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EXHIBIT 10.31
LOAN AGREEMENT
DATED AS OF DECEMBER 19, 1997
BY AND BETWEEN
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
AND
SILVERLEAF RESORTS, INC.
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TABLE OF CONTENTS
PAGE
ARTICLE 1 PARTICULAR TERMS; DEFINITIONS . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.2 Loan Requests; Loan Supplements . . . . . . . . . . . . . . 16
2.2.1 Submission of Loan Requests . . . . . . . . . . . 16
2.2.2 Execution and Delivery of Loan Supplement . . . . 17
2.3 Effect of Loan Supplement . . . . . . . . . . . . . . . . . 17
2.4 References . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.5 Disbursement of Loan Proceeds . . . . . . . . . . . . . . . 17
2.6 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.7 Loan Term; Maturity Date . . . . . . . . . . . . . . . . . . 18
2.8 Interest Rate . . . . . . . . . . . . . . . . . . . . . . . 18
2.8.1 Interest Rate . . . . . . . . . . . . . . . . . . 18
2.8.2 Calculation of Interest . . . . . . . . . . . . . 18
2.9 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.9.1 Interest . . . . . . . . . . . . . . . . . . . . . 18
2.9.2 Repayment of Outstanding Principal
Balance . . . . . . . . . . . . . . . . . . 18
2.9.3 General . . . . . . . . . . . . . . . . . . . . . 18
2.10 Funding Losses; Change in Law, Etc. . . . . . . . . . . . . 19
2.11 Prepayment of Loans . . . . . . . . . . . . . . . . . . . . 21
2.11.1 Optional Prepayments . . . . . . . . . . . . . . . 21
2.11.2 Mandatory Prepayments . . . . . . . . . . . . . . 21
2.11.3 No Reborrowings . . . . . . . . . . . . . . . . . 21
2.12 Default Interest; Late Charge . . . . . . . . . . . . . . . 22
2.13 Excess Interest . . . . . . . . . . . . . . . . . . . . . . 22
2.14 Loan Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.15 Servicing of Loans . . . . . . . . . . . . . . . . . . . . . 25
2.16 Certain Notices . . . . . . . . . . . . . . . . . . . . . . 25
2.17 Non-Disturbance . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 3 SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.1 Loan Obligations; Facility Obligations . . . . . . . . . . . 25
3.2 Cross-Collateralization . . . . . . . . . . . . . . . . . . 25
ARTICLE 4 CONDITIONS PRECEDENT TO LOANS . . . . . . . . . . . . . . . . . . . 26
4.1 Representations and Warranties . . . . . . . . . . . . . . . 26
4.2 No Default . . . . . . . . . . . . . . . . . . . . . . . . . 26
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4.3 No Injunction . . . . . . . . . . . . . . . . . . . . . . . 26
4.4 Transaction Costs . . . . . . . . . . . . . . . . . . . . . 26
4.5 Delivery of Documents . . . . . . . . . . . . . . . . . . . 26
4.6 Loan Requests . . . . . . . . . . . . . . . . . . . . . . . 27
4.7 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.8 Borrower's Minimum Equity Requirement . . . . . . . . . . . 28
4.9 Title Policy and Endorsements . . . . . . . . . . . . . . . 28
4.10 Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.11 Environmental Report . . . . . . . . . . . . . . . . . . . . 29
4.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . 29
4.14 Counsel Opinions . . . . . . . . . . . . . . . . . . . . . . 29
4.15 Property . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.16 Timeshare Documents . . . . . . . . . . . . . . . . . . . . 29
4.17 Mortgage Recording Tax . . . . . . . . . . . . . . . . . . . 30
4.18 Additional Items . . . . . . . . . . . . . . . . . . . . . . 30
4.19 Consents, Licenses, Approvals, Etc . . . . . . . . . . . . . 30
4.20 Initial and Subsequent Extensions of Credit . . . . . . . . 30
ARTICLE 5 CERTAIN REPRESENTATIONS AND WARRANTIES OF BORROWER . . . . . . . . 30
5.1 Borrower Organization, Enforceability, Etc . . . . . . . . . 31
5.1.1 Borrower Existence; Status . . . . . . . . . . . . 31
5.1.2 Borrower Address . . . . . . . . . . . . . . . . . 31
5.1.3 Borrower's Corporate Structure . . . . . . . . . . 31
5.1.4 Borrower's Organizational Documents . . . . . . . . 31
5.2 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.3 Valid Liens . . . . . . . . . . . . . . . . . . . . . . . . 32
5.4 Property Uses . . . . . . . . . . . . . . . . . . . . . . . 32
5.5 No Structural Defects . . . . . . . . . . . . . . . . . . . 32
5.6 Compliance with Zoning, Etc. . . . . . . . . . . . . . . . . 32
5.7 No Condemnation . . . . . . . . . . . . . . . . . . . . . . 33
5.8 No Casualty . . . . . . . . . . . . . . . . . . . . . . . . 33
5.9 Purchase Options . . . . . . . . . . . . . . . . . . . . . . 33
5.10 No Encroachments . . . . . . . . . . . . . . . . . . . . . . 33
5.11 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.12 No Conflict with Law or Agreements . . . . . . . . . . . . . 34
5.13 Personal Property . . . . . . . . . . . . . . . . . . . . . 34
5.14 Easements; Access; Utilities . . . . . . . . . . . . . . . . 34
5.15 No Flood Hazard, Etc . . . . . . . . . . . . . . . . . . . . 34
5.16 Property Taxed as a Separate Tax Lot . . . . . . . . . . . . 35
5.17 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.18 Environmental . . . . . . . . . . . . . . . . . . . . . . . 35
5.19 No Default . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.20 No Offsets . . . . . . . . . . . . . . . . . . . . . . . . . 36
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5.21 Financial Statements . . . . . . . . . . . . . . . . . . . . 36
5.22 No Insolvency . . . . . . . . . . . . . . . . . . . . . . . 37
5.22.1 Fraudulent Conveyance . . . . . . . . . . . . . . 37
5.23 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.24 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . 37
5.25 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.26 FIRPTA . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.27 PUHCA . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.28 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.29 No Margin Stock . . . . . . . . . . . . . . . . . . . . . . 38
5.30 Investment Company Act . . . . . . . . . . . . . . . . . . . 38
5.31 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.32 Full and Accurate Disclosure . . . . . . . . . . . . . . . . 38
5.33 Other Obligations and Liabilities . . . . . . . . . . . . . 39
5.34 Documents . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.35 Survival of Representations and Warranties . . . . . . . . . 39
5.36 Timeshare Development . . . . . . . . . . . . . . . . . . . 39
5.37 Resorts . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.38 Timeshare Regimen Reports . . . . . . . . . . . . . . . . . 41
5.39 Architectural and Environmental Control . . . . . . . . . . 42
5.40 Other Compliance . . . . . . . . . . . . . . . . . . . . . . 42
5.41 No Investigations or Violations . . . . . . . . . . . . . . 42
ARTICLE 6 CERTAIN COVENANTS OF BORROWER . . . . . . . . . . . . . . . . . . . 42
6.1 Payment and Performance of Loan Obligations and Facility
Obligations . . . . . . . . . . . . . . . . . . . . . . . . 42
6.2 Transfers . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.3 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.4 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 44
6.5 Compliance with Restrictive Covenants, Etc . . . . . . . . . 44
6.6 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.7 Delivery of Notices . . . . . . . . . . . . . . . . . . . . 46
6.8 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.9 Intentionally Omitted . . . . . . . . . . . . . . . . . . . 47
6.10 After Acquired Property . . . . . . . . . . . . . . . . . . 48
6.11 Books and Records . . . . . . . . . . . . . . . . . . . . . 48
6.12 Delivery of Estoppel Certificates . . . . . . . . . . . . . 48
6.13 Management . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.14 Financial Statements; Audit Rights . . . . . . . . . . . . . 48
6.14.1 Statements to be Delivered . . . . . . . . . . . . 48
6.14.2 Time for Delivery . . . . . . . . . . . . . . . . 50
6.14.3 Officer's Certificate . . . . . . . . . . . . . . 50
6.15 Maintenance of Non-Taxable Status . . . . . . . . . . . . . 50
6.16 Lender's Attorneys' Fees and Expenses . . . . . . . . . . . 50
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6.17 Environmental . . . . . . . . . . . . . . . . . . . . . . . 51
6.18 Report Updates . . . . . . . . . . . . . . . . . . . . . . . 53
6.19 Lender Access to Property . . . . . . . . . . . . . . . . . 54
6.20 Delivery of Documents Regarding Ownership . . . . . . . . . 54
6.21 Use of Property . . . . . . . . . . . . . . . . . . . . . . 54
6.22 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.23 Borrower's Minimum Equity . . . . . . . . . . . . . . . . . 54
6.24 Capital Offering Proceeds . . . . . . . . . . . . . . . . . 54
6.25 Resort Utilities . . . . . . . . . . . . . . . . . . . . . . 54
6.26 Resort Maintenance and Amenities . . . . . . . . . . . . . . 54
6.27 Timeshare Regime . . . . . . . . . . . . . . . . . . . . . . 55
6.28 Marketing/Sales . . . . . . . . . . . . . . . . . . . . . . 55
6.29 Tangible Consolidated Net Worth . . . . . . . . . . . . . . 55
ARTICLE 7 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.1 Events of Default; Defaults . . . . . . . . . . . . . . . . 55
7.1.1 Non-Payment . . . . . . . . . . . . . . . . . . . 55
7.1.2 Affirmative Covenants . . . . . . . . . . . . . . 55
7.1.3 Negative Covenants . . . . . . . . . . . . . . . 56
7.1.4 Financial Statements . . . . . . . . . . . . . . 56
7.1.5 Representations . . . . . . . . . . . . . . . . . 56
7.1.6 Other Loan Documents . . . . . . . . . . . . . . 56
7.1.7 Failure to Deliver Estoppel Certificate . . . . . 56
7.1.8 Cessation of Borrower . . . . . . . . . . . . . . 56
7.1.9 Transfer . . . . . . . . . . . . . . . . . . . . 57
7.1.10 Liens . . . . . . . . . . . . . . . . . . . . . . 57
7.1.11 Involuntary Bankruptcy, Etc . . . . . . . . . . . 57
7.1.12 Voluntary Bankruptcy, Etc . . . . . . . . . . . . 57
7.1.13 Judgments . . . . . . . . . . . . . . . . . . . . 57
7.1.14 Delivery of Financial Statements . . . . . . . . 57
7.1.15 ERISA . . . . . . . . . . . . . . . . . . . . . . 58
7.1.16 Other Conditions for Acceleration . . . . . . . . 58
7.1.17 Denial of Obligation . . . . . . . . . . . . . . 58
7.1.18 Failure to Provide Further Assurances . . . . . . 58
7.1.19 Priority of Liens Under Loan Documents . . . . . 58
7.1.20 Certain Covenants . . . . . . . . . . . . . . . . 58
7.1.21 Default in Payment of Indebtedness . . . . . . . 58
7.1.22 Environmental Claims . . . . . . . . . . . . . . 58
7.1.23 Continuous Operation . . . . . . . . . . . . . . 59
7.1.24 Suspension of Sales . . . . . . . . . . . . . . . 59
7.2 Termination of Commitment and Rights upon Event of Default . 59
7.3 Waiver of Stay, Extension and Moratorium Laws, Appraisal and
Valuation, Redemption and Marshalling . . . . . . . . . . 60
7.4 Preferences . . . . . . . . . . . . . . . . . . . . . . . . 61
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7.5 Waiver of Cross-Default and Cross-Collateralization . . . . 61
ARTICLE 8 RELEASES OF COLLATERAL; RIGHT OF FIRST REFUSAL . . . . . . . . . . 61
8.1 Release Provisions . . . . . . . . . . . . . . . . . . . . . 61
8.1.1 Release Conditions . . . . . . . . . . . . . . . . 61
8.1.2 Definition of Property . . . . . . . . . . . . . . 62
8.1.3 Release . . . . . . . . . . . . . . . . . . . . . . 62
8.2 Right of First Refusal . . . . . . . . . . . . . . . . . . . 62
ARTICLE 9 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 63
9.1 Rights Cumulative; Waivers . . . . . . . . . . . . . . . . . 63
9.2 Lender's Action for its Own Protection Only . . . . . . . . 64
9.3 No Third Party Beneficiaries . . . . . . . . . . . . . . . . 65
9.4 Payment of Expenses, Etc . . . . . . . . . . . . . . . . . . 65
9.4.1 Payment Of Expenses . . . . . . . . . . . . . . . . 65
9.4.2 Advances Secured . . . . . . . . . . . . . . . . . 66
9.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . 66
9.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.7 No Oral Modification . . . . . . . . . . . . . . . . . . . . 70
9.8 Assignment by Lender . . . . . . . . . . . . . . . . . . . . 70
9.8.1 Assignment . . . . . . . . . . . . . . . . . . . . 70
9.8.2 Participations . . . . . . . . . . . . . . . . . . 70
9.8.3 Assignment and Acceptance . . . . . . . . . . . . . 71
9.8.4 Other Business . . . . . . . . . . . . . . . . . . 71
9.8.5 Privity of Contract . . . . . . . . . . . . . . . . 71
9.8.6 Availability of Records . . . . . . . . . . . . . . 71
9.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . 71
9.10 No Assignment by Borrower . . . . . . . . . . . . . . . . . 72
9.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 72
9.12 Successors and/or Assigns . . . . . . . . . . . . . . . . . 72
9.13 Entire Contract . . . . . . . . . . . . . . . . . . . . . . 72
9.14 Liability . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.15 Counterparts; Headings . . . . . . . . . . . . . . . . . . . 72
9.16 Time of the Essence . . . . . . . . . . . . . . . . . . . . 72
9.17 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.17.1 No Subsequent Consent . . . . . . . . . . . . . . 72
9.17.2 Withholding of Consent . . . . . . . . . . . . . . 73
9.18 No Partnership . . . . . . . . . . . . . . . . . . . . . . . 73
9.19 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . 74
9.20 Limitation on Liability . . . . . . . . . . . . . . . . . . 74
9.21 Jurisdiction, Venue, Service of Process . . . . . . . . . . 74
9.22 Appointment of Agent for Service of Process . . . . . . . . 75
9.23 Rule of Construction . . . . . . . . . . . . . . . . . . . . 75
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9.24 Further Assurances . . . . . . . . . . . . . . . . . . . . . 75
9.25 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.26 Placement of Loan . . . . . . . . . . . . . . . . . . . . . 76
9.26.1 Loan Pool. . . . . . . . . . . . . . . . . . . . . 76
9.26.2 Rating Agency Requirements . . . . . . . . . . . . 76
9.26.3 Disclosure; Indemnification . . . . . . . . . . . 78
9.26.4 Trustee . . . . . . . . . . . . . . . . . . . . . 79
9.26.5 Information Access . . . . . . . . . . . . . . . . 79
9.26.6 Time of Transfer or Placement . . . . . . . . . . 79
9.27 Disclosure of Information By Lender . . . . . . . . . . . . 79
ARTICLE 10 SPECIAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 80
10.1 Tax and Insurance Escrow . . . . . . . . . . . . . . . . . . 80
10.1.1 Tax and Insurance Deposits . . . . . . . . . . . . 80
10.1.2 Payment of Taxes and Insurance Premiums . . . . . 80
10.1.3 Application upon Event of Default . . . . . . . . 81
10.1.4 Reliance . . . . . . . . . . . . . . . . . . . . . 81
10.1.5 No Third Party Beneficiary . . . . . . . . . . . . 81
SCHEDULES
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Schedule A Approved Loans
EXHIBITS
Exhibit A Form of Loan Supplement
Exhibit B Form of Mortgage Note
Exhibit C Form of First Mortgage
Exhibit D Form of Second Mortgage
Exhibit E Form of Environmental Indemnity
Exhibit F-1 Form of Corporate Opinion
Exhibit F-2 Form of Local Counsel Opinion
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LOAN AGREEMENT
THIS LOAN AGREEMENT (this "AGREEMENT") is made as of the 19th day of
December, 1997 between CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, a
Delaware limited liability company ("Lender"), and SILVERLEAF RESORTS, INC., a
Texas corporation ("BORROWER").
RECITALS
A. Borrower has acquired or shall acquire each of the Properties (as
hereinafter defined) for the purpose of owning, developing and operating
timeshare resort developments in a manner similar to the timeshare resort
developments currently owned and operated by Borrower.
B. Borrower has requested that Lender make available to Borrower a
non-revolving credit facility in the aggregate principal sum of up to Ten
Million and 00/100 Dollars ($10,000,000.00) to be used by Borrower for the
purpose of financing and/or refinancing certain of the development and
acquisition costs for each of the Properties.
C. Lender has advised Borrower that, subject to the terms of this
Agreement and the documents to be executed in connection herewith, and based
upon the representations, warranties, covenants and undertakings of Borrower
herein and therein contained, Lender is willing to make the Loans (as
hereinafter defined) to Borrower on the terms and conditions set forth herein.
D. It is the intention of the parties that, notwithstanding that
Borrower owns each of the Properties, all of the Loan Obligations (as
hereinafter defined) of Borrower under this Agreement, the Loan Documents and
the Facility Documents (as each such term is hereinafter defined) shall be
secured by first and second mortgage or deed of trust liens on each of the
Properties and by other collateral and agreements, as more particularly set
forth in this Agreement.
NOW, THEREFORE, in consideration of the above premises and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Lender and Borrower hereby agree as follows:
ARTICLE 1
PARTICULAR TERMS; DEFINITIONS
For all purposes of this Agreement, the following terms shall have the
respective meanings hereinafter specified, such definitions to be applicable
equally to the singular and plural forms of such terms:
"ACM" shall mean asbestos-containing materials.
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"AFFILIATE" shall mean, with respect to a specified Person, (i) a
Person who, directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with, the specified
Person, (ii) any Person who is an officer, director, partner, manager,
employee, or trustee of, or serves in a similar capacity with respect to, the
specified Person or of which the specified Person is an officer, partner,
manager or trustee, or with respect to which the specified Person serves in a
similar capacity, (iii) any Person who, directly or indirectly, has an
Ownership Interest in the specified Person, (iv) any Person in which the
specified Person has an Ownership Interest, (v) the spouse, issue, or parent of
the specified Person, and (vi) any Person which would constitute an Affiliate
of any such Person described in clauses (i) through (v) above.
"AFFIRMATIVE COVENANT" shall mean a promise or covenant by any Person
to perform, act, suffer, permit or consent to.
"AGGREGATE LOAN AMOUNT" shall mean, as of any date of determination,
the aggregate Loan Amount of all Loans which have been made on or before such
date.
"AGREEMENT" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"APPROVED ACCOUNTANT" shall mean one of the so-called "Big Six"
accounting firms or such other independent certified public accountant of
nationally recognized standing selected by the Person required to deliver the
applicable Financial Statements and other reports specified herein, which
Approved Accountant shall be approved by Lender.
"APPROVED BUDGET" shall have the meaning ascribed to such term in
Section 6.14.1 (d) hereof.
"APPROVED LEASES" shall mean all Leases entered into after the date of
this Agreement in accordance with Section 6.6 hereof.
"ASSIGNEES" shall have the meaning ascribed to such term in Section
9.8.1, hereof.
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code, 11
U.S.C. Section 101 et seq., as amended.
"BASE RATE" shall mean the rate per annum equal to,
(i) during the period prior to the Scheduled Maturity Date,
three percent (3.0%) in excess of the then applicable Treasury Rate,
or
(ii) during the period on and after the Maturity Date, seven
percent (7.0%) in excess of the then applicable Treasury Rate.
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"BEST KNOWLEDGE" OR "KNOWLEDGE" shall mean, for the purpose of this
Agreement and the other Loan Documents and Facility Documents, the actual
knowledge of the Person in question, after having made due inquiry. If any
entity with respect to which this term would be applicable is a corporation,
knowledge of such entity shall refer to actual knowledge of its officers or
directors, after having made due inquiry. If any such entity is a partnership,
knowledge of such entity shall refer to actual knowledge of each of its
partners who participates in the management of such partnership (directly or
indirectly), after having made due inquiry. If any such entity is a limited
liability company, knowledge of such entity shall refer to actual knowledge of
its managing members, after having made due inquiry.
"BORROWER" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"BORROWER'S MINIMUM EQUITY" shall have the meaning ascribed to such
term in Section 4.8 hereof.
"CAPITAL ADEQUACY EVENTS" shall have the meaning ascribed to such term
in Section 2.10(d) hereof.
"CAPITAL OFFERING" shall mean any public offering by Borrower of its
securities or any bond offering by Borrower; provided, however, that should
Borrower transfer its business and assets, or any Ownership Interests in
Borrower to another non-natural Person of which it shall retain control
(notwithstanding that such transfer is not permitted hereunder), the term
Capital Offering shall mean any public offering of the securities of such
Person or any bond offering by such Person.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601, et seq.), as the same
may be amended from time to time.
"CERTIFICATES" means the securities issued in connection with a
Securitization of the Loans.
"CHANGE OF CONTROL" shall be deemed to have occurred at such time
after the date of this Agreement as a "person" or "group" (within the meaning
of Sections 13 (d) and 14 (d) (2) of the Securities Exchange Act of 1934),
other than a Person who has filed a Schedule 13(d) with the Securities and
Exchange Commission on or prior to the date of this Agreement (but only as to
the stock of Borrower that such Person holds as of the date of this Agreement),
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of more than 5% of the total
voting power of all classes of stock then outstanding of Borrower normally
entitled to vote in the election of directors. Notwithstanding anything to the
contrary set forth herein, if any stock or other interest in Borrower or right
to manage Borrower shall have been pledged or otherwise given as security
prior to the date of this Agreement, a Change of Control shall be deemed to
have occurred upon the exercise of any rights or remedies under or in
connection with such pledge or other security arrangement which results in such
stock or other interest or the right to manage being foreclosed or otherwise
being finally vested in another Person.
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"CLAIM" shall have the meaning ascribed to such term in Section 9.5(b)
hereof.
"CLOSING DATE" shall mean, for each Loan, the date of disbursement by
Lender to or for the account of Borrower of the Funding Amount of such Loan.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall have the meaning ascribed to such term in Section
3.2 hereof.
"COMMITMENT" shall mean the obligation of Lender to make Loans in an
aggregate principal sum up to, but not exceeding, Ten Million and 00/100
Dollars ($ 10,000,000.00).
"COMMITMENT TERMINATION Date" shall mean the earliest to occur of (i)
December 19, 1998, or (ii) such date as there shall have occurred (A) an Event
of Default hereunder and the Commitment shall have terminated in the manner
specified in Section 7.2(a) hereof, or (B) a prepayment of the Loans in
accordance with,Section 2.11.1 (b) hereof.
"COMMON ELEMENTS" shall mean all common elements at the Property
including, but not limited to, any limited common element, as each such common
element is defined or provided for in the Declaration or other Timeshare
Document.
"CONTROL" (AND THE CORRELATIVE TERMS "CONTROLLED BY" AND
"CONTROLLING") shall mean the power to direct the business and affairs of the
Person in question by reason of the ownership of beneficial interests, by
contract or otherwise.
"CORRECTIVE WORK" shall mean the removal, relocation, elimination,
remediation, encapsulation or any other treatment of Hazardous Substances of or
from all or any portion of any Property or any other property owned and/or
leased by Borrower and, to the extent thereby required, the reconstruction and
rehabilitation of such Property or any other property owned and/or leased by
Borrower performed by any Person including, without limitation, Borrower,
Lender, any other Indemnified Party, any of their respective agents,
contractors, subcontractors, employees, or any Governmental Authority for any
reason, including, without limitation, pursuant to any Environmental Laws.
"COSTS"' shall mean all out-of-pocket expenditures and expenses which
may be paid or incurred by or on behalf of Lender in connection with the
preparation, negotiation and enforcement of this Agreement and the other Loan
Documents and Facility Documents, including payments to remove or protect
against liens, attorneys' fees, receivers' fees, engineers' fees, accountants'
fees, appraisal fees, independent consultants' fees (including environmental
consultants), servicing fees, all costs and expenses incurred in connection
with any of the foregoing, Lender's out-of-pocket costs and expenses related to
any audit or inspection of any Property, outlays for documentary and expert
evidence, stenographers' charges, stamp taxes, publication costs, repair costs
and costs (which may be estimates as to items to be expended after entry of an
order or judgment) for procuring all such abstracts of title, title and Uniform
Commercial Code searches and examinations, title insurance policies, Torrens'
Certificates and similar data and assurances with respect to title as
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12
Lender may deem reasonably necessary either to prosecute any action or to
evidence to bidders at any foreclosure sale of any Property the true condition
of the title to, or the value of, such Property.
"DECLARATION" OR "DECLARATIONS" shall mean with respect to each
Resort, the applicable declaration filed by Borrower on the land records where
such Resort is located, submitting the Property described therein to a time
share form of vacation ownership.
"DEFAULT" shall have the meaning ascribed to such term in Section 7.1
hereof.
"DEFAULT RATE" shall have the meaning ascribed to such term in Section
2.12 hereof. In no event shall the Default Rate exceed the maximum interest
rate permitted under applicable law.
"DESIGNATED OFFICER" shall mean (i) if Borrower is a corporation, the
chief financial officer of such corporation or such other officer of such
corporation as is fully familiar with the financial affairs of Borrower and is
approved by Lender, (ii) if Borrower is a partnership, such officer of
Borrower's managing general partner as satisfies the first sentence of this
definition, or (iii) if Borrower is a limited liability company, such officer
of Borrower's managing member as satisfies the first sentence of this
definition.
"DESIGNEE" shall have the meaning specified in Section 9.22 hereof.
"DISCLOSED VIOLATIONS" shall have the meaning ascribed to such term in
Section 5.6(a) hereof.
"DISCLOSURE DOCUMENT" shall have the meaning ascribed to such term
in Section 9.26.3 hereof.
"DISQUALIFIED PERSON" shall have the meaning ascribed to such term in
Section 5.25 hereof.
"DOLLAR" or "$" shall mean lawful money of the United States of
America.
"DOMESTIC BUSINESS DAY" shall mean any day except a Saturday, Sunday
or other day on which commercial banks are required or permitted by law to
close in New York City.
"EASEMENT" shall have the meaning ascribed to such term in Section
5.14 hereof
"ENVIRONMENTAL COSTS" shall mean incurred and potential damages,
losses, liabilities, costs and expenses of Corrective Work, any other clean-up
or response costs (which, without limitation, shall include costs to cause any
Property or any other property owned and/or leased by Borrower to come into
compliance with Environmental Laws), investigation costs (including fees of
consultants, counsel and other experts in connection with any environmental
investigation, testing, audits or studies), and any other incurred or potential
obligations, penalties, fines,.impositions, fees, levies, lien removal or
bonding costs, claims, litigation, demands, causes of action (including,
without limitation, any reduction in the value of such Property or other
property owned and/or leased by Borrower) damages (including any actual,
punitive or consequential
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damages under any disbursements or expenses of any kind and nature whatsoever
(including, without limitation, attorneys' and experts' or other consultants'
reasonable fees and disbursements incurred in connection with any of the
matters with respect to which Lender is indemnified hereunder or under any
other Loan Agreement), including interest thereon.
"ENVIRONMENTAL LAWS" shall mean CERCLA; The Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, et seq.; The Hazardous Substances
Transportation Act, 42 U.S.C. Section 9601, et seq.; The Emergency Planning &
Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001, et seq.; The Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; The Clean Air Act, 42
U.S.C. Section 7401 et seq.; The Clean Water Act, 33 U.S.C. Section 1251 et
seq.; The Safe Drinking Water Act, 42 U.S.C. Section 201 et seq.; as any of the
foregoing may be amended from time to time; and any other federal, state and
local laws or regulations, codes, statutes, orders, decrees, guidance documents,
judgments or injunctions, now or hereafter issued, promulgated, approved or
entered thereunder, relating to pollution, contamination or protection of the
environment, including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata, buildings or facilities) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes.
"ENVIRONMENTAL MATTER" shall mean any matter arising out of, relating
to, or resulting from pollution, contamination or protection of the environment
(including natural resources), and any matters relating to emission, discharge,
release or threatened release, of Hazardous Substances into the air (indoor and
outdoor), surface water, ground water, soil, land surface or subsurface,
buildings or facilities or otherwise arising out of, relating to, or resulting
from the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, handling, release or threatened release of Hazardous
Substances.
