Exhibit 10.1 Amended and Restated Credit Agreement
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AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of March 15, 2002
Among
BOOTH CREEK SKI HOLDINGS, INC.
TRIMONT LAND COMPANY
SIERRA-AT-TAHOE, INC.
BEAR MOUNTAIN, INC.
BOOTH CREEK SKI ACQUISITION CORP.
WATERVILLE VALLEY SKI RESORT, INC.
MOUNT CRANMORE SKI RESORT, INC.
SKI LIFTS, INC.
LMRC HOLDING CORP.
LOON MOUNTAIN RECREATION CORPORATION
LOON REALTY CORP.
as Borrowers,
DRE, L.L.C.,
as Guarantor
THE LENDERS PARTY HERETO,
as Lenders
and
FLEET NATIONAL BANK,
as Agent for the Lenders
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TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS...................................3
Section 1.1. Restatement; Calculations......................................3
Section 1.2. Definitions....................................................3
Section 1.3. Accounting Terms..............................................27
ARTICLE 2. THE CREDITS.......................................................27
Section 2.1. The Term Loans................................................27
Section 2.2. The Revolving Credit..........................................28
Section 2.3. Making of Additional Term Loans and.............................
Revolving Credit Advances.....................................28
Section 2.4. Interest on Term Loans and Revolving Credit Advances..........30
Section 2.5. Election of LIBOR Pricing Options.............................30
Section 2.6. Letters of Credit.............................................31
Section 2.7. Additional Payments...........................................35
Section 2.8. Computation of Interest, Etc..................................35
Section 2.9. Fees..........................................................36
Section 2.10. Set-Off.......................................................37
Section 2.11. Sharing of Payments...........................................37
Section 2.12. Reduction of Commitment by the Borrowers......................37
Section 2.13. Increased Costs, Etc..........................................37
Section 2.14. Changed Circumstances.........................................39
Section 2.15. Use of Proceeds...............................................40
Section 2.16. Guaranty......................................................40
ARTICLE 3. CONDITIONS TO LOANS AND ADVANCES..................................41
Section 3.1. Conditions to Initial Term Loans and............................
First Revolving Credit Advance................................41
Section 3.2. Conditions to All Additional Term Loans.......................44
Section 3.3. Conditions to All Revolving Credit Advances...................45
ARTICLE 4. PAYMENT AND REPAYMENT.............................................46
Section 4.1. Mandatory Prepayment..........................................46
Section 4.2. Voluntary Prepayments.........................................46
Section 4.3. Payment and Interest Cutoff...................................47
Section 4.4. Payment or Other Actions on Non-Business Days.................47
Section 4.5. Method, Timing and Application of Payments....................47
Section 4.6. Payments Not at End of Interest Period........................48
Section 4.7. Taxes.........................................................49
Section 4.8. Mitigation of Expenses........................................51
i
ARTICLE 5. GENERAL COVENANTS.................................................51
Section 5.1. Taxes and Other Charges.......................................51
Section 5.2. Conduct of Business, etc......................................52
Section 5.3. Insurance.....................................................53
Section 5.4. Financial Statements and Reports..............................53
Section 5.5. Certain Financial Tests.......................................58
Section 5.6. Indebtedness..................................................59
Section 5.7. Guarantees; Letters of Credit.................................61
Section 5.8. Liens.........................................................61
Section 5.9. Investments...................................................62
Section 5.10. Distributions.................................................64
Section 5.11. Capital Expenditures..........................................64
Section 5.12. Merger and Dispositions of Assets; Release of Liens;............
Use of Certain Proceeds.......................................65
Section 5.13. Subsidiaries..................................................66
Section 5.14. ERISA.........................................................67
Section 5.15. Transactions with Affiliates..................................67
Section 5.16. Environmental Cleanup.........................................67
Section 5.17. Cash Concentration............................................67
Section 5.18. Permitted Management Fees.....................................68
Section 5.19. Letters of Credit at Annual Clean-up..........................68
Section 5.20. Use of Equipment..............................................68
Section 5.21. NMP...........................................................68
Section 5.22. No Impairment of Cross-Streaming, Upstreaming,..................
Downstreaming or Liens........................................68
Section 5.23. Adjusted Incurred Real Estate Costs...........................69
Section 5.24. Loon Appraisal................................................69
Section 5.25. Miscellaneous Real Estate Documentation.......................69
Section 5.26. Booth Creek Ski Acquisition...................................69
ARTICLE 6. REPRESENTATIONS AND WARRANTIES....................................69
Section 6.1. Organization and Business.....................................69
Section 6.2. Financial Statements and Other Information....................70
Section 6.3. Changes in Condition..........................................70
Section 6.4. Agreements Relating to Financing Debt, Investments, etc.......71
Section 6.5. Title to Assets...............................................71
Section 6.6. Licenses, etc.................................................71
Section 6.7. Litigation....................................................71
Section 6.8. Tax Returns...................................................72
Section 6.9. No Legal Obstacle to Agreements...............................72
Section 6.10. Defaults......................................................73
Section 6.11. Certain Business Representations..............................73
Section 6.12. Pension Plans.................................................74
Section 6.13. Disclosure....................................................74
Section 6.14. NMP...........................................................74
Section 6.15. Valid and Binding Obligations.................................74
Section 6.16. Other Agreements..............................................75
Section 6.17. Stock.........................................................75
Section 6.18. Governmental Regulations......................................75
Section 6.19. Margin Stock..................................................75
Section 6.20. Solvency......................................................76
Section 6.21. Senior Indenture..............................................76
Section 6.22. Adjusted Incurred Real Estate Costs...........................77
Section 6.23. Forest Service Permits........................................77
Section 6.24. Booth Creek Ski Acquisition...................................77
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ARTICLE 7. EVENTS OF DEFAULT AND REMEDIES....................................77
Section 7.1. Events of Default.............................................77
Section 7.2. Remedies......................................................80
Section 7.3. Distribution of Proceeds......................................81
ARTICLE 8. CONSENTS; AMENDMENTS; WAIVERS; REMEDIES...........................82
Section 8.1. Actions by Lenders............................................82
Section 8.2. Actions by Loan Parties.......................................83
ARTICLE 9. SUCCESSORS AND ASSIGNS............................................83
Section 9.1. General.......................................................83
Section 9.2. Assignments...................................................84
Section 9.3. Participations................................................85
ARTICLE 10. THE AGENT........................................................86
Section 10.1. Authorization and Action......................................86
Section 10.2. Agent's Reliance, Etc.........................................86
Section 10.3. Agent as a Lender.............................................87
Section 10.4. Lender Credit Decision........................................87
Section 10.5. Indemnification of Agent......................................87
Section 10.6. Successor Agent...............................................88
Section 10.7. Amendment of Article 10.......................................88
ARTICLE 11. MISCELLANEOUS....................................................88
Section 11.1. Notices.......................................................88
Section 11.2. Merger........................................................89
Section 11.3. Governing Law; Consent to Jurisdiction........................89
Section 11.4. Counterparts; Replacement of Instruments......................90
Section 11.5. Expenses and Indemnification..................................90
Section 11.6. Confidentiality...............................................91
Section 11.7. Usury Limitation..............................................91
Section 11.8. Reliance on Representations and Actions of BCS Holdings.......92
Section 11.9. WAIVER OF JURY TRIAL; VENUE...................................92
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Term Note
Exhibit A-2 Form of Revolving Credit Note
Exhibit B-1 Form of Notice of Additional Term Loan Borrowing
Exhibit B-2 Form of Notice of Revolving Credit Borrowing
Exhibit C Form of Compliance Certificate
Exhibit D Form of LIBOR Pricing Notice
Exhibit E Form of Opinion of Loan Parties' Counsel
Exhibit F Form of Assignment and Acceptance Agreement
Schedule 1 Schedule of Commitment Percentages
Schedule 2 Schedule of Excluded Asset Sales
Schedule 5.3 Schedule of Insurance
Schedule 5.6(n) Schedule of Indebtedness
Schedule 5.7(a) Schedule of Performance and Surety Bonds Containing Guarantees
Schedule 5.7(b) Schedule of Letters of Credit
Schedule 5.16 Schedule of Environmental Remediation
Schedule 5.22 Schedule of Impairment Agreements
Schedule 5.25 Schedule of Miscellaneous Real Estate Documentation
Schedule 6.1(a) Schedule of Loan Parties and Subsidiaries
Schedule 6.1(b) Schedule of Foreign Qualifications
Schedule 6.3 Schedule of Material Transactions
Schedule 6.4 Schedule of Financing Debt, Liens, Guaranties and Investments
Schedule 6.7 Schedule of Litigation
Schedule 6.11 Schedule of Environmental Matters
Schedule 6.17 Schedule of Capital Stock and Membership Interests
Schedule 6.23 Schedule of Forest Service Agreements
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of March
15, 2002 by and among BOOTH CREEK SKI HOLDINGS, INC., a Delaware corporation
(together with its successors and assigns, "BCS Holdings"), BOOTH CREEK SKI
ACQUISITION CORP., a Delaware corporation (together with its successors and
assigns, "BCS Acquisition"), TRIMONT LAND COMPANY, a California corporation
(together with its successors and assigns, "TLC"), SIERRA-AT-TAHOE, INC., a
Delaware corporation (together with its successors and assigns,
"Sierra-at-Tahoe"), BEAR MOUNTAIN, INC., a Delaware corporation (together with
its successors and assigns, "Bear Mountain"), WATERVILLE VALLEY SKI RESORT,
INC., a Delaware corporation (together with its successors and assigns,
"Waterville"), MOUNT CRANMORE SKI RESORT, INC., a Delaware corporation (together
with its successors and assigns, "Cranmore"), SKI LIFTS, INC., a Washington
corporation (together with its successors and assigns, "Ski Lifts"), LMRC
HOLDING CORP., a Delaware corporation (together with its successors and assigns,
"LMRC Holding"), LOON MOUNTAIN RECREATION CORPORATION, a New Hampshire
corporation (together with its successors and assigns, "Loon"), and LOON REALTY
CORP., a New Hampshire corporation (together with its successors and assigns,
"Loon Realty"), and together with BCS Holdings, BCS Acquisition, TLC,
Sierra-at-Tahoe, Bear Mountain, Waterville, Cranmore, Ski Lifts, LMRC Holding
and Loon, the "Borrowers", and each a "Borrower"), as borrowers, DRE, L.L.C., a
Delaware limited liability company (together with its successors and assigns,
"DRE"), as a Guarantor, the Lenders party hereto, and FLEET NATIONAL BANK (f/k/a
BankBoston, N.A.), as agent (the "Agent") for itself and the other Lenders.
Recitals
The Borrowers and Fleet National Bank ("Fleet"), as Lender and the
Agent, are parties to an Amended and Restated Credit Agreement dated as of
October 30, 1998 (as amended, the "1998 Credit Agreement") and the Borrowers,
jointly and severally, desire to amend, restate and supplement their existing
credit facilities, add DRE as a Guarantor, and add an additional Lender on the
terms and conditions set forth herein. The credit facilities established
hereunder evidence the Borrowers' obligations under the 1998 Credit Agreement,
as amended and restated hereunder, and future advances hereunder will be used
(a) in the case of the Term Loans, to repurchase certain indebtedness of BCS
Holdings and BCS Acquisition and (b) in the case of Revolving Credit Advances,
to provide for ongoing working capital and other specified needs. The Lenders
are willing to provide such financing on the terms and conditions set forth
herein, including, among others, that the Borrowers amend and restate the 1998
Credit Agreement as provided herein. The Loan Parties conduct their operations
on a combined basis with shared management, purchasing, planning, financial
controls and other functions, and the access of all Borrowers to the credit
facilities provided hereunder benefits all Loan Parties in connection with their
various businesses.
2
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, (a) the Borrowers party to the
1998 Credit Agreement and Fleet hereby amend and restate the 1998 Credit
Agreement in its entirety and (b) all the parties hereto hereby agree as
follows:
ARTICLE 1. ...... DEFINITIONS AND ACCOUNTING TERMS
Section 1.1.......Restatement; Calculations. Effective as of the date
hereof (the "Restatement Date"), this Amended and Restated Credit Agreement
amends and restates in its entirety the 1998 Credit Agreement.
Effective on the Restatement Date, the "Revolving Loan" outstanding
under the 1998 Credit Agreement on such date shall be deemed to be Revolving
Credit Advances outstanding under Section 2.2 and shall be evidenced by the
Revolving Notes, and the Lenders shall make appropriate transfers between them
so that such Revolving Credit Advances are allocated in accordance with their
Commitment Percentages.
Amounts in respect of interest, fees and other amounts payable to or
for the account of the Lenders shall be calculated in accordance with the
provisions of (a) the 1998 Credit Agreement with respect to any period (or
portion of any period) ending prior to the Restatement Date and (b) this
Agreement as in effect on the Restatement Date after giving effect to the
amendment and restatement thereof effected hereby and as from time to time
thereafter in effect with respect to any period (or portion of any period)
commencing on or after the Restatement Date.
Section 1.2.......Definitions. In addition to the terms defined
elsewhere in this Agreement, unless otherwise specifically provided herein, the
following terms shall have the following meanings for all purposes when used in
this Agreement, and in any note, agreement, certificate, report or other
document made or delivered in connection with this Agreement:
"Accumulated Benefit Obligations" means the actuarial present
value of the accumulated benefit obligations under any Plan, calculated
in a manner consistent with Statement No. 87 of the Financial
Accounting Standards Board.
"Additional Term Loans" has the meaning set forth in Section
2.1.
"Adjusted Consolidated Capital Base" at any time means the sum
of (a) Consolidated Net Worth at such time plus (b) the aggregate
principal amount outstanding of Senior Unsecured Notes at such time.
"Adjusted Consolidated Leverage Ratio" at any time means the
ratio of Consolidated Senior Secured Indebtedness to Adjusted
Consolidated Capital Base.
3
"Adjusted Incurred Real Estate Costs" means the sum of (a)
reasonable capitalized real estate costs of the Loan Parties incurred
before or after the date hereof in connection with the development of
Porcupine Ridge at the Northstar-at-Tahoe resort, ▇▇▇▇ ▇▇ at the
Northstar-at-Tahoe resort and Unit 7B at the Northstar-at-Tahoe resort
and (b) reasonable selling, general and administrative costs incurred
after February 1, 2002 in connection with the Loan Parties' real estate
operating segment.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under
direct or indirect common control with such Person, and shall include
(i) any officer or director or general partner of such Person and (ii)
any Person of which such Person or any Affiliate (as defined in clause
(i) above) of such Person shall, directly or indirectly, beneficially
own either at least 10% of the outstanding equity securities having the
general power to vote or at least 10% of all equity interests.
"Agent" means Fleet National Bank, in its capacity as agent
for the Lenders, and its successors in that capacity.
"Agreement" means this Amended and Restated Credit Agreement,
as amended or supplemented from time to time. References to Articles,
Sections, Exhibits, Schedules and the like refer to the Articles,
Sections, Exhibits, Schedules and the like of this Agreement unless
otherwise indicated, as amended and supplemented from time to time.
"Applicable Base Rate" means the sum of (a) the Base Rate plus
(b) the Base Rate Margin, as each is in effect from time to time.
"Applicable LIBOR Rate" means the sum of (a) the LIBOR Rate
plus (b) the LIBOR Rate Margin, as each is in effect from time to time.
"Appraisal" means a valuation of the operating business,
assets, real estate or any portion thereof of any of the Loan Parties,
in similar form as the appraisals previously provided to the Agent.
"ASC Subordinated Note" means the Subordinated Promissory Note
dated November 27, 1996 issued by BCS Acquisition, Waterville and
Cranmore payable to American Skiing Company, a Delaware corporation.
"Assignment and Acceptance Agreement" shall have the meaning
set forth in Section 9.2 hereof.
4
"Base Rate" means the greater of (a) the Prime Rate and (b)
the Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded
upwards, if necessary, to the next 1/8 of 1%).
"Base Rate Loan" means any Revolving Credit Advance or any
portion of the Term Loans bearing interest at a fluctuating rate
determined by reference to the Applicable Base Rate.
"Base Rate Margin" means a rate per annum equal to 1 1/2%.
"BCS Acquisition" has the meaning provided in the preamble
hereto.
"BCS Acquisition Security Agreement" means the Amended and
Restated Security Agreement, dated as of the date hereof between the
Agent and BCS Acquisition, as amended, restated, supplemented or
otherwise modified and in effect from time to time.
"BCS Group" means Booth Creek Ski Group, Inc., a Delaware
corporation, together with itssuccessors and assigns.
"BCS Holdings" has the meaning provided in the preamble
hereto.
"BCS Holdings Security Agreement" means the Amended and
Restated Security Agreement dated as of the date hereof between the
Agent and BCS Holdings, as amended, restated, supplemented or otherwise
modified and in effect from time to time.
"Bear Mountain" has the meaning provided in the preamble
hereto.
"Bear Mountain Mortgage" means the Amended and Restated Deed
of Trust, Assignment of Rents, Security Agreement and Fixture Filing
dated as of the date hereof, executed by Bear Mountain in favor of the
Agent, as amended, restated, supplemented or otherwise modified and in
effect from time to time.
"Bear Mountain Security Agreement" means the Amended and
Restated Security Agreement dated as of the date hereof, between Bear
Mountain and the Agent, as amended, restated, supplemented or otherwise
modified and in effect from time to time.
"Booth Creek Management Company" means Booth Creek Management
Corporation, a Delaware corporation, and its successors and assigns.
"Booth Creek LLLP" means Booth Creek Partners Limited II,
L.L.L.P., a Colorado limited liability limited partnership, and its
successors and assigns.
5
"Booth Creek Ski Acquisition" means Booth Creek Ski
Acquisition, Inc., a Pennsylvania corporation.
"Borrower(s)" has the meaning provided in the preamble hereto.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in The Commonwealth of
Massachusetts are authorized or required to close under the laws of The
Commonwealth of Massachusetts, and if the applicable day relates to a
LIBOR Rate Loan or an Interest Period for a LIBOR Rate Loan, a day on
which dealings in dollar deposits are also carried on in the London
interbank market and banks are open for business in London.
"California Resorts" means the Northstar-at-Tahoe,
Sierra-at-Tahoe and Bear Mountain ski resorts, collectively.
"Capital Expenditures" means, for any period, amounts added or
required to be added to the "property and equipment" or "real estate
held for development and sale" accounts on the Consolidated balance
sheet of the Loan Parties, prepared in accordance with GAAP, in respect
of (a) the acquisition, construction, improvement or replacement of
land, buildings, machinery, equipment, leaseholds and any other real or
personal property, and (b) to the extent not included in clause (a)
above, expenditures on account of materials, contract labor and direct
labor relating thereto (excluding expenditures properly expensed as
repairs and maintenance in accordance with GAAP); provided, however,
that additions to the fixed asset accounts resulting from exchanges of
an existing capital asset for another capital asset of equal or greater
net book value shall not constitute a Capital Expenditure to the extent
effected without the expenditure of cash or the incurrence of
additional debt, if the net book value of such capital asset(s) for one
or a series of related transactions being replaced is less than or
equal to $1,500,000 or otherwise with the written consent of the Agent.
Capital Expenditures shall not include any such amounts added to
property and equipment or real estate held for development and sale
resulting from Capitalized Leases, Financing Debt (other than the
Lender Obligations) or insurance proceeds or which amounts are
reimbursed or paid by any Person other than a Loan Party.
"Capitalized Lease" means any lease which is required to be
capitalized on the balance sheet of the lessee in accordance with GAAP
and Statement Nos. 13 and 98 of the Financial Accounting Standards
Board.
"Capitalized Lease Obligations" means the amount of the
liability reflecting the aggregate discounted amount of future payments
under all Capitalized Leases calculated in accordance with GAAP and
Statement Nos. 13 and 98 of the Financial Accounting Standards Board.
6
"Cash Equivalents" means:
(a) negotiable certificates of deposit, time
deposits, demand deposits and bankers' acceptances issued by,
or maintained with, as the case may be, any United States
financial institution having capital and surplus and undivided
profits aggregating at least $100,000,000 and rated Prime-1 by
▇▇▇▇▇'▇ or A-1 by Standard & Poor's or issued by any Lender;
(b) short-term corporate obligations rated Prime
-1 by ▇▇▇▇▇'▇ or A-1 by Standard & Poor's;
(c) any direct obligation of the United States of
America or any agency or instrumentality thereof, or of any
state or municipality thereof, (i) which has a remaining
maturity at the time of purchase of not more than one year or
(ii) which is subject to a repurchase agreement with any
Lender (or any other financial institution referred to in
clause (a) above) exercisable within one year from the time of
purchase and (iii) which, in the case of obligations of any
state or municipality, is rated AA or better by ▇▇▇▇▇'▇; and
(d) any mutual fund or other pooled investment
vehicle rated AA or better by Standard & Poor's which invests
primarily in obligations described above.
"Cash Management System" has the meaning provided in Section
5.17.
"Cash Proceeds" means, with respect to any disposition of
assets permitted hereunder, the aggregate cash payments (including any
cash received by way of deferred payment when and as received) received
by the Loan Parties or any of their Subsidiaries.
"CIBC Securities Subsidiary" means, collectively, CIBC WG
Argosy Merchant Fund 2, L.L.C. and Co-Investment Merchant Fund, LLC and
their respective successors and assigns.
"Closing Date" means the date on which all of the conditions
set forth in Section 3.1 have been satisfied.
"Code" means, collectively, the federal Internal Revenue Code
of 1986 (or any successor statute), and the rules and regulations
thereunder, all as from time to time in effect.
"Commitment Percentage" means as to each Lender its percentage
interest in the Term Loans and the Maximum Revolving Credit Amount as
set forth on Schedule 1 hereto.
7
"Compliance Certificate" means a certificate in the form of
Exhibit C hereto and executed by an Officer.
"Computation Covenants" means the covenants set forth in
Sections 5.5 and 5.11.
"Consolidated" and "Consolidating," and "consolidated" and
"consolidating" when used with reference to any term, mean that term
(or the terms "combined" and "combining", as the case may be, in the
case of partnerships, joint ventures and Affiliates that are not
Subsidiaries) as applied to the accounts of the Loan Parties (or other
specified Person) and all of its Subsidiaries (or other specified
Persons), or such of its Subsidiaries as may be specified, consolidated
(or combined) in accordance with GAAP and with appropriate deductions
for minority interests in Subsidiaries, as required by GAAP.
"Consolidated Debt Service" means, for any period, with
respect to the Loan Parties and their Subsidiaries, the sum of (a)
Consolidated Interest Expense, determined in accordance with GAAP
consistently applied, (b) cash payments of principal made with respect
to Capitalized Lease Obligations, (c) the aggregate amount of scheduled
mandatory reductions of the Maximum Term Loan Amount pursuant to
Section 2.1(d) hereof during such period and actually paid or payable
during such period, without giving effect to any other prepayments of
the Term Loans and (d) amounts reflected as "Minority Interest" in the
Loan Parties' Consolidated statements of operations resulting from the
non-voting preferred stock of Ski Lifts for periods prior to February
1, 2002.
"Consolidated EBITDA" means for any period the sum of (a)
Consolidated Net Income plus (b) all amounts deducted in computing
Consolidated Net Income in respect of (i) depreciation, depletion and
amortization; (ii) Consolidated Interest Expense; (iii) taxes based
upon or measured by income; (iv) non-cash cost of real estate sales;
(v) amortization of deferred financing costs ; and (vi) amounts
reflected as "Minority Interest" in the Loan Parties' Consolidated
statements of operations resulting from the non-voting preferred stock
of Ski Lifts for periods prior to February 1, 2002; provided, however,
that Consolidated EBITDA shall not include (A) extraordinary or
non-recurring gains or losses other than gains or losses from sales of
real estate by TLC to TLH in accordance with the terms of the First
Northstar Purchase Agreement; (B) $6,000,000 in cash income from real
estate sales that was received by the Loan Parties in a fiscal year
other than their fiscal year ending November 1, 2002, but recognized by
the Loan Parties in their fiscal year ending November 1, 2002; (C) any
portion of Consolidated Net Income that is attributable to any form of
weather related insurance, including paid skier visit insurance and
weather related derivatives and (D) any non-cash amounts reflected as
"Other income (expense)" in the Loan Parties' Consolidated statements
of operations.
"Consolidated Interest Expense" means for any period the sum
of (a) the aggregate amount of interest which, in conformity with GAAP,
would be set forth opposite the caption "Interest Expense" on the
Consolidated statement of operations of the Loan Parties, which shall
include imputed interest on Capitalized Lease Obligations, plus (b) all
capitalized interest for such period minus (c) interest and dividend
income earned on Cash Equivalents.
8
"Consolidated Net Income" means the net income (or loss) from
operations of the Loan Parties and their Subsidiaries, after taxes,
determined in accordance with GAAP consistently applied.
"Consolidated Net Worth" at any time shall mean the total
amount of stockholders' equity of the Loan Parties at such time
determined in accordance with GAAP, except that equity shall not be
reduced by any non-cash impairment charges for long-lived assets or
goodwill recorded in accordance with FAS 142 or FAS 144 or similar
accounting pronouncements.
"Consolidated Resort EBITDA" means for any period the sum of
(a) Consolidated Resort Net Income plus (b) all amounts deducted in
computing Consolidated Resort Net Income in respect of (i) depreciation
and amortization; (ii) Consolidated Interest Expense; (iii) taxes based
upon or measured by income; (iv) amortization of deferred financing
costs; and (v) amounts reflected as "Minority interest" in the Loan
Parties' Consolidated statements of operations resulting from the
non-voting preferred stock of Ski Lifts for periods prior to February
1, 2002; provided, however, that Consolidated Resort EBITDA shall not
include (A) extraordinary or non-recurring gains or losses, and (B) any
portion of Consolidated Resort Net Income that is attributable to any
form of weather related insurance, including paid skier visit insurance
and weather related derivatives and (C) any non-cash amounts reflected
as "Other income (expense)" in the Loan Parties' Consolidated
statements of operations.
"Consolidated Resort Net Income" means the net income (or
loss) of the Loan Parties and their Subsidiaries from resort operations
(calculated consistent with past practice), after taxes, determined in
accordance with GAAP consistently applied.
"Consolidated Senior Secured Indebtedness" means the sum of
(a) the amount of all Lender Obligations plus (b) the amount of all
other Financing Debt of the Loan Parties and their Subsidiaries secured
by any Lien on any assets of any Loan Party or any Subsidiary other
than the ASC Subordinated Note.
"Control Group Person" means any of the Loan Parties, any
Subsidiary and any Person which is a member of the controlled group or
under common control with any of the Loan Parties or any Subsidiary
within the meaning of sections 414(b) or 414(c) of the Code or section
4001(a)(14) of ERISA.
9
"Cranmore" has the meaning provided in the preamble hereto.
"Cranmore Mortgage" means the Amended and Restated Fee
Mortgage and Security Agreement, dated as of the date hereof, executed
by Cranmore in favor of the Agent, as amended, restated, supplemented
or otherwise modified and in effect from time to time.
"Cranmore Security Agreement" means the Amended and Restated
Security Agreement, dated as of the date hereof, between Cranmore and
the Agent, as amended, restated, supplemented or otherwise modified and
in effect from time to time.
