EXHIBIT 10.25
AMENDED AND RESTATED
CREDIT AGREEMENT
among
THE VAIL CORPORATION
(d/b/a "Vail Associates, Inc.")
Borrower
NATIONSBANK, N.A.
Agent
NATIONSBANC MONTGOMERY SECURITIES LLC
Sole Lead Arranger, Sole Book Manager and Syndication Agent
and
THE LENDERS NAMED HEREIN
$450,000,000
May 1, 1999
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.................................................................15
2.3 L/C 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...............................................................20
3.4 Quotation of Rates.............................................................20
3.5 Default Rate...................................................................20
3.6 Interest Recapture.............................................................20
3.7 Interest Calculations..........................................................20
3.8 Maximum Rate...................................................................21
3.9 Interest Periods...............................................................21
3.10 Conversions....................................................................21
3.11 Order of Application...........................................................22
3.12 Sharing of Payments, Etc.......................................................22
3.13 Booking Loans..................................................................22
3.14 Basis Unavailable or Inadequate for LIBOR......................................22
3.15 Additional Costs...............................................................22
3.16 Change in Laws.................................................................23
3.17 Funding Loss...................................................................23
3.18 Foreign Lenders................................................................24
3.19 Affected Lender's Obligation to Mitigate.......................................24
3.20 Replacement Lender.............................................................24
SECTION 4 FEES...........................................................................24
4.1 Treatment of Fees..............................................................24
4.2 Fee Letter.....................................................................25
4.3 L/C Fees.......................................................................25
4.4 Commitment Fee.................................................................25
SECTION 5 GUARANTIES.....................................................................25
SECTION 6 CONDITIONS PRECEDENT...........................................................25
6.1 Initial Advance................................................................25
6.2 Each Advance...................................................................26
(i)
SECTION 7 REPRESENTATIONS AND WARRANTIES.................................................26
7.1 Regulation U...................................................................26
7.2 Corporate Existence, Good Standing, Authority and Compliance...................26
7.3 Subsidiaries...................................................................26
7.4 Authorization and Contravention................................................27
7.5 Binding Effect.................................................................27
7.6 Financial Statements; Fiscal Year..............................................27
7.7 Litigation.....................................................................27
7.8 Taxes..........................................................................27
7.9 Environmental Matters..........................................................27
7.10 Employee Plans.................................................................28
7.11 Properties and Liens...........................................................28
7.12 Government Regulations.........................................................28
7.13 Transactions with Affiliates...................................................28
7.14 Debt...........................................................................29
7.15 Material Agreements............................................................29
7.16 Labor Matters..................................................................29
7.17 Solvency.......................................................................29
7.18 Intellectual Property..........................................................29
7.19 Full Disclosure................................................................29
7.20 Year 2000 Compliance...........................................................29
SECTION 8 AFFIRMATIVE COVENANTS..........................................................30
8.1 Items to be Furnished..........................................................30
8.2 Use of Proceeds................................................................31
8.3 Books and Records..............................................................31
8.4 Inspections....................................................................31
8.5 Taxes..........................................................................32
8.6 Payment of Obligations.........................................................32
8.7 Expenses.......................................................................32
8.8 Maintenance of Existence, Assets, and Business.................................32
8.9 Insurance......................................................................33
8.10 Environmental Laws.............................................................33
8.11 Subsidiaries...................................................................33
8.12 Indemnification................................................................33
SECTION 9 NEGATIVE COVENANTS.............................................................34
9.1 Taxes..........................................................................34
9.2 Payment of Obligations.........................................................34
9.3 Employee Plans.................................................................34
9.4 Debt...........................................................................34
9.5 Liens..........................................................................34
9.6 Transactions with Affiliates...................................................34
9.7 Compliance with Laws and Documents.............................................34
9.8 Loans, Advances and Investments................................................34
9.9 Management Fees and Distributions..............................................36
9.10 Sale of Assets.................................................................36
9.11 Mergers and Dissolutions.......................................................37
9.12 Assignment.....................................................................37
9.13 Fiscal Year and Accounting Methods.............................................37
(ii)
9.14 New Businesses.................................................................37
9.15 Government Regulations.........................................................37
SECTION 10 FINANCIAL COVENANTS............................................................37
10.1 Maximum Leverage Ratios........................................................37
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..............................................................42
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.............................................44
13.4 Delegation of Duties; Reliance.................................................44
13.5 Limitation of Agent's Liability................................................44
13.6 Default; Collateral............................................................45
13.7 Limitation of Liability........................................................45
13.8 Relationship of Lenders........................................................45
13.9 Benefits of Agreement..........................................................45
SECTION 14 MISCELLANEOUS..................................................................46
14.1 Headings.......................................................................46
14.2 Nonbusiness Days; Time.........................................................46
14.3 Communications.................................................................46
14.4 Form and Number of Documents...................................................46
14.5 Exceptions to Covenants........................................................46
14.6 Survival.......................................................................46
14.7 Governing Law..................................................................46
(iii)
14.8 Invalid Provisions.............................................................46
14.9 Venue; Service of Process; Jury Trial..........................................47
14.10 Amendments, Consents, Conflicts and Waivers....................................47
14.11 Multiple Counterparts..........................................................48
14.12 Successors and Assigns; Participation..........................................48
14.13 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances....49
14.14 Entirety.......................................................................50
(iv)
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SCHEDULES AND EXHIBITS
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Schedule 1 Parties, Addresses, Committed Sums, and Wiring Information
Schedule 2 Critical Assets
Schedule 2.3 Existing Letters of Credit and Debt Existing on the Date of the Original Agreement
Schedule 7.2 Corporate Structure and Jurisdictions of Incorporation and Business
Schedule 7.7 Material Litigation Summary
Schedule 7.9 Material Environmental Matters
Schedule 7.13 Non-Standard Transactions with Affiliates
Exhibit A Revolving Credit Promissory Note
Exhibit B Guaranty
Exhibit C Loan Request
Exhibit D Compliance Certificate
Exhibit E Conversion Request
Exhibit F L/C Request
Exhibit G Assignment
(v)
CREDIT AGREEMENT
----------------
This Amended and Restated Credit Agreement is entered into as of May 1,
1999, among The Vail Corporation, a Colorado corporation doing business as "Vail
Associates, Inc." ("Borrower"), the Lenders (defined below), NationsBank, N.A.,
as Agent for itself and the other Lenders, and NationsBanc Montgomery Securities
LLC, as Sole Lead Arranger, Sole Book Manager and Syndication Agent.
WHEREAS, Borrower, Lenders and Agent (as successor by merger to NationsBank
of Texas, N.A.) are parties to a Credit Agreement dated as of December 19, 1997
(as amended, the "Original Agreement"); and
WHEREAS, the parties wish to amend and restate the Original Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Original Agreement is hereby amended and restated
to read in its entirety as follows:
SECTION 1 DEFINITIONS AND TERMS.
- - - - - - - - - - - - - - - - - - - - - --------- ---------------------
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, N.A., a national banking association, and its
successor or successors as agent for Lenders under this Agreement.
Applicable Margin means, for any day, the margin of interest over the Base
Rate or LIBOR, as the case may be, that is applicable when any interest rate is
determined under this Agreement. The Applicable Margin is subject to adjustment
(upwards or downwards, as appropriate) based on the ratio of Funded Debt to
Resort EBITDA, as follows:
Ratio of Funded Debt Applicable Applicable
to Resort EBITDA Margin for Margin for
LIBOR Base Rate
Loans Loans
================================================================================
Less than 3.25 to 1.00 0.750% 0.000%
- - - - - - - - - - - - - - - - - - - - - --------------------------------------------------------------------------------
Greater than or equal to 3.25 to 1.00, but less than 1.000% 0.000%
3.75 to 1.00
- - - - - - - - - - - - - - - - - - - - - --------------------------------------------------------------------------------
Greater than or equal to 3.75 to 1.00, but less than 1.500% 0%
================================================================================
Ratio of Funded Debt Applicable Applicable
to Resort EBITDA Margin for Margin for
LIBOR Base Rate
Loans Loans
4.25 to 1.00
Greater than or equal to 4.25 to 1.00, but less than 1.875% 0.375%
5.00 to 1.00
Greater than or equal to 5.00 to 1.00 2.250% 0.750%
===============================================================================
Prior to Agent's receipt of the Companies' consolidated unaudited Financial
Statements for the Companies' fiscal quarter ended April 30, 1999, the ratio of
Funded Debt to Resort EBITDA shall be deemed to be greater than 4.25 to 1.00,
but less than 5.00 to 1.00. Thereafter, the ratio of Funded Debt to Resort
EBITDA shall be calculated on a consolidated basis for the Companies in
accordance with GAAP for the most recently completed fiscal quarter of the
Companies for which results are available. The ratio shall be determined from
the Current Financials and any related Compliance Certificate and any change in
the Applicable Margin resulting from a change in such ratio shall be effective
as of the date of delivery of such compliance certificate. However, if Borrower
fails to furnish to Agent the Current Financials and any related Compliance
Certificate when required pursuant to Section 8.1, then the ratio shall be
deemed to be greater than 5.00 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 any fiscal year pursuant to Section 8.1(a)(ii) result in
a different ratio, such revised ratio (whether higher or lower) shall govern
effective as of the date of such delivery. For purposes of determining such
ratio, Resort EBITDA for any fiscal quarter shall include on a pro forma basis
all EBITDA for such period relating to assets acquired (including Restricted
Subsidiaries formed or organized) during such period, but shall exclude on a pro
forma basis all EBITDA for such period relating to any such assets disposed of
in accordance with this Agreement during such period.
Applicable Percentage means, for any day, the commitment fee percentage
applicable under Section 4.4 when commitment fees are determined under this
Agreement. The Applicable Percentage is subject to adjustment (upwards or
downwards, as appropriate) based on the ratio of Funded Debt to Resort EBITDA,
as follows:
================================================================================
Ratio of Funded Debt to Resort EBITDA Applicable Percentage
- - - - - - - - - - - - - - - - - - - - - --------------------------------------------------------------------------------
Less than 3.25 to 1.00 0.200%
- - - - - - - - - - - - - - - - - - - - - --------------------------------------------------------------------------------
Greater than or equal to 3.25 to 1.00, but less than 3.75 0.300%
to 1.00
Greater than or equal to 3.75 to 1.00, but less than 4.25 0.375%
to 1.00
Greater than or equal to 4.25 to 1.00 0.500%
================================================================================
The ratio of Funded Debt to Resort EBITDA shall be determined as described in
the definition of "Applicable Margin."
Apollo means any one or more of the following: Apollo Advisors, L.P.,
a Delaware limited partnership, or any fund, investment vehicle or account
managed, advised or controlled by Apollo Advisors, L.P., or any of its
Affiliates, other than the Companies.
Base Rate means, for any day, the rate per annum equal to the higher
of (a) the sum of the Federal Funds Rate for such day plus 0.5%, and (b) the
Prime Rate for such day. Any change in the Base Rate due to a change in the
Prime Rate or the Federal Funds Rate shall be effective on the effective date of
such change in the Prime Rate or Federal Funds Rate.
Base Rate Loan means a Loan bearing interest at the sum of the Base
Rate plus the Applicable Margin.
BC Housing L/C means the $9,232,709 irrevocable transferable L/C
expiring June 15, 2002, issued by Agent to Colorado National Bank and any
successor thereto as Trustee under the 1997 Trust Indenture with Eagle County,
Colorado, as Issuer, relating to $9,100,000 of Eagle County, Colorado, Taxable
Housing Facilities Revenue Bonds (BC Housing, LLC Project) Series 1997A, under
the terms of which such Trustee will be entitled to draw, with respect to such
Bonds, up to (a) an amount sufficient to pay (i) the principal of such Bonds
when due, or (ii) the portion of the purchase price of such Bonds tendered or
deemed tendered for purchase in accordance with such 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 such
Bonds (at up to 15% per annum), to pay (i) interest on such Bonds when due, or
(ii) the portion of the purchase price of such Bonds tendered or deemed tendered
for purchase in accordance with such Indenture and not subsequently remarketed
corresponding to accrued interest.
Bond L/Cs means the BC Housing L/C, the Smith Creek L/Cs, the
Breckenridge Terrace L/C, the Tarnes L/C and any L/C issued by Agent after the
date hereof under this Agreement at the request of Borrower in support of
revenue bonds or notes for municipal infrastructure or housing projects.
Borrower is defined in the preamble to this Agreement.
Breckenridge Terrace L/C means an irrevocable transferable L/C of up
to $16,250,000 expiring December 15, 2002, to be issued by Agent to U.S. Bank
National Association and any successor thereto as Trustee under the 1999 Trust
Indenture with Breckenridge Terrace LLC as Issuer, relating to approximately
$16,000,000 of Breckenridge Terrace LLC Taxable Housing Facilities Revenue Notes
(Breckenridge Terrace Project), Series 1999A, under the terms of which such
Trustee will be entitled to draw up to (a) an amount sufficient to pay (i) the
principal of such Notes when due, or (ii) the portion of the purchase price of
such Notes tendered or deemed tendered for purchase in accordance with such
Indenture and not subsequently remarketed corresponding to the principal amount
of such Notes, plus (b) an amount equal to approximately 35 days of accrued
interest on such Notes (at up to 15% per annum), to pay (i) interest on such
Notes when due, or (ii) the portion of the purchase price of such Notes tendered
or deemed tendered for purchase in accordance with such Indenture and not
subsequently remarketed corresponding to accrued interest.
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.
Commitment Usage means, at any time, the sum of (a) the aggregate
Principal Debt, plus (b) the L/C Exposure.
Committed Sum means the amount (as reduced and canceled under this
Agreement) stated beside a Lender's name for the Facility on Schedule 1 as most
recently amended under this Agreement.
Companies means VRI and each of VRI's Restricted and Unrestricted
Subsidiaries now or hereafter existing.
Compliance Certificate means a certificate substantially in the form
of Exhibit D and signed by Borrower's Chief Financial Officer, together with the
calculation worksheet described therein.
Conversion Request means a request substantially in the form of
Exhibit E.
Current Financials means, initially, the consolidated Financial
Statements of the Companies for the period ended January 31, 1999, and
thereafter, 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.
4
Debtor Relief Laws means the Bankruptcy Reform Act of 1978, as amended
from time to time, and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments or similar Laws affecting creditors' Rights from time to
time in effect.
Default is defined in Section 11.
Default Rate means an annual rate of interest equal from day to day to
the lesser of (a) the then-existing Base Rate plus 2%, and (b) the Maximum Rate.
Distribution means, with respect to any shares of any capital stock or
other equity securities issued by a Person, (a) the retirement, redemption,
purchase or other acquisition for value of those securities by such Person, (b)
the payment of any dividend on or with respect to those securities by such
Person, (c) any loan or advance by that Person to, or other investment by that
Person in, the holder of any of those securities, and (d) any other payment by
that Person with respect to those securities.
EBITDA means earnings before interest expenses, taxes and non-cash
operating charges (such as depreciation and amortization expense), and
extraordinary gains and losses, calculated on a consolidated basis for the
Companies in accordance with GAAP.
Eligible Assignee means (i) a Lender; (ii) an Affiliate of a Lender;
and (iii) any other Person approved by Agent and, unless a Default or Potential
Default exists at the time any assignment is effected in accordance with Section
14.12(c), Borrower, such approval not to be unreasonably withheld or delayed by
Borrower, provided, however, that neither Borrower nor an Affiliate of Borrower
shall qualify as an Eligible Assignee.
Employee Plan means an employee pension benefit plan covered by Title
IV of ERISA and established or maintained by any Company.
Environmental Law means any Law that relates to the pollution or
protection of ambient air, water or land or to Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and related rules and regulations.
Facility means the revolving credit facility and L/C Subfacility made
available to Borrower under this Agreement.
Federal Funds Rate means, for any day, the annual rate (rounded
upwards, if necessary, to the nearest 0.01%) determined (which determination is
conclusive and binding, absent manifest error) by Agent to be equal to the
weighted average of the rates on overnight federal funds transactions with
member banks of the Federal Reserve System arranged by federal funds brokers on
that day, as published by the Federal Reserve Bank of New York on the next
Business Day, or, if those rates are not published for any day, the average rate
charged to Agent (in its individual capacity) on such day on such transactions
as determined by Agent.
5
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 Permit Agreements means (a) that certain Multiparty
Agreement regarding Forest Service Term Special Use Permit No. 4056-01; (b) that
certain Multiparty Agreement regarding Forest Service Special Use Permit Nos.
4149-01 and 4149-02; (c) any similar agreement or instrument relating to any
Forest Service Permit and authorized or contemplated by the provisions of the
documents executed in connection with the issuance of the Vail Bonds; and (d)
all renewals, extensions and restatements of, and amendments and supplements to,
any of the foregoing.