"ENVIRONMENTAL REPORT" shall have the meaning ascribed to such term in
Section 4.11 hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the regulations promulgated thereunder from time to time.
"EURODOLLAR BUSINESS DAY" shall mean any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London, England.
"EVENT OF DEFAULT" shall have the meaning ascribed to such term in
Section 7.1 hereof.
"EXCESS INTEREST" shall have the meaning ascribed to such term in
Section 2.13 hereof.
"EXCHANGE ACT" shall mean the Securities and Exchange Act of 1934, as
amended.
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"EXERCISE NOTICE" shall have the meaning ascribed to such term in
Section 8.2 hereof.
"FACILITY COLLATERAL" shall have the meaning ascribed to such term in
Section 3.2 hereof.
"FACILITY DOCUMENTS" shall have the meaning ascribed to such term in
Section 3.1.2 hereof.
"FACILITY OBLIGATIONS" shall have the meaning ascribed to such term in
Section 3.1.2 hereof.
"FINANCIAL STATEMENTS" shall mean the financial statements and other
documentation required to be delivered pursuant to Section 6.14 hereof.
"FINANCING NOTICE" shall have the meaning ascribed to such term in
Section 8.2 hereof.
"FIRST MORTGAGE" shall have the meaning ascribed to such term in
Section 4.5 hereof.
"FUNDING AMOUNT" shall mean, in respect of any Loan advanced
hereunder, an amount equal to not more than sixty-five percent (65%) of the
Property Capitalization of the Property for which such Loan is being advanced
as calculated and set forth in the Loan Supplement for such Loan.
"FUNDING LOSSES" shall have the meaning ascribed to such term in
Section 2.10(a) hereof.
"FUNDING PARTY" shall mean any bank or other entity, if any, which is
indirectly or directly funding Lender with respect to the Loan, in whole or in
part, including, without limitation, any direct or indirect assignee of, or
participant in, any of the Loans.
"GOVERNMENTAL AUTHORITY" shall mean the United States, the State and
City where the applicable Property is located and any political subdivision of
any of the foregoing, and any agency, department, commission, board, court,
bureau or instrumentality of any of them, or any securities exchange.
"HAZARDOUS SUBSTANCES" shall mean asbestos, ACM, PCBs,
urea-formaldehyde and urea-formaldehyde foam insulation, nuclear fuel or waste,
petroleum products and any hazardous waste, toxic substance, related
components, related constituents, pollutant or contaminant, including, without
limitation, any substance defined or treated as a "hazardous substance",
"extremely hazardous substance" or "toxic substance" (or comparable term) in
any applicable Environmental Law and any other material, which may give rise to
Environmental Costs.
"IMPROVEMENTS" shall mean the buildings, improvements and structures
situated on or appurtenant to any Property.
"INDEBTEDNESS" shall mean any and all liabilities and obligations
owing by any Person to any Person, including principal, interest, charges,
fees, reimbursements and expenses, however
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evidenced, whether as principal, surety, endorser, guarantor or otherwise,
direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated, secured or unsecured,
original, renewed or extended, (i) in respect of any borrowed money (whether by
loans, the issuance and sale of debt securities or the sale of any property to
another Person subject to an understanding, agreement, contract or otherwise to
repurchase such property) or for the deferred purchase price of any property or
services (other than trade accounts payable or accrued expenses that are or
would be incurred in the ordinary course of business ("TRADE PAYABLES") and
payable within thirty (30) days), (ii) as lessee under any leases which shall
have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (iii) under direct or indirect
guarantees and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise assure any creditor against loss in respect of the
obligations of others, (iv) in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for
the account of such indebted Person, or (v) in respect of unfunded vested
benefits under plans covered by ERISA or any similar liabilities to, for the
benefit of, or on behalf of, any employees of such indebted Person.
"INDEMNIFIED PARTIES" shall mean each of Lender, the Affiliates of
Lender and the Participants and their respective successors, assigns, partners,
members, shareholders, officers, directors, employees, agents and attorneys.
"INSOLVENT" shall mean (i) the inability of a Person to pay its debts
as they become due and/or (ii) the fair value of such Person's debts is greater
than the fair value of such Person's assets.
"INTEREST ACCRUAL PERIOD" shall mean, with respect to any Payment
Date, the calendar month preceding such Payment Date, provided, however, that
no Interest Accrual Period shall end later than the Maturity Date (other than
for purposes of calculating interest at the Default Rate), and the initial
Interest Accrual Period shall begin on the date of this Agreement.
"INTERVAL" shall mean with respect to each Resort, the undivided
fractional fee simple interval ownership interest as a tenant-in-common
(sometimes referred to in the Timeshare Documents as a "Vacation Ownership
Interest") in a Unit sold to a third party purchaser by delivery of a warranty
deed, for a time-share period (sometimes referred to in the Timeshare Documents
as a "Use Period") per calendar year of one week, together with all appurtenant
rights and interests, including, without limitation, appurtenant rights in and
to the Common Elements, and Easements and other use rights in and to all Resort
facilities and amenities all as more particularly described in the Declaration
or other Timeshare Documents.
"LAW CHANGE" shall have the meaning ascribed to such term in Section
2.14(c) hereof.
"LEASE" shall mean any lease now or hereafter on or affecting any
Property, or any part thereof, whether written or oral, and all licenses and
other agreements for the use and/or occupancy of any Property, or any part
thereof, as the same shall have been or shall hereafter be amended.
"LEGAL REQUIREMENT" shall mean any law, statute, ordinance, order,
rule, regulation, decree or other requirement of a Governmental Authority, and
all conditions of any Permit.
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"LENDER" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"LENDER'S COUNSEL" shall mean Brown Raysman Millstein Felder & Steiner
LLP, located in New York, New York, and any other law firm acting as counsel to
Lender.
"LENDER'S COUNSEL FEES" shall mean all reasonable fees and
disbursements of Lender's Counsel.
"LENDER'S PROPOSED FINANCING" shall have the meaning ascribed to such
term in Section 8.2 hereof
"LIBOR" shall mean, with respect to any Interest Accrual Period, the
rate per annum (rounded upwards, if necessary, to the nearest one-sixteenth
(1/16th) of one percent (1%)) reported, with respect to the initial Interest
Accrual Period, at 11:00 a.m. London time on the date of this Agreement (or if
such date is not a Eurodollar Business Day, the immediately preceding
Eurodollar Business Day), and thereafter, at 11:00 a.m. London time on the date
two (2) Eurodollar Business Days prior to the first day of such Interest
Accrual Period, on Telerate Access Service Page 3750 (British Bankers
Association Settlement Rate) as the non-reserve adjusted London Interbank
Offered Rate for U.S. dollar deposits having a thirty (30) day term and in an
amount of $1,000,000 or more (or on such other page as may replace Telerate
Page 3750 on that service or such other service or services as may be nominated
by the British Bankers Association for the purpose of displaying such rate, all
as determined by Lender in its sole but good faith discretion). In the event
that (i) more than one such LIBOR is provided, the average of such rates shall
apply or (ii) no such LIBOR is published, then LIBOR shall be determined from
such comparable financial reporting company as Lender in its sole but good
faith discretion shall determine. LIBOR for any Interest Accrual Period shall
be adjusted from time to time by increasing the rate thereof to compensate
Lender and any Funding Party for any aggregate reserve requirements (including,
without limitation, all basic, supplemental, marginal and other reserve
requirements and taking into account any transitional adjustments or other
scheduled changes in reserve requirements during any Interest Accrual Period)
which are required to be maintained by Lender or such Funding Party with
respect to "Eurocurrency Liabilities" (as presently defined in Regulation D of
the Board of Governors of the Federal Reserve System) of the same term under
Regulation D, or any other regulations of a Governmental Authority having
jurisdiction over Lender or such Funding Party of similar effect.
"LIBOR INTEREST RATE" shall mean, with respect to any Interest Accrual
Period, the floating rate per annum equal to three percent (3.0%) in excess of
LIBOR for such Interest Accrual Period.
"LIENS" shall have the meaning ascribed to such term in Section 6.3
hereof.
"LOAN" shall mean a non-revolving credit loan made in respect of a
Property in accordance with the terms hereof (collectively, the "LOANS").
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"LOAN AMOUNT" shall mean, in respect of any Loan, the original maximum
principal amount of such Loan, whether or not ultimately advanced to Borrower.
"LOAN COLLATERAL" shall have the meaning ascribed to such term in
Section 3.2 hereof.
"LOAN DOCUMENTS" shall have the meaning ascribed to such term in
Section 4.5 hereof.
"LOAN INTEREST" shall have the meaning ascribed to such term in
Section 9.26.1 hereof.
"LOAN OBLIGATIONS" shall have the meaning ascribed to such term in
Section 3.1.1 hereof.
"LOAN POOL" shall have the meaning ascribed to such term in Section
9.26.1 hereof.
"LOAN REQUEST" shall have the meaning ascribed to such term in Section
2.2.1 hereof.
"LOAN SERVICER" shall have the meaning ascribed to such term in
Section 2.15 hereof.
"LOAN SERVICING FEE" shall have the meaning ascribed to such term in
Section 2.15 hereof.
"LOAN SUPPLEMENT" or "LOAN SUPPLEMENTS" shall have the meaning
ascribed to such term in Section 2.2.1 hereof.
"LOAN TAXES" shall have the meaning ascribed to such term in section
2.14(a) hereof.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (i)
the ability of Borrower to perform its material obligations under any of the
Loan Documents and/or Facility Documents, including, without limitation, the
timely payment of principal of or interest on any Loan or other amounts payable
in connection therewith by Borrower, (ii) the validity or enforceability of any
of the Loan Documents and/or Facility Documents by or against Borrower, (iii)
the rights and remedies of Lender under any of the Loan Documents and/or
Facility Documents, or (iv) without limiting the foregoing, any Property or any
use or occupancy thereof and/or the Collateral and the priority of the Liens
thereon in favor of Lender.
"MATURITY DATE" shall mean the day which is the earlier to occur of
(i) the Scheduled Maturity Date or (ii) the date on which payment of the Loans
shall have been accelerated pursuant to the terms of this Agreement.
"MORTGAGES" shall have the meaning ascribed to such term in Section
4.5 hereof.
"NEGATIVE COVENANT" shall mean a promise or covenant by any Person not
to act, perform, suffer, permit or consent to.
"NOTE" or "NOTES" shall have the meaning set forth in Section 2.6
hereof.
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"NOTICES" shall have the meaning ascribed to such term in Section 9.6
hereof.
"OBLIGATED PARTY" shall have the meaning ascribed to such term in
Section 7.2(b)(i) hereof.
"OFFICER'S CERTIFICATE" shall mean a certificate delivered to Lender
and signed by the Designated Officer of Borrower. Any Officer's Certificate
shall be based on the actual knowledge, upon due inquiry, of the officer
executing the same and shall contain a statement by such officer that (i) in
the ordinary course of the performance of his duties he would normally obtain
knowledge of, or (ii) he has made such inquiry as in his judgment is reasonably
sufficient to obtain knowledge of, the existence of any condition or event
necessary to make the statement(s) otherwise set forth in such Officer's
Certificate.
"ORGANIZATIONAL DOCUMENTS" shall mean, with respect to any Person who
is not a natural person, the certificate or articles of incorporation,
memorandum of association, articles of association, trust agreement, by-laws,
partnership agreement, limited partnership agreement, certificate of
partnership or limited partnership, limited liability company articles of
organization, limited liability company operating agreement or any other
organizational document, and all shareholder agreements, voting trusts and
similar arrangements with respect to its stock, partnership interests,
membership interests or other equity interests.
"OUTSTANDING PRINCIPAL BALANCE" means, as of any date with respect to
any Loan made to Borrower hereunder, the outstanding principal balance of such
Loan.
"OWNERSHIP INTEREST" shall mean, with respect to any Person, ownership
of the right to profits and losses of, and/or the right to exercise voting
power to elect directors, managers, operators or other management of, or
otherwise to affect the direction of management, policies or affairs of, such
Person, whether through ownership of securities or partnership, membership or
other interests therein, by contract or otherwise.
"PARTICIPANTS," shall have the meaning ascribed to such term in
Section 9.8.2. hereof.
"PARTY IN INTEREST" shall have the meaning ascribed to such term in
Section 5.25(a) hereof.
"PAYMENT DATE" shall mean February 1, 1998 and the first day of each
month thereafter during the Term.
"PCBs" shall mean polychlorinated biphenyls.
"PERMIT" shall mean all approvals, consents, registrations,
franchises, permits, licenses, variances, certificates of occupancy and other
authorizations with regard to zoning, landmark, ecological, environmental, air
quality, subdivision, planning, building or land use required by the applicable
Governmental Authority for the construction, lawful occupancy and operation of
the improvements on any Property and the actual and contemplated uses thereof.
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"PERMITTED ENCUMBRANCES" shall mean those interests encumbering all or
any portion of any Property, which interests are set forth on Schedule B of the
Title Policy in respect of such Property or which have otherwise been disclosed
in writing to Lender or are hereafter consented to by Lender in writing.
"PERMITTED TRANSFERS" shall have the meaning ascribed to such term in
Section 6.2(e) hereof.
"PERSON" shall mean any individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
estate, trust, unincorporated association, joint venture or other entity or a
government or an agency or political subdivision thereof.
"PLACEMENT PARTY" shall have the meaning ascribed to such term in
Section 9.26.1 hereof.
"PROHIBITED TRANSACTION" shall mean a prohibited transaction as
described under Section 406 of ERISA or Section 4975 of the Code which is not
the subject of a statutory exemption under Section 408(b) of ERISA or an
administrative exemption granted pursuant to Section 408(a) of ERISA.
"PROPERTY" shall mean any parcel or parcels of real property and the
related Improvements owned and/or leased by Borrower, which are either vacant
land or used as a campground and/or Resort, and which are encumbered by the
Mortgages as Collateral for the Loan Obligations and/or Facility Obligations
(collectively, the "PROPERTIES").
"PROPERTY CAPITALIZATION" shall mean, in respect of any Property, the
total costs and expenses incurred by Borrower to acquire and finance such
Property, as determined by Lender in its sole discretion, including, without
limitation, the purchase price and any Soft Costs.
"PROPOSED FINANCING" shall have the meaning ascribed to such term in
Section 8.2 hereof.
"RATING AGENCIES" shall mean (i) any nationally-recognized statistical
rating organizations that provide a rating on any of the Certificates on the
date of issuance of such Certificates, or (ii) prior to the issuance of the
Certificates, Standard & Poor's Rating Group, a division of The McGraw Hill
Corporation, and any other nationally-recognized statistical rating
organization that has been designated by Lender in its sole discretion.
"RELEASE" shall have the meaning ascribed to such term in Section
8.1.1 hereof.
"RELEASE CONDITIONS" shall have the meaning ascribed to such term in
Section 8.1.1 hereof.
"RELEASE PRICE" shall have the meaning ascribed to such term in
Section 8.1.1(c) hereof.
"RELEASE REQUEST" shall have the meaning ascribed to such term in
Section 8.1.1(a) hereof
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"RESORT" or "RESORTS" shall mean, as applicable, each or all of the
vacation ownership, interval ownership and time-share projects existing or to
be developed at each of the Properties, consisting of, among other things,
Units and Intervals now existing or hereafter added, in one or more buildings
or phases and all related Common Elements and appurtenances, together with all
related or appurtenant properties, amenities, facilities, equipment,
appliances, fixtures, Easements, and other rights and interests as established
by and more fully described in the applicable Declaration and other Timeshare
Documents, as the same may be amended from time to time.
"RESPA" shall have meaning ascribed to such term in Section 5.40
hereof.
"SCHEDULED MATURITY DATE" shall mean January 1, 2000.
"SECOND MORTGAGE" shall have the meaning ascribed to such term in
Section 4.5 hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITIZATION" shall have the meaning ascribed to such term in
Section 9.26.1 hereof.
"SECURITIZATION INDEMNIFICATION" shall have the meaning ascribed to
such term in Section 9.26.3 hereof.
"SECURITIZATION INDEMNIFIED PARTY" shall have the meaning ascribed to
such term in Section 9.26.3 hereof.
"SOFT COSTS" shall mean, in respect of any Property, the total "soft"
costs and expenses incurred by Borrower to acquire and finance such Property
set forth on the Loan Supplement for such Property, as determined by Lender in
its sole discretion, including, without limitation, the title search fees and
premiums, survey fees, brokerage commissions, attorneys fees and expenses, the
costs incurred for the preparation of engineering, environmental, marketing and
other due diligence reports in anticipation of such purchase and financing of
such Property (including any such costs incurred with respect to the Loan for
such Property), which costs shall not exceed $100,000.00 in the aggregate for
each Property.
"SURVEY" shall have the meaning ascribed to such term in Section 4.10
hereof.
"TANGIBLE ASSETS" shall mean, as to any Person at any particular date,
all amounts that would be included as assets on a consolidated balance sheet of
such Person and its subsidiaries as of such date, computed in accordance with
generally accepted accounting principles, consistently applied, minus without
duplication (a) the amount of any Indebtedness owed to such Person by any
Affiliate of such Person, (b) the value of any intangible assets (including any
value attributable to goodwill, organizational expenses, trademarks, tradenames
and similar intellectual property rights, franchises, licenses and other items
which would properly be treated as intangible in accordance with generally
accepted accounting principles, consistently applied, (c) all reserves, prepaid
expenses, deferred charges or unamortized debt discount and expense (except
those paid or incurred
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in the ordinary course of business), (d) without duplication of amounts
allocable to assets already excluded therefrom in accordance with generally
accepted accounting principles, consistently applied, the value of any other
securities of, capital contributions to, or investments in any Affiliate of
such Person unless publicly traded, readily marketable, or capable of
independent valuation, but such securities shall not fail to be readily
marketable because of, for example, restrictions on transfer or other
requirements of law where such restrictions or requirements are reasonably
taken into consideration in determining the value thereof), and (e) any write-
up in the book value of any asset (other then readily marketable securities)
resulting from a revaluation thereof subsequent to such Person's fiscal year
end for the most recent fiscal year of such Person.
"TANGIBLE CONSOLIDATED NET WORTH" shall mean, at any particular date,
an amount equal to the excess of all of Borrower's Tangible Assets over all
amounts that would be included as liabilities on a balance sheet of Borrower as
of such date, computed on a consolidated basis in accordance with generally
accepted accounting principles, consistently applied.
"TAXES" shall have the meaning ascribed to such term in the Mortgages.
"TERM" shall mean the period commencing on the date hereof and ending
on the date on which the entire Outstanding Principal Balance of all Loans and
all other sums that shall be due and payable to Lender hereunder and under any
of the other Loan Documents and Facility Documents, shall be paid in full to
Lender.
"TIMESHARE ACT" shall mean, collectively, those certain timeshare acts
or other laws, if any, as the same may be amended from time to time, and any
rules and regulations promulgated thereunder, and any subsequent statutes that
may be enacted pertaining to the development, establishment, existence, or
operation of interval ownership, timeshare membership or vacation ownership or
membership resorts or any matter whatsoever relating thereto in the states
where each of the Resorts are located, including, but not limited to, Nevada,
Illinois, Missouri and Texas.
"TIMESHARE DOCUMENTS" shall mean all of the documents relating to each
of the Resorts and the creation, marketing and sale of Intervals thereat,
respectively, including:
(i) The registration statements, if required, to be filed
with each of the states in which a Resort is located approving the
establishment and operation of the Resorts and the sale of Intervals;
(ii) The Declaration and all amendments establishing and
describing the timeshare state status of the Units and Intervals, and
all amenities, services, and the Common Elements and areas related or
appurtenant thereto and any other declarations, covenants, conditions
and restrictions encumbering the Resorts;
(iii) The rules and regulations of the Resorts;
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(iv) Other registrations, approvals and permits for the
creation and sale of Intervals and the operation of the Resorts,
including, without limitation, samples of all advertising and
promotional materials;
(v) The Organizational Documents of any Timeshare Owner's
Association, together with its certificate of good standing if the
Timeshare Owner's Association is an incorporated association;
(vi) All agreements entered into, by or on behalf of the
Timeshare Owner's Association, including, but not limited to,
agreements with Borrower or any Affiliate thereof related to marketing
management, operations and maintenance of the Resorts and agreements
with purchasers of Intervals; and
(vii) The form of all documents used to market and sell
Intervals or that govern the rights of purchasers thereof, including,
without limitation, purchase contacts, advertising materials, notes
receivable, truth-in-lending and RESPA disclosure statements,
purchaser's acknowledgments, grant deeds, mortgages or deeds of trust,
reservation agreements, subsidy agreements, management agreements,
warranties, space leases, equipment leases or other personal property
financing arrangements, if any.
"TIMESHARE OWNER'S ASSOCIATION" shall mean, with respect to each
Resort, those nonstock not-for-profit corporations, whose members are Interval
owners, which are organized to administer the Resort, including, without
limitation, those not-for-profit corporations set forth on each Loan
Supplement.
"TIMESHARE PROPERTY" shall mean any Property which has an existing
Resort located thereon.
"TITLE COMPANY" shall have the meaning ascribed to such term in
Section 4.9 hereof.
"TITLE POLICY" shall have the meaning ascribed to such term in Section
4.9 hereof.
"TRADE PAYABLES" shall have the meaning ascribed to such term in the
definition of "Indebtedness" above.
"TRANSFER" shall have the meaning specified in Section 6.2 hereof.
"TREASURY RATE" shall mean, with respect to any Interest Accrual
Period, the rate per annum (rounded upwards, if necessary, to the nearest one-
sixteenth (1/16th) of one percent (1%)) reported, with respect to the initial
Interest Accrual Period, at 11:00 a.m. New York City time on the date of this
Agreement (or if such date is not a Domestic Business Day, the immediately
preceding Domestic Business Day), and during any Interest Accrual Period
thereafter, at 11:00 a.m. New York City time on the date two (2) Domestic
Business Days prior to the first day of each such Interest Accrual Period, on
United States Treasury Securities, adjusted to a constant maturity of one (1)
year.
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"U.S. PERSON" shall mean any Person that is (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created
or organized under the laws of the United States or any State thereof, or (iii)
any estate or trust that is subject to United States federal income taxation,
regardless of the source of its income.
"UNIT" shall mean, with respect to each Resort located at a Timeshare
Property, one living unit in a building incorporated into the Resort pursuant
to the Declaration, together with all related or appurtenant Common Elements
and related or appurtenant interests and services, Easements and other rights
or benefits as described and provided for in the Declaration, including, but
limited to, the right to use the Resort amenities and facilities in accordance
with the Timeshare Documents.
ARTICLE 2
THE LOANS
2.1 LOANS. Subject to the terms and conditions of this Agreement,
including, without limitation, satisfaction of each of the conditions precedent
set forth in Article 4 hereof, and relying upon the representations and
warranties set forth herein and in the other Loan Documents, Lender agrees to
make Loans to Borrower in an aggregate principal amount up to, but not
exceeding, the Commitment, beginning on the date hereof and continuing through
the Commitment Termination Date. Within the limitations set forth in this
Agreement, Borrower may, from time to time, borrow and prepay (but may not
reborrow) the Loans up to the Commitment.
2.2 LOAN REQUESTS; LOAN SUPPLEMENTS.
2.2.1 SUBMISSION OF LOAN REQUESTS. At any time prior to the
Commitment Termination Date, provided no Default shall have occurred and be
continuing, Borrower shall have the right to submit to Lender requests for
Loans (each, a "LOAN REQUEST"), the aggregate principal amount of which shall
never exceed the Commitment. Each Loan Request shall include (i) a Loan
Supplement substantially in the form annexed hereto as Exhibit A (each, a "LOAN
SUPPLEMENT", and collectively, the "LOAN SUPPLEMENTS"), setting forth the terms
of the proposed Loan, (ii) evidence reasonably satisfactory to Lender that,
with respect to such Loan, the conditions precedent set forth in Article 4
hereof have been, or as of the closing of such proposed Loan will be,
satisfied, and (iii) a representation and warranty of Borrower that the
requested Loan, when added to the then existing or concurrently requested
Loans, does not exceed the Commitment. All Loans shall be in a minimum Loan
Amount of $300,000.00, and Lender shall not be obligated to fund any Loans more
often than four (4) times prior to the Commitment Termination Date. Lender
shall have ten (10) days following its receipt of each Loan Request to approve
or disapprove the proposed Loan requested therein in its sole reasonable
discretion; provided, however, that Lender's failure to so notify Borrower of
the approval or disapproval of such Loan Request shall be deemed a disapproval
of such Loan Request, but shall have no effect on any of Lender's rights or
remedies hereunder. Lender
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hereby approves the Loan Requests for each of the Loans set forth on Schedule A
annexed hereto. Notwithstanding Lender's approval of a Loan Request, Borrower
shall comply with all of the terms and conditions of this Agreement and the
other Loan Documents as a condition precedent to Lender advancing the requested
Loan.
2.2.2 EXECUTION AND DELIVERY OF LOAN SUPPLEMENT. Following
Lender's approval of any proposed Loan pursuant to a Loan Request, as provided
in Section 2.2.1 hereof, at any time prior to the Commitment Termination Date,
and provided that no Default shall have occurred and be continuing, upon (i)
the due execution and delivery of a completed Loan Supplement together with the
other Loan Documents contemplated herein in respect of such proposed Loan, and
(ii) the satisfaction of the conditions precedent set forth in Article 4 hereof
with respect to such proposed Loan, Lender shall advance a Loan to Borrower in
respect of the Property identified in such Loan Supplement in accordance with
and subject to the terms and conditions set forth in such Loan Supplement, this
Agreement, the other Loan Documents and such other terms and conditions as
Lender reasonably shall require.
2.3 EFFECT OF LOAN SUPPLEMENT. The execution and delivery by
Borrower of a Loan Supplement shall constitute the irrevocable acceptance,
assumption and ratification by Borrower of the terms and conditions of this
Agreement for all purposes with respect to the Loan identified in such Loan
Supplement. Each Loan to be advanced in connection with any Loan Supplement
shall constitute a separate Loan and shall incorporate therein all of the terms
and conditions of this Agreement to the same extent as if the provisions hereof
were set forth in full therein, provided that each successive Loan Supplement
shall be deemed to amend and restate the aggregate amount of Loans advanced
under all Loan Supplements.
2.4 REFERENCES. This Agreement shall constitute Lender's and
Borrower's agreement concerning, and contains all terms, covenants and
conditions applicable to, all Loans contemplated hereby, and shall also
evidence the Loan Obligations and the Facility Obligations. Accordingly, all
references in this Agreement to the terms "Loan" and "Property", in the
singular sense, shall be deemed to be a reference to each Loan provided for in
each Loan Supplement and the Property identified in such Loan Supplement
securing such Loan. All references in this Agreement to the terms "Loans" and
"Properties", in the plural sense, shall be deemed to be a reference to all
Loans provided for in all Loan Supplements and all Properties identified in all
Loan Supplements securing each Loan, in the aggregate.
2.5 DISBURSEMENT OF LOAN PROCEEDS. Not later than 4:00 P.M. New
York City Time, on the date specified in each Loan Supplement pursuant to a
Loan Request which has been approved by Lender, and so long as no Default shall
then have occurred and be continuing, Lender shall transfer to Borrower or to
such other party as Borrower shall direct, by wire transfer or otherwise as
directed by Borrower, but in any event in immediately available funds, an
amount equal to the Funding Amount relating to the Loan to be made by Lender to
Borrower pursuant to such Loan Supplement on such date.
2.6 NOTE. Each Loan shall be evidenced by a Mortgage Note of
Borrower with respect thereto (each,a "NOTE", and collectively, the "NOTES")
which shall be substantially in the
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form of Exhibit B annexed hereto, with such changes thereto, if any, as shall
be required to properly evidence and reflect the terms of the Loan as provided
for in the Loan Supplement for such Loan and/or to conform to the laws of the
state in which the applicable Property is located.
2.7 LOAN TERM; MATURITY DATE. Each of the Loans shall mature on
the Maturity Date, irrespective of its Closing Date, at which time the entire
Loan Obligations shall be due and payable, it being expressly understood and
agreed that the other Facility Obligations shall also mature and be due and
payable on the Maturity Date.
