MASTER VISTANA RESORT CONSTRUCTION LOAN FACILITY
SECTION 1. EXTENSION OF FINANCING 1
1.1 Financing Generally. 1
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1.2 Requests for Financing 3
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1.3 Closing of Resort Loans 3
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1.4 Payment of Resort Loans 3
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1.5 Funding Fee 4
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1.6 Maximum Loan Amount 5
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1.7 Vistana Guaranty 5
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1.8 Prepayment 5
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SECTION 2. FINANCING CLOSING CONDITIONS 5
2.1 Resort Loan Documents 5
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2.2 Deliveries Prior to Each Resort Loan 5
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2.3 Resort Loan Mortgage 6
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2.4 Other Security Documents 6
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2.5 Representations and Warranties 6
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2.6 No Termination Events 6
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2.7 Performance of Agreements 6
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2.8 Opinions of Counsel 6
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2.9 Eligible Vistana Subsidiary 6
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2.10 Vistana Guaranties 7
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2.11 Cross Collateralization 7
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2.12 Trigger Events 7
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2.13 Intentionally Omitted 7
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2.14 Expenses 7
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2.15 Proceedings Satisfactory 8
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SECTION 3. FINANCIAL COVENANTS 8
SECTION 4. REPRESENTATIONS AND WARRANTIES 8
4.1 Existence 8
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4.2 Authorization and Enforceability 8
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4.3 Financial Statements and Business Condition 8
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4.4 Litigation and Proceedings 9
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4.5 No Breach or Default 9
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4.6 Licenses and Permits 9
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4.7 Disclosure 9
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4.8 Employee Benefit Plans 10
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4.9 Year 2000. 10
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4.10 Vistana's Deposit 10
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SECTION 5. REPORTING REQUIREMENTS 10
5.1 Monthly Construction Activity Reports 10
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5.2 Monthly Sales Activity Reports 10
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5.3 Quarterly Financial Reports 11
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ii
5.4 Year-End Financial Reports 11
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5.5 Audit Reports 11
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5.6 Other Reports 12
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5.7 SEC Reports 12
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5.8 Notice of Litigation, Claims, and Financial Change 12
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SECTION 6. TERMINATION EVENTS 12
6.1 Termination Events 12
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SECTION 7. RIGHTS AND REMEDIES OF LENDER 14
7.1 Rights of Lender 14
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7.2 No Waiver or Exhaustion 14
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7.3 Marshalling Waiver 14
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SECTION 8. MISCELLANEOUS 15
8.1 Notices 15
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8.2 Entire Agreement and Modifications 16
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8.3 Severability 16
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8.4 Election of Remedies 16
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8.5 Form and Substance 16
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8.6 No Third Party Beneficiary 16
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8.7 Vistana in Control 16
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8.8 Number and Gender 16
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8.9 Captions 17
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8.10 Applicable Law 17
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8.11 Venue 17
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8.12 Jury Trial Waiver 17
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8.13 Attorneys' Fees 17
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8.14 Counterparts 17
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8.15 Participating Lenders 17
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8.16 Consent to Advertising and Publicity 18
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iii
MASTER VISTANA RESORT CONSTRUCTION LOAN FACILITY
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This MASTER VISTANA RESORT CONSTRUCTION LOAN FACILITY (this "Agreement")
dated as of October 9, 1998, is made by and between HELLER FINANCIAL, INC., a
Delaware corporation ("Lender"), and VISTANA, INC., a Florida corporation
("Vistana").
R E C I T A L S:
- - - - - - - -
A. All capitalized terms used herein shall have the meanings ascribed
thereto in the Appendix attached hereto and made a part hereof by this
reference.
B. Vistana, directly or through one or more of its subsidiaries, is in the
business of acquiring, constructing, renovating and developing certain Resorts
for the purpose of selling Intervals therein.
C. Upon satisfaction of the terms and conditions set forth herein, Lender
may extend financing from time to time to certain Eligible Vistana Subsidiaries,
the proceeds of which will be used to acquire, construct, renovate and develop
certain Eligible Resorts, the first of which is Lakeside Terrace Condominiums
located in Avon, Colorado, for which Resort Loan Documents shall be executed as
of the date hereof the form of which Resort Loan Documents shall be the basis
for execution of future Resort Loan Documents for future Eligible Resorts
hereunder, subject to modifications as required on a resort by resort basis.
D. The second Eligible Resort hereunder which is hereby approved by Lender
is the Embassy Vacation Resort located in Scottsdale, Arizona for which Resort
Loan Documents shall be prepared and executed subsequent to the Closing of the
Resort Loan for the Lakeside Terrace Condominiums.
E. Vistana has agreed to guarantee all of the obligations of such Eligible
Vistana Subsidiaries under this Agreement and the other Resort Loan Documents,
including, without limitation, all of the obligations of the Eligible Vistana
Subsidiaries with respect to any financing provided from time to time by Lender.
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements, provisions and covenants herein contained, Vistana and Lender agree
as follows:
SECTION 1. EXTENSION OF FINANCING
1.1 Financing Generally.
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(a) Extension of Resort Loans. During the Eligibility Period but
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subject to the requirements of this Section 1.1 and the requirements of Sections
1.2, 1.3 and 2
hereof, Lender shall extend Resorts Loans to Eligible Vistana Subsidiaries
identified from time to time by Vistana to Lender as being the owners and
developers of particular Eligible Resorts. Each such Resort Loan shall
(i) be made to an Eligible Vistana Subsidiary that is the owner and
developer of an Eligible Resort whose Resort Development Costs are to be
financed, in whole or in part, by such Resort Loan;
(ii) be disbursed in a series of Resort Advances during the then
remaining unexpired portion of the Eligibility Period to pay the Resort
Development Costs incurred or to be incurred by such Eligible Vistana Subsidiary
in acquiring, constructing, renovating and developing such Eligible Resort (each
such Resort Advance shall relate to particular line item or items identified in
the Approved Development Budget and Completion Schedule for such Resort; no more
than two Resort Advances (plus one addition Resort Advance of the Interest
Reserve) shall be made in any calendar month);
(iii) shall have a final maturity date of seven (7) years from the
Facility Closing Date inclusive of a three (3) year Eligibility Period;
provided, however, that with respect to a particular Resort Loan, such final
maturity date will be the projected date on which such Resort Loan is required
to be amortized to a zero balance based on the agreed upon amortization schedule
for such Resort Loan, subject to extension for up to ninety (90) days in the
event completion of the subject improvements is delayed beyond the applicable
"Completion Date" as a result of Force Majeure as such term is defined in the
applicable Resort Loan Documents;
(iv) bear interest at the Interest Rate in effect from time to time
(which interest shall be computed on the unpaid principal balance which exists
from time to time with respect to each Resort Advance under such Resort Loan
only from the date on which such Resort Advance is made and shall be paid by
such Eligible Vistana Subsidiary to Lender on a monthly basis as provided in the
applicable construction loan agreement or promissory note for such Resort Loan);
(v) be guaranteed in full by Vistana and be secured by all right,
title and interest of such Eligible Vistana Subsidiary in and to the Eligible
Resort related to such Resort Loan, and in and to all leases, rents, products
and proceeds in respect thereof in accordance with the terms and description of
collateral set forth in the Resort Loan Documents; and
(vi) be otherwise governed by the Resort Loan Documents for such
Resort Loan; provided, that, in no event shall the maximum principal amount
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available under such Resort Loan at the time of the initial extension thereof
exceed the Resort Loan Limit determined at such time; it is the intention of
Lender and Vistana that this Master Vistana Resort Construction Loan Facility is
a revolving credit facility pursuant to which Vistana or the Eligible Vistana
Subsidiary may borrow, repay and reborrow principal in an
amount not to exceed the maximum loan amount set forth in Section 1.6 below;
provided, however, each Resort Loan described herein is a term Resort Loan and
not a revolving credit facility and if an Eligible Resort is to be developed in
successive phases, a Resort Loan shall be extended separately for each agreed
upon phase. Each such separate Resort Loan for an Eligible Resort may be
referred to herein from time to time as tranche "A," "B," "C," etc. with respect
to each successive phase of an Eligible Resort.
(b) Resort Loan Documents. On or prior to the Resort Loan Closing
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Date for each Resort Loan, Lender and the Eligible Vistana Subsidiary for such
Resort Loan shall enter into the Resort Loan Documents for such Resort Loan.
1.2 Requests for Financing. During the Eligibility Period, Vistana
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shall have the right to request Lender to make one or more Resort Loans with
respect to an Eligible Resort. Each such request shall be made not less than
thirty (30) days and not more than one hundred twenty (120) days prior to the
Resort Loan Closing Date requested by Vistana for such Resort Loan, shall
identify the Eligible Vistana Subsidiary and the Eligible Resort in respect of
such requested Resort Loan and shall be substantially in the form of SCHEDULE
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1.2 attached hereto and made a part hereof. Upon receipt of all items set forth
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on SCHEDULE 1.2, Lender shall have no more than fifteen (15) Business Days to
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complete its review and approval process with respect to the requested Resort
Loan. Anything contained herein to the contrary notwithstanding, Vistana
acknowledges that Lender has reserved its right to approve each request on a
case-by-case basis in its sole discretion and that Lender must apply its credit
approval standards and processes to each such request and each such Resort Loan
and Eligible Resort that is the subject thereof. Notwithstanding the foregoing,
Lender acknowledges its approval of both Lakeside Terrace Condominiums as an
Eligible Resort for the initial Resort Loan hereunder and Embassy Vacation
Resort located in Scottsdale, Arizona, as an Eligible Resort for the second
Resort Loan hereunder.
1.3 Closing of Resort Loans. Resort Advances under each Resort Loan
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shall be advanced upon the satisfaction of the conditions precedent set forth in
the Resort Loan Documents in respect thereof. The first Resort Advance under
each Resort Loan shall be subject to such conditions precedent and the
conditions set forth in the Resort Loan Documents. All Resort Advances under
each Resort Loan shall be disbursed by Lender pursuant to construction loan
disbursement procedures set forth in the Resort Loan Documents which shall
include, among other things, inspections and certifications by Lender's
Architect, general contractor certifications, mechanic's lien partial or final
(as the case may be) waivers (within sixty (60) days after each Resort Loan
Advance), and mortgagee title insurance policy bringdown endorsements as more
particularly set forth in the Resort Loan Documents.