Forest Service Permits means (a) Ski Area Term Special Use Permit
Holder No. 4056/01 issued by the Service to Borrower for the Vail ski area on
November 23, 1993, and expiring on October 31, 2031; (b) Term Special Use Permit
No. Holder 4191/01 issued by the Service to Borrower's wholly-owned subsidiary,
Beaver Creek Associates, Inc., for the Beaver Creek ski area on January 29,
1980, and expiring on December 31, 2006; (c) Special Use Permit Holder No.
4191/02 issued by the Service to Beaver Creek Associates, Inc., on January 29,
1980, to supplement Term Special Use Permit Holder No. 4191/01, and expiring on
December 31, 2006; (d) Term Special Use Permit Holder No. 5289-01 for Keystone
ski area issued by the Service to Ralston Resorts, Inc., now known as Vail
Summit Resorts, on December 31, 1996, and expiring on December 31, 2032; (e)
Term Special Use Permit Holder No. 5289-04 for Breckenridge ski area issued by
the Service to Ralston Resorts, Inc., now known as Vail Summit Resorts, on
December 31, 1996, and expiring on December 31, 2029; and (f) any replacements
of any of the foregoing.
Funded Debt means the following, calculated on a consolidated basis
for the Restricted Companies in accordance with GAAP: (i) all obligations for
borrowed money (whether as a direct obligation on a promissory note, bond, zero
coupon bond, debenture or other similar instrument, or as an unfulfilled
reimbursement obligation on a drawn letter of credit or similar instrument, or
otherwise), plus (but without duplication) (ii) all Capital Lease obligations
(other than the interest component of such obligations) of any Restricted
Company.
Funding Loss means any loss or expense that any Lender reasonably
incurs because (a) Borrower fails or refuses (for any reason whatsoever, other
than a default by Agent or the Lender claiming such loss or expense) to take any
Loan that it has requested under this Agreement, or (b) Borrower pays any LIBOR
Loan or converts any LIBOR Loan to a Base Rate Loan, in each case, before the
last day of the applicable Interest Period.
GAAP means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time.
6
Guaranty means each guaranty executed in connection with the Original
Agreement or a guaranty executed in connection with this Agreement, in each case
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) U.S. and foreign patents (including, without
limitation, all pending applications, continuations, continuations-in-part,
divisions, reissues, substitutions and extensions of existing patents or
applications), patent licenses and all proceeds of patents (including, without
limitation, license royalties and proceeds from infringement suits), (c)
copyrights (including, without limitation, all registrations and pending
applications), copyright licenses and all proceeds of copyrights (including,
without limitation, license royalties and proceeds from infringement suits), and
(d) trade secrets, but does not include (i) any licenses (including, without
limitation, liquor licenses) or any permits (including, without limitation,
sales tax permits) issued by a Tribunal and in which (y) the licensee's or
permittee's interest is defeasible by such Tribunal and (z) the licensee or
permittee has no right beyond the terms, conditions and periods of the license
or permit, or (ii) trade names or "dba"s to the extent they do not constitute
trademarks or service marks.
Interest Period is determined in accordance with Section 3.9.
Laws means all applicable statutes, laws, treaties, ordinances, rules,
regulations, orders, writs, injunctions, decrees and judgments.
L/C means (a) each of the Bond L/Cs and each existing letter of credit
issued by Agent for the account of any of the Companies and described on Part A
of Schedule 2.3, and (b) each other letter of credit (in such form as shall be
customary in respect of obligations of a similar nature and as shall be
reasonably requested by Borrower) issued by Agent under this Agreement and an
L/C Agreement.
L/C 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 L/C for the account of any Company.
L/C Exposure means, without duplication, the sum of (a) the aggregate
face amount of all undrawn and uncancelled L/Cs, plus (b) the aggregate unpaid
reimbursement obligations of Borrower under drawings, drafts or other forms of
demand honored under any L/C.
L/C Request means a request substantially in the form of Exhibit G.
L/C Subfacility means a subfacility for the issuance of L/Cs, as
described in Section 2.3.
7
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 (rounded upwards, if necessary, to the nearest 1/100 of
1%).
LIBOR Loan means a Loan bearing interest at the sum of LIBOR plus the
Applicable Margin.
Lien means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
Litigation means any action by or before any Tribunal.
Loan means any amount disbursed by any Lender to Borrower or on behalf
of any Company under the Loan Papers, either as an original disbursement of
funds, the continuation of an amount outstanding, or payment under an L/C.
Loan Date is defined in Section 2.2(a).
Loan Papers means (a) this Agreement and the Notes, (b) each Guaranty,
(c) all L/Cs and L/C Agreements, (d) any Financial Hedge between Borrower and
any Lender or an Affiliate of any Lender, and (e) all renewals, extensions and
restatements of, and amendments and supplements to, any of the foregoing.
Loan Request means a request substantially in the form of Exhibit C.
Material Adverse Event means any (a) material impairment of the
ability of the Restricted Companies as a whole to perform their payment or other
material obligations under the Loan Papers or material impairment of the ability
of Agent or any Lender to enforce any of the material obligations of the
Restricted Companies as a whole under the Loan Papers, or (b) material and
adverse effect on the financial condition of the Restricted Companies as a
whole.
8
Material Agreement means, for any Person, any agreement (excluding
purchase orders for material, services or inventory in the ordinary course of
business) to which that Person is a party, by which that Person is bound, or to
which any assets of that Person may be subject, and that is not cancelable by
that Person upon 30 or fewer days' notice without liability for further payment,
other than nominal penalty, and that requires that Person to pay more than
$2,000,000 during any 12-month period.
Maximum Amount and Maximum Rate respectively mean, for a Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest that,
under applicable Law, such Lender is permitted to contract for, charge, take,
reserve or receive on the Obligation held by such Lender.
Moody's means Moody's Investors Service, Inc.
Multiemployer Plan means a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to which any Company
(or any Person that, for purposes of Title IV of ERISA, is a member of
Borrower's controlled group or is under common control with Borrower within the
meaning of Section 414 of the Code) is making, or has made, or is accruing, or
has accrued, an obligation to make contributions.
Note means a promissory note executed under the Original Agreement or
a promissory note executed under this Agreement, in each case substantially in
the form of Exhibit A, as amended, supplemented or restated.
Obligation means all present and future indebtedness and obligations,
and all renewals, increases and extensions thereof, or any part thereof, now or
hereafter owed to Agent and Lenders (and, with regard to any Financial Hedge, to
an Affiliate of any Lender) 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.
Original Agreement is defined in the Recitals to this Agreement.
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) Debt which existed on the date of the Original Agreement and
which is listed on Part B of Schedule 2.3;
(c) Debt arising from endorsing negotiable instruments for
collection in the ordinary course of business;
9
(d) Subordinated Debt (and guarantees by Restricted Companies of
Subordinated Debt of other Restricted Companies, if such guarantees are
subordinated, upon terms satisfactory to Agent, to the payment and
collection of the Obligation);
(e) in addition to the foregoing, (i) Debt of Unrestricted
Subsidiaries which is non-recourse to the Restricted Companies and their
assets, (ii) fees and other amounts payable under the Forest Service
Permits in the ordinary course of business, and (iii) inter-Company Debt
between Restricted Companies; and
(f) in addition to the foregoing, up to $100,000,000 of additional
Debt of the Companies in the aggregate at any point in time.
Permitted Liens means:
(a) Liens directly securing the Obligation;
(b) Liens created by, or pursuant to, the Forest Service Permit
Agreements for the benefit of the holders of the Vail Bonds and Liens on
the amounts in the Bond Fund established and maintained in accordance with
the provisions of the documents executed in connection with the issuance of
the Vail Bonds (and Liens created on all or any portion of the same assets
in connection with any refinancing of such bonds);
(c) Liens on the amounts in the Bond Fund, Redemption Fund and Rebate
Fund established and maintained in accordance with the provisions of the
documents executed in connection with the issuance of the Summit Bonds (and
Liens created on all or any portion of the same assets in connection with
any refinancing of such bonds);
(d) Liens on assets of Unrestricted Subsidiaries securing Debt which
is non-recourse to the Restricted Companies and their assets;
(e) purchase money liens which encumber only the assets acquired;
(f) pledges or deposits made to secure payment of workers'
compensation, unemployment insurance or other forms of governmental
insurance or benefits or to participate in any fund in connection with
workers' compensation, unemployment insurance, pensions or other social
security programs;
(g) good-faith pledges or deposits made to secure performance of bids,
tenders, contracts (other than for the repayment of borrowed money) or
leases, or to secure statutory obligations, surety or appeal bonds or
indemnity, performance or other similar bonds in the ordinary course of
business;
(h) encumbrances and restrictions on the use of real property which do
not materially impair the use thereof;
10
(i) the following, if either (1) no amounts are due and payable and no
Lien has been filed or agreed to, or (2) the validity or amount thereof is
being contested in good faith by lawful proceedings diligently conducted,
reserve or other provision required by GAAP has been made, levy and
execution thereon have been (and continue to be) stayed or payment thereof
is covered in full (subject to the customary deductible) by insurance: (i)
Liens for Taxes; (ii) Liens upon, and defects of title to, property,
including any attachment of property or other legal process prior to
adjudication of a dispute on the merits; (iii) Liens imposed by operation
of law (including, without limitation, Liens of mechanics, materialmen,
warehousemen, carriers and landlords, and similar Liens); and (iv) adverse
judgments on appeal;
(j) any interest or title of a lessor or licensor in assets being
leased or licensed to a Company;
(k) licenses, leases or subleases granted to third Persons which do
not interfere in any material respect with the business conducted by the
Companies;
(l) any Lien on any asset of any corporation that becomes a Subsidiary
of VRI, which Lien exists at the time such corporation becomes a Subsidiary
of VRI and is not created in contemplation thereof;
(m) in respect of Water Rights, the provisions of the instruments
evidencing such Water Rights and any matter affecting such Water Rights
which does not affect the Companies' rights to sufficient quantity and
quality of water to conduct business as in effect on the date hereof or any
expansion planned as of the date hereof (including, without limitation, any
Lien of the Colorado Water Conservation Board, or its successors and
assigns, on stock owned by any Company in a Colorado ditch and reservoir
company formed in accordance with the Colorado Corporation Code, as
amended);
(n) in respect of the Forest Service Permits, the provisions of the
instruments evidencing such permits and all rights of the U.S. and its
agencies with respect thereto or with respect to the land affected thereby;
and
(o) Liens on cash accounts not to exceed $250,000 in the aggregate at
the FirstBank of Vail established in connection with collateralizing a
portion, if any, of certain second mortgage loans made by such bank, and
guaranteed by Borrower, as part of the Vail Associates Home Mortgage
Program for Borrower's employees.
Person means any individual, partnership, entity or Tribunal.
Potential Default means the occurrence of any event or existence of any
circumstance that would, upon notice or lapse of time or both, become a Default.
Prime Rate means the per annum rate of interest established from time to
time by Agent as its prime rate, which rate may not be the lowest rate of
interest charged by Agent to its customers.
Principal Debt means, at any time, the unpaid principal balance of all
Loans.
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Pro Rata and Pro Rata Part means, when determined for any Lender, if no
Default or Potential Default exists, the proportion (stated as a percentage)
that its Committed Sum bears to the Total Commitment, or if a Default or
Potential Default exists, the proportion (stated as a percentage) that the
Principal Debt owed to it bears to the aggregate Principal Debt owed to all
Lenders.
Purchaser is defined in Section 14.12(c).
Quarterly Date means each January 31, April 30, July 31 and October 31.
Representatives means representatives, officers, directors, employees,
attorneys and agents.
Required Lenders means Lenders holding more than (a) 50% of the Total
Commitment, if no Default or Potential Default exists, or (b) 50% of the
outstanding Principal Debt, if a Default or Potential Default exists.
Reserve Requirement means, with respect to any LIBOR Loan for the relevant
Interest Period, the maximum rate at which reserves (including, without
limitation, any marginal, special, supplemental, or emergency reserves) are
required to be maintained under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities" (as such
term is used in Regulation D). Without limiting the effect of the foregoing, the
Reserve Requirement shall reflect any other reserves required to be maintained
by such member banks with respect to (i) any category of liabilities which
includes deposits by reference to which LIBOR is to be determined, or (ii) any
category of extensions of credit or other assets which include LIBOR Loans.
LIBOR shall be adjusted automatically on and as of the effective date of any
change in the Reserve Requirement.
Resort EBITDA means EBITDA, plus insurance proceeds (up to a maximum of
$10,000,000 in the aggregate in any fiscal year) received by the Restricted
Companies under policies of business interruption insurance, minus EBITDA
related to real estate activities and minus any portion of EBITDA attributable
to Unrestricted Subsidiaries.
Responsible Officer means the chairman, president, chief executive officer
or chief financial officer of Borrower.
Restricted Company means VRI, VHI, Borrower and all of VRI's other direct
and indirect Subsidiaries (other than Unrestricted Subsidiaries).
Restricted Subsidiary means VHI, Borrower and all of VRI's other direct and
indirect Subsidiaries (other than Unrestricted Subsidiaries).
Rights means rights, remedies, powers, privileges and benefits.
S&P means Standard & Poor's Ratings Group (a division of McGraw Hill,
Inc.).
Senior Debt means Funded Debt other than Subordinated Debt.
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Senior Subordinated Debt Indenture means the Indenture dated as of May 11,
1999, between VRI, as Issuer, United States Trust Company of New York, as
Trustee, and certain of VRI's Subsidiaries, as Guarantors.
Service means the U.S. Department of Agriculture Forest Service or any
successor agency.
Smith Creek L/Cs means the $27,581,370 irrevocable transferable L/C and the
$19,625,206 irrevocable transferable L/C, each expiring October 15, 2002, and
issued to Colorado National Bank and any successor thereto as Trustee under the
1995 Trust Indenture with Smith Creek Metropolitan District as Issuer, as
supplemented by the 1997 First Supplemental Trust Indenture, relating to the
Smith Creek Metropolitan District, Eagle County, Colorado, Variable Rate Revenue
Bonds, Series 1995 (in the amount of $26,000,000) and Series 1997 (in the amount
of $18,500,000), under the terms of which such Trustee will be entitled to draw,
with respect to the applicable series of Bonds, up to (a) an amount sufficient
to pay (i) the principal of the "Outstanding Bonds" (as defined in such
Indenture) when due, or (ii) the portion of the purchase price of Outstanding
Bonds tendered or deemed tendered for purchase in accordance with such 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 such Trustee may
designate in accordance with such 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
such Indenture and not subsequently remarketed corresponding to accrued
interest.
Solvent means, as to a Person, that (a) the aggregate fair market value of
its assets exceeds its liabilities, (b) it has sufficient cash flow to enable it
to pay its Debts as they mature, and (c) it does not have unreasonably small
capital to conduct its businesses.
Subordinated Debt means any unsecured indebtedness for borrowed money for
which a Company is directly and primarily obligated that (i) does not have any
stated maturity before the latest maturity of any part of the Obligation, (ii)
has terms that are no more restrictive upon the Company than the terms of the
Loan Papers, and (iii) is subordinated, upon terms satisfactory to Agent, to the
payment and collection of the Obligation; and, in any event, "Subordinated Debt"
includes notes, guarantees and all other obligations now or hereafter arising
under or pursuant to the Senior Subordinated Debt Indenture.
Subsidiary means with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person.
Summit Bonds means (a) the Summit County, Colorado, Sports Facilities
Refunding Revenue Bonds (Keystone Resorts Management, Inc. Project) Series 1990,
in the original principal amount of $20,360,000 (of which, approximately
$19,000,000 is outstanding on the date hereof), (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 (all of
which remains outstanding on the date hereof), and (c) refinancings of any of
the foregoing.
13
Tarnes L/C means an irrevocable transferable L/C of up to $8,250,000
expiring December 15, 2002, to be issued by Agent to U.S. Bank National
Association and any successor thereto as Trustee under the 1999 Trust Indenture
with Eagle County, Colorado, as Issuer, relating to approximately $8,000,000 of
Eagle County, Colorado, Taxable Housing Facilities Revenue Bonds (The Tarnes at
BC, LLC Project), Series 1999A, under the terms of which such Trustee will be
entitled to draw up to (a) an amount sufficient to pay (i) the principal of such
Bonds when due, or (ii) the portion of the purchase price of such Bonds tendered
or deemed tendered for purchase in accordance with such 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 such
Bonds (at up to 15% per annum), to pay (i) interest on such Bonds when due, or
(ii) the portion of the purchase price of such Bonds tendered or deemed tendered
for purchase in accordance with such Indenture and not subsequently remarketed
corresponding to accrued interest.
Taxes means, for any Person, taxes, assessments or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises or assets.