2.8 INTEREST RATE.
2.8.1 INTEREST RATE. Subject to the further provisions of
this Agreement, including Sections 2.12 and 2.13 hereof, the Outstanding
Principal Balance shall bear interest throughout the Term at the LIBOR Interest
Rate for any Interest Accrual Period commencing throughout the Term.
2.8.2 CALCULATION OF INTEREST. All interest payable
hereunder shall be computed on the basis of a 360-day year for the actual
number of days elapsed. In computing the number of days during which interest
accrues, the day on which funds are initially advanced shall be included
regardless of the time of day such advance is made, and the day on which funds
are repaid shall be excluded.
2.9 PAYMENTS.
2.9.1 INTEREST. Prior to the Maturity Date, interest
accruing on the Outstanding Principal Balance during each Interest Accrual
Period shall be payable by Borrower monthly in arrears on each Payment Date.
2.9.2 REPAYMENT OF OUTSTANDING PRINCIPAL BALANCE. The
entire Outstanding Principal Balance, together with all accrued and unpaid
interest thereon and all other amounts payable hereunder or under any of the
other Loan Documents and/or the Facility Documents, shall, to the extent not
sooner paid pursuant to the terms of the Notes, the other Loan Documents or the
Facility Documents, be due and payable in full on the Maturity Date.
2.9.3 GENERAL. All sums payable to Lender hereunder shall
be payable, without setoff, deduction or counterclaim, in immediately available
funds, no later than 12:00 P.M. New York City time on the date when due by wire
transfer to the following account: NationsBank, N.A., ABA Number: 101-000-035,
Account Number: 010161046526, Account Name: Midland Loan Services, L.P.,
Reference: Silverleaf Resorts, Inc., or to such other account or address as
Lender may from time to time designate in a written notice to Borrower.
Payments received by Lender in immediately available funds on any day after
12:00 P.M. New York City time shall be treated for all purposes of the Loans
as having been paid and received by Lender on the next Domestic Business Day.
Notwithstanding anything to the contrary contained herein, when any payment is
due hereunder or under any of the other Loan Documents on a day which is not a
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Domestic Business Day, such payment shall be made on the next succeeding
Domestic Business Day.
2.10 FUNDING LOSSES; CHANGE IN LAW, ETC.
(a) Borrower hereby agrees to pay to Lender any amount necessary
to compensate Lender and any Funding Party for any losses or costs (including,
without limitation, the costs of breaking any "LIBOR" contract, if applicable,
or funding losses determined on the basis of Lender's or such Funding Party's
reinvestment rate and the interest rate thereon) (collectively, "FUNDING
LOSSES") sustained by Lender or any Funding Party: (i) if the Loan, or any
portion hereof, is repaid for any reason whatsoever on any date other than a
Payment Date (including, without limitation, from condemnation or insurance
proceeds), (ii) upon the conversion of the interest rate on the Loan to the
Base Rate in accordance with Section 2.10(b) hereof, (iii) as a consequence of
(A) any increased costs that Lender or any Funding Party may sustain in
maintaining the borrowing evidenced hereby or (B) the reduction of any amounts
received or receivable from Borrower, in either case, due to the introduction
of, or any change in, law or applicable regulation or treaty (including the
administration or interpretation thereof), whether or not having the force of
law, or due to the compliance by Lender or the Funding Party, as the case may
be, with any directive, whether or not having the force of law, or request from
any central bank or domestic or foreign governmental authority, agency or
instrumentality having jurisdiction, and/or (iv) any other set of circumstances
not attributable to Lender's or a Funding Party's acts. Payment of Funding
Losses hereunder shall be in addition to any obligation to pay a prepayment
premium under Section 2.11 hereof in circumstances where such prepayment
premium would be due and owing.
(b) If Lender determines (which determination shall be conclusive
and binding upon Borrower, absent manifest error) (i) that Dollar deposits in
an amount approximately equal to the then Outstanding Principal Balance are not
generally available at such time in the London Interbank Market for deposits in
Eurodollars, (ii) that the rate at which such deposits are being offered will
not adequately and fairly reflect the cost to Lender or a Funding Party of
maintaining a LIBOR Interest Rate on the Loan (or the portion of the Loan being
funded by such Funding Party), or of funding the same in such market for such
Interest Accrual Period, due to circumstances affecting the London Interbank
Market generally, (iii) that reasonable means do not exist for ascertaining
LIBOR, or (iv) that the LIBOR Interest Rate would be in excess of the maximum
interest rate which Borrower may by law pay, then, in any such event, Lender
shall so notify Borrower and, as of the date of such notification with respect
to an event described in clause (ii) or (iv) above, or as of the expiration of
the applicable Interest Accrual Period with respect to an event described in
clause (i) or (iii) above, interest shall accrue at the Base Rate until such
time as the situations described above are no longer in effect, or as otherwise
provided herein; provided, however, if the situation described in clause (ii)
above occurs, (x) Borrower shall have the option, to be exercised by written
notice to Lender, to pay Lender (in the manner reasonably required by Lender)
for such increased cost of maintaining the LIBOR Interest Rate, and (y) if the
same only affects a portion of the Loan, then only such portion shall have
interest accrue at the Base Rate (provided the remaining portion is at least
$1,000,000.00), and interest shall continue to accrue on the remaining portion
at the LIBOR Interest Rate.
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(c) If the introduction of, or any change in, any law, regulation
or treaty, or in the interpretation thereof by any governmental authority
charged with the administration or interpretation thereof, shall make it
unlawful for Lender or any Funding Party to maintain the LIBOR Interest Rate
with respect to the Loan, or any portion thereof, or to fund the Loan, or any
portion thereof, in Eurodollars in the London Interbank Market, then, (i) the
Loans (or such portion of the Loan) shall thereafter bear interest at the Base
Rate (unless the Default Rate shall be applicable), and (ii) Borrower shall pay
to Lender the amount of Funding Losses (if any) incurred in connection with
such conversion. The accrual of interest at the Base Rate shall continue until
such Payment Date, if any, as the situation described in this Section 2.10(c)
is no longer in effect.
(d) If Lender or a Funding Party, as the case may be, shall have
determined that the applicability of any law, rule, regulation or guideline
adopted pursuant to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards", or
the adoption of any other law, rule, regulation or guideline (including, but
not limited to, any United States law, rule, regulation or guideline) regarding
capital adequacy, or any change becoming effective in any of the foregoing or
in the enforcement or interpretation or administration of any of the foregoing
by any court or any domestic or foreign governmental authority, central bank or
comparable agency charged with the enforcement or interpretation or
administration thereof, or compliance by Lender or its holding company or such
Funding Party or its holding company, as the case may be, with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of Lender, Lender's
holding company, such Funding Party or such Funding Party's holding company, as
the case may be, to a level below that which Lender or its holding company or
the Funding Party or its holding company, as the case may be, could have
achieved but for such applicability, adoption, change or compliance (taking
into consideration Lender's or its holding company's or such Funding Party's or
its holding company's, as the case may be, policies with respect to capital
adequacy) (the foregoing being hereinafter referred to as "CAPITAL ADEQUACY
EVENTS"), then, upon demand by Lender, Borrower shall pay to Lender, from time
to time, such additional amount or amounts as will compensate Lender or such
Funding Party for any such reduction suffered.
(e) Any amount payable by Borrower under Section 2.10(a) or
Section 2.10(d) hereof shall be paid to Lender within five (5) days of receipt
by Borrower of a certificate signed by an officer of Lender setting forth the
amount due and the basis for the determination of such amount, which statement
shall be conclusive and binding upon Borrower, absent manifest error. Failure
on the part of Lender to demand payment from Borrower for any such amount
attributable to any particular period shall not constitute a waiver of Lender's
right to demand payment of such amount for any subsequent or prior period.
Lender shall use reasonable efforts to deliver to Borrower prompt notice of any
event described in Section 2.10(a) or 2.10(d) hereof and of the amount to be
paid under this Section 2.10 as a result thereof, provided, however, any
failure by Lender to so notify Borrower shall not affect Borrower's obligation
to make the payments to be made under this Section 2.10 as a result thereof.
All amounts which may become due and payable by Borrower in
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accordance with the provisions of this Section 2.10 shall constitute additional
interest hereunder and shall be secured by the Mortgages and the other Loan
Documents.
(f) If Lender or any Funding Party requests compensation for any
losses or costs to be reimbursed pursuant to any one or more of the provisions
of Sections 2.10(a)(iii), 2.10(a)(iv) or Section 2.10(d) hereof, or if any
event occurs as described in Sections 2.10(b) or 2.10(c) which would cause the
Note no longer to bear interest at the LIBOR Interest Rate then, upon request
of Borrower, Lender or such Funding Party shall use reasonable efforts, in a
manner consistent with such institution's practice in connection with loans
like the Loan, to designate a different lending office for funding or booking
the Loans or to assign its rights and obligations under this Agreement to
another of its offices, branches or Affiliates if such designation or
assignment, in Lender's sole but good faith judgment, (i) would eliminate,
mitigate or reduce amounts payable by Borrower in connection with Funding
Losses or Capital Adequacy Events or, with respect to an event described in
Sections 2.10(b) or 2.10(c) hereof, would allow the Loans to continue to bear
interest at the LIBOR Interest Rate without additional cost to Lender, and (ii)
would not be otherwise prejudicial to Lender. Borrower hereby agrees to pay all
reasonably incurred costs and expenses incurred by Lender or any Funding Party
in connection with any such designation or assignment.
2.11 PREPAYMENT OF LOANS.
2.11.1 OPTIONAL PREPAYMENTS.
(a) Borrower expressly waives any right to prepay the
Loans, in whole or in part, except as hereinafter provided.
(b) Provided that no Event of Default shall have occurred
and be continuing, Borrower may elect to prepay the entire Outstanding
Principal Balance of all Loans, in whole but not in part, on any Payment Date,
provided that: (i) Borrower has given Lender written notice of such prepayment
not more than sixty (60) days and not less than thirty (30) days prior to the
date of such prepayment, and (ii) such prepayment is accompanied by all
interest accrued on all Facility Obligations and all other Loan Obligations and
Facility Obligations due hereunder and under the other Loan Documents and/or
the Facility Documents up to and including the date of prepayment.
2.11.2 MANDATORY PREPAYMENTS. Prior to the Maturity Date,
Borrower shall from time to time prepay the Loans then outstanding in the
following amounts at the following times: (i) subject to the requirements of
Section 8.1 hereof, upon the Release of any Unit, an amount equal to the
Release Price thereof, (ii) in the event of any casualty or condemnation of any
Property, such amounts as are required under the terms of the Mortgages; and
(iii) upon the occurrence of a Capital Offering, the entire Outstanding
Principal Balance of all Loans which shall be applied by Lender to any
outstanding Loan Obligations and/or Facility Obligations in any manner or order
of priority as determined by Lender in its sole discretion.
2.11.3 NO REBORROWINGS. The amount of any Loan, once repaid, whether
in whole or in part, may not be reborrowed under this Agreement.
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2.12 DEFAULT INTEREST; LATE CHARGE.
(a) If any payment of principal, interest or other sum payable
hereunder or under any of the other Loan Documents or Facility Documents, is
not paid when due (including by reason of failure to pay all principal,
interest and all other amounts due hereunder and under the other Loan Documents
and Facility Documents on the Maturity Date (or such earlier date as the same
may become due, whether by acceleration or otherwise)), such principal amount,
interest or other sum shall bear interest at a rate per annum (the "DEFAULT
RATE") equal to seven percent (7%) in excess of LIBOR (or, if at such time
Lender shall have notified Borrower that reasonable means do not exist for
ascertaining LIBOR as provided in clause (iii) of Section 2.10(b) hereof, the
Treasury Rate), which Default Rate shall so apply from the date such amount was
due until the date such amount is indefeasibly paid to Lender. Without limiting
the foregoing, upon the occurrence of, and during the continuance of, an Event
of Default hereunder, the entire Outstanding Principal Balance shall bear
interest at the Default Rate. Interest at the Default Rate shall be paid
immediately upon demand, which demand may be made as frequently as Lender shall
elect.
(b) If any installment of interest or principal (including,
without limitation, the entire Outstanding Principal Balance on the Maturity
Date) is not paid when due, or if any other amount payable hereunder or under
any other Loan Document or Facility Document is not paid within ten (10) days
after written notice thereof is given to Borrower, Borrower shall pay to Lender
a late charge of four percent (4%) of the amount so overdue in order to defray
part of the expense incident to handling such delinquent payment or payments.
Such late charge shall be immediately due and payable without notice or demand
by Lender. Such late charge shall be in addition to, and separate from, any
increase in interest due hereunder as a result of calculation of interest due
hereunder at the Default Rate. Acceptance by Lender of any late charge or
interest at the Default Rate shall not be deemed a waiver of any of Lender's
rights hereunder or under the other Loan Documents or Facility Documents with
respect to such late payment.
2.13 EXCESS INTEREST. It is agreed that, notwithstanding any
provision to the contrary in this Agreement, the Notes or any of the other Loan
Documents or Facility Documents, no such provision shall require the payment or
permit the collection of any amount ("EXCESS INTEREST") in excess of the
maximum amount of interest permitted by law to be charged for the use or
detention, or the forbearance in the collection, of all or any portion of the
indebtedness evidenced by the Note. If any Excess Interest is provided for, or
is adjudicated to be provided for, in the Note, this Agreement or any of the
other Loan Documents or Facility Documents, then in such event:
(a) the provisions of this Section 2.13 shall govern and
control;
(b) neither Borrower nor any of the other Persons
required to pay any amounts with respect to the Loans shall be
obligated to pay any Excess Interest;
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(c) any Excess Interest that Lender may have received
hereunder shall, at the option of Lender, (i) be applied as a credit
against the then entire Outstanding Principal Balance (without payment
of prepayment premium) due hereunder, accrued and unpaid interest
thereon not to exceed the maximum amount permitted by law, or both,
(ii) be refunded to the payor thereof, or (iii) any combination of the
foregoing;
(d) the applicable interest rate or rates shall be
automatically subject to reduction to the maximum lawful rate and this
Agreement, the Notes and the other Loan Documents or Facility
Documents shall be deemed to have been, and shall be, reformed and
modified to reflect such reduction in such interest rate or rates; and
(e) neither Borrower nor any of the other Persons
required to pay any amounts with respect to the Loans shall have any
action or remedy against Lender for any damages whatsoever, or any
defense to enforcement of this Agreement, the Notes or any of the
other Loan Documents, arising out of the payment or collection of any
Excess Interest.
2.14 LOAN TAXES.
(a) Any and all payments by Borrower to Lender hereunder and under
the other Loan Documents shall, provided that Lender complies with the
requirements of Section 2.14(c) hereof, be made free and clear of, and without
deduction for, any and all present or future taxes, levies, imposts, deductions,
charges, withholdings or liabilities with respect thereto, except for the
following, for which Borrower shall not be responsible: (i) taxes imposed on or
measured by Lender's net income or net receipts; or (ii) franchise taxes imposed
on Lender by the jurisdiction in which (A) Lender is organized, (B) Lender is
"doing business" (unless such determination of "doing business" is made solely
as a result of Lender's interest in the Loans and the security therefor), or (C)
Lender's applicable lending office is located (all such taxes, levies, imposts,
deductions, charges or withholdings and liabilities (except those described in
the foregoing clauses (i) and (ii)) and being hereinafter referred to as "LOAN
TAXES"). If Borrower shall be required by law to deduct or withhold any Loan
Taxes from or in respect of any sum payable hereunder or under any other Loan
Document, then (1) any such sum payable hereunder or under any other Loan
Document shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions applicable to
additional sums payable under this Section 2.14), Lender receives an amount
equal to the sum it would have received had no such deductions or withholdings
(including deductions applicable to additional sums payable under this Section
2.14) been made, (2) Borrower shall make such deductions or withholdings, and
(3) Borrower shall pay the full amount deducted or withheld to the relevant
taxing authority in accordance with applicable law. Borrower will indemnify
Lender for the full amount of any Loan Taxes (including, without limitation, any
Loan Taxes (as well as taxes described in clauses (i) and (ii) of the second
preceding sentence) imposed by any jurisdiction on any amounts payable under
this Section 2.14) paid or payable by Lender and any liability (including,
without limitation, penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Loan Taxes were correctly or legally
asserted. A certificate as to the amount of such payment or liability delivered
to Borrower by Lender shall be conclusive absent manifest error.
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The agreements and obligations of Borrower contained in this Section 2.14 shall
survive the payment in full of principal and interest under this Agreement and
the Notes.
(b) Within thirty (30) days after the date of any payment
of Loan Taxes withheld by Borrower in respect of any payment to Lender,
Borrower will furnish to Lender the original or a certified copy of a receipt
or other evidence satisfactory to the Lender evidencing payment thereof.
(c) If Lender is a U.S. Person (other than the lender
originally named herein), Lender shall deliver to Borrower, upon request, a
Form W-9 (unless it establishes to the reasonable satisfaction of Borrower that
it is otherwise eligible for an exemption from backup withholding tax or other
withholding tax). If Lender is not a U.S. Person, Lender shall deliver to
Borrower, upon request, a Form W-8 and either (i) a Form 1001 which indicates a
0% rate of tax or (ii) a Form 4224. If Lender is not a U.S. Person, Lender
further undertakes to deliver to Borrower additional Forms W-8, 1001, 4224 (or
any successor forms) or other manner of certification, as the case may be, (A)
on or before the date that any such form expires or becomes obsolete, (B) after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to Borrower, and (C) such extensions or renewals
thereof as may reasonably be requested by Borrower, certifying that Lender is
entitled to receive payments hereunder without deduction or withholding of any
Loan Taxes. However, in the event that any change in law, rule, regulation,
treaty or directive, or in the interpretation or application thereof (a "LAW
CHANGE"), has occurred prior to the date on which any delivery pursuant to the
preceding sentence would otherwise be required which renders such form
inapplicable, or which would prevent Lender from duly completing and delivering
any such form, or if such Law Change results in Lender being unable to deliver
a Form W-9 (or other satisfactory evidence that it is otherwise eligible for an
exemption from backup withholding tax or other withholding tax), Lender shall
not be obligated to deliver such forms but shall, promptly following such Law
Change, but in any event prior to the time the next payment hereunder is due
following such Law Change, advise Borrower in writing whether it is capable of
receiving payments without any deduction or withholding of Loan Taxes. In the
event of such Law Change, Borrower shall have the obligation to make Lender
whole and to "gross-up" under Section 2.14(a) hereof, despite the failure by
Lender to deliver such forms.
(d) If Lender receives a refund in respect of Loan Taxes
paid by Borrower, it shall promptly pay such refund, together with any other
amounts paid by Borrower pursuant to Section 2.14(a) hereof in connection with
such refunded Loan Taxes, to Borrower; provided, however, that Borrower agrees
to promptly return such refund to Lender if it receives notice from Lender that
it is required to repay such refund. Nothing contained herein shall be
construed to require Lender to seek any refund and Lender shall have no
obligation to Borrower to do so.
(e) All amounts payable under this Section 2.14 shall
constitute additional interest hereunder and shall be secured by the Mortgages
and the other Loan Documents. The provisions of this Section 2.14 shall survive
any payment or prepayment of the Loans and any foreclosure or satisfaction of
the Collateral.
(f) Any reference under this Section 2.14 to "Lender" shall
be deemed to include any Participant and any Assignee.
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2.15 SERVICING OF LOANS. The Loans shall be serviced by an
insured financial servicer selected by Lender in its sole discretion (the "LOAN
SERVICER"). Lender may change the Loan Servicer from time to time without the
consent of Borrower, on notice to Borrower. The Loan Servicer's fees in the
amount of twelve one-hundredths of one percent (.12%) (the "LOAN SERVICING
FEE") shall be payable by Borrower monthly in arrears on each Payment Date.
2.16 CERTAIN NOTICES. Notices hereunder to Lender of optional
prepayments or Loan Requests shall be effective only if received by Lender not
later than 1:00 p.m. New York City time on the number of Domestic Business Days
or days prior to the date of the relevant reduction, prepayment, or borrowing
or funding specified herein. Each such notice shall specify the amount and date
of the prepayment or borrowing or funding requested.
2.17 NON-DISTURBANCE. Lender acknowledges that certain
purchasers of Intervals or campground memberships who have paid a portion but
not all of the sums due under their obligations to Borrower may have an
interest in an Interval or a campground membership, as the case may be, without
having received a deed or membership certificate. Notwithstanding anything to
the contrary contained herein, in the event that Lender shall foreclose upon
the Mortgages and succeed to the interest of Borrower at any such Property,
Lender agrees for itself, its successors and assigns that it will not disturb
or interfere with the rights of any such purchaser to whom Borrower has
heretofore granted or may hereafter grant, a beneficial interest, pursuant to a
Declaration or campground membership contract, reviewed and approved by Lender,
at any such Property, including, but not limited to, the rights of any such
purchaser to the use of the recreational facilities, amenities, roads and the
other Common Elements of the Resort at such Property, provided that such
purchaser is not in default of, and performs in a prompt and timely fashion,
all obligations required under such purchaser's Interval or campground
membership, as the case may be, sale/ownership agreements with Borrower.
ARTICLE 3
SECURITY
3.1 LOAN OBLIGATIONS; FACILITY OBLIGATIONS. Borrower shall
promptly pay the principal, interest and any other sums payable in respect of
(i) each Loan made to Borrower under the Loan Documents with respect to each
such Loan, and shall perform and observe all of the terms, covenants and
conditions of such Loan Documents (collectively, the "LOAN OBLIGATIONS"), and
(ii) all of the Loans made to Borrower under all of the Loan Documents
(collectively, the "FACILITY DOCUMENTS") and shall perform and observe and/or
cause to be performed and observed all of the terms, covenants and conditions
of the Facility Documents (collectively, the "FACILITY OBLIGATIONS").
3.2 CROSS-COLLATERALIZATION. The Loan Obligations shall be
secured by the following (collectively, the "LOAN COLLATERAL"): (i) the Loan
Documents, (ii) the collateral or security described in this Agreement and/or
in the other Loan Documents, and (iii) any other collateral as shall be
reasonably required by Lender as a condition to the making of any Loan. The
Facility Obligations shall be secured by the following (collectively, the
"FACILITY COLLATERAL", and
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together with the Loan Collateral, collectively, the "COLLATERAL"): (i) the
Facility Documents, (ii) the collateral or security described in this Agreement
and/or in the other Facility Documents, and (iii) any other collateral as shall
be reasonably required by Lender as a condition to the making of any Loan.
ARTICLE 4
CONDITIONS PRECEDENT TO LOANS
The obligation of Lender to make any Loan provided for hereunder is subject to
the fulfillment on or prior to the Closing Date therefor of all of the
following conditions to Lender's satisfaction:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Borrower hereunder, and under the other Loan Documents in respect
of any Loan, and any certificate, document OR financial or other statement
furnished at any time under or in connection herewith or therewith, shall be
true and correct in all material respects as of the date thereof and, except as
otherwise provided in Section 5.35 hereof, as of the current Closing Date.
4.2 NO DEFAULT. Borrower shall be in compliance with all of
the terms and conditions set forth herein and in each of the other Loan
Documents on its part to be observed or performed, and there shall not have
occurred and be continuing any Default, and each Loan Request delivered by
Borrower hereunder shall be deemed to constitute a representation and warranty
by Borrower as of the date of such Loan Request to that effect (as of the date
of such Loan Request and, unless Borrower otherwise notifies Lender prior to
the current Closing Date, as of such Closing Date).
4.3 No INJUNCTION. No law or regulation shall have been
adopted, no order, judgment or decree of any Governmental Authority having
jurisdiction over Lender, Borrower, or the transactions contemplated by this
Agreement shall have been issued, and no litigation shall be pending or
threatened in writing, which in the good faith judgment of Lender would enjoin,
prohibit or restrain, or impose or result in the imposition of any condition
having a Material Adverse Effect.
4.4 TRANSACTION COSTS. The obligation of Lender to make any
Loan is subject to Borrower paying, or having made provision from the
anticipated proceeds of such Loan for the payment of, all Costs paid or payable
relating to such Loan.
4.5 DELIVERY OF DOCUMENTS. Lender shall have received the
following agreements and instruments in respect of each Loan, duly executed by
Borrower dated the Closing Date, all in form and substance satisfactory to
Lender (all of such documents, together with this Agreement, the Loan
Supplement for the Loan, and any other documents evidencing or securing the
Loan or executed in connection therewith, and any modifications, renewals and
extensions thereof, are referred to herein collectively as the "LOAN
DOCUMENTS"), it being understood and agreed that any such Loan Documents may be
modified to conform, to the extent determined
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necessary by Lender in its sole but reasonable discretion, to the law of the
jurisdiction in which the Property is located:
(a) a Note;
(b) a first priority Mortgage, Security
Agreement, Assignment of Leases and Fixture Filing (or Deed of
Trust, if applicable) in the form annexed hereto as Exhibit C, to
secure the Loan Obligations, with such changes thereto as shall be
required to properly evidence and reflect the terms of the Loan as
provided for in the Loan Supplement (the "FIRST MORTGAGE");
(c) a second priority Mortgage, Security
Agreement, Assignment of Leases and Fixture Filing (or Deed of
Trust, if applicable) in the form annexed hereto as Exhibit D, to
secure all of the Facility Obligations (with respect to all Loans
theretofore and thereafter made hereunder) or such lesser portion of
the Facility Obligations as shall be provided for in the Loan
Supplement, with such changes thereto as shall be required to
properly evidence and reflect the terms of the Loan as provided for
in the Loan Supplement, and subordinate to the First Mortgage (the
"SECOND MORTGAGE", and together with the First Mortgage, the
"MORTGAGES");
(d) such Uniform Commercial Code financing
statements as Lender may require;
(e) an Environmental Indemnification Agreement,
in the form annexed hereto as Exhibit E (the "ENVIRONMENTAL
INDEMNITY"), executed by Borrower;
(f) if any portion of the Property consists of a
leasehold interest, a consent and estoppel executed by the lessor
under the lease creating such interest and/or an amendment to such
lease, which consent and/or amendment shall provide, inter alia, for
customary "mortgagability" provisions, including, without
limitation, that (i) such lease may be mortgaged to Lender, (ii)
such lease shall not be terminated, modified or amended without the
prior written consent of Lender, (iii) Lender shall receive copies
of any notice of default under such lease and an opportunity to cure
such default, (iv) such lessor shall accept a cure from Lender, (iv)
if any such default is incapable of cure without possession of the
Property, such lessor shall grant Lender additional time to cure
such default as is necessary to allow Lender to obtain possession of
the Property, and (v) if such default is incapable of cure and such
lease shall be terminated, to enter into a new lease with Lender on
the same terms and conditions as set forth in such terminated lease;
and
(g) any other documents reasonably requested by
Lender.
4.6 LOAN REQUEST. Lender shall have (i) received a Loan
Request, (ii) approved such Loan Request, and (iii) received a Loan Supplement,
in each case as required by Section 2.2 hereof.
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4.7 FEES. The obligation of Lender to make its initial
extension of credit hereunder is also subject to the payment or delivery by
Borrower of such fees and other consideration as Borrower shall have agreed to
pay or deliver to Lender in connection herewith, including, without limitation,
the fees and expenses of Lender's Counsel in connection with the negotiation,
preparation, execution and delivery of this Agreement, the Notes and the other
Loan Documents and the extensions of credit hereunder.
4.8 BORROWER'S MINIMUM EQUITY REQUIREMENT. As of the
Closing Date, Borrower shall have invested cash equity in the Property in an
amount equal to not less than thirty five percent (35%) of the Property
Capitalization for such Property ("BORROWER'S MINIMUM EQUITY") and shall have
provided reasonably satisfactory evidence of such investment to Lender.