1.4 Payment of Resort Loans. Each Resort Loan shall be due and payable
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in accordance with the Resort Loan Documents for such Resort Loan. Such Resort
Loan Documents shall provide that any security interest or lien granted pursuant
thereto upon any Interval in the Eligible Resort shall be released from time to
time by Lender from
such security interest or lien only after payment to Lender of a release price
equal to the amount as set forth in each such Resort Loan. For each Resort Loan,
an interval release price will be established at an amount sufficient to repay
100.0% of the Resort Loan amount at a 90.0% sell-out of the phase which relates
to such Resort Loan. Notwithstanding this requirement, there shall be a special
allocation of the amenity portion of the release price over all benefitted
phases. The Eligible Vistana Subsidiary will also be required to meet mutually
agreed-upon quarterly amortization payments for each Resort Loan. The amount of
each amortization payment for a Resort Loan will be based on achieving sales of
not more than eighty percent (80%) of the sales projected in the Approved Sales
and Marketing Plan for such Resort Loan. The due date for each of the required
amortization payments will be the last day of a calendar quarter with the first
amortization payment due on the earlier of (i) the last day of the first full
calendar quarter following the calendar quarter during which the Completion of
the Unit Building Improvements (as defined in the applicable Resort Loan
Documents) occurs, or (ii) the last day of the first full calendar quarter
following three (3) months after the date for Completion of such Unit Building
Improvements as set forth in the applicable Resort Loan Documents; provided,
however, that if the Unit Building Improvements consist of more than one
building, the amortization payment dates will be adjusted for Force Majeure (as
defined in the applicable Resort Loan Documents).
1.5 Funding Fee. Vistana acknowledges and agrees that the Funding Fee
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to be paid by Vistana or one or more Eligible Vistana Subsidiaries pursuant
hereto shall be $350,000 (.875% of the maximum loan amount of the Master Vistana
Resort Construction Loan Facility), 50% of which shall be earned and payable on
the date of this Agreement with the balance earned and payable on the first
anniversary date of this Agreement. At Vistana's option, on the first
anniversary date of this Agreement, the maximum loan amount of $40,000,000 may
be reduced to the greater of (i) $20,000,000, or (ii) another amount between
$20,000,000 and $40,000,000 (but in no event less than the then outstanding
principal balance of the Master Vistana Resort Construction Loan Facility as of
such date). In the event Vistana exercises such option, the second installment
of the Funding Fee due and payable on the first anniversary date of this
Agreement shall be equal to (i) zero ($0) if Vistana elects to establish the
maximum loan amount as of such date at $20,000,000 (assuming the outstanding
principal balance of the Master Vistana Resort Construction Loan Facility as of
such date is not more than $20,000,000), or (ii) an amount equal to the product
of .875% times the amount, if any, by which the amount selected at Vistana's
option between $20,000,000 and $40,000,00 (but in no event less than the
outstanding principal balance of the Master Vistana Resort Construction Loan
Facility as of such date) exceeds $20,000,000.
1.6 Maximum Loan Amount. Notwithstanding any provision to the contrary
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in this Agreement or the Resort Loan Documents, the outstanding principal
balance under this Master Vistana Resort Construction Loan Facility shall never
exceed in the aggregate $40,000,000.
4
1.7 Vistana Guaranty. In connection with this Master Vistana Resort
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Construction Loan Facility, Vistana shall execute the Vistana Guaranty which
shall guaranty the payment by Vistana of all amounts outstanding under this
Master Vistana Resort Construction Loan Facility upon the occurrence of a
Termination Event of the type described in Section 6.1(a) or 6.1(b) hereto.
1.8 Prepayment. Each Resort Loan is prepayable in whole or in part
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without premium or penalty.
SECTION 2. FINANCING CLOSING CONDITIONS
The obligation of Lender to extend any Resort Loan hereunder to an Eligible
Vistana Subsidiary in respect of an Eligible Resort is subject to the
satisfaction, in Lender's sole discretion, of all of the conditions set forth
below.
2.1 Resort Loan Documents. Lender shall have received, in form and
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substance satisfactory to Lender, counterparts of the Resort Loan Documents for
such Resort Loan executed by the Eligible Vistana Subsidiary and Vistana, as the
case may be, and each of such Resort Loan Documents shall be in form and
substance acceptable to Lender in Lender's reasonable discretion and based upon
the form Resort Loan Documents for the Lakeside Terrace Condominiums located in
Avon, Colorado with modifications which reflect differences in each resort
subject to this Agreement.
2.2 Deliveries Prior to Each Resort Loan. Prior to the extension of
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such Resort Loan, Lender shall have received copies (certified to be true and
correct) of the Purchase Agreement for such Eligible Resort, the Resort
Construction Contract for such Eligible Resort, the Resort Architectural
Contract for such Eligible Resort and all plans, specifications and drawings for
such Eligible Resort, the Approved Development Budget and Completion Schedule
for such Eligible Resort, the Approved Sales and Marketing Plan for such
Eligible Resort, a Sources and Uses of Cash Projection for such Eligible Resort,
all other deliveries required to be delivered in order for Vistana to
demonstrate to Lender that such Eligible Resort satisfies the requirements of
the applicable Resort Loan Documents and this Agreement with respect thereto and
such other instruments and information applicable to such Resort Loan as are
identified on the form of closing checklist set forth on SCHEDULE 2.2 attached
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hereto and made a part hereof.
2.3 Resort Loan Mortgage. Lender shall have received satisfactory
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evidence that the lien of the Resort Loan Mortgage constitutes a first priority
lien in and to such Eligible Resort, which satisfactory evidence shall include
receipt by Lender of a mortgagee's title insurance policy in the maximum amount
of each such Resort Loan in form and content acceptable to Lender in Lender's
sole discretion in respect of such
5
Resort Loan and such Eligible Resort (together with such endorsements thereto as
Lender may request in its reasonable determination).
2.4 Other Security Documents. In addition to, but without duplication
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of, the Resort Loan Documents in respect of such Resort Loan, Vistana and/or
such Eligible Vistana Subsidiary shall have executed and delivered to Lender
such other instruments as may be necessary or required by Lender in order to
create, maintain, perfect or protect a lien or security interest in any
collateral relating to such Eligible Resort as described in the Resort Loan
Documents, including, without limitation, an assignment of rents from such
Eligible Resort, an assignment of all construction and other contracts relating
to such Eligible Resort and UCC-1 financing statements required in connection
with such Resort Loan, with the exception of marketing contracts, property
management contracts, resort affiliation agreements and reservation agreements
to reserve and use a Unit at the Resort.
2.5 Representations and Warranties. The representations and warranties
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contained herein and in the Resort Loan Documents for such Resort Loan shall be
true, correct and complete in all material respects on and as of the Resort Loan
Closing Date for such Resort Loan.
2.6 No Termination Events. No Termination Event as defined hereunder
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shall be in existence as of the Resort Loan Closing Date for such Resort Loan.
2.7 Performance of Agreements. Vistana and the Eligible Vistana
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Subsidiary shall have performed all agreements, paid all fees, costs and
expenses and satisfied all conditions which this Agreement or any Resort Loan
Document for such Resort Loan provides shall be paid, performed or satisfied as
of the Resort Loan Closing Date for such Resort Loan.
2.8 Opinions of Counsel. Lender shall have received from independent
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counsel for Vistana and such Eligible Vistana Subsidiary, one or more closing
opinions, each dated as of the Resort Loan Closing Date for such Resort Loan as
to such matters in respect of Vistana, such Eligible Vistana Subsidiary, such
Resort Loan, the Resort Loan Documents for such Resort Loan, and such Eligible
Resort as Lender may request in its reasonable discretion.
2.9 Eligible Vistana Subsidiary. Such Eligible Vistana Subsidiary shall
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be acceptable to Lender in Lender's reasonable discretion, and Lender shall have
received such financial statements, credit reports, UCC searches and other
similar background information relating to such Eligible Vistana Subsidiary as
Lender shall require in Lender's discretion. Such Eligible Vistana Subsidiary
shall have provided Lender with copies of its organizational documents, and the
same shall be acceptable to Lender in Lender's reasonable discretion. Lender
acknowledges that an Eligible Vistana Subsidiary may be a newly formed entity
with no credit history.
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2.10 Vistana Guaranties. Vistana shall have executed and delivered to
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Lender a guaranty of such Resort Loan and all obligations of such Eligible
Vistana Subsidiary under the Resort Loan Documents for such Resort Loan. Vistana
shall have executed and delivered to Lender a guaranty of the completion of the
construction of the phase or phases of such Eligible Resort which is subject of
the Resort Loan. Vistana shall have executed the Vistana Guaranty as set forth
in Section 1.7 above.
2.11 Cross Collateralization. The Resort Loan Documents for each Resort
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Loan shall provide that the collateral securing such Resort Loan and the payment
and completion guaranties of Vistana for such Resort Loan shall secure such
Resort Loan and any other Resort Loans for the same Eligible Resort. The
collateral securing each such Resort Loan and the payment and completion
guaranties of Vistana for such Resort Loan shall not secure any receivables
loans of Lender arising from the sale of Intervals at such Resort or Resort
Loans by Lender to an Eligible Vistana Subsidiary for any other Eligible Resort.
Vistana acknowledges Lender and Vistana may establish a master receivables loan
facility, which master receivables loan facility may include receivables
originated by Vistana MB, Inc. Vistana further acknowledges that any portion of
such master receivables loan facility secured by receivables originated by
Vistana MB, Inc. will continue to be cross -collateralized with the existing
construction loan from Lender to Vistana MB, Inc.
2.12 Trigger Events. In the event that (i) Completion of improvements
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related to any Resort Loan for an Eligible Resort is not achieved by the
Completion Trigger Date (as defined in the applicable Resort Loan Documents), or
(ii) the Eligible Vistana Subsidiary which is the borrower under such Resort
Loan fails to achieve Borrower's Minimum Net Earnings (as defined in the
applicable Resort Loan Documents and determined in accordance with the
applicable provisions thereof) for each calendar quarter beginning with the
fifth calendar quarter subsequent to Completion of the subject improvements at
such Eligible Resort, then Lender on a going forward basis shall not be required
to fund any future Resort Loans for such Eligible Resort.
2.13 Intentionally Omitted.
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2.14 Expenses. Vistana and such Eligible Vistana Subsidiary for such
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Resort Loan shall have paid all costs and expenses incurred by or on behalf of
Lender in connection with such Resort Loan, including, without limitation, all
reasonable costs and expenses of Lender's counsel and Lender's Architect.