Termination Date means the earlier of (a) December 19, 2002, and (b) the
effective date that Lenders' commitments to lend under this Agreement are
otherwise canceled or terminated.
Total Commitment means, at any time, the sum of all Committed Sums for all
Lenders (as reduced or canceled under this Agreement) then in effect.
Tribunal means any (a) local, state, or federal judicial, executive, or
legislative instrumentality, (b) private arbitration board or panel, or (c)
central bank.
Trustee means any Trustee designated as the beneficiary of a Bond L/C.
Type means any type of Loan determined with respect to the applicable
interest option.
UCP means The Uniform Customs and Practice for Documentary Credits, 1993
Revision, International Chamber of Commerce Publication No. 500 (or any revision
thereof).
Unrestricted Subsidiary means Eagle Park Reservoir Company, SSI Venture
LLC, Vail Associates Investments, Inc., Boulder/Beaver, LLC, and any existing
Subsidiary or newly-formed Subsidiary created by Borrower pursuant to Section
8.11 (which may be a partnership, joint venture, corporation, limited liability
company or other entity) (a) which does not own any Forest Service Permit or the
stock of any Restricted Company or any of the assets described on Schedule 2,
(b) which has (and whose other partners, joint venturers, members or
shareholders have) no Debt or other material obligation which is recourse to any
Restricted Company or to the assets of any Restricted Company (other than with
respect to limited guarantees or other recourse agreements of the Companies
which are permitted to be incurred hereunder within the $100,000,000 of recourse
Debt allowed under clause (f) of the definition of "Permitted Debt"), and (c)
which has been designated by Borrower as an Unrestricted Subsidiary by notice to
Agent. Subject to Section 14.10(b)(v), Agent shall execute documentation
reasonably required to release any Restricted Subsidiary which is redesignated
by Borrower as an Unrestricted Subsidiary from its Guaranty.
U.S. means the United States of America.
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Vail Bonds means (a) the Eagle County, Colorado, Sports Facilities Revenue
Refunding Bonds Series 1998, in the original principal amount of $41,200,000,
and (b) refinancings of any of the foregoing.
Vail Summit Resorts means Vail Summit Resorts, Inc. (f/k/a "Ralston
Resorts, Inc."), a Colorado corporation and a wholly-owned Subsidiary of
Borrower.
VHI means Vail Holdings, Inc., a Colorado corporation and the direct owner
of Borrower.
VRI means Vail Resorts, Inc., a Delaware corporation and the indirect owner
of Borrower.
Water Rights means all water rights and conditional water rights that are
appurtenant to real property owned by the Companies or that have been used or
are intended for use in connection with the conduct of the business of the
Companies, including but not limited to (a) ditch, well, pipeline, spring and
reservoir rights, whether or not adjudicated or evidenced by any well or other
permit, (b) all rights with respect to groundwater underlying any real property
owned by the Companies, (c) any permit to construct any water well, water from
which is intended to be used in connection with such real property, and (d) all
right, title and interest of the Companies under any decreed or pending plan of
augmentation or water exchange plan.
Year 2000 Compliant and Year 2000 Problem are defined in Section 7.20.
1.2 Number and Gender of Words. The singular number includes the
--------------------------
plural where appropriate and vice versa, and words of any gender include each
other gender where appropriate.
1.3 Accounting Principles. Under the Loan Papers and any documents
---------------------
delivered thereunder, unless otherwise stated, (a) GAAP in effect on the date of
this Agreement determines all accounting and financial terms and compliance with
financial covenants, (b) otherwise, all accounting principles applied in a
current period must be comparable in all material respects to those applied
during the preceding comparable period, and (c) while VRI has any consolidated
Restricted Subsidiaries, all accounting and financial terms and compliance with
financial covenants must be on a consolidating and consolidated basis, as
applicable.
SECTION 2 COMMITMENT.
- - - - - - - - - - - - - - - - - - - - - --------- ----------
2.1 Credit Facility. Subject to the provisions in the Loan Papers,
---------------
each Lender hereby severally and not jointly agrees to lend to Borrower its Pro
Rata Part of one or more revolving Loans in an aggregate principal amount
outstanding at any time up to such Lender's Committed Sum, which Borrower may
borrow, repay, and reborrow under this Agreement. Loans are subject to the
following conditions:
(a) Each Loan must occur on a Business Day and no later than the
Business Day immediately preceding the Termination Date;
(b) Each Loan must be in an amount not less than (i) $500,000 or
a greater integral multiple of $100,000 (if a Base Rate Loan), or (ii)
$1,000,000 or a greater integral multiple of $100,000 (if a LIBOR Loan);
and
15
(c) When determined, (i) Commitment Usage may not exceed the
Total Commitment, and (ii) for any Lender, its Pro Rata Part of the
Commitment Usage may not exceed such Lender's Committed Sum.
2.2 Loan Procedure.
--------------
(a) Borrower may request a Loan by submitting to Agent a Loan
Request, which is irrevocable and binding on Borrower. It must be received
by Agent no later than 1:00 p.m. on the third Business Day preceding the
date on which funds are requested (the "Loan Date") for any LIBOR Loan or
no later than 1:00 p.m. on the Business Day immediately preceding the Loan
Date for any Base Rate Loan. Agent shall promptly notify each Lender of its
receipt of any Loan Request and its contents.
(b) Each Lender shall remit its applicable Pro Rata Part of each
requested Loan to Agent's principal office in Dallas, Texas, in funds that
are available for immediate use by Agent by 11:00 a.m. on the applicable
Loan Date. Subject to receipt of such funds, Agent shall (unless to its
actual knowledge any of the applicable conditions precedent have not been
satisfied by Borrower or waived by Required Lenders) make such funds
available to Borrower as directed in the Loan Request.
(c) Absent contrary written notice from a Lender, Agent may
assume that each Lender has made its Pro Rata Part of the requested Loan
available to Agent on the applicable Loan Date, and Agent may, in reliance
upon such assumption (but shall not be required to), make available to
Borrower a corresponding amount. If a Lender fails to make such Pro Rata
Part of any requested Loan available to Agent on the applicable Loan Date,
Agent may recover the applicable amount on demand (i) from that Lender,
together with interest at the Federal Funds Rate during the period
commencing on the date the amount was made available to Borrower by Agent
and ending on (but excluding) the date Agent recovers the amount from that
Lender, or (ii), if that Lender fails to pay its amount upon demand, then
from Borrower, together with interest at an annual interest rate equal to
the rate applicable to the requested Loan during the period commencing on
the Loan Date and ending on (but excluding) the date Agent recovers the
amount from Borrower. No Lender is responsible for the failure of any other
Lender to fund any part of any Loan.
2.3 L/C Subfacility.
---------------
(a) Subject to the terms and conditions of this Agreement and
applicable Law, Agent agrees to issue L/Cs denominated in U.S. Dollars
under the Facility upon Borrower's delivery of an L/C Request and an L/C
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 L/C is
to be issued; provided that, Commitment Usage may not exceed the Total
Commitment. Each L/C (other than the Bond L/Cs) must expire no later than
13 months from its issuance; provided that any L/C (other than the Bond
L/Cs) may, at Borrower's request, provide that it is self-extending upon
its expiration date for successive periods of 6 to 12 months each (as
selected by Borrower), unless Agent has given the beneficiary thereunder at
least 30 days (but no more than 120 days) prior written notice to the
contrary (provided, however, that such notice shall in no event be given by
Agent unless (i) Agent is directed so to do by Borrower, (ii) a Default
exists, or (iii) such extension would extend the
16
expiration date beyond the Termination Date). Amounts drawn under the Bond
L/Cs are subject to reinstatement upon the terms set forth therein. In no
event may any L/C have an expiration date later than the Termination Date.
(b) Immediately upon Agent's issuance of any L/C, Agent shall be
deemed to have sold and transferred to each Lender, and each Lender shall
be deemed irrevocably and unconditionally to have purchased and received
from Agent, without recourse or warranty, an undivided interest and
participation (to the extent of such Lender's Pro Rata Part) in the L/C and
all applicable Rights of Agent in the L/C (other than Rights to receive the
fronting fees provided for in Section 4.3). Agent shall provide copies of
L/Cs to Lenders upon request and shall distribute quarterly schedules of
the outstanding L/Cs to each Lender.
(c) To induce Agent to issue and maintain L/Cs, and to induce
Lenders to participate in issued L/Cs, Borrower agrees to pay or reimburse
Agent (i) on or before the date when any draft, draw or other form of
demand is presented under any L/C, the amount paid or to be paid by Agent
(subject to a credit, in the case of a Bond L/C, 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 L/C, for amending L/C Agreements, for
honoring drafts, draws or other forms of demands, and taking similar action
in connection with letters of credit. If Borrower (or, in the case of a
drawing under a Bond L/C, the relevant Trustee) has not reimbursed Agent
for any drafts or draws or other forms of demands paid or to be paid and
Borrower has not requested a Loan to fund such reimbursement obligations
within 24 hours following Agent's demand for reimbursement, Agent is
irrevocably authorized to fund Borrower's reimbursement obligations as a
Loan under this Agreement (and the proceeds of the Loan shall be advanced
directly to Agent to pay Borrower's unpaid reimbursement obligations). If
funds cannot be advanced because the Facility has been terminated under
Section 12.1, then Borrower's reimbursement obligation shall constitute a
demand obligation. Borrower's obligations under this Section 2.3(c) are
absolute and unconditional under any and all circumstances and irrespective
of any setoff, counterclaim or defense (other than payment) that Borrower
may have at any time against Agent or any other Person. Agent shall
promptly distribute reimbursement payments received from Borrower to all
Lenders according to their Pro Rata Part. From the date due to the date
paid, unpaid reimbursement amounts accrue interest that is payable on
demand at the Default Rate.
(d) Agent shall promptly notify Borrower of the date and amount
of any draft, draw or other form of demand presented for honor under any
L/C 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, draw or other form of demand, unless presentment on its face does
not comply with the terms of the applicable L/C. 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,
17
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 Bond L/C,
the relevant Trustee) fails to reimburse Agent as provided in Section
2.3(c) within 24 hours after Agent's demand for reimbursement, and funds
cannot be advanced under this Agreement to satisfy the reimbursement
obligations, Agent shall promptly notify each Lender of Borrower's failure,
of the date and amount paid, and of each Lender's Pro Rata Part of the
unreimbursed amount. Each Lender shall promptly and unconditionally make
available to Agent in immediately available funds such Pro Rata Part of the
unpaid reimbursement obligation. Funds are due and payable to Agent before
the close of business on the Business Day when Agent gives notice to each
Lender of Borrower's reimbursement failure (if notice is received by such
Lender before 2:00 p.m.) (in the time zone where such Lender's office
listed on Schedule 1 is located) or on the next succeeding Business Day (if
received after 2:00 p.m.). All amounts payable by any Lender accrue
interest at the Federal Funds Rate from the day the applicable draft, draw
or other form of demand is paid by Agent to (but not including) the date
the amount is paid by the Lender to Agent.
(f) Borrower acknowledges that each L/C is deemed issued upon
delivery to the beneficiary or Borrower. If Borrower requests any L/C be
delivered to Borrower rather than the beneficiary, and Borrower
subsequently cancels that L/C, Borrower agrees to return it to Agent
together with Borrower's written certification that it has never been
delivered to the beneficiary. If any L/C 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 L/C.
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 L/C.
(g) Agent agrees with each Lender that it will exercise and
give the same care and attention to each L/C as it gives to its other
letters of credit. Each Lender and Borrower agree that, in paying any
draft, draw or other form of demand under any L/C, Agent has no
responsibility to obtain any document (other than any documents expressly
required by the respective L/C) 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 L/C'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 L/C, applicable draws, drafts, other
forms of demand 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 L/C.
18
(h) On the Termination Date, or during the continuance of any
Default under Section 11.3, or upon any demand by Agent during the
continuance of any other Default, Borrower shall provide to Agent, for the
benefit of Lenders, cash collateral in an amount equal to the then-existing
L/C Exposure. Any cash collateral provided by Borrower to Agent hereunder
shall be deposited by Agent in an interest-bearing cash collateral account
maintained with Agent at the office of Agent and invested in obligations
issued or guaranteed by the U.S. and, upon cure of any Default or upon the
surrender of any L/C, 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 L/C, any dispute
about it, or the failure of Agent to honor a draft, draw or other form of
demand under any L/C, unless they arise as a result of Agent's failure to
act in accordance with the procedures of the UCP (as modified by any L/C
Agreement or other writing between Borrower and Agent).
(j) Although referenced in any L/C, 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 L/C are as provided in this Agreement, drafts and draws and
other forms of demands under each L/C are part of the Obligation, and the
terms of this Agreement control any conflict between the terms of this
Agreement and any L/C Agreement.
SECTION 3 TERMS OF PAYMENT.
- - - - - - - - - - - - - - - - - - - - - --------- ----------------
3.1 Notes and Payments.
------------------
(a) The Principal Debt shall be evidenced by Notes, payable to each
Lender in the stated principal amount of its Committed Sum.
(b) Borrower must make each payment on the Obligation to Agent's
principal office in Dallas, Texas, in funds that will be available for
immediate use by Agent by 12:00 noon on the day due; otherwise, but subject
to Section 3.8, those funds continue to accrue interest as if they were
received on the next Business Day. Agent shall pay to each Lender any
payment to which that Lender is entitled on the same day Agent receives the
funds from Borrower if Agent receives the payment before 12:00 noon, and
otherwise before 12:00 noon on the following Business Day. If and to the
extent that Agent does not make payments to Lenders when due, unpaid
amounts shall accrue interest at the Federal Funds Rate from the due date
until (but not including) the payment date.
19
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 and on the Termination Date.
(b) The Principal Debt is due and payable on the Termination Date.
(c) If the Commitment Usage ever exceeds the Total Commitment,
Borrower shall pay Principal Debt in at least the amount of that excess,
together with (i) all accrued and unpaid interest on the principal amount
so paid and (ii) any resulting Funding Loss.
(d) Borrower may voluntarily reduce or prepay the Facility as follows:
(i) Without premium or penalty and upon giving at least two
Business Days prior written and irrevocable notice to Agent, Borrower
may terminate all or reduce part of the unused portion of the Total
Commitment. Each partial reduction (unless the remaining portion of
such commitment is less) must be in an amount of not less than
$5,000,000 or a greater integral multiple of $1,000,000, and shall be
Pro Rata among all Lenders. Once terminated or reduced, such
commitments may not be reinstated or increased.
(ii) Borrower may voluntarily prepay all or any part of the
Principal Debt at any time without premium or penalty, subject to the
following conditions:
(A) Agent must receive Borrower's written payment notice
(which shall specify (1) the payment date, and (2) the Type and
amount of the Loan(s) to be paid; such notice shall constitute an
irrevocable and binding obligation of Borrower to make a payment
on the designated date) by 1:00 p.m. on (x) the third Business
Day preceding the date of payment of a LIBOR Loan and (y) the
date of payment of a Base Rate Loan;
(B) each partial payment must be in a minimum amount of at
least $500,000 if a Base Rate Loan or $1,000,000 if a LIBOR Loan
or, in either case, a greater integral multiple of $100,000;
(C) all accrued interest on the principal amount so to be
prepaid must also be paid in full on the date of payment; and
(D) Borrower shall pay any related Funding Loss upon
demand.
3.3 Interest Options. Except where specifically otherwise provided,
----------------
Loans bear interest at an annual rate equal to the lesser of (a) the Base Rate
plus the Applicable Margin or LIBOR plus the Applicable Margin for the Interest
Period, if any, selected by Borrower (in each case as designated or deemed
designated
20
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
L/Cs, 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
21
rather than as interest, (c) exclude voluntary payments and their effects, and
(d) amortize, prorate, allocate and spread the total amount of interest
throughout the entire contemplated term of the Obligation. However, if the
Obligation is paid in full before the end of its full contemplated term, and if
the interest received for its actual period of existence exceeds the Maximum
Amount, Lenders shall refund any excess (and Lenders shall not, to the extent
permitted by Law, be subject to any penalties provided by any Laws for
contracting for, charging, taking, reserving or receiving interest in excess of
the Maximum Amount).
3.9 Interest Periods. When Borrower requests any LIBOR Loan,
----------------
Borrower may elect the applicable interest period (each an "Interest Period"),
which may be, at Borrower's option, one, two, three or six months, subject to
the following conditions: (a) the initial LIBOR Interest Period commences on the
applicable Loan Date or conversion date, and each subsequent LIBOR Interest
Period commences on the day when the next preceding applicable Interest Period
expires; (b) if any LIBOR Interest Period begins on a day for which no
numerically corresponding Business Day in the calendar month at the end of the
Interest Period exists, then the Interest Period ends on the last Business Day
of that calendar month; (c) no LIBOR Interest Period for any portion of
Principal Debt may extend beyond the scheduled payment date for that portion of
Principal Debt; and (d) no more than 20 LIBOR Interest Periods may be in effect
at one time.