4.9 TITLE POLICY AND ENDORSEMENTS. Lender shall have
received a title insurance policy or an acceptable marked commitment therefor
("TITLE POLICY"), dated the Closing Date and acceptable to Lender, insuring
marketability of title and insuring that the lien of the First Mortgage is a
valid first lien on the Property and the lien of the Second Mortgage is a valid
second lien on the Property, subject only to the First Mortgage and such other
exceptions to title approved by Lender. The Title Policy shall also contain any
reinsurance or co-insurance and any endorsements required by Lender, including,
without limitation, if applicable and if available, the following endorsements
in form and substance acceptable to Lender: creditors' rights, zoning 3.1,
survey, variable rate, usury, first loss, last dollar, tie in (cluster),
contiguity (where applicable), street address, "doing business", extended
coverage endorsements and such other endorsements and affirmative assurances as
Lender shall reasonably require in order to provide insurance against specific
risks identified by Lender in connection with the Property or the Loan,
provided, that (i) to the extent that the title company(ies) issuing the Title
Policy (individually or collectively, as the case may be, the "TITLE COMPANY")
shall be precluded by law or regulation from issuing any required endorsement
or if such endorsement is not generally available for a reasonable cost as
reasonably determined by Lender, such endorsement shall not be required if
Borrower shall provide alternative assurances to Lender (by way of counsel
opinion or indemnity, for example) as to the matters that would otherwise have
been addressed by such title endorsement, and (ii) in lieu of a zoning 3.1
endorsement, Borrower may provide to Lender an official letter from the
appropriate official in the locality in which the Property is situated, in form
and content reasonably satisfactory to Lender, as to the zoning classification
of the Property and that the current use of the Property conforms with such
zoning classification. In addition, on the Closing Date, tie-in (cluster)
endorsements and/or amendments to previously issued tie-in (cluster)
endorsements shall be provided, to aggregate, to the greatest extent permitted
by applicable law and regulations, the Title Policy issued on the Closing Date
with the Title Policies issued for Loans previously made. It is expressly
understood and agreed by Borrower that the Title Policies issued on each of the
Loans must all be issued by the same Title Company.
4.10 SURVEY. Lender shall have received and approved a
survey of the Property (the "SURVEY"), dated or redated not more than sixty
(60) days prior to the Closing Date, but in any event subsequent to the
completion of the Improvements on the Property, prepared by a registered land
surveyor in accordance with the 1992 American Land Title Association/American
Congress on Surveying and Mapping Standards and certified or re-certified in
favor of Lender
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and the Title Company. The Survey shall be sufficient for the Title Company to
remove the general survey exception from the Title Policy.
4.11 ENVIRONMENTAL REPORT. Lender shall have received a
Phase I Environmental audit of the Property prepared not more than six (6)
months prior to the Closing Date by an environmental consultant approved by
Lender, and, if recommended by such Phase I Environmental audit, a Phase II
Environmental audit of the Property thereafter prepared by such environmental
consultant (individually or collectively, if applicable, the "ENVIRONMENTAL
REPORT"). The Environmental Report shall (i) be addressed to Lender and/or be
accompanied by a letter from the consultant who prepared the same acknowledging
that Lender may rely thereon, and (ii) be acceptable to Lender, in form and
substance, in Lender's sole discretion.
4.12 INSURANCE. Borrower shall have provided to Lender
copies of certificates evidencing the insurance policies required to be
delivered pursuant to the terms of the Mortgages, each in form and substance
acceptable to Lender.
4.13 COMPLIANCE WITH LAWS. Borrower shall have submitted to
Lender, and Lender shall have approved, (i) a final and valid certificate of
occupancy (or its equivalent) for the Property or, if required under applicable
law in lieu of a certificate covering the entire Property, final and valid
certificates of occupancy (or their equivalents) for each of the individual
retail spaces at the Property, or, if applicable, if any of the foregoing
certificates shall not be final, a temporary and valid certificate of occupancy
(or its equivalent) in lieu thereof, provided such temporary certificate
permits occupancy of the Property covered thereby and shall become a final
certificate upon completion of certain conditions stated therein, (ii) all
other permits necessary for the use and/or operation of the Property as
currently used and operated and as contemplated to be used and operated
(whether such permits are held in the name of Borrower or any other Person),
and (iii) evidence reasonably satisfactory to Lender that the Property complies
in all material respects with all applicable laws, rules, regulations and
ordinances (including, without limitation, building, zoning, density, land use,
planning requirements and restaurant, liquor and beverage laws, rules,
regulations and ordinances, to the extent applicable), covenants, conditions
and restrictions, subdivision requirements (including, without limitation,
parcel maps), and environmental impact and other environmental requirements.
4.14 COUNSEL OPINIONS. Lender shall have received
acceptable legal opinions (i) from corporate counsel to Borrower, substantially
in the form of Exhibit F-1 annexed hereto, and (ii) from real estate counsel to
Borrower in the jurisdiction where the Property is situated, substantially in
the form of Exhibit F-2 annexed hereto.
4.15 PROPERTY. The Property shall be a Timeshare Property
or raw land or a campground intended to be developed by Borrower into a Resort
and located in the United States of America.
4.16 TIMESHARE DOCUMENTS. Lender shall have received copies
of all Timeshare Documents related to the Property.
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4.17 MORTGAGE RECORDING TAX. Borrower shall have paid or
caused to be paid all state, county and municipal recording and other taxes
imposed upon the execution and recordation of the Mortgages, if any, and upon
all other Mortgages previously executed hereunder to secure any other Loans for
which any such taxes, if any, shall not have been paid.
4.18 ADDITIONAL ITEMS. Lender shall have received such
other certificates, opinions, documents and instruments relating to the
transactions contemplated hereby and by any of the Loan Documents as Lender may
have reasonably requested, and all corporate and other proceedings and all
other documents (including, without limitation, all documents referred to
herein) and legal matters in connection with the transactions contemplated by
this Agreement, the Note and the other Loan Documents shall be reasonably
satisfactory in form and substance to Lender and its counsel.
4.19 CONSENTS, LICENSES, APPROVALS, ETC. Lender shall have
received copies of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by Borrower, and the
validity and enforceability against Borrower, of this Agreement and the other
Loan Documents, and such consents, licenses and approvals shall be in full
force and effect.
4.20 INITIAL AND SUBSEQUENT EXTENSIONS OF CREDIT. The
obligation of Lender to make any such Loan or otherwise extend any credit to
Borrower upon the occasion of each borrowing or other extension of credit
hereunder is subject to the receipt by Lender on the Closing Date of a
certificate of a Designated Officer of Borrower to the effect that, both
immediately prior to the making of any such Loan or extension of credit, and
also after giving effect thereto and to the intended use thereof:
(a) each of the conditions specified in Article
4 hereof have been satisfied together with such evidence thereof
satisfactory to Lender as Lender may reasonably request;
(b) no Material Adverse Effect shall have
occurred; and
(c) the Aggregate Loan Amount as of such Closing
Date does not exceed the Commitment.
ARTICLE 5
CERTAIN REPRESENTATIONS AND WARRANTIES OF BORROWER
As an inducement to Lender to enter into this Agreement and to
make the Loans, Borrower hereby represents and warrants as follows, which
representations and warranties shall be true and correct as of the date hereof
and as of each Closing Date hereunder (except as otherwise provided in Section
5.35 hereof), which shall survive any closing hereunder, and which (except as
otherwise provided in Section 5.35 hereof) shall remain true and correct until
all of the Loan Obligations are repaid in full:
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5.1 BORROWER ORGANIZATION, ENFORCEABILITY, ETC.
5. 1.1 BORROWER EXISTENCE; STATUS. Borrower is a duly formed
corporation under the laws of Texas, validly existing and in good standing
under the laws of the state of its formation, and has full power and authority
to execute and deliver to Lender this Agreement and all other Loan Documents
and Facility Documents to which it is a party, to own its properties and to
perform the Loan Obligations and Facility Obligations and carry out the duties
imposed upon Borrower by this Agreement and the other Loan Documents and
Facility Documents to which it is a party. All Loan Documents and Facility
Documents executed by Borrower have been duly authorized, approved, executed
and delivered by Borrower and constitute the legal, valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms. Borrower is authorized to do business in the State where the
Property is located and is not required by applicable law to be authorized to
do business in any other jurisdiction.
5.1.2 BORROWER ADDRESS. Borrower's chief executive office is
located at 1221 Riverbend - Suite 120, Dallas, Texas and shall not be changed
during the Term without giving Lender at least thirty (30) days prior notice
thereof.
5.1.3 BORROWER'S CORPORATE STRUCTURE.
(a) Borrower uses no trade name, and has not and will not
do any business under any name other than its actual name set forth herein.
(b) The authorized capital stock of Borrower consists of
one hundred million (100,000,000) shares of common stock, par value $0.01 per
share, of which eleven million three hundred eleven thousand five hundred
seventeen (11,311,517) shares are outstanding; such outstanding shares have
been duly authorized and validly issued; and Borrower has delivered to Lender a
true and correct list of all warrants and stock options granted by borrower to
any Person.
5.1.4 BORROWER'S ORGANIZATIONAL DOCUMENTS. A true and
complete copy of Borrower's Organizational Documents have been furnished to
Lender. Borrower's Organizational Documents constitute the entire agreement
among the shareholders in Borrower and are binding upon and enforceable against
all of such shareholders in accordance with their respective terms. There are
no other agreements, oral or written, among any of the shareholders in Borrower
relating to Borrower. No party is in default of its obligations under
Borrower's Organizational Documents and no condition exists which, with the
giving of notice and/or the passage of time, would constitute a default under
Borrower's Organizational Documents.
5.2 TITLE. Fee simple and/or leasehold title to the
Property (other than any portion thereof which consists of an Easement) is, or
contemporaneously with the funding of the Loan will be, owned by Borrower, free
and clear of all liens, claims, encumbrances, covenants,
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conditions, restrictions, security interests and claims of others, except for
the Loan Documents, the Facility Documents, and the Permitted Encumbrances.
5.3 VALID LIENS. Subject to the Permitted Encumbrances,
the First Mortgage is a good and valid first mortgage lien on the Property and
first priority security interest in the personal property described in the
First Mortgage; the Second Mortgage is a good and valid second mortgage lien on
the Property and second priority security interest in the personal property
described in the Second Mortgage.
5.4 PROPERTY USES. The Property consists solely of raw
land, a campground or a Resort (as set forth in the Loan Supplement pursuant to
a Loan Request approved by Lender) and, in each case, is used for no other
purpose.
5.5 NO STRUCTURAL DEFECTS. There are no structural defects
in the Improvements, or material defects to the building systems thereof.
5.6 COMPLIANCE WITH ZONING, ETC.
(a) Except as may be disclosed in the violations searches
received from the Title Company in connection with the Title Policy (the
"DISCLOSED VIOLATIONS"), the Property complies with all applicable Legal
Requirements. Borrower shall use its diligent efforts to cure, or cause to be
cured, the Disclosed Violations and to have them removed of record. Any zoning
or subdivision approval is based on no real property, or rights appurtenant
thereto, other than the Property. The Property as improved and used is not in
material violation of any recorded and, to the best knowledge of Borrower,
unrecorded covenants, conditions or restrictions of any kind or nature
affecting all or any part of the Property, or any interest therein. To the best
knowledge of Borrower, the Improvements can be fully rebuilt in the event of
casualty or destruction thereof under the Permits applicable to the Property,
subject, however, to non-discretionary requirements of any Governmental
Authority. No amendment or change in any such material Permit, and no amendment
or change in zoning or any other land use control, has been sought or obtained
by Borrower or any Affiliate of Borrower, or will be sought or obtained by
Borrower or any Affiliate of Borrower, with respect to any Property or the
Improvements thereon, except as specifically approved in writing by Lender or
as may be required in connection with the conversion of such Property into a
Timeshare Property, provided that any amendment or change in zoning or any
other land use control shall not in any way reduce the maximum number of Units
as set forth in the Loan Supplement with respect to such Property.
(b) Except as may be disclosed in the violations searches
received from the Title Company in connection with the Title Policy, all
Permits required by any Governmental Authority for the operation of the
Improvements and the actual and contemplated uses thereof, or otherwise
required to be in compliance with any Environmental Laws, have been obtained.
The copy of the certificate of occupancy for the Property, if any, delivered to
Lender prior to the date hereof is a true and correct copy of the permanent
certificate of occupancy for the Property, remains in full force and effect,
and is not subject to any conditions or limitations, other than
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those of general applicability to all certificates of occupancy for similar
properties located in the county where the Property is located.
(c) If and when requested by Lender, Borrower shall deliver
to Lender true, correct and complete copies of each material Permit.
(d) There are no pending or, to the best knowledge of
Borrower, threatened actions, suits or proceedings to revoke, attack,
invalidate, rescind or modify the zoning of the Property, or any material
Permits issued with respect to the Property or any part thereof, or asserting
that such Permits or the zoning of the Property do not permit the use of the
Property as contemplated by the Loan Documents.
5.7 NO CONDEMNATION. Borrower has not received any notice
of, and to the best of Borrower's knowledge there does not exist, any actual,
proposed or threatened exercise of the power of eminent domain or other taking
by any governmental or quasi-governmental body or agency, of all or any portion
of the Property, or any interest therein, or any right of access thereto.
5.8 NO CASUALTY. The Improvements have suffered no material
casualty or damage which has not been fully repaired and the cost thereof fully
paid.
5.9 PURCHASE OPTIONS. Except as set forth in Section 5.36
hereof, neither the Property nor any part thereof is subject to any purchase
options or other similar rights in favor of third parties.
5.10 NO ENCROACHMENTS. There are no material encroachments
on the Property and the Improvements do not encroach upon any Easement, any
other interest in real property, any adjoining land or any adjoining street,
except as set forth in the Survey.
5.11 LITIGATION. There are no actions, suits, proceedings,
arbitrations, tenant disputes, labor disputes or governmental investigations
pending, or, to the best knowledge of Borrower, threatened against or affecting
Borrower, any Affiliate of Borrower, the Timeshare Owner's Associations or the
Property, including, without limitation, the Resorts (i) which, if successful,
are reasonably likely to have an adverse effect on Borrower or any Property, or
Borrower's ability to perform its obligations pursuant to and as contemplated
by this Agreement and the other Loan Documents, (ii) which, if successful, are
reasonably likely to affect the validity or enforceability of any of the Loan
Documents or the priority of the Liens thereof, or (iii) which, if successful,
are reasonably likely to adversely affect the use of, operations at, or capital
improvements being made to, the Property. Borrower is neither operating under,
nor subject to, any order, writ, injunction, decree or demand of any court or
any Governmental Authority. No actions, suits, proceedings or arbitrations are
pending or, to the best knowledge of Borrower, threatened against Borrower
which involve claims, damages or sums of money not covered (including all
applicable deductibles) by insurance.
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5.12 NO CONFLICT WITH LAW OR AGREEMENTS. The execution and
delivery of this Agreement and the other Loan Documents or Facility Documents,
and the performance and consummation of the transactions contemplated hereby
and thereby, on the part of Borrower and fulfillment of the terms of the Loan
Documents and Facility Documents by Borrower (i) do not and will not conflict
with, violate, or constitute a default (or a condition or event which, after
notice or lapse of time or both, would constitute such a default) under any
provision of any Organizational Document or any contractual obligation of
Borrower or any Legal Requirement or any court decree or order applicable to
any Property or Borrower, and (ii) will not result in, or require, the creation
or imposition of any lien or encumbrance on, or conveyance of, any of
Borrower's properties pursuant to any contractual obligation, and (iii) do not
require the consent or approval of any Governmental Authority or other person
or entity, except for consents and approvals already obtained.
5.13 PERSONAL PROPERTY. All equipment and other personal
property necessary for (or otherwise actually used in connection with) the
proper and efficient operation and maintenance of the Property, the actual and
contemplated uses of the Property and Borrower's compliance with its
obligations under the Leases, are owned and/or leased by Borrower and
constitute part of the Property subject to the Mortgages and located thereat,
other than (i) any such equipment which is owned by a utility company, or (ii)
any such equipment and personal property which is owned by tenants of the
Property and utilized solely by such tenant.
5.14 EASEMENTS; ACCESS; UTILITIES. All easements, cross
easements, licenses, air rights and rights-of-way or other similar property
interests (collectively, "EASEMENTS"), if any, necessary for the full
utilization of the Property and the Improvements for their intended purposes
have been obtained, are described in the Title Policy and are in full force and
effect without default thereunder. The Property has direct rights of access to
public ways and is served by water, sewer, sanitary sewer and storm drain
facilities adequate to service the Property for its intended uses. All public
utilities necessary or convenient to the full use and enjoyment of the Property
is located either in the public right of way abutting the Property (which are
connected so as to serve the Property without passing over other property) or
in recorded Easements serving the Property and described in the Title Policy.
All roads necessary for the use of the Property for its current purposes have
been completed and are available for public use.
5.15 NO FLOOD HAZARD, ETC. Except as set forth in the
Survey, (i) the Property is not situated in an area designated as having
special flood hazards as defined by the Flood Disaster Protection Act of 1973,
as amended, or designated a wetlands by any governmental entity having
jurisdiction over such Property, or (ii) the Property is situated in an area
designated as having special flood hazards as defined by the Flood Disaster
Protection Act of 1973, as amended, or as a wetlands by any governmental entity
having jurisdiction over the Property, but Borrower either (i) has obtained and
paid for, and there is currently in effect, or (ii) upon the existence of any
Improvements on such Property, shall obtain and maintain in effect, the flood
insurance required under the terms of the Mortgages. No portion of the Property
is located on or adjacent to navigable waters and no portion of the Property
consists of filled-in land, except as set forth on the Survey.
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5.16 PROPERTY TAXED AS A SEPARATE TAX LOT. Except as set
forth in the Survey, (i) the Property is taxed as a separate and distinct tax
lot, (ii) no part of the Property shares a tax lot with any adjoining lands,
and (iii) for all purposes the Property may be mortgaged, conveyed and
otherwise dealt with as a single, independent parcel.
5.17 LEASES.
(a) Borrower has not entered into any Lease which continues
in existence, and is not bound by any such Lease, other than the Approved
Leases.
(b) Rent has not been collected under any of the Leases
more than one (1) month in advance of the due date. The term of each Lease has
commenced and the tenant has commenced the full payment of rent under such
Lease without the tenant thereunder being entitled to any abatement thereof.
The landlord is not required to perform any tenant work or pay any work
allowances under any Lease.
(c) Borrower has delivered true, correct and complete
copies of the Leases (including all amendments and supplements thereto) to
Lender.
(d) There are no brokerage fees or commissions due and
payable in connection with the leasing of space at the Property, except as has
been previously disclosed to Lender in writing, and no such fees or commissions
will become due and payable in the future in connection with the Leases,
including by reason of any extension of such Lease or expansion of the space
leased thereunder, except as has previously been disclosed to Lender in
writing.
5.18 ENVIRONMENTAL. Borrower covenants and represents to
Lender that, except as may be actually disclosed in the Environmental Report,
(i) no Hazardous Substances are now or have ever been located, produced, used,
stored, treated, transported, incorporated, discharged, emitted, released,
deposited or disposed of in, upon, under, over or from the Property in a manner
that may give rise to any actual or potential liability to pay response costs
or other damages, losses or expenses or otherwise violate any Environmental
Laws; (ii) no Hazardous Substances are currently located, stored or used at the
Property, except with respect to such Hazardous Substances which are (A)
customarily located, stored or used at golf courses similar to the Property, or
(B) unique and necessary to a tenant's business located in the Property,
provided that such Hazardous Substances described in clause (ii)(A) or (ii)(B)
are at all times stored, located and used in compliance with all Environmental
Laws; (iii) no Hazardous Substances have been discharged, released or emitted,
upon or from the Property into the environment, and no threat exists of a
discharge, release or emission of a Hazardous Substance upon or from the
Property into the environment, which discharge, release or emission, in either
case, would subject the owner of the Property to any damages, penalties or
liabilities under any applicable Environmental Laws; (iv) the Property has not
ever been used as or for a mine, a landfill, a dump or other disposal facility,
or a gasoline service station; (v) no underground storage tank is now located
on or in the Property or, if previously located therein, each such tank has
been removed therefrom in compliance with all applicable Environmental Laws and
any clean-up of the surrounding soil in connection therewith has been
completed; (vi) no asbestos, ACM, materials
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containing urea-formaldehyde, or transformers, capacitors, ballasts or other
equipment that contain PCBs are located about the Property; (vii) the Property
has never been used by Borrower or any Affiliate of Borrower, or to the best of
Borrower's knowledge, after due inquiry, any other Person (including any prior
owner of the Property), as a permanent or temporary treatment, storage or
disposal site for any Hazardous Substance; (viii) (A) no violation of any
Environmental Law now exists in, upon, under, over or from the Property, (B) no
notice of any such violation or any alleged violation thereof has been issued
or given by any Governmental Authority, and (C) there is not now any
investigation or report involving the Property by any Governmental Authority or
agency which in any way relates to Hazardous Substances; (ix) no Person has
given any notice of or asserted any claim, cause of action, penalty, cost or
demand for payment or compensation, whether or not involving any injury or
threatened injury to human health, the environment or natural resources,
resulting or allegedly resulting from any activity or event described in
clauses (i)-(viii) above and, to the best knowledge of Borrower, no basis for
such a claim exists; (x) there are not now, nor to Borrower's best knowledge
have there ever been, any actions, suits, proceedings or damage settlements
relating in any way to Hazardous Substances in, upon, under, over or from the
Property; (xi) no oral or written notification of a Release (as such term is
defined in 42 U.S.C. Section 9601(22)) of any Hazardous Substances has been
filed by or on behalf of Borrower through authorized employees or agents and
the Property is not listed on the Environmental Protection Agency's List of
Hazardous Waste Sites or any other list of Hazardous Substance sites maintained
by any federal, state or local Governmental Authority; (xii) there are no
environmental liens on the Property and, to the best knowledge of Borrower, no
governmental actions have been taken or are in process which could subject the
Property to such liens; (xiii) Borrower has not transported or arranged for the
transportation of any Hazardous Substances to any location which is listed or
proposed for listing under CERCLA or on any similar state list or which is the
subject of federal, state or local enforcement actions or other investigations;
(xiv) no environmental or engineering investigations, studies, audits, tests,
reviews or other analyses have been conducted by, or are in the possession of,
Borrower or the Affiliates of Borrower in relation to the Property, other than
the Environmental Report; Borrower has delivered a true, correct and complete
copy of the Environmental Report to Lender; and (xv) to the best of Borrower's
knowledge, the Environmental Report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make any statement
contained therein or herein, in light of the circumstances under which such
statement was made, not misleading.
5.19 NO DEFAULT. There is no Default on the part of Borrower
under this Agreement, the Notes, the Mortgages or any other Loan Document or
Facility Document.
5.20 NO OFFSETS. Borrower has no counterclaims, offsets or
defenses with respect to the Loan, the Notes or any other Loan Document or
Facility Document.
5.21 FINANCIAL STATEMENTS. All financial statements of
Borrower heretofore delivered to Lender in connection with the Loan are true
and correct in all material respects and fairly present the financial condition
of the subjects thereof as of the respective dates thereof, and no material
adverse change has occurred in the financial condition reflected therein, or
the operations or business of Borrower since the respective dates of the most
recent financial
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statements delivered to Lender. The financial statements heretofore delivered
have been prepared in accordance with the procedures and accounting principles
and standards required by Section 6.14 hereof.
5.22 NO INSOLVENCY. Borrower is not Insolvent, and Borrower
will not be rendered Insolvent by the execution of this Agreement, the Note or
any other Loan Documents or Facility Documents, or by the consummation of the
transactions contemplated hereby and thereby.
5.22.1 FRAUDULENT CONVEYANCE. Borrower has not
entered into the transactions contemplated by this Agreement or any other Loan
Document or Facility Documents with the actual intent to hinder, delay, or
defraud any creditor, and Borrower has received reasonably equivalent value in
exchange for its Loan Obligations and Facility Obligations under the Notes, this
Agreement and the other Loan Documents and Facility Documents. After giving
effect to the transactions contemplated by the Loan Documents and the Facility
Documents, the fair salable value of Borrower's assets exceeds, and will,
immediately following the execution and delivery of the Loan Documents and the
Facility Documents and the advance of the Loan proceeds thereunder, exceed,
Borrower's total probable liabilities, including, without limitation, the
maximum amount of its subordinated, unliquidated, disputed and/or contingent
liabilities. Borrower's assets do not, and, immediately following the execution
and delivery of the Loan Documents and Facility Documents and the advance of the
Loan proceeds thereunder, will not, constitute unreasonably small capital to
carry out its business as conducted or as proposed to be conducted. Borrower
does not intend to, and does not believe that it will, incur debts and
liabilities (including, without limitation, contingent liabilities and other
commitments) beyond its ability to pay such debts and liabilities as they mature
(taking into account the timing and amounts to be payable on or in respect of
obligations of Borrower).
5.23 BROKER. No broker or consultant has been retained by
Borrower or any Affiliate of Borrower in connection with the Loan or the Loan
Documents. Borrower will indemnify, defend and hold the Indemnified Parties
harmless from and against all loss, cost, liability and expense arising from
the claims of all brokers and consultants relating to the Loan and/or the
Property with whom Borrower, any Affiliate of Borrower or any employee or agent
of Borrower has dealt, including, without limitation, sales, mortgage or
leasing brokers or consultants.
5.24 FISCAL YEAR. Each fiscal year of Borrower commences on
January 1.
5.25 ERISA.
(a) The execution, delivery and performance of this
Agreement, the Mortgages and the other Loan Documents do not constitute a
Prohibited Transaction, assuming solely for this purpose that Lender is a party
in interest as defined in Section 3(14) OF ERISA ("PARTY IN INTEREST") or a
disqualified person as defined in Section 4975(e)(2) of the Internal Revenue
Code ("DISQUALIFIED PERSON") with respect to an employee benefit plan, if any,
which has directly or indirectly invested in Borrower.
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(b) Borrower has made, and shall continue to make, all
required contributions to all employee benefit plans, if any, within the time
periods required by the applicable provisions of ERISA and any other federal or
state law, and Borrower has no knowledge of any material liability which has
been incurred by Borrower which remains unsatisfied for any taxes or penalties
with respect to any employee benefit plan or any multi-employer plan. Each such
plan has been administered in compliance with its terms and the applicable
provisions of ERISA and any other federal or state law.
5.26 FIRPTA. Borrower is not a "foreign person" within the
meaning of Sections 1445 or 7701 of the Internal Revenue Code.
5.27 PUHCA. Borrower is not a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of either a
"holding company" or a "subsidiary company", all as defined in the Public
Utility Holding Company Act of 1935, as amended.
5.28 INSURANCE. All Insurance Policies (as defined in the
Mortgages) required to be obtained and maintained by Borrower pursuant to the
Mortgages are in full force and effect and the premiums due thereon have been
paid in full. Borrower and the Property are in compliance with the provisions of
such Insurance Policies and the provisions relating to the Insurance Policies
in the Mortgages, and no notice of cancellation, termination or default has
been received with respect to any such policy.
5.29 NO MARGIN STOCK. None of the proceeds of the Loan will
be used by Borrower for the purpose of purchasing or carrying "margin stock"
within the meaning of Regulation G, T, U or X issued by the Board of Governors
of the Federal Reserve System, as at any time amended, and Borrower agrees to
execute all instruments which may be necessary from time to time, if any, to
comply with all the requirements of Regulation U of the Federal Reserve System,
as at any time amended.
5.30 INVESTMENT COMPANY ACT. Borrower is not (i) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or (ii)
subject to any other United States federal or state law or regulation which
purports to restrict or regulate its ability to borrow money.
5.31 TAXES. Borrower has filed all federal, state and local
tax returns required to be filed prior to the date hereof and has paid all
taxes, charges and assessments shown to be due from Borrower on such tax
returns. There are no delinquent Taxes in respect of, or affecting, the
Property. Except as disclosed in writing to Lender, there are no pending, or to
Borrower's best knowledge, proposed special or other assessments for public
improvements or otherwise affecting the Property.
5.32 FULL AND ACCURATE DISCLOSURE. No statement of fact made
by Borrower in this Agreement or in any of the other Loan Documents contains
any untrue statement of a material fact or omits to state any material fact
necessary to make statements contained herein or therein not misleading. There
is no material fact presently known to Borrower which has not been
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disclosed to Lender which adversely affects, nor as far as Borrower can
foresee, might reasonably adversely affect, the Property or the business,
operations or condition (financial or otherwise) of Borrower.