2.15 Proceedings Satisfactory. Such Resort Loan and such Eligible
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Resort, all Resort Loan Documents in respect thereof, and all due diligence
information in respect thereof shall be satisfactory to Lender in Lender's
reasonable discretion. Lender and its counsel shall have received copies of
such documents, instruments and information as Lender or its counsel may request
in connection therewith, and all such documents, instruments and information
shall be in form and substance satisfactory to Lender and its counsel.
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SECTION 3. FINANCIAL COVENANTS
Vistana covenants that on and after the Facility Closing Date and so long
as any Resort Loan shall be outstanding or there are any outstanding obligations
of Vistana under any guarantee of any such Resort Loan, Vistana will comply with
the applicable covenants set forth in the Resort Loan Documents for each Resort
Loan and maintain Vistana's Minimum Net Worth from and after the Loan Facility
Closing Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES
Vistana hereby represents and warrants to Lender as of the date hereof and
as of the date on which any Resort Loan is extended to an Eligible Vistana
Subsidiary hereunder:
4.1 Existence. Vistana is a Florida corporation duly formed, validly
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existing and in good standing under the laws of the State of Florida with its
principal place of business at Orlando, Florida. Vistana is authorized to
transact business in the State of Florida and in each other state where the
failure to so comply would have a Material Adverse Effect.
4.2 Authorization and Enforceability.
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(a) Execution. This Agreement has been duly authorized, executed and
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delivered and constitutes the duly authorized, valid and legally binding
obligations of Vistana, enforceable against Vistana in accordance with its
terms.
(b) Other Agreements. The execution, delivery and compliance with the
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terms and provisions of this Agreement, will not (i) to the best of Vistana's
knowledge, violate any applicable law or regulation, order or other decree of
any court or governmental entity, or (ii) conflict or be inconsistent with, or
result in any default under, any contract, agreement or commitment to which
Vistana is bound.
4.3 Financial Statements and Business Condition. The most recent annual
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consolidated and consolidating and quarterly consolidated financial statements
of Vistana and its consolidated subsidiaries have been delivered to Lender and
fairly present the financial condition and (if applicable) results of operations
of such Persons as of the date or dates thereof and for the periods covered
thereby. Lender acknowledges that Vistana's Form 10-Q and 10-K quarterly and
annual financial statements are acceptable to Lender to satisfy the annual and
quarterly consolidated financial statements requirements for Vistana, Inc.
Except for any such changes heretofore expressly disclosed in writing to Lender,
there has been no material adverse change in the financial condition of Vistana
or its consolidated subsidiaries from the financial condition shown in such
consolidated financial statements. Vistana is able to pay all of its debts as
they become due, and Vistana shall maintain such solvent financial condition,
giving effect to all obligations, absolute and contingent, of Vistana.
8
Vistana's obligations under this Agreement will not render it unable to pay its
debts as they become due.
4.4 Litigation and Proceedings. Except as previously disclosed to
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Lender in writing (which disclosures shall be satisfactory to Lender in its
reasonable determination), there are no actions, suits, proceedings, orders or
injunctions pending or, to the best of Vistana's knowledge, threatened against
or affecting Vistana or any Affiliate, at law or in equity, or before or by any
Governmental Authority which if adversely determined would have a Material
Adverse Effect. Neither Vistana nor any Affiliate has received any notice from
any court or Governmental Authority alleging that such Person or any Affiliate
has violated any applicable Governmental Regulation, any of the rules or
regulations thereunder, or any other applicable laws, the result of which, if
adversely determined, would have a Material Adverse Effect. Vistana shall
promptly inform Lender of (a) any litigation against Vistana or affecting any
Eligible Resort, which, if determined adversely, is reasonably likely to have a
Material Adverse Effect or might cause an Event of Default under a Resort Loan
or a Termination Event hereunder, (b) any claim or controversy which is
reasonably likely to become the subject of such litigation, and (c) any material
adverse change in the financial condition of Vistana.
4.5 No Breach or Default. The consummation of the transactions
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contemplated hereby, and the performance of any of the terms and conditions
hereof, will not result in a breach of, or constitute a default in, Vistana's
organizational documents or in any mortgage, deed of trust, lease, promissory
note, loan agreement, credit agreement, partnership agreement or other agreement
to which Vistana is a party or by which Vistana may be bound or affected where
such breach or default would have a Material Adverse Effect. Vistana is not in
default of any order of any court or any applicable requirement of any
Governmental Authority which default would have a Material Adverse Effect.
4.6 Licenses and Permits. Vistana possesses all requisite franchises,
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certificates of convenience and necessity, operating rights, licenses, permits,
consents, authorizations, exemptions and orders as are necessary to carry on its
business as now being conducted.
4.7 Disclosure. There is no fact of which Vistana is aware that Vistana
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has not disclosed to Lender in writing that could have a Material Adverse Effect
on the property, business or financial condition of Vistana.
4.8 Employee Benefit Plans. Vistana is in compliance in all material
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respects with all applicable provisions of the Employee Retirement Income
Security Act, the Internal Revenue Code and all other applicable laws and the
regulations and interpretations thereof with respect to all employee benefit
plans adopted by Vistana for the benefit of its employees. No material
liability has been incurred by Vistana which remains unsatisfied for any funding
obligation, taxes or penalties with respect to any such employee benefit plan.
9
4.9 Year 2000. Vistana has made an assessment of the microchip and
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computer-based systems and the software used in its business and based upon such
assessment believes that it will be "Year 2000 Compliant" by January 1, 2000.
For purposes of this paragraph, "Year 2000 Compliant" means that all software,
embedded microchips and other processing capabilities utilized by, and material
to the business operations or financial condition of Vistana are able to
interpret, store, transmit receive and manipulate data on and involving all
calendar dates correctly and without causing any abnormal ending scenarios in
relation to dates in and after the Year 2000. From time to time, at the request
of Lender, Vistana shall provide to Lender such updated information as is
requested regarding the status of its efforts to become Year 2000 Compliant.
4.10 Vistana's Deposit. If pursuant to the "borrower's deposit" covenant
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in the Resort Loan Documents for any Resort Loan to an Eligible Vistana
Subsidiary, such Eligible Vistana Subsidiary fails to deposit funds as required
therein, then Lender has the option to require Vistana to deposit such required
funds in the manner set forth in the applicable Resort Loan Documents.
SECTION 5. REPORTING REQUIREMENTS
So long as any Resort Loan is outstanding or there are any outstanding
obligations of Vistana under any guarantee in respect of a Resort Loan, Vistana
shall deliver to Lender the following:
5.1 Monthly Construction Activity Reports. As part of any request for
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an Advance with respect to any Resort Loan hereunder, a summary of construction
activity at each Eligible Resort which is the subject of a Resort Loan for the
period of time covered by the Advance request, in form, content and detail
acceptable to Lender in Lender's reasonable discretion.
5.2 Monthly Sales Activity Reports. Within twenty-five (25) days after
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the end of each month, a summary of sales activity at each Eligible Resort which
is the subject of a Resort Loan for such month, in form, content and detail
acceptable to Lender in Lender's reasonable discretion.
5.3 Quarterly Financial Reports. Within forty-five (45) days after the
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end of each fiscal quarterly period, unaudited financial statements of Vistana
and each Eligible Vistana Subsidiary that is an obligor under a Resort Loan,
certified by the chief financial officer or chief operating officer of Vistana
to be true and correct, as well as, to the extent requested by the Lender,
unaudited financial statements of each Resort Association in respect of each
Eligible Resort available after the first closing (recordation of applicable
documents) with respect to the sale of an Interval at such Eligible Resort.
5.4 Year-End Financial Reports. As soon as available and in any event
--------------------------
within one hundred and twenty (120) days after the end of each fiscal year of
Vistana and
10
each Eligible Vistana Subsidiary that is an obligor under a Resort Loan: (i) the
consolidated and consolidating balance sheets of Vistana and, to the extent
provided to Lender in connection with Lender's initial approval of this
facility, its consolidated subsidiaries and the balance sheets of each such
Eligible Vistana Subsidiary as of the end of such year and the related
consolidated and consolidating statements of income and cash flow for such
fiscal year for Vistana and to the extent provided to Lender in connection with
Lender's initial approval of this facility, its consolidated subsidiaries and
the related statements of income and cash flow for such fiscal year for each
such Eligible Vistana Subsidiary; (ii) a schedule of all outstanding
Indebtedness of Vistana and such Eligible Vistana Subsidiary describing in
reasonable detail each such debt or loan outstanding and the principal amount
and amount of accrued and unpaid interest with respect to each such debt or loan
which separate schedule may be part of the balance sheet; (iii) in the case of
Vistana, copies of reports from a firm of independent certified public
accountants, selected by Vistana, which reports shall be unqualified as to going
concern and scope of audit and shall state that such financial statements
present fairly the financial position of Vistana and its consolidated
subsidiaries, as of the dates indicated and the results of Vistana's operations
and cash flow for the periods indicated in conformity with GAAP; and (iv) in the
case of each such Eligible Subsidiary, a certificate from the chief financial
officer or chief operating officer of Vistana certifying that such financial
statements present fairly the financial position of such Eligible Vistana
Subsidiary, as of the dates indicated and the results of such Eligible Vistana
Subsidiary's operations for the periods indicated in conformity with such
Eligible Vistana Subsidiary's current preparation of these reports. Lender
acknowledges that Vistana's Form 10-Q and 10-K quarterly and annual financial
statements are acceptable to Lender for Vistana's financial statements required
by this Section 5.4.
5.5 Audit Reports. Promptly upon receipt thereof, one (1) copy of each
-------------
other report submitted to Vistana or such Eligible Vistana Subsidiary by
independent public accountants in connection with any annual audit made by them
of the books of Vistana or such Eligible Vistana Subsidiary.
5.6 Other Reports. Such other reports, statements, notices or written
-------------
communications relating to Vistana or such Eligible Vistana Subsidiary, as
Lender may require, in its reasonable discretion.
5.7 SEC Reports. Promptly upon their becoming available one (1) copy of
-----------
each financial statement, report, notice or proxy statement sent by Vistana to
security holders generally, and of each regular or periodic report and any
registration statement, prospectus or written communication (other than
transmittal letters) in respect thereof filed by Vistana with, or received by
Vistana in connection therewith from, any securities exchange or the Securities
and Exchange Commission or any successor agency.