"Credit Participants" has the meaning set forth in Section 9.3
hereof.
"Credit Security" means all assets now or from time to time
hereafter subjected to a security interest or charge (or intended or
required so to be pursuant to the Security Agreements, the Mortgages or
any other Lender Agreement) to secure the payment or performance of any
of the Lender Obligations, including the assets described in the
Security Agreements, the Mortgages (excluding any environmental
indemnity agreements) and any three party agreement with the Forest
Service.
"Default" means an Event of Default or an event or condition
which with the passage of time or giving of notice, or both, would
become such an Event of Default.
"Defaulting Lender" has the meaning set forth in Section 8.1
hereof.
"Designated Cleanup Period" has the meaning provided in
Section 2.2(c).
"Distribution" means, with respect to any Person:
(i) the declaration or payment of any dividend,
including dividends payable in shares of Stock of such Person,
on or in respect of any shares of Stock of such Person;
(ii) the purchase or redemption of any shares of any
Stock of such Person (or of options, warrants or other rights
for the purchase of such shares), directly, indirectly through
a Subsidiary of such Person or otherwise;
(iii) any other distribution on or in respect of
any shares of Stock in such Person;
(iv) any payment of principal or interest with
respect to, or any purchase or redemption of, any Indebtedness
of such Person which by its terms is subordinated to the
payment of the Lender Obligations; and
(v) any payment, loan or advance (including any
salary, management fee or other fee, benefit, bonus or any
other compensation in respect of services provided to such
Person or any lease payments) by such Person to, or any other
Investment by such Person in, the holder of any shares of
Stock in such Person other than (a) compensation to officers
and employees of such Person in the ordinary course of
business, (b) director's fees payable to independent outside
directors and (c) in connection with any transaction that
complies with Section 5.15 hereof.
10
"DRE" has the meaning provided in the preamble hereto.
"DRE Mortgage" means the Mortgage and Security Agreement,
dated as of the date hereof, executed by DRE in favor of the agent, as
amended, restated, supplemented or otherwise modified and in effect
from time to time.
"DRE Security Agreement" means the Guarantee and Security
Agreement, dated as of the date hereof, between DRE and the Agent, as
amended, restated, supplemented or otherwise modified and in effect
from time to time.
"East West" mean East West Partners, Inc., a Colorado
corporation.
"Environmental Law" means any judgment, decree, order, law,
license, rule or regulation pertaining to environmental matters, or any
federal, state, county or local statute, regulation, ordinance, order
or decree relating to public health, welfare, the environment, or to
the storage, handling, use or generation of hazardous substances in or
at the workplace, worker health or safety, whether now existing or
hereafter enacted.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Event of Default" has the meaning set forth in Section 7.1
hereof.
"EWRD V" means East West Resort Development V L.P., L.L.L.P.,
a Delaware limited liability limited partnership.
"Excess Cash Proceeds" means Net Cash Proceeds from Permitted
Real Estate Sales minus (a) the cumulative amount of Adjusted Incurred
Real Estate Costs incurred through the last day of the fiscal quarter
in which any such Permitted Real Estate Sale was consummated and (b)
the aggregate amount of the Term Loans previously repaid by the Loan
Parties from the Closing Date through the last day of such fiscal
quarter. For purposes of clarification, "Excess Cash Proceeds" will be
determined on a quarterly basis beginning with the fiscal quarter
ending April 30, 2002.
11
"Excess Real Property" means unimproved parcels of real
property owned by the Loan Parties which are not then used or
contemplated to be used in connection with the ski or golf operations
of the Loan Parties (excluding real property included within the
definition of Permitted Real Estate Sales) which, for purposes hereof,
shall be deemed to include the items listed on Schedule 2 hereto.
"Exchange Act" means the federal Securities Exchange Act of
1934, as amended and in effect from time to time.
"Excluded Asset Sales" means (a) sales of single family lots
in the ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, (▇) the
sale, lease or other transfer of real estate by TLC to TLH as
contemplated by the First Northstar Purchase Agreement, (c) sales of
development real estate at the Loon Mountain ski resort with the
Agent's consent, which consent shall not be unreasonably withheld, (d)
sales of inventory or timber in the ordinary course of business, (e)
sales of tangible assets to be replaced in the ordinary course of
business by other assets of substantially equal or greater value, (f)
sales or transfers of assets to any other Loan Party and (g) other
sales, leases and transfers of real or personal property (other than
Investments in Subsidiaries), or interests therein, in an amount not to
exceed $2,000,000 in any fiscal year of the Loan Parties.
"Federal Funds Effective Rate" means for any day, a
fluctuating interest rate per annum equal to the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published
for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by
the Agent from three federal funds brokers of recognized standing
selected by the Agent.
"Fee Letter" has the meaning set forth in Section 2.9(d)
hereof.
"Financing Debt" means (without duplication):
(a) Indebtedness for borrowed money;
(b) Indebtedness evidenced by notes, bonds,
debentures or similar instruments;
(c) Indebtedness in respect of Capitalized Lease
Obligations;
(d) Indebtedness for the deferred purchase price of
assets, including, without limitation, the ASC Subordinated
Note (other than normal trade accounts payable or other
accrued liabilities arising in the ordinary course of business
including, without limitation, trade accounts (payable over
not more than 24 months) for inventory, rental equipment,
uniforms, and, with the consent of the Agent which will not be
unreasonably withheld or delayed, other items); and
(e) Indebtedness in respect of mandatory
redemption or mandatory dividends on capital stock (or other
equity interests).
12
"First Northstar Purchase Agreement" means that certain
Agreement for Purchase and Sale of Real Property by and among TLH and
TLC dated as of September 22, 2000.
"Fleet" means Fleet National Bank.
"Forest Service" has the meaning set forth in Section 6.23
hereof.
"Forest Service Permits" has the meaning set forth in Section
6.23 hereof.
"Generally Accepted Accounting Principles" or "GAAP" means
accounting principles generally accepted in the United States as
defined by the Financial Accounting Standards Board, as from time to
time in effect.
"Guaranteed Obligations" has the meaning set forth in Section
2.16 hereof.
"Guarantor" means (a) DRE and (b) each other Person which
guarantees, pursuant to Section 2.16 or otherwise, all or any part of
the Lender Obligations.
"Guaranty" or "Guarantee" means
(a) any guarantee by a Person of the payment or
performance of, or any contingent obligation by a Person in
respect of, any Indebtedness or other obligation of any
obligor other than such Person;
(b) any other arrangement whereby credit is extended
to one obligor on the basis of any legally enforceable promise
or undertaking of another Person (including any "comfort
letter" or "keep well agreement" written by such other Person
to a creditor or prospective creditor) to (i) pay the
Indebtedness of such obligor, (ii) purchase an obligation owed
by such obligor, (iii) pay for the purchase or lease of assets
or services regardless of the actual delivery thereof or (iv)
maintain the capital, working capital, solvency or general
financial condition of such obligor, in each case whether or
not such arrangement is disclosed in the balance sheet of such
other Person or referred to in a footnote thereto;
(c) any liability of a Person as a general
partner of a partnership in respect of Indebtedness or other
obligations of such partnership;
(d) any liability of a Person as a joint
venturer of a joint venture in respect of Indebtedness or
other obligations of such joint venture; and
(e) reimbursement obligations with respect to
letters of credit, surety bonds and other financial
guarantees;
provided, however, that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of
business.
13
"Hazardous Material" means, collectively, any pollutant, toxic
or hazardous material or waste, including any "hazardous substance" or
"pollutant" or "contaminant" as defined in section 101(14) of the
Comprehensive Environmental Response, Compensation and Liability Act
(or any successor statute) or regulated as toxic or hazardous under the
Resource Conservation and Recovery Act of 1976 or any similar state or
local statute or regulation, and the rules and regulations thereunder,
all as from time to time in effect.
"Indebtedness" means, as to any Person, all obligations,
contingent and otherwise, which in accordance with GAAP consistently
applied should be classified upon such Person's balance sheet as
liabilities, but in any event including liabilities secured by any
mortgage, pledge, security interest, lien, charge or other encumbrance
existing on property owned or acquired by such Person whether or not
the liability secured thereby shall have been assumed, letters of
credit open for account, obligations under acceptance facilities,
Capitalized Lease Obligations and all obligations on account of
Guarantees, endorsements and any other contingent obligations in
respect of the Indebtedness of others whether or not reflected on such
balance sheet or in a footnote thereto.
"Initial Term Loans" has the meaning provided in Section
2.1(a) hereof.
"Interest Period" means with respect to each LIBOR Rate Loan,
the period commencing on the date of such LIBOR Rate Loan and ending
one, two, three, six or, if available from all of the Lenders, twelve
months thereafter, as the Borrowers may request as provided in Section
2.5(a) hereof, provided that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (c) below) that would otherwise
end on a day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in the next
calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day;
14
(b) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Business Day of a calendar month;
(c) any Interest Period that would otherwise end
after the Revolving Credit Termination Date shall end on the Revolving
Credit Termination Date; and
(i) notwithstanding clause (c) above, no Interest
Period shall have a duration of less than one month, and if any
Interest Period applicable to any LIBOR Rate Loan would be for a
shorter period, such Interest Period shall not be available hereunder.
"Interest Rate Protection Agreement" means any interest rate
swap, cap or collar arrangement or any other derivative product
customarily offered by banks or other financial institutions to their
customers in order to reduce the exposure of such customers to interest
rate fluctuations entered into by any Loan Party.
"Investment" means, with respect to any Person:
(a) any share of Stock, evidence of Indebtedness or
other security issued by any other Person;
(b) any loan, advance or extension of credit to, or
contribution to the capital of, any other Person;
(c) any Guarantee of the Indebtedness of any other
Person;
(d) any acquisition of all or any material part of
the business of or any resort property of any other Person or
the assets comprising such business or part thereof;
(e) any commitment to make any Investment or any
option payments made relating to an Investment; and
(f) any other similar investment.
The investments described in the foregoing clauses (a) through
(f) shall be included in the term "Investment" whether they are made or
acquired by purchase, exchange, issuance of Stock or other securities,
merger, reorganization or any other method; provided, however, that the
term "Investment" shall not include (i) current trade and customer
accounts receivable for goods furnished or services rendered in the
ordinary course of business and payable in accordance with customary
trade terms, (ii) advances and prepayments to suppliers for goods and
services in the ordinary course of business, (iii) advances to
employees for travel expenses, drawing accounts and similar
expenditures, (iv) stock or other securities acquired in connection
with the satisfaction or enforcement of Indebtedness or claims due to
such Person or as security for any such Indebtedness or claim, (v)
stock, instruments or other securities received in connection with the
sale, lease or other transfer of assets permitted under Section 5.12
(other than Permitted Real Estate Sales) or (vi) demand deposits in
banks or trust companies.
15
"Issuing Bank" shall mean Fleet.
"▇▇▇▇ ▇▇▇▇▇▇▇" means, collectively, the ▇▇▇▇ ▇▇▇▇▇▇▇ Life
Insurance Company, a Massachusetts corporation, and ▇▇▇▇▇▇▇ Mezzanine
Partners, L.P. and their respective successors and assigns.
"Legal Requirement" means any present or future requirement
imposed upon any of the Lenders or the Loan Parties and their
Subsidiaries by any law, statute, rule, regulation, directive, order,
decree or guideline (or any interpretation thereof by courts or of
administrative bodies) of the United States of America, or any
jurisdiction in which any LIBOR Office is located or any state or
political subdivision of any of the foregoing, or by any board,
governmental or administrative agency, central bank or monetary
authority of the United States of America, any jurisdiction in which
any LIBOR Office is located, or any political subdivision of any of the
foregoing. Any such law, statute, rule, regulation, directive, order,
decree, guideline or interpretation imposed on any of the Lenders not
having the force of law shall be deemed to be a Legal Requirement for
purposes of Section 3 if such Lender reasonably believes that
compliance therewith is customary commercial practice of similarly
situated lending institutions generally.
"Lender Agreements" means this Agreement, the Revolving Credit
Notes, the Term Notes, the Mortgages, the Security Agreements and any
Interest Rate Protection Agreement with any Lender (or an Affiliate of
any Lender) at the time such arrangement is entered into, each as from
time to time amended or supplemented, and all statements, reports and
certificates delivered by the Loan Parties to the Agent or the Lenders
in connection therewith.
"Lender Obligations" means all present and future obligations
and Indebtedness of any Loan Party or any Subsidiary owing to the Agent
or the Lenders under this Agreement or any other Lender Agreement,
including, without limitation, the obligations to pay the Indebtedness
from time to time evidenced by the Revolving Credit Notes and the Term
Notes, and obligations to pay interest, commitment fees, balance
deficiency fees, charges, expenses and indemnification from time to
time owed under any Lender Agreement.
16
"Lenders" means (a) initially, each Lender listed on the
signature pages hereof, (b) any other Person who becomes a Successor
Lender hereunder in accordance with the terms of Section 9.2 hereof,
and (c) their respective successors.
"Letter of Credit Exposure" means, with respect to any Letter
of Credit, the amount of the Maximum Exposure Under Letters of Credit
attributable to such Letter of Credit.
"Letters of Credit" has the meaning provided in Section 2.6(a)
hereof.
"LIBOR Office" means such non-United States office or
international banking facility of any Lender as the Lender may from
time to time select.
"LIBOR Pricing Option" means the option granted to the
Borrowers pursuant to Section 2.5 hereof to have interest on all or a
portion of the Loans computed on the basis of the Applicable LIBOR Rate
for an applicable Interest Period.
"LIBOR Rate" means, as applicable to any LIBOR Rate Loan, the
rate per annum as determined on the basis of the offered rates for
deposits in U.S. dollars, for a period of time comparable to such LIBOR
Rate Loan which appears on the Telerate page 3750 as of 11:00 a.m.
London time on the day that is two (2) Business Days preceding the
first day of such LIBOR Rate Loan; provided, however, if the rate
described above does not appear on the Telerate System on any
applicable interest determination date, the LIBOR Rate shall be the
rate (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point), determined on the basis of
the offered rates for deposits in U.S. dollars for a period of time
comparable to such LIBOR Rate Loan which are offered by four major
banks in the London interbank market at approximately 11:00 a.m. London
time, on the day that is two (2) Business Days preceding the first day
of such LIBOR Rate Loan as selected by the Agent. The principal London
office of each of the four major London banks will be requested to
provide a quotation of its U.S. dollar deposit offered rate. If at
least two such quotations are provided, the rate for that date will be
the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that date will be determined on the
basis of the rates quoted for loans in U.S. dollars to leading European
banks for a period of time comparable to such LIBOR Rate Loan offered
by major banks in New York City at approximately 11:00 a.m. New York
City time, on the day that is two (2) Business Days preceding the first
day of such LIBOR Rate Loan. In the event that the Agent is unable to
obtain any such quotation as provided above, it will be deemed that the
LIBOR Rate for a requested LIBOR Rate Loan cannot be determined. In the
event that the Board of Governors of the Federal Reserve System shall
impose a Reserve Percentage with respect to LIBOR deposits of any
Lender, then for any period during which such Reserve Percentage shall
apply, the LIBOR Rate shall be equal to the amount determined above
divided by an amount equal to 1 minus the Reserve Percentage. "Reserve
Percentage" shall mean the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which
is imposed on member banks of the Federal Reserve System against
"Euro-currency Liabilities" as defined in Regulation D. The LIBOR Rate
shall be adjusted automatically as of the effective date of any change
in the Reserve Percentage.
17
"LIBOR Rate Fixing Day" means, in the case of any LIBOR Rate
Loan, the second Business Day preceding the Business Day on which an
Interest Period begins.
"LIBOR Rate Loan" means any Loan hereunder upon which interest
will accrue on the basis of a formula including as a component thereof
the LIBOR Rate. The expiration date of any LIBOR Rate Loan shall be the
last day of the Interest Period applicable to such LIBOR Rate Loan.
"LIBOR Rate Margin" means a rate per annum equal to 4%.
"Lien" means, with respect to any Person:
(a) any encumbrance, mortgage, pledge, lien, charge
or security interest of any kind upon any property or assets
of such Person, whether now owned or hereafter acquired, or
upon the income or profits therefrom;
(b) the acquisition of, or the agreement to acquire,
any property or assets upon conditional sale or subject to any
other title retention agreement, device or arrangement
(including a Capitalized Lease); and
(c) the sale, assignment, pledge or transfer for
security of any accounts, general intangibles or chattel paper
of such Person, with or without recourse.
"LMRC Holding" has the meaning provided in the preamble
hereto.
"LMRC Holding Security Agreement" means the Amended and
Restated Security Agreement dated as of the date hereof between LMRC
Holding and the Agent, as amended, restated, supplemented and in effect
from time to time.
"Loan" means all or a portion of any Term Loan and any
Revolving Credit Advance outstanding hereunder or made to the Borrowers
by the Lenders pursuant to Article 2 of this Agreement, and "Loans"
means all of such loans, collectively.
"Loan Party" means any Borrower or any Guarantor.
"Loan Parties" means the Borrowers and the Guarantors.
18
"Loon" has the meaning provided in the preamble hereto.
"Loon Mortgage" means the Amended and Restated Mortgage,
Security Agreement and Assignment of Leases and Rents, dated as of the
date hereof, executed by Loon and Loon Realty in favor of the Agent, as
amended, restated, supplemented or otherwise modified and in effect
from time to time.
"Loon Realty" has the meaning provided in the preamble hereto.
"Loon Realty Security Agreement" means the Amended and
Restated Security Agreement, dated as of the date hereof, between Loon
Realty and the Agent, as amended, restated supplemented or otherwise
modified and in effect from time to time.
"Loon Security Agreement" means the Amended and Restated
Security Agreement, dated as of the date hereof, between Loon and the
Agent, as amended, restated, supplemented or otherwise modified and in
effect from time to time.
"Majority Lenders" means, at any time, the Lenders (excluding
Defaulting Lenders) having made not less than 75% of the outstanding
principal amount of the Loans (excluding Loans made by a Defaulting
Lender) hereunder, or, if no Loans are outstanding, the Lenders
(excluding Defaulting Lenders) having aggregate Commitment Percentages
of not less than 75% (excluding Commitment Percentages of Defaulting
Lenders); provided, however, if there are only two Lenders, the
Majority Lenders shall mean Lenders having made one hundred percent
(100%) of the outstanding principal amount of the Loans (excluding
Loans made by Defaulting Lenders) and, if no Loans are outstanding,
shall mean Lenders (excluding Defaulting Lenders) holding one hundred
percent (100%) of the aggregate Commitment Percentages (excluding
Commitment Percentages of Defaulting Lenders).
"Margin Stock" means "margin stock" within the meaning of
Regulation U (or any successor provisions) of the Board of Governors of
the Federal Reserve System, or any regulations, interpretations or
rulings thereunder, all as from time to time in effect.
"Material Adverse Change" means any materially adverse change
in the business, assets, financial condition or income of the Loan
Parties and their Subsidiaries taken as a whole since November 2, 2001.
"Material Plan" means any Plan or Plans, collectively, as to
which (a) the excess of (i) the aggregate Accumulated Benefit
Obligations under such Plan or Plans over (ii) the aggregate fair
market value of the assets of such Plan or Plans allocable to such
benefits, all determined as of the then most recent valuation date or
dates for such Plan or Plans, is greater than (b) $1,000,000.
19
"Maximum Credit Amount" means $50,000,000.
"Maximum Exposure Under Letters of Credit" means at any time
the sum of (a) the aggregate face amount of all unpaid drafts which may
then or thereafter be presented by beneficiaries under all Letters of
Credit then outstanding, plus (b) the aggregate face amount of all
drafts then outstanding which the Agent has theretofore accepted under
Letters of Credit but has not paid.
"Maximum Revolving Credit Amount" means as of any date of
determination, the lesser of (a) $25,000,000 or (b) the amount to which
the Maximum Revolving Credit Amount may have been reduced pursuant to
Section 2.12 hereof; provided that if the obligation of the Lenders to
make further Revolving Credit Advances is terminated upon the
occurrence of an Event of Default, the Maximum Revolving Credit Amount
as of any date of determination thereafter shall be deemed to be $0.
"Maximum Term Loan Amount" shall initially be the amount of
outstanding Term Loans at the close of business on the Term Loan
Commitment Termination Date and as of any subsequent date of
determination, the maximum principal amount of the Term Loans which may
be outstanding pursuant to Section 2.1(d).
"Moody's" means ▇▇▇▇▇'▇ Investor Service, Inc. and its
successors.
"Mortgages" means, collectively, the TLC Mortgage, the
Sierra-at-Tahoe Mortgage, the Bear Mountain Mortgage, the Waterville
Mortgage, the Cranmore Mortgage, the DRE Mortgage, the Ski Lifts
Mortgage, the Loon Mortgage and related assignments to the Agent of
leases of real property owned by any of the Loan Parties.
"Multiemployer Plan" means any Plan which is a "multiemployer
plan" as defined in section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means the Cash Proceeds with respect to
any disposition of assets permitted hereunder less, to the extent not
included in Adjusted Incurred Real Estate Costs, the sum of (a) any
reasonable sales commissions payable to third parties and other direct
sales and out-of-pocket administrative expenses in connection
therewith, (b) fees and expenses of attorneys and other professionals
in connection therewith, (c) any taxes payable in connection with such
disposition, including any appropriate reserves taken in accordance
with GAAP for taxes in connection therewith and (d) any appropriate
liabilities accrued in accordance with GAAP for contractual obligations
or formal commitments associated with (i) project development
mitigation measures required by governmental or regulatory agencies,
(ii) requirements of annexation and similar arrangements with
homeowners' associations or similar bodies, (iii) warranties or
post-sale remediation arrangements with purchasers of property in
Permitted Real Estate Sales, and (iv) other similar obligations and
commitments incurred in connection with Permitted Real Estate Sales.
20
"New Hampshire Resorts" means collectively, the Waterville
Valley, Cranmore and Loon Mountain resorts.
"NMP" means Northstar Mountain Properties, LLC, a Delaware
limited liability company.
"NMP Non-Residential Property Agreement" means that certain
Non-Residential Property Agreement, dated as of September 23, 2000,
entered into by and among TLH and NMP.
"NMP Operating Agreement" means the Operating Agreement of
Northstar Mountain Properties, LLC dated as of September 23, 2000, by
and between TLH and EWRD V, as amended by the First Amendment to
Operating Agreement of NMP dated as of January 31, 2002, and as
modified and amended from time to time in accordance with the terms
thereof and hereof.
"NMP Property" means the Property as defined in the First
Northstar Purchase Agreement.
"NMP Resort Right of First Offer Agreement" means a Right of
First Offer Agreement which may be entered into between TLH and EWRD V
pursuant to the NMP Operating Agreement.
"NMP Transaction Agreements" means the First Northstar
Purchase Agreement, the Second NMP Purchase Agreement, the NMP
Operating Agreement, the NMP Non-Residential Property Agreement, the
"Net Lease" and the "Easement Agreement," as such terms are defined in
the First Northstar Purchase Agreement, and that certain Employee
Housing Agreement, dated as of September 22, 2000, between TLC and NMP.
"Northstar Club" means Northstar Club, L.L.C., a California
limited liability company, together with its successors and assigns.
"Notes" means the Revolving Credit Notes and the Term Notes.
"Notice of Additional Term Loan Borrowing" has the meaning set
forth in Section 2.3(a).
"Notice of Revolving Credit Borrowing" has the meaning set
forth in Section 2.3(a).
"Officer" means the chief executive officer, president, chief
financial officer or a vice president whose primary responsibility is
for the financial affairs of, any of the Borrowers.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor entity.
21
"Permitted BCS Group Owners" means Booth Creek LLLP (so long
as ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. or ▇▇▇▇ ▇▇▇▇▇▇▇ is the managing general
partner thereof), ▇▇▇▇ ▇▇▇▇▇▇▇ and its Affiliates (other than its
portfolio companies), the CIBC Securities Subsidiary, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇▇▇▇▇▇▇, any trust solely for the benefit
of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇ ▇▇▇▇▇▇▇ or their respective
immediate family members, or any partnership all the ownership
interests in which are beneficially owned by any of the foregoing;
provided that with respect to any trust or partnership either ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇. or ▇▇▇▇ ▇▇▇▇▇▇▇ shall at all times have the exclusive
power under such trust or partnership to direct, directly or
indirectly, the voting of the share of voting stock of BCS Group held
by such trust or partnership.
"Permitted Real Estate Sales" means sales for cash or, with
respect to up to three parcels, without cash consideration pursuant to
the terms of written employment agreements, of single family lots in
the developments of Porcupine Ridge at the Northstar-at-Tahoe resort,
▇▇▇▇ ▇▇ at the Northstar-at-Tahoe resort and Unit 7B at the
Northstar-at-Tahoe resort.
"Person" means any present or future natural person or any
corporation, association, partnership, limited liability company, joint
venture, company, trust, business trust, organization, business,
individual or government or any governmental agency or political
subdivision thereof.
"Plan" means any pension or other employee benefit plan
subject to Title IV of ERISA and/or Section 412 of the Code maintained,
or to which contributions have been made by any of the Loan Parties,
any of their Subsidiaries or any Control Group Person at any time after
December 3, 1996.
"Pricing Notice" means a notice substantially in the form of
Exhibit D hereto.
"Prime Rate" means the variable per annum rate of interest so
designated from time to time by the Agent as its prime rate. The Prime
Rate is a reference rate and does not necessarily represent the lowest
or best rate being charged to any customer.
22
"Properties" means all real properties and interests therein
owned by the Loan Parties or any of their Subsidiaries which are
subject to mortgage liens in favor of the Agent under the Mortgages.
"Reportable Event" means an event reportable to the Pension
Benefit Guaranty Corporation under Section 4043 of Title IV of ERISA.
"Resorts" means the California Resorts, the New Hampshire
Resorts and the Washington Resorts, collectively.
"Revolving Credit Advance" means any loan or advance from any
Lender to the Borrowers pursuant to Section 2.2 of this Agreement.
"Revolving Credit Notes" means the Amended and Restated
Revolving Credit Notes substantially in the form of Exhibit A-2 hereto
executed by the Borrowers in favor of each Lender to evidence the
Revolving Credit Advances to be made by the Lenders from time to time
hereunder.
"Revolving Credit Termination Date" means October 31, 2005.
"S.A.S." means Statement of Auditing Standards, as promulgated
by the Auditing Standards Board of the American Institute of Certified
Public Accountants, as from time to time in effect.
"Second NMP Purchase Agreement" means the Agreement for
Purchase and Sale of Real Property dated as of September 22, 2000 by
and between TLH and East West, which subsequently assigned its interest
therein to NMP.
"Security Agreements" means, collectively, the TLC Security
Agreement, the Sierra-at-Tahoe Security Agreement, the Bear Mountain
Security Agreement, the Waterville Security Agreement, the Cranmore
Security Agreement, the Ski Lifts Security Agreement, the DRE Security
Agreement, the LMRC Holding Security Agreement, the Loon Security
Agreement, the Loon Realty Security Agreement, the BCS Acquisition
Security Agreement and the BCS Holdings Security Agreement.