5.33 OTHER OBLIGATIONS AND LIABILITIES. Borrower has no liabilities
or other obligations that arose or accrued prior to the date hereof that,
either individually or in the aggregate, could have a Material Adverse Effect.
Borrower has no known material contingent liabilities, except as may be
disclosed in writing to Lender.
5.34 DOCUMENTS. Borrower has furnished (or caused to be furnished)
to Lender true and complete copies of all material documents relating to the
Property which a reasonably prudent institutional Lender, making a loan in a
similar amount and on similar terms as the Loan, would want to have the
opportunity to review prior to agreeing to make such loan or prior to agreeing
to any of the material terms thereof.
5.35 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties set forth in Article 5 hereof shall be true and
correct as to all of the Loans as of the date hereof, as of each Closing Date
and shall remain true throughout the Term, except (i) to the extent agreed to
by Lender in its written approval of any Loan Request, and (ii) as specified in
any Loan Supplement.
5.36 TIMESHARE DEVELOPMENT. With respect to each Timeshare
Property,
(a) Borrower and the Timeshare Documents are or shall be, prior to
the sale of any Interval, at the Resort, in compliance with all applicable laws
related to the sale of such Intervals, including, without limitation, the
applicable Timeshare Acts;
(b) Borrower has or shall obtain, prior to the sale of any
Intervals, all applicable governmental permits, approvals, consents, licenses
and certificates for the establishment and/or operation of the Resort as
vacation ownerships, interval ownerships and/or timeshare projects in
accordance with the applicable Timeshare Acts, and for the occupancy and
intended use and operation of the Resort, including the Units;
(c) All water, sewer (sanitary and storm), electricity, solid
waste disposal, telephone, police, fire and rescue services are being or shall
be provided to the Resort, respectively;
(d) The Timeshare Documents provided to Lender shall be true,
correct and complete copies in each instance;
(e) In accordance with the requirements set forth in the
Declaration, respectively, Borrower or the Timeshare Owner's Association, as
required, has paid or will have paid in full, prior to delinquency, all ad
valorem taxes and other taxes and assessments against the Resort; and Borrower
knows of no basis for any additional taxes or assessments against the Resort;
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(f) The Timeshare Owner's Association has filed all tax returns
required to have been filed by it and has paid or will paid, prior to
delinquency, all taxes shown to be due and payable on such returns, including
interest and penalties and all other taxes which are payable by it to the
extent the same has become due and payable;
(g) Borrower has good and marketable title to all unsold Units and
Intervals at the Resort, respectively, and all rights, properties and benefits
appurtenant to or benefiting the Resort;
(h) Borrower has not received any notice from any court,
government or authority or other tribunal alleging that Borrower or the Resort,
has violated any applicable Timeshare Acts, respectively, any rules or
regulations thereunder, the Declaration, or any other applicable laws,
agreements or arrangements which could have a Materially Adverse Effect;
(i) Borrower, the Resort, the Timeshare Owner's Association and/or
any Affiliate of Borrower, respectively, involved in the development and
operation of the Resort, respectively, and to the best of Borrower's knowledge,
other Persons involved in the development and operation of the Resort,
respectively, possess all requisite franchises, certificates of convenience and
necessity, operating rights, approvals, licenses, permits, consents,
authorizations, exceptions and orders as are necessary to carry on its or their
business as now being conducted, without any known conflict with the rights of
any other Person, and with respect to Borrower, the Resort and the Timeshare
Owner's Association, respectively, in each case subject to no Lien other than
as provided for of permitted by the terms of this Agreement; and
(j) Borrower has not failed, nor has the Resort or, to Borrower's
knowledge, the Timeshare Owner's Association failed, to obtain any consents or
joinders, or any approvals, licenses, permits, franchise or other governmental
authorizations, or to make or cause to be made any filings, submissions,
registrations or declarations with any government or agency or department
thereof, necessary to the establishment, ownership or operation of the Resort,
or to the conduct of Borrower's business, including, without limitation, the
operation of the Resort and the sale, or offering for sale, of Intervals
therein; which violation or failure to obtain or register could have a Material
Adverse Effect.
5.37 RESORTS. With respect to each Timeshare Property,
(a) The Resort has been established and dedicated, and is and
shall remain, a timeshare plan and project in full compliance with all
applicable laws and regulations, including without limitation, the applicable
Timeshare Acts;
(b) The Resort has direct access to a publicly dedicated road and
all roadways inside the Resort are subject to access and use Easements or other
dedication or provision that benefits and will continue to benefit all
purchasers of Intervals;
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(c) All Easements necessary to the furnishing of any utility
services have been or shall be obtained and duly recorded, and inure or shall
inure to the benefit of the Resort and the Timeshare Owner's Association,
respectively;
(d) Each purchaser of an Interval has access to and the full use
and enjoyment of all of the Common Elements and public utilities of the Resort,
all in accordance with the Declaration and the Timeshare Documents;
(e) All costs arising from the construction or acquisition of any
Units and any other improvements and the purchase of any fixtures or equipment,
inventory, furnishings or other personalty located in, at, or on the Resort
have been paid or will be paid when due;
(f) The marketing, sale, offering for sale, retail solicitation of
purchasers or, if applicable, lessees, and financing of Intervals in the Resort
(1) do not constitute the sale, or the offering for sale, of securities subject
to the registration requirements of the Securities Act, or any state securities
law, (2) do not violate the applicable Timeshare Acts or any land sales or
consumer protection law, statute or regulation of the state in which such
purchaser is located or any other state or jurisdiction in which a purchaser
resides or in which sales or solicitation activities occur; and (3) do not
violate any consumer credit or usury statute of the state in which such
purchaser is located or any other state or jurisdiction in which a purchaser
resides or in which sales or solicitation activities occur. All marketing and
sales activities are performed by employees or agents of Borrower, all of which
are and shall be properly licensed in accordance with applicable laws;
(g) Except for specific items which may be owned by independent
contractors, the machinery, equipment, fixtures, tools and supplies used or to
be used in connection with the Resort, including without limitation, with
respect to the operation and maintenance of the Common Elements, are or shall
be owned by either Borrower or the Timeshare Owner's Association; and
(h) Borrower has entered or shall enter into the contracts,
agreements, and arrangements necessary for the operation of the Resort,
including but not limited to, those with respect to utilities, maintenance,
management, services, marketing sales which contracts shall be, in each
instance, satisfactory to and approved by Lender in form and substance.
5.38 TIMESHARE REGIMEN REPORTS. With respect to each Timeshare
Property, Borrower has furnished to Lender true and correct copies of the
Timeshare Documents with respect to such Timeshare Property which consist of
all those placed on file by Borrower as of the Closing Date with the applicable
and appropriate federal, state or local regulatory or recording agencies,
offices or departments. All such filings and/or recordations, and all joinders
and consents necessary in order to establish the plan in respect of the Resort,
including without limitation, the Units, Intervals, and all appurtenant Common
Elements, and all related use and access rights, have been or shall be done or
obtained as of the Closing Date, and all laws, regulations and statutes, and
all agreements or arrangements, in connection therewith have been or shall be
complied with as of the Closing Date.
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5.39 ARCHITECTURAL AND ENVIRONMENTAL CONTROL. With respect to each
Timeshare Property, all Units, Common Elements and other Improvements at, upon
or appurtenant to the Resort, respectively, are in compliance with the design,
use, architectural and environmental control provisions, if any, set forth in
the applicable Declaration and under applicable laws.
5.40 OTHER COMPLIANCE. With respect to each Timeshare Property,
Borrower has, in all material respects, complied with and will at all times
comply with all laws and regulations of the United States, the states in which
the Resort is located, any political subdivision of any of such states and any
other governmental, quasi governmental or administrative jurisdiction in which
Intervals have been or shall be sold or offered for sale, or in which sales,
offers of sale or solicitations with respect to the Resort, have been or will
be conducted, including to the extent applicable, but not limited to: (i) the
applicable Timeshare Acts; (ii) the Consumer Credit Protection Act; (iii)
Regulation Z of the Federal Reserve Board; (iv) the Equal Credit Opportunity
Act, (v) Regulation B of the Federal Reserve Board; (vi) the Federal Trade
Commission's 3-Day Cooling-Off Rule for Door-2-Door Sales; (vii) Section 5 of
the Federal Trade Commission Act; (viii) Interstate Land Sales Full Disclosure
Act; (ix) Federal postal laws; (x) applicable state and federal securities
laws; (xi) applicable usury laws; (xii) applicable trade practices, home and
telephone solicitation, sweepstakes, anti-lottery and consumer credit and
protection laws; (xiii) applicable real estate sales, licensing, disclosure,
reporting and escrow laws; (xiv) the Americans With Disabilities Act and
related accessibility guidelines; (xv) Real Estate Settlement Procedures Act
("RESPA"); (xvi) all amendments to and rules and regulations promulgated under
the foregoing acts or laws; (xvii) other applicable federal statutes and rules
and regulations promulgated thereunder; and (xviii) any state law or law of any
state (and the rules and regulations promulgated thereunder) relating to
ownership, establishment or operation of the Resort, or the sale, offering for
sale, or financing of Intervals.
5.41 NO INVESTIGATIONS OR VIOLATIONS. With respect to each
Timeshare Property, neither Borrower nor the Resort, nor the operations,
marketing or sales conducted with respect thereto are under investigation with
respect to any Timeshare Documents or any Timeshare Act, and Borrower has not
received any notification of, nor is Borrower aware of any violations of any
Timeshare Documents, any Timeshare Act, or any other laws or regulations,
whether state or federal, relating to the Resort or any other resorts owned by
Borrower, or the marketing of Intervals for sale.
ARTICLE 6
CERTAIN COVENANTS OF BORROWER
Borrower hereby covenants and agrees with Lender as follows:
6.1 PAYMENT AND PERFORMANCE OF LOAN OBLIGATIONS AND FACILITY
OBLIGATIONS. Borrower shall punctually pay and perform the Loan Obligations in
accordance with the respective terms of the Loan Documents. Borrower shall
punctually pay and perform the Facility Obligations in accordance with the
respective terms of the Facility Documents.
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6.2 TRANSFERS.
(a) Except for Permitted Transfers, Borrower will not, directly or
indirectly, sell, assign, convey, pledge, hypothecate, encumber, lease (except
in accordance with the terms of Section 6.6 hereof) or otherwise transfer (each
of the foregoing constituting a "TRANSFER") the Property or any part thereof,
or any interest therein, or suffer, consent to or permit the foregoing,
without, in each instance, the prior written consent of Lender. Borrower will
not permit any owner (directly or indirectly) of a legal or beneficial interest
in Borrower to Transfer such interest, whether by transfer of stock, assignment
of partnership interest or other transfer of legal or beneficial interest in
Borrower or in any direct or indirect owner thereof, or otherwise permit any
new or additional legal or beneficial Ownership Interests in Borrower or any
direct or indirect owner to be issued, without, in each instance, the prior
written consent of Lender.
(b) To the extent that Lender elects to consent to any Transfer as
to which its consent is required hereunder, Lender shall be entitled to
condition its consent on such matters as Lender may elect, in its sole
discretion, including, without limitation, execution of instruments of
assignment and assumption with respect to the Loan Documents and the
Collateral, payment of a transfer fee or other consideration, delivery of
Officer's Certificates and affidavits and indemnities, including an affidavit
and indemnification regarding Code Sections 1445 and 7701, agreements
restricting actions which may or may not be taken by any transferee or its
owners or restrictions in any such Person's Organizational Documents with
respect thereto, additional or replacement security for the Loan, restrictions
as to the use of any consideration paid for such Transfer, and opinions,
including opinions regarding the assumptions of Loan Obligations hereunder,
substantive consolidation and such other matters as Lender may request. Within
ten (10) days after the closing of any Transfer, whether or not such Transfer
required Lender's consent, if (i) the Property or any part thereof or any
interest therein, or (ii) any direct or indirect ownership interests in
Borrower, is transferred, Borrower will provide Lender with a copy of the deed
or other instrument of Transfer to the transferee. Borrower will promptly after
request therefor provide Lender with such other information and documentation
with respect to such Transfer as Lender shall reasonably request, including,
without limitation, information as to ownership of such transferee.
(c) Upon the occurrence of any Transfer, the provisions of this
Section 6.2 shall continue to apply to the transferee as if it were the
transferor hereunder, and any consent by Lender permitting a transaction
otherwise prohibited under this Section 6.2, or any right of Borrower or any
other Person to Transfer without such consent, shall not constitute a consent
to or waiver of any right, remedy or power of Lender to withhold its consent on
a subsequent occasion to a transaction not otherwise permitted by the
provisions of this Section 6.2. Notwithstanding the giving of any consent
hereunder by Lender, Borrower shall not engage in any Prohibited Transaction.
(d) Notwithstanding the provisions of this Section 6.2, Obsolete
Collateral (as such term is defined in the Mortgages) may be sold or otherwise
disposed of, provided, however, that either (i) such Obsolete Collateral has
been or is contemporaneously being replaced by like
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collateral of at least equal value and utility which is subject to the Lien of
the Mortgages with the same priority as with respect to the Obsolete
Collateral, or (ii) such Obsolete Collateral may be removed without adversely
affecting the maintenance, safety and operations at the Property.
(e) For purposes hereof, "PERMITTED TRANSFERS" shall mean (i) any
Transfers of the capital stock of Borrower so long as the same do not,
individually or in the aggregate, result in a Change of Control, and (ii) any
Transfers of Intervals contemplated under any contract of sale for any
Intervals pursuant to a Declaration, provided that no Transfer of record shall
be permitted with respect to any such Intervals prior to the Release of the
Unit containing any such Intervals and receipt by Lender of the Release Price
therefor.
6.3 LIENS. Borrower shall not create, suffer or permit to exist
any mortgage, pledge, lien, security interest (including, without limitation, a
purchase money security interest), encumbrance, charge, attachment, levy,
distraint or other judicial process (collectively, "LIENS") on, of or against,
or otherwise affecting, all or any portion of any Property (including, without
limitation, fixtures and other personal property), or any other property of
Borrower (whether tangible or intangible and now owned or hereafter acquired)
in favor of any Person other than Lender, without the prior written consent of
Lender (which consent may be withheld in Lender's sole discretion) in each
instance, other than the Permitted Encumbrances.
6.4 INDEBTEDNESS.
(a) Borrower shall timely pay any and all Indebtedness incurred by
Borrower.
(b) Notwithstanding that any Trade Payables incurred with respect
to any Property are otherwise permitted hereunder, Borrower shall pay any
portion of such Trade Payables which becomes due and payable within sixty (60)
days following the date on which each such amount is due and payable.
6.5 COMPLIANCE WITH RESTRICTIVE COVENANTS, ETC.
(a) Borrower will not modify, waive in any material respect or release any
Easements, restrictive covenants or other Permitted Encumbrances, or suffer,
consent to or permit the foregoing, without Lender's prior written consent,
which consent shall not be unreasonably withheld or delayed, except that
Lender's prior written consent shall not be required for any of the foregoing
in connection with the conversion of any Property into a Timeshare Property,
provided that the same shall not cause any diminution in value of any
Collateral. Borrower will timely comply in all material respects with the terms
of all Easements, restrictive covenants and all other Permitted Encumbrances.
Borrower shall take such further actions as Lender may reasonably request from
time to time with respect to such Easements, restrictive covenants or Permitted
Encumbrances.
(b) Borrower shall observe and comply with any conditions and
requirements necessary to preserve and extend any and all rights, privileges,
franchises and concessions that are applicable to the Property, the use and
occupancy thereof, or the business conducted thereat,
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and will timely comply in all material respects with all regulations, rules,
ordinances, statutes, orders and decrees of any Governmental Authority or court
applicable to it and/or the Property or any part thereof.
6.6 LEASES.
(a) Except as permitted in this Section 6.6, Borrower will not
enter into any Lease without the prior written consent of Lender, which may be
granted or withheld in Lender's sole discretion. Notwithstanding the foregoing,
Lender shall use its commercially reasonable discretion in granting or
withholding its consent with respect to a new Lease; provided, however, that
(i) the tenant under the Lease in question is not an Affiliate of Borrower,
(ii) such transaction is entered into on arms length terms (without
consideration of any other relationship Borrower or any Affiliate of Borrower
may have with the tenant or any Affiliate of such tenant), and (iii) the fair
market value of the Property and the ability of Borrower to make all payments
under the Loan Documents is not adversely affected thereby.
(b) Borrower will timely comply with all material terms and
conditions on its part to be performed under each Lease. Borrower shall neither
do nor neglect to do, nor permit to be done, anything which may cause the
termination of any Lease, other than due to the default of the tenant(s) under
such Lease. Borrower shall not collect any rent or other payment under any
Lease more than one month in advance of the due date thereof. Borrower will use
its best efforts to require the performance of all of the obligations of
tenants and other Persons bound by the Leases and to enforce the Leases,
subject, however, to the limitation on termination described in this Section
6.6.
(c) Borrower may, without Lender's prior written consent, enter
into any Lease, provided that each of the following conditions is satisfied:
(i) such Lease is subordinate to the Mortgages; (ii) the term of such Lease is
less than one (1) year, and (iii) such Lease does not contain any options to
purchase or other rights with respect to the ownership of the Property.
(d) Borrower may, without Lender's prior written consent, modify
or amend any Lease, provided that either (i) such modification or amendment is
required to be entered into pursuant to the terms of such Lease, or (ii) each
of the following conditions is satisfied: (A) such Lease would, after such
amendment or modification, satisfy the conditions set forth in Section 6.6(c)
hereof, to as great an extent as it did prior to such amendment or
modification; and (B) such amendment or modification does not otherwise have a
Material Adverse Effect.
(e) Each Lease executed by Borrower after the date hereof shall
provide, in a manner satisfactory to Lender, for (i) automatic subordination of
such Lease to the liens of the Mortgages, (ii) attornment by the tenant or
licensee thereunder to Lender promptly after the giving by Lender of a notice
to such tenant requiring such attornment, (iii) the tenant or licensee
thereunder to give a notice to Lender of each material default by the landlord
or licensor thereunder, simultaneously with the giving of notice of such
default to such landlord or licensor, (iv) Lender to have the right, but not
the obligation, to cure any default by the landlord or licensor thereunder
after the expiration of the landlord's or licensor's cure period, if any, and
(v)
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execution and delivery (not more than ten (10) days after a request therefor)
of an estoppel certificate satisfactory to Lender. Without limiting the
foregoing, each Lease shall also provide that Lender (or any other successor to
the landlord or licensor acquiring the Property by foreclosure, deed in lieu of
foreclosure or otherwise in connection with the enforcement of the Loan
Documents) shall not be: (A) liable for any previous act or omission of the
landlord or licensor under such Lease; (B) subject to any credit, demand,
claim, counterclaim, offset or defense which theretofore accrued to such tenant
or licensee against the landlord or licensor; (C) unless consented to by Lender
or permitted without Lender's consent under this Section 6.6, bound by any
previous modification of such Lease, or by any previous prepayment of more than
one month's fixed rent or additional rent; (D) bound by any covenant or
obligation of the landlord or licensor to perform, undertake or complete any
work in the leased space of the Property or to prepare it for occupancy; (E)
required to account for any security deposit of the tenant or licensee other
than any security deposit actually delivered to Lender by Borrower; (F) bound
by any obligation to make any payment to such tenant or licensee or grant any
credits, except for services, repairs, maintenance and restoration provided for
under the Lease to be performed by landlord or licensor after the date of such
attornment; and (G) responsible for any monies owing by the landlord or
licensor to such tenant or licensee.
6.7 DELIVERY OF NOTICES. Borrower will promptly, but in no event
later than five (5) days after Borrower becomes aware of any of the following
events, furnish a written notice to Lender (together with the applicable
correspondence and papers relating thereto) specifying the nature and period of
existence of such condition or event and, with respect to events described in
clause (a) below, what action Borrower is taking or proposes to take with
respect thereto (compliance with the provisions of this Section 6.7 shall not
be deemed or construed to constitute a waiver of or consent to any Default or
Event of Default of which Borrower has given Lender notice pursuant to this
Section 6.7):
(a) any Default hereunder or under any of the other Loan
Documents or Facility Documents, or any Event of Default;
(b) (1) any receipt or delivery by Borrower of a notice
of default or termination, (2) any proposed action with respect to any
default, or (3) any failure by any Person to perform any material
obligation, maintain any material representation or warranty or
satisfy any material condition, in each instance, in connection with
any material Easement, recorded instrument or Permit;
(c) the filing of any action, suit or proceeding against
or affecting Borrower or the Property that, if adversely determined,
could singly or collectively (1) impair the validity or enforceability
of this Agreement or any of the other Loan Documents or Facility
Documents or the ability of Borrower to perform its Loan Obligations
or Facility Obligations hereunder or thereunder or otherwise have a
Material Adverse Effect, or (2) result in a Lien on any portion of the
Property; and/or
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(d) any notice received from any Governmental Authority
asserting a violation of any material Legal Requirement and any
correspondence to or from Borrower with respect thereto.
(e) the filing of any Timeshare Documents whereby any
Property shall convert to a Timeshare Property.
Without limiting the generality of the foregoing, Borrower will
transmit to Lender, immediately upon receipt thereof, any communication
(addressed to Borrower or any Affiliate of Borrower) which relates to matters
which is reasonably likely to adversely affect Lender's security for the Loan
or reasonably likely to have an adverse effect on the financial condition of
Borrower, and will promptly respond fully to any inquiry of Lender made with
respect thereto.
6.8 ERISA.
(a) In addition to the prohibitions set forth in Section 5.25
hereof, and not in limitation thereof, Borrower shall not Transfer or
hypothecate its interest or rights in this Agreement or in the Property, or
attempt to do any of the foregoing or suffer any of the foregoing, nor shall
any Person owning a direct or indirect interest in Borrower Transfer any of its
rights or interest (direct or indirect) in such Person, attempt to do any of
the foregoing or suffer any of the foregoing, nor shall Borrower or any Person
owning a direct or indirect interest in Borrower take, without limitation, any
action or fail to take any action, if, in any such case, doing so would (i)
cause the Loan or the exercise of any of Lender's rights in connection
therewith to constitute a Prohibited Transaction (unless Borrower furnishes a
legal opinion reasonably satisfactory to Lender that the same is exempt from
the Prohibited Transaction provisions of ERISA and the Internal Revenue Code or
otherwise does not constitute a Prohibited Transaction), assuming solely for
this purpose that Lender is a Party In Interest or a Disqualified Person with
respect to an employee benefit plan, if any, which has directly or indirectly
invested in Borrower, or (ii) otherwise result in Lender being deemed in
violation of any applicable provisions of ERISA with respect to the Loan.
Borrower shall take such steps as are necessary to assure that each of them
(and their respective shareholders, partners and members) does not commit any
act, or fail to commit any act, the occurrence of which or the failure of which
to occur would cause the Loan to be a Prohibited Transaction.
(b) If the provisions of this Section 6.8 are violated, Borrower
agrees, at its own cost and expense, to take such steps as Lender shall
reasonably request to prevent the occurrence of a Prohibited Transaction or to
correct the occurrence of a Prohibited Transaction. Borrower agrees to
indemnify, defend and hold the Indemnified Parties free and harmless from and
against all loss, costs (including attorney's fees and expenses), taxes,
penalties, damages and expenses any Indemnified Party may suffer by reason of
the investigation, defense and settlement of claims based upon a breach of the
foregoing provisions. The provisions of Section 9.5 hereof shall apply to such
indemnification. The foregoing indemnification shall survive repayment of the
Loan.
6.9 INTENTIONALLY OMITTED.
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6.10 AFTER ACQUIRED PROPERTY. Borrower will grant to Lender a first
lien security interest in and to all equipment and other personal property
owned by Borrower and located at any Property, whether or not used in the
construction, maintenance and/or operation of the Improvements, immediately
upon acquisition of same or any part of same, unless such equipment or personal
property is the subject of any Indebtedness which would prohibit the granting
of such security interest.
6.11 BOOKS AND RECORDS. Borrower shall keep and maintain at all
times at its principal office complete, true and accurate books of account and
records reflecting the results of its operations. Borrower shall permit Lender,
its agents, consultants and representatives, upon reasonable notice (which may
be given orally or in writing) and at reasonable times, to examine and audit
the books and records of Borrower and make copies thereof, at Borrower's
expense. Borrower shall make all records relating to the Property available to
Lender and shall cooperate with any examination, audit or other inquiry
(including causing the personnel responsible for the Property to be available
to respond to inquiries).
6.12 DELIVERY OF ESTOPPEL CERTIFICATES.
(a) Borrower shall, from time to time, within ten (10) days after
written request from Lender, furnish to Lender or such other party (or parties
as may be requested by Lender) a written certificate setting forth the unpaid
principal of and interest due on the Note and any other sums evidenced or
secured by the Mortgages, and/or the other Loan Documents or Facility
Documents, stating the date through which interest has been paid, and stating
whether or not any offsets, defenses or counterclaims exist with respect to the
Loan Documents or Facility Documents. If requested, such certificate will also
attach true and correct copies of any Loan Documents or Facility Documents and
state such other information as Lender shall require. Upon request of Lender,
Borrower shall within ten (10) days after such request furnish Lender or such
other party or parties as Lender may request, a written certificate certifying
as to such matters as Lender may reasonably request.
(b) Borrower shall use all reasonable efforts to deliver to Lender
upon request, which may be made from time to time, tenant estoppel certificates
from each commercial tenant at the Property in form and substance reasonably
satisfactory to Lender.
6.13 MANAGEMENT. The Property is at all times to be managed by
Borrower in a competent and professional manner appropriate for a Resort
similar to the Property.
6.14 FINANCIAL STATEMENTS; AUDIT RIGHTS.
6.14.1 STATEMENTS TO BE DELIVERED. Until the Loan is repaid
in full, Borrower shall cause the following financial statements and
documentation to be delivered at the time and in the form and manner referenced
below:
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(i) audited statements of the financial position (balance
sheet) of Borrower as of the close of each fiscal year of Borrower
during the Term, and of stockholders' equity, retained earnings,
changes in financial position and cash flows for such fiscal year,
which statements shall be duly certified by the Designated Officer to
fairly represent the financial condition of Borrower as of the date
thereof and to have been prepared in accordance with generally
accepted accounting principles and accompanied by an opinion of the
Approved Accountant (which opinion shall be unqualified and shall not
contain any "statement of emphasis") to the effect that such financial
statements present fairly, in all material respects, the financial
condition of Borrower as of the end of the fiscal year being reported
on and that the results of the operations and cash flows for said year
are in conformity with generally accepted accounting principles,
consistently applied, and that the examination of the Approved
Accountant in connection with such financial statements has been
conducted in accordance with generally accepted auditing standards and
included such tests of the accounting records and such other auditing
procedures as the Approved Accountant deemed necessary in the
circumstances;
(ii) unaudited quarterly balance sheet of Borrower, a
statement of profits and losses and a calculation of net cash flows
for the applicable quarter, such quarterly financial statements to be
certified by a Designated Officer to fairly represent the financial
condition of Borrower as of the date thereof and to have been prepared
in accordance with generally accepted accounting principles;
(iii) a monthly operating statement showing all receipts,
expenses and net cash flow for the applicable calendar month,
year-to-date results and variances from the same month in the prior
calendar year and from the Approved Budget, and such other matters as
Lender shall reasonably require, which monthly operating statements
shall be certified by a Designated Officer to be true, correct and
complete in all material respects and shall be prepared on a cash
basis;
(iv) not later than each December 1 during the Term,
Borrower shall submit to Lender a detailed budget for each Property
covering the calendar year commencing on the following January 1 (each
such budget is referred to as an "APPROVED BUDGET"); until Lender
shall receive a new budget, the Approved Budget from the prior year
shall remain in effect, and it is expressly understood and agreed that
the budget for the calendar year in which the Closing Date shall occur
shall be delivered to Lender within thirty (30) days following the
Closing Date;
(v) the annual Form 1065 (with accompanying schedules
K-1) (or any substitute therefor) prepared by Borrower;
(vi) schedule of all accounts payable with respect to each
Property at the end of each calendar quarter, certified by a
Designated Officer to be true, correct and complete in all material
respects; and
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(vii) such other reports and information which Lender
reasonably requires certified by a Designated Officer to be true,
correct and complete in all material respects.