5.8 Notice of Litigation, Claims, and Financial Change. Notice of (i)
--------------------------------------------------
any litigation against Vistana or any Eligible Vistana Subsidiary or affecting
any Eligible Resort, which, if determined adversely, is reasonably likely to
have a Material Adverse Effect or is reasonably likely to cause an Event of
Default under a Resort Loan or a
11
Termination Event hereunder, (ii) any claim or controversy which is reasonably
likely to become the subject of such litigation, and (iii) any material adverse
change in the financial condition of Vistana or any Eligible Vistana Subsidiary.
SECTION 6. TERMINATION EVENTS
6.1 Termination Events. A "Termination Event" shall exist hereunder
------------------
upon the occurrence and during the continuance of any one or more of the
following:
(a) Events:
------
(i) Vistana does not pay its debts as they become due or
admits in writing its inability to pay its debts or makes a general assignment
for the benefit of creditors; or
(ii) Vistana commences any case, proceeding or other action
seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any Debtor Relief Laws; or
(iii) Vistana in any involuntary case, proceeding or other
action commenced against it which seeks to have an order for relief entered
against it, as debtor, or seeks reorganization, arrangement, liquidation,
dissolution or composition of it or its debts under any Debtor Relief Laws, (i)
fails to obtain a dismissal of such case, proceeding or other action within
sixty (60) days of its commencement, or (ii) converts the case from one chapter
of the Federal Bankruptcy Code to another chapter, or (iii) is the subject of an
order for relief; or
(iv) Vistana conceals, removes, or permits to be concealed
or removed any part of its property, with intent to hinder, delay or defraud its
creditors or any of them, or makes or suffers a transfer of any of its property
which may be fraudulent under any bankruptcy, fraudulent conveyance or similar
law; or makes any transfer of its property to or for the benefit of a creditor
at a time when other creditors similarly situated have not been paid; or suffers
or permits, while insolvent, any creditor to obtain a lien upon any of its
property through legal proceedings which is not vacated within sixty (60) days
from the date thereof; or
(v) Vistana has a trustee, receiver, custodian or other
similar official appointed for, or take possession of, all or any part of its
property or has any court take jurisdiction of any other of its property which
continues for a period of sixty (60) days (except where a shorter period is
specified in the immediately following subparagraph (vi)); or
(vi) Vistana fails to have discharged within a period of
sixty (60) days any attachment, sequestration, or similar writ levied upon any
property of such owner; or
12
(vii) Vistana fails to pay within sixty (60) days of issuance
or entry any final money judgment, after appeal, any tax, lien, or attachment in
the amount of One Hundred Thousand Dollars and 00/100 ($100,000) or greater; or
(viii) a Declared Default by Vistana, any Eligible Vistana
Subsidiary or a wholly-owned Affiliate of Vistana or of any Eligible Vistana
Subsidiary under the terms of any Indebtedness in an aggregate principal amount
in excess of $5,000,000 in one or a series of related or unrelated transactions;
or
(ix) Vistana fails to maintain Vistana's Minimum Net Worth;
or
(x) any statements, representations, warranties or
covenants of Vistana in this Agreement or any financial statement or any other
writing delivered by Vistana to Lender in connection with this Agreement is
false, misleading or incorrect in any material respect as of the date made;
provided, however, that such occurrence shall not constitute a Termination Event
unless the actual conditions have a reasonable likelihood of adversely and
materially affecting any of the collateral for any Resort Loan, or business or
financial condition of Vistana or the ability of Vistana to perform its
obligations under this Agreement or any Resort Loan Documents.
(b) A Declared Default by Vistana, any Eligible Vistana
Subsidiary or a wholly-owned Affiliate of Vistana or of any Eligible Vistana
Subsidiary in the payment of any Indebtedness owed to Lender shall constitute a
Termination Event hereunder without regard to any dollar threshold or any notice
and cure provisions granted to Vistana pursuant to the terms hereof.
Notwithstanding the foregoing provisions of this 6.1(b) to the contrary, a
Termination Event hereunder shall not be deemed to exist if within thirty (30)
days following a Declared Default by Vistana, by any Eligible Vistana Subsidiary
or by a wholly-owned Affiliate of Vistana or of any Eligible Vistana Subsidiary
in the payment of any Indebtedness owed to Lender, Vistana, the Eligible Vistana
Subsidiary or the wholly-owned Affiliate of Vistana or of the Eligible Vistana
Subsidiary which is the borrower with respect to the Indebtedness the failure to
pay which has given rise to the Declared Default pays Lender the total amount of
the Indebtedness as to which such occurrences pertained, together with any
accrued but unpaid interest thereon and any other amounts advanced by or
otherwise owed to Lender in connection with such Indebtedness.
SECTION 7. RIGHTS AND REMEDIES OF LENDER
7.1 Rights of Lender. Upon the occurrence of a Termination Event of the
----------------
type described in Section 6.1(a) or 6.1(b) hereof, Lender shall have the right
(i) to declare all of the Resort Loans for all Eligible Resorts and any
Indebtedness owed to Lender with respect to this Master Vistana Resort
Construction Loan Facility immediately due and payable, together with interest
accrued thereon, and any costs, fees and charges in connection therewith,
without presentment, demand, protest or notice of any kind, all of
13
which are hereby expressly waived, (ii) to terminate Lender's obligation to
extend future Resort Loans, Lender's obligations to make Resort Advances under
existing Resort Loans and all other obligations of Lender under this Agreement
and under the Resort Loan Documents for any Eligible Resort, and (iii) to
exercise such remedies under or in respect of the Resort Loan Documents for any
Eligible Resort, this Agreement and the Vistana Guaranty as may be permitted
thereunder or under applicable law, all as more particularly set forth in the
Resort Loan Documents for any Eligible Resort, this Agreement and the Vistana
Guaranty.
7.2 No Waiver or Exhaustion. No waiver by Lender of any of its rights
-----------------------
or remedies hereunder, in the Resort Loan Documents, under any Indebtedness owed
to Lender by Vistana, any Eligible Vistana Subsidiary or by a wholly-owned
Affiliate of Vistana or of any Eligible Vistana Subsidiary, or otherwise, shall
be considered a waiver of any other or subsequent right or remedy of Lender; no
delay or omission in the exercise or enforcement by Lender of any rights or
remedies shall ever be construed as a waiver of any right or remedy of Lender;
and no exercise or enforcement of any such rights or remedies shall ever be held
to exhaust any right or remedy of Lender.
7.3 Marshalling Waiver. Vistana waives any and all rights to require
------------------
the marshalling of assets in connection with the exercise of any of the remedies
hereunder.
SECTION 8. MISCELLANEOUS
8.1 Notices. Any notice or other communication required or permitted to
-------
be given shall be in writing addressed to the respective party as set forth
below and may be personally served, telecopied, or sent by overnight courier, or
sent by registered or certified U.S. Mail return receipt requested, and shall be
deemed given: (a) if served in person, when served; (b) if telecopied, on the
date of transmission if before 3:00 p.m. (Chicago time) on a Business Day
otherwise, on the next Business Day; provided that a confirmation of the receipt
--------
of any such telecopy is obtained and retained by the sending party and that a
hard copy of such notice is also sent pursuant to (c) or (d) below; (c) if by
overnight courier, on the first Business Day after delivery to the courier; or
(d) if by certified or registered U.S. Mail, return receipt requested, on the
fourth (4th) day after deposit in the mail postage prepaid.
Notices to Vistana: Vistana, Inc.
Attn: Chief Financial Officer
8801 Vistana Centre Drive
Orlando, Florida 32821-6353
Telecopy: (407) 239-3198
With a Copy to: Vistana, Inc.
Attn: Susan Werth, Esq.
701 Brickell Avenue
Suite 2100
Miami, Florida 33131
14
Telecopy: (305) 374-7159
Notices to Lender: Heller Financial, Inc.
Attn: Portfolio Manager, Vacation Ownership Finance
Loan No. 98-151
500 West Monroe Street
Chicago, Illinois 60661
Telecopy: (312)441-7924
With a copy to: Heller Financial, Inc.
Attn: Vacation Ownership Legal Representative
Loan No. 98-151
500 West Monroe Street
Chicago, Illinois 60661
Telecopy: (312)441-7872
8.2 Entire Agreement and Modifications. This Agreement and the Resort
----------------------------------
Loan Documents constitute the entire understanding and agreement between the
undersigned with respect to the transactions arising in connection with the
Resort Loans and supersede all prior written or oral understandings and
agreements between the undersigned in connection therewith. No provision of
this Agreement or the Resort Loan Documents may be modified, waived, terminated,
supplemented, changed or amended except by a written instrument executed by all
parties hereto or thereto. Notwithstanding the foregoing, in the event there is
a conflict between this Agreement and the Resort Loan Documents with respect to
a certain Resort Loan, the terms of the Resort Loan Documents for such Resort
Loan shall govern.
8.3 Severability. In case any of the provisions of this Agreement shall
------------
for any reason be held to be invalid, illegal, or unenforceable, such
invalidity, illegality, or unenforceability shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.
8.4 Election of Remedies. Lender shall have all of the rights and
--------------------
remedies granted herein and in the Resort Loan Documents and available at law or
in equity, and these same rights and remedies shall be cumulative and may be
pursued separately, successively, or concurrently against Vistana, any Eligible
Vistana Subsidiary, or any property encumbered by the Resort Loan Documents, at
the sole discretion of Lender. The exercise or failure to exercise any of the
same shall not constitute a waiver or release thereof or of any other right or
remedy, and the same shall be nonexclusive.
8.5 Form and Substance. All documents, certificates, insurance
------------------
policies, evidence, and other items required under this Agreement to be executed
and/or
15
delivered to Lender shall be in form and substance satisfactory to Lender in
Lender's reasonable discretion.
8.6 No Third Party Beneficiary. This Agreement is for the sole benefit
--------------------------
of Lender and Vistana and is not for the benefit of any third party.
8.7 Vistana in Control. In no event shall Lender's rights and interests
------------------
under the Resort Loan Documents be construed to give Lender the right to, or be
deemed to indicate that Lender is in control of the business, management or
properties of Vistana or any Eligible Vistana Subsidiary or has power over the
daily management functions and operating decisions made by Vistana.
8.8 Number and Gender. Whenever used herein, the singular number shall
-----------------
include the plural and the plural the singular, and the use of any gender shall
be applicable to all genders.