3.10 Conversions. Subject to the dollar limits and denominations of
-----------
Section 2.1 and the limitations on LIBOR Interest Periods of Section 3.9,
Borrower may (a) convert all or part of a LIBOR Loan on the last day of the
applicable Interest Period to a Base Rate Loan, (b) convert all or part of a
Base Rate Loan at any time to a LIBOR Loan, and (c) elect a new Interest Period
for all or part of a LIBOR Loan, in each case by delivering a Conversion Request
to Agent no later than 1:00 p.m. on the third Business Day before the conversion
date or the last day of the Interest Period, as the case may be (for conversion
to a LIBOR Loan or election of a new Interest Period), and no later than 1:00
p.m. one Business Day before the last day of the Interest Period (for conversion
to a Base Rate Loan). Absent Borrower's notice of conversion or election of a
new Interest Period, a LIBOR Loan shall be converted to a Base Rate Loan when
the applicable Interest Period expires.
3.11 Order of Application. If no Default or Potential Default
--------------------
exists, any payment shall be applied to the Obligation in the order and manner
as Borrower directs. If a Default or Potential Default exists or if Borrower
fails to give direction, any other payment (including proceeds from the exercise
of any Rights hereunder) shall be applied in the following order: (a) to all
fees and expenses for which Agent or Lenders have not been paid or reimbursed in
accordance with the Loan Papers (and if such payment is less than all unpaid or
unreimbursed fees and expenses, then the payment shall be paid against unpaid
and unreimbursed fees and expenses in the order of incurrence or due date); (b)
to accrued interest on the Principal Debt; and (c) ratably to the remainder of
the Obligation.
3.12 Sharing of Payments, Etc. If any Lender obtains any payment
------------------------
(whether voluntary, involuntary or otherwise) that exceeds its Pro Rata Part of
the Commitment Usage then that Lender shall purchase from the other Lenders
participations that will cause the purchasing Lender to share the excess payment
ratably with each other Lender. If all or any portion of any excess payment is
subsequently recovered from the purchasing Lender, then the purchase shall be
rescinded and the purchase price restored to the extent of the recovery.
Borrower agrees that any Lender purchasing a participation from another Lender
under this section may, to the fullest extent permitted by Law, exercise all of
its Rights of payment with respect to that participation as fully as if that
Lender were the direct creditor of Borrower in the amount of that participation.
22
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 L/C, if any present or future Law
regarding capital adequacy or compliance by Agent (as issuer of L/Cs) 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.
23
(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 U.S. or any State thereof (a) represents to
Agent and Borrower that (i) no Taxes are required to be withheld by Agent or
Borrower with respect to any payments to be made to it in respect of the
Obligation and (ii) it has furnished to Agent and Borrower two duly completed
copies of U.S. Internal Revenue Service Form 4224 or Form 1001 (wherein it
claims entitlement to complete exemption from U.S. federal withholding tax on
all interest payments under the Loan Papers) or Form W-8, or any other successor
tax form acceptable to Agent and Borrower, and (b) covenants to (i) provide
Agent and Borrower a new tax form upon the expiration, inaccuracy or
obsolescence of any previously delivered form according to, and to the extent
permitted by, Law, duly executed and completed by it, and (ii) comply from time
to time with all Laws with regard to the withholding tax exemption. If any of
the foregoing is not true or the applicable forms are not provided, then
Borrower and Agent (without duplication) may deduct and withhold from interest
payments under the Loan Papers U.S. federal income tax at the full rate
applicable under the Code. In addition, Borrower shall not be required to make
any payments contemplated by Section 3.15(c) to the extent that such payments
would not have been payable if such Lender had furnished the appropriate form
24
(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.
- - - - - - - - - - - - - - - - - - - - - --------- ----
4.1 Treatment of Fees. The fees described in this Section 4 (a) are
-----------------
not compensation for the use, detention, or forbearance of money, (b) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this Agreement, (c) are payable in accordance with Section 3.1(b), (d) are non-
refundable, and (e) to the fullest extent permitted by Law, bear interest, if
not paid when due, at the Default Rate.
4.2 Fee Letter. Borrower shall pay the fees described in the letter
----------
agreements between Borrower and Agent dated November 19, 1997, and April 30,
1999.
4.3 L/C Fees. Borrower shall pay to Agent for the Pro Rata benefit
--------
of Lenders a fee for the issuance of each L/C (which fee may, subject to the
provisions of this Agreement, be included in a Loan) equal to (a) the Applicable
Margin for LIBOR Loans (as in effect from day to day while such L/C is
outstanding), multiplied by (b) the face amount of such L/C as it exists from
day to day, payable in arrears on each Quarterly Date during the life of such
L/C, and on the expiry date of such L/C, calculated on the basis of the actual
number of days elapsed (including the first day, but excluding the last day of
any calculation period), but computed as if each calendar year consisted of 360
days. In addition, Borrower shall
25
pay to Agent for its own account a fronting fee for the issuance of each L/C
equal to 0.125% of the face amount of such L/C (but in no event less than $350).
4.4 Commitment Fee. Borrower shall pay to Agent for the ratable
--------------
account of Lenders a commitment fee, payable as it accrues on each Quarterly
Date and on the Termination Date, equal to the Applicable Percentage (per
annum), of the amount by which the Total Commitment exceeds the average daily
Commitment Usage, in each case during the calendar quarter (or portion thereof)
ending on such date, calculated on the basis of the actual number of days
elapsed (including the first day, but excluding the last day) in a calendar year
of 365 or 366 days, as the case may be.
SECTION 5 GUARANTIES. All obligations of Borrower under the Loan Papers to
- - - - - - - - - - - - - - - - - - - - - --------- ----------
which it is a party shall be guaranteed in accordance with a Guaranty executed
by each other Restricted Company.
SECTION 6 CONDITIONS PRECEDENT.
- - - - - - - - - - - - - - - - - - - - - --------- --------------------
6.1 Initial Advance. In addition to the items delivered under the
---------------
Original Agreement and 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 L/C, unless Agent has received each of the following items:
(a) the Promissory Notes;
(b) a Guaranty executed by each Restricted Company (other than
Borrower);
(c) an Officers' Certificate for each Restricted Company, relating to
Articles of Incorporation, Bylaws, Resolutions, and Incumbency;
(d) Certificates of Existence and Good Standing (Account Status) for
each Restricted Company from its state of organization and each other state
where it does business, each dated after April 10, 1999;
(e) Legal opinions of Ingrid J. Keiser, Assistant General Counsel of
VRI, and Cahill, Gordon & Reindel, special New York counsel to Borrower;
(f) Payment in full of all amounts then due Agent under Section 8.7 or
the fee letter described in Section 4.2; and
(g) Evidence that the Companies have issued and sold at least
$150,000,000 of Subordinated Debt and have applied the net proceeds thereof
to the repayment of the Principal Debt outstanding on the date hereof.
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 L/C (including the initial
L/Cs), unless on the applicable date (and after giving effect to the requested
Loan or L/C): (a) Agent shall have timely received a Loan Request or L/C Request
(together with the applicable L/C Agreement), as the case may be; (b) Agent
shall have received any applicable L/C fee; (c) all of the representations and
warranties of the Companies in the Loan Papers are true and correct in all
material
26
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 L/C 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 L/C. 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 L/C, without all
conditions being satisfied, but, to the extent permitted by Law, that funding
and issuance shall not be deemed to be a waiver of the requirement that each
condition precedent be satisfied as a prerequisite for any subsequent funding or
issuance, unless Required Lenders specifically waive each item in writing.
SECTION 7 REPRESENTATIONS AND WARRANTIES. Borrower represents and
- - - - - - - - - - - - - - - - - - - - - --------- ------------------------------
warrants to Agent and Lenders as follows:
7.1 Regulation U. No Company is engaged principally, or as one of
------------
its important activities, in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulations T, U
or G of the Board of Governors of the Federal Reserve System, as amended.
7.2 Corporate Existence, Good Standing, Authority and Compliance.
-------------------------------------------------------------
Each Company is duly organized, validly existing and in good standing under the
Laws of the jurisdiction in which it is incorporated or organized as identified
on Schedule 7.2 (or any revised Schedule 7.2 delivered by Borrower to Lenders
pursuant to Section 8.11, 9.10 or 9.11). Except where failure is not a Material
Adverse Event, each Restricted Company (a) is duly qualified to transact
business and is in good standing as a foreign corporation or other entity in
each jurisdiction where the nature and extent of its business and properties
require due qualification and good standing as identified on Schedule 7.2 (or
any such revised Schedule 7.2), and (b) possesses all requisite authority,
permits and power to conduct its business as is now being, or is contemplated by
this Agreement to be, conducted.
7.3 Subsidiaries. VRI has no Subsidiaries, other than as disclosed
------------
on Schedule 7.2 (or on any revised Schedule 7.2 delivered by Borrower to Lenders
pursuant to Section 8.11, 9.10 or 9.11). All of the outstanding shares of
capital stock (or similar voting interests) of the Companies are duly
authorized, validly issued, fully paid and nonassessable. All of the outstanding
shares of capital stock of the Companies other than VRI are owned of record and
beneficially as set forth thereon, free and clear of any Liens, restrictions,
claims or Rights of another Person, other than Permitted Liens, and are not
subject to any warrant, option or other acquisition Right of any Person or
subject to any transfer restriction, other than restrictions imposed by
securities Laws and general corporate Laws.
7.4 Authorization and Contravention. The execution and delivery by
-------------------------------
each Company of each Loan Paper or related document to which it is a party and
the performance by it of its obligations thereunder (a) are within its corporate
power, (b) have been duly authorized by all necessary corporate action, (c)
require no action by or filing with any Tribunal (other than any action or
filing that has been taken or made on or before the date of this Agreement), (d)
do not violate any provision of its charter or bylaws, (e) do not violate any
provision of Law or any order of any Tribunal applicable to it, other than
violations that individually or collectively are not a Material Adverse Event,
(f) do not violate any Material Agreements to which it is a party, or (g) do not
result in the creation or imposition of any Lien on any asset of any Company.
27
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
28
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 on
any Company's property.
(c) As of the date hereof, the Forest Service Permits constitute all
of the material licenses, permits or leases from the U.S. held by the
Companies for use in connection with their respective skiing businesses.
(d) Each of the Water Rights is, to the knowledge of the Companies, in
full force and effect and, to the knowledge of the Companies, there is no
material default or existing condition which with the giving of notice or
the passage of time or both would cause a material default under any Water
Right that is material to the operation of the Companies. Subject to the
available supply and to the terms and conditions of the applicable decrees,
the Companies' Water Rights provide a dependable, legal and physical
snowmaking, irrigation and domestic water supply for the operation of the
Companies' businesses.
7.12 Government Regulations. No Company is subject to regulation
----------------------
under the Investment Company Act of 1940, as amended, or the Public Utility
Holding Company Act of 1935, as amended.
7.13 Transactions with Affiliates. Except as set forth in Schedule
----------------------------
7.13 and except for other transactions which do not, in the aggregate, cost the
Restricted Companies more than $2,000,000 in any fiscal year, no Restricted
Company is a party to any transaction with any Affiliate (other than another
Restricted Company), except upon fair and reasonable terms not materially less
favorable than it could obtain or could become entitled to in an arm's-length
transaction with a Person that was not its Affiliate.
7.14 Debt. No Company is an obligor on any Debt, other than
----
Permitted Debt.
7.15 Material Agreements. All Material Agreements to which any
-------------------
Restricted Company is a party are in full force and effect, and no default or
potential default exists on the part of any Restricted Company thereunder that
is a Material Adverse Event.
29
7.16 Labor Matters. There are no binding agreements of any type with
-------------
any labor union, labor organization, collective bargaining unit or employee
group to which any Company is bound, other than Vail Summit Resorts' collective
bargaining agreements with the Breckenridge Professional Ski Patrol Association
and Keystone Professional Ski Patrol Association and agreements which may be
entered into after the date of this Agreement which do not constitute a Material
Adverse Event. No actual or threatened strikes, labor disputes, slow downs,
walkouts, or other concerted interruptions of operations by the employees of any
Company that constitute a Material Adverse Event exist. Hours worked by and
payment made to employees of the Companies have not been in violation of the
Fair Labor Standards Act, as amended, or any other applicable Law dealing with
labor matters, other than any violations, individually or collectively, that are
not a Material Adverse Event. All payments due from any Company for employee
health and welfare insurance have been paid or accrued as a liability on its
books, other than any nonpayments that are not, individually or collectively, a
Material Adverse Event.
7.17 Solvency. On each Loan Date, Borrower is, and after giving
--------
effect to the requested Loan will be, Solvent.
7.18 Intellectual Property. Each Company owns (or otherwise holds
---------------------
rights to use) all material Intellectual Property, licenses, permits and trade
names necessary to continue to conduct its businesses as presently conducted by
it and proposed to be conducted by it immediately after the date of this
Agreement. To its knowledge, each Company is conducting its business without
infringement or claim of infringement of any license, patent, copyright, service
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.
7.19 Full Disclosure. Each material fact or condition relating to
---------------
the Loan Papers or the financial condition, business or property of any Company
has been disclosed to Agent. All information furnished by any Company to Agent
in connection with the Loan Papers on or before the date of this Agreement was,
taken as a whole, true and accurate in all material respects or based on
reasonable estimates on the date the information is stated or certified.
7.20 Year 2000 Compliance. Borrower has: (a) initiated a review and
--------------------
assessment of all areas within each Restricted Company's business and operations
(including those affected by suppliers, vendors and customers) that could be
materially and adversely affected by the "Year 2000 Problem" (that is, the risk
that computer applications used by any Restricted Company (or suppliers, vendors
or customers) may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to, and any date after, December 31,
1999); (b) developed a plan and timeline for addressing the Year 2000 Problem on
a timely basis; and (c) to date, implemented that plan in accordance with that
timetable. Based on the foregoing, Borrower believes that (i) all computer
applications (including those of its suppliers, vendors and customers) that are
material to any Restricted Company's business and operations are reasonably
expected on a timely basis to be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000 (that is, "Year 2000
Compliant"), except to the extent that a failure to do so could not reasonably
be expected to constitute a Material Adverse Event; or (ii) the Restricted
Companies have planned for
30
reasonable alternatives in respect of those suppliers, vendors or customers
which are unable to address the Year 2000 Problem to Borrower's satisfaction.
SECTION 8 AFFIRMATIVE COVENANTS. So long as Lenders are committed to fund
- - - - - - - - - - - - - - - - - - - - - --------- ---------------------
Loans and Agent is committed to issue L/Cs under this Agreement, and thereafter
until the Obligation is paid in full, Borrower covenants and agrees as follows:
8.1 Items to be Furnished. Borrower shall cause the following to
---------------------
be furnished to each Lender:
(a) With respect to each fiscal year of the Companies:
(i) Promptly after preparation, unaudited Financial
Statements showing the consolidated financial condition and
results of operations of the Companies as of the last day of such
fiscal year and for such fiscal year, accompanied by a Compliance
Certificate with respect to such Financial Statements (for
purposes of adjusting the Applicable Margin and the Applicable
Percentage in accordance with the definitions of such terms); and
(ii) Promptly after preparation, and no later than 105 days
after the last day of each fiscal year of the Companies,
Financial Statements showing the consolidated financial condition
and results of operations of the Companies as of, and for the
year ended on, that last day, accompanied by: (A) the unqualified
opinion of a firm of nationally-recognized independent certified
public accountants, based on an audit using generally accepted
auditing standards, that the Financial Statements were prepared
in accordance with GAAP and present fairly, in all material
respects, the consolidated financial condition and results of
operations of the Companies, (B) any management letter prepared
by the accounting firm delivered in connection with its audit,
(C) a certificate from the accounting firm to Agent indicating
that during its audit it obtained no knowledge of any Default or
Potential Default or, if it obtained knowledge, the nature and
period of existence thereof, and (D) a Compliance Certificate
with respect to the Financial Statements.
(b) Promptly after preparation, and no later than 60 days after
the last day of each fiscal quarter of the Companies, Financial Statements
showing the consolidated financial condition and results of operations of
the Companies for the fiscal quarter and for the period from the beginning
of the current fiscal year to the 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
31
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.
(g) Notice, promptly after any Restricted Company discovers or
determines that any computer application (including those of its suppliers,
vendors and customers) that is material to any Restricted Company's
business and operations will not be Year 2000 Compliant, except to the
extent (i) such failure could not reasonably be expected to constitute a
Material Adverse Event; or (ii) such Restricted Company has planned for
reasonable alternatives in respect of those suppliers, vendors or customers
which are unable to address the Year 2000 Problem to Borrower's
satisfaction.