6.14.2 TIME FOR DELIVERY.
(a) The statements referred to in paragraph (i) of
Section 6.14.1 hereof shall be delivered to Lender within ninety (90) days
after the last day of each fiscal year of Borrower. The statements referred to
in paragraphs (ii) and (vi) of Section 6.14.1 hereof shall be delivered to
Lender within thirty (30) days after the last day of each calendar quarter. The
reports referred to in paragraph (iii) of Section 6.14.1 hereof shall be
delivered to Lender within twenty (20) days after the last day of each calendar
month. Notwithstanding anything to the contrary, the information required under
paragraph (v) of Section 6.14.1 hereof shall be delivered to Lender
simultaneously with delivery to the partners/members of Borrower but in no
event later than ninety (90) days after the last day of each fiscal year of
Borrower. All Financial Statements shall be in form and substance satisfactory
to Lender.
(b) Borrower shall deliver to Lender Borrower's Form 10-Q
Quarterly Reports, Form 10-K Annual Reports, Form 8-K Current Reports and any
other filings made by Borrower with the Securities and Exchange Commission, if
any, as soon as the same are filed, or any other information that is provided by
Borrower to its shareholders, and any other report reasonably requested by
Lender relating to any of the Collateral and/or the financial condition of
Borrower.
6.14.3 OFFICER'S CERTIFICATE. Each Financial Statement
described in paragraphs (i), (ii) and (iii) of Section 6.14.1 hereof shall be
accompanied by an Officer's Certificate of Borrower certifying that, to the
best of such officer's knowledge, Borrower has observed and performed, in all
material respects, all of its covenants and other agreements contained in this
Agreement and the other Loan Documents, whether there exists any material
Default or Event of Default and, if there is, specifying the nature and period
of existence thereof and the action Borrower is taking or proposing to take
with respect thereto.
6.15 MAINTENANCE OF TAXABLE STATUS. Borrower will maintain its
status of being taxed as a corporation for the purposes of federal, state and
local income taxes.
6.16 LENDER'S ATTORNEYS' FEES AND EXPENSES. Borrower shall appear
in and defend any action or proceeding purporting to affect the security of the
Mortgages or the security interests granted under any of the other Loan
Documents, or the rights and powers of Lender under any of the Loan Documents,
and Borrower (in addition to Lender's attorneys' fees and expenses to be paid
by Borrower otherwise pursuant to this Agreement or the other Loan Documents)
shall pay all of Lender's attorneys' fees and expenses in connection with the
enforcement of this Agreement and the other Loan Documents and the collection
of all amounts payable hereunder and thereunder. In case of any Default under
this Agreement or any of the other Loan Documents, or if any action or
proceeding is commenced in which it becomes necessary to defend or uphold the
Lien or priority of the Mortgages or the other Loan Documents, or which
adversely affects Lender's interests in the Property or any part thereof,
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including, but not limited to, eminent domain, or proceedings of any nature
affecting the Property or involving the bankruptcy, insolvency, arrangement,
reorganization or other form of debtor relief with respect to Borrower or
relating to a decedent, then Lender may, but without obligation to do so, and
without releasing Borrower from any obligation hereunder or under the other
Loan Documents, make such appearances, disburse such reasonable sums and take
such action as Lender deems necessary or appropriate to protect Lender's
interest in the Property. All costs incurred by Lender, including attorneys'
fees and disbursements, in taking any action described above shall be paid by
Borrower upon demand together with interest thereon at the Default Rate from
the date paid by Lender through the date of repayment by Borrower and the same
shall be deemed to constitute protective advances evidenced by the Note and
secured by the Mortgages and the other Loan Documents. In addition to, and
without limiting the generality of, the foregoing, if, at any time hereafter,
Lender employs counsel (i) upon the occurrence of a Default, for advice or
other representation (whether or not any suit has been, or shall thereafter be,
filed, and whether or not other legal proceedings have been, or shall
thereafter be, instituted, and whether or not Lender shall be a party thereto)
with respect to the Loan, the Property or any part thereof, this Agreement or
any of the other Loan Documents, or (ii) to protect, collect, lease, sell, take
possession of, foreclose upon or liquidate all or any part of the Property, or
to attempt to enforce any security interest or Lien in all or on any part of
the Property, or to enforce any rights of Lender or any of Borrower's Loan
Obligations hereunder or under any of the other Loan Documents, or any
obligations of any other Person which may be obligated to Lender by virtue of
this Agreement or any other agreement, instrument or document heretofore or
hereafter delivered to Lender by or for the benefit of Borrower, then, in any
such event, all of the attorneys' fees and expenses arising from such services,
and all expenses, costs and charges relating thereto, shall be paid by Borrower
upon demand, together with interest thereon at the Default Rate from the date
paid by Lender through the date of repayment by Borrower, and the same shall be
deemed to constitute protective advances evidenced by the Note and secured by
the Mortgages and the other Loan Documents.
6.17 ENVIRONMENTAL.
(a) Borrower shall not (and it shall not permit any tenant,
subtenant, contractor, agent or manager to) locate, produce, use, store, treat,
transport, incorporate, discharge, emit, release, deposit or dispose of any
Hazardous Substance in, upon, under, at, over or from the Property, except that
Borrower (its tenants, subtenants, manager, contractors or agents) may store,
locate and use on the Property Hazardous Substances which are (i) customarily
located, stored or used at golf courses similar to the Property, or (ii) unique
to a tenant's business located in the Property, provided that such Hazardous
Substances described in clauses (i) or (ii) above are at all times stored,
located and used in compliance with all Environmental Laws. Borrower shall not
permit any Hazardous Substances to be located, produced, used, stored, treated,
transported, incorporated, discharged, emitted, released, deposited, disposed
of or to escape in, upon, under, over or from the Property in violation of any
Environmental Law, and shall comply with all Environmental Laws which are
applicable to the Property. Borrower shall not engage in any conduct in
connection with the Property that may subject Borrower to Environmental Costs
or contribute to or aggravate a release of Hazardous Substances. In addition to
the foregoing restrictions, Borrower agrees that no asbestos, ACM, materials
containing urea-formaldehyde, or
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transformers, capacitors, ballasts or other equipment that contain PCBs are, or
will at any time be, located about the Property.
(b) Borrower shall, promptly within the time permitted by
Environmental Laws, initiate and diligently pursue to completion, any and all
remedial action required pursuant to any Environmental Laws in response to the
presence of any Hazardous Substances at, on, under or about, or emanating from,
the Property, and shall take such remedial action as is required to minimize
any impairment of Lender's Lien on, and security interest in, the Property. If
Borrower undertakes any remedial action with respect to any Hazardous Substance
about the Property, Borrower shall conduct and complete such remedial action in
compliance with all applicable Environmental Laws. If any Hazardous Substance
is removed or caused to be removed from the Property by Borrower, the generator
number assigned by the Environmental Protection Agency to such Hazardous
Substance shall not be in the name of Lender, and Borrower shall assume any and
all liability for such removed Hazardous Substance.
(c) The representations and warranties contained in Section 5.18
hereof and the covenants contained in this Section 6.17 shall be deemed
continuing covenants for the benefit of Lender, the Indemnified Parties and
their respective successors and/or assigns, except the rights and remedies of
Lender and the Indemnified Parties under such Sections 5.18 and 6.17 of this
Agreement shall not inure to the benefit of (i) any purchaser of the Property
at a foreclosure sale, (ii) any Person taking title to the Property by deed in
lieu of foreclosure or (iii) any successor or assign of any Person described in
clauses (i) and (ii) above, except that Lender's and Indemnified Parties'
rights shall inure to the benefit of the parties described in clauses (i), (ii)
and (iii) hereof if such parties are Lender (including, for these purposes, its
successors and assigns as holder of the Loan Documents), any beneficiaries of
any Loan Pool, and any Participant's or any of Lender's (or such successors,
assigns, beneficiaries or Participant's) Affiliates or nominees.
(d) Borrower shall give prompt written notice to Lender of:
(i) any proceeding or inquiry by any Governmental
Authority with respect to the presence of any Hazardous Substance on
the Premises or the migration thereof from or to other property;
(ii) all claims made or threatened by any third party
against Borrower or the Premises relating to any loss or injury
resulting from any Hazardous Substance;
(iii) the storage, production, release, discharge or
disposal of any Hazardous Substances on the Premises other than in
accordance with all applicable Environmental Laws; and/or
(iv) Borrower's discovery of any occurrence or condition
on any real property adjoining or in the vicinity of the Premises that
could cause the Premises or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of
the Premises under any Environmental Law or to be otherwise subject to
any restrictions on the ownership, occupancy, transferability or use
of the Premises under any Environmental Law.
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(e) Borrower shall keep Lender apprised of the status of, and any
material developments in, any governmental investigation relating to
Environmental Matters at or about the Property, any and all enforcement, clean-
up, removal or other governmental or regulatory actions instituted, completed
or threatened pursuant to any Environmental Law with respect to the Property
and any other claims, actions or proceedings with respect to the Property
relating to Environmental Matters. Borrower shall provide Lender with copies of
all communications with all Governmental Authorities relating to Hazardous
Substances Claims. Without Lender's prior written consent, Borrower shall not
enter into any settlement agreement, consent decree or other compromise with
respect to any such governmental investigation or action, or other claim,
action or proceeding relating to Hazardous Substances which Borrower does not
have the funds available to pay or which may adversely affect Lender's Lien on,
or the value of, the Property.
(f) The foregoing rights and remedies contained in this Section
6.17 are cumulative with, and in addition to, any rights and remedies Lender
may have against Borrower under the other terms and provisions of this
Agreement, under any other Loan Document or under any Environmental Law,
including, without limitation, CERCLA.
6.18 REPORT UPDATES.
(a) Lender reserves the right at any time during the Term to
conduct or require Borrower to conduct, at Borrower's expense, such
environmental inspections, audits and tests as Lender shall deem reasonably
necessary or advisable from time to time utilizing a company acceptable to
Lender; provided, however, that Borrower shall not be required to pay for such
environmental inspections, audits and tests so long as: (i) no Event of Default
exists under this Agreement or any other Loan Document or Facility Document;
(ii) Lender has no cause to believe, in Lender's sole but good faith judgment,
that there has been a release or a threatened release of Hazardous Substances
at the Property or that Borrower or the Property is in violation of any
applicable Environmental Law; (iii) such inspections, audits and tests are not
being obtained in satisfaction of the provisions of Section 9.26 hereof; and
(iv) such inspection, audit or test has not been recommended in any other
audit, inspection, test or consultants report previously conducted with respect
to the Property. In the event that any environmental site assessment report
prepared for the Property recommends that an operations and maintenance plan be
implemented for any Hazardous Substance, including, without limitation,
asbestos, Borrower shall cause such operations and maintenance plan to be
prepared and implemented at Borrower's expense upon request of Lender and in
accordance with the recommendation.
(b) Lender shall have the right from time to time throughout the
Tenn to order engineering reports with respect to any Property. Such
engineering reports shall be paid for by Borrower in accordance with Section
9.4 hereof; provided, however, that Borrower shall not be required to pay for
such engineering reports unless (i) an Event of Default has occurred, (ii) any
such engineering report is being obtained pursuant to Section 9.26 hereof,
(iii) any such engineering report is required by applicable Legal Requirements
to be obtained, or (iv) in Lender's sole but good faith judgment, an adverse
change in the condition of any Property has occurred.
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(c) Lender shall not be liable for any action or inaction by
Borrower with respect to any remedial or other response activity in connection
with any Hazardous Substance or any repair or replacement recommended in any
engineering report, notwithstanding any review or approval of Borrower's method
of remediation or repair or replacement, as applicable, or any response by
Lender.
6.19 LENDER ACCESS TO PROPERTY. Borrower will permit Lender and
its agents, consultants or representatives, to enter upon the Property on
reasonable notice (which may be given orally or in writing) at reasonable times
to inspect the Property and/or the Improvements. Lender or its agents,
consultants or representatives as part of any inspection may take soil, air,
water, building material and other samples, subject to the rights of tenants
under Leases.
6.20 DELIVERY OF DOCUMENTS REGARDING OWNERSHIP. Borrower will
deliver to Lender, on demand made therefor by Lender, copies of all documents
which evidence Borrower's title in or to any materials, fixtures or articles
incorporated in the Improvements or subject to the Lien of any of the Loan
Documents.
6.21 USE OF PROPERTY. Unless required by applicable law,
Borrower shall not permit changes in the use of any part of any Property from
the use existing on the date hereof, except for the conversion of any Property
into a Timeshare Property. Borrower shall not initiate or acquiesce in a change
in the plat of subdivision or zoning classification of any Property without
Lender's prior written consent, except that Lender's prior written consent for
such change shall not be required with respect to the conversion of any
Property into a Timeshare Property.
6.22 INSURANCE. Borrower shall at all times maintain all
Insurance Policies required to be obtained and maintained by Borrower pursuant
to the terms of the Mortgages.
6.23 BORROWER'S MINIMUM EQUITY. Borrower's Minimum Equity shall
remain invested in each Property for the remainder of the Term.
6.24 CAPITAL OFFERING PROCEEDS. Upon the occurrence of a
Capital Offering, Borrower shall repay the Outstanding Principal Balance with
the proceeds of such Capital Offering in accordance with the provisions of
Sections 2.11.2 hereof.
6.25 RESORT UTILITIES. With respect to each Timeshare Property,
Borrower, to the extent provided for pursuant to the Declaration, shall use its
best efforts to insure that the Timeshare Owner's Association will cause,
electric, sanitary and stormwater sewer, water facilities, drainage facilities,
solid waste disposal, telephone and other necessary utilities to be available
to the Resort in sufficient capacity to serve said Resort.
6.26 RESORT MAINTENANCE AND AMENITIES. With respect to each
Timeshare Property, Borrower, to the extent provided for pursuant to the
Declaration, shall use its best efforts to insure that the Timeshare Owner's
Association will cause the Resort to be maintained in good condition and
repair, in accordance with the provisions of the applicable Timeshare
Documents.
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Borrower will cause each purchaser of an Interval at the Resort to have
continuing access to, and use of, to the extent of such purchaser's time-share
periods, the Common Elements and related or appurtenant services, rights and
benefits, all as provided for in the Declaration and the Timeshare Documents.
6.27 TIMESHARE REGIME. With respect to each Timeshare Property,
Borrower shall not (i) assign any of its rights as "developer" under the
Declaration, nor (ii) materially modify any Timeshare Documents, without
notifying Lender of such modification.
6.28 MARKETING/SALES. With respect to each Timeshare Property,
Borrower shall not market, attempt to sell or sell or permit or justify any
sales or attempted sales of any Intervals, except in compliance with the
applicable Timeshare Acts, and applicable laws in the state and other
jurisdictions where marketing, sales or solicitation activities occur.
6.29 TANGIBLE CONSOLIDATED NET WORTH Throughout the Term,
Borrower shall maintain at all times a Tangible Consolidated Net Worth of not
less than an amount equal to $67,000,000.00, which shall be determined as of
the first day of each month during the Term. Borrower shall promptly deliver to
Lender, from time to time, all information requested by Lender to substantiate
Borrower's then Tangible Consolidated Net Worth which shall be certified by a
Designated Officer to be true, correct and complete.
ARTICLE 7
EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT; DEFAULTS. The term "DEFAULT" as used
herein shall mean any one or more of the events set forth below prior to the
expiration of the applicable notice or grace period, if any. The term "EVENT OF
DEFAULT", wherever used in this Agreement, shall mean any one or more of the
events set forth below after the expiration of the applicable notice or grace
period, if any.
7.1.1 NON-PAYMENT. Failure by Borrower to pay (i) any
periodic installment of interest or principal when the same shall become due
and payable hereunder or under the Notes and the continuation of such failure
for a period of five (5) days after written notice thereof is given to
Borrower; provided, however, that such notice shall not be required to be given
to Borrower more than two (2) times in any twelve (12) month period, and/or
(ii) the Outstanding Principal Balance, together with the interest accrued on
the Note and all other sums which may then be owed by Borrower to Lender, at
maturity or upon prepayment of the Note in full, and/or (iii) any other sums to
be paid by Borrower hereunder or under any other Loan Documents or Facility
Documents within ten (10) days following the date on which Lender gives
Borrower written notice of such failure.
7.1.2 AFFIRMATIVE COVENANTS. Failure by Borrower or any
other Person to duly keep, perform and observe any Affirmative Covenant or
agreement in this Agreement, the Note or any other Loan Document (unless same
constitutes a Default under any other clause of this
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Section 7.1 or any other Loan Document or Facility Document, in which case, the
grace or cure period, if any, set forth in such other clause shall govern)
within thirty (30) days after Lender gives Borrower written notice of such
failure; provided, however, that in the event such failure is not susceptible
of cure within ten (10) days following the date on which Lender gives Borrower
written notice of such failure within such thirty (30) day period, it shall not
be an Event of Default hereunder if such failure is curable, Borrower commences
to cure such failure within such thirty (30) day period, and thereafter
diligently prosecutes such cure to completion within thirty (30) days following
the expiration of such sixty (60) day period.
7.1.3 NEGATIVE COVENANTS. If Borrower or any other
Person shall breach or otherwise not comply with any Negative Covenant set
forth herein or in any other Loan Document (unless same constitutes a Default
under any other clause of this Section 7.1 or any other Loan Document, in which
case, the grace or cure period, if any, set forth in such other clause shall
govern) and such Default shall continue for five (5) Domestic Business Days
after written notice thereof by Lender to Borrower, provided that no such
notice and grace shall be required with respect to a knowing, intentional and
willful breach of a Negative Covenant.
7.1.4 FINANCIAL STATEMENTS. If any material
inaccuracy shall exist in any of the Financial Statements or in any other
financial statement or other information (i) furnished to Lender by Borrower,
any officer of Borrower, or any other Person on behalf of Borrower, pursuant to
the provisions of this Agreement or any other Loan Document, or (ii) furnished
to or to be furnished to Lender to induce Lender to make any Loan or any
advance hereunder or to consent to any matter hereunder or under any other Loan
Document.
7.1.5 REPRESENTATIONS. If, at any time, any
representation, warranty or certification made by Borrower in this Agreement,
the Note or any other Loan Document, or in any document delivered pursuant to
any Loan Document, or otherwise delivered in connection with the Loan, shall be
untrue, incorrect or misleading in any material respect when made, materiality
to be reasonably determined by Lender.
7.1.6 OTHER LOAN DOCUMENTS. If an "Event of
Default" shall occur under any other Loan Document or Facility Document (or
under any document evidencing or securing or delivered in connection with any
loan (other than the Loan) which Lender may have made or hereafter elect to
make to Borrower, including, but not limited to, a certain $40,000,000.00 line
of credit facility, as the same may be amended from time to time) or any other
default shall occur and continue beyond the applicable notice or grace period,
if any, under or with respect to any other Loan Document or Facility Document
(or under or with respect to any of the documents evidencing or securing any
such other loan).
7.1.7 FAILURE TO DELIVER ESTOPPEL CERTIFICATE. If
Borrower shall fail to deliver any estoppel certificate required by Section
6.13 hereof within the time period provided in said Section.
7.1.8 CESSATION OF BORROWER. If Borrower ceases to
exist.
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7.1.9 TRANSFER. If a Transfer shall occur in
violation of Section 6.2 hereof.
7.1.10 LIENS. If, in violation of Section 6.3
hereof, the Collateral or any part thereof is mortgaged or any other Lien is
voluntarily placed thereon by Borrower.
7.1.11 INVOLUNTARY BANKRUPTCY, ETC. The entry by a
court of (i) a decree or order for relief in respect of any Borrower in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law, or (ii) a decree
or order adjudging Borrower a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of Borrower under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of Borrower or of any substantial part of the property of Borrower, or ordering
the winding up or liquidation of the affairs of, Borrower, and the continuance
of any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of sixty (60) days.
7.1.12 VOLUNTARY BANKRUPTCY ETC. (i) The
commencement by Borrower of a voluntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law,
or of any other case or proceeding, to be adjudicated a bankrupt or insolvent;
(ii) the consent by Borrower (A) to the entry of a decree or order for relief
in respect of Borrower in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law, or (B) to the commencement of any bankruptcy or insolvency case or
proceeding against Borrower; (iii) the filing by Borrower of a petition or
answer or consent seeking reorganization or relief under any applicable federal
or state bankruptcy, insolvency, reorganization or other similar law against
it; (iv) the consent by Borrower to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of Borrower, or of any
substantial part of any property of Borrower; (v) the making by Borrower of an
assignment for the benefit of creditors; or (vi) the admission by Borrower in
writing of its inability to pay its debts generally as they become due.
7.1.13 JUDGMENTS. If, at any time, a judgment shall
be rendered against Borrower which could adversely affect the ability of
Borrower to perform any of its Loan Obligations or Facility Obligations, if
any, under this Agreement, the Notes or any other Loan Document or Facility
Document; provided, however, that if Borrower appeals said judgment and (i)
said appeal (A) is timely filed, (B) is diligently pursued, (C) is permitted by
law, and (D) has the effect of staying any action on such judgment, (ii)
Borrower posts any security required by law or required by Lender in respect of
said judgment, (iii) said judgment does not subject Lender, the Collateral or
the Property to any civil or criminal penalties, and (iv) such judgment is not
a Lien on the Collateral, the Property, then it shall not be an Event of
Default hereunder until such judgment is final and non-appealable.
7.1.14 DELIVERY OF FINANCIAL STATEMENTS. If Borrower
fails to deliver to Lender any Financial Statement required to be delivered
hereunder or under any other Loan Document,
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and such failure continues for fifteen (15) days after notice thereof is given
by Lender to Borrower.
7.1.15 ERISA. If Borrower shall breach any of the
provisions of Section 6.8 hereof.
7.1.16 OTHER CONDITIONS FOR ACCELERATION. The
occurrence of any conditions set forth herein, in the Note or any other Loan
Document or Facility Document permitting Lender to accelerate the Loans.
7.1.17 DENIAL OF OBLIGATION. If Borrower shall take
the position in any written communication with Lender or in any litigation that
any Loan Document or Facility Document is no longer the valid, binding and
enforceable obligation of Borrower or any other party thereto, or that such
Person's obligations to Lender, if any, pursuant to such Person's
Organizational Documents are no longer the valid, binding and enforceable.
7.1.18 FAILURE TO PROVIDE FURTHER ASSURANCES. If,
after fifteen (15) days notice from Lender to Borrower that Borrower has failed
to comply with any of the provisions of Section 9.24 hereof, Borrower fails to
cure such Default.
7.1.19 PRIORITY OF LIENS UNDER LOAN DOCUMENTS. The
Liens created by the Loan Documents or Facility Documents shall at any time,
except by reason of the acts of Lender, not constitute a valid and perfected
first (or second in the case of the Second Mortgage) lien on the Collateral
intended to be covered thereby in favor of Lender, free and clear of all other
Liens (other than Liens permitted under the Loan Documents), or, except for
expiration in accordance with its terms, any of the Loan Documents shall for
whatever reason be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by Borrower or any other Person, and
any such action by any such other Person is not being contested by Borrower in
good faith and by appropriate proceedings diligently conducted.
7.1.20 CERTAIN COVENANTS. Borrower has failed to
comply with any of the provisions of Sections 6.4 (Indebtedness) or 6.22
(Insurance) hereof.
7.1.21 DEFAULT IN PAYMENT OF INDEBTEDNESS. Borrower
shall default in the payment of any Indebtedness (other than any Loan
Obligations or Facility Obligations) in excess of $250,000.00 and such default
is declared and is not cured within the time, if any, specified therefor in any
agreement governing the same.
7.1.22 ENVIRONMENTAL CLAIMS. There shall have been
asserted against Borrower, or any predecessor in interest of Borrower, an
Environmental Claim that, in the judgment of Lender is reasonably likely to be
determined adversely to Borrower and such Environmental Claim arises with
respect to or may affect any Collateral or the value thereof (either
individually or in the aggregate) and is reasonably likely in the opinion of
Lender to have a Material Adverse Effect.
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7.1.23 CONTINUOUS OPERATION. The loss, revocation or
failure to renew or file for renewal of any registration, approval, license,
permit or franchise now held or hereafter acquired by Borrower or with respect
to any Resort, or the failure to pay any fee which is necessary for the
continued operation of any Resort or Borrower's business in the same manner as
is being conducted at the time of such loss, revocation, failure to renew or
failure to pay.
7.1.24 SUSPENSION OF SALES. The issuance of any
stay, order, cease and desist order, injunction, temporary restraining order or
similar judicial or non-judicial sanction, which is not dismissed with
prejudice within ninety (90) days, limiting or otherwise adversely affecting
any Interval sales activities, or other business operations in respect of the
Resorts located at any Property or the enforcement of Lender's remedies.
7.2 TERMINATION OF COMMITMENT AND RIGHTS UPON EVENT OF DEFAULT.
(a) Upon the occurrence and during the continuance of any
Event of Default, other than one referred to in Section 7.1.12 or 7.1.13
hereof, Lender may, by notice to Borrower, terminate the Commitment and it
shall thereupon terminate in its entirety. Upon the occurrence of an Event of
Default referred to in Section 7.1.12 or 7.1.13 hereof, the Commitment shall
automatically be terminated.
(b) Upon the occurrence and during the continuance of any
Event of Default, Lender shall, in addition to all other remedies conferred
upon Lender at law or in equity or by the terms of the Note and the other Loan
Documents and Facility Documents, have the right, but not the obligation, to
pursue any one or more of the following remedies, concurrently or successively,
it being the intent hereof that all such remedies shall be cumulative and that
no such remedy shall be to the exclusion of any other:
(i) take any action which, in
Lender's sole judgment, is necessary or appropriate to effect
observance and performance of the covenants, agreements and Loan
Obligations and Facility Obligations (under this Agreement and the
other Loan Documents and Facility Documents) of Borrower or any
other Person providing collateral pursuant to, or obligated to
perform any of the terms and provisions of, this Agreement or the
other Loan Documents or Facility Documents (each, an "OBLIGATED
PARTY");
(ii) declare any and/or all of the
Notes to be immediately due and payable;
(iii) use and apply (i) any receipts or
proceeds from any Property, (ii) any Tax and Insurance Deposits
deposited with Lender or (iii) any other monies deposited by
Borrower with Lender, regardless of the purpose for which the same
were deposited, to cure any Default or Event of Default, or apply
any such receipts or proceeds from any Property and/or such monies
on account of any indebtedness under this Agreement or any of the
other Loan Obligations or Facility Obligations, or for any other
purposes described herein or in any other Loan Document or
Facility Document, in such order or priority as Lender shall
determine in its sole discretion;
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(iv) institute an action, suit or
proceeding at law or in equity for the specific performance of any
covenant, condition or agreement contained herein or in the Note
or in any other Loan Document or Facility Document, or in aid of
the execution of any power granted hereunder or for the
enforcement of any other appropriate legal or equitable remedy;
and/or
(v) setoff against the Loan
Obligations and/or Facility Obligations to Lender of Borrower or
any other Obligated Party, any sum owed by Lender or any Affiliate
of Lender in any capacity to Borrower or such other Obligated
Party, or any property of any of them in the possession of Lender
or any Affiliate of Lender.
7.3 WAIVER OF STAY, EXTENSION AND MORATORIUM LAWS, APPRAISAL AND
VALUATION, REDEMPTION AND MARSHALLING.
(a) Borrower shall not at any time insist upon, or plead,
or in any manner whatever claim or take any benefit or advantage OF ANY stay or
extension or moratorium law, any exemption from execution or sale of any of the
Collateral, or any part of any thereof, wherever enacted, which may affect the
covenants and terms of performance of the Loan Documents and/or the Facility
Documents, nor claim, take or insist upon any benefit or advantage of any law
now or hereafter in force providing for the valuation or appraisal of any of
the Collateral, or any part of any thereof, prior to any sale or sales thereof
which may be made pursuant to any provision of any Loan Document and/or
Facility Document, or pursuant to the decree, judgment or order of any court of
competent jurisdiction; nor, after any such sale or sales, claim or exercise
any right under any statute to redeem the property so sold, or any part
thereof, and Borrower hereby expressly waives all benefit or advantage of any
such law or laws, and covenant not to hinder, delay or impede the execution of
any power herein granted or delegated to Lender, but to suffer and permit the
execution of every power as though no such law or laws had been made or
enacted. Borrower, for itself and all who may claim under it, waives, to the
extent that they lawfully may, all right to have the Collateral marshaled upon
any foreclosure.