8.9 Captions. The captions, headings, and arrangements used in this
--------
Agreement are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.
8.10 Applicable Law. This Agreement shall be governed by and construed
--------------
in accordance with the laws of the State of Illinois (without regard to
conflicts of law principles) and the laws of the United States applicable to
transactions within such state.
8.11 Venue. VISTANA HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
-----
FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK STATE OF ILLINOIS AND
IRREVOCABLY AGREES THAT, SUBJECT TO LENDER'S ELECTION, ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN
SUCH COURTS. VISTANA EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. VISTANA HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF PROCESS MAY BE MADE UPON VISTANA BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO VISTANA, AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS
BEEN POSTED.
8.12 Jury Trial Waiver. VISTANA AND LENDER HEREBY WAIVE THEIR
-----------------
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. VISTANA AND LENDER ACKNOWLEDGE THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE
TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. VISTANA AND
16
LENDER WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS
JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS.
8.13 Attorneys' Fees. In any action hereunder between the parties
---------------
hereto, the prevailing party shall be entitled to reasonable attorneys' fees and
costs including those for pretrial, trial and appellate proceedings.
8.14 Counterparts. This Agreement may be signed in multiple
------------
counterparts which taken together shall constitute the entire agreement between
the parties.
8.15 Participating Lenders. Lender shall have the right to designate up
---------------------
to three participating lenders and to grant to such participating lenders
undivided participation interests in this Master Vistana Resort Construction
Loan Facility or in any one or more of the Resort Loans, on terms and conditions
satisfactory to Lender. Lender shall provide Vistana with the name of each such
proposed participating lender and Vistana shall have the right to approve each
such participating lender (such approval not to be unreasonably withheld) for a
period of four (4) Business Days after written notice is provided by Lender to
Vistana. It would be reasonable for Vistana to withhold its consent in the
event the potential participating lender is a timeshare developer (not including
a lender that has taken back timeshare assets as a result of a defaulted
timeshare related loan or credit facility), a timeshare exchange company or
hospitality industry company. Such participating lenders shall communicate and
deal only with Lender with respect to such participating lenders' participation
interests in this Master Vistana Resort Construction Loan Facility, and neither
Vistana nor any Eligible Vistana Subsidiary shall be required to deal with any
participating lender unless such participating lender accompanies Lender on any
inspection or site visit. Neither Vistana nor any Eligible Vistana Subsidiary
shall be liable hereunder to make any payment to any participating lender or
incur any related expenses as a result of such participation arrangement. The
Lender may furnish any information concerning Vistana or the transactions
contemplated herein in the possession of Lender from time to time to such
participating lenders (including prospective participating lenders which are not
a timeshare developer, timeshare exchange company or hospitality industry
company), provided that such participating lenders shall treat any such
--------
information as "confidential."
8.16 Consent to Advertising and Publicity. Lender may issue and
------------------------------------
disseminate to the public press releases and other information describing the
credit accommodations entered into pursuant to this Agreement and/or pursuant to
any Resort Loan, provided that Vistana shall approve the description of such
--------
credit accommodation and the timing of such announcement, which approval shall
not be unreasonably withheld.
IN WITNESS WHEREOF, the parties set their hands as of the date above first
written.
17
LENDER:
HELLER FINANCIAL, INC.
/s/ Elisa Nicely
By: __________________________________
Elisa Nicely
Name:__________________________________
Assistant Vice President
Its: __________________________________
VISTANA:
VISTANA, INC., a Florida corporation
/s/ Susan Werth
By: ________________________________
Name: Susan Werth
Its: Senior Vice President and General Counsel
18
APPENDIX
--------
DEFINED TERMS
-------------
For purposes of this Agreement, the following terms shall have the
respective meanings assigned to them:
AFFILIATE. Any individual, trust, estate, partnership, limited liability
company, corporation or any other incorporated or unincorporated organization
that directly or indirectly, through one or more intermediaries, Controls or is
Controlled by or is under common Control with Vistana, any officer, director,
partner or shareholder of Vistana, or any relative of any of the foregoing. The
term "Control" means possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
AGREEMENT. First paragraph of this Agreement.
APPROVED DEVELOPMENT BUDGET AND COMPLETION SCHEDULE. As defined in clause
(e) of the definition of Eligible Resort.
APPROVED SALES AND MARKETING PLAN. As defined in clause (f) of the
definition of Eligible Resort.
BUSINESS DAY. The term "business day" shall mean a day which is not a
Saturday or Sunday on which banks are open for business in Illinois and Florida.
COMPLETION. The substantial completion of any of the improvements,
including units and amenities, in any applicable phase of an Eligible Resort in
accordance with the Approved Development Budget and Completion Schedule, the
Construction Contract, the Architectural Contract and the plans, as evidenced by
(i) a certificate of occupancy (or its equivalent), if applicable, permitting
legal occupancy thereof in the respective completed improvements, issued by the
local Governmental Authority with jurisdiction over construction of the
improvements, (ii) a certificate of the contractor in form and substance
satisfactory to Lender regarding completion of the improvements, (iii) a
certificate of the architect in form and substance satisfactory to Lender
regarding completion of the Improvements and (iv) a certificate of the
Inspecting Lender's Architect in form and substance satisfactory to Lender.
CONTROL. As defined in the definition of "Affiliate."
DEBTOR RELIEF LAWS. Any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization, or similar
laws affecting the rights or remedies of creditors generally, as in effect from
time to time.
DECLARATION. With respect to any Resort, that certain condominium
declaration to be recorded in the appropriate land records office of the
applicable Governmental Authority in which such Resort is located, pursuant to
which a condominium regime will be created in and to such Resort.
DECLARED DEFAULT. With respect to any Person at any date, a default under
any instrument evidencing any Indebtedness for which (i) such Person has
received written notice of default by the holder of such Indebtedness and (ii)
said default has not been cured by such Person or waived in writing by the
holder of such Indebtedness, and the period for cure, if any, has expired.
ELIGIBLE RESORT. Any Resort which has satisfied the following requirements
(in the sole determination of Lender):
(a) such Resort is located in a state of the United States of America or in
the Bahamas; other countries shall be considered on a country-by-country basis
subject to Lender's reasonable approval;
(b) the acquisition of such Resort shall be pursuant to a purchase and sale
agreement (a "PURCHASE AGREEMENT") which shall have been delivered to Lender and
shall be satisfactory to Lender in its reasonable discretion; and the Eligible
Vistana Subsidiary's right, title and interest in and to such Resort (including,
without limitation, all title exceptions set forth on Schedule B to a mortgagee
policy in respect of such Resort) is or shall be satisfactory to Lender in its
reasonable discretion;
(c) if Lender is advancing funds for construction, the construction of such
Resort shall be pursuant to a contract (a "RESORT CONSTRUCTION CONTRACT") with a
general contractor, if any, licensed by the applicable Governmental Authority
in the jurisdiction in which the Resort is located, which contract shall have
been delivered to Lender and which contract and general contractor, if any,
shall be approved by Lender, which approval shall not be unreasonably withheld.
Lender acknowledges that there may be no Resort Construction Contract in the
event an Affiliate of Vistana acts as the general contractor for construction in
which case Vistana agrees to provide customary information and disclosures as
would typically be provided in a standard Resort Construction Contract;
(d) if Lender is advancing funds for construction, the construction of such
Resort shall be pursuant to an architectural contract (a "RESORT ARCHITECTURAL
CONTRACT") and certain plans, specifications and designs prepared by an
architect licensed by the applicable Governmental Authority in the jurisdiction
in which the Resort is located, which contract, plans, specifications and
designs shall have been delivered to Lender's Architect for review and approval,
which approval shall not be unreasonably withheld;
(e) a detailed construction budget and time schedule (with respect to any
Resort, an "APPROVED DEVELOPMENT BUDGET AND COMPLETION SCHEDULE") shall have
2
been delivered to Lender and shall be satisfactory to Lender in its sole
discretion (such budget shall include, among other things, all costs of
materials, fixtures, furnishings, personal property and labor to be incurred in
the construction and furnishing of such Resort, all common elements and
amenities in respect thereof and the provision of all utilities to such Resort
and shall, among other things, consist of
(i) a description of work (such work being classified and shown on a
line item basis reasonably satisfactory to Lender for all buildings and the
other improvements to be built at such Resort; such classification should
include: "construction line items" for site work, concrete work, masonry work,
rough carpentry work, finish carpentry and cabinet work, architectural carpentry
work, waterproofing, insulation, fireproofing, drywall, ceiling work, flooring
and base work, painting and finishing work, wall covering work, windows, ceramic
tile work, bathroom fixtures and hardware, kitchen fixtures and hardware, HVAC,
plumbing work, sprinkler work and electrical work; "furniture, fixtures and
equipment line items"; "professional fee line items" (including architectural,
engineering, accounting and legal services); and overhead, general conditions
and contingency),
(ii) an allocation to each construction line item of a scheduled
portion of the fixed construction price in the Resort Construction Contract for
such Resort, if applicable, and
(iii) an estimated completion time line for each construction line
item indicating the date that such item is anticipated to be completed);
(f) a detailed sales and marketing budget (with respect to any Resort, an
"APPROVED SALES AND MARKETING PLAN") showing all expenses and out-of-pocket
costs to be incurred by the applicable Eligible Vistana Subsidiary or the
Borrower in connection with selling and marketing of the Intervals in respect of
such Resort (together with an estimated sales time line indicating the Intervals
expected to be sold on a monthly and annual basis) shall have been delivered to
Lender and shall be satisfactory to Lender in its sole discretion (such budget
shall show "marketing costs line items;" "sale cost line items"; "commissions
payable line items"; and "professional fee line items");
(g) (i) the Resort Development Costs for such Eligible Resort to be funded
from a particular Resort Loan shall be equal to the lesser of (A) 100% of the
total acquisition costs, construction costs (including so-called "soft costs"
but excluding any sales and marketing costs) and furnishing costs of such Resort
as set forth in the Approved Development Budget and Completion Schedule for such
Resort, or (B) the Eligible Vistana Subsidiary's actual out-of-pocket expenses
for the applicable Eligible Resort (collectively, with respect to any Resort,
the "RESORT DEVELOPMENT COSTS"); and (ii) the Resort Development Costs for such
Resort shall not exceed 35% of the Projected Resort Net Sales Proceeds for such
Resort as determined prior to the first Advance of a Resort Loan from the
information submitted prior to the Resort Loan Closing Date; and (iii) a
detailed certificate of the chief financial officer or chief
3
operating officer of Vistana shall have been received by Lender confirming the
correctness and calculations of clauses (i) and (ii) above and shall be
satisfactory to Lender in its reasonable discretion;
(h) The portion of the Resort Development Costs attributable to
construction of identified amenities of such Resort as set forth in the
amenities portion of the Approved Development Budget and Completion Schedule
shall not exceed 30% of the total Resort Development Costs of all phases of such
Resort that benefit from such identified amenities (which calculation shall be
certified to Lender by the chief financial officer or chief operating officer of
Vistana and which shall be acceptable to Lender in its reasonable discretion);
(i) The portion of the Resort Development Costs attributable to working
capital purposes for such Resort as set forth in the Approved Development Budget
and Completion Schedule shall not exceed 10% of the total Resort Development
Costs for all such Resort Loans for a subject Resort (which calculation shall be
certified to Lender by the chief financial officer or chief operating officer of
Vistana and which shall be acceptable to Lender in its sole discretion);
provided, however, that the total amount of Resort Advances with respect to all
Resort Loans on all Eligible Resorts hereunder for working capital purposes
shall not exceed an overall maximum outstanding amount of $2,000,000 across all
Eligible Resorts at any one time. For purposes of this Agreement, "working
capital" shall be all costs relating to start-up.