8.2 Use of Proceeds. Borrower will use all of the proceeds of Loans
---------------
and L/Cs for seasonal working capital, to make acquisitions, advances and other
investments permitted by Section 9.8, and for other general corporate purposes
and capital expenditures of the Companies. No part of the proceeds of any L/C
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
32
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) Neither Borrower, VRI nor VHI will change its name in any
manner (except by registering additional trade names), unless such Company
shall have given Agent prior notice thereof. Borrower shall promptly notify
Agent of any change in name of any other Company (except the registering of
additional tradenames).
8.9 Insurance. Each Company will maintain with financially sound,
---------
responsible, and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by self-
insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and businesses against casualties and contingencies
and of types and in amounts (and with
33
co-insurance and deductibles) as is customary in the case of similar businesses.
At Agent's request, each Company will deliver to Agent certificates of insurance
for each policy of insurance and evidence of payment of all premiums.
8.10 Environmental Laws. Each Company will (a) conduct its business
------------------
so as to comply in all material respects with all applicable Environmental Laws
and shall promptly take required corrective action to remedy any non-compliance
with any Environmental Law, except where failure to comply or take action would
not be a Material Adverse Event, and (b) establish and maintain a management
system designed to ensure compliance with applicable Environmental Laws and
minimize material financial and other risks to each Company arising under
applicable Environmental Laws or as the result of environmentally related
injuries to Persons or property, except where failure to comply would not be a
Material Adverse Event. Borrower shall deliver reasonable evidence of compliance
with the foregoing covenant to Agent within 30 days after any written request
from Required Lenders, which request shall be made only if Required Lenders
reasonably believe that a failure to comply with the foregoing covenant would be
a Material Adverse Event.
8.11 Subsidiaries. Subject to Section 9.8, the Companies may create
------------
or acquire additional Subsidiaries (including Unrestricted Subsidiaries);
provided that (a) each Person that becomes a Restricted Subsidiary after the
date of this Agreement (whether as a result of acquisition, creation or
otherwise) shall execute and deliver a Guaranty within 10 days after becoming a
Restricted Subsidiary, and (b) Borrower shall deliver to Agent a revised
Schedule 7.2 reflecting such new Subsidiary within 10 days after it becomes a
Subsidiary. Subject to Section 14.10(b)(v), Agent shall execute documentation
reasonably required to release any Restricted Subsidiary which is redesignated
by Borrower as an Unrestricted Subsidiary from its Guaranty.
8.12 Indemnification. Borrower shall indemnify, protect and hold
---------------
Agent and Lenders and their respective Affiliates, Representatives, successors
and assigns and attorneys (collectively, the "indemnified parties") harmless
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims and proceedings and all costs,
expenses (including, without limitation, all attorneys' fees and legal expenses
whether or not suit is brought) and disbursements of any kind or nature (the
"indemnified liabilities") that may at any time be imposed on, incurred by or
asserted against the indemnified parties, in any way relating to or arising out
of (a) the direct or indirect result of the violation by any Company of any
Environmental Law, (b) any Company's generation, manufacture, production,
storage, release, threatened release, discharge, disposal or presence in
connection with its properties of a Hazardous Substance (including, without
limitation, (i) all damages of any use, generation, manufacture, production,
storage, release, threatened release, discharge, disposal or presence, or (ii)
the costs of any environmental investigation, monitoring, repair, cleanup or
detoxification and the preparation and implementation of any closure, remedial
or other plans), or (c) the Loan Papers or any of the transactions contemplated
therein. However, although each indemnified party has the Right to be
indemnified for its own ordinary negligence, no indemnified party has the Right
to be indemnified for its own fraud, gross negligence or willful misconduct. The
provisions of and undertakings and indemnification set forth in this paragraph
shall survive the satisfaction and payment of the Obligation and termination of
this Agreement.
SECTION 9 NEGATIVE COVENANTS. So long as Lenders are committed to fund
- - - - - - - - - - - - - - - - - - - - - --------- ------------------
Loans and Agent is committed to issue L/Cs under this Agreement, and thereafter
until the Obligation is paid in full, Borrower covenants and agrees as follows:
34
9.1 Taxes. No Company shall use any portion of the proceeds of
-----
any Loan to pay the wages of employees, unless a timely payment to or deposit
with the U.S. of all amounts of Tax required to be deducted and withheld with
respect to such wages is also made.
9.2 Payment of Obligations. No Company shall voluntarily prepay
----------------------
principal of, or interest on, any Funded Debt, other than the Obligation, if a
Default or Potential Default exists (or would result from such payment). No
Company shall repay, repurchase, redeem or defease Subordinated Debt without the
prior written consent of Required Lenders.
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 documents executed in
connection with the Vail Bonds (and any documents relating to a refinancing of
the Vail Bonds), the Senior Subordinated Debt Indenture as in effect on May 11,
1999 (which does not prohibit the creation or incurrence of Liens securing
"Senior Debt," as defined therein), and leases or licenses that prohibit Liens
on the leased or licensed property.
9.6 Transactions with Affiliates. Except for transactions which
----------------------------
do not, in the aggregate, cost the Restricted Companies more than $2,000,000 in
any fiscal year, no Restricted Company shall enter into or suffer to exist any
transaction with any Affiliate (other than another Restricted Company), or
guaranty, obtain any letter of credit or similar instrument in support of, or
create, incur or suffer to exist any Lien upon any of its assets as security
for, any Debt or other obligation of any Affiliate (other than Debts or other
obligations of another Restricted Company) unless (i) such transaction is an
advance or equity contribution to an Unrestricted Subsidiary permitted by
Section 9.8(j), (ii) such transaction is described in Section 9.9 or on Schedule
7.13, or (iii) such transaction is upon fair and reasonable terms not materially
less favorable than it could obtain or could become entitled to in an arm's-
length transaction with a Person that was not its Affiliate.
9.7 Compliance with Laws and Documents. No Company shall (a)
----------------------------------
violate the provisions of any Laws or rulings of any Tribunal applicable to it
or of any Material Agreement to which it is a party if that violation alone, or
when aggregated with all other violations, would be a Material Adverse Event,
(b) violate the provisions of its charter or bylaws if such violation would
cause a Material Adverse Event, or (c) repeal, replace or amend any provision of
its charter or bylaws if that action would be a Material Adverse Event.
9.8 Loans, Advances and Investments. Except as permitted by
-------------------------------
Section 9.9 or Section 9.11, no Restricted Company shall make or suffer to exist
any loan, advance, extension of credit or capital contribution to, make any
investment in, or purchase or commit to purchase any stock or other securities
or evidences of Debt of, or interests in, any other Person, other than:
35
(a) expense accounts for and other loans or advances to its directors,
officers and employees in the ordinary course of business;
(b) marketable obligations issued or unconditionally guaranteed by the
U.S. or issued by any of its agencies and backed by the full faith and
credit of the U.S., in each case maturing within one year from the date of
acquisition;
(c) short-term investment grade domestic and eurodollar certificates
of deposit or time deposits that are fully insured by the Federal Deposit
Insurance Corporation or are issued by commercial banks organized under the
Laws of the U.S. or any of its states having combined capital, surplus, and
undivided profits of not less than $100,000,000 (as shown on its most
recently published statement of condition);
(d) commercial paper and similar obligations rated "P-1" by Moody's or
"A-1" by S&P;
(e) readily marketable tax-free municipal bonds of a domestic issuer
rated "A-2" or better by Moody's or "A" or better by S&P, and maturing
within one year from the date of issuance;
(f) mutual funds or money market accounts investing primarily in items
described in clauses (b) through (e) above;
(g) demand deposit accounts maintained in the ordinary course of
business;
(h) current trade and customer accounts receivable that are for goods
furnished or services rendered in the ordinary course of business and that
are payable in accordance with customary trade terms;
(i) Financial Hedges existing on the date hereof which have previously
been approved by Agent and other Financial Hedges entered into after the
date hereof under terms reasonably acceptable to Agent;
(j) in addition to items covered elsewhere in this definition, but
subject to Sections 8.11 and 9.14, investments in any Person (including
purchases of stock or other securities or evidence of Debt of, assets of,
or loans, advances, extensions of credit or capital contributions to such
Person, but excluding capital appreciation and accrued interest), provided
that all such investments (when added to those made by Unrestricted
Subsidiaries) made in (i) Unrestricted Subsidiaries, (ii) Persons that are
not Affiliates of Borrower after such investment (excluding investments in
Keystone/Intrawest LLC existing on the date of this Agreement and the
existing obligation of Vail Summit Resorts to contribute to
Keystone/Intrawest LLC additional land which had a book value as of June
30, 1996, of $8,900,000), and (iii) Apollo shall not in the aggregate
exceed 15% of the Companies' consolidated net worth at the time of
determination; and
(k) the following investments:
(i) Housing Revenue Bonds, Series A-1, A-2, A-3, and B-2, issued
by Eagle Bend Affordable Housing Corporation, held in the face amount
of $800,000;
36
(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 made to Lucinda M. Daly in 1996, and a
secured loan of $350,000 made to Mr. and Mrs. James P. Thompson in
1996;
(v) a capital contribution, in an amount not to exceed $650,000,
in Boulder/Beaver LLC;
(vi) a capital contribution, in the amount of $1,364,579, in
The Inn Hotel Partnership; and
(vii) Workers compensation reserve account, established pursuant
to a self-insurance permit from the State of Colorado Department of
Labor, invested exclusively in items described in clauses (b) through
(f) above.
9.9 Management Fees and Distributions. No Company shall make
---------------------------------
any Distribution, except as follows:
(a) if no Default or Potential Default exists (or would result
therefrom), the Companies may pay management fees to Apollo of up to
$500,000 (in cash and/or services) in any fiscal year of the Companies;
(b) VRI may make payments of approximately $2,000,000 accruing to
certain option holders;
(c) any Company may make Distributions to a Restricted Company;
(d) if VRI issues any Subordinated Debt which is subsequently
converted to preferred stock, VRI may pay dividends on such stock at an
annual rate which is less than or equal to the annual rate of interest
payable on such Subordinated Debt prior to its conversion; and
(e) VRI may make other Distributions to its shareholders (in addition
to those described in clause (d) above), so long as all of such other
Distributions made during any four consecutive fiscal quarters of the
Companies (including any dividends on preferred stock which exceed the
amount permitted under clause (d) above) do not exceed 50% of the
Restricted Companies' net income during such period.
37
9.10 Sale of Assets. No Company shall sell, assign, lease, transfer
--------------
or otherwise dispose of all or any material portion of the assets described in
Schedule 2, if the ratio described in Section 10.1 would increase as a result of
such disposition.
9.11 Mergers and Dissolutions. No Restricted Company shall merge
------------------------
or consolidate with any other Person (unless Borrower or, if Borrower is not a
party to such merger or consolidation, a Restricted Subsidiary is the surviving
entity in connection with any such merger or consolidation) or liquidate, wind
up or dissolve (or suffer any liquidation or dissolution). Promptly after such
merger or consolidation, Borrower shall deliver to Agent a revised Schedule 7.2
reflecting any merger or consolidation.
9.12 Assignment. No Company shall assign or transfer any of its
----------
Rights or cause to be delegated its duties or obligations under any of the
Loan Papers.
9.13 Fiscal Year and Accounting Methods. No Company shall change
----------------------------------
its fiscal year or its method of accounting (other than immaterial changes in
methods or as required by GAAP).
9.14 New Businesses. No Restricted Company shall engage in any
--------------
business, except the businesses in which they are presently engaged and any
other business reasonably related to the Companies' current operations or the
resort, leisure or ski business; provided, however, that the foregoing shall not
be construed to prohibit the cessation by any Company of its business activities
or the sale or transfer of the business or assets of such Company to the extent
not otherwise prohibited by this Agreement.
9.15 Government Regulations. No Company shall conduct its business
----------------------
in a way that it becomes regulated under the Investment Company Act of 1940, as
amended, or the Public Utility Holding Company Act of 1935, as amended.
SECTION 10 FINANCIAL COVENANTS. So long as Lenders are committed to fund
- - - - - - - - - - - - - - - - - - - - - ---------- -------------------
Loans and Agent is committed to issue L/Cs 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 Ratios.
-----------------------
(a) Funded Debt to Resort EBITDA. 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:
------
July 31, 1999 5.25 to 1.00
October 31, 1999 5.75 to 1.00
January 31, 2000 5.25 to 1.00
38
April 30, 2000 4.50 to 1.00
July 31, 2000 4.50 to 1.00
October 31, 2000 4.75 to 1.00
January 31, 2001 4.50 to 1.00
April 30, 2001 4.50 to 1.00
July 31, 2001 4.50 to 1.00
October 31, 2001 4.75 to 1.00
January 31, 2002 4.50 to 1.00
April 30, 2002 4.50 to 1.00
July 31, 2002 4.50 to 1.00
October 31, 2002 4.75 to 1.00
(b) Senior Debt to Resort EBITDA. 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 amount of Senior 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:
------
July 31, 1999 3.50 to 1.00
October 31, 1999 4.00 to 1.00
January 31, 2000 3.75 to 1.00
April 30, 2000 3.50 to 1.00
July 31, 2000 3.50 to 1.00
October 31, 2000 3.75 to 1.00
January 31, 2001 3.50 to 1.00
April 30, 2001 3.25 to 1.00
July 31, 2001 3.25 to 1.00
October 31, 2001 3.50 to 1.00
January 31, 2002 3.25 to 1.00
April 30, 2002 3.25 to 1.00
July 31, 2002 3.25 to 1.00
October 31, 2002 3.50 to 1.00
10.2 Minimum Fixed Charge Coverage Ratio. As calculated as of the
-----------------------------------
last day of each fiscal quarter of the Companies, the Companies shall not permit
the ratio of (x) Resort EBITDA for the four fiscal
39
quarters ending on such last day minus Adjusted Capital Expenditures (as defined
below) to (y) interest on the Obligation and scheduled principal and interest
payments on all other Funded Debt plus Distributions made by VRI, in each case
in such four fiscal quarters, to be less than the following:
----
=====================================================================================
As of the last day of each fiscal quarter occurring after the Closing 1.15 to 1.00
Date through and including July 31, 1999:
As of the last day of each fiscal quarter commencing with 1.20 to 1.00
October 31, 1999, through and including July 31, 2000:
As of the last day of each fiscal quarter commencing with 1.25 to 1.00
October 31, 2000:
=====================================================================================
As used in this Section 10.2, "Adjusted Capital Expenditures" means (a) for the
four fiscal quarters ending any January 31, the lesser of (i) the Companies'
actual capital expenditures during such four fiscal quarters, and (ii)
$25,000,000, and (b) for the four fiscal quarters ending on any April 30, July
31, or October 31, the lesser of (i) the Companies' actual capital expenditures
during such four fiscal quarters, and (ii) $15,000,000.
10.3 Interest Coverage Ratio. As calculated as of the last day of
-----------------------
each fiscal quarter of the Companies, the Companies shall not permit the ratio
of (x) Resort EBITDA for the four fiscal quarters ending on such last day to (y)
payments of interest on Funded Debt in such four fiscal quarters to be less than
----
the following:
=====================================================================================
As of the last day of each fiscal quarter occurring after the Closing 2.25 to 1.00
Date through and including July 31, 2000:
As of the last day of each fiscal quarter commencing with 2.50 to 1.00
October 31, 2000:
=====================================================================================
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 L/C 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:
40
(a) Any covenant, agreement or condition applicable to it contained in
Sections 8.2, 9 (other than Sections 9.1, 9.3, 9.6 and 9.7) or 10; or
(b) Any other covenant, agreement or condition applicable to it
contained in any Loan Paper (other than the covenants to pay the Obligation
and the covenants in clause (a) preceding), and failure or refusal
continues for 30 days.
11.3 Debtor Relief. Any Restricted Company (a) fails to pay its
-------------
Debts generally as they become due, (b) voluntarily seeks, consents to, or
acquiesces in the benefit of any Debtor Relief Law, (c) becomes a party to or is
made the subject of any proceeding provided for by any Debtor Relief Law 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), or (d)
becomes subject to an order for relief granted under the Bankruptcy Reform Act
of 1978, as amended from time to time (other than as a creditor or claimant).
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; or (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.
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.
41
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 L/C 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
L/C Exposure then existing; and (v) exercise any and all other legal or
equitable Rights afforded by the Loan Papers, the Laws of the State of New
York, or any other applicable jurisdiction.
12.2 Company Waivers. To the extent permitted by Law, each Company
---------------
waives presentment and demand for payment, protest, notice of intention to
accelerate, notice of acceleration and notice of protest and nonpayment, and
agrees that its liability with respect to all or any part of the Obligation is
not affected by any renewal or extension in the time of payment of all or any
part of the Obligation, by any indulgence, or by any release or change in any
security for the payment of all or any part of the Obligation.