"Securities Purchase Agreement" means the Amended and Restated
Securities Purchase Agreement dated May 28, 2000 among the CIBC
Securities Subsidiary, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ Creek LLLP and BCS Group, as
further amended and in effect from time to time.
"Senior Credit Facility" means the "Senior Credit Facility" as
such term is defined in the Senior Indenture.
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"Senior Indenture" means the Indenture dated as of March 18,
1997, among BCS Holdings, the Guarantors named therein, Marine Midland
Bank as Trustee, as amended and supplemented by Supplemental Indenture
No. 1 dated as of April 25, 1997, Supplemental Indenture No. 2 dated as
of February 20, 1998, Supplemental Indenture No. 3 dated as of February
26, 1998 and Supplemental Indenture No. 4 dated as of October 8, 1998.
"Senior Unsecured Notes" means the notes issued pursuant to
the Senior Indenture.
"Sierra-at-Tahoe" has the meaning provided in the preamble
hereto.
"Sierra-at-Tahoe Mortgage" means the Amended and Restated Deed
of Trust, Assignments of Rents, Security Agreement and Fixture Filing
dated as of the date hereof, executed by Sierra-at-Tahoe in favor of
the Agent, as amended, restated, supplemented or otherwise modified and
in effect from time to time.
"Sierra-at-Tahoe Security Agreement" means the Amended and
Restated Security Agreement dated as of the date hereof, between
Sierra-at-Tahoe and the Agent, as amended, restated, supplemented or
otherwise modified and in effect from time to time.
"Ski Lifts" has the meaning provided in the preamble hereto.
"Ski Lifts Mortgage" means the Amended and Restated Deed of
Trust, Assignment of Rents, Security Agreement and Fixture Filing dated
as of the date hereof, executed by Ski Lifts in favor of the Agent, as
amended, restated, supplemented or otherwise modified and in effect
from time to time.
"Ski Lifts Security Agreement" means the Security Agreement
dated as of the date hereof, between Ski Lifts and the Agent, as
amended, restated, supplemented or otherwise modified and in effect
from time to time.
"Solvent" means, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including
contingent liabilities, of such Person; (b) the present fair salable
value of the assets of such Person, as part of a going concern, is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured; (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature; and (d) such Person is not
engaged in a business or transaction, and is not about to engage in a
business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
liabilities (such as litigation, guarantees and pension plan
liabilities) at any time shall be computed as the amount which, in
light of all the facts and circumstances existing at the time,
represents the amount which can reasonably be expected to become an
actual or matured liability.
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"Standard & Poor's" means Standard & Poor's Rating Group and
any successors to its corporate ratings business.
"Stock" means all shares, options, warrants, general or
limited partnership interests, limited liability company membership
interests or other equivalents (regardless of how designated) of or in
a corporation, partnership, limited liability company or equivalent
entity whether voting or nonvoting, including common stock, preferred
stock or any other "equity security" (as such term is defined in Rule
3-1 of the General Rules and Regulations promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as
amended).
"Subordinated Indebtedness" means Indebtedness of the Loan
Parties which is subordinated to the Lender Obligations on terms
reasonably acceptable to and approved in writing by the Agent.
"Subsidiary" means any Person of which any Loan Party or other
specified parent shall now or hereafter at the time own, directly or
indirectly through one or more Subsidiaries or otherwise, sufficient
voting stock (or other beneficial interest) to entitle it to elect at
least a majority of the board of directors or trustees or similar
managing body.
"Successor Lender" has the meaning provided in Section 9.2
hereto.
"Sustaining Capital Expenditures" means the Capital
Expenditures expected to be incurred by the Loan Parties in connection
with customary maintenance of the Resorts, which the parties hereby
agree shall be $5,000,000 during each four-quarter period.
"Term Loan Commitment Amount" means as of any date of
determination, $25,000,000 less the aggregate principal amount of the
Initial Term Loans, less the aggregate original principal amount of any
outstanding Additional Term Loans made to the Borrowers and less the
amount of any voluntary reduction of the Term Loan Commitment Amount
pursuant to Section 2.12; provided that if the obligation of the
Lenders to make further Additional Term Loans is terminated upon the
occurrence of an Event of Default and at any time after the Term Loan
Commitment Termination Date, the Term Loan Commitment Amount as of any
date of determination thereafter shall be deemed to be $0.
"Term Loan Commitment Fee" has the meaning set forth in
Section 2.9.
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"Term Loan Commitment Termination Date" has the meaning set
forth in Section 2.1.
"Term Loan Maturity Date" means October 31, 2005.
"Term Loan Reduction Dates" has the meaning set forth in
Section 2.1.
"Term Loans" means the Initial Term Loans and the Additional
Term Loans made by the Lenders to the Borrowers under Section 2.1
hereof.
"Term Notes" means the Term Notes substantially in the form of
Exhibit A-1 hereto executed by the Borrowers in favor of each Lender to
evidence the Term Loan made by the Lenders hereunder.
"TLC" has the meaning provided in the preamble hereto.
"TLC Mortgage" means the Amended and Restated Deed of Trust,
Assignments of Rents, Security Agreement and Fixture Filing dated as of
the date hereof, executed by TLC in favor of the Agent, as amended,
restated, supplemented or otherwise modified and in effect from time to
time.
"TLC Security Agreement" means the Amended and Restated
Security Agreement dated as of the date hereof, between TLC and the
Agent, as amended, restated, supplemented or otherwise modified and in
effect from time to time.
"TLH" means Trimont Land Holdings, Inc., a Delaware
corporation.
"2001 Financial Statements" means the Consolidated Balance
Sheet of the Loan Parties and their Subsidiaries as of November 2, 2001
and the related Consolidated Statements of Operations, Shareholder's
Equity and Cash Flows for the year then ended and the notes to such
financial statements.
"UCC" means the Massachusetts Uniform Commercial Code,
Massachusetts General Laws c. 106, as amended from time to time.
"UCP" shall mean the most recent Uniform Customs and Practices
adopted by a Congress of the International Chamber of Commerce, and any
subsequent revisions thereof approved by such a congress and adhered to
by the Issuing Bank.
"Washington Resorts" means the Summit resort.
"Waterville" has the meaning provided in the preamble hereto.
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"Waterville Mortgage" means the Amended and Restated Fee
Mortgage and Security Agreement originally dated as of the date hereof
between Waterville and the Agent, as amended, restated, supplemented or
otherwise modified and in effect from time to time.
"Waterville Security Agreement" means the Amended and Restated
Guarantee and Security Agreement, dated as of the date hereof between
Waterville and the Agent, as amended, restated, supplemented or
otherwise modified and in effect from time to time.
Section 1.3. Accounting Terms. All accounting terms used and not
defined in this Agreement shall be construed in accordance with GAAP
consistently applied, and all financial data required to be delivered hereunder
shall be prepared in accordance with such principles.
ARTICLE 2. THE CREDITS
Section 2.1. The Term Loans.
(a) Subject to the terms and conditions of this Agreement, including
satisfaction of the conditions set forth in Section 3.1, on the first Business
Day following the Restatement Date, each Lender, severally and not jointly,
shall make an initial Term Loan (collectively, the "Initial Term Loans") to the
Borrowers in an amount equal to such Lender's respective Commitment Percentage
of $14,000,000.
(b) At any time on or before August 15, 2002 (the "Term Loan Commitment
Termination Date"), upon not less than five (5) Business Days written notice
from the Borrowers to the Agent, subject to the terms and conditions of this
Agreement and so long as there exists no Default, each Lender, severally and not
jointly, shall make additional Term Loans (each an "Additional Term Loan" and
collectively, the "Additional Term Loans") to the Borrowers as the Borrowers may
from time to time request, by notice to the Agent in accordance with Section
2.3, in an aggregate amount (i) as to each Lender, not to exceed at any time
such Lender's Commitment Percentage of the Term Loan Commitment Amount, and (ii)
as to all Lenders, not to exceed the Term Loan Commitment Amount; provided, that
the aggregate number of outstanding Additional Term Loans shall not exceed seven
(7).
(c) On the Closing Date, the Borrowers shall execute and deliver to
each Lender a Term Note to evidence the Term Loans from time to time made by
such Lender to the Borrowers hereunder.
(d) The Term Loans shall mature on the Term Loan Maturity Date.
Commencing January 31, 2003, the Maximum Term Loan Amount shall permanently
reduce by an amount equal to $1,000,000 on the last day of each January, April,
July and October (each a "Term Loan Reduction Date"). The Borrowers, jointly and
severally, shall make repayments, if necessary, of the Term Loans in such
amounts and at such times so that the outstanding principal amount of the Term
Loans on each Term Loan Reduction Date shall not exceed the applicable Maximum
Term Loan Amount.
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(e) The final principal installment shall be due on the Term Loan
Maturity Date, together with all outstanding principal, accrued interest and
other fees and charges hereunder. No amounts of the Term Loans which are repaid
may be reborrowed.
Section 2.2. The Revolving Credit.
(a) Subject to the terms and conditions of this Agreement and so long
as there exists no Default, at any time prior to the Revolving Credit
Termination Date, each Lender, severally and not jointly, shall make such
Revolving Credit Advances to the Borrowers as the Borrowers may from time to
time request, by notice to the Agent in accordance with Section 2.3, in an
aggregate amount (i) as to each Lender, not to exceed at any time such Lender's
Commitment Percentage of (A) the Maximum Revolving Credit Amount minus (B) the
Maximum Exposure Under Letters of Credit, and (ii) as to all Lenders, not to
exceed the Maximum Revolving Credit Amount minus the Maximum Exposure Under
Letters of Credit. The outstanding principal amount of the Revolving Credit
Advances, together with all accrued interest and other fees and charges related
thereto, shall be repaid in full on the Revolving Credit Termination Date. On
the Closing Date the Borrowers shall execute and deliver to each Lender a
Revolving Credit Note to evidence the Revolving Credit Advances from time to
time made by such Lender to the Borrowers hereunder.
(b) Subject to the foregoing limitations and the provisions of Section
4.2, the Borrowers shall have the right to make prepayments reducing the
outstanding balance of Revolving Credit Advances and to request further
Revolving Credit Advances, all in accordance with Section 2.3, without other
restrictions hereunder; provided that the Lenders shall have the absolute right
to refuse to make any Revolving Credit Advances for so long as there exists any
Default or a Default would result from the making of such a Revolving Credit
Advance.
(c) For a period of thirty (30) consecutive days in each year,
commencing between January 15 and February 28 of such year (such period being
the "Designated Cleanup Period" for such year), there shall be no Revolving
Credit Advances outstanding.
Section 2.3. Making of Additional Term Loans and Revolving Credit
Advances.
(a) Each Additional Term Loan and Revolving Credit Advance shall be
made on notice given by BCS Holdings, as agent for the Borrowers, to the Agent
not later than five (5) Business Days prior to the proposed Borrowing with
respect to an Additional Term Loan (a "Notice of Additional Term Loan
Borrowing") or not later than 12:00 noon (Boston time) on the date of the
proposed Borrowing with respect to Revolving Credit Advance (a "Notice of
Revolving Credit Borrowing"); provided, however, that if the Borrowers elect a
LIBOR Rate Pricing Option with respect to any Revolving Credit Advance in
accordance with Section 2.5 hereof, such Notice of Revolving Credit Borrowing
shall be given by BCS Holdings, as agent for the Borrowers, contemporaneously
with a Pricing Notice in the manner and within the time specified in Section
2.5. The Agent shall give the Lenders notice of each Notice of Additional Term
Loan Borrowing or Notice of Revolving Credit Borrowing in accordance with the
Agent's customary practice. Each such Notice of Additional Term Loan Borrowing
or Notice of Revolving Credit Borrowing shall be by telephone or telecopy, in
each case confirmed immediately in writing by the Borrowers in substantially the
form of Exhibit B-1 and Exhibit B-2 hereto, as applicable, specifying therein
(i) the requested date of such Additional Term Loan or Revolving Credit Advance,
and (ii) the amount of such Additional Term Loan (which shall not be less than
$1,000,000 and in an integral multiple of $100,000) or Revolving Credit Advance
(which shall not be less than $100,000 and in an integral multiple of $50,000).
The Loan Parties agree to indemnify and hold the Lenders harmless for any
action, including the making of any Additional Term Loans or Revolving Credit
Advances hereunder, or loss or expense, taken or incurred by the Agent and the
Lenders in good faith reliance upon such telephone request. The Loan Parties
hereby agree that each request for an Additional Term Loan or Revolving Credit
Advance, whether by telephone or in writing or otherwise, shall constitute a
confirmation that the conditions set forth in Sections 3.2 and 3.3 hereof, as
applicable, have been satisfied as of the date of such request.
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(b) Subject to the terms and conditions of this Agreement, each Lender
shall make available on or before 2:00 p.m. on the date of each proposed
Additional Term Loan or Revolving Credit Advance, to the Agent at the Agent's
address and in immediately available funds, such Lender's Commitment Percentage
of such Additional Term Loan or Revolving Credit Advance. After the Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article 3, the Agent will credit such funds to the account of BCS
Holdings, as agent for the Borrowers, on the date of the proposed Additional
Term Loan or Revolving Credit Advance.
(c) Unless the Agent shall have received notice from a Lender prior to
the date of any Additional Term Loan or Revolving Credit Advance that such
Lender will not make available to the Agent such Lender's Commitment Percentage
of such Additional Term Loan or Revolving Credit Advance, the Agent may assume
that such Lender has made such amount available to the Agent on the date of such
Additional Term Loan or Revolving Credit Advance in accordance with and as
provided in this Section 2.3 and the Agent may, in reliance upon such
assumption, make available on such date a corresponding amount to the Borrowers.
If and to the extent such Lender shall not have so made its Commitment
Percentage of such Additional Term Loan or Revolving Credit Advance available to
the Agent and the Agent shall have made available such corresponding amount to
the Borrowers, such Lender agrees to pay to the Agent forthwith on demand, and
the Borrowers agree to repay to the Agent within two Business Days after demand
(but only after demand for payment has first been made to such Lender and such
Lender has failed to make such payment), an amount equal to such corresponding
amount together with interest thereon for each day from the date the Agent shall
make such amount available to the Borrowers until the date such amount is paid
or repaid to the Agent, at an interest rate equal to the interest rate
applicable at the time to such Additional Term Loan or Revolving Credit
Advances. If such Lender shall pay to the Agent such corresponding amount, such
amount so paid shall constitute such Lender's Additional Term Loan or Revolving
Credit Advance for purposes of this Agreement. If the Borrowers make a repayment
required by the foregoing provisions of this Section 2.3(c) and thereafter the
applicable Lender or Lenders make the payments to the Agent required by this
Section 2.3(c), the Agent shall promptly refund the amount of the Borrowers'
payment.
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(d) The failure of any Lender to make the Additional Term Loan or
Revolving Credit Advance to be made by it on any date shall not relieve any
other Lender of its obligation, if any, hereunder to make its Additional Term
Loan or Revolving Credit Advance on such date, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving Credit
Advance to be made by such other Lender.
Section 2.4. Interest on Term Loans and Revolving Credit Advances.
(a) Subject to the terms of Section 2.5 relating to LIBOR Pricing
Options, the Borrowers shall pay interest on the unpaid principal balance of the
Term Loans from time to time outstanding at a rate per annum equal to the
Applicable Base Rate. Interest on the Term Loans shall be payable quarterly in
arrears on the last day of each January, April, July and October, commencing
April 30, 2002 and continuing until the Term Notes shall have been paid in full.
(b) Subject to the terms of Section 2.5 relating to LIBOR Pricing
Options, the Borrowers shall pay interest on the unpaid balance of the Revolving
Credit Advances from time to time outstanding at a per annum rate equal to the
Applicable Base Rate. Interest on the Revolving Credit Advances shall be payable
quarterly in arrears on the last day of each January, April, July and October,
commencing April 30, 2002 and continuing until all of the Indebtedness of the
Borrowers to the Lenders under the Revolving Credit Notes shall have been paid
in full.
Section 2.5. Election of LIBOR Pricing Options.
(a) Subject to all the terms and conditions hereof and so long as there
exists no Default, BCS Holdings, as agent for the Borrowers may, by delivering a
Pricing Notice to the Agent received at or before 10:00 a.m. Boston time on the
date three Business Days prior to the commencement of the Interest Period
selected in such Pricing Notice, elect to have all or a portion of the
outstanding Term Loans or Revolving Credit Advances, as the Borrowers may
specify in such Pricing Notice, accrue and bear daily interest during the
Interest Period so selected at a per annum rate equal to the Applicable LIBOR
Rate for such Interest Period; provided, however, that any such election made
with respect to such Term Loans or Revolving Credit Advances shall be in an
amount not less than $1,000,000 and in increments of $500,000; and provided
further that no such election will be made if it would result in there being
more than eight (8) LIBOR Pricing Options in the aggregate outstanding at any
one time. Interest on Loans bearing interest at the Applicable LIBOR Rate shall
be paid for the applicable Interest Period on the last day thereof and when such
Loan is due (whether at maturity, by reason of acceleration or otherwise). In
the case of any Interest Period longer than 90 days, the Borrowers will also
jointly and severally pay the accrued and unpaid interest on the portion of the
Loan subject to the LIBOR Pricing Option having such Interest Period at
quarterly intervals, the first such payment to be made on the last Business Day
of the three-month period which begins on the first day of such Interest Period.
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(b) Each Pricing Notice shall specify: (i) the selection of a LIBOR
Pricing Option; (ii) the effective date and amount of Revolving Credit Advances
or Term Loans or portion thereof subject to such LIBOR Pricing Option, subject
to the limitations set forth herein; and (iii) the duration of the applicable
Interest Period. Each Pricing Notice shall be irrevocable.
(c) The Agent will promptly inform each Lender of a Pricing Notice and
the Interest Period specified by the Borrowers therein. Upon determination by
the Agent of the Applicable LIBOR Rate for any Interest Period selected by the
Borrowers, the Agent will promptly inform the Borrowers and each Lender of such
Applicable LIBOR Rate so determined or, if applicable, the reason why the
Borrowers' election will not become effective.
Section 2.6. Letters of Credit.
(a) Subject to the terms and conditions hereof, including satisfaction
of the conditions set forth in Sections 3.1 and 3.3 hereof, and provided no
Default has occurred and is continuing, the Issuing Bank shall at any time prior
to the Revolving Credit Termination Date, upon the request of the Borrowers
pursuant to paragraph (b) below, issue letters of credit ("Letters of Credit")
for the account of the Borrowers, provided that the aggregate face amount of all
outstanding Letters of Credit shall not at any time exceed $3,000,000. As of the
date hereof, the Issuing Bank has issued letters of credit for the account of
the Borrowers described on Schedule 5.7(b), which from and after the date hereof
shall be deemed to be Letters of Credit issued hereunder, and the face amount
thereof from time to time shall count against the limit set forth above.
(b) BCS Holdings on behalf of the Borrowers may request that the
Issuing Bank issue a Letter of Credit by written notice (the "Letter of Credit
Notice") given by BCS Holdings to the Issuing Bank not less than three (3)
Business Days prior to the proposed date of issuance of such Letter of Credit.
The Letter of Credit Notice shall (i) specify the proposed date of issuance, the
beneficiary, amount and the purpose of such Letter of Credit and (ii) be
accompanied by a completed letter of credit application furnished by the Issuing
Bank.
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(c) The Borrowers hereby agree, jointly and severally, to pay to the
Issuing Bank on the date on which the Issuing Bank shall be required to pay any
draft presented under any Letter of Credit, a sum (each such sum, a
"Reimbursement Obligation") equal to: (i) the amount so paid under such Letter
of Credit, plus (ii) interest on any amount remaining unpaid by the Borrowers to
the Issuing Bank under clause (i) from and including the date on which such
amount becomes payable pursuant to clause (i) until payment in full, payable on
demand, at a per annum rate of interest equal to the rate applicable to the
Revolving Credit Advances which are Base Rate Loans under Section 2.4 hereof. If
the Borrowers shall fail to pay to the Issuing Bank the Reimbursement Obligation
on the date on which the Issuing Bank shall be required to pay any draft
presented under any such Letter of Credit, the Agent shall, to the extent the
Borrowers have availability to request a Revolving Credit Advance, consider such
failure to be a request for a Revolving Credit Advance in the amount of the
unpaid Reimbursement Obligation (which request shall be deemed a confirmation
that the conditions set forth in Section 3.3 have been satisfied), and the Agent
shall apply the proceeds of such Revolving Credit Advance to reimburse the
Issuing Bank for the Reimbursement Obligation.
(d) The Borrowers shall, jointly and severally, quarterly in advance,
on the date of issuance of each Letter of Credit and on each 90th day
thereafter, pay (i) a fee (in each case, a "Letter of Credit Fee") to the
Issuing Bank for the account of the Lenders in respect of each Letter of Credit
issued at the request of the Borrowers equal to 4% per annum, multiplied by the
face amount of each Letter of Credit and (ii) a fronting fee to the Issuing Bank
for its account equal to 1/4% per annum multiplied by the face amount of each
Letter of Credit. The Issuing Bank shall, in turn, remit to each Revolving
Credit Lender its pro rata portion of such Letter of Credit Fee. In addition,
the Borrowers shall, jointly and severally, pay to the Issuing Bank, for its own
account, on the date of issuance, or any extension or renewal of any Letter of
Credit and at such other time or times as such charges are customarily made by
the Issuing Bank, the Issuing Bank's standard issuance, processing, negotiation,
amendment and administrative fees, determined in accordance with customary fees
and charges for similar facilities.
(e) Each payment by the Borrowers hereunder shall be made to the
Issuing Bank at the Issuing Bank's head office in Boston, Massachusetts (or such
other office as the Issuing Bank shall designate in writing to the Borrowers) in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrowers under this Section 2.6 at any time from the date such amounts
become due and payable (whether as stated in this Section 2.6, by acceleration
or otherwise) until payment in full (whether before or after judgment) shall be
payable to the Issuing Bank on demand at the rate specified in Section 2.7 for
the overdue principal on Revolving Credit Advances which are Base Rate Loans.
(f) The obligations of the Borrowers with respect to the Letters of
Credit shall be joint and several, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:
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(i) any lack of validity or enforceability of such
Letters of Credit;
(ii) any amendment or waiver of or any consent to or
actual departure from this Agreement;
(iii) the existence of any claim, set-off, defense
or other right which the Borrowers may have at any time
against any beneficiary or any transferee of any such Letter
of Credit (or any Persons or entities for which any such
beneficiary or any such transferee may be acting), the Issuing
Bank or any other Person or entity, whether in connection with
this Agreement, the transactions contemplated herein or in any
other agreements or any unrelated transaction;
(iv) any statement or any other document presented
under any such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of
Credit against presentation by the beneficiary thereof of a
draft or certificate which does not comply with the terms of
such Letter of Credit; or
(vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing;
provided, that the provisions of this Section 2.6(f) shall not in any way impair
the right of the Borrowers to make a claim against the Lenders or the liability
of the Lenders to the Borrowers, as set forth in Section 2.6(k), for direct
damages suffered by the Borrowers which were caused by the Issuing Bank's gross
negligence, willful misconduct or failure to conform to the standards of the
UCP.
(g) The UCP shall be binding on the Borrowers, the Lenders and the
Issuing Bank. The Borrowers assume all risks of the acts or omissions of the
beneficiary of each Letter of Credit with respect to such Letter of Credit. In
furtherance of, and not in limitation of the Issuing Bank's rights and powers
under the UCP, but subject to all other provisions of this paragraph (g), it is
understood and agreed that the Issuing Bank shall not have any liability for,
and that the Borrowers assume all responsibility for: (i) the genuineness of any
signature; (ii) the form, correctness, validity, sufficiency, genuineness,
falsification and legal effect of any draft, certification or other document
required by any Letter of Credit or the authority of the Person signing the
same; (iii) the failure of any instrument to bear any reference or adequate
reference to such Letter of Credit or the failure of any Persons to note the
amount of any instrument on the reverse of such Letter of Credit or to surrender
such Letter of Credit or otherwise to comply with the terms and condition of
such Letter of Credit; (iv) the good faith or acts of any Person other than the
Issuing Bank and its agents and employees; (v) the existence, form or
sufficiency or breach or default (other than by the Issuing Bank) under any
agreement or instrument of any nature whatsoever (other than the Issuing Bank's
gross negligence, willful misconduct or failure to conform to the standards of
the UCP); (vi) any delay in giving or failure to give any notice, demand or
protest; and (vii) any error, omission, delay in or nondelivery of any notice or
other communication, however sent. The determination as to whether the required
documents are presented prior to the expiration of any Letter of Credit and
whether such other documents are in proper and sufficient form for compliance
with such Letter of Credit shall be made by the Issuing Bank in its sole
discretion, which determination shall be conclusive and binding upon the
Borrowers absent manifest error. It is agreed that the Issuing Bank may honor,
as complying with the terms of any Letter of Credit and this Agreement, any
documents otherwise in order and signed or issued by the beneficiary thereof
without responsibility for further investigation, regardless of any notice or
information to the contrary. Any action, inaction or omission on the part of the
Issuing Bank under or in connection with any Letters of Credit or any related
instruments or documents, if in good faith and in conformity with such laws,
regulations or commercial or banking customs as the Issuing Bank may reasonably
deem to be applicable, shall be binding upon the Borrowers, shall not place the
Issuing Bank under any liability to the Borrowers, and shall not affect, impair
or prevent the vesting of any of the Issuing Bank's rights or powers hereunder
or the Borrowers' obligation to make full reimbursement of amounts drawn under
the Letters of Credit. It is further agreed that the provisions of this Section
2.6(g) shall not in any way impair the right of the Borrowers to make a claim
against the Lenders or the liability of the Lenders to the Borrowers, as set
forth in Section 2.6(k), for direct damages suffered by the Borrowers which were
caused by the Issuing Bank's gross negligence, willful misconduct or failure to
conform to the standards of the UCP.
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(h) If the Borrowers, either in writing or orally, request or consent
to any modification or extension of a Letter of Credit or waive failure of any
draft, certificate or other documents to comply with the terms of such Letter of
Credit, the Issuing Bank shall be entitled to rely and shall be deemed to have
relied on such request, consent or waiver with respect to any action taken or
omitted by the Issuing Bank pursuant to any such request, consent or waiver, and
such extension, modification or waiver shall be binding upon the Borrowers.
(i) Each Lender severally agrees that it shall be absolutely liable,
without regard to the occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to the extent of such Lender's Commitment
Percentage, to reimburse the Issuing Bank on demand for the amount of each draft
paid by the Issuing Bank under each Letter of Credit to the extent that such
amount is not reimbursed by the Borrowers pursuant to paragraph (c) above (such
agreement by each Lender being called herein the "Letter of Credit
Participation" of such Lender).