(b) In the event that any bankruptcy or insolvency
proceeding under any federal, state or local law is filed by or against
Borrower or any of their assignees or designees at any time prior to full
satisfaction of the Loan, Lender shall, to the extent permitted by law, be
absolutely and unconditionally entitled to relief from any automatic stay
imposed with respect to Borrower or its assignees or designees and/or the
Collateral by the filing of such bankruptcy or insolvency proceeding,
including, but not limited to, the stay imposed by Section 362(a) of the
Bankruptcy Code effective as of any such filing, without further action by
Lender or order of any court, and Lender shall be authorized to exercise all of
its rights and remedies with respect to the Collateral, including, but not
limited to, commencing a foreclosure action, seeking the appointment of a
receiver therein and selling the Collateral therein, and Borrower hereby
irrevocably consents to the foregoing. Without limiting the previous sentence,
Borrower hereby irrevocably consents to, shall not oppose or contest, and
shall not request or cause any creditors' committee or any party in interest to
oppose or contest, any application for relief from the automatic stay or for
"adequate protection," as that term is defined in the Bankruptcy Code, which
may be filed by Lender in any future bankruptcy or insolvency proceeding with
respect to Borrower and/or the Collateral. No
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other action, inaction or agreement by Lender in any future bankruptcy or
insolvency proceeding shall be deemed to be a waiver of the rights given to
Lender hereby.
7.4 PREFERENCES. Lender shall have no obligation to
marshal any assets in favor of Borrower or any other party or against or in
payment of the Loans. To the extent Borrower makes a payment to Lender, which
payment or the proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent, preferential or avoidable, set aside or required to
be repaid to a trustee, receiver or any other party having requisite authority
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligation
hereunder or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment or proceeds had not been
received.
7.5 WAIVER OF CROSS-DEFAULT AND CROSS-COLLATERALIZATION.
Borrower acknowledges and agrees that Lender may unilaterally waive, release
and/or terminate any provisions of the Facility Documents relating to
cross-defaults and/or cross-collateralization. In any such event, Lender shall
have the right to record one or more declaration(s) or other instrument(s) with
respect to the Facility Documents referring to this Section and stating that
from and after the date of such declaration(s) or other instrument(s), the
Facility Documents designated therein shall no longer secure the Facility
Obligations (other than the designated Loan Obligations) and that any default
that may thereafter occur in the payment, performance or observance of any
Facility Obligations (other than the designated Loan Obligations) shall no
longer constitute an Event of Default under the Facility Documents. Upon the
recording of any such declaration(s) or instrument(s), (a) the Facility
Obligations shall no longer be deemed to include the designated Loan
Obligations, (b) the designated Facility Documents shall no longer evidence
and/or secure the Facility Obligations (other than the Loan designated
Obligations), (c) the Facility Documents (other than the designated Loan
Documents) shall no longer be deemed to evidence or secure the designated Loan
Obligations, and (d) the Facility Documents shall thereafter be construed,
interpreted and enforced for all purposes in the same manner and to the same
extent and on the same terms as if the Facility Documents had never contained
any reference to the designated Facility Documents or the designated Loan
Obligations. Borrower shall cooperate with Lender in connection with any such
waiver, release and/or termination and shall, within three (3) Domestic Business
Days after request by Lender, execute and deliver such documents as Lender shall
reasonably request confirming such waiver, release and/or termination. Each
Borrower hereby irrevocably appoints Lender as its attorney-in-fact, coupled
with an interest, to execute any document required in connection with the
foregoing if such Borrower shall fail to execute any such document within three
(3) Domestic Business Days after request by Lender.
ARTICLE 8
RELEASES OF COLLATERAL; RIGHT OF FIRST REFUSAL
8.1 RELEASE PROVISIONS.
8.1.1 RELEASE CONDITIONS. Borrower may, from
time to time, obtain a release of any Units (each, a "RELEASE") from the
Mortgages and the other Loan Documents or Facility
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Documents encumbering such Timeshare Property provided that Borrower shall have
complied with all of the following conditions (collectively, the "RELEASE
CONDITIONS"):
(a) Borrower shall have submitted to Lender a written
request for such Release (each, a "RELEASE REQUEST") at least five (5)
Domestic Business Days prior to the anticipated date of such Release,
including therein a certification that, as of the date of the Release
Request, (i) the number of Units which shall be the subject of such
Release, and (ii) no Event of Default shall have occurred and be
continuing;
(b) All accrued and unpaid interest and any unpaid or
unreimbursed amounts in respect of the Loans and any other sum then due
hereunder or under any of the other Loan Documents or Facility Documents
shall have been paid in full or shall have been arranged to be paid in
full contemporaneously with the Release;
(c) Borrower shall have paid, or caused to be paid, to
Lender by wire transfer or otherwise in immediately available funds, an
amount equal to (i) the release price per Unit set forth in the Loan
Supplement in respect of the Timeshare Property identified in the
Release Request, multiplied by (ii) the number of Units set forth in
such Release Request (collectively, the "RELEASE PRICE");
(d) No Default shall have occurred and be continuing at
the time of the submission by Borrower of the Release Request or at the
time of the Release; and
(e) Borrower shall have paid, in connection with each
Release, all of the reasonable legal and administrative fees and
expenses incurred by Lender in connection with preparing, reviewing,
processing and delivering each such Release.
8.1.2 DEFINITION OF PROPERTY. Upon the recordation of any
Release, all references herein to the term "Properties" shall be deemed to
exclude the Property or any portion thereof covered under such Release.
8.1.3 RELEASE. Upon satisfaction of the Release Conditions,
Lender, at the sole cost and expense of Borrower, shall execute and deliver to
Borrower partial releases, satisfactions, discharges and/or assignments, as
applicable and as reasonably requested by Borrower, of the Loan Documents and
the other Facility Documents relating to the Timeshare Property or any portion
thereof set forth in the Release Request.
8.2 RIGHT OF FIRST REFUSAL. Borrower shall, from time to time during
the Term, give Lender a written notice (a "FINANCING NOTICE") setting forth a
description in reasonable detail of any proposal by another Person to provide a
new loan to Borrower to be secured by the Properties or any portion thereof
whether by way of a credit facility, mortgage repurchase facility or otherwise
(each, a "PROPOSED FINANCING"), including a copy of any term sheet, and/or
draft commitment letter and draft agreements for any such proposed transaction
to the extent permitted by applicable confidentiality requirements. The
Financing Notice shall be delivered within five (5) Domestic Business Days
following Borrower's and such Person's agreement with respect to
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the terms of the Proposed Financing. Borrower shall not enter into a binding
agreement with respect to a Proposed Financing prior to giving the Financing
Notice or, after the Financing Notice is given, until such time as the
Financing Notice is deemed revoked pursuant to this Section 8.2.
During the ten (10) day period commencing on the date Lender receives a
Financing Notice, Lender shall have the option (but not the obligation) to
provide financing for Borrower on terms which shall match the material terms of
the Proposed Financing ("LENDER'S PROPOSED FINANCING") by giving Borrower
written notice (the "EXERCISE NOTICE"); PROVIDED, however, that the terms of
Lender's Proposed Financing may differ from the non-material terms of the
Proposed Financing. Upon Lender giving the Exercise Notice, Borrower and
Lender shall negotiate in good faith the non-material terms of Lender's
Proposed Financing, and Borrower shall take all action reasonably required by
it or its agents to consummate a financing with Lender on the terms of Lender's
Proposed Financing, or such other terms as such Person and Lender may agree.
For the purposes of this Section 8.2. "material" terms shall include interest
rate, term of the facility, principal amount of the facility, recourse, if any,
to Borrower, amortization, collateral, advance rate, points and other fees,
transferability and assumption.
If (i) Lender fails to give the Exercise Notice during such ten (10)
calendar day period, or (ii) Lender gives the Exercise Notice during such ten
(10) calendar day period but Lender and Borrower shall fail to consummate the
Lender's Proposed Financing within thirty (30) days (or such longer period as
shall be agreed to in a writing signed by Borrower and Lender) after the giving
of the Exercise Notice (other than by reason of Borrower failing to perform its
obligations under the preceding paragraph), the Financing Notice shall be
deemed revoked and of no further force and effect, and Borrower may thereafter
proceed with the Proposed Financing with the Person referred to in the related
Financing Notice upon the terms thereof. If Borrower shall fail to consummate
such Proposed Financing in accordance with the terms thereof and the Financing
Notice, such Persons shall continue to comply with the provisions of this
Section 8.2 and provide Lender with a Financing Notice of any Proposed
Financing prior to consummating a Proposed Financing with any Person.
ARTICLE 9
GENERAL PROVISIONS
9.1 RIGHTS CUMULATIVE; WAIVERS.
(a) Each right, power and remedy conferred upon
Lender herein or in any of the other Loan Documents or Facility Documents is
cumulative and in addition to every other right, power or remedy, express or
implied, now or hereafter provided by law or in equity, and each and every
right, power and remedy herein set forth or otherwise so existing may be
exercised, concurrently or independently, from time to time as often and in such
order as may be deemed expedient to Lender. The exercise of one right, power or
remedy shall not be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy; and no delay or omission of Lender
in the exercise of any right, power or remedy accruing hereunder or arising
otherwise shall impair any
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such right, power or remedy, or be construed to be a waiver of any Default or
acquiescence therein. Enumeration of special rights or powers herein or in the
other Loan Documents or Facility Documents shall not be construed to limit any
grant of general rights or powers herein or in the other Loan Documents or
Facility Documents or to limit Lender's exercise of any and all rights granted
under the laws of the State of New York, the state where any Property is
located, or the United States of America. No act of Lender shall be construed
as an election to proceed under any provision herein or in any other Loan
Document or Facility Document to the exclusion of any other provision herein or
in any other Loan Document or Facility Document. Except as otherwise
specifically required herein, notice of the exercise of any right, remedy or
power granted to Lender by this Agreement or any other Loan Document or
Facility Document is not required to be given. Lender shall be entitled to
enforce payment of the Loans and any other amount payable under the Loan
Documents or Facility Documents, and performance of this Agreement and the
other Loan Documents and Facility Documents, and to exercise all rights and
remedies under this Agreement or the other Loan Documents or Facility Documents
or otherwise at law or in equity, notwithstanding that some or all of the
indebtedness secured thereby may now or hereafter be otherwise secured, whether
by mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this Agreement nor its enforcement shall prejudice or
in any manner affect Lender's right to realize upon or enforce any other
security now or hereafter held by Lender, it being agreed that Lender shall be
entitled to enforce this Agreement and any other security now or hereafter held
by Lender hereunder, under any of the other Loan Documents, Facility Documents
or otherwise, in such order and manner as Lender may determine in its absolute
discretion.
(b) Lender may, by written notice to Borrower, at any time
and from time to time, waive in whole or in part, and absolutely or
conditionally, any Default or Event of Default hereunder. Any such waiver shall
be subject to such conditions or limitations as shall be specified in any such
notice. In the case of any such waiver, the rights of Borrower shall be
otherwise unaffected, and any Default or Event of Default so waived shall be
deemed to be cured and not continuing only to the extent, and only on the
conditions or limitations, set forth in such waiver, but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right, remedy or power consequent thereupon.
9.2 LENDER'S ACTION FOR ITS OWN PROTECTION ONLY. The authority herein
conferred upon Lender, and any action taken by Lender, to inspect the Property,
to review and/or approve all documents and instruments submitted to Lender, or
otherwise, will be exercised and taken by Lender and by Lender's employees,
agents, consultants and representatives for their own protection only and may
not be relied upon by Borrower or any other party for any purposes whatever; and
neither Lender nor Lender's employees, agents, consultants or representatives
shall be deemed to have assumed any responsibility to Borrower or any other
party with respect to any such action herein or under any of the other Loan
Documents or Facility Documents authorized to be taken by Lender or Lender's
employees, agents and representatives. Any review, investigation or inspection
conducted by Lender, any architect, engineer or other consultant retained by
Lender, or any agent or representative of Lender, in order to verify
independently Borrower's satisfaction of the covenants, agreements and Loan
Obligations and/or Facility Obligations of Borrower under this Agreement or any
of the other Loan Documents or Facility Documents or the validity of any
representations and warranties made by Borrower or any other
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party (regardless of whether or not the party conducting such review,
investigation or inspection should have discovered that any of such conditions
precedent were not satisfied or that any such covenants, agreements, Loan
Obligations or Facility Obligations were not performed or that any such
representations or warranties were not true) shall not affect (or constitute,
except as may specifically be provided in this Agreement or in the other Loan
Documents or Facility Documents to the contrary, a waiver by Lender of) (i) any
representations and warranties under this Agreement or the other Loan Documents
or Facility Documents or Lender's reliance thereon, or (ii) Lender's reliance
upon any certifications of Borrower or any other party in connection with the
Loan, or any other facts, information or reports furnished to Lender by
Borrower or any other party in connection with the Loans. Lender neither
undertakes nor assumes any responsibility or duty to Borrower to select,
review, inspect, supervise, pass judgment upon or inform Borrower of any matter
in connection with the Property or the Collateral, and Borrower shall rely
entirely upon their own judgment with respect to such matters, and any review,
inspection, supervision, exercise of judgment or supply of information to
Borrower by Lender in connection with such matters is for the protection of
Lender only and neither Borrower nor any third party is entitled to rely
thereon.
9.3 NO THIRD PARTY BENEFICIARIES. All conditions to the obligations of
Lender hereunder and under the other Loan Documents and Facility Documents are
imposed solely and exclusively for the benefit of Lender and its Assignees and
Participants, if any, and its or their successors and assigns, and no other
Person (other than Servicer) shall have standing to require satisfaction of
such conditions in accordance with their terms, or be entitled to assume that
Lender will refuse to advance proceeds of the Loans or refuse to agree or
consent to any matter in the absence of strict compliance with any or all
thereof, and no other Person (other than Servicer) shall, under any
circumstances, be deemed to be the beneficiary of such conditions, any or all
of which may be freely waived in whole or in part by Lender at any time if, in
its sole discretion, it deems it advisable to do so.
9.4 PAYMENT OF EXPENSES, ETC.
9.4.1 PAYMENT OF EXPENSES. BORROWER will, on the Closing
Date and at all times thereafter, pay all costs and fees incurred by Lender in
connection with (i) the preparation, negotiation, consummation, execution,
administration, repayment, collection and enforcement of the Loans and the Loan
Documents, and (ii) any approval, consent, amendment or modification requested
by Borrower or waiver related to any of the foregoing. Without limiting the
generality of the foregoing, Borrower will pay:
(a) all Lender's Counsel Fees in connection with
the foregoing;
(b) all taxes AND RECORDING FEES AND EXPENSES,
INCLUDING, without limitation, stamp and/or mortgage taxes AND
TRANSFER TAXES, if any;
(c) all fees and out-of-pocket expenses incurred
by Lender, including all expenses of Lender and its respective
agents and representatives, in connection
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with any Default or Event of Default hereunder, under the Note or
under any other Loan Document or the collection or enforcement
thereof,
(d) subject to Sections 6.18 and 9.26 hereof, all
fees and expenses of any environmental, engineering, appraisal,
construction, insurance or other consultants retained by Lender in
connection with any Loan or the administration, enforcement or
collection thereof; and
(e) all brokers' fees and commissions relative to
any Loan, any the Property, the Collateral and/or any Lease or
purchase contract affecting same.
Without limiting the generality of the foregoing, to the extent
that Lender, after the Closing Date, deems it necessary to employ counsel
and/or any other consultant for whatever purpose relative to any Loan or
Lender's interest in the Collateral, including, without limitation, all future
amendments requested by Borrower, supplements, notices, recordings, approvals,
consents and waivers with respect to the Loan Documents (or any proposal by
Borrower therefor), whether or not consummated, the adjustment and collection
of any and all insurance proceeds with respect to any insurance coverage
required hereunder, or obtaining any and all awards in connection with any
condemnation, the fees and expenses of such counsel and/or consultants shall be
borne by Borrower. Any fees and expenses referred to in this Section 9.4.1
which are incurred by Lender are to be paid by Borrower within five (5) days
after demand is made by Lender therefor. Borrower hereby agrees to indemnify,
defend and hold Lender harmless from and against any loss, cost (including
attorneys' fees) or damage whatsoever incurred by Lender as a result of
Borrower's failure to pay any cost or expense contemplated hereby. The
provisions of this Section 9.4.1 are not intended to limit any other obligation
of Borrower or any other Obligated Party to pay fees and expenses of Lender or
other Persons contained herein or in any other Loan Document.
9.4.2 ADVANCES SECURED. All costs and expenses incurred and
payments made by Lender under this Agreement or any of the other Loan Documents
from time to time, which are to be paid or reimbursed by Borrower as described
herein or in any of the other Loan Documents shall, as and when advanced or
incurred by Lender, constitute protective advances evidenced by the Note and
secured by the Loan Documents to the same extent and with the same effect as if
the terms and provisions of this Agreement were set forth therein, whether or
not the principal balance of the Note plus such protective advances shall
exceed the face amount of the Note. If Borrower shall fail to reimburse or pay
to Lender the amount of such protective advances by the applicable due date
therefor, interest at the Default Rate shall accrue on such protective advances
from the date such protective advances were made by Lender to and including the
date that such protective advances are reimbursed or paid to Lender in full,
together with all such accrued interest thereon.
9.5 INDEMNIFICATION.
(a) In addition to any other indemnifications provided herein or
in the other Loan Documents or Facility Documents, Borrower shall protect,
defend, indemnify and save harmless the Indemnified Parties from and against all
liabilities, obligations, claims, demands, damages,
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penalties, causes of action, losses, fines, costs, expenses (including, without
limitation, attorneys' fees and disbursements) and Environmental Costs, imposed
upon or incurred by or asserted against any Indemnified Party (other than by
reason of such Indemnified Party's active gross negligence or willful
misconduct, provided that such active gross negligence or willful misconduct is
determined to have occurred by a final and appealable decision of a court of
competent jurisdiction) by reason of (i) ownership or holding of this
Agreement, the other Loan Documents or any Collateral, including any funds
deposited with Lender, (ii) any accident, injury to or death of Persons or loss
of or damage to property occurring on or about the Property or any part thereof
or on the adjoining sidewalks, curbs, adjacent property or adjacent parking
areas, streets or ways, (iii) any design, construction, alteration, operation,
maintenance, use, nonuse or condition of the Property or any part thereof or on
adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways, (iv) any failure on the part of Borrower to perform or comply
with any of the terms of this Agreement or any other Loan Document or Facility
Document, (v) performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof,
(vi) any failure of the Property to comply with any Legal Requirements, (vii)
the presence in, at or under the Property of any Hazardous Substance, or any
release or discharge on or from the Property of any Hazardous Substance,
(viii) any representation or warranty made in the Note, this Agreement or any
of the other Loan Documents or Facility Documents being false or misleading in
any material respect as of the date such representation or warranty was made,
(ix) except to the extent any such claims are made solely as a result of any
dealings between Lender and any broker, finder or similar Person claiming to be
entitled to a commission in connection with the Loan, and with whom Borrower
has had no dealings in connection with the Loan, any claim by brokers, finders
or similar Persons claiming to be entitled to a commission in connection with
the Loan, the Collateral, any Lease or any other action involving the Property
or any part thereof, (x) the claims of any tenant of any portion of the
Property or any Person acting through or out of any tenant or otherwise arising
out of or as a consequence of any Lease, (xi) any claim that the relationship
of Lender and Borrower is other than that of lender and borrower, and/or (xii)
the execution and delivery of this Agreement and the other Loan Documents and
Facility Documents, the transactions contemplated hereby or thereby, and the
performance by the parties hereto of their respective Loan Obligations and
Facility Obligations hereunder or thereunder. Any amounts payable to any
Indemnified Party by reason of the application of this Section 9.5 shall become
immediately due and payable and shall bear interest at the Default Rate from
the date such loss or damage is sustained by any Indemnified Party until paid.
The Loan Obligations, the Facility Obligations and liabilities of Borrower
under this Section 9.5 shall survive any termination, satisfaction or
assignment of this Agreement and the exercise by Lender of any of its rights or
remedies hereunder, including, but not limited to, the acquisition of the
Collateral or the Property by foreclosure or a conveyance in lieu of
foreclosure.
(b) In case any claim, action or proceeding (a "CLAIM") is
brought against any Indemnified Party in respect of which indemnification may
be sought by such Indemnified Party pursuant to this Section 9.5, such
Indemnified Party shall give notice thereof to Borrower, provided, however,
that the failure of such Indemnified Party to so notify Borrower shall not
limit or affect such Indemnified Party's rights to be indemnified pursuant to
this Section 9.5 hereof, except to the extent such delay shall materially and
adversely prejudice Borrower's defense of such Claim. Upon receipt of such
notice of Claim, Borrower shall, at its sole cost and expense, diligently
defend any
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such Claim with counsel satisfactory to such Indemnified Party (it being
understood that counsel selected by Borrower's insurance carrier shall be
deemed to be acceptable to such Indemnified Party, provided that such insurer
is an acceptable insurer under this Agreement and the other Loan Documents or
otherwise was accepted by Lender as an insurer), which counsel may, without
limiting the rights of Indemnified Party pursuant to the next succeeding
sentence, also represent Borrower in such Claim. In the alternative, the
Indemnified Parties may elect to conduct their own defense through counsel of
their own choosing, and at the expense of Borrower, if (i) the Indemnified
Parties reasonably determine that the conduct of its defense by Borrower
presents a conflict or potential conflict between Borrower and Lender that
would make separate representation advisable or otherwise could be prejudicial
to its interests, (ii) Borrower refuses to defend, or (iii) Borrower (or, if
applicable, its insurance carrier) shall have failed, in Lender's reasonable
judgment, to diligently defend the Claim. Except as provided in the preceding
sentence, Borrower shall not be responsible for the fees of counsel for any
Indemnified Party incurred in connection with the indemnification contained in
this Section 9.5. Borrower may settle any Claim against Indemnified Parties
without such Indemnified Parties' consent, provided that (A) such settlement is
without any liability, cost or expense whatsoever to such Indemnified Parties,
(B) the settlement does not include or require any admission of liability or
culpability by such Indemnified Parties under any Legal Requirement, whether
criminal or civil in nature, and (C) Borrower obtains an effective written
release of liability for such Indemnified Parties from the party to the Claim
with whom such settlement is being made, which release must be reasonably
acceptable to such Indemnified Parties, and a dismissal with prejudice with
respect to all claims made by the party with whom such settlement is being
made, with respect to any pending legal action against such Indemnified Parties
in connection with such Claim. If the Indemnified Parties are conducting their
own defense as provided above, Borrower shall be responsible for any good faith
settlement of such Claim entered into by such Indemnified Parties, provided
such Indemnified Parties shall obtain Borrower's consent to any such
settlement, which consent shall not be unreasonably withheld or delayed.
Nothing contained herein shall be construed as requiring any Indemnified
Parties to expend funds or incur costs to defend any Claim in connection with
the matters for which such Indemnified Parties are entitled to indemnification
pursuant to this Section 9.5 hereof.
9.6 NOTICES. Any notice, report, demand or other instrument authorized
or required to be given or furnished ("NOTICES") shall be in writing and shall
be given as follows: (i) by hand delivery; (ii) by deposit in the United States
mail as first class certified mail, return receipt requested, postage paid;
(iii) by overnight nationwide commercial courier service; or (iv) by telecopy
transmission with a confirmation copy to be delivered by duplicate notice in
accordance with any of clauses (i) through (iii) above, in each case, to the
party intended to receive the same at the following address(es):
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Lender: Credit Suisse First Boston Mortgage
Capital LLC
Principal Transactions
11 Madison Avenue
New York, New York 10010
Attention: David Arzi
Re: Silverleaf Resorts, Inc.
Telecopier: (212) 325-8299
with a copy to: Credit Suisse First Boston Mortgage
Capital LLC
Legal & Compliance Department
11 Madison Avenue
New York, New York 10010
Attention: Colleen Graham, Esq.
Re: Silverleaf Resorts, Inc./David Arzi
Telecopier: (212) 325-8220
and
Midland Loan Services LP
210 West 10th Street
Kansas City, Missouri 64105
Attention: Jan Sternin
Telecopier: (816) 435-2326
and
Brown Raysman Millstein Felder & Steiner LLP
120 West 45th Street
New York, New York 10036
Attention: Jeffrey B. Steiner, Esq.
Telecopier: (212) 840-2429
Borrower: Silverleaf Resorts, Inc.
1221 Riverbend - Suite 120
Dallas, Texas 75247
Attention: Robert Mead
Telecopier: (214) 905-0514
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with a copy to: Meadows, Owens, Collier, Reed, Cousins & Blau, LLP
901 Main Street, Suite 3700
Dallas, Texas 75202-3792
Attention: George Bedell, Esq.
Telecopier: (214) 747-3732
Any party may change the address to which any such Notice is to be
delivered, by furnishing ten (10) days written notice of such change to the
other parties in accordance with the provisions of this Section 9.6. Notices
shall be deemed to have been given on the date they are actually received;
provided, however, that the inability to deliver Notices because of a changed
address of which no Notice was given, or rejection or refusal to accept any
Notice offered for delivery shall be deemed to be receipt of the Notice as of
the date of such inability to deliver or rejection or refusal to accept
delivery. Notice for either party may be given by its respective counsel.
Additionally, notice from Lender may also be given by Servicer.
9.7 NO ORAL MODIFICATION. Borrower recognizes that, in
general, borrowers who experience difficulties in honoring their loan
obligations, in an effort to inhibit or impede lenders from exercising the
rights and remedies available to lenders pursuant to mortgages, notes, loan
agreements or other instruments evidencing or affecting loan transactions,
frequently present in court the argument, often without merit, that some loan
officer or administrator of lender made an oral modification or made some
statement which could be interpreted as an extension or modification or
amendment of one or more debt instruments and that the borrower relied to its
detriment upon such "oral modification of the loan document." For that reason,
and in order to protect Lender from such allegations in connection with the
transaction contemplated by this Agreement, Borrower acknowledges that this
Agreement, the Note and the other Loan Documents and Facility Documents and all
instruments referred to in any of them can be extended, modified or amended
only in a writing executed by Lender and Borrower, and that none of the rights
or benefits of Lender can be waived permanently except in a written document
executed by Lender. Borrower further acknowledges its understanding that no
officer or administrator of Lender has the power or the authority from Lender
to make an oral extension or modification or amendment of any such instrument
or agreement on behalf of Lender.
9.8 ASSIGNMENT BY LENDER.
9.8.1 ASSIGNMENT. Lender may assign (and thereafter,
at any time and from time to time, repurchase) all or a portion of its rights
and obligations under this Agreement and the other Loan Documents to one or
more Persons ("ASSIGNEES"; the term "ASSIGNEE" or "ASSIGNEES" shall, unless
otherwise expressly indicated, include Lender) and, with respect to any
Assignee, be released from its rights and obligations as Lender in respect of
such portion of the Loan, this Agreement and the other Loan Documents.
9.8.2 PARTICIPATIONS. Lender and each of the other
Assignees may sell participations in the Loans to one or more Persons
(collectively, the "PARTICIPANTS"). Notwithstanding such sale, (i) the selling
party's obligations to Borrower under this Agreement and the other Loan
Documents and Facility Documents shall remain unchanged by reason
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thereof, and (ii) the selling party shall remain solely responsible to Borrower
for the performance of such obligations. In order to assist Lender in any
sales of interests in the Loan, Borrower agrees to reasonably cooperate with
Lender in connection with any efforts by Lender to obtain one or more Assignees
or Participants, to provide additional information and to execute and deliver
such further documents, instruments or agreements, in each case, as Lender or
any Assignee or Participant may reasonably require.