(j) A projected sources and uses of cash for such Resort and the Eligible
Vistana Subsidiary that will own it (presented in a month-by-month format) for
each year during which the requested Resort Loan for such Resort is anticipated
to be outstanding shall be delivered to Lender together with a detailed
statement of the assumptions upon which such sources and uses statement was
prepared and such statement and such assumptions shall be satisfactory to Lender
in its sole discretion (with respect to any Resort, a "SOURCES AND USES OF CASH
PROJECTION");
(k) The following additional deliveries shall be made to Lender in respect
of such Resort and shall be satisfactory to Lender in its sole discretion: (i) a
current phase I environmental survey in respect of such Resort, (ii) a soil
report in respect of such Resort, (iii) copies of all payment and performance
bonds in respect of the general contractor under the Resort Construction
Contract for such Resort to the extent required by Vistana, (iv) copies of such
general contractor's builder's risk insurance policy, (v) copies of all
excavation, foundation and building permits for such Resort prior to the initial
Advance with the exception of reimbursements for acquisition costs, (vi) copies
of all zoning, density and design approvals, waivers or variances (except to the
extent the same are contingent upon completion of construction) prior to the
initial Advance with the exception of reimbursements for acquisition costs,
(vii) copies of all organization documents, bylaws, operating agreements and
other organic documents of the Eligible Vistana Subsidiary that is to own such
Resort, (viii) a perimeter survey of the Resort by a licensed surveyor that
meets the ALTA/ACSM 1997 Minimum Survey Requirements (which shall show any flood
zones or plains in which such Resort may be
4
located) and (ix) such other documents, reports or information as Lender may
reasonably request in order for Lender to make a credit/resort determination in
respect of such Resort; and
(l) The maximum amount outstanding shall not be in excess of the Resort
Loan Limit.
ELIGIBLE VISTANA SUBSIDIARY. With respect to any Resort, a subsidiary of
Vistana (which may be a corporation, limited liability company or limited
partnership), (a) all of whose capital stock and other equity interests are
wholly owned directly or indirectly by Vistana, and (b) whose sole business is
the ownership, construction, development, operation and management of one or
more resorts (including at least one (1) Eligible Resort) and the sale of
Intervals in respect thereof.
ELIGIBILITY PERIOD. The period commencing on the Facility Closing Date and
ending on the earlier of (a) October 31, 2001 or (b) the date on which this
Agreement is terminated under Section 7.1 as a result of the existence of a
Termination Event.
ESTIMATED NET SALES PRICE. With respect to any Resort, the sales prices
for an Interval therein (giving effect to the type of Unit associated with such
Interval, the seasonality of such Interval and any other use restrictions or
advantages associated with such Interval) certified by the chief financial
officer or chief operating officer to Lender (which certification shall be
acceptable to Lender in its reasonable discretion) less all estimated out-of-
pocket costs and expenses (including commissions) that would be incurred in
consummating the sale of such Interval, likewise certified to Lender (which
certification shall also be acceptable to Lender in its reasonable discretion).
If a Resort is to be developed in phases, "Estimated Net Sales Price" shall be
determined in respect of each phase of such Resort.
FACILITY CLOSING DATE. October 9, 1998.
FUNDING FEE. A funding fee which is payable in accordance with Section 1.5
hereof.
GAAP. Generally accepted accounting principles, applied on a consistent
basis, set forth in Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and/or in statements of the Financial
Accounting Standards Board which are applicable in the circumstances as of the
date in question; and the requisite that such principles be applied on a
consistent basis means that the accounting principles in a current period are
comparable in all material respects to those applied in a preceding period, with
any exceptions thereto noted.
GOVERNMENTAL AUTHORITY. The United States of America, the states and
counties in which any of the Eligible Resorts are located, the Bahamas and any
other governmental authorities (including other foreign countries if approved by
Lender as the location of an Eligible Resort) having jurisdiction over Vistana
or any Eligible Vistana
5
Subsidiary, any of the Eligible Resorts or any other property of either Vistana
or any Eligible Vistana Subsidiary, or the sale of Intervals in any of the
Eligible Resorts.
GOVERNMENTAL REGULATIONS. All rules, regulations, ordinances, laws and
statutes of any Governmental Authority which affect any one or more of the
Eligible Resorts or the right of Vistana or any Eligible Vistana Subsidiary to
sell Intervals.
INDEBTEDNESS. With respect to any Person at any date, (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price of property
or services, including, without limitation, any Resort Loans and any pre-sale or
other receivables financing, other than: (i) current liabilities incurred in the
ordinary course of business and payable in accordance with customary trade
practices; or (ii) liabilities incurred or to be incurred among, from, under or
through one or a series of related or unrelated transactions each of which
qualify for treatment as a "true sale" in accordance with FAS-125 issued by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants; (b) all obligations of such Person under capital leases; (c)
all obligations of such Person in respect of acceptances issued or created for
the account of such Person; and (d) all liabilities secured by any lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof.
INTEREST RATE. A floating rate per annum equal to the Base Rate plus 265
basis points, (2.65%) (the aggregate rate referred to as the "Interest Rate").
"Base Rate" shall mean the rate published each Business Day in The Wall Street
---------------
Journal for notes maturing three (3) months after issuance under the caption
- -------
"Money Rates, London Interbank Offered Rates (LIBOR)". The Interest Rate for
each calendar month shall be fixed based upon the Interest Rate published prior
to and in effect on the first (1st) Business Day of such month. Interest shall
be calculated based on a 360 day year and charged for the actual number of days
elapsed.
INTERVAL. An undivided fee simple ownership interest as tenants in common
with all other Purchasers with respect to any Unit, with a right to use an
assigned unit at the Resort for one week annually, or on an every other year
basis, together with all appurtenant rights and interests as more particularly
described in the Timeshare Declaration.
LENDER. First paragraph of this Agreement.
LENDER'S ARCHITECT. With respect to any Eligible Resort, (a) an architect
or engineer licensed by the applicable Governmental Authority in the
jurisdiction in which such Eligible Resort is located that has been hired by
Lender or (b) any other construction consultant selected and retained by Lender
in its sole discretion.
MATERIAL ADVERSE EFFECT. With respect to any event or circumstance, a
material adverse effect on:
6
(a) the business, assets, financial condition or operations of Vistana and
its subsidiaries, taken as a whole;
(b) the ability of Vistana or any Eligible Vistana Subsidiary to perform
its respective obligations under this Agreement or any Resort Loan Document to
which it is a party;
(c) the validity, enforceability or collectibility against Vistana or any
Eligible Vistana Subsidiary of this Agreement or any Resort Loan Document to
which it is a party; or
(d) the status, existence, perfection or priority of (i) Lender's security
interest and lien in the collateral securing any Resort Loan or (ii) any
Eligible Vistana Subsidiary's ownership interest in any Eligible Resort.
PERSON. Natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
PROJECTED RESORT NET SALES PROCEEDS. With respect to any Resort, the
product of (a) the number of Intervals in respect of the Units to be constructed
at such Resort that will be available for sale to the public times (b) the
-----
Estimated Net Sales Price in respect of such Intervals. If a Resort is to be
developed in phases, "Projected Resort Net Sales Proceeds" shall be determined
in respect of each phase of such Resort.
PURCHASE AGREEMENT. As defined in clause (b) of the definition of Eligible
Resort.
RESORT. Any property and the improvements and amenities existing or to be
constructed thereon that (a) is owned or will be owned on the applicable Resort
Loan Closing Date by an Eligible Vistana Subsidiary pursuant to the terms of a
Purchase Agreement, (b) is to be made subject to a condominium and timeshare
regime under applicable Governmental Regulations, (c) pursuant to such
condominium and timeshare regime is to be divided into Intervals and (d) is to
be directly marketed and sold as a timeshare resort.
RESORT ADVANCE. As defined in the definition of Resort Loan.
RESORT ARCHITECTURAL CONTRACT. As defined in clause (d) of the definition
of Eligible Resort.
RESORT ASSOCIATION. A condominium, timeshare or owners' association in
which owners of Intervals in an Eligible Resort are members.
7
RESORT CONSTRUCTION CONTRACT. As defined in clause (c) of the definition
of Eligible Resort.
RESORT DEVELOPMENT COSTS. As defined in clause (g) of the definition of
Eligible Resort.
RESORT LOAN. With respect to any Resort, a loan from Lender to the
Eligible Vistana Subsidiary that owns such Resort to fund 100% (or such lesser
amount as may be requested by such Eligible Vistana Subsidiary) of the Resort
Development Costs for such Resort but not in excess of any of the requirements
of subsections (g), (h) and (i) under the definition of "Eligible Resort," which
loan is to be advanced in a series of advances (each a "RESORT ADVANCE"); and
Resort Advances in respect of such Resort Loan shall be made available to such
Eligible Vistana Subsidiary (subject to the satisfaction of the conditions
precedent set forth in the Resort Loan Documents in respect thereof) during the
Eligibility Period (with a maximum of two such Resort Advances plus an interest
Advance to be extended during each calendar month in the Eligibility Period).