(j) If any draft shall be presented or other demand for payment shall
be made under any Letter of Credit, the Issuing Bank shall notify the Borrowers
of the date and amount of the draft presented or demand for payment and of the
date and time when it expects to pay such draft or honor such demand for
payment. If the Borrowers fail to reimburse the Issuing Bank as provided in
paragraph (c) above on or before the date that such draft is paid or other
payment is made by the Issuing Bank, the Issuing Bank may at any time thereafter
notify the Lenders of the amount of any such unpaid Reimbursement Obligation. No
later than 3:00 p.m. (Boston time) on the Business Day next following the
receipt of such notice, each Lender shall make available to the Issuing Bank, at
its head office located in Boston, Massachusetts, in immediately available
funds, such Lender's Commitment Percentage of such unpaid Reimbursement
Obligation, together with an amount equal to the product of (i) the average,
computed for the period referred to in clause (iii) below, of the weighted
average interest rate paid by the Issuing Bank for federal funds acquired by the
Issuing Bank during each day included in such period, times (ii) the amount
equal to such Lender's Commitment Percentage of such unpaid Reimbursement
Obligation, times (iii) a fraction, the numerator of which is the number of days
that elapse from and including the date the Issuing Bank paid the draft
presented for honor or otherwise made payment to the date on which such Lender's
Commitment Percentage of such unpaid Reimbursement Obligation shall become
immediately available to the Issuing Bank, and the denominator of which is 360.
(k) Neither the Issuing Bank nor any Lender nor any of their officers,
directors or employees shall be liable or responsible for: (i) the use which may
be made of any Letter of Credit or any acts or omissions of any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (iii) payment by the Issuing Bank against presentation of documents
which do not comply with the terms of a Letter of Credit, including failure of
any documents to bear any reference or adequate reference to a Letter of Credit;
or (iv) any other circumstances whatsoever in making or failure to make payment
under a Letter of Credit; provided, that, notwithstanding anything in this
Section 2.6 to the contrary, the Borrowers shall have a claim against the
Lenders, and the Lenders shall be liable to the Borrowers, to the extent, but
only to the extent, of any direct, as opposed to consequential, damages suffered
by the Borrowers which were caused by the Issuing Bank's gross negligence,
willful misconduct or failure to conform to the standards of the UCP.
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Section 2.7. Additional Payments. Upon Default (whether or not any of the
Lender Obligations have been accelerated), or after maturity or after judgment
has been rendered on the Notes, the Borrowers' right to select LIBOR Pricing
Options shall cease and the unpaid principal of all Revolving Credit Advances
and the Term Loans, including all LIBOR Rate Loans, shall, at the option of the
Agent, bear interest at a rate per annum equal to the Applicable Base Rate plus
2%.
Section 2.8. Computation of Interest, Etc. All computations of interest
hereunder and under the Term Loans and the Revolving Credit Advances shall be
made (a) with respect to LIBOR Rate Loans on the basis of a three hundred sixty
(360) day year and the actual number of days elapsed and (b) with respect to
Base Rate Loans on the basis of a three hundred sixty-five (365) day year and
the actual number of days elapsed. Changes in the rate of interest on the Term
Loans and the Revolving Credit Advances resulting from changes in the Base Rate
and/or the Prime Rate shall take place immediately without notice or demand of
any kind. The outstanding balance of the Revolving Credit Notes and the Term
Notes as reflected on the Agent's records from time to time shall be considered
correct and binding on the Borrowers and the Lenders (absent manifest error)
unless within thirty (30) days after receipt of any notice by the Agent or any
Lender of such outstanding amount, the Borrowers or a Lender notifies the Agent
to the contrary.
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Section 2.9. Fees.
(a) The Borrowers shall pay to the Agent, for the accounts of the
Lenders in accordance with their respective Commitment Percentages, a commitment
fee (the "Revolving Commitment Fee") computed at a rate of 1/2% per annum on the
average daily unused amount of the Maximum Revolving Credit Amount from time to
time in effect less the Maximum Exposure Under Letters of Credit from the date
hereof to and including the Revolving Credit Termination Date. The Revolving
Commitment Fee shall be payable quarterly in arrears on the first day of each
January, April, July and October, commencing April 1, 2002, and on the date this
Agreement is terminated for the quarter or portion thereof then ended.
(b) The Borrowers shall pay to the Agent, for the accounts of the
Lenders in accordance with their respective Commitment Percentages, a commitment
fee (the "Term Loan Commitment Fee") computed at a rate of 1/2% per annum on the
average daily amount of the Term Loan Commitment Amount from time to time in
effect from the date hereof to and including the Term Loan Commitment
Termination Date. The Term Loan Commitment Fee shall be payable quarterly in
arrears on April 1, 2002, July 1, 2002, and on the earlier of the Term Loan
Commitment Termination Date and the date this Agreement is terminated for the
quarter or portion thereof then ended.
(c) The Borrowers shall pay to the Agent, for the accounts of the
Lenders in accordance with their respective Commitment Percentages, a facility
fee (the "Facility Fee") of $1,250,000, due, payable and earned in full on the
Closing Date.
(d) The Borrowers shall pay to the Agent, for the Agent's own account,
an annual agency fee as provided in a letter agreement dated as of the Closing
Date between the Borrowers and the Agent (as such letter agreement may from time
to time be amended or supplemented, the "Fee Letter").
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Section 2.10. Set-Off. The Loan Parties hereby grant the Agent and each
Lender, a continuing lien, security interest and right of setoff as security for
all Lender Obligations, upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of
the Agent or any Lender or any entity under the control of FleetBoston Financial
Corporation and its successors and assigns or in transit to any of them. At any
time, without demand or notice (any such notice being expressly waived by the
Loan Parties), the Agent and each Lender may setoff the same or any part thereof
and apply the same to any liability or obligation of the Loan Parties even
though unmatured and regardless of the adequacy of any other collateral securing
the Lender Obligations. ANY AND ALL RIGHTS TO REQUIRE THE AGENT OR ANY LENDER TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE LENDER OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE LOAN PARTIES, ARE
HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
Section 2.11. Sharing of Payments. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Loans made by it in excess of its ratable share
(according to the then outstanding principal amount of the Loans) of payments on
account of the Loans obtained by all the Lenders, such Lender shall purchase
from the other Lenders such participations in the Loans held by such other
Lenders as shall cause such purchasing Lender to share such payment ratably
according to the then outstanding principal amount of the Loans with each of
such other Lenders; provided, however, that if all or any portion of such
payment is thereafter recovered from such purchasing Lender, the purchase shall
be rescinded and the purchase price restored to the extent of such recovery,
with interest at an interest rate per annum equal to the Applicable Base Rate.
The Borrowers agree that any Lender so purchasing a participation in the Loans
from another Lender pursuant to this Section 2.11 may, to the fullest extent
permitted by law, exercise all its rights of payment with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation.
Section 2.12. Reduction of Commitment by the Borrowers. The Borrowers at
their option may, at any time and from time to time, irrevocably reduce in part
(in a minimum amount of $300,000 and integral multiples of $100,000) the unused
portion of the Maximum Revolving Credit Amount or the Term Loan Commitment
Amount on not less than five (5) Business Days' prior written notice to the
Agent. No such reduction may be reinstated by the Borrowers.
Section 2.13. Increased Costs, Etc.
(a) Anything herein to the contrary notwithstanding, if any changes in
present or future applicable law (which term "applicable law," as used in this
Agreement, includes statutes and rules and regulations thereunder and
interpretations thereof by any competent court or by any governmental or other
regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time heretofore or hereafter made upon or otherwise issued
to any Lender by any central bank or other fiscal, monetary or other authority,
whether or not having the force of law), including without limitation any change
according to a prescribed schedule of increasing requirements, whether or not
known or in effect as of the date hereof, shall (i) subject such Lender to any
tax, levy, impost, duty, charge, fee, deduction or withholding of any nature
with respect to this Agreement or the payment to such Lender of any amounts due
to it hereunder, or (ii) materially change the basis of taxation of payments to
such Lender of the principal of or the interest on the Revolving Credit Advances
or the Term Loans or any other amounts payable to such Lender hereunder, or
(iii) impose or increase or render applicable any special or supplemental
deposit or reserve or similar requirements or assessment against assets held by,
or deposits in or for the account of, or any liabilities of, or loans by an
office of such Lender in respect of the transactions contemplated herein, or
(iv) impose on such Lender any other condition or requirement with respect to
this Agreement or any Revolving Credit Advance or any Term Loan, and the result
of any of the foregoing is (A) to increase the cost to such Lender of making,
funding or maintaining all or any part of the Revolving Credit Advances or the
Term Loans or its commitment hereunder, or (B) to reduce the amount of
principal, interest or other amount payable to such Lender hereunder, or (C) to
require such Lender to make any payment or to forego any interest or other sum
payable hereunder, the amount of which payment or foregone interest or other sum
is calculated by reference to the gross amount of any sum receivable or deemed
received by such Lender from the Borrowers hereunder, then, and in each such
case not otherwise provided for hereunder, the Borrowers will upon demand made
by such Lender promptly following any Borrower's receipt of notice pertaining to
such matters accompanied by calculations thereof in reasonable detail, pay to
such Lender such additional amounts as will be sufficient to compensate such
Lender for such additional cost, reduction, payment or foregone interest or
other sum; provided that the foregoing provisions of this sentence shall not
apply in the case of any additional cost, reduction, payment or foregone
interest or other sum resulting from any taxes charged upon or by reference to
the overall net income, profits or gains of any Lender. In determining the
additional amounts payable hereunder, the Lenders may use any reasonable method
of averaging, allocating or attributing such additional costs, reductions,
payments, foregone interest or other sums among their respective customers.
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(b) Anything herein to the contrary notwithstanding, if, after the date
hereof, any Lender shall have determined that any changes in any present or the
adoption of any future applicable law, rule, regulation, guideline, directive or
request (whether or not having force of law), including without limitation any
change according to a prescribed schedule of increasing requirements, whether or
not known or in effect as of the date hereof, regarding capital requirements for
banks or bank holding companies generally, or any change therein or in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Lender with any of the foregoing, either imposes
a requirement upon such Lender to allocate additional capital resources or
increases such Lender's requirement to allocate capital resources or such
Lender's commitment to make, or to such Lender's maintenance of, the Revolving
Credit Advances or the Term Loans hereunder, which has or would have the effect
of reducing the return on such Lender's capital to a level below that which such
Lender could have achieved (taking into consideration such Lender's then
existing policies with respect to capital adequacy and assuming full utilization
of such Lender's capital) but for such applicability, change, interpretation,
administration or compliance, by any amount deemed by such Lender to be
material, such Lender shall promptly after its determination of such occurrence
give notice thereof to the Borrowers. The Borrowers and such Lender shall
thereafter attempt to negotiate in good faith an adjustment to the compensation
payable hereunder which will adequately compensate such Lender for such
reduction. If the Borrowers and such Lender are unable to agree to such
adjustment within thirty (30) days of the day on which the Borrowers receive
such notice, then commencing on the date of such notice (but not earlier than
the effective date of any such applicability, change, interpretation,
administration or compliance), the fees payable hereunder shall increase by an
amount which will, in such Lender's reasonable determination, evidenced by
calculations in reasonable detail furnished to the Borrowers, compensate such
Lender for such reduction. In determining such amount, such Lender may use any
reasonable methods of averaging, allocating or attributing such reduction among
its customers.
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Section 2.14. Changed Circumstances. In the event that:
(a) on any date on which the Applicable LIBOR Rate would otherwise be
set the Agent shall have determined in good faith (which determination shall be
final and conclusive) that adequate and fair means do not exist for ascertaining
the LIBOR Rate, as applicable; or
(b) at any time the Agent shall have determined in good faith (which
determination shall be final and conclusive) that
(i) the implementation of LIBOR Pricing Option has been made
impracticable or unlawful by (A) the occurrence of a contingency that
materially and adversely affects the London interbank market, or (B)
compliance by any Lender in good faith with any applicable law or
governmental regulation, guideline or order or interpretation or change
thereof by any governmental authority charged with the interpretation
or administration thereof or with any request or directive of any such
governmental authority (whether or not having the force of law); or
(ii) the LIBOR Rate shall no longer represent the effective
cost to the Lenders for U.S. dollar deposits in the London interbank
market, as applicable for deposits in which they regularly participate;
then, and in such event, the Agent shall forthwith so notify the Borrowers
thereof. Until the Agent notifies the Borrowers that the circumstances giving
rise to such notice no longer apply, the obligation of the Lenders and the Agent
to allow election by the Borrowers of a LIBOR Pricing Option shall be suspended.
If at the time the Agent so notifies the Borrowers, the Borrowers have
previously given the Agent a Pricing Notice with respect to a LIBOR Pricing
Option, but the LIBOR Pricing Option requested therein has not yet gone into
effect, such Pricing Notice shall automatically be deemed to be withdrawn and be
of no force or effect. If the LIBOR Pricing Option has been made unlawful by any
of the circumstances described in Section 2.14(b)(i), then upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given), the LIBOR Pricing Option with respect to all LIBOR Rate Loans
shall be terminated and the Borrowers shall pay all interest due on such LIBOR
Rate Loans and any amounts required to be paid pursuant to Section 4.3.
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Section 2.15. Use of Proceeds. The proceeds of all Revolving Credit
Advances shall be used by the Borrowers solely for working capital and general
corporate purposes, including, without limitation, fees and expenses of the Loan
Parties incurred in connection with this Agreement. No portion of the Revolving
Credit Advances shall be used by the Borrowers for the repurchase of the Senior
Unsecured Notes. The proceeds of the Term Loans shall be used by the Borrowers
solely for (a) the repurchase of the Senior Unsecured Notes (or to reimburse BCS
Holdings for the same) or the repayment of the ASC Subordinated Note, together,
in each case, with accrued and unpaid interest thereon and (b) fees and expenses
of the Loan Parties incurred in connection with this Agreement. No portion of
the proceeds of the Revolving Credit Advances or the Term Loans shall be used,
in whole or in part, for the purpose of purchasing or carrying any Margin Stock
or to extend credit to any Person for the purpose of purchasing or carrying any
such Margin Stock.
Section 2.16. Guaranty. Each Guarantor, jointly and severally, hereby
unconditionally guarantees to the Agent and the Lenders the full and punctual
payment when due (whether at maturity, by acceleration or otherwise), and the
performance of (a) the Lender Obligations accrued in each case to the date of
payment and (b) the performance of all other agreements, covenants and
conditions of the Loan Parties with respect thereto set forth in this Agreement
and all other Lender Agreements. The responsibilities and obligations of the
Loan Parties to the Agent and the Lenders described in the preceding sentence
are hereinafter referred to collectively as the "Guaranteed Obligations." The
guaranty pursuant to this Section 2.16 is an absolute, unconditional, joint and
several, and continuing guaranty of the full and punctual payment and
performance by the Loan Parties of the Guaranteed Obligations and not of
collectability of the Guaranteed Obligations, and is in no way conditioned upon
any requirement that the Agent or the Lenders first attempt to collect any of
the Guaranteed Obligations from the Borrowers or resort to any security or other
means of obtaining payment of any of the Guaranteed Obligations which the Agent
or the Lenders now has or may acquire after the date hereof, or upon any other
contingency whatsoever. Upon any default by the Loan Parties in respect of the
full and punctual payment and performance of the Guaranteed Obligations which
constitutes an Event of Default, the liabilities and obligations of each
Guarantor hereunder shall, at the option of the Agent, become forthwith due and
payable to the Agent and the Lenders without demand or notice of any nature, all
of which are expressly waived by each Guarantor. Payments by each Guarantor
under this Section 2.16 may be required by the Agent or the Lenders on any
number of occasions. Each Guarantor waives presentment, demand, protest, notice
of acceptance, notice of Guaranteed Obligations incurred and all other notices
of any kind, all defenses which may be available by virtue of any valuation,
stay, moratorium law or other similar law now or hereafter in effect, any right
to require the marshaling of assets of the Loan Parties and all suretyship
defenses generally. Without limiting the generality of the foregoing, each
Guarantor agrees to the provisions of any instrument evidencing, securing or
otherwise executed in connection with any Guaranteed Obligations and agrees that
the obligations of each Guarantor hereunder shall not be released or discharged,
in whole or in part, or otherwise affected by any rescissions, waivers,
amendments or modifications of any of the terms or provisions of any agreement
evidencing securing or otherwise executed in connection with any Guaranteed
Obligation or any release of any Credit Security. Until the payment and
performance in full of all Guaranteed Obligations, no Guarantor shall exercise
any rights against the Loan Parties arising as a result of payment by any
Guarantor hereunder, by way of subrogation or otherwise. The payment of any
amounts due with respect to any indebtedness of the Loan Parties now or
hereafter held by each Guarantor is hereby subordinated to the prior payment in
full of the Guaranteed Obligations.
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ARTICLE 3. CONDITIONS TO LOANS AND ADVANCES
Section 3.1. Conditions to Initial Term Loans and First Revolving Credit
Advance. The Lenders' obligations to make the Initial Term Loans and first
Revolving Credit Advance shall be subject to compliance by the Loan Parties with
their agreements contained in this Agreement, and to the condition precedent
that the Lenders shall have received each of the following, in form and
substance reasonably satisfactory to the Agent and its counsel or in the form
attached hereto as an Exhibit, as the case may be:
(a) The Revolving Credit Notes, the Term Notes, the Security
Agreements, the Mortgages and the Fee Letter duly executed by the relevant
Borrowers.
(b) Copies of the resolutions of the Board of Directors of each Loan
Party authorizing the execution, delivery and performance of this Agreement, the
Revolving Credit Notes, the Term Notes and the other Lender Agreements to which
each Loan Party is a party, certified by the Secretary or an Assistant Secretary
(or Clerk or Assistant Clerk) of each Loan Party (which certificate shall state
that such resolutions are in full force and effect).
(c) A certificate of the Secretary or an Assistant Secretary of each
Loan Party certifying the name and signatures of the officers of each Loan Party
authorized to sign this Agreement, the Revolving Credit Notes, the Term Notes,
the other Lender Agreements to which each Loan Party is a party and the other
documents to be delivered by each Loan Party hereunder.
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(d) Certificates of legal existence and corporate good standing for
each Loan Party of recent date issued by the appropriate California, Delaware,
Washington and New Hampshire governmental authorities.
(e) Certificate of tax good standing, if applicable, for the Loan
Parties of recent date issued by the appropriate California, Delaware,
Washington and New Hampshire governmental authorities.
(f) The opinions of (i) Winston & ▇▇▇▇▇▇, special counsel to the Loan
Parties, (ii) Loeb & Loeb LLP, local counsel to the Borrowers in the State of
California, (iii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, local counsel to the Loan Parties in the
State of Washington, and (iv) ▇▇▇▇▇ & Peabody LLP, local counsel to the
Borrowers in the State of New Hampshire, each dated the date of execution of
this Agreement, substantially the forms set forth in Exhibit E attached hereto.
(g) A certificate of a duly authorized officer of the Borrowers, dated
the date of the Initial Term Loans and first Revolving Credit Advances, to the
effect that all conditions precedent on the part of the Loan Parties to the
execution and delivery hereof and the making of the Term Loans and First
Revolving Credit Advances have been satisfied.
(h) Each of the Security Agreements and Mortgages, shall have been duly
and properly authorized, executed and delivered by the parties thereto and shall
be in full force and effect, and pursuant to the Security Agreements and
Mortgages, the Loan Parties and their Subsidiaries shall have granted to the
Agent first perfected, valid and binding security interests, liens and
encumbrances on all of the assets of the Loan Parties and their Subsidiaries in
favor of the Agent (subject only to Liens permitted under Section 5.8), with
such exceptions as may be agreed upon on the Restatement Date, including without
limitation:
(i) all fee simple interests in and to all real property owned
or leased by the Loan Parties and their Subsidiaries, and all buildings
and improvements now located or to be constructed thereon, whether now
owned or hereafter acquired;
(ii) all tangible and intangible assets of the Loan Parties
and their Subsidiaries, whether now owned or hereafter acquired,
including without limitation all machinery, equipment, furniture,
furnishings, inventory, appliances, contract rights, deposit accounts,
investment property (including certificates representing all of the
issued and outstanding capital stock and membership interests of any
Subsidiary of a Loan Party together with stock powers or powers of
interest endorsed in blank), cash collateral, instruments, general
intangibles, etc., whether now owned or hereafter acquired;
(iii) all leases, tenancies, purchase and sale agreements for
the sale of condominium units or other property, operating agreements,
contract and rental agreements for the lease, sale (as permitted
hereunder), rental, occupancy, hire or use of any of Loan Parties' and
their Subsidiaries' assets, including without limitation the
Properties, or any portion thereof together with all income, profits,
revenues, cash collateral and other proceeds thereof; and
42
(iv) all licenses, permits (other than the Forest Service
Permits), trade names, patents, trademarks, approvals and contracts.
(i) All actions necessary or appropriate to perfect the Agent's liens
and security interests in the assets of the Loan Parties and their Subsidiaries
shall have been fully performed including without limitation:
(i) the due and proper recording and filing of all of the
Mortgages, collateral assignments of leases, collateral assignments of
income, assignments in trust and assignments of licenses or gap
insurance in lieu thereof;
(ii) the filing of Uniform Commercial Code financing
statements necessary to perfect the security interests of the Agent in
the assets of the Loan Parties; and
(iii) the receipt by the Agent of marked commitments or pro
formas from First American Title Insurance Company to issue ALTA
standard form mortgage loan policies or endorsements thereto insuring
the first priority of the Mortgages, subject only to Liens permitted
under Section 5.8 hereof, covering all real property of the Loan
Parties both as owned in fee or held as a leasehold estate under any
leases or otherwise and covering the real property described in the
Mortgages, such policies to be in form, substance and amount
satisfactory to the Agent, including without limitation, such
endorsements and affirmative insurance as the Agent shall require with
the standard tenant's and mechanic's liens exceptions deleted and with
such portions of the survey coverage deleted as the Agent may require,
and the Agent shall also have received proof of full payment of all
fees and premiums for said policies and copies of all documents listed
as exceptions on Schedule B to each such policy.
(j) The Agent shall have received (i) certificates of insurance as to
the liability hazard and other insurance maintained by the Loan Parties and
their Subsidiaries on the Credit Security in conformity with the insurance
requirements contained in the Security Agreements (including flood insurance if
necessary) from the insurer or an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms all in accordance with the provisions of the Security Agreements;
(ii) certified copies of all policies evidencing such insurance (or certificates
therefor signed by the insurer or an agent authorized to bind the insurer); and
(iii) such further information and certificates from the Loan Parties, their
insurers and insurance brokers as the Agent may request.
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(k) The Agent shall have received evidence satisfactory to the Agent
that all activities being conducted on the Properties which require federal,
state or local licenses or permits have been duly licensed except where the
absence of any such license would not have a Material Adverse Change and that
such licenses or permits are in full force and effect and have been assigned to
the Agent pursuant to the Security Agreements to the extent they are assignable.
(l) The Agent shall have received copies of all material service
contracts and material leases affecting any portion of the Properties.
(m) Such other documents, agreements, certificates and opinions as the
Agent or the Lenders may reasonably request.
Section 3.2. Conditions to All Additional Term Loans. The Lenders'
obligations to make any Additional Term Loans pursuant to this Agreement shall
be subject to compliance by the Loan Parties with their agreements contained in
this Agreement and each other Lender Agreement, and to the satisfaction, at or
before the making of each Additional Term Loan, of all of the following
conditions precedent:
(a) The representations and warranties herein and those made by or on
behalf of the Loan Parties in any other Lender Agreement shall be correct in all
material respects as of the date on which any Additional Term Loan is made with
the same effect as if made at and as of such time (except as to transactions
permitted hereunder and described in a Compliance Certificate previously
delivered to the Agent and except to the extent that any representation or
warranty expressly relates to an earlier date).
(b) On the date of any Additional Term Loan made hereunder, there shall
exist no Default.
(c) The making of the requested Additional Term Loan shall not be
prohibited by any law or governmental order or regulation applicable to the
Lenders or to the Loan Parties, and all necessary consents, approvals and
authorizations of any Person for any such Additional Term Loan shall have been
obtained.
(d) The request by the Borrowers for the making of each Additional Term
Loan as provided above, and the acceptance by the Borrowers of each such
Additional Term Loan, shall be deemed a representation and warranty by the
Borrowers that the conditions specified above in this Section 3.2 have been
satisfied.
(e) A certificate of a duly authorized officer of the Borrowers, dated
the date of each Additional Term Loan, to the effect that all conditions
precedent on the part of the Borrowers to the execution, delivery and the making
of each such Additional Term Loan have been satisfied. Such certificate shall
have attached thereto calculations in reasonable detail demonstrating compliance
with Section 6.21 hereof.
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Section 3.3. Conditions to All Revolving Credit Advances. The Lenders'
obligations to make any Revolving Credit Advances or issue any Letter of Credit
pursuant to this Agreement shall be subject to compliance by the Loan Parties
with their agreements contained in this Agreement and each other Lender
Agreement, and to the satisfaction, at or before the making of each Revolving
Credit Advance or issuance of any Letter of Credit, of all of the following
conditions precedent:
(a) The representations and warranties herein and those made by or on
behalf of the Loan Parties in any other Lender Agreement shall be correct in all
material respects as of the date on which any Revolving Credit Advance is made
or Letter of Credit is issued, with the same effect as if made at and as of such
time (except as to transactions permitted hereunder and described in a
Compliance Certificate previously delivered to the Agent, except to the extent
that any representation or warranty expressly relates to an earlier date and
except that the references in Article 5 to the 2001 Financial Statements shall
be deemed to refer to the most recent annual audited consolidated financial
statements of the Loan Parties and their Subsidiaries furnished to the Agent.)
(b) On the date of any Revolving Credit Advance made or Letter of
Credit issued hereunder, there shall exist no Default.
(c) The making of the requested Revolving Credit Advance or issuance of
the requested Letter of Credit shall not be prohibited by any law or
governmental order or regulation applicable to the Lenders or to the Loan
Parties, and all necessary consents, approvals and authorizations of any Person
for any such Revolving Credit Advance and Letter of Credit shall have been
obtained.
(d) The request by the Borrowers for the making, continuation or
conversion of each Revolving Credit Advance or LIBOR Rate Loan or issuance of
any Letter of Credit as provided above, and the acceptance by the Borrowers of
each such Revolving Credit Advance or issuance of any Letter of Credit and of
each such continuation or conversion of such LIBOR Rate Loan, shall be deemed a
representation and warranty by the Borrowers that the conditions specified above
in this Section 3.3 have been satisfied.
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ARTICLE 4. PAYMENT AND REPAYMENT
Section 4.1. Mandatory Prepayment.
(a) If at any time the aggregate outstanding principal balance of all
Revolving Credit Advances plus the Maximum Exposure Under Letters of Credit made
hereunder exceeds the Maximum Revolving Credit Amount, the Borrowers shall
immediately repay to the Agent for the ratable accounts of the Lenders an amount
equal to such excess.
(b) The Borrowers shall make principal payments on the Term Loans on or
prior to the Term Loan Reduction Dates and in such amounts as will be sufficient
to cause the principal amount of the Term Loans outstanding on the applicable
Term Loan Reduction Date to be equal to or less than the applicable Maximum Term
Loan Amount permitted to be outstanding on such date under Section 2.1 hereof.
For avoidance of any doubt, any repayments of the Term Loans under Section
4.1(c) hereof shall be credited toward the Borrowers' obligations under this
Section 4.1(b) in the order in which such payments come due.