12.3 Performance by Agent. If any covenant, duty or agreement of any
--------------------
Company is not performed in accordance with the terms of the Loan Papers, Agent
may, while a Default exists, at its option (but subject to the approval of
Required Lenders), perform or attempt to perform that covenant, duty or
agreement on behalf of that Company (and any amount expended by Agent in its
performance or attempted performance is payable by the Companies, jointly and
severally, to Agent on demand, becomes part of the Obligation, and bears
interest at the Default Rate from the date of Agent's expenditure until paid).
However, Agent does not assume and shall never have, except by its express
written consent, any liability or responsibility for the performance of any
covenant, duty or agreement of any Company.
42
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 ever securing payment or performance of all or
any part of the Obligation (other than diminution in or loss of value caused by
its gross negligence or willful misconduct).
12.9 Certain Proceedings. The Companies will promptly execute and
-------------------
deliver, or cause the execution and delivery of, all applications, certificates,
instruments, registration statements and all other documents and papers Agent or
Required Lenders reasonably request in connection with the obtaining of any
consent, approval, registration, qualification, permit, license or authorization
of any Tribunal or other Person necessary or appropriate for the effective
exercise of any Rights under the Loan Papers. Because Borrower agrees that
Agent's and Required Lenders' remedies at Law for failure of the Companies to
comply with the provisions of this paragraph would be inadequate and that
failure would not be adequately compensable in damages, Borrower agrees that the
covenants of this paragraph may be specifically enforced.
43
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 L/Cs issued and outstanding before the appointment of the successor
Agent, "Agent" shall continue to refer solely to NationsBank, N.A. (but,
any L/Cs 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.
44
(d) Agent may now or hereafter be engaged in one or more loan,
letter of credit, leasing or other financing transactions with Borrower,
act as trustee or depositary for Borrower, or otherwise be engaged in other
transactions with Borrower (collectively, the "other activities") not the
subject of the Loan Papers. Without limiting the Rights of Lenders
specifically set forth in the Loan Papers, Agent is not responsible to
account to Lenders for those other activities, and no Lender shall have any
interest in any other activities, any present or future guaranties by or
for the account of Borrower that are not contemplated or included in the
Loan Papers, any present or future offset exercised by Agent in respect of
those other activities, any present or future property taken as security
for any of those other activities, or any property now or hereafter in
Agent's possession or control that may be or become security for the
obligations of Borrower arising under the Loan Papers by reason of the
general description of indebtedness secured or of property contained in any
other agreements, documents, or instruments related to any of those other
activities (but, if any payments in respect of those guaranties or that
property or the proceeds thereof is applied by Agent to reduce the
Obligation, then each Lender is entitled to share ratably in the
application as provided in the Loan Papers).
13.2 Expenses. Each Lender shall pay its Pro Rata Part of any
--------
reasonable expenses (including, without limitation, court costs, reasonable
attorneys' fees and other costs of collection) incurred by Agent (while acting
in such capacity) in connection with any of the Loan Papers if Agent is not
reimbursed from other sources within 30 days after incurrence. Each Lender is
entitled to receive its Pro Rata Part of any reimbursement that it makes to
Agent if Agent is subsequently reimbursed from other sources.
13.3 Proportionate Absorption of Losses. Except as otherwise provided
----------------------------------
in the Loan Papers, nothing in the Loan Papers gives any Lender any advantage
over any other Lender insofar as the Obligation is concerned or to relieve any
Lender from absorbing its Pro Rata Part of any losses sustained with respect to
any portion of the Obligation in which it participates (except to the extent
unilateral actions or inactions by any Lender result in Borrower or any other
obligor on the Obligation having any credit, allowance, setoff, defense, or
counterclaim solely with respect to all or any part of that Lender's portion of
the Obligation).
13.4 Delegation of Duties; Reliance. Lenders may perform any of
------------------------------
their duties or exercise any of their Rights under the Loan Papers by or through
Agent, and Lenders and Agent may perform any of their duties or exercise any of
their Rights under the Loan Papers by or through their respective
Representatives. Agent, Lenders and their respective Representatives (a) are
entitled to rely upon (and shall be protected in relying upon) any written or
oral statement believed by it or them to be genuine and correct and to have been
signed or made by the proper Person and, with respect to legal matters, upon
opinion of counsel selected by Agent or that Lender (but nothing in this clause
(a) permits Agent to rely on (i) oral statements if a writing is required by
this Agreement or (ii) any other writing if a specific writing is required by
this Agreement), (b) are entitled to deem and treat each Lender as the owner and
holder of its portion of the Principal Debt for all purposes until, subject to
Section 14.12, written notice of the assignment or transfer is given to and
received by Agent (and any request, authorization, consent or approval of any
Lender is conclusive and binding on each subsequent holder, assignee or
transferee of or Participant in that Lender's portion of the Principal Debt
until that notice is given and received), (c) are not deemed to have notice of
the occurrence of a 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
45
other experts selected by Agent and are not liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of
counsel, accountants, or experts.
13.5 Limitation of Agent's Liability.
-------------------------------
(a) Neither Agent nor any of its Affiliates, Representatives,
successors or assigns will be liable for any action taken or omitted to be
taken by it or them under the Loan Papers in good faith and believed by it
or them to be within the discretion or power conferred upon it or them by
the Loan Papers or be responsible for the consequences of any error of
judgment (except for fraud, gross negligence or willful misconduct), and
none of them has a fiduciary relationship with any Lender by virtue of the
Loan Papers (but nothing in this Agreement negates the obligation of Agent
to account for funds received by it for the account of any Lender).
(b) Unless indemnified to its satisfaction, Agent may not be
compelled to do any act under the Loan Papers or to take any action toward
the execution or enforcement of the powers thereby created or to prosecute
or defend any suit in respect of the Loan Papers. If Agent requests
instructions from Lenders, or Required Lenders, as the case may be, with
respect to any act or action in connection with any Loan Paper, Agent is
entitled to refrain (without incurring any liability to any Person by so
refraining) from that act or action unless and until it has received
instructions. In no event, however, may Agent or any of its Representatives
be required to take any action that it or they determine could incur for it
or them criminal or onerous civil liability or that is contrary to any Loan
Paper or applicable Law. Without limiting the generality of the foregoing,
no Lender has any right of action against Agent as a result of Agent's
acting or refraining from acting under this Agreement in accordance with
instructions of Required Lenders (or of all Lenders, if instructions from
all Lenders is specifically required by the terms of the Loan Papers).
(c) Agent is not responsible to any Lender or any Participant
for, and each Lender represents and warrants that it has not relied upon
Agent in respect of, (i) the creditworthiness of any Company and the risks
involved to that Lender, (ii) the effectiveness, enforceability,
genuineness, validity or due execution of any Loan Paper (other than by
Agent), (iii) any representation, warranty, document, certificate, report
or statement made therein (other than by Agent) or furnished thereunder or
in connection therewith, (iv) the adequacy of any collateral ever securing
the Obligation or the existence, priority or perfection of any Lien ever
granted or purported to be granted on any collateral under any Loan Paper,
or (v) the observance of or compliance with any of the terms, covenants or
conditions of any Loan Paper on the part of any Company. Each Lender agrees
to indemnify Agent and its Representatives and hold them harmless from and
against (but limited to such Lender's Pro Rata Part of) any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, reasonable expenses and reasonable disbursements of any kind
or nature whatsoever that may be imposed on, asserted against, or incurred
by them in any way relating to or arising out of the Loan Papers or any
action taken or omitted by them under the Loan Papers if Agent and its
Representatives are not reimbursed for such amounts by any Company.
Although Agent and its Representatives have the right to be indemnified
under this Agreement for its or their own ordinary negligence, Agent and
its Representatives do not have the right to be indemnified under this
Agreement for its or their own fraud, gross negligence or willful
misconduct.
46
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 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.
47
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 U.S. govern the Rights and
duties of the parties to the Loan Papers and the validity, construction,
enforcement and interpretation of the Loan Papers.
14.8 Invalid Provisions. Any provision in any Loan Paper held to be
------------------
illegal, invalid or unenforceable is fully severable; the appropriate Loan Paper
shall be construed and enforced as if that provision had never been included;
and the remaining provisions shall remain in full force and effect and shall not
be affected by the severed provision. Agent, Lenders, and the Companies shall
negotiate, in good faith, the terms of a replacement provision as similar to the
severed provision as may be possible and be legal, valid and enforceable.
14.9 Venue; Service of Process; Jury Trial. Each Party to Any Loan
-------------------------------------
Paper, in Each Case for Itself, its Successors and Assigns (And in the Case of
Borrower, for Each Other Company), (a) Irrevocably Submits to the Nonexclusive
Jurisdiction of the State and Federal Courts of the State of Texas, (b)
irrevocably Waives, to the Fullest Extent Permitted by Law, Any Objection That
it May Now or Hereafter Have to the Laying of Venue of Any Litigation Arising
out of or in Connection with the Loan Papers and the Obligation Brought in
District Courts of Dallas or Harris County, Texas, or in the U.S. District Court
for the Northern or Southern District of Texas, Dallas or Houston Division, (c)
irrevocably Waives Any Claims That Any Litigation Brought in Any of the
Aforementioned Courts Has Been Brought in an Inconvenient Forum, (d) irrevocably
Agrees That Any Legal Proceeding Against Any Party to Any Loan Paper Arising out
of or in Connection with the Loan Papers or the Obligation May Be Brought in One
of the Aforementioned Courts, and (e) Irrevocably Waives, to the Fullest Extent
Permitted by Law, its Respective Rights to a Jury Trial of Any Claim or Cause of
Action Based upon or Arising out of Any Loan Paper. The scope of each of the
foregoing waivers is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including, without limitation, contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. Borrower (for
itself and on behalf of each other Company) acknowledges that these waivers are
a material inducement to Agent's and each Lender's agreement to enter into a
business relationship, that Agent and each Lender has already relied on these
waivers in entering into this Agreement, and that Agent and each Lender will
continue to rely on each of these waivers in related future dealings. Borrower
(for itself and on behalf of each other Company) further warrants and represents
that it has reviewed these waivers with its legal counsel, and that it knowingly
and voluntarily agrees to each waiver following consultation with legal counsel.
The Waivers in this Section 14.9 May Not Be Modified Except in Accordance with
Section 14.10, and Shall, Except to the
48
Extent Waived or Modified in Accordance with Section 14.10, Apply to Any
Subsequent Amendments, Supplements or Placements to or of this or Any Other Loan
Paper. In the event of Litigation, this Agreement may be filed as a written
consent to a trial by the court.
14.10 Amendments, Consents, Conflicts and Waivers.
-------------------------------------------
(a) Unless otherwise specifically provided, (i) this Agreement
may be amended only by an instrument in writing executed by Borrower, Agent
and Required Lenders and supplemented only by documents delivered or to be
delivered in accordance with the express terms of this Agreement, and (ii)
the other Loan Papers may only be the subject of an amendment, modification
or waiver that has been approved by Required Lenders and Borrower.
(b) Any amendment to or consent or waiver under any Loan Paper
that purports to accomplish any of the following must be by an instrument
in writing executed by Borrower and Agent and executed (or approved, as the
case may be) by each Lender: (i) extend the due date, decrease the amount
of, or reallocate any scheduled payment of the Obligation; (ii) decrease
any rate or amount of interest, fees or other sums payable to Agent or
Lenders under this Agreement (except such reductions as are contemplated by
this Agreement); (iii) change the definition of "Committed Sum," "Required
Lenders," or "Termination Date;" (iv) increase any one or more Lenders'
Committed Sums; (v) waive compliance with, amend or release (in whole or in
part) the Guaranties of VRI or all or substantially all of the Restricted
Subsidiaries; or (vi) change this clause (b), Section 9.12 or any other
matter specifically requiring the consent of all Lenders under this
Agreement.
(c) Any conflict or ambiguity between the terms and provisions of
this Agreement and terms and provisions in any other Loan Paper is
controlled by the terms and provisions of this Agreement.
(d) No course of dealing or any failure or delay by Agent, any
Lender, or any of their respective Representatives with respect to
exercising any Right of Agent or any Lender under this Agreement operates
as a waiver thereof. A waiver must be in writing and signed by Agent and
Lenders (or Required Lenders, if permitted under this Agreement) to be
effective, and a waiver will be effective only in the specific instance and
for the specific purpose for which it is given.
14.11 Multiple Counterparts. Each Loan Paper (other than the Notes)
---------------------
may be executed in a number of identical counterparts, each of which shall be
deemed an original for all purposes and all of which constitute, collectively,
one agreement; but, in making proof of thereof, it shall not be necessary to
produce or account for more than one counterpart. Each Lender need not execute
the same counterpart of this Agreement so long as identical counterparts are
executed by Borrower, each Lender, and Agent. This Agreement shall become
effective when counterparts of this Agreement have been executed and delivered
to Agent by each Lender, Agent and Borrower, or, in the case only of Lenders,
when Agent has received telecopied, telexed or other evidence satisfactory to it
that each Lender has executed and is delivering to Agent a counterpart of this
Agreement.
49
14.12 Successors and Assigns; Participation.
-------------------------------------
(a) The Loan Papers bind and inure to the benefit of the parties
hereto, any intended beneficiary thereof, and each of their respective
successors and permitted assigns. No Lender may transfer, pledge, assign,
sell any participation in, or otherwise encumber its portion of the
Obligation, except as permitted by this Section 14.12.
(b) Any Lender may, in the ordinary course of its business, at
any time sell to one or more Persons (each a "Participant") participating
interests in all or any part of its Rights and obligations under the Loan
Papers. The selling Lender shall remain a "Lender" under this Agreement
(and the Participant shall not constitute a "Lender" under this Agreement)
and its obligations under this Agreement shall remain unchanged. The
selling Lender shall remain solely responsible for the performance of its
obligations under the Loan Papers and shall remain the holder of its share
of the Principal Debt for all purposes under this Agreement. Borrower and
Agent shall continue to deal solely and directly with the selling Lender in
connection with that Lender's Rights and obligations under the Loan Papers.
Participants have no Rights under the Loan Papers, other than certain
voting Rights as provided below. Subject to the following, each Lender may
obtain (on behalf of its Participants) the benefits of Section 3 with
respect to all participations in its part of the Obligation outstanding
from time to time so long as Borrower is not obligated to pay any amount in
excess of the amount that would be due to that Lender under Section 3
calculated as though no participation have been made. No Lender may sell
any participating interest under which the Participant has any Rights to
approve any amendment, modification or waiver of any Loan Paper, except to
the extent the amendment, modification or waiver extends the due date for
payment of any principal, interest or fees due under the Loan Papers or
reduces the interest rate or the amount of principal or fees applicable to
the Obligation (except reductions contemplated by this Agreement).
(c) Any Lender may at any time, in the ordinary course of its
business, assign to any Eligible Assignee (each a "Purchaser") all or any
part (but if less than all, then not less than $5,000,000) of its Rights
and obligations under the Loan Papers. In each case, the Purchaser shall
assume those Rights and obligations under an assignment agreement
substantially in the form of the attached Exhibit G. Each assignment under
this Section 14.12(c) shall include a ratable interest in the assigning
Lender's Rights and obligations under the Facility. Upon (i) delivery of
an executed copy of the assignment agreement to Borrower and Agent and the
recordation thereof in the Register provided for in Section 14.12(d) and
(ii) with respect to each assignment after the completion of the primary
syndication of the Facility, payment of a fee of $3,500 from the transferor
to Agent, from and after the effective date specified in the Assignment
Agreement (which shall be after the date of delivery), the Purchaser shall
for all purposes be a Lender party to this Agreement and shall have all the
Rights and obligations of a Lender under this Agreement to the same extent
as if it were an original party to this Agreement with commitments as set
forth in the assignment agreement, and the transferor Lender shall be
released from its obligations under this Agreement to a corresponding
extent, and, except as provided in the following sentence, no further
consent or action by Borrower, Lenders or Agent shall be required. Upon
the consummation of any transfer to a Purchaser under this clause (c), the
then-existing Schedule 1 shall automatically be deemed to reflect the name,
address and Committed Sum of such Purchaser, Agent shall deliver to
Borrower and Lenders an amended Schedule 1 reflecting those changes, and
Borrower shall execute and deliver to the Purchaser and, if applicable,
such Lender, a Note in the face amount of its Committed Sum and the
50
transferor Lender shall return to Borrower the Note previously delivered to
it under this Agreement. A Purchaser is subject to all the provisions in
this section as if it were a Lender signatory to this Agreement as of the
date of this Agreement.