Notwithstanding this definition, the amount outstanding under any Resort Loan
hereunder shall not be in excess of the Resort Loan Limit.
RESORT LOAN CLOSING DATE. With respect to any Resort Loan, the date on
which the Resort Loan Documents for such Resort Loan are signed and delivered
and all conditions precedent in respect of the extension of such Resort Loan to
the applicable Eligible Vistana Subsidiary are satisfied or otherwise waived by
Lender.
RESORT LOAN DOCUMENTS. With respect to any Eligible Resort and the Resort
Loan in respect thereof, each of the following: (a) the acquisition and
construction loan agreement for such Resort Loan, (b) the
acquisition/construction promissory note or notes for such Resort Loan, (c) the
guarantee of Vistana in respect of such Resort Loan, (d) the guarantee of
Vistana in respect of the completion of the construction of such Eligible
Resort, (e) the mortgage, security agreement and assignment of leases and rents
or the deed of trust, security agreement and assignment of leases and rents in
and to such Eligible Resort securing such Resort Loan (a "RESORT LOAN
MORTGAGE"), (f) the collateral assignment of the Resort Construction Contract in
respect of such Eligible Resort, (g) the collateral assignment of the Resort
Architectural Contract in respect of such Eligible Resort, (h) the collateral
assignment of Purchase Agreement in respect of such Eligible Resort, (i) the
hazardous material indemnity agreement in respect of such Eligible Resort and
(j) such other collateral security documents as are customarily obtained by
prudent construction lenders.
RESORT LOAN LIMIT. The maximum principal amount outstanding at any time
with respect to all Resort Loans for any Eligible Resort; provided, however,
such amount outstanding shall never be in excess of $35,000,000 for any Eligible
Resort.
RESORT LOAN MORTGAGE. As defined in the definition of Resort Loan
Documents.
8
SOURCES AND USES OF CASH PROJECTION. As defined in clause (i) of the
definition of Eligible Resort.
TERMINATION EVENT. As defined in Section 6 hereof.
TIMESHARE DECLARATION. With respect to any Resort, that certain timeshare
declaration to be recorded in the appropriate land records office for the
applicable Governmental Authority in the jurisdiction in which such Resort is
located, pursuant to which a timeshare regimen based on Intervals will be
created in and to such Resort. The Timeshare Declaration may be combined with,
and made a part of, a Declaration.
UNIT. With respect to any Resort, an individual condominium unit within
such Resort, together with all furniture, fixtures and furnishings therein, and
together with any and all interest in common elements appurtenant thereto, as
provided in the Declaration or Timeshare Declaration of such Resort.
VISTANA. First paragraph of this Agreement.
VISTANA GUARANTY. The guaranty agreement executed by Vistana of even date
herewith which guarantees all amounts outstanding pursuant to the terms of this
Agreement.
VISTANA'S MINIMUM NET WORTH. Vistana agrees to (i) maintain a consolidated
minimum net worth of One Hundred Million and 00/100 Dollars ($100,000,000.00) as
determined in accordance with Vistana's Form 10-Q and Form 10-K quarterly and
annual financial statements from and after the date hereof; and (ii) such
Vistana minimum net worth shall increase over time by an amount equal to fifty
percent (50%) of Vistana's after-tax net income over time as determined in
accordance with Vistana's Form 10-Q and Form 10-K quarterly and annual financial
statements; and (iii) maintain a minimum tangible net worth of Eighty Million
and 00/100 Dollars ($80,000,000.00), defined as total shareholders equity plus
subordinated indebtedness less any intangible assets and inter-company
receivables not eliminated in consolidated financial statements as determined in
accordance with Vistana's Form 10-Q and 10-K quarterly and annaul financial
statements from and after the date hereof.
9
SCHEDULE 1.2
------------
[REQUEST FOR RESORT LOAN]
DATE:___________________________
Heller Financial, Inc.
Attn: Portfolio Manager, Vacation Ownership
500 West Monroe Street
Chicago, Illinois 60661
RE: Loan No.
$_______ Master Vistana Resort Construction Loan Facility (the
"AGREEMENT") between Heller Financial, Inc. ("LENDER") and Vistana,
Inc. ("VISTANA")
Dear Sir or Madam:
Capitalized terms used herein shall have the meanings assigned thereto in
the Agreement.
In accordance with the terms of the Agreement, Vistana hereby notifies
Lender that it desires to obtain a new Resort Loan from Lender in a maximum
principal amount not to exceed $_______________________. The following
information is true and correct with respect to such Resort Loan:
(a) Borrower: [Name of Eligible Vistana Subsidiary].
(b) All of the equity of Borrower is wholly owned directly or indirectly by
Vistana.
(c) Borrower's certificate of incorporation and bylaws are attached hereto
as Exhibit A.
(d) The Borrower satisfies all of the eligibility requirements of an
"Eligible Vistana Subsidiary."
(e) The Resort is described on Exhibit B hereto and is located at
_____________.
(f) The Purchase Agreement for such Resort is attached hereto as Exhibit C.
(g) The Resort Construction Contract for such Resort is attached hereto as
Exhibit D.
10
(h) The Resort Architectural Contract for such Resort is attached hereto
as Exhibit E.
(i) The construction and sales and marketing budgets for such Resort are
attached hereto as Exhibit F.
(j) The Sources and Uses of Cash Projection for such Resort is attached
hereto as Exhibit G.
(k) The total Resort Development Costs for the Resort to be funded from the
Resort Loan are estimated to be $_______________. Vistana's Chief Financial
Officer of Chief Operating Officer certifies to the best of his knowledge
as of the date hereof with respect to the information contained in Exhibit
F that:
(i) the requested Resort Development Costs set forth on Exhibit
F do not exceed 35% of the Projected Resort Net Sales Proceeds;
(ii) not more than 10% of the requested Resort Development Costs
has been requested for working capital purposes; and
(iii) the amenities portion of requested Resort Development Costs
set forth on Exhibit F does not exceed 30% of the total cost of all
phases at the Resort which benefit from such amenities.
(l) The Resort satisfies all of the eligibility requirements of an
"Eligible Resort."
(m) A current phase I environmental survey of the Resort is attached
hereto as Exhibit I.
(n) A soil report in respect of the Resort is attached hereto as Exhibit J.
(o) A perimeter survey of the Resort is attached hereto as Exhibit K.
(p) A [preliminary] owner's title insurance policy is attached hereto as
Exhibit L.
(q) Vistana requests that the Resort Loan have a maturity date of ____ [may not
be later than 7 years from the Facility Closing Date] and a draw period
during which Resort Advances will be available for ____ years [may not
extend beyond Eligibility Period].
11
(r) The Resort Loan Limit is $35,000,000. The overall outstanding amount
of working capital in all Resort Loans for all Eligible Resorts shall
not exceed $2,000,000 at any one time.
(s) At the conclusion of the fifteen (15) Business Day approval process,
Heller will prepare the release fee schedule per Interval and Vistana
will have the opportunity to approve (subject to adjustment as
provided for in Section 1.4 of the Construction Loan Agreement for the
Resort Loan) and that the minimum amortization be as set forth on
Exhibit N hereto.
(t) Vistana requests that the Resort Loan Closing Date for the requested
Resort Loan be ______ __, ____.
(u) The form of Declaration and/or Timeshare Declaration for the Resort
are set forth on Exhibit O hereto or will be submitted to Lender at
the time such documents are prepared.
(v) No Termination Event has occurred and is continuing. The Master
Vistana Receivables Loan Facility is in full force and effect.
(w) Vistana confirms that Intervals at the Resort will be sold on a deeded
basis using mortgage notes and mortgages substantially in the form set
forth on Exhibit P hereto or on such forms as will be submitted to
Lender at the time such documents are prepared.
(x) The Approved Development Budget and Completion Schedule (as
updated) is attached hereto as Exhibit Q.
(y) Any franchise management, submanagement or Affiliate agreements
are attached hereto as Exhibit R or will be submitted to Lender at the
time such documents are prepared.
(z) All public offering statements for the Resort which have been
filed with the applicable Governmental Authority in the jurisdiction
in which the Eligible Resort is located, along with the consumer
documents for the sale of timeshares at such Resort, are attached
hereto as Exhibit S or will be submitted to Lender at the time such
documents are prepared.
2. The representations and warranties contained in this Agreement are
true, correct and complete in all material respects to the same extent as though
made on the date of this Agreement except for any representation or warranty
limited by its terms to a specific date and taking into account any amendments
to the schedules or exhibits as a result of any subsequent disclosures made by
Vistana in writing to and approved by Lender.
12
3. Vistana is in compliance in all material respects with each and every
one of its covenants, agreements and obligations under this Agreement.
4. To the best of Vistana's knowledge, Vistana has no defenses or offsets
with respect to the payment of any amounts due Lender pursuant to this
Agreement.
5. Vistana acknowledges that this request is subject to approval by
Lender.
VISTANA, INC.
By: ________________________________
Name: ________________________________
Its: ________________________________
13
SCHEDULE 2.2
------------
[Closing Checklist]
HFS NO.
HELLER FINANCIAL, INC. $__________
RESORT LOAN TO [NAME OF ELIGIBLE VISTANA SUBSIDIARY]
LENDER: Heller Financial, Inc.
500 West Monroe Street
Suite 2800
Chicago, Illinois 60640
Attention: Nora Ciesla , Account Executive
Telephone: 312-441-7606
Facsimile: 312-441-7924
Stephen Lewis, Esq.
Telephone: 312-441-7309
Facsimile: 312-441-7173
LENDER'S COUNSEL:
BORROWER: [Name of Eligible Vistana Subsidiary], a ________
corporation
BORROWER'S COUNSEL: [To Be Supplied]
GUARANTOR: Vistana, Inc.