(c) The Borrowers shall make prepayments of the Loans of the following
amounts:
(i) At any time on and after the Closing Date, if the
Borrowers or any of their Subsidiaries receives Excess Cash Proceeds,
an amount equal to 100% of such Excess Cash Proceeds, shall, upon
receipt, be applied as a repayment of principal of outstanding
Revolving Credit Advances (without reducing the Maximum Revolving
Credit Amount) and not later than 50 days following the end of the
fiscal quarter in which such Excess Cash Proceeds are received, the
Borrowers shall repay the Term Loans on such date by an amount equal to
such Excess Cash Proceeds.
(d) The Borrowers shall, within five (5) Business Days of the
occurrence of any event described in clause (i) of Section 4.1(c), provide the
Agent with written notice of the estimated proceeds received or to be received
in connection with any Permitted Real Estate Sale. The mandatory repayment
provisions of Section 4.1(c) shall not apply until the Excess Cash Proceeds that
are required to be applied to the repayment of the Term Loans exceed $500,000.
Section 4.2. Voluntary Prepayments.
(a) The Borrowers may make prepayments to the Agent for the ratable
accounts of the Lenders of any outstanding principal amount of the Revolving
Credit Advances in a minimum amount of $100,000 and an integral multiple of
$50,000 which are Base Rate Loans in accordance with Section 4.3 at any time
prior to 12:00 noon (Boston time) on any Business Day without premium or
penalty.
(b) The Borrowers may make prepayments to the Agent for the ratable
accounts of the Lenders of any portion of the Term Loans in a minimum amount of
$300,000 and an integral multiple of $100,000 which are Base Rate Loans in
accordance with Section 4.3 at any time prior to 12:00 noon (Boston time) on any
Business Day without premium or penalty.
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(c) The Borrowers may make prepayments to the Agent for the ratable
accounts of the Lenders of any Revolving Credit Advances or of any portion of
the Term Loans in a minimum amount of $1,000,000 and an integral multiple of
$100,000 which are LIBOR Rate Loans only in accordance with and subject to the
premiums and penalties set forth in Section 4.6.
Section 4.3. Payment and Interest Cutoff. Notice of each prepayment
pursuant to
Section 4.2 shall be given to the Agent, in the case of the prepayment of
Base Rate Loans, not later than 12:00 noon (Boston time) on the date of such
payment, and, in the case of the prepayment of LIBOR Rate Loans, not later than
12:00 noon (Boston time) at least three (3) Business Days prior to the date of
such payment and, in each case, shall specify the total principal amount of the
Revolving Credit Advances and the Term Loans to be paid on such date. Notice of
prepayment having been given in compliance with this Section 4.3, the amount
specified to be prepaid shall become due and payable on the date specified for
prepayment and from and after said date (unless the Borrowers shall default in
the payment thereof) interest thereon shall cease to accrue. Unpaid interest on
the principal amount of any Revolving Credit Advances and the Term Loans so
prepaid accrued to the date of prepayment shall be due on the date of
prepayment.
Section 4.4. Payment or Other Actions on Non-Business Days. If any payment
to be made hereunder or under any other Lender Agreement becomes due on a day
which is not a Business Day, the due date of such payment shall be extended to
the next succeeding Business Day, and such extension of time shall be included
in computing interest and fees in connection with such payment. In the case of
any other action the last day for performance of which shall be a day other than
a Business Day, the date for performance shall be extended to the next
succeeding Business Day.
Section 4.5. Method, Timing and Application of Payments.
(a) All payments required to be made pursuant to the provisions of this
Agreement and any other Lender Agreement, and all prepayments pursuant to
Section 4.1, may be charged by the Agent against the Borrowers' accounts with
the Agent. The Borrowers hereby authorize the Agent and the Lenders, without
notice to the Borrowers, to charge against any account of the Borrowers with the
Agent or such Lender an amount equal to the accrued interest, principal and
other amounts from time to time due and payable to the Agent and the Lenders
hereunder and under all other Lender Agreements.
(b) All payments shall be made by the Borrowers to the Agent at the
Agent's address set forth in Section 11.1 hereof or such other place as the
Agent may from time to time specify in writing not later than 12:00 noon (Boston
time) in lawful currency of the United States of America in immediately
available funds without counterclaim or setoff and free and clear of, and
without any deduction or withholding for, any taxes or other payments. The Agent
will, after its receipt thereof, distribute like funds relating to the payment
of principal, interest or any other amounts payable hereunder ratably to the
Lenders in accordance with their respective Commitment Percentages. Any payment
made by the Borrowers to the Agent under this Agreement or under the Notes in
the manner provided in this Agreement shall be deemed to be a payment to each of
the respective Lenders, unless the provisions of this Agreement expressly
provide that any such payment shall be solely for the account of the Agent or
any specific Lender.
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(c) All payments shall be applied first to the payment of all fees,
expenses and other amounts due to the Agent and the Lenders (excluding principal
and interest), then to accrued interest, and the balance on account of
outstanding principal, in each case with respect to the Revolving Credit
Advances or the Term Loans, as the case may be; provided, however, that after an
Event of Default payments will be applied to the obligations of the Borrowers to
Agent and the Lenders as provided in Section 7.3 or otherwise as the Agent and
the Lenders determine in their sole discretion.
Section 4.6. Payments Not at End of Interest Period. The Borrowers may
prepay a LIBOR Rate Loan only upon at least three (3) Business Days prior
written notice to the Agent (which notice shall be irrevocable), and any such
prepayment shall occur only on the last day of the Interest Period for such
LIBOR Rate Loan. The Borrowers shall pay to Agent, for the account of the
Lenders, upon request of the Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of the Agent) to compensate for any loss,
cost, or expense incurred as a result of: (a) any payment of a LIBOR Rate Loan
on a date other than the last day of the Interest Period for such LIBOR Rate
Loan; (b) any failure by the Borrowers to borrow a LIBOR Rate Loan on the date
specified by the Borrowers' written notice; and (c) any failure by the Borrowers
to pay a LIBOR Rate Loan on the date for payment specified in the Borrowers'
written notice. Without limiting the foregoing, the Borrowers shall pay to the
Agent, for the account of the Lenders, a "yield maintenance fee" in an amount
computed as follows: The current rate for United States Treasury securities
(bills on a discounted basis shall be converted to a bond equivalent) with a
maturity date closest to the term of such LIBOR Rate Loan as to which the
prepayment prior to the last day of an Interest Period is made, shall be
subtracted from the LIBOR Rate in effect at the time of prepayment. If the
result is zero or a negative number, there shall be no yield maintenance fee. If
the result is a positive number, then the resulting percentage shall be
multiplied by the amount of the principal balance being repaid. The resulting
amount shall be divided by 360 and multiplied by the number of days remaining in
the term for such LIBOR Rate Loan as to which the prepayment is made. Said
amount shall be reduced to present value calculated by using the above
referenced United States Treasury securities rate and the number of days
remaining in the term for such LIBOR Rate Loan as to which prepayment is made.
The resulting amount shall be the yield maintenance fee due to the Agent, for
the account of the Lenders, upon the prepayment of a LIBOR Rate Loan on a day
other than the last day of the applicable Interest Period. If by reason of an
Event of Default, any of the Lender Obligations are declared to be immediately
due and payable, then any yield maintenance fee with respect to a LIBOR Rate
Loan shall become due and payable in the same manner as though the Borrowers had
exercised such right of prepayment.
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Section 4.7. Taxes.
(a) Any and all payments by the Borrowers hereunder shall be made
without counterclaim or setoff and free and clear of, and without any deduction
or withholding for, any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, or other payments, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, (i) by the United
States or by any political subdivision thereof or therein, (ii) by the
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or any political subdivision or taxing authority thereof or
therein or (iii) by any jurisdiction (or political subdivision or taxing
authority thereof or therein) in which such Lender or Agent operates or in which
its lending office is located or as a result of another connection between such
Lender or Agent and such jurisdiction other than a connection resulting solely
from this Agreement (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrowers shall be required by law to deduct any Taxes from or in respect
of any sum payable to any Lender or the Agent (as the case may be), (i) the sum
payable shall be increased as may be necessary so that, after making all
required deductions (including deductions applicable to additional sums payable
under this Section 4.7), such Lender or the Agent (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made; provided, however, that if the Borrowers' obligations to deduct or
withhold Taxes is caused solely by such Lender's or the Agent's (as the case may
be) failure to provide the forms described in paragraph (e) of this Section 4.7
and such Lender or the Agent (as the case may be) could have provided such
forms, no such increase shall be required; (ii) the Borrowers shall make such
deductions; and (iii) the Borrowers shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) If the Borrowers fail to pay any Taxes when due to the appropriate
taxing authority, the Borrowers shall indemnify each Lender and the Agent for
the full amount of Taxes (including, without limitation, any Taxes imposed by
any Governmental Authority on amounts payable under this Section 4.7) paid by
such Lender or the Agent (as the case may be) and any liability (including
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted. Each payment required to be made
by the Borrowers in respect of this indemnification shall be made to the Agent
for the benefit of any party claiming such indemnification within thirty (30)
days from the date the Borrowers receive written demand therefor detailing the
calculation of such amounts from the Agent on behalf of itself as Agent or any
such Lender. The agreements in this subsection shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder.
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(c) The Borrowers will pay prior to delinquency all Taxes payable in
respect of any payment under this Agreement. Upon request, the Borrowers will
furnish to the Agent for its own account or for the account of the affected
Lender, as the case may be, the original or a certified copy of a receipt
evidencing payment of such Taxes.
(d) If a Lender or the Agent receives a refund in respect of any Taxes
as to which it has been indemnified by the Borrowers or with respect to which
the Borrowers have paid additional amounts pursuant to this Section 4.7, it
shall promptly following the date of such receipt pay over the amount of such
refund to the Borrowers, net of all reasonable out-of-pocket expenses of such
Lender or the Agent and without interest (other than interest paid by the
relevant taxation authority with respect to such refund); provided that the
Borrowers, upon the request of such Lender or the Agent, agree to repay the
amount paid over to the Borrowers (plus penalties, interest or other reasonable
charges) to such Lender or the Agent in the event such Lender or the Agent is
required to repay such refund to such taxation authority.
(e) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to the
Borrowers and the Agent on the date of this Agreement or upon the effectiveness
of any Assignment and Acceptance Agreement (i) two duly completed copies of
either United States Internal Revenue Service Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY or
successor applicable form, as the case may be, certifying in each case that such
Lender is entitled to receive payments under this Agreement and the Notes
payable to it, without deduction or withholding of any United States federal
income taxes, and (ii) any other governmental forms which are necessary or
required under an applicable tax treaty or otherwise by law to eliminate any
withholding tax, which have been reasonably requested by the Borrowers. For
purposes of this Section 4.7(e), a Form W-8BEN completed and delivered by (i) an
Agent or Lender claiming an exemption from or a reduced rate of withholding at
source under an income tax treaty or (ii) certain foreign trusts will not be
considered duly completed unless the form contains such Agent or Lender's U.S.
taxpayer identification number. Such forms shall be delivered by each non-U.S.
Lender claiming complete exemption from U.S. federal withholding tax on all
payments by the Borrowers under this Agreement on or before the date such Lender
becomes a party to this Agreement. Each non-U.S. Lender hereby represents that,
under applicable law and treaties in effect on the date of this Agreement, no
U.S. federal taxes will be required to be withheld by the Borrowers with respect
to any payments to be made to such non-U.S. Lender in respect of this Agreement
and the Notes issued to it. Each Lender which delivers to the Borrowers and the
Agent a Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY pursuant to the next preceding sentence
further undertakes to deliver to the Borrowers and the Administrative Agent two
further copies of Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY, or successor applicable forms,
or other manner of certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrowers and the Agent, and such extensions or renewals thereof as may
reasonably be requested by the Borrowers and the Agent certifying in the case of
a Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY that such Lender is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes. If an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any delivery
required by the preceding sentence would otherwise be required which renders all
such forms inapplicable or which would prevent any Lender from duly completing
and delivering any such letter or form with respect to it and such Lender
advises the Borrowers and the Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax, such
Lender shall not be required to deliver such forms. The Borrowers shall withhold
tax at the rate and in the manner required by the laws of the United States with
respect to payments made to a Lender failing to timely provide the requisite
Internal Revenue Service forms without making any additional payments under
Section 4.7(a).
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(f) If any Lender claims exemption from, or reduction of, withholding
tax by providing IRS Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY and such Lender sells,
assigns or otherwise transfers all or part of the Lender Obligations of the
Borrowers to any other Lender, such Lender agrees to notify the Agent of the
amount of such transfer to the extent of such amount in which it is no longer
the owner of Lender Obligations of the Borrowers to such Lender. To the extent
of such percentage amount, the Agent will treat such Lender's IRS Form ▇-▇▇▇▇,
▇-▇▇▇▇ or W-8IMY, as the case may be, as no longer valid.
Each Lender and the Agent agrees to use reasonable efforts to change
its lending office to avoid or minimize any amounts which might otherwise be
payable pursuant to this Section 4.7.
Section 4.8. Mitigation of Expenses. Each Lender and the Agent agrees that,
as promptly as practicable after it becomes aware of any circumstances referred
to in Section 2.13, 2.14 or 4.7 which would result in any increased cost,
suspension of the LIBOR Pricing Option or payment of Taxes, the affected Lender
or the Agent, as the case may be, shall use reasonable efforts to minimize costs
and expenses incurred by it and payable to it by Borrowers pursuant to this
Agreement; provided that such efforts shall not impose on such Lender or the
Agent any additional costs or legal or regulatory burdens deemed by such Lender
or the Agent in its reasonable judgment to be material.
ARTICLE 5. GENERAL COVENANTS
The Loan Parties covenant that, until all of the Lender Obligations
shall have been paid in full and until the Lenders' commitments to extend credit
under this Agreement and any other Lender Agreement shall have been irrevocably
terminated, they will comply with each of the following provisions:
Section 5.1. Taxes and Other Charges. The Loan Parties will duly pay and
discharge, or cause to be paid and discharged, before the same shall become in
arrears (or in conformity with customary trade terms, where applicable) (i) all
taxes, assessments and other governmental charges imposed upon the Loan Parties
and their properties, sales or activities, or upon the income or profits
therefrom, (ii) all claims for labor, materials or supplies which if unpaid
might by law become a Lien upon any of its property, and (iii) all accounts
payable and other Indebtedness incident to their operations; provided, however,
that any such tax, assessment, charge, claim or Indebtedness need not be paid if
the validity or amount thereof shall at the time be contested in good faith by
appropriate proceedings and if the Loan Parties shall, in accordance with GAAP,
have set aside on their books adequate reserves with respect thereto.
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Section 5.2. Conduct of Business, etc..
(a) Types of Business. The Loan Parties will engage only in the types
of businesses in which they are engaged as of the date hereof and businesses
related or ancillary thereto.
(b) Maintenance of Properties, Compliance with Agreements, etc. The
Loan Parties will, and will cause each of their Subsidiaries to, (i) keep their
properties in such repair, working order and condition (ordinary wear and tear
excepted), and from time to time make such repairs, replacements, additions and
improvements thereto, as their management deems necessary and appropriate and
comply at all times in all material respects with all franchises, licenses,
leases and other material agreements to which any of them is a party so as to
prevent any loss or forfeiture thereof or thereunder, unless compliance at such
time is being contested in good faith by appropriate proceedings or unless such
losses or forfeitures could not in the aggregate result in any Material Adverse
Change and (ii) do all things necessary to preserve, renew and keep in full
force and effect and in good standing the legal existence and authority of the
Loan Parties and their material Subsidiaries necessary to continue any of their
businesses; provided, however, that this Section 5.2(b) shall not apply to
assets or entities disposed of in transactions permitted by Section 5.12 and
provided further that so long as before and after giving effect thereto no
Default exists, with the consent of the Agent, which shall not be unreasonably
withheld or delayed, any Loan Party or Subsidiary may merge or consolidate with
or into another Loan Party or Subsidiary.
(c) Statutory Compliance. The Loan Parties will, and will cause each of
their respective Subsidiaries to, comply in all material respects with all valid
and applicable statutes, ordinances, zoning and building codes and other rules
and regulations of the United States of America, of the states and territories
thereof and their counties, municipalities and other subdivisions and of any
foreign country or other jurisdictions applicable to the Loan Parties and their
material Subsidiaries, except where compliance therewith shall at the time be
contested in good faith by appropriate proceedings or where failure so to comply
could not in the aggregate result in any Material Adverse Change.
(d) Forest Service Permits. Without the prior written consent of the
Agent (which consent prior to the occurrence of an Event of Default shall not be
unreasonably withheld), the Loan Parties will make no changes, alterations or
amendments to any Forest Service Permit including, without limitation, to any
operative master plan provided under or incorporated by reference in any Forest
Service Permit which would have or would reasonably be expected to have a
material impact on the operations of any Loan Party. Each Loan Party will well
and truly perform, or cause to be performed, all of its material obligations and
agreements under the Forest Service Permits to which it is a party and under any
renewals or extensions thereof and will not do or suffer anything which will
impair any Forest Service Permit or which would be a default hereunder.
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Section 5.3. Insurance. Each of the Loan Parties will, and will cause its
Subsidiaries to, maintain at all times, with financially sound and reputable
insurers, insurance with respect to its properties and business and against such
casualties and contingencies in such types and such amounts as shall be in
accordance with sound business practices and reasonably satisfactory to the
Lenders. Such insurance will be deemed satisfactory so long as each of the Loan
Parties and their Subsidiaries (i) keep their material physical property insured
against fire and extended coverage risks in amounts and with deductibles equal
to those generally maintained by businesses of similar size engaged in similar
activities, (ii) maintain all such workers' compensation or similar insurance as
may be required by law, and (iii) maintain, in amounts and with deductibles
equal to those generally maintained by businesses of similar size engaged in
similar activities, general public liability insurance against claims for bodily
injury, death or property damage occurring on, in or about the properties of
each of the Loan Parties, and product liability insurance. A description of the
material elements of insurance coverage of the Loan Parties and their
Subsidiaries as of the date hereof is set forth on Schedule 5.3.
Section 5.4. Financial Statements and Reports. Each of the Loan Parties
will maintain a system of accounting in which full and correct entries will be
made of all dealings and transactions in relation to their business and affairs
in accordance with GAAP. The fiscal year of each of the Loan Parties will end on
the Friday closest to the end of October in each year.
(a) Annual Statements. The Loan Parties will furnish to the Lenders as
soon as available and in any event within 100 days after the end of each fiscal
year, the Consolidated and unaudited Consolidating balance sheet and statement
of income of each of the Loan Parties and their Subsidiaries, respectively, as
at the end of such fiscal year and the Consolidated and unaudited Consolidating
statements of changes in shareholders' equity and cash flows of the Loan Parties
and their Subsidiaries, respectively, for such year (all in reasonable detail),
together with comparative figures for the preceding fiscal year (computed on a
pro forma basis if necessary), and accompanied by:
(i) unqualified reports or certificates of Ernst & Young,
L.L.P. (or, if they cease to be auditors of the Loan Parties and their
Subsidiaries, independent certified public accountants of recognized
standing reasonably satisfactory to the Lenders), to the effect that
they have audited such Consolidated financial statements in accordance
with GAAP and that such Consolidated financial statements present
fairly, in all material respects, the financial position of the Persons
covered thereby at the dates thereof and the results of their
operations for the periods covered thereby in conformity with GAAP;
(ii) the statement of such accountants that they have caused
this Agreement to be reviewed and that in the course of their audit of
the Loan Parties and their Subsidiaries nothing has come to their
attention to lead them to believe that any Default hereunder exists and
in particular that they have no knowledge of any Default under Section
5.5 or, if such is not the case, specifying such Default or possible
Default and the nature thereof, it being understood that the
examination of such accountants cannot be relied upon to give them
knowledge of any such Default except as it relates to accounting or
auditing matters;
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(iii) a Compliance Certificate:
(A) to the effect that such officer has caused this
Agreement to be reviewed by the Borrowers and has no knowledge
of any Default, or if such officer has such knowledge,
specifying such Default and the nature thereof, and what
action the Borrowers have taken, are taking or propose to take
with respect thereto,
(B) stating what changes, if any, have occurred in
GAAP since the date of the financial statements described in
Section 6.2, and
(C) containing a schedule of computations
demonstrating, as of the close of such fiscal year, compliance
with the Computation Covenants; and
(D) supplements to Schedules 6.1(a) and 6.4 showing
any changes in the information set forth in such Schedules
during such fiscal year; provided that the Borrowers shall not
be required to supplement Schedule 6.4 to identify any Liens
or Guarantees arising after the Restatement Date that secure
obligations of less than $500,000.
(b) Quarterly Reports. The Loan Parties will furnish to the Lenders as
soon as available and, in any event, within 50 days after the end of each fiscal
quarter, internally prepared Consolidated and Consolidating balance sheets as at
the end of such quarter, and Consolidated and Consolidating statements of income
and cash flows of the Loan Parties and their Subsidiaries for such quarter and
other related information including a report of asset sales (excluding Excluded
Asset Sales) and additions to and reductions in Adjusted Incurred Real Estate
Costs that occurred within such fiscal quarter (all in reasonable detail),
accompanied by a Compliance Certificate:
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(i) to the effect that such financial statements have been
prepared in accordance with GAAP and present fairly, in all material
respects, the financial position of the Loan Parties and their
respective Subsidiaries at the dates thereof and the results of their
operations for the periods covered thereby, subject only to normal
year-end audit adjustments and the addition of footnotes;
(ii) to the effect that such officer has caused this Agreement
to be reviewed by the Borrowers and has no knowledge of any Default, or
if such officer has such knowledge, specifying such Default and the
nature thereof and what action the Borrowers have taken, are taking or
propose to take with respect thereto, and
(iii) containing a schedule of computations by the Borrowers
demonstrating, as of the close of such fiscal quarter, compliance with
the Computation Covenants.
(c) Monthly Reports. The Loan Parties will furnish to the Lenders as
soon as available and, in any event, within 40 days after the end of each fiscal
month, an internally prepared Consolidated balance sheet as at the end of such
month, and Consolidated statements of income and cash flows of the Loan Parties
and their Subsidiaries for such month and other related information.
(d) Other Reports. The Loan Parties will furnish to the Lenders:
(i) as soon as available, and in any event within 40 days
after the end of each fiscal year, an annual budget and/or operating
projections for the upcoming fiscal year of the Loan Parties;
(ii) as soon as available, any material updates, if any, of
such budget and projections;
(iii) as soon as available, all management letters furnished
to the Loan Parties by their auditors;
(iv) as soon as practicable but, in any event, within 20
Business Days after the issuance thereof, all budgets, projections,
statements of operations and other material reports furnished by the
Loan Parties or any of their Subsidiaries generally to their
shareholders in such capacity (but not including any such budgets,
projections, statements of operations and other material reports
furnished to the Board of Directors of any entity of the BCG Group but
not otherwise made generally available);
(v) as soon as practicable but, in any event, within 20
Business Days after the issuance thereof, such registration statements,
proxy statements and reports, if any, as may be filed by the Loan
Parties or any Subsidiary with the Securities and Exchange Commission;
and
(vi) as soon as the same have been sent or received by TLC,
copies of all material written notices, financial reports and other
information under the NMP Transaction Agreements, including without
limitation the Annual Plan delivered under Section 6.11 of the NMP
Operating Agreement, the financial reports and audit delivered under
Sections 10.5 and 10.6 of the NMP Operating Agreement, but excluding
notices of distributions and tax information under the NMP Operating
Agreement.
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(e) Notice of Litigation; Notice of Defaults. The Loan Parties will
promptly furnish to the Agent written notice of any litigation or any
administrative or arbitration proceeding to which any of the Loan Parties or any
Subsidiary may hereafter become a party which may involve any material risk of
any judgment which, after giving effect to any applicable insurance, may result
in a claim of more than $500,000 against any of the Loan Parties or any
Subsidiary. Within five Business Days after acquiring knowledge thereof, the
Loan Parties will notify the Lenders of the existence of any Default, specifying
the nature thereof and what action the Loan Parties have taken, are taking or
propose to take with respect thereto.
(f) ERISA Reports. The Loan Parties will:
(i) furnish the Lenders with a copy of any request for a
waiver of the funding standards or an extension of the amortization
period required by Sections 303 and 304 of ERISA or Section 412 of the
Code, promptly after any Control Group Person submits such request to
the Department of Labor or the Internal Revenue Service;
(ii) notify the Lenders of any reportable event (as defined in
Section 4043 of ERISA), unless the notice requirement with respect
thereto has been waived by regulation, promptly after any Control Group
Person learns of such reportable event; and furnish the Lenders with a
copy of the notice of such reportable event required to be filed with
the PBGC, promptly after such notice is required to be given;
(iii) furnish the Lenders with a copy of any notice received
by any Control Group Person that the PBGC has instituted or intends to
institute proceedings under Section 4042 of ERISA to terminate any
Plan, or that any Multiemployer Plan is insolvent or in reorganization
status under Title IV of ERISA, promptly after receipt of such notice;
(iv) notify the Lenders of the possibility of the termination
of any Plan by its administrator pursuant to Section 4041 of ERISA, as
soon as any Control Group Person learns of such possibility and in any
event prior to such termination; and furnish the Lenders with a copy of
any notice to the PBGC that a Plan is to be terminated, promptly after
any Control Group Person files a copy of such notice; and
(v) notify the Lenders of the intention of the Loan Parties or
any Control Group Person to withdraw, in whole or in part, from any
Multiemployer Plan, prior to such withdrawal, and, upon any Lender's
request from time to time, of the extent of the liability, if any, of
such Person as a result of such withdrawal, to be the best of such
Person's knowledge at such time.
56
(g) Right to Obtain Appraisals. The Agent shall have the right to
obtain from time to time, at the Borrowers' cost and expense, updated
Appraisals, provided that so long as no Default or Event of Default shall have
occurred and be continuing, the Borrowers shall only be obligated to reimburse
the Agent for its costs and expenses related to one updated Appraisal each
fiscal year. The costs and expenses incurred by the Agent and the Lenders in
obtaining such Appraisals shall be paid by the Borrowers forthwith upon billing
or request by the Agent for reimbursement therefor.
(h) Reports to Other Creditors. Promptly after filing the same, the
Loan Parties shall furnish to the Agent and each Lender copies of any compliance
certificate and other material information furnished to any other holder of the
securities (including debt obligations) of the Loan Parties or any Subsidiary
pursuant to the terms of any indenture, loan or credit or similar agreement and
not otherwise required to be furnished to the Agent or the Lenders pursuant to
any other provision of this Agreement.
(i) Communications with Independent Public Accountants. At any
reasonable time and from time to time, the Loan Parties shall provide the Agent
and the Lenders and any agents or representatives of the Lenders access to the
independent public accountants of the Loan Parties to discuss the Loan Parties'
financial condition, including, without limitation any recommendations of such
independent public accountants concerning the management, finances, financial
controls or operations of the Loan Parties and their Subsidiaries. Promptly
after the receipt thereof, the Loan Parties shall furnish to the Agent and each
Lender copies of written management letters, required communications under
S.A.S. #61 and other similar communications from the Loan Parties' regular
independent public accountants.