9.8.3 ASSIGNMENT AND ACCEPTANCE. From and after the
effective date of any assignment to an Assignee, (i) such Assignee shall be a
party hereto and to each of the other Loan Documents and Facility Documents to
the extent of the applicable percentage or percentages assigned to such
Assignee and, except as otherwise specified herein, shall succeed to the rights
and obligations of Lender hereunder in respect of such applicable percentage or
percentages, and (ii) Lender shall relinquish its rights and be released from
its obligations hereunder and under the Loan Documents and Facility Documents
to the extent of such applicable percentage or percentages. The liabilities of
Lender and each of the other Assignees shall be separate and not joint and
several. Neither Lender nor any Assignee shall be responsible for the
obligations of any other Assignee.
9.8.4 OTHER BUSINESS. Lender, each Assignee and each
Participant and their respective Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, Borrower, any Affiliate of Borrower, any of Borrower's
subsidiaries and any Person who may do business with or own interests in or
securities of Borrower or any such Affiliate or subsidiary, without any duty to
account therefor to each other.
9.8.5 PRIVITY OF CONTRACT. This Agreement is being
entered into by Lender individually and as agent for all present and future
Assignees, and privity of contract is hereby created among Lender, all present
and future Assignees and Borrower.
9.8.6 AVAILABILITY OF RECORDS. Borrower acknowledges and
agrees that Lender may provide to any Assignees or prospective Assignees, and
that Lender and each of the Assignees may provide to any Participants or
prospective Participants, originals or copies of this Agreement, all other Loan
Documents and Facility Documents and all other documents, instruments,
certificates, opinions, insurance policies, letters of credit, reports,
requisitions and other materials and information of every nature or
description, and may communicate all oral information, at any time submitted by
or on behalf of Borrower or any Affiliate of Borrower.
9.9 SEVERABILITY. In the event that any of the covenants,
agreements, terms or provisions contained in the Note, this Agreement or any
other Loan Document or Facility Document shall be invalid, illegal or
unenforceable in any respect, the validity of the remaining covenants,
agreements, terms or provisions contained herein or in the Note or any other
Loan Document or Facility Document shall be in no way affected, prejudiced or
diminished thereby.
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9.10 NO ASSIGNMENT BY BORROWER. Borrower shall not assign or
transfer any of its rights hereunder without the prior written consent of
Lender. Any assignment made without Lender's prior written consent shall be
void.
9.11 GOVERNING LAW. The place of negotiation, execution and
delivery of this Agreement is the State of New York. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of New York. It is the intent of the parties hereto that the provisions of
Section 5-1401 of the General obligations Law of the State of New York apply to
this Agreement.
9.12 SUCCESSORS AND/OR ASSIGNS. Subject to the restrictions
on transfer and assignment contained in this Agreement and the other Loan
Documents and Facility Documents, whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the permitted
successors and/or assigns of such party, and this Agreement shall inure to the
benefit of and shall be binding on the parties hereto and the successors and/or
assigns of such party.
9.13 ENTIRE CONTRACT. This Agreement and the other Loan
Documents and Facility Documents, including all annexes, schedules and exhibits
hereto and all other documents furnished to Lender in connection with this
Agreement and/or the Loan, constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and thereof and shall
supersede and take the place of any other instruments purporting to be an
agreement of the parties hereto relating to the transactions contemplated
hereby, including, without limitation, any letter of intent or loan commitment
letter.
9.14 LIABILITY. If Borrower consists of more than one Person,
the obligations and liabilities of each such Person hereunder and under the
other Loan Documents and Facility Documents shall be joint and several.
9.15 COUNTERPARTS; HEADINGS. This Agreement may be executed in
counterparts, each of which shall constitute an original, and all of which,
when taken together, shall constitute but one instrument. The captions and
headings of the various sections of this Agreement are for purposes of
reference only and are not to be construed as confining or limiting in any way
the scope or intent of the provisions hereof. Whenever the context requires or
permits, the singular shall include the plural, the plural shall include the
singular, and the masculine, feminine and neuter shall be freely
interchangeable.
9.16 TIME OF THE ESSENCE. Time is of the essence as to
Borrower's obligations under this Agreement and the other Loan Documents and
Facility Documents.
9.17 CONSENTS.
9.17.1 NO SUBSEQUENT CONSENT. Any consent or approval by
Lender in any single instance shall not be deemed or construed to be Lender's
consent or approval in any like matter arising at a subsequent date. Any
consent or approval requested of and granted by Lender
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pursuant hereto or pursuant to any of the other Loan Documents or Facility
Documents shall be narrowly construed to be applicable only to Borrower and to
the matter identified in such consent or approval and no third party shall
claim any benefit by reason thereof. Wherever this Agreement or any other Loan
Document or Facility Documents refers to the consent or approval of Lender, or
provides that any document or Person will be satisfactory or acceptable to
Lender or words of similar import, (i) such consent or approval may be given or
withheld by Lender, and such document or Person must be satisfactory or
acceptable to Lender, in its sole and absolute discretion, unless otherwise
expressly provided herein or therein, and (ii) such consent or approval shall
not be effective unless given in writing. Wherever this Agreement or any other
Loan Document or Facility Document refers to the provision of documents or
other items being as Lender may require, provides for the selection by Lender
of any person to provide reports or other items hereunder or thereunder or for
the selection by Lender of any means of determining any matter, or otherwise
refers to terms and conditions hereof or thereof being as Lender deems
appropriate, any such requirement, selection or determination of
appropriateness shall be made by Lender in its sole and absolute discretion,
unless expressly provided otherwise herein or therein. The foregoing provisions
are intended to be effective whether or not the applicable provision hereof or
of any other Loan Document or Facility Document specifies that the applicable
consent, approval or other matter is to be determined by Lender in its "sole
and absolute discretion" or words of similar import.
9.17.2 WITHHOLDING OF CONSENT. Wherever in this Agreement
or any other Loan Document or Facility Document, reference is made to any
consent or approval not being "unreasonably withheld" or words of similar
import, the same shall be deemed to include within its meaning (unless
expressly provided otherwise) that if such consent or approval is to be
granted, the same will occur within a commercially reasonable period of time.
If Borrower believes that Lender has improperly failed to grant its consent or
approval (or otherwise improperly failed to act as requested by Borrower as
described in Section 9.17.1 hereof (e.g., determined that a document is not
acceptable to Lender) hereunder or any other Loan Document or Facility Document
(including, without limitation, by failing to respond within a commercially
reasonable period of time) where such consent or approval is required to be
given by (or such action which was not taken is in breach of) the terms of this
Agreement or such other Loan Document or Facility Document, Borrower's sole
remedy shall be to obtain declaratory relief in a final, non-appealable
judgment determining such withholding to have been improper, whereupon such
consent or approval shall be deemed given (or such other action described in
Section 9.17.1 hereof shall be deemed taken), and Borrower hereby waives all
claims for damages or set-off resulting from any withholding of consent or
approval (or failure to take any other action described in Section 9.17.1
hereof) by Lender.
9.18 NO PARTNERSHIP. Nothing contained in this Agreement or the
other Loan Documents or Facility Documents shall be deemed to create an equity
investment in Borrower or the Collateral on the part of Lender or a joint
venture or partnership between Lender and Borrower, it being the intent of the
parties hereto that only the relationship of lender and borrower shall exist
with respect to the Collateral. Borrower agrees that it shall report this
transaction for income tax purposes, and file all related tax returns, in a
manner consistent with the form of this transaction as a loan.
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9.19 WAIVER OF JURY TRIAL. EACH OF BORROWER AND LENDER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN),
OR ACTIONS OF BORROWER OR LENDER RELATING TO THE LOANS AND/OR THE LENDING
RELATIONSHIP WHICH IS THE SUBJECT OF THIS AGREEMENT. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
9.20 LIMITATION ON LIABILITY. In no event shall Lender be liable
to Borrower for consequential damages, whatever the nature of a breach by
Lender of its obligations under this Agreement or any of the other Loan
Documents or Facility Documents, and Borrower, for itself and all of its
Affiliates, hereby waives all claims for consequential damages. Unless, within
ninety (90) days after Borrower first has actual knowledge of the occurrence of
any event about which Borrower has a dispute or claim, such Person notifies
Lender in writing of the general nature of its dispute or claim, such Person
shall be deemed to have waived any and all rights to raise such dispute or
claim in any lawsuit, action or proceeding of any kind.
9.21 JURISDICTION, VENUE, SERVICE OF PROCESS. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE
BROUGHT, AT LENDER'S OPTION, IN THE COURTS OF THE STATE OF NEW YORK, NEW YORK
COUNTY OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK. BORROWER HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS. BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO BORROWER AT
ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 9.6 HEREOF. BORROWER HEREBY
IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT IN THE
COURTS REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT
TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING CONTAINED
HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
BORROWER IN ANY OTHER JURISDICTION.
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9.22 APPOINTMENT OF AGENT FOR SERVICE OF PROCESS.
Borrower hereby designates Robert Mead ("DESIGNEE") as its agent and
attorney-in-fact to accept service of process in any action or proceeding
arising under or in connection with this Agreement and/or the other Loan
Documents or Facility Documents. The foregoing designation is irrevocable and
coupled with an interest. If Designee is not personally available, process may
be served upon Designee by United States registered or certified mail, which
service will be effective five (5) days after mailing, to the address of
Designee set forth below:
c/o Silverleaf Resorts, Inc.
1221 Riverbend - Suite 120
Dallas, Texas 75247
9.23 RULE OF CONSTRUCTION. This Agreement and the other Loan
Documents shall not be construed more strictly against one party than against
the other merely by virtue of the fact that it may have been prepared by
counsel for one of the parties, it being recognized that both Lender and
Borrower have contributed substantially and materially to the preparation of
this Agreement and the other Loan Documents or Facility Documents.
9.24 FURTHER ASSURANCES.
(a) Borrower will, at their sole cost and expense, do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and
delivered all such further acts, conveyances, notes, mortgages, assignments,
security agreements, financing statements and assurances as Lender shall from
time to time require or deem advisable (i) to carry into effect the purposes of
this Agreement and the other Loan Documents and Facility Documents, (ii) for
the better assuring, conveying, mortgaging, assigning and confirming unto
Lender of all property and rights mortgaged, granted, bargained, alienated,
confirmed, pledged, hypothecated, conveyed or assigned by this Agreement or any
of the other Loan Documents or Facility Documents or property intended now or
hereafter to be, or which Borrower may be or may hereafter become bound to
convey or assign to Lender, (iii) for facilitating the placement of a Loan
Interest in a Loan Pool as described in Section 9.26 hereof, (iv) for the
perfection of any Lien or security interest granted herein or in the other Loan
Documents or Facility Documents, and (v) for the better assuring and confirming
of all of Lender's rights, powers and remedies hereunder. Borrower, on demand,
will execute and deliver, and hereby authorizes Lender to execute in the name
of Borrower or without the signature of Borrower to the extent Lender may
lawfully do so, one or more financing statements, chattel mortgages or other
instruments, to evidence more effectively the security interest of Lender in
the Collateral under the Loan Documents or the Facility Documents.
(b) Borrower forthwith upon the execution and delivery of this
Agreement and thereafter, from time to time, will cause the Mortgages and any
security instrument creating a Lien or security interest or evidencing the
Liens of the Mortgages and the other applicable Loan Documents and Facility
Documents upon the Property or other property and each instrument of further
assurance to be filed, registered or recorded in such manner and in such places
as may be required by any present or future Legal Requirement in order to
publish notice of and fully to
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protect the Lien or security interest of, and the priority of the Mortgages and
the other Loan Documents and Facility Documents upon, and the interest of
Lender in, the Property or other applicable property. Borrower will pay all
filing, registration or recording fees, and all expenses incident to the
foregoing and all taxes, duties, assessments and charges of any Governmental
Authority arising out of or in connection with the execution and delivery of
the Mortgages any other security instrument, any instrument of further
assurance or any other Loan Document or Facility Document. Upon Lender's
request, Borrower shall, from time to time, furnish Lender with evidence
reasonably satisfactory to Lender that the Property is free of Liens and
security interests (except as permitted hereunder), including searches of
applicable public records.
(c) Upon any failure by Borrower to do so, Lender may make,
execute, record, file, re-record or refile any and all such mortgages,
instruments, certificates and documents for and in the name of Borrower, and
Borrower hereby irrevocably appoints (which appointment is coupled with an
interest and with full power of substitution) Lender the agent and
attorney-in-fact of Borrower to do so, and Borrower shall reimburse Lender, on
demand, for all reasonable costs and expenses (including reasonable attorneys'
fees) incurred by Lender in connection therewith. Upon foreclosure, the
appointment of a receiver or any other relevant action, Borrower will, at the
reasonable cost of Borrower and without expense to Lender, cooperate fully and
completely to effect the assignment or transfer of any Permit, agreement or any
other right necessary or useful to the operation of the Property and shall
deliver to Lender all books and records relating to the Property.
9.25 RECITALS. The Recitals set forth at the beginning of
this Agreement are hereby incorporated into the substantive provisions of this
Agreement.
9.26 PLACEMENT OF LOAN.
9.26.1 LOAN POOL. Borrower acknowledges that Lender,
any Assignee or any Participant (each of Lender, any Assignee or any
Participant, a "PLACEMENT PARTY") may elect to place the Loan, or its
participation interest in the Loan, as the case may be (whichever of the Loans
or such participation is to be so placed, is called the "LOAN INTEREST") in a
pool of loans, participation interests and/or notes secured by or dependent on
the cash flow of mortgage loans, which will constitute security for a rated
securities offering (such pool is called a "LOAN POOL"; and such rated
securities offering is called a "SECURITIZATION").
9.26.2 RATING AGENCY REQUIREMENTS. At the request of
Lender, Borrower will, at its sole cost and expense, use its best efforts to
satisfy the market standards to which Lender customarily adheres or which may
be required in the marketplace or by any Rating Agency in order to enable a
Placement Party to place a Loan Interest in a Loan Pool, including, without
limitation, to:
(i) provide such financial and other information with
respect to the Collateral and Borrower as may be reasonably requested
by Lender or any Rating Agency or annual rating reviews, including,
without limitation, occupancy statistics, average rents and
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periodic and annual financial statements (including cash flow
statements) for the Property (reviewed and, in the case of annual
financial statements, audited) by a firm of certified public
accountants reasonably acceptable to Lender and each Rating Agency
(Lender acknowledges that the Approved Accountant is an accounting
firm acceptable to Lender);
(ii) prepare and deliver such agreements and instruments
relating to the Note, the Loan Interest, the Collateral and Borrower,
including (A) agreements to indemnify Lender and any servicer or
trustee (except to the extent that any requested indemnification for
any loss, claim, damage, cost, expense or liability results solely
from the negligent, or with respect to Lender, grossly negligent acts
or omissions by such indemnified party in performing the duties,
functions and activities undertaken by it in connection with the
placement of the Loan Interest in a Loan Pool, including, without
limitation, any failure by the indemnified party or parties to comply
with all applicable securities laws and regulations), and (B)
amendments of any of the Loan Documents or Facility Documents that are
necessary to effect the placement of the Loan Interest in a Loan Pool,
as may be reasonably requested by, and in form and scope satisfactory
to, Lender and each Rating Agency; provided, however, that such
amendments shall not, without the consent of Borrower, affect the
terms and conditions of the Note or any other material obligation of
Borrower under the Loan Documents;
(iii) cause to be performed such site inspections,
appraisals, market studies, environmental reviews and reports (Phase I
assessments and, where appropriate, Phase 11 assessments), engineering
reports and other due diligence investigations of the Property
customarily and reasonably requested by Lender or any Rating Agency in
connection with the placement of the Loan Interest in a Loan Pool and
the rating of any securities issued in connection therewith;
(iv) provide such business plans and budgets relating to
the Property as may be reasonably requested by Lender or any Rating
Agency;
(v) cause counsel to render opinions as to "true sale"
and other matters customary in securitization transactions with
respect to the Collateral, Borrower, the Loan Interest, Loan Documents
and the Facility Documents, which counsel shall be satisfactory to,
and which opinion shall be satisfactory to, Lender and each Rating
Agency; provided, however, that Borrower shall not be responsible for
providing a "true sale" opinion,that relates solely to the sale by
Lender of the Loans or a Loan Interest into a Loan Pool; and
(vi) make the representations and warranties contained in
the Loan Documents and Facility Documents as of the date of the
closing of the transfer of the Loan Interest and make such other
representations with respect to the Property, Borrower, the Loan
Interest, the Loan Documents and Facility Documents as are customarily
provided in securitization transactions and as may be reasonably
requested by Lender or any Rating Agency in connection with such
closing.
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9.26.3 DISCLOSURE; INDEMNIFICATION. At Lender's
request, Borrower shall cooperate with Lender's preparation of a private
placement memorandum or registration statement and amendments and supplements
thereto (the "DISCLOSURE DOCUMENT") to privately place or publicly distribute
the Note or the Loan Interest or securities issued in connection therewith in a
manner that satisfies the requirements of the Securities Act and applicable
state Legal Requirements. At the time of Lender's preparation of such
Disclosure Document, Borrower shall execute and deliver to Lender and any
underwriter or placement agent an instrument (a "SECURITIZATION
INDEMNIFICATION") (in form and substance satisfactory to Lender) (i) certifying
as to the veracity of all written information that it supplied and which was
incorporated in such Disclosure Document, and (ii) indemnifying and holding each
of them, and any Person who controls any of them, within the meaning of Section
15 of the Securities Act or Section 70 of the Exchange Act (each, a
"SECURITIZATION INDEMNIFIED PARTY"), harmless against all costs, expenses and
damages incurred by any Securitization Indemnified Party as a result of any
untrue statement of a material fact made or supplied by Borrower as contained
in such Disclosure Document or the failure by Borrower (after receipt of a
draft of the Disclosure Statement) to specify for inclusion in the Disclosure
Document any material fact regarding Borrower, the Collateral or the Loans
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, but only to the
extent that such statement of material fact is made in reliance upon and in
conformity with written information Borrower furnished for use therein or the
omission of such a material fact is based upon Borrower's failure to specify
such material fact or upon Borrower's furnishing inaccurate information that
shows that such material fact is not material. If Lender (or a placement agent
or underwriter acting on behalf of Lender) shall deliver a draft of the
Disclosure Document to Borrower for its review, Borrower shall provide Lender
(or the placement agent or underwriter acting on behalf of Lender) with their
comments, if any, on such Disclosure Document as soon as practicable, but in
all events within fifteen (15) days after receipt thereof, in the case of the
first draft of such Disclosure Document, and within three (3) Domestic Business
Days after receipt of any subsequent draft of such Disclosure Document. If, in
connection with such review, Borrower advises Lender of the existence of a fact
regarding Borrower, the Collateral or the Loans and advises Lender that it
deems such fact material, Lender shall include such fact in the Disclosure
Document or shall waive the rights of the Indemnified Parties with respect to
such fact. Upon receipt of the Securitization Indemnification, Lender shall
execute and deliver to Borrower an instrument (in form and substance
satisfactory to Borrower) indemnifying and holding Borrower harmless against
all costs, expenses and damages incurred by them as a result of the preparation
or distribution of, and any untrue statement of a material fact contained in,
such Disclosure Document or the failure to include therein any material fact in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading; provided, however, that such
indemnification shall not apply if any such costs, expenses or damages arise
out of or are based upon an untrue statement of a material fact or an omission
to state a material fact in such Disclosure Document made in reliance upon and
in conformity with written information furnished by Borrower expressly for use
therein or (after receipt of a draft of the Disclosure Statement) the omission
of a material fact concerning Borrower, the Collateral or the Loans (other than
the express terms of the Loan Documents) necessary to make the statements in
the Disclosure Statement not misleading. Borrower shall notify Lender if it is
necessary to amend or supplement such Disclosure Document at any time in
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order that such Disclosure Document does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. Lender shall prepare as soon as may be reasonably
practicable an amendment or supplement to such Disclosure Document correcting
such statement or omission. At the request of Lender, in connection with any
sale of the Note or any Loan Interest, Borrower shall confirm, as of the date
of such sale, that such Disclosure Document, as it may be so amended or
supplemented, does not contain any untrue statement of a material fact
concerning Borrower, the Collateral or the Loans or omit to state a material
fact concerning Borrower, the Collateral or the Loans necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
9.26.4 TRUSTEE. It is expressly understood hereunder
that in connection with the placement of any Loan Interest in a Loan Pool,
Lender intends to transfer the Loan Interest to a trustee which shall hold such
Loan Interest for the benefit of the holders of the interests in the Loan Pool.
In connection therewith, Borrower shall execute and deliver or cause to be
executed and delivered, all such additional instruments, and do, or cause to be
done, all such additional acts as (i) may be necessary or proper to carry out
such transfer, including, without limitation, the delivery of such instruments
and documents, including assignments of mortgage (and similar documents),
assignments of Loan Documents and/or Facility Documents and the delivery of
such mortgagee's title insurance endorsements in favor of the trustee as may be
required to confirm and/or evidence the transfer to the trustee of the title
insurance issued to Lender in respect of the Collateral, including payment of
all fees, title insurance premiums and other insurance premiums, and/or (ii)
Lender may reasonably request.
9.26.5 INFORMATION ACCESS. Lender shall be permitted to
share any information provided by Borrower pursuant to this Section 9.26 in
connection with the placement of a Loan Interest in a Loan Pool with the
investment banking firms, each Rating Agency, accounting firms, law firms and
other third-party advisory firms involved with any transfer of the Loan, the
Loan Documents, the Facility Documents or the applicable Securitization. It is
understood that the information provided by Borrower to Lender may ultimately
be incorporated into the offering documents for the Securitization and thus
various investors may also see some or all of the information.
9.26.6 TIME OF TRANSFER OR PLACEMENT. Borrower
acknowledges that any transfer of the Loans or the placement of a Loan Interest
in a Loan Pool may occur at any time during the term of this Agreement and the
provisions of this Section 9.26 shall be applicable throughout the Term.
9.27 DISCLOSURE OF INFORMATION BY LENDER. Lender
shall have the right (but shall be under no obligation) to make available to
any party for the purpose of granting participations in or selling,
transferring, assigning or conveying all or any part of the Loans (including
any governmental agency or authority and any prospective bidder at any
foreclosure sale of any Collateral) any and all information which Lender may
have with respect to any Collateral, the Property, Borrower and/or any of the
Related Persons, whether provided by Borrower, any of the Related Persons or
any third party or obtained as a result of any third party reports. Except for
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the foregoing, Lender shall use its reasonable best efforts not to disclose any
such information, except to its lawyers, accountants and consultants (including
the Servicer), and except if required by law to do so, and Lender shall also
use its reasonable best efforts to cause anyone to whom it discloses any such
information as referred to in this Section 9.27, not to disclose the same to
any other Person, except its lawyers, accountants and consultants, and except
if required by law to do so. Borrower agrees that Lender shall have no
liability whatsoever as a result of delivering any such information to any
third party, and Borrower, on behalf of itself and its successors and assigns,
hereby release and discharge Lender from any and all liability, claims, damages
or causes of action, arising out of, connected with or incidental to the
delivery of any such information to any third party.
ARTICLE 10
SPECIAL PROVISIONS
10.1 TAX AND INSURANCE ESCROW. In order to assure the
payment of Taxes and premiums with respect to all insurance coverage required
pursuant to Section 8 of the Mortgages (collectively, "INSURANCE PREMIUMS") as
and when the same shall become due and payable, the following provisions shall
apply with respect to each Property:
10.1.1 TAX AND INSURANCE DEPOSITS. At any time that
Lender shall request, Borrower shall pay to Lender, on each Payment Date
following such request in immediately available funds, an amount equal to
one-twelfth (1/12) of the Taxes and Insurance Premiums to become due during the
period commencing on the first day of the first month following such Payment
Date and ending twelve (12) months following such first day. In all cases, if
required by Lender, there must be paid hereunder, to be deposited with and held
by Lender, an amount sufficient to pay such Taxes and Insurance Premiums, one
month prior to the date when they are due and payable. The amounts of all of
the foregoing deposits with respect to Taxes and Insurance Premiums (together
with all interest accruing thereon from time to time, being herein collectively
called "TAX AND INSURANCE DEPOSITS") shall be determined by Lender in its
reasonable discretion. Borrower shall promptly, upon the demand of Lender, make
additional Tax and Insurance Deposits as Lender may from time to time require
due to (i) failure of Borrower to make Tax and Insurance Deposits in previous
months, (ii) underestimation of the amounts of Taxes and/or Insurance Premiums,
(iii) the particular due dates and amounts of Taxes and/or Insurance Premiums,
or (iv) application of the Tax and Insurance Deposits pursuant to this
Agreement. Borrower agrees that, upon request by Lender, Borrower shall execute
and deliver a cash management agreement, in form and substance satisfactory to
Lender, which shall govern the deposit and disbursement of the Tax and
Insurance Deposits in accordance with the terms hereof.
10.1.2 PAYMENT OF TAXES AND INSURANCE PREMIUMS. Provided
that no Event of Default has then occurred and is continuing, Lender will, out
of the Tax and Insurance Deposits (provided such funds are sufficient for such
purpose), upon the presentation to Lender by Borrower of the bills therefor,
pay the Taxes and Insurance Premiums or will, upon the presentation of official
receipted bills therefor, reimburse Borrower for such payments made by
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Borrower. If the total Tax and Insurance Deposits on deposit with Lender shall
not be sufficient to pay all of the Taxes and Insurance Premiums when the same
shall become due, then Borrower shall pay to Lender on demand the amount
necessary to make up the deficiency. Lender shall be entitled, without request
of Borrower, but, prior to an Event of Default upon two (2) Business Days
notice to Borrower, to apply any Tax and Insurance Deposits on deposit with
Lender to the payment of any Taxes (other than any Taxes which Borrower has
notified Lender that it is contesting and such contest is then permitted under
the Mortgages) and Insurance Premiums which have become due and have not yet
been paid. Borrower and Lender acknowledge and agree that Borrower shall not be
in default under the Mortgages for failure to pay Taxes or Insurance Premiums,
if such failure arises by reason of Lender's failure to comply with its
agreement contained in this Section 10.1.2.
10.1.3 APPLICATION UPON EVENT OF DEFAULT. Upon the
occurrence and during the continuance of an Event of Default, Lender may, at
its option, without being required to do so, apply any Tax and Insurance
Deposits on hand to pay Taxes or Insurance Premiums, or to pay principal,
interest and other amounts payable to Lender hereunder or under the other Loan
Documents or the Facility Documents, all in such order and manner as Lender, in
its sole discretion, may elect. When the principal and interest under the Notes
and all prepayment premiums, if any, in connection therewith and all other Loan
Obligations and Facility Obligations have been fully and properly paid, any
remaining Tax and Insurance Deposits shall be returned to Borrower.
10.1.4 RELIANCE. Lender shall be absolutely entitled
to rely on any statements of any Governmental Authority with respect to Taxes
and any statement of Borrower's insurance carrier or its agent with respect to
Insurance Premiums.
10.1.5 No THIRD PARTY BENEFICIARY. No provision of
this Agreement, the Mortgages or any other Loan Document or Facility Documents
shall be construed as creating in any party other than Borrower and Lender (and
Servicer), any rights in and to the Tax and Insurance Deposits or any rights to
have the Tax and Insurance Deposits applied to payment of Taxes and Insurance
Premiums. Lender shall have no obligation or duty to any third party to collect
or apply Tax and Insurance Deposits.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed under seal this
Agreement as of the day and year first above written.
LENDER:
CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC, a Delaware limited
liability company
By: /s/ DAVID ARZI
-----------------------------------
Name: David Arzi
Authorized Signatory
BORROWER:
SILVERLEAF RESORTS, INC., a Texas
corporation
By: /s/ ROBERT E. MEAD
-----------------------------------
Name: Robert E. Mead
Title: Chief Executive Officer
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LIST OF EXHIBITS TO EXHIBIT 10.31
Schedule A Approved Loans
Exhibit A Form of Loan Supplement
Exhibit B Form of Mortgage Note
Exhibit C Form of First Mortgage
Exhibit D Form of Second Mortgage
Exhibit E Form of Environmental Indemnity
Exhibit F-1 Form of Corporate Opinion
Exhibit F-2 Form of Local Counsel Opinion
The above-listed exhibits are omitted from this filing. Registrant agrees to
furnish supplementally a copy of any omitted exhibit to the Commission upon
request.
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