(d) Agent shall maintain at its address on Schedule 1 a copy of
each Lender assignment agreement delivered to it in accordance with the
terms of Section 14.12(c) and a register for the recordation of the
principal amount, Type and Interest Period of each Loan and the names,
addresses and Committed Sums of each Lender from time to time (the
"Register"). Agent will make reasonable efforts to maintain the accuracy of
the Register and to promptly update the Register from time to time, as
necessary. The entries in the Register shall be conclusive in the absence
of manifest error and Borrower, Agent and Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by Borrower and each Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(e) This Section 14.12 relates to absolute assignments and,
notwithstanding Section 14.12(a), does not prohibit assignments creating
security interests. Specifically, without limitation, any Lender may at any
time, without the consent of Borrower or Agent, assign all or any part of
its Rights under the Loan Papers to a Federal Reserve Bank without
releasing the transferor Lender from its obligations thereunder.
14.13 Discharge Only Upon Payment in Full; Reinstatement in Certain
-------------------------------------------------------------
Circumstances. Each Company's obligations under the Loan Papers remain in full
- - - - - - - - - - - - - - - - - - - - - -------------
force and effect until the Total Commitment is terminated and the Obligation is
paid in full (except for provisions under the Loan Papers expressly intended to
survive payment of the Obligation and termination of the Loan Papers). If at any
time any payment of the principal of or interest on any Note or any other amount
payable by Borrower or any other obligor on the Obligation under any Loan Paper
is rescinded or must be restored or returned upon the insolvency, bankruptcy or
reorganization of Borrower or otherwise, the obligations of each Company under
the Loan Papers with respect to that payment shall be reinstated as though the
payment had been due but not made at that time.
14.14 Entirety. The Rights and Obligations of the Companies, Lenders
--------
and Agent Shall Be Determined Solely from Written Agreements, Documents and
Instruments, and Any Prior Oral Agreements among the Parties Are Superseded by
and Merged into Those Writings. This Agreement and the Other Written Loan Papers
(Each as Amended in Writing from Time to Time) Executed by Any Company, Any
Lender or Agent Represent the Final Agreement among the Parties and May Not Be
Contradicted by Evidence of Prior, Contemporaneous or Subsequent Oral Agreements
by the Parties. There Are No Unwritten Oral Agreements among the Parties. This
Agreement supersedes all prior written agreements and understandings relating to
the subject matter hereof and may be supplemented only by documents delivered in
accordance with the terms hereof.
EXECUTED as of the day and year first mentioned.
THE VAIL CORPORATION
51
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
NATIONSBANC MONTGOMERY SECURITIES LLC
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
NATIONSBANK, N.A.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
BANKBOSTON, N.A.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
U.S. BANK NATIONAL ASSOCIATION
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
BANK OF AMERICA NT & SA
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
52
THE BANK OF NOVA SCOTIA
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
CREDIT LYONNAIS NEW YORK BRANCH
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
FIRST SECURITY BANK, N.A.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
BANKERS TRUST COMPANY
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
CIBC INC.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
FLEET NATIONAL BANK
By:
------------------------------
53
Name:
------------------------------
Title:
------------------------------
HARRIS TRUST AND SAVINGS BANK
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
KEYBANK NATIONAL ASSOCIATION
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
LOS ANGELES AGENCY
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
54
GUARANTORS' CONSENT AND AGREEMENT
---------------------------------
As an inducement to Agent and Lenders to execute, and in consideration of
Agent's and Lenders' execution of the foregoing, the undersigned hereby consent
thereto and agree that the same shall in no way release, diminish, impair,
reduce or otherwise adversely affect the respective obligations and liabilities
of each of the undersigned under the Guaranty described in this Agreement, or
any agreements, documents or instruments executed by any of the undersigned to
create liens, security interests or charges to secure any of the indebtedness
under the Loan Papers, all of which obligations and liabilities are, and shall
continue to be, in full force and effect. This consent and agreement shall be
binding upon the undersigned, and the respective successors and assigns of each,
and shall inure to the benefit of Agent and Lenders, and respective successors
and assigns of each.
Vail Resorts, Inc.
Vail Holdings, Inc.
Vail Trademarks, Inc.
Vail Resorts Development Company
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/Battle Mountain, Inc.
Gillett Group Management, Inc.
GHTV, Inc.
Gillett Broadcasting, Inc.
Gillett Broadcasting of Maryland, Inc.
Vail Summit Resorts, Inc.
Keystone Conference Services, Inc.
Keystone Development Sales, Inc.
Keystone Resort Property Management
Company
Keystone Food & Beverage Company
Lodge Properties, Inc.
Lodge Realty, Inc.
The Village at Breckenridge Acquisition
Corp., Inc.
Property Management Acquisition
Corp., Inc.
By:
------------------------------
Name:
------------------------------
Senior Vice President of each of the
above Companies
55
SCHEDULE 1
Parties, Addresses, Committed Sums, and Wiring Information
----------------------------------------------------------
Borrower and all other Companies
- - - - - - - - - - - - - - - - - - - - - --------------------------------
The Vail Corporation
Post Office Box 7
Vail, Colorado 81658
137 Benchmark Road
Avon, Colorado 81620
Attn: James P. Donohue
Senior Vice President and Chief Financial Officer
Phone: 970/845-2506
FAX: 970/845-2520
copy to:
General Counsel
Vail Resorts, Inc.
Post Office Box 7
Vail, Colorado 81658
137 Benchmark Road
Avon, Colorado 81620
Phone: 970/845-2500
FAX: 970/845-2667
Committed Sums
--------------
Agent and Lender
- - - - - - - - - - - - - - - - - - - - - ----------------
NationsBank, N.A. $ 50,000,000
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Natalie E. Hebert
Phone: 214/209-9060
FAX: 214/209-0980
copy to:
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002-2764
Attn: F. Walter Bistline, Jr.
Phone: 713/226-0681
FAX: 713/226-0281
Committed Sums
--------------
Co-Agents and Lenders
- - - - - - - - - - - - - - - - - - - - - ----------------------
BankBoston, N.A. $ 55,000,000
100 Federal Street
Mail Stop 01-07-07
Boston, Massachusetts 02110
Attn: Carlton F. Williams
Director
Phone: 617/434-8108
FAX: 617/434-8102
U.S. Bank National Association $ 45,000,000
918 Seventeenth Street
Denver, Colorado 80202
Attn: William J. Sullivan
Vice President
Phone: 303/585-4111
FAX: 303/585-4135
Bank of America NT&SA $ 38,000,000
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Natalie E. Hebert
Phone: 214/209-9060
FAX: 214/209-0980
The Bank of Nova Scotia $ 37,000,000
580 California Street, Suite 2100
San Francisco, California 94104
Attn: Jon A. Burckin
Phone: 415/616-4156
FAX: 415/397-0791
Credit Lyonnais New York Branch $ 37,000,000
1301 Avenue of the Americas, 18th Floor
New York, New York 10019-6022
Attn: Andrea Griffis
Phone: 212/261-7325
FAX: 212/261-7532
2 of 5
Committed Sums
--------------
Lenders
- - - - - - - - - - - - - - - - - - - - - -------
First Security Bank, N.A. $ 30,000,000
15 East 1st South, 2nd Floor
Salt Lake City, Utah 84111
Attn: Dick van Klaveren
Vice President
Phone: 801/246-5389
FAX: 801/246-5532
Bankers Trust Company $ 23,000,000
130 Liberty Street, 30th Floor
New York, New York 10006
Attn.: Anthony LoGrippo
Vice President
Phone: 212/250-4886
FAX: 212/250-7218
CIBC Inc. $ 23,000,000
425 Lexington Avenue
New York, New York 10017
Attn: Katherine Bass
Phone: 212/856-3916
FAX: 212/856-3991
Fleet National Bank $ 23,000,000
One Federal Street
M.S. MAOFD03C
Boston, Massachusetts 02109
Attn: Eric Vandermel
Vice President
Phone: 617/346-4853
FAX: 617/346-4806
Harris Trust and Savings Bank $ 23,000,000
111 West Monroe, 10th Floor Center
Chicago, Illinois 60603
Attn: James H. Colley
Vice President
Phone: 312/461-6876
FAX: 312/293-5041
3 of 5
Committed Sums
--------------
Lenders
- - - - - - - - - - - - - - - - - - - - - -------
KeyBank National Association $ 23,000,000
700 Fifth Avenue, 46th Floor
Seattle, Washington 98104
Attn: Mary Young
Phone: 206/684-6085
FAX: 206/684-6035
The Long-Term Credit Bank of Japan, Ltd. $ 23,000,000
Los Angeles Agency
350 South Grand Avenue, Suite 3000
Los Angeles, California 90071
Attn: Brian Kelley
Phone: 213/689-6356
FAX: 213/689-3921
Norwest Bank Colorado, National Association $ 20,000,000
1740 Broadway
Denver, Colorado 80274-8673
Attn: Debbie Wright
Susan Petri
Phone: 303/863-4829
FAX: 303/863-6670
FACILITY: $450,000,000
4 of 5
Wiring Information
------------------
THE VAIL CORPORATION
- - - - - - - - - - - - - - - - - - - - - --------------------
Location of account: NationsBank, N.A. (Dallas, Texas)
ABA #: 111000025
Account No.: 129-2688745
NATIONSBANK, N.A.
- - - - - - - - - - - - - - - - - - - - - -----------------
Location of account: NationsBank, N.A. (Dallas, Texas)
ABA #: 111000025
FTA Acct. # 0180019828
Attention: Commercial Loans
(Ref. The Vail Corporation)
5 of 5
SCHEDULE 2
Critical Assets
---------------
1. The following Intellectual Property of the Companies: the federally
trademarked "VAIL V" design/symbol/logo, the federally trademarked "BEAVER
CREEK" words, the federally trademarked "BRECKENRIDGE B"
design/symbol/logo, the federally trademarked "KEYSTONE" word, the
federally trademarked "KEYSTONE SNOWFLAKE" design/symbol/logo, and the
Colorado tradenames "Vail Associates, Inc.," Breckenridge Ski Resort" and
"Keystone Resort."
Vail
2. All improvements and personal property essential, from time to time, to ski
mountain operations located within the Vail Mountain Forest Service
permitted area.
3. Rights of use and access with respect to those portions of Parcel 1, Golden
Peak Ski Base & Recreation District Parcel, which, from time to time,
contain (a) the Chairlift #6 (Riva Bahn Express Lift) base terminal and (b)
the Chairlift #12 (Gopher Hill Lift) base terminal.
4. Rights of use and access with respect to those portions of Tract E, Vail
Village Fifth Filing, which, from time to time, contain the Chairlift #16
(Vista Bahn Express Lift) base terminal.
5. Rights of use and access with respect to those portions of Tract D, Vail
Lionshead First Filing, which, from time to time, contain the Chairlift #8
(Born Free Express Lift) base terminal.
6. Rights of use and access with respect to those portions of Tract D, Vail
Lionshead First Filing, which, from time to time, contain the Lift #19
(Eagle Bahn Lift (aka Gondola)) base terminal.
7. Rights of use and access with respect to those portions of Tract D, Vail
Lionshead First Filing; Tract B, Vail Lionshead First and Second Filings;
and that certain unplatted parcel commonly known as the "Lionshead
Unplatted Parcel" which, from time to time, contain the Lionshead Skier
Bridge.
8. Rights of use and access with respect to those portions of the Lionshead
Unplatted Parcel and Tract A, Block 1, Vail Village Sixth Filing, which
from time to time provide skier access to the Lionshead Skier Bridge.
Beaver Creek
9. All improvements and personal property essential, from time to time, to ski
mountain operations located within the Beaver Creek Mountain Forest Service
permitted area.
10. Rights of use and access with respect to those portions of unplatted Tract
S, Beaver Creek Subdivision, and Lot 14, Block 1, Tract A, Beaver Creek
Subdivision which, from time to time, contain the Chairlift #1 (Haymeadow
Lift) base terminal.
11. Rights of use and access with respect to those portions of unplatted Tract
S, Beaver Creek Subdivision, which, from time to time, contain the
Chairlift #2 (Highlands Lift) base terminal.
12. Rights of use and access with respect to those portions of unplatted Tract
S, Beaver Creek Subdivision, which, from time to time, contain the
Chairlift #12 (Strawberry Park Express Lift) base terminal.
13. Rights of use and access with respect to those portions of unplatted Tract
S, Beaver Creek Subdivision, and Lot 14, Block 1, Tract A, Beaver Creek
Subdivision which, from time to time, contain the Chairlift #6 (Centennial
Express Lift) base terminal.
14. Rights of use and access with respect to those portions of Unplatted Tract
S, Beaver Creek Subdivision, which, from time to time, contain the
Chairlift #14 (Elkhorn Lift) base terminal.
15. All land, improvements and personal property essential, from time to time,
to ski mountain operations at the base of Arrowhead Mountain in the
Arrowhead Planned Unit Development ("PUD").
16. Rights of use and access with respect to those portions of Tract G,
Arrowhead at Vail, Filing No. 13 (Sixth Amendment), which, from time to
time, contain the Chairlift #17 (Arrow Bahn Express Lift) base terminal.
17. Rights of use and access with respect to those portions of Tract D,
Bachelor Gulch Village Filing No. 2, which, from time to time, contain the
Chairlift #16 (Bachelor Gulch Express Lift) base terminal.
Keystone
18. All improvements and personal property essential, from time to time, to ski
mountain operations located within the Keystone Mountain Forest Service
permitted area.
19. Rights of use and access as granted in that certain Easement described in
Section 10.07 of the Declaration of Covenants, Conditions and Restrictions
for the Neighbourhood at Keystone which, from time to time, contains the
Skyway Gondola base terminal.
20. Rights of use and access with respect to those portions of the real
property commonly referred to as the BaseII/Mountain House neighborhood
which, from time to time, contains the base terminals for the Argentine
Lift, the Peru Express Life, the Packsaddle I Life, the Pony Express I & II
Lifts, the Checkerboard Lift and the Poma Lift.
Breckenridge
21. All improvements and personal property essential, from time to time, to ski
mountain operations located within the Breckenridge Mountain Forest Service
permitted area.
22. Rights of use and access with respect to those portions of the real
property commonly referred to as the Peak 8 Base Property which, from time
to time, contains the base terminals for the Pony Lift, the Chair 7 Lift,
the Chair 5 Lift and the Colorado Superchair Lift.
2 of 3
23. Rights of use and access with respect to those portions of the real
property commonly referred to as the Quick Silver Tract which, from time to
time, contains the base terminals for the Quick Silver Lift, the Camelback
Lift and the Village Pony Lift.
24. Rights of use and access as granted in that certain Easement from Beaver
Run Developments, a Colorado general partnership, pursuant to that certain
Fourth Addendum to Lease Agreement which, from time to time, contains the
Beaver Run Superchair Lift.
3 of 3
SCHEDULE 2.3
Existing Letters of Credit and Existing Permitted Debt
------------------------------------------------------
Part A - Existing Letters of Credit
- - - - - - - - - - - - - - - - - - - - - -----------------------------------
Amount Maturity Beneficiary
- - - - - - - - - - - - - - - - - - - - - --------------------------------------------------------------------------------
$25,000.00 8/30/99 Delta Airlines
$70,000.00 1/4/00 Airlines Reporting Corp.
$27,581,370.00 10/15/02 Colorado National Bank (1995 Smith Creek Project)
$19,625,206.00 10/15/02 Colorado National Bank (1997 Smith Creek Project)
$9,232,709.00 6/15/02 Colorado National Bank (BC Housing Project)
$168,275.00 3/24/00 Summit County Board of Commissioners (Tenderfoot
Housing Landscape Project)
$70,000.00 3/14/00 Airline Reporting Corp.
$70,000.00 12/16/99 Airline Reporting Corp.
$66,700.00 12/9/99 Airline Reporting Corp.
$25,000.00 12/9/99 Airline Reporting Corp.
$3,000,000.00 1/29/00 Land Title Guarantee Co.
$70,000.00 12/16/99 Airline Reporting Corp.
$115,000.00 3/18/00 Board of County Commissioners
- - - - - - - - - - - - - - - - - - - - - ----------------
$60,119,260.00
Part B - Debt Existing on the Date of the Original Agreement
- - - - - - - - - - - - - - - - - - - - - ------------------------------------------------------------
1. The Vail Bonds and the Summit Bonds.
2. 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.
3. Obligations of the Companies with respect to letters of credit issued by
Colorado National Bank for the benefit of Eagle County, Colorado, in an
aggregate amount of up to $7,000,000 at any point in time.
4. $1,369,875 remaining outstanding as of April 30, 1999, under the Clinton
Ditch and Reservoir Company promissory note.
5. Contingent obligations of the Companies under Park Plaza Merchant Mortgage
& Trust Corp. guarantees aggregating $200,628 as of December 19, 1997.