(j) Environmental Reports. The Loan Parties shall furnish to the Agent
and each Lender: (i) not later than twenty (20) days after notice thereof,
notice of any enforcement actions, or, to the knowledge of the Loan Parties,
threatened enforcement actions affecting the Loan Parties or any Subsidiary by
any Governmental Agency related to Environmental Laws; (ii) copies, promptly
after they are received, of all orders, notices of responsibility, notices of
violation, notices of enforcement actions, and assessments, and other material
written communications pertaining to any such orders, notices, claims and
assessments received by the Loan Parties or any Subsidiary from any Governmental
Agency; (iii) not later than twenty (20) days after notice thereof, notice of
any material civil claims or threatened material civil claims affecting the Loan
Parties or any Subsidiary by any third party alleging any material violation of
Environmental Laws or harm to human health or the environment; (iv) copies of
all cleanup plans, site assessment reports, response plans, remedial proposals,
or other material submissions of the Loan Parties or any Subsidiary, other third
party (e.g., committee of potentially responsible parties at a Superfund site),
or any combination of same, submitted to a Governmental Agency in response to
any communication referenced in subsections (i) and (ii) herein promptly
following their submission to such Governmental Agency; or, if later, their
receipt by the Loan Parties.
57
(k) Other Information. From time to time upon request of any authorized
officer of the Agent, the Loan Parties will furnish to the Lenders such other
information regarding the business, affairs and condition, financial or
otherwise, of each of the Loan Parties and their Subsidiaries as such officer
may reasonably request, including copies of all licenses, agreements, contracts,
leases and instruments to which any of the Loan Parties or their Subsidiaries
are party. Upon reasonable notice to the Loan Parties, the Lenders' authorized
officers and representatives shall have the right during normal business hours
to examine the books and records of each of the Loan Parties and their
Subsidiaries, to make copies, notes and abstracts therefrom and to make an
independent examination of its books and records, for the purpose of verifying
the accuracy of the reports delivered by any of the Loan Parties and their
Subsidiaries pursuant to this Section 5.4 or otherwise and ascertaining
compliance with this Agreement or any other Credit Document.
(l) Records, Accounts and Places of Business. The Loan Parties and each
Subsidiary shall promptly notify the Agent of (a) any changes in the principal
places of business of the Loan Parties and their Subsidiaries and (b) any
additional places of business which may arise hereafter.
Section 5.5. Certain Financial Tests
(a) Minimum Consolidated Resort EBITDA. The Loan Parties and their
Subsidiaries shall earn Consolidated Resort EBITDA for any four consecutive
fiscal quarter period ending during each period set forth below of not less than
the amount set forth opposite such period:
-------------------------------------------------------------
Period Minimum Resort
EBITDA
-------------------------------------------------------------
February 1, 2002 through January 31, 2005 $25,000,000
April 30, 2005 and thereafter $28,000,000
-------------------------------------------------------------
58
(b) Ratio of Consolidated EBITDA to Consolidated Debt Service. The Loan
Parties and their Subsidiaries shall maintain as of the end of each fiscal
quarter, commencing with the quarter ending April 30, 2002, for the four
consecutive fiscal quarter period ending on such date a ratio of (i)
Consolidated EBITDA, less Sustaining Capital Expenditures, less cash income
taxes actually paid during such period to (ii) Consolidated Debt Service of not
less than 1.3:1.
(c) Adjusted Consolidated Leverage Ratio. The Adjusted Consolidated
Leverage Ratio of the Loan Parties at all times shall not exceed the ratio set
forth below opposite such period:
------------------------------------------------------------------
Leverage Ratio Period Adjusted Leverage Ratio
Closing Date through October 29, 2004 .45:1
October 30, 2004 through October 28, 2005 .40:1
Thereafter .35:1
-------------------------------------------------------------------
Section 5.6. Indebtedness. None of the Loan Parties and their Subsidiaries
will create, incur, assume or otherwise become or remain liable with respect to
any Indebtedness or obligations under operating leases having a term in excess
of one year except the following:
(a) Indebtedness in respect of the Lender Obligations.
(b) Guarantees permitted by Section 5.7.
(c) Current liabilities, (other than for Financing Debt and operating
leases), incurred in the ordinary course of business; provided, however, that
all such Indebtedness, including without limitation trade payables, shall be
paid in accordance with Section 5.1.
(d) To the extent that payment thereof shall not at the time be
required by Section 5.1, Indebtedness in respect of taxes, assessments,
governmental charges and claims for labor, materials and supplies.
(e) Indebtedness secured by Liens of carriers, warehousemen, mechanics
and landlords and similar liens permitted by Sections 5.8(e) and 5.8(f).
(f) Indebtedness in respect of (a) judgments or awards in an aggregate
amount of less than or equal to $2,000,000 (in addition to amounts covered by
insurance) and (b) judgments or awards in excess of $2,000,000 (in addition to
amounts covered by insurance) (i) which have been in force for less than the
applicable appeal period, so long as execution is not levied, or (ii) in respect
of which the Loan Parties shall at the time in good faith be prosecuting an
appeal or proceedings for review, so long as execution thereof shall have been
stayed pending such appeal or review.
59
(g) To the extent permitted by Section 5.8(g) or (i), Indebtedness in
respect of Capitalized Lease Obligations or secured by purchase money security
interests or mortgages; provided, however, that the aggregate principal amount
of all Indebtedness permitted to be incurred by this Section 5.6(g) after the
Restatement Date shall not exceed $5,000,000 at any one time outstanding.
(h) Obligations in respect of (i) leases and permits with the Forest
Service with respect to real property used in connection with the operation of
the resorts and (ii) other operating leases with a minimum initial term of
greater than one year, provided the basic annual rental payments under such
other operating leases do not exceed in the aggregate $4,000,000 in any fiscal
year.
(i) Indebtedness with respect to deferred compensation in the ordinary
course of business and Indebtedness with respect to employee benefit programs
(including liabilities in respect of deferred compensation, pension or severance
benefits, early termination benefits, disability benefits, sick leave, vacation
benefits and tuition benefits) incurred in the ordinary course of business.
(j) Indebtedness in respect of customer advances and deposits, deferred
income, deferred gains, deferred taxes and other deferred credits arising in the
ordinary course of business.
(k) Indebtedness in respect of inter-company loans and advances between
and among the Loan Parties and their Subsidiaries which are not prohibited by
Section 5.9.
(l) Indebtedness in respect of the Senior Unsecured Notes, not to
exceed $125,500,000 in aggregate principal amount less the original principal
amount of the Term Loans that have been issued and outstanding for at least five
(5) Business Days.
(m) Indebtedness in respect of the ASC Subordinated Note; provided,
however, that the aggregate principal amount of such Indebtedness shall not in
the aggregate exceed $1,800,000.
(n) Indebtedness in respect of obligations outstanding on the date
hereof and described on Schedule 5.6(n).
60
(o) Indebtedness incurred by BCS Holdings in respect of Interest Rate
Protection Agreements with any Lender (or an Affiliate of any Lender) at the
time such arrangement is entered into.
(p) Other Indebtedness in an aggregate principal amount not to exceed
$500,000 at any time outstanding.
Section 5.7. Guarantees; Letters of Credit. None of the Loan Parties or
their Subsidiaries will become or remain liable with respect to any Guarantee,
including reimbursement obligations under letters of credit and other financing
guarantees by third parties, except as contemplated by (i) the Lender
Agreements, (ii) the Senior Indenture, to the extent such Guarantees are of
Indebtedness permitted by Section 5.6(l), (iii) the ASC Subordinated Note, (iv)
a guarantee by BCS Holdings of workers' compensation liabilities of Ski Lifts
and (v) Guarantees of Indebtedness permitted to be incurred under Section 5.6
hereof of any of the Loan Parties by a Loan Party or a Subsidiary and (vi)
Guarantees in connection with performance and surety bonds entered into in the
ordinary course of business. Schedule 5.7(a) contains a list of all material
performance and surety bonds which contain Guarantees by the Loan Parties as of
the Restatement Date. Schedule 5.7(b) hereto is a complete list of all
outstanding letters of credit issued for the benefit of any Loan Party as of the
Restatement Date.
Section 5.8. Liens. None of the Loan Parties or any of their Subsidiaries
will create, incur or enter into, or suffer to be created or incurred or to
exist, any Lien, or any arrangement or agreement which prohibits it from
creating any Lien, on its respective properties or assets, except the following:
(a) Liens included in any Lender Agreement and Liens on the Credit
Security which secure the Lender Obligations.
(b) Liens to secure taxes, assessments and other governmental charges,
to the extent that payment thereof shall not at the time be required by Section
5.1.
(c) Deposits or pledges made (i) in connection with, or to secure
payment of, workers' compensation, unemployment insurance, old age pensions or
other social security, (ii) in connection with insurance maintained in
accordance with Section 5.3, (iii) to secure the performance of bids, tenders,
contracts (other than contracts relating to Financing Debt) or leases, (iv) to
secure statutory obligations or surety or appeal bonds, (v) to secure indemnity,
performance or other similar bonds in the ordinary course of business or (vi) in
connection with contests of tax or other liabilities to the extent that payment
thereof shall not at that time be required by Section 5.1.
(d) Liens in respect of judgments or awards, to the extent that such
judgments or awards are permitted by Section 5.6(f).
61
(e) Liens of carriers, warehousemen, mechanics and similar Liens or
deposits to secure the release thereof.
(f) Liens in the nature of (i) zoning restrictions, (ii) easements,
rights of way and similar interests, (iii) restrictions of record on the
Restatement Date on the use of real property and (iv) landlords' and lessors'
Liens on rented premises, which in each case do not materially detract from the
value of the encumbered property or materially impair the use thereof in the
business of the Loan Parties.
(g) Liens in respect of Capitalized Lease Obligations incurred after
the Restatement Date and purchase money security interests in or purchase money
mortgages on real or personal property acquired after the Restatement Date,
including agreements to enter into Capitalized Lease Obligations, purchase money
security interests and purchase money mortgages, to secure purchase money
Indebtedness to the extent permitted by Section 5.6(g) incurred in connection
with the acquisition of such property, which security interests or mortgages
cover only the real or personal property so acquired and proceeds thereof and
reasonable attachments and accessories thereto.
(h) Liens securing obligations under the ASC Subordinated Note, to the
extent permitted by Section 5.6(m).
(i) Other existing Liens and Capitalized Lease Obligations described on
Schedule 6.4 on the property secured by such Liens or the subject of such
Capitalized Lease as of the Restatement Date and any renewals or replacements
thereof, but not any increase in the amount thereof.
(j) Liens under the NMP Transaction Agreements.
Upon the request of any Loan Party, so long as there is no Default, the
Lenders shall upon delivery of such information as may be reasonably requested
by Lenders (including, without limitation, title endorsements) subordinate all
Liens under the Mortgages and Security Agreements to any Liens referred to in
Section 5.8(f)(ii) and (iii) above, and the Agent shall be empowered to take all
action necessary to effect such subordination on behalf of the Lenders. The
Borrowers shall reimburse the Agent for any costs and expenses (including,
without limitation, reasonable legal and accounting fees, attorneys' fees and
expenses) it reasonably incurs in connection with any request made pursuant to
the preceding sentence.
Section 5.9. Investments. None of the Loan Parties and their Subsidiaries
will have outstanding, acquire, commit itself to acquire or hold any Investment
(including any Investment consisting of the acquisition of any business) except
for the following:
62
(a) Investments in cash and Cash Equivalents.
(b) Trade or customer accounts or notes receivable for inventory or
equipment sold or leased or services rendered in the ordinary course of business
and for real estate permitted to be sold pursuant to Section 5.12 hereof.
(c) Advances to employees, agents and consultants in the ordinary
course of business, including, but not limited to, travel, payroll and other
expenses incurred in the ordinary course of business.
(d) Investments representing Indebtedness of any Person owing as a
result of the sale by any Loan Party or a Subsidiary in the ordinary course of
business to such Person of products or services or the sale of tangible property
no longer required in its business.
(e) Capital Expenditures and options to make Capital Expenditures to
the extent permitted by Section 5.11.
(f) Investments by any Loan Party in any other Loan Party.
(g) Investments consisting of loans to employees of any of the Loan
Parties provided that the aggregate outstanding principal amount of such loans
shall not at any time exceed $500,000.
(h) Investments consisting of contingent liabilities of any Loan Party
represented by endorsements of negotiable instruments for collection or deposit
in the ordinary course of business, and advances, deposits, down payments and
prepayments on account of certain firm purchase orders made in the ordinary
course of business.
(i) Investments described on Schedule 6.4.
(j) Investments by BCS Holdings that comprise part of an Interest Rate
Protection Agreement.
(k) Investments consisting of the holdback under the Loon Acquisition
Agreement.
(l) Investments in joint ventures consisting of the contribution of
Excess Real Property by the Loan Parties up to an aggregate amount at any time
not to exceed $10,000,000 in net book value of such Excess Real Property.
(m) Other Investments, whether consisting of cash or property, not to
exceed $1,000,000 for any one Investment or related series of Investments and
not to exceed $3,000,000 in the aggregate.
(n) Investments which are Guarantees permitted under Section 5.7
hereof.
63
(o) That certain Subordinated Secured Convertible Note dated September
22, 2000, issued by TLH to TLC pursuant to the First Northstar Purchase
Agreement and in any interest in NMP pursuant to any conversion right contained
in such note.
Section 5.10. Distributions. None of the Loan Parties and their
Subsidiaries shall make any Distribution except for the following:
(a) The Loan Parties may pay dividends through the issuance of their
Stock and, so long as immediately before and after giving effect thereto no
Default exists, the Loan Parties may make Distributions consisting of the
exchange of one class of Stock for another class of Stock.
(b) So long as before and after giving effect thereto no Default
exists, the Loan Parties may make Distributions to BCS Group to provide funds to
service notes issued under the Securities Purchase Agreement.
(c) So long as before and after giving effect thereto no Default
exists, payments of principal and interest due under the ASC Subordinated Note.
(d) So long as before and after giving effect thereto no Default
exists, Distributions from one Loan Party to any other Loan Party.
Section 5.11. Capital Expenditures. The Loan Parties will not make or incur
Capital Expenditures during any four consecutive fiscal quarter period ending as
of the applicable date set forth below in excess of the applicable amount set
forth opposite such date:
---------------------------------------------------------------------
Maximum
Four Quarter Period Ending (on or about) Capital Expenditures
---------------------------------------------------------------------
January 31, 2003 $22,000,000
January 31, 2004 $14,000,000
January 31, 2005 $14,000,000
October 31, 2005 $14,000,000
---------------------------------------------------------------------
To the extent that actual Capital Expenditures made or incurred by the Loan
Parties are less than the maximum amount set forth above for any applicable
four-quarter period, the maximum permitted Capital Expenditure amount for the
succeeding four-quarter period shall be increased by such unused amount up to an
aggregate amount equal to fifty percent (50%) of such maximum permitted amount
for the preceding four quarter period.
64
Section 5.12. Merger and Dispositions of Assets; Release of Liens; Use of
Certain Proceeds. None of the Loan Parties will become a party to any merger or
consolidation, and none of the Loan Parties will sell, sell and lease back,
lease, sublease or otherwise dispose of any of its assets or interests therein;
provided, however, that so long as immediately prior to and after giving effect
thereto no Default exists:
(a) the Loan Parties may consummate Excluded Asset Sales;
(b) the Loan Parties may consummate Permitted Real Estate Sales;
provided, however, that the Excess Cash Proceeds from any such Permitted Real
Estate Sale shall be applied to prepay the Term Loans to the extent provided in
Section 4.1(c) hereof;
(c) with the consent of the Agent which shall not be unreasonably
withheld or delayed, any Loan Party or Subsidiary may merge or consolidate with
or into another Loan Party or Subsidiary;
(d) the Loan Parties may sell or dispose of any parcel of Excess Real
Property; provided, however, that:
(i) each applicable municipal authority exercising
jurisdiction over the parcel of Excess Real Property has approved a lot
split ordinance or other applicable action under local law dividing the
parcel of Excess Real Property from the remainder of the property
subject to any of the Mortgages and assigning separate tax
identification numbers to each;
(ii) no part of the remaining real property subject to any of
the Mortgages shall be part of a tax lot affecting any portion of the
parcel of Excess Real Property;
(iii) all requirements under all laws, statutes, rules and
regulations (including, without limitation, all zoning and subdivision
laws, setback requirements, sideline requirements, parking ratio
requirements, use requirements and building and fire code requirements)
applicable to the property subject to any of the Mortgages necessary to
accomplish the lot split shall have been fulfilled;
(iv) as a result of the lot split, the remaining property
subject to any of the Mortgages will not be in violation of any
applicable law, statute, rule or regulation (including, without
limitation, all zoning and subdivision laws, setback requirements,
sideline requirements, parking ratio requirements, use requirements and
building and fire code requirements) and all necessary variances, if
any, shall have been obtained;
(v) appropriate reciprocal easement agreements for the benefit
and burden of the remaining property subject to any of the Mortgages
and the parcel of Excess Real Property regarding the use of common
facilities of such parcels, including, but not limited to, open areas,
ski lifts, ski trails, roadways, parking areas, utilities, snowmaking
facilities and community facilities by the occupants of the remaining
property subject to any of the Mortgages and the parcel of Excess Real
Property, in a form and substance reasonably acceptable to Agent shall
be declared and recorded;
65
(vi) BCS Holdings shall have delivered to Agent one or more
endorsements to the title insurance policies insuring the Lien of the
applicable Mortgage or such other evidence reasonably acceptable to the
Agent insuring that, after giving effect to such release, the title
insurance policies insuring the Lien of the applicable Mortgage are in
full force and effect and unaffected by such release;
(vii) Each of the Loan Parties with an interest in such Excess
Real Property shall execute such documents and instruments as Agent
shall reasonably require in connection with the foregoing; and
(viii) the aggregate consideration received from the sale of
Excess Real Property in any fiscal year shall not exceed $5,000,000.
provided, further, that the Agent may consent to a waiver of any of the
requirements listed in clauses (i) through (viii) above in its
reasonable judgment.
(e) the Loan Parties may consummate sales or other transfers of real
estate by TLC to TLH in accordance with the terms of the First Northstar
Purchase Agreement; and
(f) the Loan Parties may, as lessor, enter into commercial leases in
the ordinary course of business of the Loan Parties.
Upon the transfer of any parcel of the Excess Real Property or upon any
Permitted Real Estate Sale or Excluded Asset Sale, and upon the request of any
such Loan Party, so long as there is no Default, the Lenders shall release all
Liens under the Mortgages or Security Agreements to which such asset is subject,
provided that the Loan Parties shall reimburse the Lenders for any costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) they incur arising in connection the subordination of any Lien,
transfer of the asset and any release of such asset from the Lien of the
Mortgages or the Security Agreements. Upon the lease of any property pursuant to
Exhibit O of the NMP Operating Agreement, the Lenders shall subordinate such
Liens to such lease.
Section 5.13. Subsidiaries. Each of the Loan Parties shall have no
Subsidiaries other than (a) as set forth on Schedule 6.1(a) and (b) domestic
Subsidiaries formed after the Restatement Date so long as the following
conditions are satisfied: (i) the Agent has reviewed and approved charter
documents, by-laws and other instruments relating to the formation of such
Subsidiary; (ii) such Subsidiary has joined in this Agreement, jointly and
severally, as a borrower, or has executed an unlimited guaranty of all Lender
Obligations, each on terms and conditions acceptable to the Agent; (iii) all of
the issued and outstanding capital stock of such Subsidiary has been pledged to
the Agent to secure the Lender Obligations pursuant to the Security Agreements;
(iv) the Subsidiary has granted to the Agent a mortgage of and security interest
in all of its assets pursuant to mortgages and security agreements on terms and
conditions acceptable to Agent; (v) an opinion or opinions of counsel to such
Subsidiary covering such matters as the Agent may reasonably request has been
provided to the Agent; and (vi) the Loan Parties have executed and delivered to
the Agent of such other documents, certificates and opinions as the Agent may
reasonably request.
66
Section 5.14. ERISA. Each of the Loan Parties and their respective
Subsidiaries will meet, and will cause all Control Group Persons to meet, all
minimum funding requirements applicable to them with respect to any Plan
pursuant to Section 302 of ERISA or Section 412 of the Code, without giving
effect to any waivers of such requirements or extensions of the related
amortization periods which may be granted. Each of the Loan Parties and their
respective Subsidiaries will comply, and will cause all Control Group Persons to
comply, in all material respects, with the provisions of ERISA and the Code
applicable to each Plan. At no time shall the Accumulated Plan Benefit
Obligations under any Plan that is not a Multiemployer Plan exceed the fair
market value of the assets of such Plan allocable to such benefits by more than
$250,000.
Section 5.15. Transactions with Affiliates. No Loan Party shall effect any
transaction with any of its Affiliates, other than as permitted by Section 5.18
and other than the transactions between or among TLC, TLH and/or NMP or their
respective Affiliates pursuant to the NMP Transaction Agreements and the
agreements entered into in connection with the NMP Transaction Agreements on a
basis less favorable to such Loan Party than would be the case if such
transaction had been effected with a non-Affiliate.
Section 5.16. Environmental Cleanup. The Loan Parties will develop a
written action plan addressing those items listed on Schedule 5.16 which if not
addressed would result in a Material Adverse Change, and submit such action plan
to the Agent on or before July 1, 2002, such action plan to be reasonably
acceptable to the Agent.
Section 5.17. Cash Concentration. The Loan Parties shall maintain cash
management system accounts with the Agent (the "Cash Management System") at all
times prior to the Final Maturity Date. The Cash Management System shall include
all accounts of the Loan Parties except certain nonmaterial and trust accounts
excluded from the Cash Management System with the prior consent of the Agent,
such consent not to be unreasonably withheld. The Cash Management System shall
include an automatic weekly transfer to accounts maintained with the Agent, of
all positive balances in any deposit or other cash account included in the Cash
Management System.
67
Section 5.18. Permitted Management Fees. So long as before and after giving
effect thereto no Default exists, the Loan Parties may pay management fees in an
amount not to exceed $350,000 in any fiscal year.
Section 5.19. Letters of Credit at Annual Clean-up. At all times during any
Designated Cleanup Period the accounts of the Loan Parties maintained with the
Agent, excluding any interest account maintained for the Senior Unsecured Notes,
shall have an aggregate balance that exceeds the aggregate amount of Letter of
Credit Exposure with respect to all of the Letters of Credit previously issued
and not yet canceled or expired at such time.
Section 5.20. Use of Equipment. The Loan Parties shall provide the Agent
with 30 days' prior written notice before any Loan Party removes, relocates or
maintains any material tangible personal property (other than property sold or
otherwise transferred pursuant to Section 5.12) on property other than the
Resorts.
Section 5.21. NMP. Neither TLH nor TLC will enter into, approve, consent to
or otherwise acquiesce in any material amendment or modification of any of the
NMP Transaction Agreements, except the NMP Non-Residential Property Agreement
(but only to the extent that such amendment or modification does not have a
material impact on the business, assets, financial condition or income of TLC),
without the prior written consent of Agent which (a) shall not be unreasonably
conditioned, withheld or delayed prior to an Event of Default and (b) thereafter
shall be in the sole and absolute discretion of Agent. Neither TLH nor TLC shall
waive any of their respective material rights or grant any material consent
requested or permitted under the NMP Transaction Agreements (other than the NMP
Operating Agreement and the NMP Non-Residential Property Agreement) without the
prior written consent of Agent which (i) shall not be unreasonably conditioned,
withheld or delayed prior to an Event of Default and (ii) thereafter shall be in
the sole and absolute discretion of Agent.
Section 5.22. No Impairment of Cross-Streaming, Upstreaming, Downstreaming
or Liens. The Loan Parties shall not, and shall not cause or permit any
Subsidiary thereof to, directly or indirectly, enter into or become bound by any
agreement, instrument, indenture or other obligation (other than the Lender
Agreements) which could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to (a) the payment of dividends or
distributions or the making of intercompany loans or investments by, between or
among the Loan Parties and any of their Subsidiaries or stockholders or (b) the
creation of a lien in favor of the Agent, on behalf of itself and the Lenders,
as additional collateral for the Lender Obligations, on the properties or other
assets of the Loan Parties or such Subsidiary (except for (i) customary
restrictions against liens on, and assignments of, assets leased and assets
subject to purchase money financing permitted hereunder (ii) prohibitions or
restrictions under applicable law, (iii) customary net worth provisions or
restrictions on cash or other deposits contained in leases and other agreements
entered into in the ordinary course of business), (iv) customary prohibitions or
restrictions with respect to the distribution or disposition of, or creation of
a Lien on, assets or property pursuant to agreements entered into in the
ordinary course of business for the sale of such assets or property and (v) any
such restrictions contained in the Senior Indenture or any agreement listed on
Schedule 5.22 or any agreement or instrument that replaces or refinances any
agreement listed on Schedule 5.22 which contains similar restrictions.
68
Section 5.23. Adjusted Incurred Real Estate Costs. The Loan Parties hereby
agree that they will make or commit to make Capital Expenditures in their
businesses in an aggregate amount equal to Net Cash Proceeds arising from
Permitted Real Estate Sales, or such greater amount if required under the Senior
Indenture in connection with such Permitted Real Estate Sales, within 180 days
of the date of receipt of Net Cash Proceeds giving rise thereto.
Section 5.24. Loon Appraisal. Within Sixty (60) days after the Closing
Date, the Loan Parties will deliver to the Agent an updated Appraisal on the
assets and business of Loon prepared by ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇, Inc. demonstrating an
appraised value of not less than $20,000,000 and in form and substance
satisfactory to the Agent.
Section 5.25. Miscellaneous Real Estate Documentation. On or before July 1,
2002, the Loan Parties shall provide to the Agent the real estate related
documentation set forth on Schedule 5.25 hereto with respect to the Property
owned by each of Loon, TLC, Sierra-at-Tahoe and Ski Lifts in form and substance
satisfactory to the Agent.
Section 5.26. Booth Creek Ski Acquisition. Booth Creek Ski Acquisition
shall have no assets nor conduct any business unless the conditions set forth in
Section 5.13(b) are satisfied.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to extend credit to the Loan Parties
hereunder, the Loan Parties represent and warrant that:
Section 6.1. Organization and Business.
