Base Rate Loan.
*** 1, 2, 3 or 6 months. The Interest Period may not end after the appropriate
Termination Date.
**** Revolving Credit Loan, Tranche A Term Loan or Tranche B Term Loan.
EXHIBIT G
---------
LC REQUEST
______________, 19__
NationsBank of Texas, N.A., as Agent
Corporate Finance Group
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Frank M. Johnson
Fax: (214) 508-0980
Reference is made to the Credit Agreement dated as of January 3, 1997
(as amended, supplemented or restated, the "CREDIT AGREEMENT"), among THE VAIL
CORPORATION, the Lenders named therein, and NationsBank of Texas, N.A., as
Agent. Unless otherwise defined herein, all capitalized terms have the meanings
given to such terms in the Credit Agreement.
The undersigned hereby gives you notice pursuant to SECTION 2.3(a) of
the Credit Agreement that it requests the issuance of an LC under the LC
Subfacility on the following terms:
(A) Face amount of the LC* _____________________________________
(B) Date on which the LC is to be issued (a Business Day) _______
(C) Expiration date of the LC** _________________________________
Accompanying this notice is a duly executed and properly completed LC
Agreement, together with the payment of any LC fees due and payable pursuant to
SECTION 4.3 of the Credit Agreement.
Borrower hereby certifies that the following statements are true and
correct on the date hereof, and will be true and correct on the date specified
herein for issuance of the LC after giving effect to the issuance of such LC:
(a) all of the representations and warranties in the Loan Papers are true and
correct in all material respects (except to the extent that (i) they speak to a
specific date or (ii) the facts on which they are based have been changed by
transactions contemplated or permitted by the Credit Agreement); (b) no Material
Adverse Event has occurred; and (c) no Default or Potential Default exists.
Very truly yours,
THE VAIL CORPORATION
By:
Name:
Title:
* Not greater than the lesser of (i) an amount which when added to the LC
------
Exposure does not exceed $85,000,000 or (ii) the unused and available
portion of the aggregate commitment under the Revolving Credit.
** Not later than 13 months after issuance (subject to self-extension with up
to 120 days' cancellation notice by Agent to the beneficiary), except for
the BC Housing LC and the Smith Creek LCs.
EXHIBIT H
---------
ASSIGNMENT
Reference is made to the Credit Agreement dated as of January 3, 1997 (as
amended, supplemented or restated, the "CREDIT AGREEMENT"), among THE VAIL
CORPORATION ("BORROWER"), NationsBank of Texas, N.A., as agent ("AGENT"), and
NationsBank of Texas, N.A., and the other lenders party thereto from time to
time (collectively, "LENDERS"). Capitalized terms used herein and not otherwise
defined shall have the meanings given to such terms in the Credit Agreement.
______________________ ("ASSIGNOR"), and _______________________ ("ASSIGNEE")
agree as follows:
1. Assignor hereby sells and assigns to Assignee (without recourse to
Assignor) [INSERT AS APPROPRIATE: ______ percent (____%) of its Rights under
the Loan Papers with respect to the Revolving Credit Tranche, ______ percent
(____%) of its Rights under the Loan Papers with respect to the Tranche A Term
Loan, and ______ percent (____%) of its Rights under the Loan Papers with
respect to the Tranche B Term Loan,] and Assignee hereby purchases and accepts
from Assignor such Rights and assumes the related obligations of Assignor under
the Loan Papers, including, without limitation, [INSERT AS APPROPRIATE: (a)
______ percent (____%) of (i) all Loans funded by Assignor and outstanding on
the Effective Date (as defined below) under the Revolving Credit Tranche,
together with interest accruing thereon on and after the Effective Date, (ii)
all LCs issued under the LC Subfacility of the Revolving Credit Tranche and
uncancelled as of the Effective Date, and (iii) the commitment fee (as described
in SECTION 4.4 of the Credit Agreement) that is earned by Lenders with respect
to the Revolving Credit Tranche from and after the Effective Date and paid by
Borrower after the Effective Date, (b) ______ percent (____%) of all Loans
funded by Assignor and outstanding on the Effective Date under the Tranche A
Term Loan, together with interest accruing thereon on and after the Effective
Date, and (c) ______ percent (____%) of all Loans funded by Assignor and
outstanding on the Effective Date under the Tranche B Term Loan, together with
interest accruing thereon on and after the Effective Date.]. From and after the
Effective Date, (x) Assignee shall be a party to the Credit Agreement and have
the rights and obligations of a Lender thereunder and under the other Loan
Papers and (y) Assignor shall relinquish the Rights assigned and, to the extent
of the Rights assigned, be released from its obligations under the Loan Papers.
2. Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties, or representations
made by any Company in or in connection with any Loan Paper or the execution,
legality, validity, enforceability, genuineness, sufficiency, collectibility, or
value of any Loan Paper, other than that it is the sole legal and beneficial
owner of the interest[s] being assigned by it hereunder and that such
interest[s] is [are] free and clear of any claim, encumbrance, or participation;
(b) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Company or the performance or
observance by any Company of any of its respective obligations under any Loan
Paper; (c) represents and warrants that (i) it possesses all requisite authority
and power to execute, deliver, and comply with the terms of the Loan Papers
(including, without limitation, this Assignment), (ii) the Loan Papers
constitute the entire agreement among Borrower, Agent, and Lenders [INCLUDE
FOLLOWING PROVISO IF AGENT IS ASSIGNOR: (provided, however, that Assignor and
Borrower have executed a fee letter dated as of * , 1996, that
-----------------
does not inure to the benefit of any Lender or Assignee)], (iii) the Credit
Agreement has not been amended, and (iv) to its knowledge, no Default or
Potential Default has occurred pursuant to the Loan Papers (other than those
described on an annex to this Agreement, if any); and (d) attaches the Note[s]
held by it and requests that Agent exchange such Note[s] for [a new Note] [new
Notes] executed by Borrower and payable to Assignee [and Assignor] in accordance
with Paragraph 1 above.
3. Assignee (a) represents and warrants that it is legally authorized to enter
into this Assignment; (b) confirms that it has received a copy of the Credit
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment; (c)
agrees that it will, independently and without reliance upon Agent, Assignor, or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (d) appoints and authorizes Agent
to take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (e) agrees that it will
perform in accordance with their terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender; (f)
represents and warrants that it does not consider any amount paid by it to
Assignor hereunder a loan by it to Assignor; and (g) (i) represents and warrants
to Assignor that under applicable laws and treaties no taxes will be required to
be withheld by Agent, Borrower, or Assignor with respect to any payments to be
made to Assignor in respect of the Obligation, (ii) attaches hereto two duly
completed copies of U.S. Internal Revenue Service Form 4224, Form 1001 or
Form W-8 (wherein Assignee claims entitlement to complete exemption from U.S.
federalwithholding tax on all interest payments made on the Obligation), and
(iii) agrees to provide to Assignor, Agent, and Borrower a new Form 4224, Form
1001 or Form W-8 upon the obsolescence of any previously delivered form and
comparable statements in accordance with applicable U.S. laws and regulations
and amendments duly executed and completed by Assignee, and to comply from time
to time with all applicable U.S. laws and regulations with regard to such
withholding tax exemption./1/
4. The effective date for this Assignment shall be ______________, 19___ (the
"EFFECTIVE DATE").
5. From and after the Effective Date, Agent shall make all payments in respect
of the interest[s] assigned hereby (including payments of principal, interest,
fees, and other amounts) to Assignee. Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective Date by
Agent or with respect to the making of this assignment directly between
themselves.
6. This Assignment shall be governed by and construed in accordance with the
laws of the State of New York.
7. This Assignment (a) embodies the entire agreement between Assignor and
Assignee, supersedes all prior agreements and understandings, if any, relating
to the subject matter hereof, and may be amended only by an instrument in
writing executed jointly by an authorized officer of each party hereto, (b) is
not intended to evidence a "purchase" or "sale" of a "security" within the
meaning of any Law, and (c) may be executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes and all
of which shall constitute, collectively, one agreement; but, in making proof of
this Assignment, it shall not be necessary to reproduce or account for more than
one such counterpart.
8. Any amounts due hereunder from Assignor to Assignee shall be wire
transferred by Assignor to Assignee's account at ____________________, ABA
#________, for credit to ________________________, Attention:
______________________; Reference: THE VAIL CORPORATION. Any amounts due
hereunder from Assignee to Assignor shall be wire transferred by Assignee to
Assignor's account at _____________________, ABA #___________, for credit to
________________________, Attention: _____________________; Reference: THE
VAIL CORPORATION. For purposes of amending SCHEDULE 1 to the Credit Agreement,
Assignee's address, contact person, and facsimile number are as follows:
.
EXECUTED as of the Effective Date.
[ASSIGNOR] [ASSIGNEE]
By: By:
Name: Name:
Title: Title:
______________
/1/ Clause (g) may be deleted if Assignee is not a foreign entity.
CONSENTED TO:/2/
NATIONSBANK OF TEXAS, N.A., AS AGENT THE VAIL CORPORATION, AS BORROWER
By: By:
Name: Name:
Title: Title:
_____________
/2/ Consent not required if Assignee is Affiliate of Assignor.