RESORT: [Name of Eligible Resort]
14
- ---------------------------------------------------------------------------------------------------------------------------------
ITEM RESPONSIBILITY STATUS
- ---------------------------------------------------------------------------------------------------------------------------------
1. BORROWER/GUARANTOR BACKGROUND DOCUMENTS
---------------------------------------------------------------------------------------------------------------------------------
a. UCC judgment and tax lien search Lender's counsel
i. Borrower
ii. Guarantor
iii. Resort
- ---------------------------------------------------------------------------------------------------------------------------------
b. Borrower's/Guarantor's Certificate re: litigation and other matters Borrower;
affecting Borrower and Guarantor Guarantor
- ---------------------------------------------------------------------------------------------------------------------------------
c. Intercompany agreements and loans between Borrower, Guarantor or any Borrower;
other affiliate Guarantor
- ---------------------------------------------------------------------------------------------------------------------------------
d. Credit reports Lender
- ---------------------------------------------------------------------------------------------------------------------------------
2. ACQUISITION/CONSTRUCTION DOCUMENTS
- ---------------------------------------------------------------------------------------------------------------------------------
a. Resort Purchase and Sale Contract Borrower
i. Owner's policy of title insurance and copies of all exceptions and
liens on Schedule B thereto
- ---------------------------------------------------------------------------------------------------------------------------------
b. Resort Architectural Contract Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
c. Resort Construction Contract Borrower
i. Copies of major subcontracts
Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
d. Plans, Specifications and Drawings Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
e. Approved Development Budget and Completion Schedule Borrower
i. Construction time line
Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
f. Approved Sales and Marketing Plan Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
g. Soil/Engineering Report Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
h. Payment and Performance Bonds Borrower
i. Co-obligee endorsement in favor of Lender
Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
i. Sources and Uses of Cash Projection Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
j. Excavation, foundation and building permits; water connection Borrower
permit; storm sewer connection permit; other permits
- ---------------------------------------------------------------------------------------------------------------------------------
3. RESORT DOCUMENTS
- ---------------------------------------------------------------------------------------------------------------------------------
a. Draft Condominium Declaration Borrower
i. Draft condominium plat and horizontal/vertical site drawings
Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
b. Draft Timeshare Declaration Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
c. [PUD or other Horizontal Plan Documents] Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
d. [Copies of all Restrictive Covenants Running with Land] Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
e. Draft Articles of Incorporation and Bylaws of Condominium Borrower
Homeowners' Association
- ---------------------------------------------------------------------------------------------------------------------------------
f. Draft Articles of Incorporation and Bylaws of Timeshare Owners' Borrower
Association
- ---------------------------------------------------------------------------------------------------------------------------------
g. Draft Condominium Rules and Regulations Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
h. Draft Timesharing Rules and Regulations Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
i. Draft Management Agreement for Resort Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
j. [Registration, Public Offering Statement and other Filed Time Share Borrower
Documents for Resort in _______, _______, ________ and ______]
- ---------------------------------------------------------------------------------------------------------------------------------
k. Form of purchaser credit application Borrower
- ---------------------------------------------------------------------------------------------------------------------------------
l. Form of reservation agreement Borrower
15
- --------------------------------------------------------------------------------------------------------------------------
m. Form of escrow agreement for pre-sales Borrower
i. Location of down payment escrow deposit
- --------------------------------------------------------------------------------------------------------------------------
n. Form of purchaser buy/sell agreement Borrower
- --------------------------------------------------------------------------------------------------------------------------
o. Form of purchase money mortgage note Borrower
- --------------------------------------------------------------------------------------------------------------------------
p. Form of purchase money mortgage Borrower -
- --------------------------------------------------------------------------------------------------------------------------
q. Form of Regulation Z Disclosure Statement Borrower
- --------------------------------------------------------------------------------------------------------------------------
r. Form of Rescission Statement Borrower
- --------------------------------------------------------------------------------------------------------------------------
s. Form of Regulation X Servicing Statement Borrower
- --------------------------------------------------------------------------------------------------------------------------
t. Form of RESPA Settlement Statement Borrower
- --------------------------------------------------------------------------------------------------------------------------
u. Pro-forma Mortgagee's Title Insurance Policy Borrower
- --------------------------------------------------------------------------------------------------------------------------
v. Form of timeshare documents receipt Borrower
- --------------------------------------------------------------------------------------------------------------------------
w. Purchaser's affidavit and acknowledgment Borrower
- --------------------------------------------------------------------------------------------------------------------------
x. State timeshare filings (______, _____ and ______) Borrower
i. Subdivision/Developer/Declarant licensing
Borrower
- --------------------------------------------------------------------------------------------------------------------------
y. Evidence that forms meet state and federal requirements Borrower
- --------------------------------------------------------------------------------------------------------------------------
z. Sales/marketing contracts for Intervals and/or Club memberships Borrower
- --------------------------------------------------------------------------------------------------------------------------
aa. All Affiliate contracts with respect to Resort (except as listed Borrower/
above) Guarantor
- --------------------------------------------------------------------------------------------------------------------------
4. RESORT ACQUISITION AND OTHER INFORMATION
- --------------------------------------------------------------------------------------------------------------------------
a. Schedule of Acquisition Closing Costs and Expenses (if applicable) Borrower's counsel
- --------------------------------------------------------------------------------------------------------------------------
b. Conveyance Documents (if applicable) Borrower's counsel
- --------------------------------------------------------------------------------------------------------------------------
c. Resort Loan Request under Master Vistana Resort Loan Facility Guarantor
- --------------------------------------------------------------------------------------------------------------------------
d. Perimeter ALTA Survey for Resort Borrower
i. Surveyor's Certificate Borrower
ii. Flood zone classification (if applicable) Borrower
- --------------------------------------------------------------------------------------------------------------------------
e. Phase I Environmental Survey for Resort Borrower
i. Heller Reliance Letter Borrower
- --------------------------------------------------------------------------------------------------------------------------
f. Certificates of Insurance (including flood and builder's risk) and Borrower
proof of payment of premiums
Borrower
i. Lender named as mortgagee loss payee/co-insured
- --------------------------------------------------------------------------------------------------------------------------
g. Other Resort information:
i. Receipts evidencing payment of property taxes
ii. Copies of utility contracts (if any) Borrower
iii. Certificates of occupancy (if any)
iv. Lender Inspection Results Borrower
Borrower
Borrower
- --------------------------------------------------------------------------------------------------------------------------
h. Appraisal Borrower
- --------------------------------------------------------------------------------------------------------------------------
i. Mechanic's, materialmen's and supplier's lien partial waivers and Borrower
reconciliation of all payments to date of closing (if applicable)
- --------------------------------------------------------------------------------------------------------------------------
j. Licensing Borrower
i. Real estate broker licensing for sales of Intervals
ii. Amenities Borrower
Borrower
- --------------------------------------------------------------------------------------------------------------------------
k. Zoning compliance Borrower
16
- ---------------------------------------------------------------------------------------------------------------------------
l. ADA/HUD accessibility compliance (if applicable) Borrower
- ---------------------------------------------------------------------------------------------------------------------------
m. Financial statements of Borrower and Guarantor Borrower
- ---------------------------------------------------------------------------------------------------------------------------
n. Certificate or other evidence of satisfaction of net worth Guarantor
requirement
- ---------------------------------------------------------------------------------------------------------------------------
5. RESORT LOAN DOCUMENTS
- ---------------------------------------------------------------------------------------------------------------------------
a. Promissory note Lender's counsel
- ---------------------------------------------------------------------------------------------------------------------------
b. Acquisition and Construction Loan Agreement Lender's counsel
- ---------------------------------------------------------------------------------------------------------------------------
c. Guarantee (Payment and Completion) Lender's counsel
- ---------------------------------------------------------------------------------------------------------------------------
d. Mortgage, Assignment of Rents and Security Agreement Lender's counsel
- ---------------------------------------------------------------------------------------------------------------------------
i. Mortgagee's title insurance Commitment/Pro forma mortgagee's title
insurance policy Borrower's
ii. Endorsements: future advance, usury, condominium/pud, mechanic's counsel/title
lien, zoning, elimination of survey/easement exceptions company
iii. Copies of all listed Schedule B exceptions Borrower's
counsel/title
company
Borrower's
counsel/title
company
- ---------------------------------------------------------------------------------------------------------------------------
e. UCC-1's - Borrower Lender's counsel
i. Central/Local: _________
ii. Central/Local: _________
- ---------------------------------------------------------------------------------------------------------------------------
f. Hazardous Materials Indemnity Agreement Lender's counsel
- ---------------------------------------------------------------------------------------------------------------------------
g. Collateral Assignment of Declarant's Rights (or Form) Lender's counsel
- ---------------------------------------------------------------------------------------------------------------------------
h. Collateral Assignment of Resort-related contracts Lender's counsel
i. Collateral Assignment of Resort Construction Contract
ii. Collateral Assignment of Resort Architectural Contract
iii. [Other]
- ---------------------------------------------------------------------------------------------------------------------------
i. [Escrow Arrangement Lender's counsel
i. insured closing agent's letter]
- ---------------------------------------------------------------------------------------------------------------------------
j. Corporate authorization for the Borrower and the Guarantor Borrower
i. Good Standing Certificate for the Borrower
ii. Good Standing Certificate for the Guarantor
iii. Foreign Authorization Certificates for the Borrower from [state Borrower
in which Resort is located]
iv. Foreign Authorization Certificates for the Guarantor from [state
in which Resort is located] Guarantor
v. Certificates of Incorporation for Borrower
vi. Articles of Incorporation for Guarantor
vii. Bylaws of Borrower Borrower
viii. Bylaws of Guarantor
Guarantor
Borrower
Guarantor
Borrower
Guarantor
- ---------------------------------------------------------------------------------------------------------------------------
l. Opinion of counsel for Borrower and Guarantor Borrower counsel
- ---------------------------------------------------------------------------------------------------------------------------
m. Subordination agreement for subordinate affiliate debt Lender's counsel
i. Copies of all documentation for subordinate affiliate debt
- ---------------------------------------------------------------------------------------------------------------------------
n. Custodial Agreement (if applicable) Lender's counsel
17
- --------------------------------------------------------------------------------------------------------------------
o. Borrower's officer's and secretary's Certificates Lender's counsel
- --------------------------------------------------------------------------------------------------------------------
i. Resolutions attached
- --------------------------------------------------------------------------------------------------------------------
p. Guarantor's officer's and secretary's certificates Lender's counsel
i. Resolutions attached
- --------------------------------------------------------------------------------------------------------------------
q. Form of Architect's Certificate for disbursements Lender's counsel
- --------------------------------------------------------------------------------------------------------------------
r. Form of General Contractor's Certificate for disbursements Lender's counsel
- --------------------------------------------------------------------------------------------------------------------
s. Payment of Funding Fee installment Borrower
- --------------------------------------------------------------------------------------------------------------------
t. Reimbursement of Lender's costs and expenses Borrower
- --------------------------------------------------------------------------------------------------------------------
u. Payment of Legal Fees of Lender Borrower
====================================================================================================================
18