(a) The Loan Parties. Each of BCS Holdings, BCS Acquisition,
Sierra-at-Tahoe, Bear Mountain, Waterville, Cranmore, DRE and LMRC Holding is a
duly organized and validly existing corporation or limited liability company, as
the case may be, in good standing, under the laws of the State of Delaware, TLC
is a duly organized and validly existing corporation, in good standing, under
the laws of the State of California, Ski Lifts is a duly organized and validly
existing corporation, in good standing, under the laws of the State of
Washington, and each of Loon and Loon Realty is a duly organized and validly
existing corporation, in good standing, under the laws of the State of New
Hampshire, each with all power and authority, corporate or otherwise, necessary
to (i) enter into and perform each of this Agreement and other Lender Agreements
to which it is party, (ii) grant the Lenders the security interests in the
Credit Security owned by it to secure the Lender Obligations as applicable and
(iii) own its properties and carry on the business now conducted by it. Each of
the Loan Parties has taken all corporate or other action required to execute,
deliver and perform each of this Agreement and other Lender Agreements to which
it is party. Certified copies of the Charter, certificate of formation or
limited liability company agreement, as applicable, and By-laws or operating
agreement, as applicable, of each of the Loan Parties have been previously
delivered to the Agent and are correct and complete. Schedule 6.1(a) as from
time to time hereafter supplemented in accordance with Section 5.4(a) or
otherwise by written notice to the Lenders, sets forth (a) the exact name and
taxpayer identification number of each Loan Party and its Subsidiaries as such
name appears on the organizational or formation documents of such entity, (b)
the jurisdiction of incorporation or organization of each Loan Party and its
Subsidiaries, (c) the principal place of business of each Loan Party and its
Subsidiaries' as of the date hereof and at any time within the past five (5)
years and (d) the name under which each of the Loan Parties and Subsidiaries
conducts its business and the jurisdictions in which the name is used.
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(b) Qualification. As set forth on Schedule 6.1(b) hereto, each of the
Loan Parties is duly and legally qualified to do business as a foreign
corporation and is in good standing in each state or jurisdiction in which such
qualification is required and is duly authorized, qualified and licensed under
all laws, regulations, ordinances or orders of public authorities, or otherwise,
to carry on its business in the places and in the manner in which it is
conducted, except for failures to be so qualified, authorized or licensed which
would not in the aggregate result, or pose a material risk of resulting, in any
Material Adverse Change.
Section 6.2. Financial Statements and Other Information. The Loan Parties
have previously furnished to the Lenders copies of the Consolidated and
Consolidating balance sheets of the Loan Parties as at November 2, 2001 and
February 1, 2002 and Consolidated and Consolidating statements of operations,
changes in shareholders' equity and cash flows of the Loan Parties for the
periods then ended. The Consolidated and Consolidating financial statements
(including the notes thereto, subject, in the case of any unaudited financial
statements, to the absence of footnote disclosure and normal year-end and audit
adjustments) referred to above were prepared in accordance with GAAP and fairly
present, in all material respects, the financial position of the Persons covered
thereby at the respective dates thereof and the results of their operations for
the periods covered thereby. No Loan Party or any Subsidiary has any known
material contingent liability, which would have been required to be disclosed in
accordance with GAAP, and which is not reflected in the most recent balance
sheet referred to above or the notes thereto.
Section 6.3. Changes in Condition. Since November 2, 2001, no Material
Adverse Change has occurred, and the Loan Parties have not entered into any
material transaction outside the ordinary course of business except for the
transactions permitted by this Agreement and except as listed on Schedule 6.3
hereto.
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Section 6.4. Agreements Relating to Financing Debt, Investments, etc.
Schedule 6.4, as from time to time hereafter supplemented in accordance with
Section 5.4(a) or otherwise by written notice to the Lenders, sets forth (a) the
amounts (as of the dates indicated in Schedule 6.4, as so supplemented) of all
Financing Debt of the Loan Parties and all agreements which relate to such
Financing Debt, (b) all Liens and Guarantees with respect to such Financing Debt
and (c) all agreements which directly or indirectly require the Loan Parties to
make any Investment. The Loan Parties have furnished the Agent with correct and
complete copies of any agreements described in clauses (a), (b) and (c) above
requested by the Lenders.
Section 6.5. Title to Assets. The Loan Parties and their Subsidiaries have
good and marketable title to, or a valid and enforceable leasehold interest in,
all assets necessary for or material in the operations of their respective
businesses as now conducted by them and reflected in the most recent balance
sheet referred to in Section 6.2 (or the balance sheet most recently furnished
to the Lenders pursuant to Sections 5.4(a) through 5.4(c) or otherwise by
written notice to the Lenders), and to all material assets acquired subsequent
to the date of such balance sheet, subject to no Liens except for those
permitted by Section 5.8 and except for assets disposed of as permitted by
Section 5.12. All such assets are located on property owned, leased or licensed
by a Loan Party or for which a Loan Party has an easement, other than assets in
transit to any such location.
Section 6.6. Licenses, etc. The Loan Parties have all material patents,
patent applications, patent licenses, patent rights, trademarks, trademark
rights, trade names, trade name rights, copyrights, licenses, franchises,
permits, authorizations and other rights as are necessary for the conduct of
their business as now conducted by them. All of the foregoing are in full force
and effect, and the Loan Parties are in substantial compliance with the
foregoing without any known conflict with the valid rights of others which has
resulted, or poses a material risk of resulting, in any Material Adverse Change.
No event has occurred which permits, or after notice or lapse of time or both
would permit, the revocation or termination of any such license, franchise or
other right or affect the rights of the Loan Parties thereunder so as to result
in any Material Adverse Change. There is no litigation or other proceeding or
dispute with respect to the validity or, where applicable, the extension or
renewal, of any of the foregoing which has resulted, or poses a material risk of
resulting, in any Material Adverse Change.
Section 6.7. Litigation. Except as described on Schedule 6.7, no
litigation, at law or in equity, or in any proceeding before any court, board or
other governmental or administrative agency or any arbitrator is pending or, to
the knowledge of the Loan Parties or their Subsidiaries, threatened which may
involve any material risk of any final judgment, order or liability which, after
giving effect to any applicable insurance, has resulted, or poses a material
risk of resulting, in any Material Adverse Change or which seeks to enjoin the
consummation, or which questions the validity, or any of the transactions
contemplated by this Agreement or any other Lender Agreement. Except as
described on Schedule 6.7, no judgment, decree or order of any court, board or
other governmental or administrative agency or any arbitrator has been issued or
binds the Loan Parties or any Subsidiary which has resulted, or poses a material
risk of resulting, in any Material Adverse Change.
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Section 6.8. Tax Returns. The Loan Parties and their Subsidiaries have
filed all material tax and information returns which are required to be filed by
them and have paid, or made adequate provision for the payment of, all taxes
which have or may become due pursuant to such returns or to any assessment
received by them other than taxes being contested in good faith by appropriate
proceedings. The Loan Parties know of no material additional assessments or any
basis therefor. The Loan Parties reasonably believe that the charges, accruals
and reserves on the books of the Loan Parties and their Subsidiaries in respect
of taxes or other governmental charges are adequate.
Section 6.9. No Legal Obstacle to Agreements. Neither the execution and
delivery of this Agreement or any other Lender Agreement, nor the making of any
borrowings hereunder, nor the securing of the Lender Obligations with the Credit
Security, nor the consummation of any transaction referred to in or contemplated
by this Agreement or any other Lender Agreement, nor the fulfillment of the
terms hereof or thereof or of any other agreement, instrument, deed or lease
referred to in this Agreement or any other Lender Agreement, has constituted or
resulted in or will constitute or result in:
(a) any breach or termination of the provisions of any agreement,
instrument, deed or lease to which any Loan Party or any Subsidiary is a party
or by which it is bound, or of the charter or by-laws of any of the Loan
Parties;
(b) the violation of any law, statute, judgment, decree or governmental
order, rule or regulation applicable to any Loan Party or any Subsidiary;
(c) the creation under any agreement, instrument, deed or lease of any
Lien (other than Liens on the Credit Security which secure the Lender
Obligations) upon any of the assets of the Loan Parties; or
(d) any redemption, retirement or other repurchase obligation of the
Loan Parties under any charter, by-law, agreement, instrument, deed or lease.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person is required to
be obtained or made by the Loan Parties in connection with the execution,
delivery and performance of this Agreement, the Notes or any other Lender
Agreement, the transactions contemplated hereby or thereby or the making of any
borrowing hereunder which has not been obtained or made prior to the Restatement
Date, or which, if not obtained, does not result, or pose a material risk of
resulting, in any Material Adverse Change.
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Section 6.10. Defaults. None of the Loan Parties or any Subsidiary is in
default under any provision of its charter, certificate of formation or limited
liability company agreement, as applicable, or By-laws or operating agreement,
as applicable, or of this Agreement or any other Lender Agreement. None of the
Loan Parties or any Subsidiary is in default under any provision of any
agreement, instrument, deed or lease to which it is party or by which it or its
property is bound, or has violated any law, judgment, decree or governmental
order, rule or regulation, so as to result, or pose a material risk of
resulting, in any Material Adverse Change.
Section 6.11. Certain Business Representations
(a) Environmental Compliance.
(i) Except as set forth in Schedule 6.11, each of the Loan
Parties and their Subsidiaries is in compliance in all material
respects with the applicable provisions of the Clean Air Act, the
Federal Water Pollution Control Act, the Resource Conservation and
Recovery Act of 1976, the Comprehensive Environmental Response,
Compensation and Liability Act and any similar state or local statute
or regulation in effect in any jurisdiction in which any properties of
the Loan Parties or any Subsidiary are located, and with all applicable
published rules and regulations of the United States Environmental
Protection Agency and of any similar state agencies, other than those
which in the aggregate could not reasonably be expected to result in a
Material Adverse Change.
(ii) Except as set forth on Schedule 6.11, no suit, claim,
action or proceeding, of which any of the Loan Parties have been given
written notice or otherwise have actual knowledge, is now pending
before any court, governmental agency or board, or to the Loan Parties'
knowledge, threatened by any Person (nor to the Loan Parties'
knowledge, does any factual basis exist therefor) for, and none of the
Loan Parties nor any of their Subsidiaries has received written
correspondence from any federal, state or local governmental authority
with respect to, in each case excepting items as would not reasonably
be expected to result in a Material Adverse Change:
(A) currently alleged noncompliance by any of the
Loan Parties or Subsidiaries with any such environmental law,
rule or regulation which could result in a Material Adverse
Change,
(B) personal injury, wrongful death or other
tortious conduct relating to materials, commodities or
products used, generated, sold, transferred or manufactured by
any of the Loan Parties or their Subsidiaries (including but
not limited to products made of, containing or incorporating
asbestos, lead or other hazardous materials, commodities or
toxic substances), or
(C) the release into the environment by any of the
Loan Parties or their Subsidiaries of any Hazardous Material
generated by the Loan Parties or any of their Subsidiaries
whether or not occurring at or on a site owned, leased or
operated by any of the Loan Parties or their Subsidiaries.
(iii) To the best of the Loan Parties' knowledge, none of the
properties owned or leased by any of the Loan Parties or their
Subsidiaries has been used as a treatment, storage or disposal site.
(iv) To the best of any of the Loan Parties' knowledge, no
Hazardous Material is present in any real property currently or
formerly owned or operated by any of the Loan Parties or their
Subsidiaries except that which could not reasonably be expected to
result in a Material Adverse Change.
(b) Burdensome Obligations. None of the Loan Parties is party to or
bound by any agreement, instrument, deed or lease and is not subject to any
charter, by-law or other restriction which, in the opinion of the management of
the Loan Parties, is so unusual or burdensome as in the foreseeable future to
result, or pose a material risk of resulting, in a Material Adverse Change.
(c) Future Expenditures. The Loan Parties do not anticipate that future
expenditures, if any, by the Loan Parties needed to meet the provisions of any
then existing federal, state or foreign governmental statutes, orders, rules or
regulations will be so burdensome as to result, or pose a material risk of
resulting, in any Material Adverse Change.
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Section 6.12. Pension Plans. None of the Loan Parties or any Subsidiary has
any Plan in effect as of the date hereof, except for Plans disclosed in the
Annual Report of Form 10-K of BCS Holdings for its fiscal year ended November 2,
2001, and are in compliance with Section 5.14. Neither any of the Loan Parties
nor any Subsidiary has any liability (contingent or otherwise) under Title IV of
ERISA or under Section 412 of the Code nor is any of the Loan Parties or any
Subsidiary currently a participant in a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA).
Section 6.13. Disclosure. Neither this Agreement nor any other Lender
Agreement to be furnished to the Lenders by or on behalf of any of the Loan
Parties or any Subsidiary in connection with the transactions contemplated
hereby or by such Lender Agreement contains any untrue statement of material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein (taken together) not misleading in light of the
circumstances under which they were made. No fact is actually known to any of
the Loan Parties which has resulted, or in the future (so far as any of the Loan
Parties can reasonably foresee) will result in any Material Adverse Change,
except to the extent that present or future general economic conditions may
result in a Material Adverse Change.
Section 6.14. NMP. The Loan Parties hereby represent and warrant that (i)
they have delivered to the Agent true, correct and complete copies of the NMP
Transaction Agreements, (ii) the NMP Transaction Agreements have been duly
executed and delivered by the parties thereto and constitute the legal, valid
and binding obligations of the parties thereto and are enforceable in accordance
with their terms, and (iii) as of the date hereof, there are no agreements,
understandings, commitments or undertakings between any of the Loan Parties, on
the one hand, and any of East West, EWRD V, NMP or any of their Affiliates, on
the other hand, except for the NMP Transaction Agreements and the agreements
executed in connection therewith. The Loan Parties further represent and warrant
that the NMP Resort Right of First Offer Agreement referred to in Section 13.8
of the NMP Operating Agreement and the Ten Year Option Agreement referred to in
the Second NMP Purchase Agreement have not been executed and are not binding
upon the Loan Parties and covenant that the agreements referred to in this
sentence shall not be executed without the prior written consent of the Agent
and Lenders, which consent may be withheld in the sole and absolute discretion
of the Agent and Lenders.
Section 6.15. Valid and Binding Obligations. This Agreement, the Revolving
Credit Notes, the Term Notes and all the other Lender Agreements executed in
connection herewith and therewith constitute, or will constitute when delivered,
the valid and binding obligations of the Loan Parties and its Subsidiaries, as
the case may be, enforceable in accordance with their respective terms, except
as the enforceability thereof may be subject to bankruptcy, insolvency,
moratorium and other laws affecting the rights and remedies of creditors and
secured parties and to the exercise of judicial discretion in accordance with
general equitable principles.
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Section 6.16. Other Agreements. Neither the Loan Parties nor any Subsidiary
is a party to any indenture, loan or credit agreement, or any lease or other
agreement or instrument, or subject to any charter or corporate restriction,
which restricts the ability of the Loan Parties or any Subsidiary to carry out
any of the provisions of this Agreement, the Revolving Credit Notes, the Term
Notes or any of the Lender Agreements executed in connection herewith and
therewith.
Section 6.17. Stock. There are presently issued by the Loan Parties and
their Subsidiaries and outstanding the shares of Stock indicated on Schedule
6.17. The Loan Parties and their Subsidiaries have received the consideration
for which such Stock was authorized to be issued and have otherwise complied
with all legal requirements relating to the authorization and issuance of shares
of stock and all such shares are validly issued, fully paid and non-assessable.
The Loan Parties and their Subsidiaries have no other Stock of any class
outstanding.
Section 6.18. Governmental Regulations. None of the Loan Parties, any
Subsidiary or any Affiliate of the Loan Parties is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940, or is engaged in a business or activity subject
to any statute or regulation which regulates the incurring by the Loan Parties
of indebtedness for borrowed money, including statutes or regulations relating
to the sale of electricity, gas, steam, water, telephone or telegraph or other
public utility services.
Section 6.19. Margin Stock. Neither any of the Loan Parties nor any
Subsidiary owns any "Margin Stock" nor is any of the Loan Parties or any
Subsidiary engaged principally or as one of its important activities in
extending credit which is used for the purpose of purchasing or carrying Margin
Stock.
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Section 6.20. Solvency. Both before and after giving effect to (a) the
Loans and Letters of Credit to be made or extended on the Closing Date or such
other date as Loans and Letters of Credit requested hereunder are made or
extended, (b) the disbursement and application of the proceeds of such Loans and
(c) the payment and accrual of all transaction costs in connection with the
foregoing, each Loan Party is Solvent.
Section 6.21. Senior Indenture. The execution of this Agreement by the Loan
Parties, the incurrence of Indebtedness by the Borrowers hereunder and under the
Revolving Credit Notes and the Term Notes, the creation of the Liens under the
Lender Agreements and the application of proceeds from the sale of assets
provided under Sections 4.1 and 5.12 hereof do not and will not result in a
default or event of default under the Senior Indenture. Without limiting the
generality of the foregoing:
(a) This Amended and Restated Credit Agreement, together with the
Revolving Credit Notes, the Term Notes, the Mortgages, the Security Agreements
and all other Lender Agreements related thereto constitute the Senior Credit
Facility.
(b) Indebtedness of the Borrowers with respect to the Revolving Credit
Advances is and all times shall be "Permitted Indebtedness" (as defined in the
Senior Indenture) pursuant to the provisions of clause (i) of the definition
thereof, and as of the Restatement Date there has been no permanent reduction of
commitments to extend credit under the Senior Credit Facility provided under the
Senior Indenture.
(c) Indebtedness of the Borrowers with respect to the Term Loans has
been incurred by the Borrowers in compliance with the provisions of Section 4.06
of the Senior Indenture by reason of (i) after giving effect to the incurrence
of such Indebtedness, the receipt of the proceeds thereof and the application of
the proceeds of the Term Loans as of any such date of issuance to repurchase and
retire a portion of the principal amount of the Senior Unsecured Notes or to
repay the ASC Subordinated Note, the ratio of BCS Holdings' EBITDA (as defined
in the Senior Indenture) to BCS Holdings' Consolidated Interest Expense (as
defined in the Senior Indenture and determined on a pro forma basis for the most
recent period of four fiscal quarters of BCS Holdings (for which financial
statements are available) (the "Specified Period"), is greater than 2.0 to 1
(the "Coverage Ratio") and (ii) no Default or Event of Default under the Senior
Indenture has occurred and is continuing as of any such date of incurrence. The
calculation of the Coverage Ratio for the Specified Period was made in
accordance with the terms of the Senior Indenture.
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(d) The Liens securing the Lender Obligations created under the Lender
Agreements constitute "Permitted Liens" (as defined in the Senior Indenture).
Section 6.22. Adjusted Incurred Real Estate Costs. As of February 1, 2002,
the Adjusted Incurred Real Estate Costs were approximately $250,000.
Section 6.23. Forest Service Permits. The Loan Parties hold certain rights
under and by virtue of the Term Special Use Permits issued to the applicable
Loan Party by the Forest Service of the United States Department of Agriculture
(the "Forest Service") listed on Schedule 6.23 hereto (individually a "Forest
Service Permit" and collectively the "Forest Service Permits"). The Loan Parties
have not received any written notices of default, intent to terminate or intent
to not renew from the Forest Service with respect to any of the Forest Service
Permits nor is any Loan Party aware of any default by either Loan Parties or the
Forest Service with respect to the Forest Service Permits.
Section 6.24. Booth Creek Ski Acquisition. As of the Restatement Date,
Booth Creek Ski Acquisition has no assets and conducts no business.
ARTICLE 7. EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. The following events are referred to as
"Events of Default":
(a) Any of the Borrowers shall fail to make any payment in respect of:
(i) interest or any fee on or in respect of any of the Lender Obligations owed
by them as the same shall become due and payable, and such failure shall
continue for a period of five (5) Business Days, or (ii) principal of any of the
Lender Obligations owed by them as the same shall become due, whether at
maturity or by acceleration or otherwise.
(b) Any of the Loan Parties shall fail to perform or observe any of the
provisions of Sections 5.5 through 5.21.
(c) Any of the Loan Parties or any of their Subsidiaries or any of
their respective Affiliates party to any Lender Agreement shall fail to perform
or observe any other covenant, agreement or provision to be performed or
observed by them under this Agreement or any other Lender Agreement after giving
effect to the applicable grace period and such failure shall not be rectified or
cured to the written satisfaction of the Majority Lenders within 30 days after
notice thereof by the Agent to any of the Loan Parties.
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(d) Any representation or warranty of or with respect to any of the
Loan Parties, any Subsidiary or any of their respective Affiliates party to any
Lender Agreement made to the Lenders in, pursuant to or in connection with this
Agreement or any other Lender Agreement shall prove to have been false in any
material respect upon the date when made and the condition, transaction or event
which causes such representation or warranty to be false has had a Material
Adverse Change.
(e) Any of the Loan Parties or any of their Subsidiaries or BCS Group
shall fail to make any payment when due (after giving effect to any applicable
grace periods) in respect of any Financing Debt the principal amount of which
exceeds $2,000,000 (other than the Lender Obligations);
(f) any of the Loan Parties or any Subsidiary or BCS Group shall fail
to perform or observe the terms of any agreement relating to such Financing
Debt, and such failure or condition shall continue, without having been duly
cured, waived or consented to, beyond the period of grace, if any, specified in
such agreement or, if such Financing Debt is in respect of the notes issued
under the Securities Purchase Agreements for 30 days or longer beyond the period
of grace, if any, specified in such Securities Purchase Agreements;
(g) any such Financing Debt of any of the Loan Parties or any
Subsidiary or BCS Group shall be accelerated or become due or payable prior to
its stated maturity for any reason whatsoever (other than voluntary prepayments
thereof);
(h) any Lien on any property of any of the Loan Parties or any
Subsidiary securing any such Financing Debt shall be enforced by foreclosure or
similar action; or
(i) any holder of any such Financing Debt shall exercise any right of
rescission with respect to the issuance thereof.
(j) Except as permitted by Section 5.12, any of the Loan Parties shall
cease to own, directly or indirectly, all the capital stock of any of their
Subsidiaries.
(k) Any Lender Agreement shall cease, for any reason (other than the
scheduled termination thereof in accordance with its terms), to be in full force
and effect, or any of the Loan Parties, any Subsidiary or any of their
respective Affiliates party thereto shall so assert, or the security interests
created by this Agreement and the other Lender Agreements shall cease to be
enforceable and of the same effect and priority purported to be created hereby.
(l) A final judgment which, with other outstanding final judgments
against any of the Loan Parties and their Subsidiaries, exceeds an aggregate of
$2,000,000 (after consideration of applicable insurance proceeds) shall be
rendered against any of the Loan Parties or any of their Subsidiaries or
Affiliates party to any Lender Agreement and if, within 60 days after entry
thereof, such judgment shall not have been discharged or execution thereof
stayed pending appeal, or if, within 60 days after the expiration of any such
stay, such judgment shall not have been discharged.
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(m) Any of the Loan Parties, any Subsidiary or any of their respective
Affiliates obligated with respect to any Lender Obligation shall:
(i) commence a voluntary case under the Bankruptcy Code or
authorize, by appropriate proceedings of its board of directors or
other governing body, the commencement of such a voluntary case;
(ii) have filed against it a petition commencing an
involuntary case under the Bankruptcy Code which shall not have been
dismissed within 60 days after the date on which such petition is
filed; or file an answer or other pleading within such 60-day period
admitting or failing to deny the material allegations of such a
petition or seeking, consenting to or acquiescing in the relief therein
provided;
(iii) have entered against it an order for relief in any
involuntary case commenced under the Bankruptcy Code;
(iv) seek relief as a debtor under any applicable law, other
than the Bankruptcy Code, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors, or consent to or acquiesce in
such relief;
(v) have entered against it an order by a court of competent
jurisdiction (a) finding it to be bankrupt or insolvent, (b) ordering
or approving its liquidation, reorganization or any modification or
alteration of the rights of its creditors or (c) assuming custody of,
or appointing a receiver or other custodian for, all or a substantial
portion of its property; or
(vi) make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint, or consent to the
appointment of, or suffer to exist a receiver or other custodian for,
all or a substantial portion of its property.
(n) Any Control Group Person shall fail to pay when due amounts
aggregating in excess of $500,000 which it shall have become liable to pay to
the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate
a Material Plan shall be filed under Title IV of ERISA by any Control Group
Person or administrator; or the PBGC shall institute proceedings under Title IV
of ERISA to terminate or to cause a trustee to be appointed to administer any
Material Plan or a proceeding shall be instituted by a fiduciary of any Material
Plan against any Control Group Person to enforce Section 515 or 4219(c)(5) of
ERISA and such proceeding shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan must be
terminated.
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(o) BCS Group shall cease to own 100% of the capital stock of BCS
Holdings;
(p) the approval by the holders of capital stock of BCS Group of any
plan or proposal for the liquidation or dissolution of BCS Group;
(q) ▇▇▇▇ ▇▇▇▇▇▇▇ and its Affiliates (other than its portfolio
companies), CIBC WB Argosy Merchant Fund 2, L.L.C. and Co-Investment Merchant
Fund, LLC and their Affiliates (other than their portfolio companies) shall
cease to beneficially own (within the meaning of Rule 13d-3 under the Exchange
Act), directly or indirectly, voting stock (or non-voting stock convertible into
voting stock) representing, in the aggregate, at least 51% of the total voting
power of all voting stock of BCS Group;
(r) except for Permitted BCS Group Owners, any Person or group of
related persons for purposes of Section 13(d) of the Exchange Act (a "Group"),
together with any affiliates thereof, shall become the owner, directly or
indirectly, beneficially or of record, of voting stock representing more than
35% of the total voting power of all voting stock of BCS Group;
(s) the replacement of a majority of the Board of Directors of either
of BCS Group or BCS Holdings over a two-year period from the directors who
constituted the Board of Directors of BCS Group or BCS Holdings, respectively,
at the beginning of such period, and such replacement shall not have been
approved by a vote of at least two-thirds of the Board of Directors of BCS Group
or BCS Holdings, respectively, then still in office who either were members of
such Board of Directors at the beginning of such period or whose election as a
member of such Board of Directors was previously so approved; or
(t) the occurrence of any "Change of Control" as defined in the Senior
Indenture.
Section 7.2. Remedies. Upon the occurrence of an Event of Default, in each
and every case, the Agent may, and upon the request of the Majority Lenders,
shall proceed to protect and enforce the rights of the Agent and the Lenders by
suit in equity, action at law and/or other appropriate proceeding either for
specific performance of any covenant or condition contained in this Agreement or
any other Lender Agreement or in any instrument delivered to the Agent or the
Lenders pursuant hereto or thereto, or in aid of the exercise of any power
granted in this Agreement, any Lender Agreement or any such instrument, and
(unless there shall have occurred an Event of Default under Section 7.1(i), in
which case the unpaid balance of Lender Obligations shall automatically become
due and payable without notice or demand) by notice in writing to the Loan
Parties declare (a) the obligations of the Lenders to make Revolving Credit
Advances to be terminated, whereupon such obligations shall be terminated, and
(b) all or any part of the unpaid balance of the Lender Obligations then
outstanding to be forthwith due and payable, whereupon such unpaid balance or
part thereof shall become so due and payable without presentation, protest or
further demand or notice of any kind, all of which are hereby expressly waived,
and the Agent may proceed to enforce payment of such balance or part thereof in
such manner as the Agent may elect, and the Agent and each Lender may offset and
apply toward the payment of such balance or part thereof any Indebtedness of the
Agent or any Lender to the Loan Parties or to any Subsidiary, or to any obligor
of the Lender Obligations, including any Indebtedness represented by deposits in
any general or special account maintained with the Agent or any Lender or with
any other Person controlling, controlled by or under common control with the
Agent or any Lender.