6. $36,974 remaining outstanding as of April 30, 1999, under the Holy Cross
Electric promissory note.
SCHEDULE 7.2
Corporate Structure
-------------------
[Document # 148062]
SCHEDULE 7.2
Corporate Structure and Jurisdictions of Incorporation and Business
-------------------------------------------------------------------
Page One
--------
--------------------------------
VAIL RESORTS, INC.
(Delaware)
[also does business in Colorado]
--------------------------------
-----------------------------------------------------------------------------------------------------
| | | | |
| 100% | 100% | 100% | 100% | 100%
- - - - - - - - - - - - - - - - - - - - - ----------------------- ----------------------- ---------------------------- ---------------- --------------------
GILLETT GROUP GILLETT GHTV, INC. GILLETT VAIL HOLDINGS,
MANAGEMENT, BROADCASTING (Delaware) BROADCASTING, INC.
INC. OF MARYLAND, INC. [also does business in INC. (Colorado)
(Delaware) (Delaware) California] (Delaware)
[also does business [also does business
in Colorado in Tennessee]
- - - - - - - - - - - - - - - - - - - - - ----------------------- ----------------------- ---------------------------- ---------------- --------------------
| 100
|
------------------------------
THE VAIL CORPORATION
(d/b/a "Vail Associates, Inc."
and "Vail Resorts
Management Company")
(Colorado)
------------------------------
|
|
[DOWN ARROW]
(See Page Two)
SCHEDULE 7.2
Corporate Structure and Jurisdictions of Incorporation and Business
-------------------------------------------------------------------
Page Two
--------
------------------------------
THE VAIL CORPORATION
(d/b/a "Vail Associates, Inc.")
(Colorado)
------------------------------
|
--------------------------------------------------------------------------------------------------------------------
| | 52% | 100% | 100% | | 80% | 100% | 100% |
| ------------- ----------- ------------------ | ------------ ----------- ------------- |
| SSI VENTURE VAIL BEAVER | VAIL/BEAVER PINEY RIVER VAIL SUMMIT |
| LLC TRADEMARKS, CREEK CONSULTANTS, | CREEK RESORT RANCH, INC. RESORTS, INC. |
| (Colorado) INC. INC. | PROPERTIES, (Colorado) (Colorado) |
| [Unrestricted (Colorado) (Colorado) | INC. | |
| Subsidiary] | (Colorado) | |
| ------------- ----------- ------------------ | ------------ ----------- ------------- |
| | | |
| 55% 100% 100% | 100% 100% 100% | | 100%
- - - - - - - - - - - - - - - - - - - - - ------------- ------------ ------------- ---- |------ ----------- ---------- | -----------
EAGLE PARK VAIL RESORTS VAIL BEAVER CREEK VAIL FOOD VAIL/ | LODGE
RESERVOIR DEVELOPMENT ASSOCIATES ASSOCIATES, SERVICES, ARROWHEAD, | PROPERTIES,
COMPANY COMPANY INVESTMENTS, INC. INC. INC. | INC.
(Colorado) (Colorado) INC. (Colorado) (Colorado) (Colorado) | (Colorado)
[Unrestricted | (Colorado) | | |
Subsidiary] | [Unrestricted | 100% | |
| Subsidiary] | | |
| BEAVER [DOWN ARROW] |
[DOWN ARROW] CREEK FOOD |
SERVICES, INC. (See Page Four) |
(See Page Three) (Colorado) | 80%
| |
| 86% LODGE
BOULDER/ REALTY, INC.
BEAVER, LLC (Colorado)
(Colorado)
[Unrestricted
Subsidiary]
SCHEDULE 7.2
Corporate Structure and Jurisdictions of Incorporation and Business
-------------------------------------------------------------------
Page Three
----------
--------------
VAIL RESORTS
DEVELOPMENT
COMPANY
(Colorado)
--------------
--------------------------------------------------------------
| | | |
| 100% | 80% | 100% | 100%
- - - - - - - - - - - - - - - - - - - - - ---------- ------------ ------------ ----------
VAIL VAIL VAIL VAIL
ASSOCIATES ASSOCIATES ASSOCIATES ASSOCIATES
HOLDINGS, REAL ESTATE, CONSULTANTS, MANAGEMENT
LTD. INC. INC. COMPANY
(Colorado) (Colorado) (Colorado) (Colorado)
- - - - - - - - - - - - - - - - - - - - - ---------- ------------ ------------ ----------
|
|
| 100%
------------
VAIL/BATTLE
MOUNTAIN, INC.
(Colorado)
------------
SCHEDULE 7.2
Corporate Structure and Jurisdictions of Incorporation and Business
-------------------------------------------------------------------
Page Four
---------
-------------
VAIL SUMMIT
RESORTS, INC.
(Colorado)
-------------
--------------------------------------------------------------------------------------------------
| | | | | |
| 100% | 100% | 100% | 100% | 100% | 100%
- - - - - - - - - - - - - - - - - - - - - ---------------------- ---------------------- -------------- ----------- ------------- ----------
THE VILLAGE AT PROPERTY KEYSTONE KEYSTONE KEYSTONE FOOD KEYSTONE
BRECKENRIDGE MANAGEMENT CONFERENCE DEVELOPMENT & BEVERAGE RESORT
ACQUISITION ACQUISITION SERVICES, INC. SALES, INC. COMPANY PROPERTY
CORP., INC. CORP., INC. (Colorado) (Colorado) (Colorado) MANAGEMENT
(Tennessee) (Tennessee) COMPANY
[also does business in [also does business in (Colorado)
Colorado] Colorado]
- - - - - - - - - - - - - - - - - - - - - ---------------------- ---------------------- -------------- ----------- ------------- ----------
SCHEDULE 7.7
Material Litigation Summary
---------------------------
(Cases and possible cases reasonably
likely to become a Material Adverse Event)
None.
SCHEDULE 7.9
Material Environmental Matters
------------------------------
(Matters which constitute a Material Adverse Event)
None.
SCHEDULE 7.13
Non-Standard Transactions with Affiliates Other Than VRI and Restricted
-----------------------------------------------------------------------
Subsidiaries
------------
1. The transactions described in Sections 9.8(k)(iv) and 9.9 of the Credit
Agreement.
2. Those transactions described in the VRI Registration Statement filed on
Form S-2, as amended, filed with the Securities and Exchange Commission on
June 6, 1996, and amended on September 19, 1996.
3. Employment Agreements with various management employees and use of
facilities and provision of other perquisites by the Companies' to its
officers, directors and employees.
4. Gillett Holdings, Inc. Non-Qualified Stock Option Agreements, and other
stock option agreements, between VRI and certain employees of VRI or
Borrower as executed from time to time.
5. Transactions with employees under the Vail Associates Employee Mortgage
Program whereby qualifying employees' down payment requirements under
mortgages from the FirstBank of Vail are guaranteed by Borrower. Borrower
is granted a second mortgage on the acquired property.
6. Development Agreement between Borrower, Club Services, Inc., Game Creek
Partners, L.P. & The Game Creek Club, dated May 5, 1995, with respect to
the development and operation of The Game Creek Club facility on Vail
Mountain.
EXHIBIT A
---------
REVOLVING CREDIT PROMISSORY NOTE
$________________ Dallas, Texas ___________________
For value received, THE VAIL CORPORATION ("Maker") hereby promises to pay
to the order of ___________________ ("Payee") on or before the 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 Amended and Restated Credit Agreement dated as of May 1, 1999 (as
amended, supplemented or restated, the "Credit Agreement"), among Maker,
NationsBank, N.A., as Agent, NationsBanc Montgomery Securities LLC and the
Lenders referred to therein (including, without limitation, Payee) and is one of
the "Notes" referred to therein. 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 _____________, by each of the undersigned
(each a "Guarantor" and collectively the "Guarantors") for the benefit of
NATIONSBANK, 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 Amended and Restated Credit Agreement
with THE VAIL CORPORATION ("Borrower") dated as of May 1, 1999 (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 U.S.
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; Limit of Liability. 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, THE OBLIGATIONS OF EACH GUARANTOR HEREUNDER SHALL BE LIMITED
TO AN AGGREGATE AMOUNT EQUAL TO THE LARGEST AMOUNT THAT WOULD NOT RENDER ITS
OBLIGATIONS HEREUNDER
SUBJECT TO AVOIDANCE UNDER SECTION 548 OF THE U.S. BANKRUPTCY CODE OR ANY
COMPARABLE PROVISIONS OF ANY APPLICABLE STATE 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
B-2
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.
B-3
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 Resorts Development Company
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/Battle Mountain, Inc.
Gillett Group Management, Inc.
GHTV, Inc.
Gillett Broadcasting, Inc.
Gillett Broadcasting of Maryland, Inc.
Vail Summit Resorts, Inc.
Keystone Conference Services, Inc.
Keystone Development Sales, Inc.
Keystone Resort Property Management
Company
Keystone Food & Beverage Company
Lodge Properties, Inc.
Lodge Realty, Inc.
The Village at Breckenridge Acquisition
Corp., Inc.
Property Management Acquisition
Corp., Inc.
By:____________________________
Name:___________________________
Senior Vice President of each
of the above Companies
B-4
EXHIBIT C
---------
LOAN REQUEST
________________
NationsBank, N.A., as Agent
Corporate Finance Group
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Natalie E. Hebert
Fax: (214) 209-0980
Reference is made to the Amended and Restated Credit Agreement dated as
of May 1, 1999 (as amended, supplemented or restated from time to time, the
"Credit Agreement"), among THE VAIL CORPORATION, the Lenders named therein,
NationsBank, N.A., as Agent, and NationsBanc Montgomery Securities LLC.
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 Cred it 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*** _______________________________
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.
C-2
EXHIBIT D
---------
COMPLIANCE CERTIFICATE
FOR _____________ ENDED _______________
NationsBank, N.A., as Agent
Corporate Finance Group
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Natalie E. Hebert
Fax: (214) 209-0980
Reference is made to the Amended and Restated Credit Agreement dated as
of May 1, 1999 (as amended, supplemented or restated, the "Credit Agreement"),
among THE VAIL CORPORATION, the Lenders named therein, NationsBank, N.A., as
Agent, and NationsBanc Montgomery Securities LLC. 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 ________________
(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.
Very truly yours,
_________________________________
Name:____________________________
Chief Financial Officer
Annex A to Exhibit D
--------------------
CREDIT FACILITY COVENANTS CALCULATIONS
___________________, ________
______ Months
Ended - -
--------------
10.1(a) FUNDED DEBT TO RESORT EBITDA RATIO:
(i) FUNDED DEBT OF THE RESTRICTED COMPANIES:
(A) Funded Debt of the Companies per the Financial $
Statements
(B) Minus the following items of Funded Debt for the
following Unrestricted Subsidiaries:
(1) Vail Associates Investments, Inc. ( )
(2) ___________________________ ( )
(C) Plus the principal portion of all Capital Lease obligations
of the Companies per the Financial Statements $
(D) Minus the principal portion of the following Capital Lease
obligations for the following Unrestricted Subsidiaries:
(1) Vail Associates Investments, Inc. ( )
(2) ___________________________ ( )
TOTAL FUNDED DEBT OF THE RESTRICTED COMPANIES $
===============
(ii) RESORT EBITDA:
(A) EBITDA of the Companies for the last four fiscal quarters
per the Financial Statements $
(B) Plus pro forma EBITDA for assets acquired during such
period $
(C) Minus pro forma EBITDA for assets disposed of during
such period ( )
(D) Minus EBITDA for such period related to real estate
activities ( )
(E) Minus the following EBITDA for such period attributable
to the following Unrestricted Subsidiaries:
(1) Vail Associates Investments, Inc. ( )
(2) ___________________________ ( )
TOTAL RESORT EBITDA OF THE RESTRICTED
COMPANIES ===============
$
===============
Annex A/Page 1
Ratio _______Months
Ended - -
Maximum Ratio
===============
===============
10.1(b) SENIOR DEBT TO RESORT EBITDA RATIO:
(i) SENIOR DEBT OF THE RESTRICTED COMPANIES:
(A) Total Funded Debt of the Restricted Companies (from
Part 10.1(a)(i) above) $
(B) Minus Subordinated Debt of the Restricted Companies ( )
TOTAL SENIOR DEBT OF THE RESTRICTED COMPANIES $
===============
(ii) TOTAL RESORT EBITDA OF THE RESTRICTED
COMPANIES (from Part 10.1(a)(ii) above) ===============
$
===============
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) 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 $--------------
(iii) Plus Distributions by VRI during such period $==============
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 Funded Debt of the Restricted Companies
Annex A/Page 2
______Months
Ended - -
------------
in the last four fiscal quarters $
Ratio ============
Minimum required ratio ============
Annex A/Page 3
EXHIBIT E
---------
CONVERSION REQUEST
________________
NationsBank, N.A., as Agent
Corporate Finance Group
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Natalie E. Hebert
Fax: (214) 209-0980
Reference is made to the Amended and Restated Credit Agreement dated as
of May 1, 1999 (as amended, supplemented or restated, the "Credit Agreement"),
among THE VAIL CORPORATION, the Lenders named therein, NationsBank, N.A., as
Agent, and NationsBanc Montgomery Securities LLC. 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** and Principal Amount* 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.
E-2
EXHIBIT F
---------
LC REQUEST
________________
NationsBank, N.A., as Agent
Corporate Finance Group
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Natalie E. Hebert
Fax: (214) 209-0980
Reference is made to the Amended and Restated Credit Agreement dated as
of May 1, 1999 (as amended, supplemented or restated, the "Credit Agreement"),
among THE VAIL CORPORATION, the Lenders named therein, NationsBank, N.A., as
Agent, and NationsBanc Montgomery Securities LLC. 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 unused and available portion of the Total Commitment
under the Credit Agreement.
** 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 Bond LCs.
F-2
EXHIBIT G
---------
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit Agreement dated as of
May 1, 1999 (the "Credit Agreement") among THE VAIL CORPORATION, a Colorado
corporation ("Borrower"), the Lenders (as defined in the Credit Agreement),
NationsBank, N.A., as agent for the Lenders ("Agent"), and NationsBanc
Montgomery Securities LLC. Terms defined in the Credit Agreement are used herein
with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Loan
Documents as of the date hereof equal to the percentage interest specified on
Schedule 1 of all outstanding rights and obligations under the Loan Documents.
After giving effect to such sale and assignment, the Assignee's Commitments and
the amount of the Loans owing to the Assignee will be as set forth on Schedule
1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents; (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Loan
Party or the performance or observance by any Loan Party of any of its
obligations under the Loan Documents; and (iv) attaches the Note held by the
Assignor and requests that Agent exchange such Note for new Notes payable to the
order of the Assignee in an amount equal to the Commitments assumed by the
Assignee pursuant hereto and to the Assignor in an amount equal to the
Commitments retained by the Assignor, if any, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 8.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon Agent, the 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; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes Agent to take such action as agent on its behalf and to exercise such
powers and discretion under the Credit Agreement as are delegated to Agent by
the terms thereof, together with such powers and discretion as are reasonably
incidental thereto; (v) agrees that it will perform in accordance with their
terms all of the obligations that by the terms of the Credit Agreement are
required to be performed by it as a Lender; and (vi) attaches any U.S. Internal
Revenue Service or other forms required under Section 3.18.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to Agent for acceptance and recording by Agent. The effective date
for this Assignment and Acceptance (the "Effective Date") shall be the date of
acceptance hereof by Agent, unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by Agent, as of the Effective Date,
(i) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
6. Upon such acceptance and recording by Agent, from and after the
Effective Date, Agent shall make all payments under the Credit Agreement and the
Notes in respect of the interest assigned hereby (including, without limitation,
all payments of principal, interest and commitment fees with respect thereto) to
the Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Credit Agreement and the Notes for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Texas.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to
this Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
Percentage interest assigned: _____________%
Assignee's Commitment: $_____________
Aggregate outstanding principal amount
of Loans assigned: $_____________
Principal amount of Note payable to Assignee: $_____________
Principal amount of Note payable to Assignor: $_____________
Effective Date (if other than date
of acceptance by Agent): *_______, 19__
[NAME OF ASSIGNOR], as Assignor
By:__________________________
Name:__________________________
Title:__________________________
Dated:____________, 19__
[NAME OF ASSIGNEE], as Assignee
By:____________________________
Name:__________________________
Title:_________________________
Domestic Lending Office:
Eurodollar Lending Office:
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to Agent.
G-3
Accepted [and Approved] **
this ___ day of ___________, 19_
NATIONSBANK, N.A.
By:________________________
Name:______________________
Title:_____________________
[Approved this ____ day
of ____________, 19__
[NAME OF BORROWER]
By:_______________________]**
Name:_____________________
Title:____________________
** Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee".
G-4