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Section 7.3. Distribution of Proceeds. Notwithstanding anything to the
contrary contained herein, in the event that following the occurrence or during
the continuance of any Event of Default, the Agent or any Lender receives any
monies on account of the Lender Obligations from the Loan Parties or otherwise,
such monies shall be distributed for application as follows:
(a) First, to the payment of or the reimbursement of, the Agent for or
in respect of all costs, expenses, disbursements and losses which shall have
been incurred or sustained by the Agent in connection with the collection of
such monies by the Agent, or in connection with the exercise, protection or
enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent or the Lenders under this Agreement or any other Lender
Agreement;
(b) Second, to the payment of all interest, including interest on
overdue amounts, and late charges, then due and payable with respect to the
Loans, allocated among the Lenders in proportion to their respective Commitment
Percentages;
(c) Third, to the payment of the outstanding principal balance of the
Loans, allocated among the Lenders in proportion to their respective Commitment
Percentages;
(d) Fourth, to any other outstanding Lender Obligations, allocated
among the Lenders in proportion to their respective Commitment Percentages; and
(e) Fifth, the excess, if any, shall be returned to the Borrowers or to
such other Persons as are entitled thereto.
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ARTICLE 8. CONSENTS; AMENDMENTS; WAIVERS; REMEDIES
Section 8.1. Actions by Lenders. Except as otherwise expressly set forth in
any particular provision of this Agreement, any consent or approval required or
permitted by this Agreement to be given by the Lenders, including without
limitation under Section 8.2, may be given, and any term of this Agreement or of
any other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Loan Parties of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Borrowers and
the Majority Lenders; provided, however, that without the written consent of all
Lenders:
(a) no reduction in or waiver or forgiveness of the principal of,
accrued interest in the interest rates on or any fees relating to the Revolving
Credit Advances or the scheduled principal payments of the Term Loans shall be
made;
(b) no extension or postponement shall be made of the stated time of
payment of the scheduled payments of principal of, interest on, or fees payable
to the Lenders relating to the Revolving Credit Advances or the Term Loans;
(c) no increase in the Maximum Revolving Credit Amount, or extension of
the Revolving Credit Termination Date or the Term Loan Maturity Date shall be
made;
(d) no release of all or substantially all of the Credit Security for,
or any guarantor of, the Lender Obligations shall be made;
(e) no change in the definition of the term "Majority Lenders" shall be
made; and
(f) no change in the provisions of this Section 8.1 shall be made.
Any Lender that fails to perform its obligations under this Agreement (a
"Defaulting Lender") shall not have any right to consent to any amendment,
approval or waiver hereunder and such Defaulting Lender's consent shall not be
required in connection with any decision of the Majority Lenders. If, in
connection with any proposed amendment, modification, waiver or termination
requiring the consent of all Lenders, the consent of Majority Lenders is
obtained, but the consent of other Lenders whose consent is required is not
obtained, the Borrowers may, at their option, notify Agent and such
non-consenting Lender of their intention to replace such Lender. So long as no
Default or Event of Default has occurred and is continuing, the Borrowers, with
the consent of Agent, may obtain, at the Borrowers' expense, a replacement
Lender for the non-consenting Lender, which replacement Lender must be
reasonably satisfactory to the Agent. If the Borrowers obtain a replacement
Lender, the non-consenting Lender must sell and assign its interest in the Loans
and the Lender Agreements to such replacement Lender for an amount equal to the
principal balance of all Loans held by the non-consenting Lender and all accrued
interest and fees with respect thereto through the date of such sale; provided,
that the Borrowers shall have reimbursed such non-consenting Lender for the
additional amounts or increased costs that it is entitled to receive under this
Agreement through the date of such sale and assignment.
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Section 8.2. Actions by Loan Parties. No delay or omission on the Agent's
or the Lenders' part in exercising their rights and remedies against the Loan
Parties or any other interested party shall constitute a waiver. A breach by any
Loan Party of its obligations under this Agreement may be waived only by a
written waiver executed by the Agent and the Lenders in accordance with Section
8.1. The Agent's and any Lender's waiver of the Loan Parties' breach in one or
more instances shall not constitute or otherwise be an implicit waiver of
subsequent breaches. To the extent permitted by applicable law, the Loan Parties
hereby agree to waive, and do hereby absolutely and irrevocably waive (a) all
presentments, demands for performance, notices of protest and notices of
dishonor in connection with any of the Indebtedness evidenced by the Revolving
Credit Notes or the Term Notes, (b) any requirement of diligence or promptness
on the Agent's or the Lenders' part in the enforcement of its rights under the
provisions of this Agreement or any Lender Agreement, and (c) any and all
notices of every kind and description which may be required to be given by any
statute or rule of law with respect to its liability (i) under this Agreement or
in respect of the Indebtedness evidenced by the Revolving Credit Notes, the Term
Notes or any other Lender Obligation or (ii) under any other Lender Agreement.
No course of dealing between the Loan Parties and the Agent or the Lenders shall
operate as a waiver of any of the Agent's or the Lenders' rights under this
Agreement or any Lender Agreement or with respect to any of the Lender
Obligations. This Agreement shall be amended only by a written instrument
executed by the Agent and the Lenders in accordance with Section 8.1 making
explicit reference to this Agreement. The Agent's and the Lenders' rights and
remedies under this Agreement and under all subsequent agreements between the
Agent, the Lenders and the Loan Parties shall be cumulative and any rights and
remedies expressly set forth herein shall be in addition to, and not in
limitation of, any other rights and remedies which may be applicable to the
Agent and the Lenders in law or at equity.
ARTICLE 9. SUCCESSORS AND ASSIGNS
Section 9.1. General. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors (which
shall include in the case of the Agent or any Lender any entity resulting from a
merger or consolidation) and assigns, except that (a) the Borrowers may not
assign their rights or obligations under this Agreement, and (b) each Lender may
assign its rights in this Agreement only as set forth below in this Article 9.
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Section 9.2. Assignments.
(a) Assignments. In compliance with applicable laws with respect to
such assignment and with the consent of the Agent and, so long as no Default has
occurred and is continuing, the Loan Parties, which consents in all cases shall
not be unreasonably withheld), a Lender may assign to one or more financial
institutions (each a "Successor Lender") a proportionate part of its rights and
obligations in connection with this Agreement, its Revolving Credit Note and its
Term Note and the related Lender Agreements and each such Successor Lender shall
assume such rights and obligations pursuant to an Assignment and Acceptance
Agreement ("Assignment and Acceptance Agreement") duly executed by such
Successor Lender and such assigning Lender and acknowledged and consented to by
the Agent, substantially in the form of Exhibit F attached hereto. Any
assignment under this Section (a) shall be in a minimum amount of $7,500,000
with respect to the Term Loan, and a proportionate share of the Revolving Credit
Advances and Commitment Percentage of the Maximum Revolving Credit Amount. In
connection with any assignment under this Section 9.2(a) there shall be paid to
the Agent by the assigning Lender or the Successor Lender an administrative
processing fee in the amount of $3,500.
(b) Assignment Procedures. In the event of an assignment in accordance
with Section 9.2(a), upon execution and delivery of such an assignment at least
five (5) Business Days prior to the proposed assignment date, and payment by
such Successor Lender to the assigning Lender of an amount equal to the purchase
price agreed between such assigning Lender and such Successor Lender, such
Successor Lender shall become party to this Agreement as a signatory hereto and
shall have all the rights and obligations of a Lender under this Agreement and
the other Lender Agreements with an interest therein as set forth in such
assignment, and such assignor making such assignment shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any such
assignment, the assigning Lender, the Successor Lender and the Borrowers shall
make appropriate arrangements so that, if required, a new Revolving Credit Note
and a new Term Note are issued to the Successor Lender and a replacement
Revolving Credit Note and a replacement Term Note are issued to the assigning
Lender in principal amounts reflecting their respective revised interests.
(c) Register. The Agent shall maintain a register (the "Register") for
the recordation of (i) the names and addresses of all Successor Lenders that
enter into Assignment and Acceptance Agreements, (ii) the interests of each
Lender, and (iii) the amounts of the Term Loans and the Revolving Credit
Advances owing to each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrowers, the
Agent and the Lenders may treat each Person whose name is registered therein for
all purposes as a party to this Agreement. The Register shall be available for
inspection by the Borrowers or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
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(d) Further Assurances. The Loan Parties shall sign such documents and
take such other actions from time to time reasonably requested by the Agent or a
Lender to enable any Successor Lender to share in the benefits and rights
created by the Lender Agreements.
(e) Assignments to Federal Reserve Bank. Any Lender may at any time
pledge or assign all or any portion of its rights under the Lender Agreements,
including any portion of the Notes, to any of the twelve (12) Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section
341. No such pledge or assignment or enforcement thereof shall release such
Lender from its obligations under any of the Lender Agreements.
Section 9.3. Participations. Each Lender shall have the unrestricted right
at any time and from time to time, and without the consent of or notice to the
Loan Parties, to grant to one or more banks or other financial institutions
("Credit Participants") participating interests in such Lender's obligation to
lend hereunder and/or any or all of the Revolving Credit Advances and/or Term
Loans held by such Lender hereunder. In the event of any such grant by a Lender
of a participating interest to a Credit Participant, whether or not upon notice
to the Loan Parties, such Lender shall remain responsible for the performance of
its obligations hereunder and under all other Lender Agreements and the Loan
Parties shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations hereunder and under all
other Lender Agreements. A Lender may furnish any information concerning the
Loan Parties in its possession from time to time to prospective Credit
Participants, provided that such Lender shall require any such prospective
Credit Participant to agree in writing to maintain the confidentiality of such
information.
(a) Amount. Each such participation shall be in a minimum amount of at
least $5,000,000.
(b) Procedure. Each Lender granting such participation shall comply
with all applicable laws with respect to such transfer and shall retain the sole
right and responsibility to exercise its rights and to enforce the obligations
of the Loan Parties hereunder and under the other Lender Agreements, including
the right to consent to any amendment, modification or waiver of any provision
of any Lender Agreement, except for those matters referred to in Section 11.1
which require the consent of all Lenders and which may also require the consent
of each Credit Participant.
(c) Rights of Credit Participants. The Loan Parties agree that each
Credit Participant shall, to the extent provided in its participation
instrument, be entitled to the benefits of Sections 2.9, 2.10, 2.11, 2.13, 2.14
and 11.5, and the setoff rights in Section 7.2 with respect to its participating
interest; provided, however, that no Credit Participant shall be entitled to
receive any greater payment under such Sections than the Lender granting such
participation would have been entitled to receive with respect to the interests
transferred.
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(d) Notice. Prior to granting any participation, the Lender granting
such participation shall notify the Agent and the Borrowers.
ARTICLE 10. THE AGENT
Section 10.1. Authorization and Action. Each Lender hereby appoints and
authorizes the Agent to take such action on its behalf and to exercise such
powers under this Agreement and the other Lender Agreements as are delegated to
the Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement and the other Lender Agreements (including, without limitation,
enforcement or collection of the Revolving Credit Notes or the Term Notes), the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Majority
Lenders, and such instructions shall be binding upon all Lenders; provided,
however, that the Agent shall not be required to take any action which exposes
the Agent to liability or which is contrary to this Agreement or the other
Lender Agreements or applicable law. Subject to the foregoing provisions and to
the other provisions of this Article 10, the Agent shall, on behalf of the
Lenders: (a) execute any documents on behalf of the Lenders providing Credit
Security for or guarantees of the Lender Obligations; (b) hold and apply any
Credit Security for the Lender Obligations, and the proceeds thereof, at any
time received by it, in accordance with the provisions of this Agreement and the
other Lender Agreements; (c) exercise any and all rights, powers and remedies of
the Lenders under this Agreement or any of the other Lender Agreements,
including the giving of any consent or waiver or the entering into of any
amendment, subject to the provisions of Section 8.1; (d) at the direction of the
Lenders, execute, deliver and file UCC financing statements, mortgages, deeds of
trust, lease assignments and such other agreements in respect of any Credit
Security for the Lender Obligations, and possess instruments included in the
Credit Security on behalf of the Lenders; (e) in the event of acceleration of
the Borrowers' Indebtedness hereunder, act at the direction of the Majority
Lenders to exercise the rights of the Lenders hereunder and under the other
Lender Agreements and (f) to the extent that this Agreement or any other Lender
Agreement provides that the Agent has the right to consent to certain actions of
the Borrowers, have the right to give or withhold such consent without obtaining
written instructions from or the approval of any Lender.
Section 10.2. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Lenders for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement or the other Lender Agreements, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Agent: (a) may treat the payee of any Revolving Credit Note or
any Term Note as the holder thereof until the Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form required
under Article 9 hereof; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representations to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Lender Agreements; (d) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or the other Lender Agreements on the
part of the Loan Parties or any other Person or to inspect the property
(including the books and records) of the Loan Parties or any other Person; (e)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Lender Agreements or any other instrument or document furnished
pursuant hereto or thereto; and (f) shall incur no liability under or in respect
of this Agreement or the other Lender Agreements by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopy or
telegram) believed by the Agent to be genuine and signed or sent by the proper
party or parties.
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Section 10.3. Agent as a Lender. With respect to its interest in the Term
Loans and its Commitment Percentage of the Revolving Credit Advances hereunder,
Fleet shall have the same rights and powers under this Agreement and the other
Lender Agreements as any other Lender and may exercise the same as though it
were not the Agent; and the term "Lender" or "Lender(s)" shall, unless otherwise
expressly indicated, include Fleet in its individual capacity. Fleet and its
affiliates may lend money to, and generally engage in any kind of business with,
the Loan Parties, any of the Loan Parties' Affiliates and any Person who may do
business with or own securities of the Loan Parties or any such Affiliate of the
Loan Parties, all as if Fleet were not the Agent and without any duty to account
therefor to the Lenders.
Section 10.4. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements referred to in Section 6.2 and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent 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 this Agreement.
Section 10.5. Indemnification of Agent. Each Lender agrees to indemnify the
Agent and its directors, officers, employees and agents (to the extent that the
Agent is not reimbursed by the Borrowers), ratably according to each Lender's
Commitment Percentage, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Agent or its directors, officers, employees or
agents in any way relating to or arising out of this Agreement or any other
Lender Agreement or any action taken or omitted by the Agent in such capacity
under this Agreement; provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Lender Agreement, to the
extent that the Agent is not reimbursed for such expenses by the Borrowers.
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Section 10.6. Successor Agent. Except as provided below, the Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrowers. Upon any such resignation, the Lenders shall have the right to
appoint a successor Agent which shall be reasonably acceptable to the Borrowers.
If no successor Agent shall have been so appointed by the Lenders (other than
the resigning Agent), and shall have accepted such appointment, within thirty
(30) days after the retiring Agent's giving notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a commercial bank or financial institution organized under the laws of
the United States of America or of any state thereof and having a combined
capital and surplus of at least $100,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement and the other Lender
Agreements. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement and the
other Lender Agreements.
Section 10.7. Amendment of Article 10. The Borrowers hereby agrees that the
foregoing provisions of this Article 10 constitute an agreement among the Agent
and the Lenders (and the Agent and the Lenders acknowledge that except for the
provisions of Section 10.6, the Borrowers are not a party to or bound by such
foregoing provisions) and that any and all of the provisions of this Article 10
may be amended at any time by the Lenders without the consent or approval of, or
notice to, the Borrowers (other than the requirement of notice to the Borrowers
of the resignation of the Agent and the appointment of a successor Agent).
ARTICLE 11. MISCELLANEOUS
Section 11.1. Notices. All notices and other communications made or
required to be given pursuant to this Agreement shall be in writing and shall be
mailed by United States mail, postage prepaid, or sent by hand, or by
nationally-recognized overnight carrier service, addressed as follows:
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(a) If to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President, with a
copy to: ▇▇▇▇▇▇▇ Procter LLP, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., P.C. or at such other address(es) or to the attention
of such other Person(s) as the Agent shall from time to time designate in
writing to the Loan Parties and the Lenders.
(b) If to the Loan Parties, at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇, Esq. and at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇. ▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇ with
a copy to: Winston & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq. or at such other address(es) or to the attention of
such other Person(s) as the Loan Parties shall from time to time designate in
writing to the Agent and the Lenders.
(c) If to any Lender, at the address(es) and to the attention of the
Person(s) specified below such Lender's name on the execution page of this
Agreement (or in the case of a Successor Lender, at the address(es) and to the
attention of the Person(s) specified in the Assignment and Acceptance Agreement
executed by such Successor Lender), or at such other address(es) and to the
attention of such other Person(s) as any Lender shall from time to time
designate in writing to the Agent and the Loan Parties.
Any notice so addressed and mailed by registered or certified mail shall be
deemed to have been given when received or rejected. Any notice so addressed and
sent by hand, by telecopy or by overnight carrier service shall be deemed to
have been given when received.
A notice from the Agent stating that it has been given on behalf of the
Lenders shall be relied upon by the Loan Parties as having been given by the
Lenders.
Section 11.2. Merger. This Agreement and the other Lender Agreements are
intended by the parties as the final, complete and exclusive statement of the
transactions evidenced by this Agreement and the other Lender Agreements, as
applicable. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superseded by this
Agreement and the other Lender Agreements, and no party is relying on any
promise, agreement or understanding not set forth in this Agreement and the
other Lender Agreements. This Agreement may not be amended or modified except by
a written instrument describing such amendment or modification executed in
accordance with Section 8.1 hereof.
Section 11.3. Governing Law; Consent to Jurisdiction. This Agreement and
the rights and obligations of the parties hereunder shall be construed and
interpreted in accordance with the laws of The Commonwealth of Massachusetts
(excluding the laws applicable to conflicts or choice of law). The Loan Parties
and each Subsidiary hereby irrevocably submits itself to the non-exclusive
jurisdiction of the courts of The Commonwealth of Massachusetts and to the
non-exclusive jurisdiction of any Federal court of the United States located in
the District of Massachusetts for the purpose of any suit, action or other
proceeding arising out of this Agreement or any other Lender Agreement or any of
the transactions contemplated hereby or thereby.
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Section 11.4. Counterparts; Replacement of Instruments. This Agreement and
all amendments to this Agreement may be executed in several counterparts, each
of which shall be an original. The several counterparts shall constitute a
single Agreement. Upon receipt of an affidavit of an officer of the Agent or any
Lender as to the loss, theft, destruction or mutilation of any Note or any other
security document which is not of public record, and, in the case of any such
loss, theft, destruction or mutilation, upon cancellation of such Note or other
security document, the Borrowers will issue, in lieu thereof, a replacement note
or other security document in the same principal amount thereof and otherwise of
like tenor.
Section 11.5. Expenses and Indemnification.
(a) The Borrowers shall pay, on demand, all reasonable expenses of the
Agent and the Lenders in connection with the preparation, administration,
default, collection, waiver or amendment of this Agreement, any other Lender
Agreement or any other loan terms, or in connection with the Agent's and the
Lenders' exercise, preservation or enforcement of any of its rights, remedies or
options hereunder or under any other Lender Agreement, including, without
limitation, fees of the Agent's outside legal counsel, ▇▇▇▇▇▇▇ Procter LLP, fees
of local counsel, and accounting, and other similar professional fees or
expenses, and any fees or expenses associated with travel and other costs
relating to any appraisals or examinations reasonably conducted in connection
with the credits extended hereunder or any Credit Security therefor. In
addition, if an Event of Default has occurred and is continuing, the Borrowers
shall pay, on demand, the allocated costs of in-house legal counsel and
consulting fees and expenses reasonably incurred by the Agent in preservation or
enforcement of any of its rights, remedies or options hereunder or under any
other Lender Agreement. Subject to Section 4.7, the Borrowers also agree to pay
any present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the Notes, or any
other Lender Agreement.
(b) Without limitation of any other obligation or liability of the Loan
Parties or right or remedy of the Agent or the Lenders contained herein, the
Loan Parties hereby covenant and agree to indemnify and hold the Agent, the
Lenders, and the directors, officers, subsidiaries, shareholders, agents,
affiliates and Persons controlling the Agent and the Lenders, harmless from and
against any and all damages, losses, settlement payments, obligations,
liabilities, claims, including, without limitation, claims for finder's or
broker's fees, actions or causes of action, and reasonable costs and expenses
incurred, suffered, sustained or required to be paid by any such indemnified
party in each case by reason of or resulting from any claim relating to the
transactions contemplated hereby, other than any such claims which are
determined by a final, non-appealable judgment or order of a court of competent
jurisdiction to be the result of the gross negligence or willful misconduct of
such indemnified party. Promptly upon receipt by any indemnified party hereunder
of notice of the commencement of any action against such indemnified party for
which a claim is to be made against the Loan Parties hereunder, such indemnified
party shall notify the Loan Parties in writing of the commencement thereof,
although the failure to provide such notice shall not affect the indemnification
rights of any such indemnified party hereunder. The Loan Parties shall have the
right, at its option upon notice to the indemnified parties, to defend any such
matter at its own expense and with its own counsel, except as provided below,
which counsel must be reasonably acceptable to the indemnified parties. The
indemnified party shall cooperate with the Loan Parties in the defense of such
matter. The indemnified party shall have the right to employ separate counsel
and to participate in the defense of such matter at its own expense. In the
event that (a) the employment of separate counsel by an indemnified party has
been authorized in writing by the Loan Parties, (b) the Loan Parties have failed
to assume the defense of such matter within fifteen (15) days of notice thereof
from the indemnified party, or (c) the named parties to any such action
(including impleaded parties) include any indemnified party who has been advised
by counsel that there may be one or more legal defenses available to it or
prospective bases for liability against it, which are different from those
available to or against the Loan Parties, then the Loan Parties shall not have
the right to assume the defense of such matter with respect to such indemnified
party. The Loan Parties shall not compromise or settle any such matter against
an indemnified party without the written consent of the indemnified party, which
consent may not be unreasonably withheld or delayed.
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(c) All amounts payable by the Loan Parties under this Section 11.5
shall, until paid, bear interest at the rate applicable to Base Rate Loans
hereunder (including any default rate) and be an obligation secured by any
Credit Security.
Section 11.6. Confidentiality. The Agent and the Lenders agree to use
commercially reasonable efforts to keep in confidence all financial data and
other information relative to the affairs of the Loan Parties and their
Subsidiaries heretofore furnished or which may hereafter be furnished to them
pursuant to the provisions of this Agreement; provided, however, that this
Section 11.6 shall not be applicable to information otherwise disseminated to
the public by the Loan Parties or any of its Affiliates; and provided further,
however, that such obligation of the Agent and the Lenders shall be subject to
the Agent's or the Lenders', as the case may be, (a) obligation to disclose such
information pursuant to a request or order under applicable laws and regulations
or pursuant to a subpoena or other legal process, (b) right to disclose any such
information to bank examiners, affiliates, auditors, accountants and counsel who
agree to keep such information confidential, and (c) right to disclose any such
information (i) in connection with the transactions set forth herein including
assignments or the sale of participation interests pursuant to Article 9, so
long as such potential assignees or participants shall agree in writing to be
bound by the terms of this Section 11.6, or (ii) in connection with any
litigation or dispute involving the Agent or any transfer or other disposition
by the Agent or the Lenders, as the case may be, of any of the Lender
Obligations; provided that information disclosed pursuant to this provision
shall be so disclosed subject to such procedures as are reasonably calculated to
maintain the confidentiality thereof.
Section 11.7. Usury Limitation. All agreements between the Loan Parties,
the Agent and/or the Lenders are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of acceleration of maturity
of the indebtedness evidenced hereby or otherwise, shall the amount paid or
agreed to be paid to the Lenders for the use or the forbearance of the Lender
Obligations exceed the maximum permissible under applicable law. As used herein,
the term "applicable law" shall mean the law in effect as of the date hereof;
provided, however, that in the event there is a change in the law which results
in a higher permissible rate of interest, then this provision shall be governed
by such new law as of its effective date. In this regard, it is expressly agreed
that it is the intent of the Loan Parties, the Agent, and the Lenders in the
execution, delivery and acceptance of this Agreement and the other Lender
Agreements to contract in strict compliance with the laws of The Commonwealth of
Massachusetts from time to time in effect. If, under or from any circumstances
whatsoever, fulfillment of any provision hereof or of any of the Lender
Agreements at the time of performance of such provision shall be due, shall
involve transcending the limit of such validity prescribed by applicable law,
then the obligation to be fulfilled shall automatically be reduced to the limits
of such validity, and if under or from any circumstances whatsoever the Lenders
should ever receive as interest an amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance of the Lender Obligations, as determined by
the Lenders, and not to the payment of interest. This provision shall control
every other provision of all Lender Agreements.
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Section 11.8. Reliance on Representations and Actions of BCS Holdings. The
Borrowers hereby appoint BCS Holdings as the Borrowers' agent to execute,
deliver and perform, on behalf of the Borrowers, any and all notices,
certificates, documents and actions to be executed, delivered or performed
hereunder or under any of the other Lender Agreements, and the Borrowers hereby
agree that the Agent and the Lenders may rely upon any representation, warranty,
certificate, notice, document or telephone request which purports to be executed
or made or which the Agent or the Lenders in good faith believe to have been
executed or made by BCS Holdings or any of its executive officers, and the
Borrowers hereby further, jointly and severally, agree to indemnify and hold the
Agent and the Lenders harmless for any action, including the making of the Term
Loans or the Revolving Credit Advances hereunder, and any loss or expense, taken
or incurred by any of them as a result of their good faith reliance upon any
such representation, warranty, certificate, notice, document or telephone
request.
Section 11.9. WAIVER OF JURY TRIAL; VENUE. THE LOAN PARTIES, THE AGENT AND
THE LENDERS (BY ACCEPTANCE OF THIS AGREEMENT) MUTUALLY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR ANY OTHER LENDER AGREEMENTS CONTEMPLATED TO BE EXECUTED
IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF
THE AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE CREDITS HEREUNDER
OR ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LENDER AGREEMENTS, AND
AGREE THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS
PROHIBITED BY LAW, THE LOAN PARTIES HEREBY WAIVE ANY RIGHT IT MAY HAVE TO CLAIM
OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE LOAN
PARTIES CERTIFY THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY
LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY LENDER
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.
THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS TO
ENTER INTO THIS AGREEMENT AND PROVIDE THE CREDITS HEREUNDER. THE LOAN PARTIES
AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER
LENDER AGREEMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON LOAN PARTIES BY MAIL AT THE ADDRESS SET FORTH IN SECTION 14.1.
EACH LOAN PARTY HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT FORUM.
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IN WITNESS WHEREOF, the Loan Parties, the Agent and the Lenders have
caused this Credit Agreement to be executed by their duly authorized officers as
of the date set forth above.
Booth Creek Ski Holdings,
Booth Creek Ski Acquisition Corp.
Trimont Land Company
Sierra-at-Tahoe, Inc.
Bear Mountain, Inc.
Waterville Valley Ski Resort, Inc.
Mount Cranmore Ski Resort, Inc.
SKI LIFTS, INC.
LMRC HOLDING CORP.
Loon Mountain Recreation Corporation
Loon Realty Corp., as borrowers
By: _________________________________________
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
DRE, L.L.C. as guarantor
By: SKI LIFTS, INC., its Manager
By: _________________________________________
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
FLEET NATIONAL BANK, as agent
By:__________________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
FLEET NATIONAL BANK, as lender
By:__________________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION, as lender
By:__________________________________________
Name: ▇▇▇▇▇▇ ▇. Salem
Title: Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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